Open-Source Users Offered Insurance Against SCO and Its Ilk

By Peter Galli  |  Posted 2004-04-19 Print this article Print

As the move to protect Linux users from copyright infringement claims such as those made by The SCO Group gains momentum, users of the open-source operating system are now being offered insurancelike protection against such claims.

As the move to protect Linux users from copyright infringement claims such as those made by The SCO Group Inc. gains momentum, users of the open-source operating system are now being offered insurancelike protection against such claims. New York-based Open Source Risk Management is, starting today, offering what it claims is "the industrys first and only vendor-neutral open-source indemnification, providing users of the Linux kernel legal protection for around 3 percent a year of the maximum desired coverage; which is on par with other IP defense insurance rates." That offering follows a rigorous six-month examination of the individual software files in the Linux kernel and a detailed tracing of their origins. OSRM determined from its examination that there was no copyright infringement in Versions 2.4 and 2.6 of the Linux kernels.
As a result, OSRM decided to offer clients legal protection against copyright litigation for these versions of the kernel, Daniel Egger, the founder and chairman of OSRM, said Monday.
While OSRM also felt that lawsuits such as SCOs are legally weak, it recognized that the business issue for Linux users was that even cases without merit cost significant time and money to defend. "This is not about bad software; there is nothing inherently more risky about using open source. "This is about providing a united defense against those trying to profit from a legal system that permits frivolous but expensive claims," he said. Egger also noted that OSRMs protection differs in important ways from that of an insurance company: OSRM proactively works with clients to assess and mitigate their risks and then helps implement a set of best practices for mitigating legal risks around their use of open source. This initial legal protection covers only copyright infringement, though OSRM also plans to offer patent protection later and at an additional cost. OSRM on Monday also announced the creation of the Open Source Legal Defense Center, based in Washington, D.C., which will offer open-source developers and end users coordinated legal defense services from leading experts in software intellectual property law from legal firms across the United States. Unlike insurance companies, which provide funds for hiring lawyers, OSRM itself hires and provides specialized lawyers for its clients. The center is initially offering two targeted membership programs: one for potential corporate SCO defendants and another for individual contributors to the Linux kernel, Egger said. As SCO has sent about 1,500 of the largest global firms letters threatening litigation over their use of the Linux operating system, which SCO alleges infringes its intellectual-property rights, "OSRM will provide coordinated legal-defense services for these potential SCO defendants, enabling them to build a more powerful defense at significant cost savings. "This center will act as a central forum for confidentially gathering and sharing resources about issues common across the potential defendants and will give clients access to highly specialized IP lawyers who are already fully knowledgeable about these very technical lawsuits," Egger said. Corporate membership in the program is $100,000 annually for resources that would cost "in the millions if developed independently," he said. OSRM is also offering the full resources of the center to individual contributors to the Linux kernel. Individual developers will have access to the same panel of specialized IP legal experts available to OSRMs large corporate clients and can seek advice and services to help protect and defend their own intellectual property rights. This membership, which will cost $250 a year, includes $25,000 in legal backing from OSRM if developers are named in future lawsuits involving their contributions to Linux. OSRMs moves follow those by Hewlett-Packard Co., Novell Inc. and Red Hat Inc. In September, HP announced that it would indemnify its customers against any legal liability from the use of Linux. Novell of Provo, Utah, followed suit early this year and set up a Linux Indemnification Program for its SuSE Enterprise Linux customers, under certain conditions, with protection against intellectual-property challenges to Linux and to help reduce the barriers to Linux adoption in the enterprise. Red Hat then followed suit with its Open Source Assurance Plan, designed to protect customers Linux investments and ensure that they are legally able to continue to run Red Hat Enterprise Linux without any interruption. (Editors Note: To use eWEEK.coms Talkback feature, you must first register. To do so, click on the word "Register" below.) Check out eWEEK.coms Linux & Open Source Center at for the latest open-source news, reviews and analysis. Be sure to add our Linux news feed to your RSS newsreader or My Yahoo page:  
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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