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I make an industrial machine control product with LCD touch screen UGI. I use embedded Linux, I use GPL license tools. I am using industrial single board computer which is a bought out product. I am taking efforts to make software and add business logic to it.

My application is not so unique and there is not any kind of invention here, so I can't file a patent here to protect my IP. However it's still hell lot of work I am putting up. Isn’t it my loss if my source code goes public, lands up in hands of my competitors for whom it's an easy cake walk?

They can just change few things around and sell the product of their own. How companies are dealing with this scenario when most of them are using open source?

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    When you say you are using GPL license tools, could you be a bit more specific? Are you e.g. using GPL compilers to compile your source, or are you using GPL libraries to link your code to, or is your code based squarely on a pre-existing GPL product? – MadHatter Apr 7 at 9:53
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    You tagged this as LGPL as well, but never mentioned LGPL in your question. If you link wtih LGPL libraries those give you permission to keep your own code closed. – Brandin Apr 10 at 4:56
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If you distribute as GPL

If you competitor uses your GPL code, then if they distribute it, they must do so under the GPL, to give all the freedoms to their customers that your customers get.

Do you have to distribute as GPL

There is nothing in what you say that means you have to distribute your code as GPL. Gnu/Linux allows running of proprietary software. The output of most GPL tools is yours, to licence how you want.

Your customers may insist that all software is Free-Software, if so then GPL (copy-left), will give you the most protection.

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First I will echo the fact that if you don't distribute software that includes GPL-licensed components, you are not bound by the requirements of the GPL.

If you are, it is worth noting that Stallman addressed the issue of competition (in the context of operating systems) in the GNU Manifesto's FAQ when he first published the GNU GPL:

“My company needs a proprietary operating system to get a competitive edge.”

GNU will remove operating system software from the realm of competition. You will not be able to get an edge in this area, but neither will your competitors be able to get an edge over you. You and they will compete in other areas, while benefiting mutually in this one. [...]

By publishing your software under the GPL, you reduce the competitiveness of your software's field overall, by making software that is freely available for everyone and potentially developed by many. Your competitors have access, but then you also have access to their improvements.

You may not wish for your efforts to contribute toward this goal of reducing the competitiveness of your software's domain. In that case, you probably should consider options that don't involve distributing GPL-licensed software, and weigh the costs and benefits of GPL and non-GPL options available to you.

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