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At the company I work for we are developing an app for use within the company. The company consists of numerous branches across the world, all other legal entities. For testing we would like to send a tablet with pre-installed software from the Dutch branch office to the Chinese branch office.

Does the software has to be completely compliant with the open source software that is used in the application before sending it over? The reason for this question is that if it has to be compliant for this testing purpose, we would have to let a specialized company perform an OSS scan which is time consuming and costly.

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  • The other branches are still part of the same company, right?
    – RubberDuck
    Oct 20 '15 at 10:29
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    Yes, however the branches are registered as different companies at the chamber of commerce with some kind of link to the main organisation (I do not understand the company structure entirely)
    – Milan van Dijck
    Oct 20 '15 at 11:01
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    Do remember that better answers may come along! It's great that my answer helped you, but don't let my diamond influence your choice. Someone may well come along with something better.
    – ArtOfCode ♦
    Oct 20 '15 at 11:29
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    Personally, I would not count this (giving the software to someone else for the agreed-upon purpose of temporary testing) as distribution even if the somewhat-branch-office were a distinct entity. The problem is however that one needs to distinguish this in a legally sound way - else we'd have "long-term crowd-based testing under real-life conditions" instead of software distribution all around. That's where the small print gets necessary ...
    – Hagen von Eitzen
    Oct 20 '15 at 16:02
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You've found yourself a bit of a gray area. As Martijn notes, the FSF have addressed nearly this issue in their FAQ. The following is certainly true for single-entity companies:

  • You can make copies for internal use
  • You can send those copies to anyone, anywhere in the world, as long as they're part of the company
  • You can't give copies to any other entity

However, in your situation (with your company being a multi-entity organisation) it gets a little more confusing. It's debatable whether the same applies in your case, though I would hope that freedom-oriented organisations would come down on the side of freedom and letting you do it. Your best course of action is to consult someone who knows: ask the FSF or the OSI, or if you've got a legal team ask them.

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  • I was afraid there was no easy answer for this problem. I'm going to get my self informed about the company structure and decide if I should let the legal team take a look at this. Thanks for your help!
    – Milan van Dijck
    Oct 20 '15 at 11:31
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The FSF addresses this in their FAQ, where they say that making copies for different people within an organisation does not count as "distribution":

Is making and using multiple copies within one organization or company “distribution”?

No, in that case the organization is just making the copies for itself. As a consequence, a company or other organization can develop a modified version and install that version through its own facilities, without giving the staff permission to release that modified version to outsiders.

However, when the organization transfers copies to other organizations or individuals, that is distribution. In particular, providing copies to contractors for use off-site is distribution.

So the "heart" of the matter, I suppose, is, do these different legal entities count as "one organization or company"?

The legalistic approach probably comes down to who received the license. Is it your business unit/separate legal entity? A parent company? Can a copyright transfer be done through a parent company?

The pragmatic approach (and the one I'd be inclined to follow) is that nobody really cares. The copyright holders of the product insofar that isn't you, your legal entity or your parent org aren't going to mind any perceived or actual infringement.

If someone were to care, however unlikely, they can't perceive the infringement. They could never know you distributed anything to your China branch. If they knew you did, they wouldn't know if you did so in violation of any terms.

There is an extremely low chance of a potentially fairly large problem (in the worst case, statutory damages in case of proven willful infringement of a violation of registered copyright).

Depending on your company, you may want to take the risk, or defer to your legal department.

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If the software is only for use by those within the company, then there should be no barriers to fully complying with the licenses. Even the GPL, the most extreme license, does not require you to publish your source code for the whole world to access, but only to distribute it to those who get a compiled version.

Where it will make a difference whether it counts as distribution or not is if someone in another branch gives the software to someone outside the company. If the software is not considered distributed, then they have no right to do so, and could be prosecuted under trade secret laws. If it the software was however considered to have been distributed to them, then the GPL may give them the right to distribute it further.

I would suggest that your testing policy is not very logical if programs you internally distribute would require scans if they are open source licensed but not if they use open source licenses but are themselves proprietary licensed.

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If you are developing the application in-house, any rights reside fully with you to do as you please.

If it uses pieces from elsewhere, you might set up some script to build up the whole for the "customer". It won't matter too much if it is a real mess for a one-off use.

You could ask the owners of the rights for a temporary permission until the final (presumably publicly distributed) version.

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