SCO Just Start of Open-Source Lawsuit Wave, Attorneys Say

With its move into the mainstream, open-source software will be a growing target for increasingly creative lawsuits, legal panelists say at the Open Source Business Conference 2004.

SAN FRANCISCO—The SCO Group Inc.s lawsuits against Linux are a harbinger of the litigation likely to come as business interests seek to capitalize on the growth of open-source software, legal panelists said here Wednesday at the Open Source Business Conference 2004.

"There will be a wave of a number of lawsuits on open source simply because its become so ubiquitous," said panelist Mark Radcliffe, a partner at law firm Gray Cary.

While SCO has targeted contract and copyright law in most of its lawsuits, the next likely target for enterprising litigants will be patent law, said panelist Irwin Gross, a partner at law firm Wilson Sonsini Goodrich & Rosati. A range of companies have been collecting war chests of patents, many from failed tech companies of the 1990s.

Even if the patent infringement claims are weak, the cost of defending such cases is great, and targets in open source could stretch much further than in proprietary software development, Gross said. Thats because open source is built on a model of far-flung contributors to software code that include major software companies.

"The larger implications of the SCO lawsuits are less about the particulars of the parties or the details of the specific copyrights. But they are the opening bell on creative litigation across a wide range of intellectual property," Gross said.

Whether or not SCOs legal attacks are a sign of the times, the companys copyrights claims are likely to have the biggest impact on the open-source community, said panelist Lawrence Rosen, an attorney with LLP. SCO has expanded its claims against IBM in its first Linux lawsuit to include copyright infringement, and it also has sued Linux user AutoZone Inc. for copyright infringement. SCO, which holds the licenses to Unix code, alleges that Linux contains copyrighted code from Unix.

"What may come out of this case is a clear declaration that, first of all, thousands of programmers from Linus Torvalds on down…didnt copy anything that anyone else wrote," said Rosen, who said he does not believe any copying occurred. "And if they did, they should be punished."

Rosen also said current and potential users of open-source software should not fear litigation because of the SCO cases or any other lawsuits. As with all software, he said, companies should follow procedures for reducing risk.

Charles Schwab & Co. Inc. of San Francisco is one company that closely monitors the internal use of open-source software for legal risks. In an earlier session at the show, Schwab senior counsel Yusuf Cassim detailed the companys processes for reviewing requests to use open-source software as well as for seeking indemnity and other legal protections from larger IT vendors.

"We face the dilemma that the technical guys want to use open source, but yet were not in the position to fully negotiate those licenses with the sources were getting them from," Cassim said.

Vendors including Hewlett-Packard Co., Red Hat Inc. and Novell Inc. offer to indemnify customers using their Linux products, but specifically around copyright claims. The degree of what they cover varies widely, from covering only SCO-related claims to not covering the cost of defense, panelists said.

/zimages/1/28571.gifTo read more about the vendors indemnity programs, click here.

Rosen said the open-source projects will not and should not be expected to cover the legal risks for users because they do not receive revenue from the software they develop.

"The companies making money off open source may indemnify you," he said. "[But] you need to look at what they indemnify you for, how much they will pay if it is invoked, [if] their pockets are deep enough and if the provisions are broad enough that the indemnification is something other than a marketing ploy."

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