Let me start by first referring to embedded systems. Embedded systems are everywhere.

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2 Let me start by first referring to embedded systems. Embedded systems are everywhere. And we know embedded systems use a lot of open source, both for software and for hardware. 2

3 Kasper just explained a lot about Open Source, mainly in view of Open Source Software. However, the Open Source model is also applied to hardware these days. This basically brings the same advantages and disadvantages as discussed for Open Source Software. However, there are also some differences. The Open Source software licenses are based on copyright law. Copyright has the advantage of immediately appearing as soon as a work is made. Also, since source code is like a work of literature, copyright easily covers source code. Às the copyright immediately appears, it is also easy to grant a license on such work. Now hardware is normally not covered by copyright law. Copyright law covers works of literature, science or art. Maybe a piece of hardware could be considered art, but in any case, protection would at best be no more than a protection of the exterior appearance. Therefore copyright law or copyright licenses are rather poor vehicles for regulating the manufacture and distribution of hardware items. Instead, if you want to protect hardware you would normally opt for patent protection. A patent covers the inventive concept behind a piece of hardware. This prevents others from doing the same. Therefore, for making a system for hardware that functions as the Open Source software system, some sort of patent law equivalent has to be devised. 3

4 An example is the TAPR Open Hardware License. This contains specific clauses on patents for the open source product and how every licensee in turn grants back patent licenses to keep the system free and open. However, often Open Source hardware is licensed not under a specific Open Hardware icense, but simply under a general Open Source license that is normally used for software, e.g. GPL. Now how is this possible? 3

5 The trick is that there are other things related to the hardware product that are susceptible to copyright. In Open Source software the open bit licensed by these copyright licenses was the source code. In Open Source hardware this concerns documentation relating to the product. Such documentation is also susceptible to copyright. Therefore, a license could provide the four freedoms (the freedom to use, study, share and modify) in view of mechanical drawings, schematics PCD layouts, IC layouts or the like. If the entire documentation needed to manufacture a hardware product is Open Source, anyone can make the product. Of course here the same caveat applies. Most Open Source licenses do not provide a guarantee that the product is not covered by third party rights. 4

6 Now you have your product: it s Open Source software or hardware. But how do you keep your company in business. That is, what business models allow you te generate revenu while using open source products. One option is to get your money elsewhere. Your product is free for everyone to use, and free of charge. The money comes from funding organisations, donations for instance by members of the user group or advertising. And as we know the Googles of this world make a lot of money on advertising alone. But if you have a small company making products with a smaller footprint advertising may not generate enough revenue. Another option is to provide additional services. A good example is to provide additional services like support, consultance, and training. The Open Source product itself can then be free of charge, but people may want to subscribe to your help desk. You could even sell executable binaries of Open Source software. Red Hat has been making a decent living by selling Linux. Part of such deal of course can be based on reputation. People trust that you provide the latest most correct version, support etc. One option which basically sidesteps the possible problems associated with Open Source is providing Software as a Service. The trick here is that you do not distribute an Open Source product. You only use it on your own computers or servers and have others 5

7 use it on your servers. Since you do not distribute the software you are normally not bound to limiting clauses like publishing your source code. This option is not that well received with the die-hard Free Software people, as it basically ends the line of free software proliferation. Branded merchandise. The Angry Birds sell well. Although perhaps not all of you will be selling T-shirts. This already points towards the third group: combine Open Source and protected parts. Even though a product is Open Source and as such can be copied by anyone, you could still protect a brand, a the trademark. An example is the Arduino board, an embedded processing board. The entire technical documentation of Arduino is open source. Therefore anyone can make his own board. But only Arduino can call it arduino and put the logo on it. By purchasing a genuine Arduino board, rather than a third party board, people buy certainty or quality. Delayed open-sourcing is a model that mainly reduces costs of maintaining old or obsolete versions of your product. This presupposes that the product can de sold or licensed for money. The most recent version then is offered for money, while older versions are released as Open Source products. The aim is that the free versions attract or maintain enough users so that this community can solve problems themselves, rather than hav you support old products. A popular mdel is dual licensing. The product comes in two flavours. The first is Open Source, normally free of charge and can be used by anyone tinkering in their attic or garden shed. Again, the aim is to get some hobby community to embrace the product. The Open Source license contains a critical clause: the Open Source product may not be used in a commercial product. Nevertheless, if someone wants to use your product in their commercial product they can take a paid license that allows commercial use. Some permissive licenses, such as BSD, allow the work to be distributed under a different license. Therefore, in principle you could take such Open Source product (or create a derived work) and license it under a closed license. Finally (at least on my list today) is actually combining Open source components and proprtietary components into one product. 5

8 When combining Open Source and proprietary features the trick is to know what features represent the value of your product. The value creating features can be linked to unique selling points. If any way possible you could try to protect such features. If you can prevent others from copying these features, you have a unique proposition, a cost advantage or other edge over the competition. The features that do not represent additional value can be the features that are common in similar products. These features do not provide any competive edge. Therefore, for such feature you could try to capture the benefit of Open Source: fast development, low cost, high quality, etc. Finding the value creating features can be a creative process. There are always more ways to tackle the problem. As an example, and I know it is not completely correct but I think it illustrates my point, let s look at the giants that have been fighting the last couple of years: Apple and Samsung. These companies have built their mobile phone business on two different platforms. Apple uses ios, a proprietary operating system, and allows a community to build apps on 6

9 top of that proprietary system. These apps can represent Open Source developments. Samsung, on the other hand, uses Android which is mainly Open Source. The community can build apps on top of that Open Source system. These apps can represent proprietary developments. 6

10 So a business model can be centered around combining Open Source and proprietary features. But, under what circumstances can such features be combined? This question hinges on the license terms that govern the Open Source part of the equation. Things are most complicated when you use Open Source software or hardware under a hard copyleft type license. As we ve seen, if your product cooperates intimately with such copyleft product your product automatically is copyleft and your chances of obtaining any form of protection for your product are minimal. The question of course is what is intimately cooperating?. For software, at least static linking is intimately cooperating. Dynamic linking is a grey area (GPL FAQs say it is). Remote Procedure Calls, System Calls, Plugins, API are mostly ok. But it always has to be assessed on the merits of the case. For weak copyleft requirements are more relaxed. In bold terms, if you modify an LGPL ed libray that library is LGPL, if you merely use a LGPL ed library that can be done with a proprietary product. Finally if you use Open source products of the permissive type you have pretty good chances of combining that with your own development into a protectable product. 7

11 Form the previous slide we take that the precise license of the Open Source part determines whether and how it can be combined with proprietary components into a protectable product. Now if you know this beforehand, you can of course turn this around. If you know what features you want to protect, then you know the interaction of those features with other features. You can then determine which of those other features can be designed in Open Source, and which license types agree with your desires for protection. In practice this means that you can choose beforehand that some parts of your product cannot be made in Open Source. Thus some software components may have to be (re)written in own code, or some hardware components may have to be (re)designed. 8

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