Big Legal Issue Blockchain developers rarely discuss

Mark Radcliffe and Victoria Lee are partners of the DLA Piper law firm.


Software licensed under open source licenses (OSS) is critical to the success of blockchain projects. These licenses allow collaborative and decentralized development, encourage rapid adoption by users and allow the community to "shape" the project to resolve strategic disputes.

In reality, OSS licenses are used by both the major public blockchains, ethereum and bitcoin, as well as many other important blockchain projects, including the HyperLedger and R3 & # 39; s Rope programs.

However, OSS licenses are generally quite different from traditional proprietary software licenses. The importance of selecting the right OSS license and respecting the terms of this license is rarely discussed by the blockchain community.

If blockchain projects look for business adoption, the OSS project license will have a significant impact on the adoption rate. Even for established projects such as ethereum, potential business users carefully consider the OSS licenses that could be used.

For example, IBM's Jerry Cuomo recently noted on the Blockchain Innovation podcast of Frederick Munawa that the complexity of the OSS licenses for ethereum was the reason why IBM decided to move from ethereum to its blockchain project, which eventually it became part of the HyperLedger project.

Potential business users of a blockchain project will decide which blockchain project to adopt by adopting the same criteria they use to adopt other projects under the OSS license: (1) the complexity of the OSS project license or licenses; (2) the potential difficulty of fulfilling the obligations of this OSS license; and (3) the potential challenges of integrating a blockchain project with other software projects.

The OSS licenses vary drastically in their terms. The Open Source Initiative (OSI) has approved 83 licenses as "open source".

However, the complete complexity of the OSS licenses is suggested by the SPDX project, managed by the Linux Foundation, which has identified 345 "major" licenses; Black Duck Software lists 2,500 versions of OSS licenses in its Knowledge Base, which covers over 530 billion lines of OSS code from over 9000 forges and repositories of open source projects. Black Duck notes that 94 percent of the OSS projects are granted under the 10 best OSS licenses.

The two main types of OSS licenses are "copyleft" and "permissive". Ethereum is licensed primarily with two copyleft licenses: the Lesser General Public License version 3 (LGPLv3) and the General Public License version 3 (GPLv3). On the other hand, Bitcoin Core is licensed under the MIT license, the most popular permissive license.

Licenses Copyleft

The Copyleft licenses impose the most restrictive terms on the use of the OSS. The best-known example of a copyleft license is the General Public License version 2 (GPLv2), which is used for the Linux operating system program.

According to the Black Duck Knowledge Base, GPLv2 is the second most popular license, adopted by 14 percent of the OSS projects. The GPLv3 used by Ethereum is the updated version of GPLv2, published in 2007. The key feature of a copyleft license is its "mutual" provision: the legal requirement that both the original OSS and all the "derivative works" of the # O; original Oss to be distributed exclusively under the terms of the copyleft license. "Derivative work" is a technical term under US copyright law, which describes work based on one or more pre-existing works that represent an original work of authorship.

Copyright law was originally designed to protect books, songs and movies, but also protects software. An example is the Game of Thrones series which is a derivative work based on the series of novels of the same name. Although derivative work usually means software modification, derivative work can be created in other ways: for example, two programs that are compiled together are often considered a derivative work.

However, the application of copyright law to software continues to be uncertain. As a result, the integration of projects with a copyleft license with projects licensed under other OSS licenses or proprietary licenses involves a complex legal analysis.

Compliance with the copyleft license is much more difficult than compliance with permissive licenses: copyleft licenses have more complex obligations and the lack of clarity of software copyright law creates other problems. The OSS community that supports copyleft licenses is very concerned about the misuse of OSS by proprietary suppliers.

This community is quite aggressive in seeking compliance with such licenses from users. Practically all the litigation related to the OSS licenses has been subjected to the application of licenses of author permit.

Permissive License

"Permissive" licenses impose very few terms on the use of OSS, generally requiring only the user to include notifications and a copy of the license. Unlike copyleft licenses, they do not include "reciprocal" obligations

The OSS community that supports permissive licenses generally believes that permissive licenses favor the quicker adoption of an OSS project and that the "reciprocal" terms of licenses copyleft are not necessary for the successful development of a blockchain project.

The best-known example of permissive licensing is the MIT license used by bitcoins. According to the Black Duck Knowledge Base, 38 percent of the OSS projects have adopted the MIT license, making it the most popular OSS license.

Most blockchain projects are not historically focused on the importance of an OSS license choice. However, carefully considering the choice of license and taking the time to understand the differences between compliance and enforcement requirements should allow projects to benefit in the long run.

The choice of the license will not only condition the will of the companies to adopt the project but the chosen license will also determine the philosophy of conformity and the culture of the project community.

Image of the code syntax via Shutterstock


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