A common mistake is to assume that all open source software is licensed on the same terms, such as the GNU General Public Licence (a licence in widespread use that was written in 1989 to help create a completely free operating system).
There are many open source licences, each with their own particular terms. Indeed, some corporations label their software "open source" for marketing purposes, when in fact the terms of the licence are quite restrictive.
It is also important for organisations to understand that open source software is different from freeware, shareware or other methods of licensing software.
Shareware is software that comes with terms for people to redistribute copies, but requires anyone who continues to use a copy to pay a licence fee. Users rarely get access to the source code or the right to modify it.
Confusion on the use and scope of open source has led to a number of high profile cases, including the ongoing legal dispute surrounding SCOÕs claim on the intellectual property rights over the Linux kernel.
In 2001, for example, MySQL alleged that the Progress Corporation had used its database software, "MySQL" in violation of the GNU General Public Licence.
Although the case was eventually settled - the settlement terms were not published - it illustrated the potential dangers for corporate users of open source, not least the costs to organisations from management time and legal fees in licensing disputes.
Other risks within the corporate world arise during the merger and acquisition of technology companies. Buyers are making ever more detailed enquiries into the ownership of intellectual property rights, such as copyright, within the target company. During due diligence, buyers are also asking whether software has been built using open source. However, following a few simple rules should help you to steer clear of the courts.
Firstly, do not assume that all open source terms are the same. Read the small print and use it accordingly. Secondly, be clear about how you are going to use open source code and make sure that this policy is known and adhered to by your development team.
Finally, clearly document where and how it is used by keeping detailed programming notes and libraries. This will make it easier to forensically check open source usage in the event of an ownership dispute.
Andrew Lucas is a solicitor in the IT and telecoms group at law firm Simmons & Simmons