Balancing Open-Source and Enterprise Licensing for a CMS

Find out how we laid a solid legal foundation for the developer of a proprietary CMS for Ruby on Rails, navigating the complexities of licensing across a diverse product range and client base. See how we implemented a tiered licensing strategy—combining standard to fully customizable commercial licenses on top of an open-source layer.
The Client
The developer of a proprietary content management system (CMS) designed for the Ruby on Rails framework.
The Challange
Multiple product versions, features, and a diverse client portfolio, spanning from personal to enterprise use.
The Solution
Stacking different licenses, from open source to custom enterprise solutions, for different versions and features of the product.
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Free and Open Source License for the Entry-Level Tier: For the entry-level tier of the product, we opted for the Lesser General Public License version 3 (LGPLv3). This license was selected for its flexibility and the balance it offers between open-source freedom and protecting the proprietary components of the CMS. The LGPLv3 allows users to freely use, modify, and distribute the software, provided any modifications to the LGPLv3 licensed components are also made available under the same license.

Standard Commercial License for the Middle Tiers: The middle tiers of the product, aimed at professional users and small businesses, were made available under a standard commercial license. This licensing model offered a balanced solution, providing access to more advanced features and capabilities beyond the basic tier, with the simplicity and legal assurance that businesses require. Under this license, users pay a one-time fee or a subscription to use the CMS, receiving regular updates and support in return. This approach enabled the client to cater to a segment of its user base seeking to leverage the CMS for commercial purposes without the need for customization or extensive enterprise-level features.

Fully Customizable Commercial License for the Top Enterprise Tier: A fully customizable commercial license was implemented for the top enterprise tier. This bespoke licensing solution was tailored to meet large organizations' and enterprise clients' complex and specific needs. It offered the highest degree of flexibility, including customization of the CMS's features, integration capabilities, support services, and even the possibility to fork the project. The fully customizable license also accounted for negotiations on terms such as scalability, security, and compliance requirements specific to the enterprise domain, thereby providing a comprehensive package designed to align with the strategic objectives and operational demands of large-scale users.

Contributor License Agreement: As part of our comprehensive licensing framework, a Contributor License Agreement (CLA) was also included for individuals and organizations contributing to the CMS. The CLA is a legal document that contributors are required to accept, which clarifies the rights contributors grant to the project owner, ensuring that the contributions can be legally used in the project. This agreement is pivotal for protecting the project's integrity and legal standing, as it ensures that all contributions are compatible with the project's main license (LGPLv3 for the entry-level tier) and can be freely distributed as part of the software. Moreover, the CLA safeguards both the contributor's rights and those of the developer by clearly outlining how contributions will be used, providing a secure legal foundation for open collaboration.

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