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An interesting point came up on another thread about alleged misappropriation of a GPL project. In this case the enterprise software was used by some large companies who essentially took the code, changed the name, removed the GPL notices and used the result.

The point was - if the company did this and only used the software internally then there isn't any distribution and that's perfectly legal under GPL. Modifications by their own employees for internal use would also be allowed.

So At what point does it become a distribution?
Presumably if they brought in outside contractors under 'work for hire' their modifications would also be internal and so not a distribution.

If they hired an external software outfit to do modifications and those changes were only used internally by the company - would those changes be distributed? Does the GPL apply to the client or to the external developers?

If the company then give the result to another department, another business unit, another company? What if the other company is a wholly owned subsidiary?

ps. yes I know the answer is ask a lawyer. But all the discussion I have seen over GPL2/GPL3 distribution has been about webservices - not about internal use.

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The GPL3 uses the terms "Convey" and "Propagate" rather than distribute. –  Craig Aug 30 '12 at 21:03
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2 Answers

The essence of the GPL is that it does not limit what you can do with the software -- it imposes requirements on you when you Convey or Propagate the covered work. To quote the GPLv3:

To “propagate” a work means to do anything with it that, without permission, would make you directly or secondarily liable for infringement under applicable copyright law, except executing it on a computer or modifying a private copy. [emphasis added]

So if the only use is with a private copy you are not Propagating or Conveying the work so the conditions that allow you to Convey the work are not relevant.

See this FAQ:

Does the GPL require that source code of modified versions be posted to the public?

The GPL does not require you to release your modified version, or any part of it. You are free to make modifications and use them privately, without ever releasing them. This applies to organizations (including companies), too; an organization can make a modified version and use it internally without ever releasing it outside the organization.

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So, making a closed source derivative and only distributing it within my "organisation" seems OK. But what if I let anybody become a member of my organisation? Employ them for a cent? Or even put a binary on my website and say "by downloading this I grant you membership in my organisation"? I wonder where you could draw the line. –  jdm Apr 24 '13 at 10:05
    
IANAL, but I think it is not so simple. You would need some sort of legal entity that is your organization. Without the legal entity it is just a bunch of individuals and you are in fact propagating or conveying the work. Figuring out who is and isn't a "member" is probably contract law or employment law. And, as always, just because what you are doing is legal and you would win a lawsuit doesn't mean you won't be sued. –  Craig Apr 24 '13 at 17:15
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Look at it this way. It won't really matter if there are different departments, or subsidiaries. It only matters if you are going to distribute the binaries to another party and not give them the source.

If there is another department that will use the modifications, they will get the source to work on it. No big deal. You are complying with everything in the license. Anyone who can get a distribution needs the source.

Services over the network is not considered distribution.

Here is an attempt at a simple explanation of GPL:

If a GPL project produces awesomeProduct.jar, any place that awesomeProduct.jar exists, awesomeProduct_src.jar also needs to exist. If someone doesn't have awesomeProduct.jar they don't get awesemeProduct_src.jar

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Legally I suppose the question is "another party". eg for a giant multinational corp like Samsung or Mitsubishi there could be a lot of organisations that aren't considered "another party". My point was that mega-corp could take Linux, modify it, sell it to 1000s of users in 100s of subsidiary companies and still be within the GPL –  Martin Beckett Aug 29 '12 at 18:02
    
@MartinBeckett It doesn't matter. Unless you are suggesting that Department A would produce a product from GPL source and not give Department B the source. –  Andrew Finnell Aug 29 '12 at 18:03
    
If I modify GPL code and give it to you, you also have to redistribute it. If you pay me to modify it - do you still have to distribute it? If you are Ford and give it Jaguar do you? Seemed an interesting point! –  Martin Beckett Aug 29 '12 at 18:08
    
- I think that point came up in Android. Did Google distribute the modified Linux Kernel just to the phone maker or to every end user of the phone? Can't remember if there was a conclusion. –  Martin Beckett Aug 29 '12 at 18:17
    
not really, if the business is geared to totally different subsidiaries then they will not be part of the same company. They'll have different accounts and suchlike. Distributing to them will be to a different company. Its quite easy to tell, do you have the same CEO? Do they publish different accounts? If Google UK is a totally different legal entity than Google US for example, and they pay Google US (or Google TaxHaven that is) a licence fee for their products, they'd not be able to distribute a GPL product without the source. –  gbjbaanb Aug 30 '12 at 21:43
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