Open-Source Insurance Provider Finds Patent Risks in Linux

In response, OSRM will be expanding its risk mitigation and insurance offerings to cover this quantifiable risk.

"Patents pose a financial risk to corporate Linux users-just like they do to corporate users of almost any software-because, whether or not a patent is truly infringed, it costs $3 million dollars on average to defend a patent lawsuit," said Ravicher. "This heavy cost of proving even weak patents invalid could fall on unprepared end-users, who, until now, have often been forced to pay settlements to avoid risking millions on litigation. Orems new patent insurance gives such end-users another way to address the issue, as it is a direct competitive alternative to licensing or litigating." Ravicher summed up his findings.

Specifically, OSRM will be supplying patent-infringement defense insurance for Linux developers and users. At first, this program, which will roll out in 2005, will only be available for the Linux kernel, but OSRM will it extend it to more open-source programs over time. The insurance, which caps out at $5 million, will pay for a legal defense and for damages.

"The most important message to take away, based on Orems proprietary research and quantitative models and the best independent legal analysis available to us, is that the core of the Linux operating system appears to be a normal, insurable patent risk for the businesses that use it. And, based on our hands-on work with many different types of customers, we have found the total cost of ownership of using Linux to still be dramatically lower than proprietary alternatives for customers that add in the cost of effective risk-management," said Egger.

"What it boils down to is that Linux has patent risks; but they can and will become conventional insured risks, just an everyday cost of doing business. OSRMs whole mission is to make the issue of Linux liability simple, routine, and manageable."

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