I wrote some software (a simple command-line utility) and released the source code under the following zlib-style open source license:
Permission is granted to anyone to use this software for any purpose, including commercial applications, and to alter it and redistribute it freely. This software is provided 'as-is', without any express or implied warranty.
My software uses a third-party library which is released under a dual AGPLv3/commercial license model, i.e. I can use the library for free under the AGPL or I can purchase a commercial license. I chose to use the library under the AGPL.
The vendor (copyright holder) of the library objected to this on the grounds that my zlib-style license is not compatible with the AGPL. I proposed to the vendor that I would dual-license my code under both the existing zlib-style license and under the AGPL.
The vendor replied that I cannot dual-license my source code, because my source code will not compile without their library, and is therefore a composite work which must be licensed under the AGPL only.
My understanding is that while this would apply to a compiled version of my software (which was compiled against their library and links to it at runtime), there is no such restriction on my source code itself, because simply using an API whose implementation is licensed under the AGPL cannot impose license terms on the API user.
Who is right?
(I intend to distribute a compiled binary version of my software to a client, and I have no problem licensing that binary under the AGPL only and complying with its terms; my only concern is that I would like the source code to remain available under its existing zlib-style license as well.)