Software Agencies Ignore These Open Source Risks - Are You?

Good day guys, in today's newsletter I want to share a quick topic with you!

Recently I was on a call with a Software Agency owner.

Now this owner asked me about the use of "Open source software" (OSS).

A lot of you might know already - it’s free, flexible, and available to anyone. But here’s the catch:

It comes with strings attached.

Where The Appeal Lies

For many web agency owners, OSS seems like a no-brainer.

It offers a good variety of tools and functionalities that can be integrated into your projects.

And that too without the need for costly licensing fees.

The flexibility to modify and adapt the software to fit your specific needs is particularly attractive.

But sometimes, the freedom that OSS offers is not without its limitations.

And these limitations can have serious consequences if not properly understood.

Common Mistakes Software Agencies Make

Many agency owners dive into OSS without fully understanding the licensing terms. So let me help you understand what they can be.

1) Assuming OSS is “Free” in Every Sense:

Many agency owners believe that because OSS is free to use.

They can incorporate it into their proprietary software without any strings attached.

Well... while OSS is free to use, it can come with specific licensing requirements.

For example, licenses like the GNU General Public License (GPL) require you to disclose your source code if you distribute the software.

And ignoring these terms can lead to legal disputes and demands that you make your proprietary code public.

A scenario that could undermine your entire business model.

2) Ignoring the Fine Print:

Some agency owners assume that the licensing terms won’t apply to them or that they can simply overlook certain clauses.

But OSS licenses are legally binding agreements.

Ignoring the fine print can lead to serious consequences.

For example, suppose you integrate the GPL-licensed code into your proprietary software.

And you don't follow the license’s requirements.

Then the original creators of the code can file a legal claim against you.

This can result in 2 situations.

Either costly litigation.

Or you will be forced to release your proprietary code to the public.

3) Assuming No One Will Notice:

Some companies use OSS without complying with the license terms, assuming that the original creators will never find out.

But the internet makes it easier than ever for developers to track the use of their code.

And if you’re caught violating the terms of an OSS license, you could face legal action. But that's not all.

You can seriously damage your business operations and your reputation.

4) Relying on Verbal or Informal Agreements:

Some agency owners try to sidestep licensing issues through informal agreements.

Or by relying on verbal assurances from developers.

Again, informal agreements and verbal assurances are not enforceable in court.

If a dispute arises, the written terms of the OSS license will take precedence.

And that leaves you vulnerable if you haven’t followed them.

The Real Cost of Ignoring OSS Licensing Terms

Let me help you understand this better with an example.

Suppose you decide to integrate GPL-licensed code into your proprietary software.

You don’t disclose the source code, thinking it’s no big deal.

A year later, the original creators of the GPL code discover your software and file a legal claim.

Now, you’re faced with a nightmare scenario.

Either release your proprietary code to the public or face a costly lawsuit.

This situation is more common than you might think.

And that's why it's important to review the OSS licensing terms carefully before open-source code in your projects.

Because if you fail to do it, then you can face issues like:

1) You could face lawsuits or legal claims for non-compliance with OSS licenses.

And that normally leads to costly settlements or court battles.

2) You might be forced to modify or remove OSS components from your software.

And that disrupts your product and delays your business operations.

3) In some cases, you could be required to release your proprietary code to the public.

And that could destroy your competitive advantage and business model.

Then What To Do Instead?

To avoid such situations, there's a couple of steps that I recommend.

Step 1 - Properly Review OSS Licenses

Before integrating any OSS into your projects, carefully review the licensing terms.

Make sure you understand what is required of you, particularly concerning source code disclosure and redistribution.

Step 2 - Just Get Help

Instead of trying to figure out the terms, you can outsource it.

Legal firms like ours do this daily. We know where to look and what to look for.

Sure it might cost you early on, but at least that keeps you safe overall.

Step 3 - Have A Compliance Procedures

Make sure to establish internal procedures to ensure compliance with OSS licenses.

This could include keeping detailed records of the OSS components you use, along with their respective licenses and obligations.

Step 4 - Look at Alternatives

If the terms of an OSS license are too restrictive or pose too much risk, you can always use alternative software solutions.

Something that offers the functionality you need without the same level of legal risk.

Final Words

Don’t let the strings attached to OSS become chains that bind your business. (sounding very fancy while writing this)

Take the time to understand the licensing terms before you integrate any open-source code into your projects.

Because you are only doing that for your business protection in the end.

And that's what's important - the long-term growth.

Btw, whenever you are ready, there are 3 ways I can help you out:

1) Book a 1:1 Call - In 30 minutes, I'll share the exact strategies I use to protect businesses like yours. Whether you’re just starting out or running an established company, there’s always something new to learn. With 5 years in the game and over 400 projects completed, I’ve got the insights you need to protect your business.

2) Legal Clarity for Entrepreneurs - Legal headaches holding you back? Grab "Legal Clarity for Entrepreneurs" and get the answers to your biggest legal questions. This guide is designed to be thorough yet easy to understand, so you can quickly gain foundational legal knowledge and know where to look for further information.

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Talk to you guys soon!

-- Akhil Mishra