These folks: http://www.phpfox.com/ use 'open source' as a selling feature, where the open only refers to 'non-encrypted source code' rather than distribution rights. Here's what I told them via their Contact web form:
Hi. Your claim that your software is 100% Open Source, and yet you do not use an OSI approved Open Source license. At the very least, this will confuse your customers. Confused customers tend to avoid your business. At some level of misunderstanding, somebody might think that your software is actually Open Source and redistribute your software infringing your copyright. If you attempt to sue them, they could claim innocent infringement, saying that they were relying on your assertion that the software is Open Source. At the very worst, you might be engaging in fraudulent business practices. Most people know what Open Source means, and using a definition intended to mislead is fraud.
May I suggest that you use the term "Source Available" instead?
posted at: 17:08 | path: /opensource | permanent link to this entry