Matplotlib only uses BSD compatible code. If you bring in code from another project make sure it has a PSF, BSD, MIT or compatible license (see the Open Source Initiative licenses page for details on individual licenses). If it doesn’t, you may consider contacting the author and asking them to relicense it. GPL and LGPL code are not acceptable in the main code base, though we are considering an alternative way of distributing L/GPL code through an separate channel, possibly a toolkit. If you include code, make sure you include a copy of that code’s license in the license directory if the code’s license requires you to distribute the license with it. Non-BSD compatible licenses are acceptable in matplotlib toolkits (eg basemap), but make sure you clearly state the licenses you are using.
The two dominant license variants in the wild are GPL-style and BSD-style. There are countless other licenses that place specific restrictions on code reuse, but there is an important difference to be considered in the GPL and BSD variants. The best known and perhaps most widely used license is the GPL, which in addition to granting you full rights to the source code including redistribution, carries with it an extra obligation. If you use GPL code in your own code, or link with it, your product must be released under a GPL compatible license. I.e., you are required to give the source code to other people and give them the right to redistribute it as well. Many of the most famous and widely used open source projects are released under the GPL, including linux, gcc, emacs and sage.
The second major class are the BSD-style licenses (which includes MIT and the python PSF license). These basically allow you to do whatever you want with the code: ignore it, include it in your own open source project, include it in your proprietary product, sell it, whatever. python itself is released under a BSD compatible license, in the sense that, quoting from the PSF license page:
There is no GPL-like "copyleft" restriction. Distributing binary-only versions of Python, modified or not, is allowed. There is no requirement to release any of your source code. You can also write extension modules for Python and provide them only in binary form.
Famous projects released under a BSD-style license in the permissive sense of the last paragraph are the BSD operating system, python and TeX.
There are several reasons why early matplotlib developers selected a BSD compatible license. matplotlib is a python extension, and we choose a license that was based on the python license (BSD compatible). Also, we wanted to attract as many users and developers as possible, and many software companies will not use GPL code in software they plan to distribute, even those that are highly committed to open source development, such as enthought, out of legitimate concern that use of the GPL will “infect” their code base by its viral nature. In effect, they want to retain the right to release some proprietary code. Companies and institutions who use matplotlib often make significant contributions, because they have the resources to get a job done, even a boring one. Two of the matplotlib backends (FLTK and WX) were contributed by private companies. The final reason behind the licensing choice is compatibility with the other python extensions for scientific computing: ipython, numpy, scipy, the enthought tool suite and python itself are all distributed under BSD compatible licenses.