But my understanding is that the copyright holders have the right to change the license.

Once people contribute to the project, they, too, are copyright holders. If a contributor does not approve of the change to the license, he or she should have the ability to remove his contributions from the product (or otherwise relinquish copyright) before it is forked.

In addition, anyone is free to fork from the last "free" version, which could cause its own problems for you. The free software community could decide that they much prefer the free version, significantly enhance that fork, and leave your commercial product looking dull and not worth the money.

To clarify, the copyright holders have the right to relicense their work under a new license. This does not mean that old versions cease to be licensed under the old license -- works can be simultaneously available under several licenses, in which case people can decide which license to take advantage of.

Let's say I put something under the GPL and you download the source. Later, I regret that and don't allow more people to download the source. You (as someone who has downloaded it) can still forever use, transmit, etc. it under the GPL. So, people that want a copy of the source can get it from you even if they can't get it from me - and there is absolutely nothing that mandates I continue to give out the source if it's mine. I then add to it and make a cool Project 2.0 that's closed only and based off that old GPL code. That's perfectly fine.

However, let's say that I took some GPL code, modified it and distributed it. Now the codebase isn't all my code - it's also partly one or many other people's code. I can stop distributing it all together, but I can't distribute it and not the source code. BUT, what if part of my 2.0 closed source version development was eliminating all the GPL code from it! Then I can make it closed.

Basically, if the copyright is your copyright, you have free range. You can't take away the rights of someone who already has the code under the GPL, but you can stop the GPL thing from going forward (unless the community builds a better fork off your old GPL code). However, if you're using other people's code in your program, you're stuck with the GPL unless you can get the authors of the other code to exempt you.

So, he can't un-open-source the contributions of the other people, but he could replace them. One of the flaws in the GPL is that you have to wait for one of the author's whose copyright is infringed to sue. Courts have sometimes held that intended third party beneficiaries have standing, but that's a lot more murky since you're then claiming that the original author created something for your benefit that an intermediary is stopping you from using.

http://en.wikipedia.org/wiki/Clean_room_design might be useful.

No, but many companies (and the FSF) demand that contributors assign copyright to any open source contributions they make. Sometimes they make excuses about how owning copyright in all the code makes it easier for them to go after license infringers, but that's just an excuse; what they really want is the ability to relicense contributors' work in the future.

Therefore, it appears an old version GPL license is a neverending license without a way for the original person to end it. So no, he cannot open-source any of it, even his own original work. He can stop distributing it, but since he gave a license to others to distribute it, they can just distribute the original. And unless they break the one term of the license, he cannot stop that.

Clearly, this is where you run into the concept of the GPL. It was meant to ensure that original works of software would always be available to use and modify. "Always available" are the key words. He is out of luck.

The new GPL (v.3) appears to grant a license for the term of copyright. Not sure what that means. But, it also gives a license to someone you distribute the work to from the orignal copyright holder. To me, this means if you try to distribute a project with someone else's modifications, the person receiving the project gets a GPL license on those modifications, not your expensive license. Since the original work can also be distributed, essentially this means the whole thing can't be un-open-sourced.

Basically, the only thing I think he can do it make his own modifications, and release those for a fee. He cannot stop anyone from releasing the original or the original with others modifications.

there are a lot of companies that have an OS version of something, and then a premium version, which consists basically of proprietary scripts and upgrades that hook into the OS version and improve it. they're not touching the actual OS package itself, but selling something on top of it.

If (as seems more likely) the other contributors still hold the copyright to their own contributions, your only rights to their code are those granted under the GPL, so you couldn't distribute it under any other terms.

At any rate, those are my thoughts, but IANAL.

A few months later, they announced they were taking their code in-house and leaving the open-source stuff for anyone to fork.

BTW, above colleague also left to work for Jive - I believe he's still with them several years later.