If you run a software based business and you are looking for growth capital or a venture capital investment, you are most likely making use of some third-party code with your software. There is nothing wrong with utilizing these third-party codes, for it is very common now (and probably a best practice as well). So what is your procedure to evaluate and track this code and the related license terms (remember I am an attorney)? Well, here are 3 thoughts that may possibly help:
Think through (a) when it makes sense for your firm to use open source code (possibly with functionality that is not core to your offering), and (b) what varieties of licenses you will permit and won’t (perhaps attempt to steer clear of GPL licenses if you distribute your code to your customers). For example, you may permit licenses which only demand attribution/notice. Oh yeah, don’t overlook the need to write this up and communicate it to all your developers (and contractor developers). See below for an instance of attribution wording:
It’s important to track where you utilize the open source code and the related license terms and luckily it’s very effortless to do. Your course of action can seem as straightforward as a spreadsheet with the name of the open source code, an outline of your goods (and version) with which it is included, any license requirements and a copy of the license agreement. This tracking process is extremely straightforward if you implement it as you go, and truly difficult to re-create if you will need to perform it years later when somebody (an acquirer or your CEO) needs to know what open source code is embedded in your product.
While many people today overlook this, whoever is heading up your open source process (and I suggest you place one person in charge who owns this policy) ought to annually review what your developers (including any developers who are truly contract developers) know and adhere to your policy.
I could make this a good deal more complex, but I find that a software company looking at its company exit strategy demands at least these three simple steps and not necessarily the 25 page open source policy.
Disclaimer: This is not intended to serve as legal advice. It is provided for educational and informational purposes only.
Jeremy Aber is a Senior Adviser at OpenView Venture Partners. He works with the portfolio companies on value add-legal initiatives as part of the Organization/Operational Team of OpenView Labs.