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In this section, I'll present the entire text of the Open Source Definition, with commentary (in italic). You can find the canonical version of the Open Source Definition at http://www.opensource.org/osd.html.
Pedants have pointed out minor ambiguities in the Open Source Definition. I've held off revising it as it's little more than a year old and I'd like people to consider it stable. The future will bring slight language changes, but only the most minor of changes in the intent of the document.
Open source doesn't just mean access to the source code. The distribution terms of an open-source program must comply with the following criteria:
Note that the Open Source Definition is not itself a software license. It is a specification of what is permissible in a software license for that software to be referred to as Open Source. The Open Source Definition was not intended to be a legal document. The inclusion of the Open Source Definition in software licenses, such as a proposed license of the Linux Documentation Project, has tempted me to write a more rigorous version that would be appropriate for that use.
To be Open Source, all of the terms below must be applied together, and in all cases. For example, they must be applied to derived versions of a program as well as the original program. It's not sufficient to apply some and not others, and it's not sufficient for the terms to only apply some of the time. After working through some particularly naive interpretations of the Open Source Definition, I feel tempted to add: this means you!
The license may not restrict any party from selling or giving away the software as a component of an aggregate software distribution containing programs from several different sources. The license may not require a royalty or other fee for such sale.
This means that you can make any number of copies of the software, and sell or give them away, and you don't have to pay anyone for that privilege.
The ``aggregate software distribution containing programs from several different sources'' was intended to fit a loophole in the Artistic License, a rather sloppy license in my opinion, originally designed for Perl. Today, almost all programs that use the Artistic License are also available under the GPL. That provision is thus no longer necessary, and may be removed from a future version of the Open Source Definition.
The program must include source code, and must allow distribution in source code as well as compiled form. Where some form of a product is not distributed with source code, there must be a well-publicized means of downloading the source code, without charge, via the Internet. The source code must be the preferred form in which a programmer would modify the program. Deliberately obfuscated source code is not allowed. Intermediate forms such as the output of a preprocessor or translator are not allowed.
Source code is a necessary preliminary for the repair or modification of a program. The intent here is for source code to be distributed with the initial work, and all derived works.
The license must allow modifications and derived works, and must allow them to be distributed under the same terms as the license of the original software.
Software has little use if you can't maintain it (fix bugs, port to new systems, make improvements), and modification is necessary for maintenance. The intent here is for modification of any sort to be allowed. It must be allowed for a modified work to be distributed under the same license terms as the original work. However, it is not required that any producer of a derived work must use the same license terms, only that the option to do so be open to them. Various licenses speak differently on this subject -- the BSD license allows you to take modifications private, while the GPL does not.
A concern among some software authors is that this provision could allow unscrupulous people to modify their software in ways that would embarrass the original author. They fear someone deliberately making the software perform incorrectly in a way that would make it look as if the author was a poor programmer. Others are concerned that software could be modified for criminal use, by the addition of Trojan horse functions or locally-banned technologies such as cryptography. All of these actions, however, are covered by criminal law. A common misunderstanding about software licenses is that they must specify everything, including things like ``don't use this software to commit a crime.'' However, no license has any valid existence outside of the body of civil and criminal law. Considering a license as something apart from the body of applicable law is as silly as considering an English-language document as being apart from the dictionary, in which case none of the words would have any defined meaning.
The license may restrict source code from being distributed in modified form only if the license allows the distribution of ``patch files'' with the source code for the purpose of modifying the program at build time.
Some authors were afraid that others would distribute source code with modifications that would be perceived as the work of the original author, and would reflect poorly on that author. This gives them a way to enforce a separation between modifications and their own work without prohibiting modifications. Some consider it un-aesthetic that modifications might have to be distributed in a separate ``patch'' file from the source code, even though Linux distributions like Debian and Red Hat use this procedure for all of the modifications they make to the programs they distribute. There are programs that automatically merge patches into the main source, and one can have these programs run automatically when extracting a source package. Thus, this provision should cause little or no hardship.
Note also that this provision says that in the case of patch files, the modification takes place at build-time. This loophole is employed in the Qt Public License to mandate a different, though less restrictive, license for the patch files, in contradiction of Section 3 of the Open Source Definition. There is a proposal to clean up this loophole in the definition while keeping Qt within Open Source.
The license must explicitly permit distribution of software built from modified source code. The license may require derived works to carry a different name or version number from the original software.
This means that Netscape, for example, can insist that only they can name a version of the program Netscape Navigator(tm) while all free versions of the program must be called Mozilla or something else.
The license must not discriminate against any person or group of persons.
A license provided by the Regents of the University of California, Berkeley, prohibited an electronic design program from being used by the police of South Africa. While this was a laudable sentiment in the time of apartheid, it makes little sense today. Some people are still stuck with software that they acquired under that license, and their derived versions must carry the same restriction. Open Source licenses may not contain such provisions, no matter how laudable their intent.
The license must not restrict anyone from making use of the program in a specific field of endeavor. For example, it may not restrict the program from being used in a business, or from being used for genetic research.
Your software must be equally usable in an abortion clinic, or by an anti-abortion organization. These political arguments belong on the floor of Congress, not in software licenses. Some people find this lack of discrimination extremely offensive!
The rights attached to the program must apply to all to whom the program is redistributed without the need for execution of an additional license by those parties.
The license must be automatic, no signature required. Unfortunately, there has not been a good court test in the U.S. of the power of a no-signature-required license when it is passed from a second party to a third. However, this argument considers the license in the body of contract law, while some argue that it should be considered as copyright law, where there is more precedent for no-signature licenses. A good court test will no doubt happen in the next few years, given the popularity of this sort of license and the booming nature of Open Source.
The rights attached to the program must not depend on the program's being part of a particular software distribution. If the program is extracted from that distribution and used or distributed within the terms of the program's license, all parties to whom the program is redistributed should have the same rights as those that are granted in conjunction with the original software distribution.
This means you can't restrict a product that is identified as Open Source to be free only if you use it with a particular brand of Linux distribution, etc. It must remain free if you separate it from the software distribution it came with.
The license must not place restrictions on other software that is distributed along with the licensed software. For example, the license must not insist that all other programs distributed on the same medium must be open-source software.
A version of GhostScript (a PostScript-rendering program) requires that the media on which it is distributed contain only free software programs. This isn't permissible for Open Source licenses. Fortunately, the GhostScript author distributes another (somewhat older) version of the program with a true Open Source license.
Note that there is a difference between derivation and aggregation. Derivation is when a program actually incorporates part of another program into itself. Aggregation is when you include two programs on the same CD-ROM. This section of the Open Source Definition is concerned with aggregation, not derivation. Section 4 is concerned with derivation.
The GNU GPL, BSD, X Consortium, and Artistic licenses are examples of licenses that we consider conformant to the Open Source Definition. So is the MPL.
This would get us in trouble if any of these licenses are ever changed to be non-Open-Source -- we'd have to issue a revision of the Open Source Definition immediately. It really belongs in explanatory text, not in the Open Source Definition itself.