Open source software has become increasingly popular with some of the leading information technology providers as well as consumer and enterprise end users.

For example, IBM, Cisco, Apple, Hewlett Packard, Sun, Sharp, Intel and other companies offer open source software systems. Open source software has been widely embraced because its source code is readily available, but that benefit may come with a risk. The open source software community was rocked in March when SCO sued IBM for $1 billion and sent letters to 1,500 of the largest companies in the world, asserting that IBM illegally contributed portions of SCO’s proprietary UNIX code to the open source software distributed with the popular Linux operating system. Many end users, developers, and distributors of open source software systems are now wondering whether they could be legally liable for the actions of upstream contributors of open source software. Confusion is rampant.

Erroneous assumptions and misstatements in the media regarding open source software and the SCO v. IBM lawsuit fuel the unrest that many in the open source software community are experiencing. This three-part commentary provides some background regarding open source software and its licensing requirements, and a legal primer on some areas related to open source software. We then summarize the issues surrounding the SCO v. IBM lawsuit, and offer suggestions to open source software users.

What is Open Source Software?

The source code for open source software is readily available for users to view and modify. Users and developers of open source software must provide the source code with any open source software program or system that they distribute to allow a downstream user to modify their software for their own purposes without paying a large fee.

Open source software is not “freeware.” The fact that open source software source codes are available without charge does not mean that open source software is without cost. One may sell open source software programs for any amount, so long as the buyer is also given a license to freely use, copy, redistribute and make derivative works from the source code.

The Linux operating system is one of the most common types of open source software. Created by Linus Torvalds in 1991, a large community of Linux developers has evolved. These programmers have unrestricted access to the Linux source code and can modify it to control and customize their operating system as needed. For example, Intel Corp. recently announced a 32-processor Itanium server running Linux that has demonstrated database performance rivaling that of servers running Windows or UNIX software.

Other commonly utilized open source software includes Apple OS X, Apache (a dominant web server application), OpenSSL (leading security program for Internet transmissions), and Perl (a dominant web programming application).

A Primer on Legal Rights in Software

Several legal rights and possible liabilities are potentially implicated by open source software. First, any software is potentially subject to copyright protection. The copyright is a federal constitutionally based right that protects original works of authorship. To be eligible for copyright protection, a writing or other expression of authorship must be original to the author. That is, one may not copy a work authored by another.

On the other hand, if two authors independently wrote the original Harry Potter book, one author could not claim a copyright over the other. Of course, the chance of that happening in reality is essentially zero. Notably, to infringe a copyright, one must have some access to a prior copyrighted work.

Second, software is potentially subject to patent protection. Also a federal constitutionally based right, a patent protects inventions which are, among other requirements, novel, i.e., original for the whole world, not just the author. In contrast with the copyright, to infringe a patent, one need not necessarily copy a patented invention or even know about a patent. Thus, no access to patented software is needed in order to infringe a software patent.

Third, software may implicate trade secret protection. Trade secret law protects information that derives commercial value in part from its nonpublic nature and is usually a matter of state law. In software, this proprietary information can exist in the methods or algorithms embodied in the software program. Software can be distributed for use and yet keep its secrets since most commercial software is sold as object or machine code not generally comprehensible to human beings but understandable to computers. This is in distinction to open source software where access is given to computer programs written in a computer language comprehensible to at least those people who have studied the particular language.

Software is also usually not sold per se, but rather a license to use software is sold and numerous contractual limitations are usually incorporated into every software license. Licenses and contracts are usually governed by state law. The terms of software licenses are varied and can vary in scope on several dimensions such as duration, geographic limitations, field of use, number of users, ability to modify the software, etc.

Software licenses usually also prohibit reverse engineering, that is, attempting to convert object code back into source code and thus unlock trade secreted methods. Importantly, to be liable for breach of contract, one generally has to be a party to a contract. That is, strangers to a contract cannot breach a contract. However, a stranger can induce a party to a contract to breach the agreement producing liability for the breaching party for the breach and the stranger for inducing the breach, i.e., interfering with the contract.

Another area of the law potentially presenting issues for open source software is that of unfair competition law. This somewhat amorphous area of the law has both federal and state law manifestations and encompasses a number of claims for injury to a business ranging from trademark infringement and false advertising to antitrust type claims. State unfair competition laws vary in the type and scope of injuries subject to legal recourse. The application of unfair competition law in the open source software context is largely untested.

In Part II, we will consider the most common open source software licenses, some positive aspects of open source software, and some of the potential downside risks of incurring liability for infringing some of the rights discussed above.

This column is presented for educational and information purposes and is not intended to constitute legal advice.

Rebecca Fiechtl (, Michael D. McCoy (, and George Taulbee ( are Charlotte-based attorneys in the intellectual property law practice of Alston & Bird LLP. George O. Winborne ( is an intellectual property law attorney practicing in Alston & Bird’s Raleigh office. In 2002, IP Worldwide magazine ranked Alston & Bird No. 3 on its list of IP firms most frequently used by Fortune 250 companies.