Intellectual Property Rights and Open Source Software – A Cocktail Case Study

Introduction

This article explores the interplay between intellectual property rights (IPR) and open source software (OSS) and considers whether OSS and IPR can co-exist.

First, it is necessary to consider what OSS actually is. Wikipedia® gives the following definition (https://en.wikipedia.org/wiki/Open-source_software):

“Open source software (OSS) is computer software that is released under a licence in which the copyright holder grants users the rights to use, study, change, and distribute the software and its source code to anyone and for any purpose.”

The Open Source Initiative® (https://opensource.org/osd) suggests that a licence is an open source licence if it meets many requirements, including requiring that the source code is disclosed, that modifications can be made and that such modifications may be distributed under the same terms as the licence of the original software.

There are other definitions, but it is clear that OSS is software that is released under an open source licence. There are many types of open source licence, with varying rights and obligations.

This article considers whether it is possible to use open source software when developing products for a business and also use IP rights to protect those products and, if so, what issues need to be taken into account. These issues are explored in the following fictional case study.

The Scenario

Assume that you have a successful small business that sells cocktails in cans. The cocktail is hand-mixed, which limits production. You have a plan to upscale.

You have developed a mixing apparatus that seeks to replicate your hand mixing. The apparatus has input taps that control the flow of the cocktail ingredients, and a motor to drive the mixing. You have also devised algorithms to control the apparatus and are currently developing software code to implement those algorithms.

You plan to develop the mixing apparatus, with a view to making fairly small batches of the cocktail in the short-term. This will serve as a proof-of-concept phase. The longer-term plan is to sell the technology (and the intellectual property protecting that technology).

The Software Code

The cost of developing software code for your system from scratch is high, but your software developer has identified OSS modules that could significantly reduce both the time and cost of developing the software.

As shown in the figure above, two code modules are envisaged: an “Ingredient Selection” module and a “Mixer Control” module.

The Ingredient Selection code can be modified from an existing OSS selection algorithm. This requires a simple tweak to the software that will take almost no time at all.

The Mixer Control code is more complex and will require the writing of bespoke software code. Even here though, a number of OSS modules can be reused; for example, many sensors are required (e.g. temperature sensors and pressure sensors), which are available with OSS modules for translating module inputs and outputs. Such modules would be called by the main (bespoke) Mixer Control algorithm.

OSS Licences

What impact does the use of OSS have on the plan to sell the intellectual property in the cocktail-making business? The short answer is that it depends on the licence terms.
As discussed above, OSS is software that is released under an open source licence. An OSS licence is a legal agreement between the author(s) of the code and the user(s) of the code. There are many types of licence, but they are generally in one of two groups:

“Permissive” OSS licenses typically give the freedom to make, use, modify and share the software, but with the right to develop proprietary derivative works. They typically have very light-touch requirements, such as keeping copyright notices and disclaimers in the code. Examples include BSD, MIT and Apache.

“Restrictive” OSS licences typically give the freedom to use, modify and share the software, but with a requirement to provide a licence to the modified software on the same terms. Examples include Gnu public licence (GPL) and Mozilla Public Licence (MPL).

Impact of OSS on IP Rights

In this case study, the intention is to develop a portfolio of IP rights that could be sold with the technology. Key IP rights here might include trade secrets, patents and copyright.

Trade Secrets

The cocktail recipe itself (and the ingredient selection code) is potentially a valuable trade secret. If the code on which the Ingredient Selection code is based has a restrictive OSS licence, then it may be necessary to share the modified code. This is likely to disclose your trade secret in the recipe (or at least make it impossible to protect the recipe using trade secret principles).

Patent rights

Aspects of the algorithm for controlling the mixing apparatus may be patentable. If the Mixer Control code uses OSS modules that have restrictive licences, these might restrict the extent to which any patent rights in control algorithms for controlling the mixing are enforceable. For example, the terms of the restrictive licence may require that an OSS licence to the modified software (and hence potentially to the patented invention) be made freely available. Moreover, as this is in the same system as the Ingredient Selection module, using such OSS modules might even risk forcing disclosure of the ingredient selection code (and the underlying trade secrets).

Copyright

The software code developed for this project will be protected using copyright, but the extent of this protection will be impacted by the terms of the OSS modules that you use. For example, it is possible that the use of OSS modules relating to

the sensors that are used by the Mixer Control algorithm might impact on copyright protection for the Mixer Control code.

In all cases, the use of “permissive” OSS licences will increase the IP protection that can be obtained and enforced. In reality, there are many forms of OSS licence that exist on a continuum between highly restrictive and highly permissive licences. Thus, it is necessary to fully understand the obligations that follow from each OSS licence that you use.

Final Remarks

This article set out to consider whether open source software and IP rights can co-exist and, if so, what issues need to take into account.

The short answer is that OSS and IP rights can co-exist (particularly, if you are using permissive OSS modules), but care is required.

Issues that businesses should consider when working with OSS include the following:

• An OSS licence is a licence and should be treated as such. Who is responsible within your organisation for agreeing to such licences?
  If you are using OSS software, do you know what OSS licences are relevant? Do you know what obligations you have? Are you sure that you are meeting those obligations? Are you documenting this?
  Software teams are usually under pressure to delivery results quickly. This can increase the use of OSS. OSS is particularly attractive in development/proof-of-concept phases, but such code has a habit of spilling over into end designs. Do you have controls in place to manage this?
  Should you restrict OSS use within your organisation to permissive OSS? Is the answer different for proofs-of-concept and final products?
  Who is responsible in your organisation for answering these questions? Who is responsible for ensuring compliance with any OSS policies?

The answers to these questions will vary from business to business and may vary from project to project with a business. It can be difficult to strike the right balance between giving your R&D teams the freedom to develop concepts whilst ensuring that legal pitfalls are avoided. A good OSS policy, coupled with discussion and training is often critical to striking this balance.