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OSRM Debuts Linux Legal Insurance

Joining the ranks of Linux distributors HP, Novell and Red Hat, a companynamed Open Source Risk Management (OSRM) has launched a program to protectlarge and small users from legal entanglements arising from adoption of theopen-source operating system.

According to OSRM, its move into the indemnification business comes after arigorous six-month evaluation of the files in the Linux kernel — and a findingthat there are no copyright infringements in versions 2.4 and 2.6 of theoperating system.

“We decided to go straight to the heart of the matter and evaluate whetherwe could defend the Linux kernel,” OSRM founder and chairman Daniel Eggersaid in a statement. “We determined that we can; and we will. Our clientswill receive legal protection equal to, if not beyond, what they receivewith proprietary software licenses.”

Vendor-Free Protection

Unlike some other indemnification programs, users need not be weddedto a particular Linux vendor to obtain OSRM coverage.

Neither is there a limit on the coverage. Businesses can buy as muchcoverage as they want for a fee of 3 percent of the coverage amount — a rate, according to OSRM, comparable to that found in insurance policies covering intellectual-property lawsuits. So, if a company wanted US$1 million in coverage, it would pay $30,000 per year for it.

A legal defense center is also being set up by OSRM where individual users can get legal assistance on Linux matters for $250 and corporations can do so for $100,000.

Best Practices

According to a statement by OSRM, its indemnification program differs from atypical insurance policy because it “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.”

Also, rather than pay for a client’s lawyers, OSRM hires and providesspecialized lawyers for its clients. “These lawyers are chosen from OSRM’scarefully selected panel of leading intellectual property defenselitigators; all of whom have extensive experience with the many highlytechnical Open Source legal issues,” the company explained.

The rise of a number of indemnification programs for Linux is largely areaction to copyright-infringement lawsuits filed by The SCO Group againstIBM, AutoZone and DaimlerChrysler.

SCO Case Weak

“Along with many others, we agree that lawsuits like SCO’s are legally weak;but we recognize the business issue for Linux users is that even caseswithout merit cost significant time and money to defend,” Egger said.

“This is not about bad software; there is nothing inherently more riskyabout using Open Source,” he added. “This is about providing a uniteddefense against those trying to profit from a legal system that permitsfrivolous but expensive claims.”

Laura Koetzle, a senior analyst at Forrester Research in Boston, told TechNewsWorld: “The data that we’ve collected shows that a lot of end customers are worried about the SCO lawsuit. They’re worried that if SCOwins, they’ll be liable for back licensing fees.”

Anxiety Relief

“These programs are a way for customers who are chary of the lawsuit turningout the way they don’t want it to turn out to go ahead and use Linux and notworry about it so much,” Koetzle added.

While indemnification programs offer a measure of protection for Linuxusers, they may have broader implications for the open-source community as awhole, according to Laura DiDio, a senior analyst with the Yankee Group.

“What it all boils down to is that we’re seeing the rapid commercializationof Linux,” DiDio told TechNewsWorld. “It is very quickly being transformedfrom a sort of free hobbyists’ toy to a real commercial enterprise, with allthe attendant fees and costs associated with a commercial desktop and serveroperating system.”

Big Bets Off

“Companies have shown a reluctance to bet big on Linux,” Novell spokespersonBruce Lowry told TechNewsWorld. “We have a variety of things that we thinkwill help get a CIO beyond the concerns he or she may have about Linux, and our indemnification progam is a piece of that.”

DiDio maintained that users who opt to participate in indemnificationprograms may find them an expensive proposition. “At the end of the day,this could end up being much more expensive than the monies that companiesare spending on Microsoft licenses right now, because you have to keep buyingit every year,” she asserted.

Moreover, she added, Microsoft offers one-year warranties for all of itsvolume-licensed customers, and those warranties offer unlimited indemnification. “There is no cap on liability,” she said. “If you get sued for $150 million,Microsoft will pay for it.”

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