The source code of ZotPad is available under the GNU General Public License. Can I take the code and create a competing project?

Yes, but you probably do not want to do that. First, if you want to develop something based on ZotPad code, we would rather see you developing with us rather than duplicate our efforts. Second, any derivative work using code from ZotPad needs to be released under the GNU General Public License. The GPL is incompatible with the license options that Apple provides in the App Store preventing distributing a derivative work through this channel.

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