Bruno Lowagie's Online Gazette

Over and over again, people ask the question: Is iText free or licensed? This is a strange question because of the word or. It's as if people think that 'free software' doesn't come with a license, or that software that comes with a license can't be 'free software'.

Let me be very clear about this! iText is not 'freeware'! iText is 'free software' / 'open source software' licensed under the AGPL. The AGPL is a free software license, but this doesn't mean you can use iText 'for free'. There are specific conditions that need to be met. The 'free' in 'free software' doesn't mean 'free as in free beer'; it means 'free as in free speech'.

Listen to Ywein Van den Brande, Attorney at law, for more info:

Integrators often introduce iText into projects for customers without telling their customer that they should buy a license for iText. Then when this is discovered, all kinds of awkward situations emerge. We explain to the integrator's customer that their use of iText requires purchasing a license. The first reaction is always: 'But we've already paid the integrator!' Our answer: 'That may very well be, but we have no record of a license being purchased by either your integrator or your company!'
Then they read the fineprint of the contract with their integrator, and they discover that they, the customer, are responsible to make sure they buy all the necessary licenses. The integrator washes his hands in innocence. That's very disappointing for the customer who's point of view is: 'We’re not interested in free beer that gives us a hangover once you’ve left the party!'
Rather than having to identify all these cases one by one, we'd prefer working with integrators, offering them the opportunity to become one of our resellers. This works in the US, but unfortunately, we didn't have much success with this approach in Europe (although this is starting to change).

There are just too many misunderstandings about open source in Europe. At the last salesmeeting, our sales manager told us about a developer who was selling licenses for a product that uses iText. This developer claimed that he didn't have to pay for an iText license because he had made the source code of his product available on a site. That's like having the cake and eat it. That's not what the AGPL is about!
If you distribute software using iText without paying for an iText license, then your software needs to be distributed under the AGPL. If you distribute the same software under a different license (so you're offering a dual license), you need a commercial iText license for every copy you're distributing under that different license! It doesn't even matter if you charge your customers or not: if you're distributing it under a license that is different from the (A)GPLv3, you need to make an agreement with the owners of the IP of iText. In the case of the AGPL, distribution is a very broad concept; it also means making a service available on a web site or in the cloud!

I'm also tired of answering questions about the old iText, often referred to as 'the free iText'. Previous versions of iText (those before July 2009) were 'free software', just like current versions are 'free software'. That doesn't mean the software can be used for free (how many times do I have to repeat that?).
These old iText versions were available under the LGPL, which is of the same family of the AGPL, but with fewer restrictions. Unfortunately, there are problems with those old versions. On one side, there were technical problems: we've fixed plenty of bugs since 2009! On the other side, there were also legal problems. If you wonder why you don't find any of the pre-iText 5 version on an official iText site, this is why:

You currently have iText 2.1.7 and older versions available on SourceForge. While those versions were available under MPL or LGPL, it has come to our attention that some of the code (which has been removed in the 5.0+ versions), cannot be verified as free of possible copyright violations. You took great steps to go through the entire code base and obtain general releases for all code when moving from the LGPL/MPL version to the AGPL version. There is code in older versions (that no longer exists in version 5.0) which could pose indemnity problems for organizations. This is for your information only, we are not directly aware of any situation, only aware of the possibility since no waivers could be obtained from the organization(s) and individual(s) who contributed the code and the actual source of this code could not be identified.

In short: people who decide to use iText versions older than version 5+ are taking a risk. Not only are they using outdated software for which support has been discontinued years ago (which makes them look less than professional), it's also possible that they are investing time in software that could cause legal problems.
For instance: if you're a start-up, and you decide to use iText without a license, you should have a hard time when you go to a VC for funding, because they'll vet your code and you won't get any money if you aren't able to prove that you're entitled to use iText.
It's always fun when we get a call 'We need an iText license NOW!' We immediately recognize this type of calls. They are from companies that are about to get acquired, but after a due diligence by the buyer, they discover that they have been using iText in a way that is in violation with the AGPL. They want to regularize this situation, and we're willing to help them, but in cases like this, we also have the past use to take into account...

Really, please don't plead ignorance or exploit certain ambiguities to avoid buying a license. Do the right thing!