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How to Ensure Open Source License Compliance in Your Business


How to Ensure Open Source License Compliance in Your Business

If you’re using open source code in your operations, you’ll want to manage things properly or potentially face legal issues, financial penalties, and damage to your reputation.

You don’t need a law degree to avoid problems, but you should definitely familiarize yourself with some basic principles.

This article comes from my Complete LPI Open Source Essentials Exam Study Guide Udemy course and book. You can also view the video version here:

We’ll begin with some best practices:

  • Conduct an inventory of all open source software used in your business workflow, including third-party libraries and dependencies. This will help you identify the licenses and terms of use associated with each piece of software. You’ll also want to implement a system for tracking licenses and their terms of use. This can include using tools or software that automatically identify open source software and their associated licenses.
  • Create a license policy that outlines the procedures and guidelines for using open source software in your business workflow. This policy should be communicated to all employees and stakeholders involved in the software development process.
  • Use only approved open source licenses that comply with your license policy. This can help you avoid legal issues and ensure compliance with regulations.
  • Monitor changes to open source software licenses and updates to ensure continued compliance. This can include subscribing to notifications or alerts about license changes and updating your license inventory accordingly.
  • Document all steps taken to ensure compliance with open source licenses, including license reviews, approvals, and renewals. This documentation can help you demonstrate compliance in the event of an audit or legal challenge.

That sounds like a lot of work. Well, you might consider creating an Open Source Program Office. Let’s see how that works.

Open Source Program Offices (OSPO)

An OSPO is an organizational unit or team within a company or organization that’s responsible for managing open source software and its use within the organization.

An OSPO helps organizations effectively manage the use of open source software by providing guidelines, policies, and procedures that ensure legal and regulatory compliance, proper usage, and contribution to the open source community.

The OSPO can also help organizations to establish a strategic direction for open source use, including identifying opportunities for collaboration with other organizations or contributing to industry-wide initiatives.

Typically, an OSPO is responsible for ensuring that the organization complies with the terms of open source licenses, including understanding license obligations, tracking license usage, and managing compliance risk. It’ll also work to:

  • Build relationships with the open source community, contributing to projects, and promoting internal contributions to open source projects
  • Develop and implement policies and governance frameworks that guide the organization’s use of open source software
  • Develop and execute strategic plans for open source software use within the organization
  • Provide training and education to employees and stakeholders on the use of open source software, including compliance, governance, and community engagement.

There are some useful business tools that can help simplify the administration of your software resources.

Software Package Data Exchanges (SPDX)

A Software Package Data Exchange, for instance, is a standard format for exchanging data related to software packages, including open source licenses, copyrights, and other related information.

SPDX is intended to simplify the sharing of information between developers, software vendors, and other stakeholders in the software supply chain. SPDX provides a common language for describing software packages and their associated licenses, making it easier to understand the terms of use and comply with license obligations.

The primary purpose of SPDX is to promote license compliance and facilitate the management of open source software. SPDX allows developers and organizations to easily identify the open source software components in their software products and track license obligations associated with each component.

The Software Bill of Materials

A Software Bill of Materials (SBOM) is a list of all the components and dependencies that make up a software application or system. The SBOM provides information about the software’s components, such as open source libraries, commercial software components, and proprietary code.

The goal of an SBOM is to improve transparency and accountability in software supply chains by providing a detailed inventory of the software components used in a product.

An SBOM typically includes information about the version, license, and origin of each component. An SBOM can help identify security vulnerabilities in a software system. By providing a complete list of all software components, developers and security teams can more easily identify and address security risks.

An SBOM can also helps ensure compliance with open source licenses and other legal requirements by providing information about the licenses associated with each component. And an SBOM can help manage supply chain risks by providing visibility into the software components used in a product. By knowing what components are used and where they come from, companies can more easily assess the risks associated with each component and make informed decisions about their use.

We should also take some time to talk about lawyers. Or, at least, the things that might get lawyers all excited. By which I mean to say that open source business models can carry legal risks, including risks related to product liability and export regulations. It’s important for companies that use or distribute open source software to understand these risks and take appropriate measures to manage them.

Product Liability

Product liability is a legal concept that holds manufacturers or distributors of products liable for any harm caused to consumers by defects in the products. When a company uses or distributes open source software as part of its products, it assumes responsibility for any defects in the software that could cause harm to consumers. This could result in legal claims for product liability, which can be costly and damaging to the company’s reputation.

To manage product liability risks associated with open source software, companies should implement effective quality assurance processes to ensure that the software is free from defects and meets industry standards. Companies should also work closely with their legal teams to understand the legal implications of using and distributing open source software, including any potential product liability risks.

Export regulations are another area of concern for companies that use or distribute open source software. Export regulations are laws and regulations that govern the export of goods and technology from one country to another. These regulations can restrict the export of certain types of technology or require companies to obtain licenses or certifications before exporting certain types of products.

Like any other technology, open source software can be subject to export regulations. Companies that use or distribute open source software should be aware of these regulations and ensure that their use and distribution of open source software comply with all applicable laws and regulations.

Mergers and Acquisitions

One more lawyerly thing: mergers and acquisitions can have a significant impact on the use of open source software within organizations. When two companies merge or one company acquires another, they may have different approaches to the use of open source software and different policies and practices for managing open source licensing and compliance. This can create challenges and risks related to the integration of open source software.

One potential impact is that the acquiring company may need to conduct due diligence to understand the open source licensing and compliance practices of the acquired company. This can be a complex and time-consuming process, especially if the acquired company has a large and diverse software portfolio. The merged company may also need to reconcile different approaches to open source licensing and compliance. For example, if one company has a more permissive approach to open source licensing than the other, the merged company may need to develop a new policy or approach that takes both approaches into account.

Mergers and acquisitions can also impact the use of open source software in terms of product development and innovation. For example, if the acquiring company has a different technology stack or development process than the acquired company, it may need to integrate or replace open source components used by the acquired company. This can result in delays and added costs.

And don’t forget that mergers and acquisitions can also impact the open source community. If a company that is an active contributor to an open source project is acquired, the new company may change its approach to the project or reduce its contributions. This can have a negative impact on the project and the community that supports it.


The bottom line? Building software can be fun and profitable and can change people’s lives in positive ways. But, if you’re not careful, it can also get you into a lot of trouble.

So take some time to educate yourself on your business and compliance responsibilities.

This article comes from my Complete LPI Open Source Essentials Study Guide course. And there’s much more technology goodness available at bootstrap-it.com

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