Open-Source License
A copyright license that grants users the right to access, modify, and redistribute the source code of software, subject to specified obligations. Divided between permissive licenses (MIT, Apache, BSD) imposing minimal conditions, and copyleft licenses (GPL, AGPL, LGPL) requiring derivative works that are distributed, or for the AGPL modified and offered to network users, to be licensed on the same terms.
An open-source license is a copyright license that grants users the right to access, modify, and redistribute the source code of software, subject to specified conditions. Open-source licenses fall into two principal categories: permissive licenses (MIT, Apache 2.0, BSD), which impose minimal obligations on downstream users; and copyleft licenses (GPL, AGPL, LGPL), which require derivative works to be released under the same license. The choice between categories has substantial commercial consequences.
Permissive licenses
MIT, Apache 2.0, and BSD licenses permit virtually any use, modification, or redistribution, with only modest attribution and notice obligations. The Apache 2.0 license adds an explicit patent grant from contributors and a patent-retaliation clause. Permissive licenses do not require derivative works to be open-sourced. Code under a permissive license can generally be combined with proprietary code without bringing the proprietary code under the open-source license.
Copyleft licenses
The GNU General Public License (GPL) requires that any derivative work distributed to third parties be made available under the same GPL terms, including the requirement to provide source code. This is the "copyleft" obligation. The Lesser GPL (LGPL) softens this for libraries linked to proprietary code. The Affero GPL (AGPL) extends the obligation to network use. If a licensee modifies an AGPL program and users interact with it remotely over a network, the licensee must offer those users the corresponding source, even without distribution (AGPL v3 § 13).
License compatibility and stacking
Combining code under different open-source licenses is permissible only when the licenses are compatible. GPL code can be combined with code under a GPL-compatible license, such as the MIT (X11) license, if the combination is distributed under the GPL. A license that imposes conditions the GPL does not allow is incompatible. Apache 2.0 and GPL v2 are incompatible; Apache 2.0 and GPL v3 are compatible (in one direction). Compatibility analysis is fact-specific.
Commercial risk in copyleft
The principal commercial risk is unintended copyleft contamination of proprietary code. Distributing a proprietary application that statically links to or incorporates GPL code, or offering a modified AGPL program to users over a network, can bring the combined work under the license's source-code terms. A licensee that does not comply loses its rights under the license (GPL v3 § 8) and may face an infringement claim. License audits are a common part of due diligence when a company acquires code from contractors or in M&A.
Open-source license obligations are a regular item in M&A diligence, and buyers often use automated scanning tools to inventory a target's open-source components. Some companies keep a software bill of materials (SBOM) listing each open-source dependency and its license.