Open Source Software and the Myth of Viral Licensing

Originally published December 15, 2005

Proprietary software vendors sow fear, uncertainty and doubt (FUD) about free and open source software licenses because those licenses are new and different. More notably, open source software licenses threaten their business modes—and they want their customers to believe that those licenses will somehow "infect" their organizations. The truth is that open source software licenses will almost always be more beneficial for consumers than proprietary licenses. Furthermore, open source licenses rarely (if ever) impose more terms on software users that are any more onerous than those imposed by proprietary licenses.

This article is about software licenses, which spell out the rules by which you must play to use the software. Agreeing to an End User License Agreement (EULA) by opening a shrink-wrap package, clicking "OK" for an installer or downloading software from a website means you agree to abide by the terms the software owner sets. If you have questions about the terms of those agreements, you can contact your attorney for definitive answers.

In part one, I will introduce the concept of copyright protection and how it relates to software sales. I also explain why all types of software is licensed, not sold or given away. Using Microsoft's Windows XP Home Edition End User License Agreement as an example of a typical EULA, we can observe some of the restrictions that proprietary software vendors place on their products.

Although proprietary software licenses restrict the rights granted to end users, pioneers of the free and open source software movements believe that there must be a better way to distribute software. In part two we'll start with an introduction to open source and free software licensing, after examining why releasing software without any license (putting it in the public domain) or publishing it as shareware does NOT answer the question "How do I release software free from the constraints imposed by proprietary software licenses?"

Then, we'll look more deeply into the philosophical roots of the Free Software and Open Source Software movements. While most "Free Software" is also "Open Source Software" and vice versa, there are important distinctions between the two. Part two examines these distinctions, and discusses the extent to which F/OSS licenses are "viral," and how terms of F/OSS licenses affect the way you do business.

Part two concludes with a look at different F/OSS licensing approaches including the Free Software Foundation's GNU General Public License (GPL), the MIT license and use of dual-licensing for marketing open source software commercially.

Software and "Intellectual Property" Rights

Copyright protections have evolved in a world of solid things: books, magazines, musical recordings and other media upon which narratives, ideas or other forms of expression are imprinted. Publishers manufacture books out of paper and ink, and immediately sell them. When you buy a book, you purchase the paper and ink on which those words are recorded, but not the words themselves. You can do whatever you want with the book: write in the margins, rip it up and paste the scraps into patterns, even sell it to someone else. This is known as the First Sale Doctrine: the publisher makes it, immediately sells it and has no further interest in it.

But you cannot copy the book’s content and use it in any way that affects the ability of the copyright owner to profit.

Any expression of ideas, fiction or non-fiction books, magazine articles, songs, photographs, motion pictures—or software programs—can get copyright protection. By default, the creator of that expression ("author") owns the copyright. In practice, content publishers purchase some or all of the rights protected by copyright from content creators. The publisher buys those rights so the organization can sell books (or other products) to individuals who may read (or listen or watch) it, loan it to their friends, throw it away, sell it, or give it away.

Software is different because copyright isn't enough. When you buy software, you're not buying content: it's a set of instructions for your computer that are compiled into programs. You are essentially buying the ability to run those instructions on your hardware; you don't need to see the source, you just need to execute compiled code. Proprietary software vendors don't want to expose the internal workings of their software. This would let competitors buy their software and find a different way to express the same ideas, since copyright protects the expression of ideas, not the idea itself.

Another problem is that proprietary software vendors may want to know who is using their software as well. If the First Sale Doctrine were applied to software, they would lose that control. Part of the concern is loss of revenue through the creation of used software markets, but it also complicates how support for old software is provided. Other challenges are distributing bug fixes and security patches.

In addition to copyright, proprietary software vendors add a set of rules, the license, which comprehensively details what rights the vendor is willing to assign to its customers and what rights it reserves for itself. Thus, users are bound by the system of copyright law and the terms of the license agreement.

A Typical Proprietary Software License

With millions of installed copies, Microsoft's Windows XP Home Edition (retail) End User License Agreement (EULA) is one of the most popular software licenses available. This is a good example for various reasons: at about 3,000 words, it is not excessively long though far from a model of simplicity; it incorporates some terms that were initially considered excessive or controversial; and it is otherwise reasonable in the rights granted to the end user.

The first two clauses contain most of the controversy: at the risk of oversimplifying a complex issue, this EULA gives Microsoft a significant degree of control over your system. You must activate your software by registering it with Microsoft; you may have to go through a reactivation process if you upgrade your hardware. You must also allow Microsoft to install Digital Rights Management (DRM) software to mediate your use of certain content. When you do this, you give Microsoft permission to collect certain information about your system.

Otherwise, the license reads much like other contemporary licenses. Clause 3 states: "The Software is licensed, not sold." You only have rights to the software as defined by the license; you are specifically prohibited from examining the code, as spelled out in Clause 4: “LIMITATIONS ON REVERSE ENGINEERING, DECOMPILATION, AND DISASSEMBLY.

You may not reverse engineer, decompile, or disassemble the Software, except and only to the extent that such activity is expressly permitted by applicable law notwithstanding this limitation."

Other clauses address such issues as commercial hosting or software rental (you can't do it), internal software transfer (you can move it from one system to another, as long as you remove it from the first system), and external transfer (you can transfer it once to another user, but you must remove it from your system). A large portion of the EULA addresses what Microsoft warrants (the software distribution only) and which remedies you have (refund or replacement of the media). Under terms of the EULA, Microsoft has absolutely no liability for any damages incurred as a result of using their software. The only exceptions to this are replacing or refunding the cost of faulty distribution media. 

All software licenses, including free and open source licenses, include similar disclaimers of warranty. No software developer will accept responsibility if something goes wrong with their software; virtually all risk in using the software is vested with the user.

Remarkably, Microsoft's (or any vendor's) EULA disclaimers undercut vendor claims that proprietary software is better than open source software because there is a corporate entity "standing behind the product."

Also, many Microsoft products may have other restrictions. For example, the Microsoft SQL Server 2000 EULA forbids disclosing results of any benchmark testing to third parties without Microsoft's "prior written approval."

According to the PowerPoint 2003 EULA terms, "You may not create obscene or scandalous works, as defined by federal law at the time the work is created" using PowerPoint 2003 Media Elements. This goes on to state, "You must (a) indemnify and defend Microsoft from and against any claims or lawsuits, including attorneys' fees that arise from or result from the licensing, use or distribution of Media Elements as modified by you, and (b) include a valid copyright notice on your products and services that include the Media Elements."

This type of license term may place both an individual and an entire organization under significant legal obligations. For example, the PowerPoint 2003 user must be able to identify works that could be construed as “scandalous.”    


It is easy, yet uninformative, to view free or open source software as software you can download for free, and proprietary software as software you can buy. Whether the software is free, open or proprietary, its use is governed by copyright and the license terms under which the software is published.

Proprietary software licenses are often complex legal documents that sometimes contain frighteningly restrictive terms (for the end user). Similarly, free and open source software licenses incorporate clauses that put restrictions on how software can be used. In all cases, the license dictates restrictions; if you want to benefit from the licensed software, you must agree to the license terms.

Next month, I’ll closely examine the emergence of free and open source licenses, and how they differ from proprietary licenses. I will discuss how software freedom tends to encourage better software as free and open source software licenses differ. I’ll also examine how they are used, whether alone or in conjunction with other licenses, to produce software that is both high quality and profitable.

  • Pete LoshinPete Loshin

    Pete is Founder of, an open source and open standard computing consultancy providing technology assessment, needs analysis and transition planning services for organizations seeking alternatives to commercial software. Pete has written 20 books, including “TCP/IP Clearly Explained” 4th Edition, Morgan Kaufmann, 2003) and “IPv6 : Theory, Protocol, and Practice,” 2nd Edition (Morgan Kaufmann, 2004).

    Pete can be reached at or at 781. 859.9175.

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