FOSS license compliance in the consumer electronics market

by Shane Coughlan & Armijn Hemel
First published September 14, 2009 on

This article is an opinion piece and does not contain legal advice. The authors are not lawyers.

Free and Open Source Software (FOSS) license compliance is a contentious topic. There are different perspectives about when and how license terms apply, about which licenses can be used together, and about how potential issues should be resolved. The consumer electronics market is an area where FOSS license compliance is particularly problematic. This is primarily attributable to economic reasons rather than dishonesty, but in a market worth more than $335 Billion in 2008, it is an issue worth exploring.

Due to the relative youth of the FOSS ecosystem, there is a lack of case law and best practice information available. In the past, one of the few resources available to the community was Debian Legal, and businesses had little beyond Open Bar (USA) and ifrOSS (EU) to support them.

That situation is improving. Organizations like FSF’s Free Software Licensing and Compliance Lab,, FSFE’s Freedom Task Force and Software Freedom Law Center (SFLC) have helped push professional legal and business approaches to the forefront of FOSS discourse. The recent launch of the International Free and Open Source Software Law Review has provided a neutral platform for future discussions. As FOSS has matured so too has the level of information accessible to support businesses and projects.

The consumer electronics business

Consumer electronics are sold in high volumes for low margins, and competition in the market is fierce. The majority of sales take place during the first three months after launch and consumers focus on price and functionality when selecting new technology. Products are developed in Asia by original device manufacturers (ODMs) and original equipment manufacturers (OEMs) and shipped in completed form. There are few western companies doing their own development, and even those with in-house skills are unlikely to build a finished product themselves.

ODM/OEMs may develop products for competing western companies using a single board to save money. A board design and Software Development Kit (SDK) is provided by an upstream supplier like the chip vendor, the ODM/OEM will add hardware or software functions, and the finished system is placed into customized casings. Purchasing companies can label these variants as their own by adapting control panels, contact information, and documentation.

During this process issues can arise regarding license compliance. FOSS originating from a chip vendor may be supplied with incomplete source code to the ODM/OEM. If the source is supplied in complete form it may later be customized by the ODM/OEM and only partially re-integrated into source tree. The marketing team may forget to place licenses or written offers for source code in the product manuals. The list of potential points of failure is lengthy.

The fundamental issue is simple. If FOSS code and changes to that code are not integrated into source releases, or if other terms of popular licenses are not met, then compliance issues can occur. This problem is compounded when one board with a problem appears in devices supplied to a number of western companies. A host of violation reports spanning a dozen European and American businesses may eventually point towards a single mistake during development at an Asian supplier.

Why violations occur

There are many types of FOSS compliance issues. The specific issues depend on the license being used, but may include people forgetting to add a copy of the license text to products, forgetting to include the source code with shipped binaries, or having no policy to handle source code requests after providing a written offer promising this service. There is often a disconnect between support, website maintenance, and legal departments, so even correctly prepared material gets lost in the shuffle. At first glance it can appear daunting to perform due diligence.

However, FOSS compliance is not inherently more complex than proprietary compliance, and compliance in general is not so difficult as to be excusably ignored. There is even a field called compliance engineering where external specialists or in-house staff check that code shipped in products meets the required license terms. The problem for the consumer electronics market is that compliance engineering is perceived to endanger profit. There are two reasons for this.

The first reason is that market timing is extremely important, and a delay reaching consumers could mean being beaten by the competition. Compliance engineering with any reasonable fidelity will take a few days, and when companies will only have one or two test samples of the product available for checking functionality, it’s hard to find a way to schedule time for compliance checking. Furthermore, any questions raised will have to be answered by the supplier and potentially other parties in the supply chain. Any missing source code will have to be located and integrated in the SDK. If there is missing code or a supplier in the chain who simply won’t release required code (and this happens more than you might imagine), then it is possible that a device will face months of delays.

The second reason is that the cost of compliance engineering may drive a product out of profitability. A transaction cost of €1,200 for checking one device is reasonable given the current market rates, and this sum is a lot of money in the consumer electronics market. The initial release of a product is often a test run to check demand, and may consist of as few as 200 devices being made available to the public. A compliance check at this stage would raise the price of the product by €6, and while justified by law – license compliance is not based on quantity shipped – it may be difficult from an economic perspective. Even after the test run is complete and additional orders are made, if the company plans to ship 10,000 or fewer devices the cost per unit is still at least 12 cents.

Because of these two pressures the companies involved often don’t spend too much time trying to understand FOSS licensing or putting the infrastructure in place to ensure compliance. They may see themselves as facing a choice of shipping non-compliant software and risking a court case or facing a market loss from missed sales. With court cases relatively rare in FOSS today, risking a legal challenge may appear to be a less painful option than the alternative.

Whether this perception will continue is debatable. has made what appear to be permanent changes to how businesses approach FOSS in Europe since 2004, and SFLC have started to become pro-active in seeking compliance for projects in the USA. Community tolerance for negligent behavior by commercial entities is waning.

This market adjustment is predictable given the status of FOSS technology. The European Commission estimated that the ecosystem of FOSS applications with reasonable quality control and distribution in 2007 was worth around €12 billion. The cost of obtaining this code is adherence to the license terms, and with rising value creators are naturally less tolerant of misuse then they may have been when FOSS was still in its infancy.

What developers can do to protect their rights

Developers who own the copyright on code have various ways to ensure people obey the licenses. If you are not a copyright holder on code but have found clear evidence of a violation it is a good idea to tell the copyright holders. Ensuring fair play with using the licenses helps maintain confidence in the FOSS ecosystem. It means people can make a decision about how their code will be used and be reasonably sure everyone will stick to the terms.

Perhaps the most important thing when assessing violations is to get the facts right. SFLC’s Legal issues primer for Open Source and Free Software projects can assist with this, as can its Practical guide to GPL compliance. The second most important thing is to be fair and professional. Emotion or lack of understanding won’t help correct a problem and it certainly won’t help foster a potentially useful working relationship.

If you are pretty sure a violation has taken place you can decide what route to take regarding enforcement (if you are a copyright holder) or informing the code owners (if you are not a copyright holder). The first step for everyone is probably to document everything carefully. FSFE and published a brief document on reporting and fixing license violations that explains some of the key points that you need to cover. The suggestion is that you should make a report with:

  • The name of the product affected
  • The reason why a violation is believed to exist
  • The name of the project code that may have been violated
  • A statement regarding what license this code is under
  • A link to the project site

This information can then be used by you, the affected project, your lawyers, the infringing company, or a third party like, FSFE, FSF or SFLC, to examine the situation as applicable. Avoid doing things like forwarding email threads or inserting commentary as this makes it difficult to assess the situation.

For copyright holders there is an established formal mechanism to enforce copyright through legal action. This can be done by taking an infringing party to court or by seeking an out-of-court settlement. There is no doubt this approach is effective, as members of the project can attest, though it can also be costly in time and initial fees. Other avenues for correcting misuse of licenses also exist and may be quicker in some circumstances. For example, informal discussions can work with accidental infringement, and mediation by FSFE’s Freedom Task Force or FSF’s Free Software Licensing and Compliance Lab has also proven to be effective in the past. When it comes to legal advice, independent professionals like Carlo Piana provide excellent advice for both developers and companies with concerns.

Gaining compliance is most often an educational exercise. FOSS has a lot of a new adopters and many of the commercial entities using code in the consumer electronic market come from a proprietary background. That’s no excuse for not understanding the licenses, but it is a strong case for considering how these companies can be turned into good community citizens. Productive compliance efforts should use carrots and/or sticks to encourage people to communicate and cooperate with the code creators, projects, and other businesses in this area.

Punishment is not the name of the game. Working together in good faith is.

About the authors

Armijn Hemel is a technology consultant with Loohuis Consulting in The Netherlands and the primary engineer for the project.

Shane Coughlan is a business and technology consultant with Opendawn in Japan. He is an expert in Free/Open Source Software licensing, standardization, communication methods and business development

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