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As I understand GPL, your software can be sold for any amount you wish, but you must make the source code available to everyone without charge.

I have noticed a trend where certain software released under GPL has a "standard" edition with limited features, and is fully open source. But you can buy a "premium" version of that same software with all the features and the premium feature source is not included in the source distribution.

This effectively allows marketing your product as free and open source but still keep the important features behind a closed source paywall.

Is this allowed under GPL?

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As I understand GPL, your software can be sold for any amount you wish, but you must make the source code available to everyone without charge.

This is not a correct read of the GPL. You may sell your software for any amount that you wish, but you must make source code available to anyone to whom you give binaries for no additional charge. That person then has the right to redistribute your source code (and binaries, provided they also include the source) to third parties, and so it is effectively impossible for you to prevent the source code from ending up publicly available, if your users want it to be available.

However, in the case you describe, the company providing the software under the GPL is (probably) the sole copyright holder. The copyright holder, in general, is not bound by their own license.* They can do whatever they like with their software, including selectively licensing only the "core" of their software under the GPL. On the other hand, if the proprietary portions are derivative works of other GPL'd software, and the company does not own the copyright of that software, then the company might be infringing the copyright of that software.

* Think of it like this: A license is basically a (legally-binding) promise not to sue for copyright infringement, provided that certain rules are followed. Nobody is going to sue themselves for copyright infringement, so you don't need to give a license to yourself in the first place, much less follow the license that you give to others.

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    While this is true, it - of course - is easy to fall into pit holes with this strategy as you must not accept any patches etc from extern where you do not get full copyright ownership (e.g. via CLA). Otherwise you might stop being allowed to dual-license your software in a way you describe. – planetmaker Aug 3 at 8:27
  • "you must make source code available to anyone to whom you give binaries for no additional charge." This would imply that you could buy the premium version and then request it's source. While I understand that the premium version can be released under another license and that would be allowed, in the cases I speak of both versions of the software are only under GPL. Would the company be in violation of GPL for not providing the source to the premium version after request? – Chris Larkin Aug 3 at 11:55
  • @ChrisLarkin: As I say in the next paragraph, you can't infringe your own copyright. If they own the copyright, then they can do no wrong. But if the premium version is under the GPL, then the buyer can't redistribute it without the source code, and since the source is not provided, the buyer therefore can't redistribute it at all. It is effectively "GPL" in name only. – Kevin Aug 3 at 20:42

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