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Novell Offers Linux Users Legal Indemnity

Anonymous Coward writes "Novell today said it intends to indemnify its enterprise Linux users against possible legal action by The SCO Group and/or others. According to eWeek Novell's new Linux Indemnification Program is designed to provide its SUSE Enterprise Linux customers with protection against intellectual-property challenges to Linux and to help reduce the barriers to Linux adoption in the enterprise. Under the terms of the program, Novell will offer indemnification for copyright infringement claims made by third parties against registered Novell customers who obtain SUSE Enterprise Linux 8 after January 13, 2004, upgrade protection and a qualifying technical support contract from Novell or a Novell channel partner."

18 of 271 comments (clear)

  1. it looks like they're only looking for sales by dogas · · Score: 5, Insightful

    so it starts January 13th? otherwise you have to buy an 'upgrade package'?

    they're just trying to make a sale. It would be better if they offered this protection to all of their customers, rather than forcing companies to buy an 'upgrade', that will most likely prove worthless anyhow,

    --
    'When the going gets weird, the weird turn pro.' -HST
  2. Re:Okay, but... by HotNeedleOfInquiry · · Score: 5, Insightful
    The indemnification issue is not about indemnification itself. It's a smart, tactical play to encourage corporate Linux users not to cave and buy "licenses" from SCO.

    This move deprives SCO of its *only* positive cashflow.

    --
    "Eve of Destruction", it's not just for old hippies anymore...
  3. In other words... by AndroidCat · · Score: 3, Insightful
    Novell: Me too!

    Sure why not. What SCO's chances of winning past IBM, Redhat and the rest to actually sue a SUSE user? Isn't think like selling "The Moon landing on your head" insurance?

    --
    One line blog. I hear that they're called Twitters now.
    1. Re:In other words... by Fjornir · · Score: 3, Insightful
      Novell: Me too!

      Funny. I read it exactly the other way around. The way it looks to me is Novell is saying, "Don't worry about it. If you got your Linux from us, we got you covered like a jimmy-hat."

      I'd like it more if Novell said, "NOT ON MY WATCH!" but I'll take this.

      --
      I want a new world. I think this one is broken.
  4. it seems by toddhunter · · Score: 4, Insightful

    That everyone now is using SCO to cash in a little. No doubt Novell, IBM et al have made these funds knowing full well that SCO will never see any of that money because they will never really challenge anyone in court if they can help it.
    Meanwhile, these companies get free good publicity.

  5. SCO Terrorist Effect by ChowyChow · · Score: 4, Insightful

    Nearly all the posts on Slashdot so far point to Novell and say that they're trying to cash in on SCO.

    While it seems that Novell is feeding the fear of users, they're really not. It simply says that Novell is willing to spend big $$$ in legal fees to fend off SCO just as IBM is. However, they are doing this volentarily in order to make extra sales. This helps Linux/open source. Notice that they are not charging extra ($600) for this service.

    Think of SCO as the terrorists of Linux. Novell is offering protection, just as if some airline started carrying on board guards. Whether or not you think it's useful, its there for those companies who are not buying into Linux because of SCO's allegations.

  6. Business move... by AndyFewt · · Score: 3, Insightful

    If you have had a hand in development of Unix, now own suse and know probably where most of the source code came from in unix (development history too).. wouldnt you make this move and hopefully cash in on some sales.

    People might see that Novell have been part of unix development, add that to the current copyright dispute with SCO and that Novell do have some rights. This could swing it for those companies wanting to use linux but dont want the risk. They might go with suse now, get some legal protection and have the perception that novell knows SCO's claims are utter BS and have now covered you from any lawsuit SCO may or may not file.

    Just a thought.

  7. Re:ARGGHHH... by MarcQuadra · · Score: 3, Insightful

    Because there's an ARMY of PHBs in suits who think that Linux is 'interesting, but just a toy' and this is 'big trouble, they stole SCO code!'

    Do you think a guy who's title is 'Vendor Risk Manager' is going to tell his boss to buy -LINUX- right now, with all the conflicting press?

    This way Novell makes a buck, and the PHBs can 'safely' deploy. Everybody wins. We even get greater circulation of OUR product in the end!

    --
    "Sometimes, I think Trent just needs a cup of hot chocolate and a blankie." -Tori Amos on Nine Inch Nails
  8. Re:Novell wins either way by Anonymous Coward · · Score: 5, Insightful

    The payments to Novell are from licensees at the time of the transfer agreement. SCO gets 100% of new license revenue, which would include licensing of Linux.

  9. Are you people happy with nothing? by soren42 · · Score: 5, Insightful

    Why is everyone attacking Novell for this? Why are you all claiming they are in bed with SCO for offering enterprise customers what we have been asking for?

    I can only speak for my large enterprise (Fortune 50, 70,000+ employees, billons of US$ in revenue, etc.), but our biggest obstacle to buying Linux was our legal department, demanding "I can get indemnity from everyone else, why can't someone offer me indemntiy for Linux?"

    Large organizations (particularly ones that have large sums of other people's money to protect) only have one issue here - it's not open source politics, it's not SCO's pump and dump, and it's not who's right or wrong - it's risk mitigation. It's a question of how much money are we going to lose if SCO is right, and who is going to protect us from this?

    I, for one, am glad to see Novell offering the opportunity for real Linux indemnity - goodness knows, I've asked everyone in the industry for it.

    --

    "Adventure? Excitement? A Jedi craves not these things."
    1. Re:Are you people happy with nothing? by stewball · · Score: 5, Insightful

      I wish I had some mod points to give you, but hopefully someone will take care of that.

      I've seen the inside of a fair number of discussions on whether and to what extent to provide indemnification in contract, and the calculus is pretty damn simple.

      1) How much are we making on this deal/this product?

      2) How big would the exposure be (including legal fees, etc.) if we provided x kind of indemnity? (There are a LOT of different ways to structure indemnification provisions, and I don't know what Novell has in mind.)

      3) What is the likelihood that we'll have to pay out?

      If revenue is less than risk magnitude multiplied by exposure estimate, you don't indemnify unless you're willing to play craps with the future of your company. Period. Punto. End of story.

      Now, Novell is saying it will indemnify people on a PROSPECTIVE BASIS if those people contribute to Novell's revenue stream. This is a pretty reasonable bargain. I don't think there's a CFO or institutional investor alive who would agree to let their company go BACK to the customer base and add risk to the company's profile when all of the pricing to those customers was calculated using a lower risk profile.

      In other words, there's no such thing as a free lunch.
      ------

      --
      Point and Counterpoint: The Tick - "Spoon!" Neo - "There is no spoon."
  10. Re:does it seem like.. by cbreaker · · Score: 3, Insightful

    You're right man.

    Seriously, where do people think companies are going to make money? Everyone says "support contracts" but then when a company tries to sell them, people claim they are no better then Microsoft.

    Why would Novell protect someone that does not purchase their support? I think it's a pretty good idea, good business practice, and throws this back in the face of SCO.

    --
    - It's not the Macs I hate. It's Digg users. -
  11. A less cynical response... by Alethes · · Score: 4, Insightful

    It's possible that they're just not comfortable guaranteeing the legality of code prior to this release because they haven't reviewed it. Just a thought.

  12. Re:ARGGHHH... by AJWM · · Score: 5, Insightful

    Novell has absolutely ZERO need for an insurance company to handle the claims.

    SCO sues some Linux user over alleged SCO Unix IP? Novell exercises its right to waive SCO's action, as per the purchase agreement that bought whatever feeble Unix rights SCO has from Novell in the first place.

    Novell also has the right to license Unix to its own customers, again voiding any attempted SCO suit.

    --
    -- Alastair
  13. Nope by Lobo_Louie · · Score: 3, Insightful

    It says go ahead and implement Linux at your site. We (the open source community) think these charges are *so* baseless, we'll pay for your defense.

  14. Re:Novell, I'd think better of you if you didn't. by stewball · · Score: 3, Insightful

    Well, in corporate sales, as in poker, money talks and bullshit walks.

    Novell can say over and over and over again in excruciating detail why they think that SCO is full of it, but unless and until they put their money on the line and actually stand up to take some risk with their customers, no-one will really believe them.
    -----

    --
    Point and Counterpoint: The Tick - "Spoon!" Neo - "There is no spoon."
  15. No cost to Novell for indemnity by arrianus · · Score: 3, Insightful
    From the Novell-SCO sale agreement, section 4.16b (source: Groklaw):
    (b) Buyer shall not, and shall not have the authority to, amend, modify or waive any right under or assign any SVRX License without the prior written consent of Seller. In addition, at Seller's sole discretion and direction, Buyer shall amend, supplement, modify or waive any rights under, or shall assign any rights to, any SVRX License to the extent so directed in any manner or respect by Seller. In the event that Buyer shall fail to take any such action concerning the SVRX Licenses as required herein, Seller shall be authorized, and hereby is granted, the rights to take any action on Buyer's own behalf.
    In other words, if SCO sues a Novell customer for violating SVRX copyright, Novell may simply compell SCO to issue them a SVRX license permitting them to keep using the SVRX code. The indemnity for Novell is pretty much full-proof for Novell. The question we should be asking is why Novell doesn't exercise this option to grant full rights to IBM and others. My guess is that they are trying to maintain a bargaining chip. Once this card is played, Novell/SuSE will be in a very weak position, due to the non-compete in the original Novell-SCO agreement. SCO would lose the war with IBM, but would have no reason not to squash Novell. That leaves SCO and Novell are in a bit of a cold war, where either can destroy the other completely, resulting in mutual annhilation. In the meantime, both sides are supporting their own versions of Afghanistan and Vietnam against the other.
  16. I think everyone missed the point here by Craig+Maloney · · Score: 3, Insightful

    Just a few stories up SCO was blasting the Linux vendors for not poviding legal indemnity. Their take was "Look, if you're so sure your code isn't infringing, give your users legal peace of mind". They thought no Linux company would take them up on it. Novell with this move has stepped up to the table, anteed up, and put the ball right back in SCO's corner.