Start-up launches Linux legal protection

Open Source Risk Management will sell insurance against Linux-related copyright infringement suits starting Monday, though an analyst says the firm probably won't be overrun with clients.

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Open Source Risk Management plans on Monday to begin selling Linux users protection against copyright infringement claims such as those levied by the SCO Group.

The New York-based company is launching the insurance-like offering after a six-month study that compared Linux with several versions of Unix. The evaluation uncovered no copyright problems with versions 2.4 or 2.6 of Linux's heart, or kernel, a finding that contradicts SCO's legal attack on IBM, AutoZone and DaimlerChrysler.

"We have come out of the examination process with the strong belief that there are no meritorious copyright infringement claims in the kernel," said John St. Clair, OSRM's executive director. "With all we have seen to date, I don't believe they have a strong case."

SCO disagreed. "Everything we have looked at and found would run contrary to what they're finding," spokesman Blake Stowell said. But SCO has no objection to OSRM's business: "If people feel there's risk involved in running open source, I suppose the business they've created is a good one."

OSRM's legal protection is the adaptation of the business world to the arrival of open-source software, a collaborative programming philosophy in which developers cooperate by freely sharing their programs' source code rather than keeping it under tight proprietary wraps. The new offering follows indemnification Novell and Hewlett-Packard provide customers who buy Linux products and a promise by Red Hat to replace any Linux software that a court case finds to infringe copyrights.

However, RedMonk analyst Stephen O'Grady hasn't encountered widespread interest in such protections thus far. "I'd be surprised if the traction was huge," he said of OSRM's insurance offering. "We don't see a lot of folks concerned with the ongoing litigation."

The legal protection covers only copyright infringement, though OSRM plans to offer patent protection later as well. Chairman Daniel Egger said that protection will cost extra.

Also Monday, OSRM launched another element of its business: a group of legal experts called the Open Source Legal Defense Center. Companies can pay $100,000 per year--$250 for individual Linux programmers--to get access to the experts' legal advice, St. Clair said. Individuals can get up to $25,000 worth of advice in advance or when dealing with a direct legal threat involving software they wrote.

"It's a very nice gesture," O'Grady said. "It's likely to win them quite a few friends in the open-source community."

SCO, which owns a disputed amount of Unix intellectual property, sued AutoZone in March for using Linux, asserting that several Linux features violate Unix copyrights. At the same time, it sued DaimlerChrysler, alleging that the automaker violated its Unix license with SCO by refusing to say how many computers at the company use Unix technology.

The suits have shocked the computing industry and incensed open-source community members. Despite SCO's actions, Linux server sales have accelerated, growing 63 percent in the fourth quarter of 2004 to $960 million and moving toward higher-end computers.

OSRM's legal protection comes one month after OSRM announced its plans, and three weeks after it publicized plans for seminars on handling open-source software.

The start-up charges 3 percent per year of the cost of a given amount of copyright infringement protection. Thus, protection against legal costs of $1 million would cost $30,000 per year, St. Clair said.

As a starting point, OSRM recommends that Linux users buy protection equivalent to how much money they spend on hardware, software and personnel related to open-source technology, St. Clair said.

In addition, St. Clair said that Bruce Perens, a prominent open-source advocate, will join OSRM's board of directors this week.

OSRM's study compared the generic Linux kernel--which founder Linus Torvalds publishes at the Kernel.org Web site--to several versions of Unix, St. Clair said, though he refused to say which ones. Although OSRM's insurance protects only against that version of the kernel, the company plans to expand to include patches used by Linux sellers such as Red Hat and Novell, St. Clair said. The company also plans to move to higher-level software beyond the kernel.

The start-up doesn't yet have any takers for the legal protection, but "I think there are easily in the hundreds of customers that would want this," St. Clair said.