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I am forking a source code repository. The repository contains a file, LICENSE.TXT, which reads:

"MIT License

Copyright (c) 2021 Microsoft

[...]

The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.

[...]"

What is the common practice here? It seems I must keep a copy of this license in my repository and also publish it when deploying my software. I also want to provide my own license (also under MIT), but I can't sign it using 'Microsoft'. Should I perhaps rename Microsoft's LICENSE.TXT to something else, then create my own LICENSE.TXT and put my name in it?

Basically, I want to abide by the existing license and to publish my own license (which incidentally will be identical but not signed by 'Microsoft' as I am not employed by that company).

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It seems it's the license itself that is under Microsoft's copyright. So if you copy the license, you should leave Microsoft's copyright notice intact. And please, please don't create your own license. It just leads to legal trouble. And Microsoft hasn't given you any permission to modify the license. (Same with the GPL licenses, you are free to copy them, but they will get VERY angry if you modify a GPL license).

Next you look at the copyright for the actual code. The original has one or more copyright holders. If you modify it, you will be an additional copyright holder. So don't write a license that claims you are the sole copyright holder.

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