Felix Stalder on Sat, 7 Aug 2004 11:56:52 +0200 (CEST)

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<nettime> A 'licensing fee' for GNU/Linux?

It seems like the real battle over the future of Free and Open Source Software 
is being fought in the area of patents, not copyright.

Copyright, which protects a particular expression, is very hard to infringe 
upon involuntarily. Even if two people happen to have the same idea, chances 
are, they will express it differently. From the point of view of copyright, 
no harm done. Patents are different, they protect an idea, independent from 
its expression. If you have an idea that someone else has already patented, 
though luck. It's not your idea anymore. The history of technology is full of 
cases where two people came up with the same invention, but one was faster. 
Famous is the case of Alexander Graham Bell and Elisha Grey. Both filed their 
patents for the telephone on February 14, 1876. Bell's was the fifth entry of 
that day, while Gray's was the 39th.

Fast forward to today. Patent offices everywhere are drowning in applications 
and are chronically understaffed. Once a patent has been submitted, it can 
take more than a year before it is reviewed, but once it has been approved, 
it becomes valid retroactively. In an area like software development, where 
product cycles counted in months, rather than years, this introduces 
irreducible uncertainty. There is no way of knowing what patents are in the 
pipeline. Combine that with the fact that complex software packages include a 
potentially large number of ideas that might, or might not, be patentable it 
becomes evident that it's essentially unknowable if there might be a patent 
issue hidden somewhere.

This applies to all kinds of software, proprietary as well as free/open 
source. From a user's point of view, there is, however, a crucial 
differences. With proprietary software, the company from which the software 
is licensed assumes all responsibility and the user has no worries beyond the 
licensing fees. So, when last August a court ruled in an exeptional case that 
Internet Explorer improperly contained patented technology, it was Microsoft 
that had to pay up $520,600,000.00 [1]. For the users, the verdict had no 
relevance what so ever. The case was exceptional because usually, large 
corporations can settle their patent disputes by crosslicensing their patent 
portfolios. That makes things easy and has the nice effect of keeping others 

The case is different with Free /Open Source Software. In this case, the users 
are at real risk. The city of Munich realized this and, in early August, 
postponed their high profile switch to Linux to assess the patent risk. For 
the moment, they remain committed to the migration project [2]. They were 
afraid to suddenly receive an injunction and having to stop using their Linux 
machines. Chances, one might guess, are remote, but even this is unacceptable 
to a public administration.  

A few days earlier, a company called 'Open Source Risk Management' [3], which 
has Bruce Perens as one of its board members, issued a report warning that 
the Linux Kernel potentially infringes on 283 patents. Of these only 98 are 
owned by companies currently friendly to Linux, including 60 from IBM, 20 
from Hewlett-Packard and 11 from Intel. This warning was not entirely 
disinterested, since OSRM will soon begin to sell insurances. The prices, as 
announced so far, are $150,000.00 per year and this protects against 
settlement costs of up to $ 5,000,000 [4].

In a similar vein, large Linux sellers such as IBM and HP offer indemnity 
clauses as part of their Linux deals (in the context of the SCO cause).

It's not a big leap of imagination to see the explicit costs of an insurance, 
or the implicit costs of an indemnification clause as part of a service 
contract, as a kind of 'licensing fee' for Linux. And like other licensing 
contracts, they could introduce serious restrictions that work perfectly well 
on top of GPL code. In HP's case, for example, the indemnification only 
applies to Linux run on HP hardware. 

In case of OSRM, one must assume that there will be limits to the kinds of 
modifications one is allowed to do to the software. Perhaps there will be a 
list of approved modules one may to compile into the kernel under the terms 
of the insurance. In some way or another, OSRM will have to define what code 
exactly the insurance covers.

While this kind of patent risk is unlikely to hit the end user directly, it 
might turn into a major issue for institutional users who are vital in 
helping Linux break out of its current niche.

If anything, this problem is going to get worse. At the end of July, Microsoft 
announced that it plans to file 3000 patents this year. This would be a 
significant increase over the 2000 patents it filed last year and the 1000 
patents filed just a few years ago. No wonder Bill Gates says that this "is 
something that we are pretty excited (about)."[5] 

[1] http://www.ucop.edu/news/archives/2003/aug11art1.htm
[2] http://www.muenchen.de/Rathaus/bb_dir/presse/2004/08/
    99502/limux_softwarepatent.html (DE)
[3] http://www.osriskmanagement.com
[4] http://news.com.com/2100-7344_3-5291403.html
[5] http://news.com.com/2100-1014_3-5288722.html


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