FSFE Seeks to Protect Licenses from Bankruptcy

The Free Software Foundation Europe (FSFE) is working to protect Free Software licenses from bankruptcy. In a statement released this week, the FSFE said, “It is not entirely clear what can happen to the Free Software licenses that were granted by rights holders either before or after they went bankrupt. This lack of clear rules could greatly endanger functioning of the Free Software, which depends on the contributions from numerous rights holders.”

According to the statement, when the companies or authors that license Free Software enter bankruptcy, there is a risk that granted Free Software licenses will face legal challenges in some jurisdictions, and the FSFE is currently working to prevent this situation in Germany.

The FSFE website states that, some time ago, the German Ministry of Justice published an initiative to improve the regulation of licenses during the insolvency proceedings. So, the Institute for Legal Questions on Free and Open Source Software (ifrOSS), supported by FSFE, prepared a suggestion of the Free Software clause that “ensures that Free Software licensing model would not be negatively affected by a bankruptcy of a licensing rights holder.” Under the clause, any offer to grant Free Software license made before the licensor’s bankruptcy can be accepted by anyone even after bankruptcy proceedings have started.