Felix Stalder on Tue, 10 Aug 2004 00:51:59 +0200 (CEST)

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

OK, let me try to restate my argument somewhat differently as to take into
consideration a) the fact that software being proprietary _per se_ does
not indemnify the user (Florian's point) and b) that SW patents create a
mess for all programmers (Scott's point) and c) that none of us is a
patent lawyer hence we don't know when patent infringement creates
liability for the author and when for the user (Novica's point).

The key point here is b). SW patents make the publishing of software code
more difficult because they create uncertainly over IP rights. This
uncertainty can be limited, but never completely eliminated, by extensive
and expensive patent research.

Users, for understandable reasons, don't want to be exposed to this kind
of risk, so they will demand, if that is not already a standard clause in
contracts, that the provider of software guarantees that he has all the
rights to the software licensed. So the party which issues the license of
the software will have to assume this risk.

Small companies have a hard time to do this because they can neither
afford to do the necessary research to be able to assess the risk
realistically, nor can they afford to pay possible settlements, in case
they get sued successfully. After all, how many companies could pony up
more than $520 million as the result of an infringement suit?

Large companies can deal with this risk for a variety of reasons. They
hold many of the patents themselves; they are in cross-licensing
agreements with other companies with large patent pools; they have the
lawyers necessary to fight the cases and they have the reserves to pay the
occasional fine as a general costs of doing business.

Small companies have none of that and, this is the key point, neither have
various foundations and authors of FOSS.  Consequently, neither small
proprietary software companies, nor FOSS communities can issues such
guarantees and hence the users of their software will have to assume the

For users of FOSS unwilling to accept such risk -- mainly large
institutional users -- there are two possibilities. One is to buy their
FOSS solution from a major vendor that offers indemnification as part of
the service contract (similar to a provider of proprietary software). The
other is to purchase insurance (like the one offered by OSRM). Both create
costs not entirely dissimilar to a licensing fee.

In addition, I would speculate, that such indemnification clauses and
insurances will limit the freedom of development in the future and could
lead to a concentration in the SW industry, proprietary _and_ FOSS. The
difference is that the proprietary SW industry is already highly
concentrated, whereas the FOSS industry is usually thought of as more

In this sense, SW patents will not kill FOSS, but they will give large
companies much more leaway in determining its future, substantially
hollowing out the 'freedom' in free software.



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