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."

Comments

it looks like they're only looking for sales

[dogas]

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,

Re:Okay, but...

[HotNeedleOfInquiry]

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.

Re:does it seem like..

[Rosco P. Coltrane]

And you think they bought SuSE because ...?

Indemnity is sign of an already-successful attack

[phr1]

If SCO (and imagine Microsoft doing the same thing later on) have managed to create enough FUD for users to be afraid of using free software unless identified by some company, that already undermines the goals of free software pretty badly. Being able to download, modify, and redistribute software with the author's permission isn't all that attractive if SCO has made you feel threatened by legal hassles for doing it. You no longer get the freedom from bureaucracy, hassles, per-seat fees, and so forth that the free software developers labored to bring you.

We shouldn't celebrate just because indemnification is available and say it solves the problem. That SCO has created demand for such indemnification is already a big problem. And of course companies offering indemnification have a vested interest in creating more such demand. They're not doing anything bad by offering it, but neither is it completely in the interests of free software for everyone to jump on it. It's more complicated than that and we have to keep the issues clear.

Didn't SCO get a court order to....

[beforewisdom]

Was not a court order for SCO to present their "evidence" supposed to have come due today 1/12/04?

If so will not this issue be dieing soon..?

( assuming they really do not have a claim )

Steve

Re:Didn't SCO get a court order to....

[futuramarama]

As usual, check Groklaw for the lastest.

Seems that SCO did indeed submit (so we wait while IBM reads it).

Now its their turn to put a motion to compel discovery, asking for all modifications ever made by IBM to the System V source code.

It seems that if SCO doesn't give in (and its unlikely they will), they can drag this out for quite some time.

Re:does it seem like..

[Pharmboy]

And you think they bought SuSE because ...?

I would agree. Its ironic. Everyone is talking roses about them because even Novell says they are smoking crack. Then they put their money where their mouth is and offers protection for their customers (they can't offer protection for NON customers, there is no contract to protect, duh).

And now everyone is comparing them to MS.

It doesn't strengthen SCOs case, it demonstrates that SCO doesn't have one. They just called SCO's bluff because they can, for free. Indemnifying customers of legal action against SCO is like offering life insurance for your pet rock: There is little fear you will ever need to exercise the right and collect on it.

If they make some money, too, great. Since they just invested $210 million in open source software, I hope they make a wad.

I smell conspiracy!

[SuperBanana]

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

Wow. I smell a great conspiracy theory here. SCO's actually the puppet of Novell etc, to get businesses to buy Linux distros from vendors who will indemnify them from the big bully SCO.

I'd discuss my theory more, but I just heard a click on my telephone line and that sounds like a black helicopter nearing the house!

Re:SCO Terrorist Effect

[zurab]

Think of SCO as the terrorists of Linux. Novell is offering protection ...

So ... either pay Novell the "protection" or SCO will "blow up" your workplace? I am a SuSE user but, quite frankly, this indemnification business is getting too messy. Nobody that I know of has started becoming scared of SCO or paying their license fees, or ditched Linux. If Novell believes SCO is making false accusations, they can follow RedHat and simply sue SCO right there in Utah! They now own SuSE and they have every right to shut SCO up.

Whatever's comming out of the court room

[rsilvergun]

must be laughable. Why else would there be all these indemnification announcements today? I figure Novell knows some things we don't (yet). I'm looking forward to the end of SCO.

What has gotten into Novell!?

[Fefe]

They have now missed over a dozen opportunities to do something very stupid! Has someone removed the alien face huggers there or what is happening here?

This would have never happened with the old Novell we all loved to loathe.

I find this deeply disturbing. Stupidity does not simply go away just like that. Where is my tinfoil hat again?

Re:Novell wins either way

[Anonymous Coward]

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.

Are you people happy with nothing?

[soren42]

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.

Re:Are you people happy with nothing?

[stewball]

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.
------

Re:Are you people happy with nothing?

[spitzak]

Because such actions reinforce stupid decisions by legal departments such as yours.

If it becomes standard that you cannot buy or use code without "indemnity" then you have made it impossible for an independent code writer to write a program and have people use it. This is irrelevant to open source, what you have pretty much said is that writing code is the realm of big business and that start-ups and free enterprise and just the desire to tell people about solutions you have figured out have become illegal.

This goes far beyond Linux. Linux is now being protected by big money interests in the same way Windows is. But the next genius grad student who writes the "Linux-killer" operating system is going to be out of luck, as everybody who he shows it to is going to say "but you have no idemnity, so I'm going to have to stick with Linux..."

Even people who think Linux is the end-all of software should realize that this means the death of applications for Linux from independent authors, since they cannot "idemnify" their code. And Windows fans should realize this means the death of all the Shareware and Freeware and open source software, and also the few remaining tiny software vendors, all of who cannot afford "idemnification" either.

I don't care if this action causes SCO to go bankrupt tomorrow, this is a bad precedent for Novell to do this.

Re:ARGGHHH...

[AJWM]

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.

Check the date of the merger!

[bstadil]

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

Or maybe the fact that Novell does not acquire SuSe before 13'th Might have something to do with it. DUH!

The indemnification program will go into effect on Tuesday, the same day that Novell is expected to complete its $210 million acquisition of the German software company