Could Open Source Code in Your Product Trigger a Million-Dollar Lawsuit?

In some circumstances, yes. Open-source code can lead to serious liability when your product ships copyleft-licensed components and your team overlooks the attached license terms. Copyright law governs how open-source licenses are enforced, and the consequences of non-compliance can include monetary damages and injunctive relief that halt your ability to distribute entirely. Courts in the United States and Europe have repeatedly enforced open-source license obligations under copyright and contract principles, depending on the jurisdiction and the facts of each case.

This is not a concern for large enterprises alone. Startups and small software companies face the same exposure, often with less visibility into what their codebases actually contain. If your product protects valuable intellectual property, the open-source components within it deserve the same care.

Is Open Source Software Really Free to Use?

The word “free” in open source refers to access and modification rights, not the absence of legal obligations. Every component arrives with license terms that govern how you use, modify, and distribute it.

Those terms shift intellectual property risk onto you, the user, the moment you embed the code in a commercial product. Break the terms, and you can lose the permission the license granted in the first place, which turns continued distribution into copyright infringement.

How License Violations Turn Into Costly Enforcement

Non-compliance creates exposure through several distinct mechanisms, and they do not all apply in every case.

• Copyleft obligations. Strong copyleft licenses, including the GPL, AGPL, and LGPL, can require you to release corresponding source code when you distribute a derivative work. That determination is fact-specific. Depending on how the licensed code is incorporated into your product, the obligation may or may not attach, and simply linking against GPL code does not automatically create a derivative work in every situation.
• Loss of distribution rights. If you fail to meet the license conditions, you may lose permission to distribute the software at all. The GPL does not literally force you to publish your code. Instead, distribution without meeting the terms becomes infringement.
• Damages and injunctions. Remedies vary considerably by case. Injunctions and negotiated settlements are far more common than large damage awards. In some matters, courts have ordered disgorgement of profits or compensatory damages, but that is one possible outcome rather than the standard result.

Recent Enforcement Examples

Enforcement is no longer concentrated in Europe. U.S. courts, including those in California, are actively developing the law around who can bring these claims and what remedies are available.

• Entr’Ouvert v. Orange (France, 2024). The Paris Court of Appeal ruled on February 14, 2024 that Orange violated the GPL v2 terms attached to LASSO, an open-source C library for federated identity and single sign-on based on SAML and Liberty Alliance standards. Orange had embedded LASSO in its Identity Management Platform (IDMP), which it supplied as a contractor for France’s Mon.service-public.fr government portal project, without meeting the GPL’s source disclosure and distribution obligations or taking a commercial license. The court awarded €860,000 ($980K) in total, comprising €500,000 ($570K) for economic harm, €150,000 ($171K) for moral damages, €150,000  ($171K) for disgorgement of Orange’s benefits from the infringement, and €60,000 ($68K) in procedural costs. The award reflects the specific facts of that dispute and should not be read as a fixed price tag for every violation.
• Steck v. AVM (Germany, 2024). Sebastian Steck, a private developer funded by the Software Freedom Conservancy, sued AVM in Berlin after purchasing a FRITZ!Box 4020 router and finding that AVM’s provided source package was incomplete. It could not be compiled and reinstalled onto the device, as LGPL-2.1 requires for the libraries involved. AVM eventually supplied the complete source code and installation scripts during litigation. On June 24, 2024, the Berlin court ruled in Steck’s favor on costs, awarding approximately €7,500 ($8.5K)  in legal expenses. AVM did not appeal. The case matters because a single consumer, backed by a nonprofit, successfully compelled a major hardware manufacturer to meet its open-source obligations.
• Software Freedom Conservancy v. Vizio (United States). This closely watched California state court case, filed in 2021 and now at trial in Orange County Superior Court, tests whether a product purchaser, rather than the original copyright holder, can enforce the terms of the GPL and LGPL as a third-party beneficiary. The court denied Vizio’s first motion for summary judgment on the third-party-beneficiary theory back in December 2023, letting that claim go forward. Two further rulings followed: in December 2025, the court sided with Vizio on a narrower issue, holding that the GPL and LGPL do not obligate a manufacturer to guarantee that reinstalled, modified source code keeps the device fully functional; then in February 2026, the court held that factual disputes on the remaining issues, including the third-party-beneficiary question itself, must go to a jury. Trial began on August 10, 2026, and a verdict is expected within three to six months of its conclusion. A ruling in the Conservancy’s favor could significantly widen who may bring open-source enforcement claims, including against companies distributing products in California.

Where Does Open Source License Risk Hide?

Risk rarely originates with the well-known library your team chose on purpose. It comes from code that entered the product undocumented and unreviewed.

Common Blind Spots That Trigger Liability

Three patterns account for most hidden exposure, and each works through a different route.

• Transitive dependencies. Package managers like npm, pip, and Maven automatically pull in nested libraries. Your direct dependency may carry a permissive license, yet the packages beneath it can include copyleft terms that clash with your commercial model. You inherit those terms without ever selecting them.
• Snippet reuse and forks. Under deadline pressure, developers copy code from Stack Overflow or fork a repository, then drop the copyright notices and skip the attribution the license requires. The code works, so nobody flags it, and the obligation travels quietly into your product.
• SaaS and AGPL traps. The AGPL extends source-release obligations to software delivered over a network, not only to software you ship as a download. SaaS teams often assume that hosting code rather than distributing it keeps them clear. That assumption is precisely what the AGPL was written to address.

Why Standard Due Diligence Misses It

Careful teams still miss these issues because their detection methods cannot see the whole picture. Spreadsheet inventories capture the libraries someone remembered to list, but they overlook snippet-level reuse and the version drift that occurs as packages update.

Third-party vendors add another layer, since a commercial supplier may embed open source in its own components without disclosing what comes attached. That undisclosed code becomes your downstream liability once it ships inside your product.

Without a reliable inventory of both direct and nested components, you cannot confirm your licensing position for code you cannot even name. Such is the importance of having the legal guidance of an experience copyright attorney here.

Which Open Source Licenses Carry the Most Risk?

Not all open-source licenses create the same level of commercial exposure. Permissive licenses ask for little beyond attribution. Copyleft licenses attach conditions that can affect how you distribute your own product. The table below groups common licenses by the level of commercial risk they typically present.

The Open Source Initiative maintains the approved list of these licenses and their terms, which gives your team a reliable reference when you evaluate a new component. Risk level is a starting point for review, not a substitute for reading the specific license against how you actually use the code.

How Does an Open Source License Problem Become Expensive?

Three factors compound a single overlooked dependency into a company-wide problem.

• Retroactive reach. Noncompliance can convert previously licensed distributions into unauthorized ones, opening infringement exposure for prior shipments. A court may consider past distributions of the offending software, not only the version you ship today.
• Product-wide impact. A single copyleft component inside a shared core library can affect every product built on top of it. The fix then spans your entire suite rather than a single isolated feature.
• Transaction pressure. Mergers, acquisitions, and IPO diligence now treat license hygiene as a baseline requirement, not a bonus. Buyers request a complete inventory of your components and their terms, evidence of a review process, and a plan for resolving any conflicts. Unresolved issues can delay a deal, reduce the price, or kill it entirely.

How Do You Reduce Open Source License Risk?

Governance has shifted from an optional practice into a baseline expectation. The reassuring part is that a structured, lightweight approach prevents most exposure before it ever becomes subject to litigation. You do not need a large program to close the biggest gaps. You need consistent visibility and a few disciplined habits.

Open-source compliance sits within the broader domain of copyright law. A copyright attorney can help you identify where your current agreements and practices may fall short before a violation surfaces in litigation or a deal.

Build a Governance-Ready Development Workflow

Strong internal engineering practice stops problems at the source, inside your own pipeline.

• Inventory everything. Use software composition analysis (SCA) tools to catalog every direct and nested dependency, including the snippets and forked code that manual reviews overlook.
• Track licenses by risk tier. Flag high-risk copyleft licenses such as the GPL and AGPL, and document any modifications your team makes to open-source code.
• Automate the checks. Build license scanning into your CI/CD pipeline so violations surface early, when they cost minutes to fix rather than quarters.

Prepare for External Scrutiny

Internal discipline should pair with readiness for the outside review that funding, acquisition, or a major contract will bring.

• Maintain disclosures. Preserve copyright notices, license texts, and any “NOTICE” files that upstream projects require, so your attribution stays defensible.
• Write a simple policy. A one-page policy covering approved licenses, review steps, and attribution standards gives developers clear expectations they can follow without friction.
• Audit before transactions. Run a confidential review of your components ahead of any merger, fundraising round, or significant customer contract, so you resolve conflicts on your own timeline rather than a buyer’s.

Frequently Asked Questions

Can using open source code get my company sued?

In some cases, yes. When you use open source software in a commercial product and disregard its license terms, the copyright holder or an authorized enforcer can bring a claim, seeking damages, an injunction, or both.

What is a copyleft license?

A copyleft license, such as the GPL or AGPL, grants you rights to use and modify the code on the condition that you release corresponding source code when you distribute a derivative work. How you incorporate the component determines if that condition applies.

Does the GPL apply to my commercial product?

It can. If your product includes GPL-licensed code and you distribute a derivative work, the obligations can attach even when you charge nothing for the software. The AGPL extends further, covering software you deliver over a network rather than via a traditional download.

What is an SBOM and why do acquirers want one?

A Software Bill of Materials is a complete inventory of the components in your software, including nested dependencies and their licenses. Acquirers request it because it lets them verify your position and accurately assess open-source risk during due diligence.

What if we already used a component without meeting its license?

Address it early rather than waiting for a demand letter. A common path is to identify the component, meet the outstanding conditions, swap in a compliant alternative, or negotiate a commercial license. Counsel can weigh the options with you and reduce exposure before the issue surfaces in litigation or a transaction.

Can we replace GPL code later if we need to?

Often, yes, though the effort depends on how deeply the component is embedded. Substituting a permissively licensed equivalent, or your own implementation, can remove the copyleft obligation going forward. Earlier action is usually cheaper than a rewrite forced by a dispute or a deal.

Protect Your Product Before Open Source Becomes a Liability

Open source accelerates development, but only when you know, track, and satisfy the license terms that come with it. Enforcement activity is rising across major markets, and the cost of getting it wrong has moved from theoretical to concrete. If you build software in California or across Silicon Valley, experienced counsel can assess your exposure before it reaches a courtroom or a diligence checklist.

Heimlich Law PC advises technology companies on copyright and trade secret matters, including the licensing questions that surface in product development and enforcement. Attorney Alan Heimlich brings over 20 years of engineering experience as a registered professional engineer, a background that makes a practical difference when the question involves how code is actually incorporated into a product, not just what the license says on paper.

For guidance on defending or resolving a dispute, our team handles copyright litigation. To learn more about how copyright law protects your software and creative work, visit our copyrights practice page.

Contact Heimlich Law PC at (408) 253-3860 or contact us online to schedule a consultation.