Section 5.3. A Primer on Intellectual Property

5.3. A Primer on Intellectual Property

Dual licensing, when you first encounter it, can seem like a parlor trick. How can I possibly charge money for software that you can get for free?

There is, in fact, no sleight of hand. Nobody gets tricked. Dual licensing requires some care, and the same diligence that most businesspeople bring to their jobs, but it turns out that governments around the world want businesses to be able to do this. They have constructed legal infrastructures that permit all sorts of businesses to make money with confidence. All it takes is to behave like a business and comply with the law.

Understanding the mechanism here is easier with some background in intellectual property law. Most software vendors make money by charging fees for an intangible productalgorithms and their implementations as expressed in computer code. All these businesses, including dual-licensing businesses, exist because of crucial legal concepts regarding intellectual propertyconcepts such as ownership and license grants.

5.3.1. Ownership

Ownership of real property is easy to understandmy ball, your house, her island. Ownership of something intangible like the expression of ideas, is harder to understand. Over several centuries, governments have created rules about who may and may not make copies of artifacts like books and music. This "copyright" law balances the interests of the creator of a workan author or a composerwith the interests of consumers who purchase those copies. Copyright law clarifies issues and resolves disputes among authors and readers. Copyright law has been adapted to apply to software, balancing the rights of software authors with those people who license and use their computer programs.^[1]

^[1] The bodies of law dealing with trade secrets and patents are also both important to businesses, but are beyond the scope of this discussion. Patents in particular complicate open source software development and distribution, and are something of a lightning rod in the debate between proponents and opponents of open source.

Copyright law worldwide generally says that the creator of an expression of an idea owns that expression. From the point of view of a computer programmer, this means that whoever writes a program owns the program. If the programmer copied parts of it from somewhere else, of course, he was not the creator of those parts, and he does not own them.

Unless the owner expressly assigns his rights to someone else, he owns his creation. Most employment agreements include just such an assignment provision, so the code a programmer writes for his job instantly becomes the property of his employer. The Free Software Foundation, an important organization in the free software movement, requires such assignment for any contribution to projects that it manages.

Without an explicit assignment, there can be many different owners of a large software product. This is exactly the case with many open source projects, including Linux. If 10 developers collaborate on an open source package, each of the 10 owns the pieces she produced. None of them owns the entire work.

5.3.2. Licensing

Except in very rare circumstances, no one ever buys computer software. The person who created the work is its owner; a purchaser only buys certain rights to use the copy of the software in his possession. This distinction is critical to businesses that build software products. These businesses do not sell ownership. Instead, they sell licenses to the software, where "licenses" generally means a collection of rights to copy, run, and use the software product.

The owner is allowed, under the law, broad latitude to set conditions on use of the software. If someone wants a license to use the software, the owner can require that person to do any number of different things in exchange for the license.

Most proprietary software vendors require payment of a fee. This has been a remarkably successful business strategy for many decades, producing a number of billion-dollar software companies.

Open source software licensing does not require payment of a fee. The owners of open source software do impose other conditions on their open source licensees. Those conditions vary, depending on the open source license in use, but two broad categories are most common:

• Reciprocal licenses require that any recipient promise to contribute back any changes or additions to the software. Reciprocal licenses are coercive; they essentially enforce sharing. The most common reciprocal license in use is the GNU General Public License, or GPL.

• Academic licenses usually require very littleoften, just acknowledgment of the original owner's work on the software. Academic licenses encourage reuse of other programmers' work by making it available on liberal terms. The most popular academic license in use is the Berkeley Software Distribution, or BSD, license.

In both the proprietary and open source cases, the owner of the software sets the conditions that others must meet to use the software.

The owner is allowed to set different conditions for different people. This same situation applies to real property: you might allow your brother to sleep in your spare bedroom for free, but probably would not let me do that on the same terms. At best, I could hope to pay you rent for use of the room. Likewise, the owner of a piece of software can grant different rights, on different terms, to different people.

This is common in proprietary software businesses. For example, if you buy a computer with an operating system and a word processor installed, you are most likely permitted to use those packages, but not to make copies of them for others to use. By contrast, the computer manufacturer is allowed to copy, install, and distribute both pieces of software to you and to others. The company that owns the operating system and word processor chooses to grant the computer manufacturer broader rights than you have, because the owner's goal is to make money in business, and creating a distribution channel that generates license fees is a good way to do that.

The fundamental point to remember is that open source licensing rests on the same foundation that proprietary software businesses use for their own licensing: copyright law and the notions of ownership and licensing that inform it. In both the proprietary and open source cases, the owner grants licenses to use the software under certain conditions.

One main benefit of being an owner is having the right to set those conditions.