How is 'commercial use' of software defined?

Question

Licenses often distinguish between commercial use and non-commercial use. I found different sources discussing this topic:

• What is commercial and non-commercial?
• What Does Commercial Software Mean?
• Related question: Classifying Commercial and non commercial use
• The tags commercial and non-commercial

But I still don't know how to decide if I use a software commercially or not. Is there a canonical check list on how to decide whether the usage of a software is commercial or not?

Example 1

I bundle different software products together and sell them.

I'm pretty sure, that this is commercial use, because it is sold directly.

Example 2

I use software to create a product, that I sell.

This is also commercial use, in my opinion, as the software directly supports the financial gain.

Example 3

I use software to maintain the IT infrastructure of a company so that the employees can use the IT infrastructure to create products, which the company sells.

I'm not sure here. The use of the software does indirectly support the business.

Example 4

As a software developer, I can use all my SE tools directly on my computer to create software, that I sell. But I can also use all my SE tools inside a VM hosted by any hypervisor (e. g. VirtualBox, VMware Workstation, Hyper-V etc.). If I use that hypervisor software, is that commercial usage?

I'm not sure here. The use of the hypervisor might indirectly support the financial gain. But if it does not really matter, if I use it or not, does it really support anything?

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The examples are just examples. I'm not looking for specific answers to them. As stated, I'm looking for a canonical check list. I mean, developers who distinguish between commercial use and non-commercial use of their products, what do they intend?

Answer 1

Unfortunately you won't find the canonical checklist that you're looking for, as laws for these sorts of things vary from place to place.

From what I've seen, scenario #1 (interpreted in the sense of selling a CD containing multiple third-party programs) isn't generally "commercial use" because it's not "use" at all. You're not using the software, you're redistributing it. That's a different beast altogether, and is frequently subject to different terms than use. "Use" would mean some activity involving running the software yourself. If this scenario involves bundling in the sense of bundling a bunch of Python libraries with the code for your commercial program, then that's a derivative work which will generally have separate rules as well.

Scenarios #2 and #3 are generally considered commercial use. Even though #3 is indirect, internal use is still commercial use if it's used to support, run, or manage the business.

If I'm understanding scenario #4 correctly, then it's likely also commercial use. You're using that VM for the express purpose of doing commercial software development. That's not particularly different than the "internal use" scenario #3.

It seems like these definitions are a bit vague, but in practice it's not quite that bad. Licenses that care about the distinction between commercial and non-commercial use will (typically) explicitly define what they mean by "commercial use". In the event of vagary in a contract, courts traditionally rule in favor of the person who didn't write the contract. If a company wants their license to be reliably enforceable, they'll explicitly define terms like "commercial use" that aren't defined by law. For example, the "free for personal use" version of TeamViewer defines "personal use" as:

any tasks within your personal life for which you are not being paid. Connections between personal devices at home or helping friends and family remotely qualify as personal use.

and "commercial use" as:

Commercial use is not limited to tasks for which you are being paid. Connections to or from corporate networks, connections to or from recognized server operating systems, and providing support to customers and colleagues all fall under commercial use.

In this case, they consider anything running a server OS as "commercial use", even when that same use case would be "personal use" under a desktop OS. These are the sorts of nuances that the license creator will have to explicitly define.

The license for DeepNormals explains that they mean "commercial use" as:

includes, without limitation, incorporation in a commercial product, use in a commercial service, or production of other artefacts for commercial purposes.

These examples seem to correspond to your scenarios #1, #3, and #4, respectively.

So in general, you'll have to read each license's details to see what exactly they mean when they say "commercial" or "non-commercial" use. Your locale might also have specific laws that govern the interpretation so if there's any doubt at all, it's best to either ask a lawyer or find another piece of software that has a more free license.

Answer 2

"Non-commercial" is always tricky, as it is not black or white. Actually, this is also one way of reasoning that any restriction of the purpose puts a license out-of-scope for open-source (and thus actually makes this question border-line on-topic – but it's IMHO interesting to discuss the boundaries of non-commercial in order to discuss the boundaries of open source).

On the Creative Commons Attribution-NonCommercial 4.0 International license page, you find the following definition:

NonCommercial means not primarily intended for or directed towards commercial advantage or monetary compensation. For purposes of this Public License, the exchange of the Licensed Material for other material subject to Copyright and Similar Rights by digital file-sharing or similar means is NonCommercial provided there is no payment of monetary compensation in connection with the exchange.

So in more detail:

1. Selling the software in a bundle: Grey area. It depends on the price, I'd reckon, and whether the price is mostly asking for compensation of the compilation and conveying the software or whether it is actually done with quite a profit margin.
2. Usage to create products for sale: Not allowed. This is the definition of commercial usage.
3. Usage within a business, but not directly used in product creation: Not allowed either, most likely. This is also commercial usage. You use it to maintain your business, thus to increase your profit.
4. Used to host a VM, in which products are created for sale: Not allowed either, most likely. This is the same case as (3) except the business type.

For instance, the European Union's directive says (supporting the above conclusion, especially for #3) and #4):

(42) When applying the exception or limitation for non-commercial educational and scientific research purposes, including distance learning, the non-commercial nature of the activity in question should be determined by that activity as such. The organisational structure and the means of funding of the establishment concerned are not the decisive factors in this respect.

As such, 'non-commercial' is defined by the nature of the endeavour, and not by the actual place where it is being used. So there can be cases in (3) and (4) where the use is allowed, if it is used in a part which does not deal with generating profit directly or indirectly.

There have even been rulings in Germany by lesser courts that usage of stuff (e.g. photos or graphics with a CC-NC-license) on a low-traffic private website counts as commercial usage on grounds that they display ads.