What does it mean that Arduino is an open hardware device?

This means that Arduino devices are not protected by patent law – they can be copied and distributed (even commercially), and their schematics are provided free of charge by their creators. Arduino clones include i.e. Freeduino boards and shields that are compatible with the original devices. You should keep in mind that – even if the devices can be copied – the name Arduino is a registered trademark (e.g. it cannot be used to describe homemade shields for sale). Some of the software is also proprietary. So before you create a commercial design using the board, it is a good idea to carefully check which components can be used free of charge.