Business Matters
Open Source Software

Open Source Software, the panacea for expensive proprietary software ?

Of late there has been increased press coverage relating to open source software, and those in the computing and legal sectors will, no doubt, be keeping an eye on ongoing litigation between SCO v IBM (relating to the Unix system) of which the US trial is presently scheduled for November of this year. This article is intended to give the reader an understanding of what is meant by open source software and to identify some of the considerations that are pertinent to analysing whether this type of software is beneficial to a business, not for profit organisation, or other end user.

What does open source software mean?

Most software which is bought or downloaded comes in a ready to run format (known as the object code). This final format is achieved from the programme that the developer created (known as the source code) being run through a special programme called a compiler. The compiler translates the source code into the object code which is in a binary format that can be understood by a computer. It can be diff icult, although not impossible if you know how, to modify or reverse compile the source code to see how the developer created different parts of the programme. This task might be undertaken by a person wishing to emulate the whole or part of a programme and, in the majority of cases, is likely to be a breach of the terms of a licence.

Open source software is, therefore, at the polar end of the software spectrum to proprietary software in which the source code is retained and highly protected by the programmer (or his employer).

An example of how open source software is created and evolves is the well documented history of Linux software. Linux is based on the Minix operating system and was developed by a Finnish student called Linus Torvalds. Linux was released by Torvalds under a (GNU) General Public Licence and downloaded and used by many people around the world. Many of the people using the software were programmers themselves and they made modifications to the source code. These modifications were sent to Torvalds who then included them in the software and he later released an upgraded version of Linux.

Who uses open source software?

The Office of Government Commerce¹ published a report late last year following a trial of open source software. Its Chief Executive, John Orton, said that “[open source software] could support Government bodies by offering efficient and cost effective IT solutions”. One of the decisions resulting from the launch by the Office of Government Commerce of a new, more embracing policy on this subject was that the “UK Government will consider open source software solutions alongside proprietary ones in IT procurements [emphasis added]”.

The emergence of the Office of Government Commence’s report and the UK Government’s policy of considering open source software along proprietary software when assessing best value for money will increase industry and public awareness of this type of software. Indeed, the Office of Government Commerce reports the following statistics in support of a claim of dominance of open source software in public facing internet services²:

• Apache is the number one web server with 60% of all installations. Microsoft held second place at just under 35%.
• GNU/Linux is the second place operating system at nearly 30%, again behind Microsoft at nearly 50%.
• Sendmail was the first placed mail server at 42%.
• BIND (Berkeley Internet Naming Daemon) which is responsible for mapping domain names to IP addresses, was used in 95% of all public reverse DNS services.

The above list, which was compiled from statistics in 2002, is illustrative of the divergence of open source software in addition to its more traditional presence in developer tools, such as scripting languages and compilers.

Aside from its present use in the commercial arena, it is yet to be seen whether the reduced licence fee costs (see below) will make open source software attractive to the not for profit sector as the assessment undertaken by charity trustees in furtherance of their fiduciary duty to the charity is analogous to the best value for money assessment of government departments.

What are the pros and cons of open source software?

The main advantages are:

• Open source software has lower (and in some cases no) licensing cost. Contrast this with the relatively high licensing costs of proprietary software. Open source software is distributed under one of a number of public licences some of which provide that the software is to be available for little more than the distribution cost.
• Reduced hardware costs, as open source software can be portable or adapted to a wide range of platforms.
• In the event that faults are discovered these are generally quickly remedied by way of a patch or upgrade once the fault has been publicised.
• The nature of open source software means that it is supplier independent because the source code can be taken to another supplier, should the need arise.

Some of the disadvantages are:

• 1 Unlike proprietary software, most open source licences do not include the contractual provisions which give comfort to the end user that the software does not breach the intellectual property rights of a third party. The reason for this is that the software will contain intellectual property rights of the developer and also those of the person(s) who created any modifications the software contains. This leaves the end user at risk of potential third party claim of infringement. Such risk may be difficult to quantify where the development or modification chain is long because of the number of parties whose rights may be involved. Furthermore, the number of infringement claims could rise as rights-holders are woken up to the issue by the high profile SCO v IBM case. This case concerns an allegation by SCO that IBM used the proprietary source code in the Unix operating system (such proprietary right having been acquired by SCO) to commercially develop its own open source system.
• Some open source licence terms impose an obligation that anyone distributing software (being derived from open source software) must licence that software on open source terms. Others include terms which purport to oblige the user who bundles proprietary software with open source software to distribute the source code of both pieces of software on open source terms. In some quarters this is referred to as the risk of “infection” and it could have severe adverse affects on a company.
• Linked to the absence of an intellectual property warranty (number 1 above) is the lack of a warranty of performance for a part icular purpose. In proprietary software it is common to see a warranty that the software will perform a particular purpose that the buyer has made known to the supplier. Also often absent is an obligation to provide technical support, although there are some open source software providers, such as Red Hat Software, who supply this warranty and also technical support.

As with proprietary licences, it is important to ensure that an open source licence is unambiguous, professionally drafted (which is not always the case) and is compliant with the requirements of the jurisdiction in which the software is to be used.

Conclusion

Whilst the increased flexibility and lower costs that are associated with open source software may make this type of software more attractive than proprietary software, serious consideration should be given to the risks involved, including those identified above. Before accepting a licence for open source software, whether to further commercial or benevolent purposes, a cost/risk analysis (including legal risk) should be undertaken along with careful consideration of the precise contractual obligations under the licence (including whether or not any technical support will be given).

Large organisations are also recommended to conduct an audit of the type of licences for existing software. Open source software can easily be downloaded from the Internet, the use of which senior management may not be fully aware. This issue is not one which is confined to software developers whose proprietary software could be infected by a programmer including a small pierce of open source software, but could also occur on a merger, business or share sale, or transfer of charitable undertaking if open source software was overlooked during the due diligence process.

Robinsons can assist you in ascertaining the type of existing licences for software presently in use and can identify the legal risks in a part icular open source licence agreement being considered.

This article is a summary only of open source software. It is not intended to be, nor should it be regarded as a substitute for advice in a part icular set of circumstances. If you require any further information, please contact Chris Hallam.

Robinsons Solicitors
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© Robinsons 2005

¹The Office of Government Commerce was established in 2000 to achieve best value for money for Government Departments in their commercial activities.

²Taken from the Office of Government Commerce’s “Open Source Software Guidance on Implementing UK Government Policy” which states that the source of this information is Netcraft (number 1 and 2), D J Bernstein (number 3) and Information Sciences Institute of the University of South California (number 4).