Use of open source software can affect your IP and rights

Intellectual Property rights applied to open source software (OSS) sounds like an oxymoron. This is not the case and we will discuss in this blog, in what circumstances can IP protection be extended to products containing open source software.

The term open source software broadly encompasses source code which is distributed via an open source license. The most well known OSS software is the operating system, Linux, which is released under the GNU Public License (GPL). OSS licenses often have a number of conditions attached, such as the user of the OSS having to issue licenses on the same terms to anyone who uses software incorporating the OSS; limitations on enforcing any patent rights that a licensee may hold and whether any software containing the OSS has to be distributed via the platform which originated the OSS.

An open source license is predominantly about copyright and the right to modify, use and distribute the underlying code. However, there may also be underlying patent rights associated with either the OSS or software which incorporate the OSS.

There are many advantages for a company in using open source software such as reduced developmental costs, ability to access improvements and development at no cost and attracting a large customer base. This needs to be balanced with the developing company not being able to assert its intellectual property rights and possibly losing substantial income through forgone licensing fees.

There is a middle ground or hybrid approach where IP rights may be retained in an open source software. The developing company may file for patent protection and issue licenses to allow for parts of the program to be used as open source. Protection can be built into the open source licensing agreement giving the patentee broad rights to terminate an open source license. The advantages of patenting the software subsequently licensed as open source include:

1. To choose which components of the software code will be licensed as open source;
2. The ability of the patent holder to exercise control over the licensing terms of the open source software by retaining the right to enforce the patent;
3. To prevent the use of the OSS through unlicensed users;
4. To develop, release and commercialise versions of the software which do not incorporate an OSS;
5. To prevent third parties from developing and patenting similar software and restricting the use of the OSS.

Issues can arise where a software developer incorporates open source code into an existing program or code which is patented (or the subject of a patent application). Some open source software have, as a condition of use, that automatic patent licenses are granted to other users when incorporated into other code. It is crucial for any software developer to understand the terms of any automatic patent license grants which are incorporated in the open source software that they are modifying or incorporating into their software.

It is also important to check the terms of the open source software for any “patent retaliation clauses”. These clauses allow the license holder to terminate any license granted to the open source software if a licensee attempts to assert any patent infringement claims associated with the use of the open source software (or any of its components). Some patent retaliation clauses are broadly drafted to the extent that license rights to use the OSS will be terminated if the licensee asserts patent rights against anyone. This could have significant implications on the rights of any company that is developing software incorporating an OSS component.

Key takeaways for software developers are that:

• It is possible to patent OSS;
• It is also possible to develop an IP strategy and retain and commercialise some components of software code whilst providing other components as open source software; 
• Be aware of the possibility of third party infringement claims especially where the OSS has been modified by a number of users;
• It is crucial to check the terms of the licensing conditions of any open source software which is being incorporated into the developer’s software to ensure there is no broad flow on licensing rights to the developer’s patent rights; and
• The potential implication when incorporating OSS into your software and its impact on your rights and any future sales of your business or product. Potential investors or buyers may require substantially more due diligence when your products incorporate OSS and may require you to provide some indemnities in relation to third party infringement claims;
• The incorporation of patent retaliation clauses may limit your ability to enforce any patent rights you may hold in software which incorporates an OSS component.