The Open Source Alternative: Understanding Risks and Leveraging Opportunities

Chapter 17. Open Source in Mergers and Acquisitions and Other Transactions^[286]

The treatment of open source in mergers and acquisitions (M&As) and other transactions has grown with the popularity of open source and with the adoption of open source by commercial technology developers. When open source was relatively unknown and considered within the purview of hobbyists, most agreements relating to technology licensing or development sought primarily to exclude open source. However, as open source has become more popular, and particularly more popular in commercial technology development, the treatment of open source in commercial agreements and mergers and acquisitions has necessarily become more sophisticated.

In the 1990s, when contracts relating to routine technology development and licensing generally contained nothing about open source, representations like the following were common in a merger, acquisition, or investment agreement:

The Company Intellectual Property^[287] contains no software source code that is covered by a so-called "open source" license. For purposes of this paragraph, "open source" is any software that is made generally publicly available in source code form.

This kind of representation demonstrates a few of the problems that arose in negotiating agreements when awareness of open source was minimal. For instance, the definition of open source in the language above is too broad. Many kinds of software are, of course, available in source code form regardless ...