Publicly traded companies that violate the GPL risk federal prosecution under the Sarbanes-Oxley Act (SOX) of 2002, says a whitepaper published by Wasabi Systems. Wasabi is an embedded operating system vendor that uses some GPL-licensed software, but is best known for its embedded BSD (Berkeley Software Distribution) products.

According to a Wasabi whitepaper entitled “Open Source Licensing: What Every OEM Should Know,” the Free Software Foundation and other GPL watchdog organizations pursue several dozen GPL violators each year. Violators typically face penalties no worse than being forced to share their source code.

However, the SOX act, passed into law in 2002 in the wake of financial reporting scandals involving such publicly traded companies as Enron, made failure to report intellectual property ownership a federal crime for publicly traded companies, Wasabi says.

Wasabi's general counsel, Jay Michaelson, stated, “If companies violate the [GPL], the consequences can be more severe than they think.”

In addition to SOX act exposure, the Wasabi whitepaper discusses potential legal exposure from loadable kernel modules, and whether BSD or GPL is more “free.” It can be found here.

Several companies offer risk mitigation products and services for publicly traded companies wishing to use GPL-licensed software. For example, OSRM (Open Source Risk Management) offers an insurance product, while Black Duck offers license management services. Both companies mention Sarbanes-Oxley explicitly in their marketing materials.

Interestingly, in 2001, embedded software market leader Wind River acquired the software assets of Berkeley Software Design Inc. (BSDi), stating it planned to add BSD/OS to its embedded OS product line as a business-friendly alternative to Linux. The company later abandoned BSD and adopted a Linux strategy instead.

 
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