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How does the GPL affect the licensing and selling of software?

When a copyright holder licenses their software under a GNU General Public Licence, does this affect their entitlement to license the software to another third party and to sell modifications to that software?

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The GNU GPL protects the legal right of a copyright holder to continue to distribute or alter what belongs to them by obligating each licensee to display all applicable copyright notices prominently. However, the "secret formula" for software is the source code and the GPL requires that any software licensed under the GPL be accompanied by a copy of the source code. As a practical matter, therefore, distribution of the software under the GPL could diminish its market value.

This was first published in July 2004

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