Subject: Re: Open Source Business Found Parasitic, and the ADCL
From: John Cowan <>
Date: Thu, 13 Mar 2003 07:38:29 -0500 (EST) scripsit:

> Most open source licenses, including GPL, simply forbid selling the
> software.  I have found no rationale for this.

This is simply false.  The FSF will cheerfully sell you its software; if you
send them money, they will send you one of a variety of CD-ROMs full of
software.  Indeed, this is more than your typical proprietary software
company will do -- they are always very careful to tell you that their
software is "licensed not sold".  Selling software is one of the ways the
FSF pays its expenses.

> However, because of clause 6 (no discrimination against fields of
> endeavor), the open source business must either sell to all recipients
> (including authors of derivative works?) or give away to all.

Section 6 means that the *license* must not discriminate against fields of
endeavor:  it cannot have clauses saying "This program may not be used
by nuclear physicists or long-distance runners", for example.  It does
not mean that software *retailers* cannot discriminate.  The FSF, for
example, does discriminate: it will sell you software at one price if
you are an individual buying for individual use, and another if you are
a corporation or an individual buying for corporate use.

Price discrimination (if you can pull it off) is the standard way of
extracting consumer surplus: sell cheaply to the poor and expensively to
the rich, as airlines and wire services (full disclosure: I work for a
wire service, Reuters) do.

> Also, the general problem depends on an certain interpretation of
> clause 6 itself, whereby "restrict" includes "requiring a fee". (This
> interpretation seems fairly reasonable, but if it is wrong please let
> me know ASAP so I can start selling open source software right away.)

You can certainly sell open-source software for all the traffic will bear.
You just can't extract monopoly rent from those sales; i.e. you cannot
prevent a secondary market that may undercut you if you sell for too much.

"Restrict" means "forbid, or place under such onerous terms as to be
tantamount to forbidding".

> Dual licensing: Copyright owners release under a "spreading" open source 
> license (usually GPL). Users wanting to sell derivatives must obtain a non 
> open source (or just non spreading?) license.

I don't know what you mean by "spreading".  But yes, this is practical and
is often done.

> Problem: Only the copyright owners can sell the closed license. So
> the closed license vendor must own the copyright of all modifications
> made to their product (by the open source community at large). Is this
> feasible? Practical?  Done? (MySQL?)

Yes.  The FSF (back to them again) insist that any contributor assign the
copyright of the contribution back to them, not because they have any
intention of dual-licensing, but because it allows them to be the sole
copyright author for purposes of copyright-infringement lawsuits.

> Another problem: The need to buy a closed license for X lies exclusively
> on the existence of (exclusively) closed software Y the buyer is joining
> with X to form a distributable or sellable product Z. If Y is opened,
> then Z must also be opened, and then, again, bye bye business. Corollary
> (unwanted?): the open source business (dual licensing) is parasitic on
> non-open source business. If everybody went open source, nobody could
> sell software!

And if nobody sold computers, nobody could sell or give away software either.
Elimination of proprietary software is not likely to happen, given that there
are often good business reasons to keep software closed.  

Eric Raymond says in "The Magic Cauldron"

	On the other hand, open source seems to make the least sense
	for companies that have unique possession of a value-generating
	software technology (strongly fulfilling criterion (e)) which is
	(a) relatively insensitive to failure, which can (b) readily be
	verified by means other than independent peer review, which is
	not (c) business-critical, and which would not have its value
	substantially increased by (d) network effects or ubiquity.

> Conditions of Use of MAA Artifacts

It is more than questionable whether any such conditions of use are
enforceable among people who have not signed a contract with the source.
In particular,

>     1.3  The use of any MAA artifact is subject to these conditions. The use,
>     of an MAA artifact, not in accordance with these conditions, is an
>     illegal act.

does not give any theory whereby the use of something can be made "an
illegal act".  Copyright law, at least, does not constrain use.  Patent
law can and does, but I suppose that the creators of MAA artifacts do not
generally hold patents on the subject matter.

John Cowan     
To say that Bilbo's breath was taken away is no description at all.  There
are no words left to express his staggerment, since Men changed the language
that they learned of elves in the days when all the world was wonderful.
        --_The Hobbit_
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