Copyleft/guide Changeset - 5bc647b59144

Changeset - 5bc647b59144

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Bradley Kuhn (bkuhn) - 9 years ago 2014-11-12 02:23:58
bkuhn@ebb.org

Full rewrite of the new M&A compliance section.

Again, upon careful reading of the pasted text, it was clearly not
as useful as it first appeared, and is in fact somewhat misleading.

This rewrite does a better job explaining the necessary focus required
for an M&A situation. The section could use some work, but generally
speaking IMO this new does a better job than both the pasted text and
other texts on the issues I've read elsewhere.

1 file changed with 38 insertions and 17 deletions:

compliance-guide.tex

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compliance-guide.tex

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@@ ... @@
 help you do this, and make it easy.  If those vendors cannot, pick a
 different vendor before proceeding with the product.
 % FIXME-URGENT: Needs a new section
 % \section{Mergers and Acquisitions}
 [GPLv3] Section 10 also clarifies that in business acquisitions, whether by
 \section{Mergers and Acquisitions}
 Often, larger companies often encounter copyleft licensing during a Mergers
 and Acquisitions (M\&A) process.  Ultimately, a merger or acquisition causes
 all of the other company's problems to become yours.  Therefore, for most
 concerns, the acquirer ``simply'' must apply the compliance analysis and
 methodologies discussed earlier across the acquired company's entire product
 line.  Of course, this is not so simple, as such effort may be substantial,
 but a well-defined process for compliance investigation means the required
 work, while voluminous, is likely rote.
 A few sections of GPL require careful attention and legal analysis to
 determine the risk of acquisitions.  Those handling M\&A issues should pay
 particular attention to the requirements of GPLv2~\S7 and GPLv3~\S10--12 ---
 focusing on how they relate to the acquired assets may be of particular
 importance.
 For example, GPLv3\S10 clarifies that in business acquisitions, whether by
 sale of assets or transfers of control, the acquiring party is downstream
 from the party acquired. This results in new automatic downstream licenses
+from the party acquired.  This results in new automatic downstream licenses
 from upstream copyright holders, licenses to all modifications made by the
 acquired business, and rights to source code provisioning for the
 now-downstream purchaser.
 In our experience, the process whereby these matters are adjusted in most M\&A
 situations are ludicrously expensive and inefficient. A simple waiver and
 release of all claims to GPL compliance against the purchased entity by the
 purchaser, issued before closure, removes the problem. If the purchasing
 entity has adequate software governance systems in place, all software
 acquired in the course of the entity transaction is input to the standard
 governance processes for acquired software, and downstream compliance by the
 new merged entity is automatically handled.
 %FIXME-URGENT: END
 now-downstream purchaser.  However, despite this aid given by explicit
 language in GPLv3, acquirers must still confirm compliance by the acquired
 (even if GPLv3\S10 does assert the the acquirers rights under GPL, that does
 not help if the acquired is out of compliance altogether).  Furthermore, for
 fear of later reprisal by the acquirer if a GPL violation is later discovered
 in the acquired's product line, the acquired may need to seek a waiver and
 release of from additional damages beyond a requirement to comply fully (and
 a promise of rights restoration) if a GPL violation by the acquired is later
 uncovered during completion of the acquisition or thereafter.
 Finally, other advice available regarding handling of GPL compliance in an
 M\&A situation tends to ignore the most important issue: most essential
 copylefted software is not wholly copyrighted by the entities involved in the
 M\&A transaction.  Therefore, copyleft obligations likely reach out to the
 customers of all entities involved, as well as to the original copyright
 holders of the copylefted work.  As such, notwithstanding the two paragraphs
 in GPLv3\S10, the entities involved in M\&A should read the copyleft licenses
 through the lens of third parties whose software freedom rights under those
 licenses are of equal importance to then entities inside the transaction.
 \section{User Products and Installation Information}
 \label{user-products}

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