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Jon Corbet on indemnification

Jon Corbet, editor of LWN.net, has an interesting hypothesis about SCO's continued bleating about indemnification by software vendors:

There sure has been a big push recently on the fact that Linux vendors don't indemnify their customers against IP claims. Of course, a lot of proprietary software vendors fail to do that too, but that's a digression...

Forbes has been a good SCO mouthpiece through all this. Consider

http://www.forbes.com/2003/08/05/cz_dl_0805ibmlinux.html

But what if five years from now a court rules in SCO's favor and by then you've deployed Linux on thousands of servers throughout your company? Will you be forced to cough up fees to SCO at gunpoint? Or will you rip out all your Linux servers and replace them with something else? Either way you've got a costly headache.

I wonder if the real strategy isn't this: do everything you can into pushing, manipulating, and shaming vendors into promising some sort of indemnity to their customers. At that point, SCO pulls out the stops and goes after those customers with all the lawyer squads it can muster. The customers will, of course, go to their vendor to get them to pay off SCO and make it go away. Said vendors, besieged by angry customers, give in and write a check. SCO laughs its way to the bank.

The vendors likely see this, and that can only stiffen their resolve to not make promises about other peoples' code.

To stress the obvious: the problem with blanket indemnities, and the reason why they're rarely given, is that they can expose the party granting the indemnification to unbounded legal risk, even if they act in good faith and there is no underlying infringement. A party can make a frivolous claim which the vendor would still be required to defend.

The Forbes piece should not really be dignified with a response, but here are just a few problems with this single paragraph:

1. As Moglen points out, SCO have already reneged on their original licensing of this code under the GPL. What grounds does a potential licensor have to believe that they will not demand additional fees later on?
2. As Moglen also points out, there do not seem to be any legal grounds for SCO to sue end users, and so those users are not in need of any indemnity.
3. SCO has not publicly produced any evidence that there is even a whiff of an an infringement. Does Lyons really suggest users fork over thousands of dollars in licence fees with no real proof that they're necessary? If so, I have a bridge to sell him.

posted Wed 6 Aug 2003 in /issues/sco-vs-linux | link

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