Open-Source software as standard bankruptcy procedure

In the ever-changing world of technology, companies rise and fall, leaving behind a trail of abandoned software and disappointed users. But what if there was a way to breathe new life into these orphaned projects? What if, instead of letting them fade into digital oblivion, we could open-source them and let the community take over?

When companies go bankrupt, their software often becomes collateral damage. Users are left without support or updates, and the software itself is relegated to the dustbin of history. This is a tragedy, not just for the users who relied on the software, but for the entire tech ecosystem.

Benefits of Open-Sourcing Software in Bankruptcy

The policy of requiring companies to open-source their software during bankruptcy would encourage collaboration, innovation, and the preservation of software value, while also providing a safety net for consumers and affected companies who rely on these products.

• Preservation of Value: Open-sourcing software can preserve its value by allowing the community to continue its development and maintenance. This can be particularly beneficial for users who rely on the software, ensuring they have access to updates and improvements.
• Innovation and Collaboration: Open-source projects foster innovation and collaboration. By making software available to a wider audience, new ideas and solutions can emerge, potentially leading to advancements in technology and product development.
• Consumer Protection: Open-sourcing software can protect consumers from losing access to critical updates and support, which is a significant concern when a company goes bankrupt. It ensures that users can continue to use and benefit from the software.

New Market Opportunities

A law mandating the open-sourcing of software during bankruptcy could indeed foster new markets and opportunities.

• Transition Services: A market could develop for companies specializing in helping bankrupt entities transition their proprietary software to open source. These services might include code auditing, documentation, and compliance with open-source licenses.
• Product Development: Businesses could leverage open-sourced code to enhance existing products or develop new ones. This encourages innovation and allows companies to build on established technologies without starting from scratch.
• Maintenance and Support: Companies could offer maintenance and support for open-sourced software, creating business models similar to those used by successful open-source companies like Red Hat. This would ensure ongoing development and support for the software.

Challenges and Conditions

Even the easiest of changes come with some challenges.

• Intellectual Property Rights: Bankruptcy law often involves complex issues related to intellectual property rights. Non-exclusive licenses may not be assumed without the licensor's consent, complicating the open-sourcing process.
• Legal and Compliance Issues: There are potential legal implications, such as compliance with existing licenses and the risk of litigation if open-source components are improperly used or attributed.
• Liability Concerns: Introducing liability regulations for open-source software could impose strict liability on creators and licensees for any harm caused by their software, deterring companies from open-sourcing their software due to increased legal risks.
• Economic Viability: Not all projects may have enough interest or resources to sustain themselves as open-source projects, especially if they were not successful commercially.

Moreover, to create a law that mandates open-sourcing software during bankruptcy, several corollary conditions would need to be established to address the challenges.

• Legal Framework: Establish clear legal guidelines for transitioning proprietary software to open source during bankruptcy, including handling intellectual property rights and ensuring compliance with existing licenses.
• Incentives for Participation: Provide incentives for companies to participate in the open-source ecosystem, such as tax benefits or grants for contributing to community projects.
• Liability Protections: Implement legal protections that limit the liability of developers and contributors when software is open-sourced as part of a bankruptcy process.
• Community Engagement: Encourage the formation of communities around open-sourced projects to ensure ongoing development and support, similar to models used by Linux and other successful open-source initiatives.
• Escrow Agreements: Require companies to have software escrow agreements in place that automatically release the source code if the company enters bankruptcy, ensuring continuity and access for users.

The Consequences of Not Having Such a Law

The discontinuation of software support and maintenance when companies go bankrupt can have severe consequences for users and the broader economic ecosystem. Here are just a few examples:

• Drobo: Known for its network-attached storage (NAS) devices, Drobo filed for Chapter 7 bankruptcy and ceased sales and support. The company transitioned to a self-service model for data recovery, leaving customers without official support or updates for their devices.
• Palm: A personal digital assistant (PDA) manufacturer that went out of business in 2011, leaving its software and devices without support, affecting users who relied on Palm's operating system and applications.
• Nokia's Symbian: Although Nokia itself did not go bankrupt, its Symbian operating system was discontinued after the company switched to Windows Phone. This left users of Symbian devices without further software updates or support.
• Solyndra: A solar power startup that went bankrupt in 2011, discontinuing its proprietary technology and software for managing solar installations, impacting customers and partners who used its systems.
• Alta Motors: An electric motorcycle manufacturer that shut down in 2018, discontinuing its proprietary software used in its motorcycles, affecting owners who relied on it for vehicle diagnostics and performance management.
• Fisker Automotive: An electric vehicle manufacturer that went bankrupt in 2013, discontinuing its software and support for its vehicles, leaving owners without access to critical updates and maintenance.
• Friends Reunited, an early social media platform, closed down in 2016 after 16 years of operation, leaving users without access to their data and connections.
• Blockbuster: Primarily focused on video rentals, its later attempts to transition into online distribution and digital streaming services involved software that was never maintained after the company failed in 2010, outpaced by Netflix.
• 3DFX Interactive: A graphics chip manufacturer that went bankrupt in 2002 and was acquired by Nvidia for intellectual property rights. Its products, such as the Voodoo and Voodoo2 graphics cards, were no longer supported or updated.
• OnLive: A cloud gaming service that went bankrupt in 2015, discontinuing its game streaming service and leaving users without access to their purchased games.
• THQ: A video game publisher that went bankrupt in 2013, leading to the discontinuation of several game franchises and the closure of its studios.
• SegaSoft: A video game developer and publisher that went bankrupt in 2000, discontinuing several game titles and leaving users without support or updates.

By creating a legal framework that supports the open-sourcing of software during bankruptcy, we can foster innovation, protect consumers, and ensure the continuity of critical software projects. It's time to rethink how we handle software in bankruptcy and give new life to abandoned projects.