Can I create a legal entity and distribute the proprietary modification of GPLed code just to the members of this entity to bypass GPL requirements ?
This controversial idea surfaced at Slashdot (see Slashdot discussion: Hole in GNU GPL) and in essence can be explained as the creation of a legal entity (for example a non-profit foundation) for the explicit purpose of circumventing the notion of “distribution” used by the GPL. GPL mandates this by requiring that modifications to software licensed under the GPL also be distributed under the GPL. But formally this is an “external distribution” and this limitation does not apply to the “internal distribution” within a given legal entity, for example a corporation. The GPL FAQ states: You are free to make modifications and use them privately, without ever releasing them. This applies to organizations (including companies), too; an organization can make a modified version and use it internally without ever releasing it outside the organization.” If only members of this specially-created legal entity (let’s call it “Truly Free Software Foundation” (TFSF)) are eligible to use the derived pr
