Subject: Re: licensing adn open source business models
From: Michael Bauer <>
Date: Fri, 18 Jan 2002 16:56:21 -0500 (EST)

I've been working on something I call "Open Corporations" 
(").  Basically, it's a 
summary of thought that advocates establishing a formal legal entity 
around an open source project.  This entity manages the intellectual 
property on behalf of the open source developers in such a way that 
supports both the open source developers and more scalable business 
models.  An Open Corporation uses "Common Source"  licenses for the 
software that support it's "free" use in most contexts,  but simply 
requires fair compensation for use when distributing 
revenue-generating derivative works.  

The essay draws on a number of other ideas such as those proposed in the 
Democratic Software license.  It tries to simplify things a bit by leaving 
the definition and allocation of "equity" up to a corporation rather than 
defined in a license.  It also provides a currently informal analysis of 
traditional open source business models.  Food for thought.

On 18 Jan 2002, David wrote:

> Please find below a copy of an email I sent to the license-discuss
> mailing list and received some very good replies.
> Ideas received are free for non commercial use (including education etc.
> ) and also the delayed public license model. I would like to hear
> opinions from this list on my issues if possible.
> Thanks in advance
> _____________________________________________________________
> Hi,
> Sorry for the email I am looking for some advice on licensing, I am not
> looking for legal advice simply some helpfull tips that I will not hold
> anyone to.
> I have a company with a software product that runs on a linux distro
> (based on an RPM distro). Thsi product is a small business server with
> simple web admin and apps included (email , schedule, doc management,
> crm etc.).
> I have spent a lot of my own money and some more (over $300,000) in
> development etc. now we have no cash to launch the product. I have
> always looked at open source and really wish to be involved in that area
> (especially as we use it). I have approached a Linux magazine in the UK
> and they will put the cd out on their magazine and help launch an open
> source version - thats great.
> My issues
> 1: I do not want to be a services only company, in fact I want to sub
> contract most services (maybe even zope type model).
> 2: I do want to be able to sell the system for a profit.
> 3: I do want to make source avaliable to let developers and interested
> parties get involved in the system.
> 4: I would like to employ only developers who actually contribute to the
> project and pay them for development.
> 5: I would like many to get the system free (education etc.)
> 6: I would like to ensure nobody can steal the product or at least delay
> thsi until we are a substanical company (if we are not good then
> somebody should fork but I would prefer a fighting chance).
> I have seen a lot of pseudo open source stuff about even GPL'd and do
> not want to do that (I am talking about companies that elease stuff that
> would be almost impossible to develop with, little documentation and
> hard to find recent source). I have also seen companies blindly going
> GPL and trying to become service based and failing (I feel developers do
> not automatically become good service providers).
> I would like to seek a way of giving away open source perhaps in a
> restricted manner to begin with and then gpl or similar when we have
> some steam. I am not interested in the make no profits type argument as
> I do want to make a living and pay others to do the same. 
> I hope that open source like this can allow developers to easily market
> products (by mostly giving away the code or charging a pitance for it).
> This negates the big business getting involved and basically stealing
> the company or forcing a model that is not compatible with the original
> developers (through funding for blood).
> If anyone has any suggestions I would be delighted to discuss.
> David

Michael Bauer