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Lloyds of London to Offer Open Source Insurance
darkworm writes "Lloyds of London, the world's oldest insurance house, is to offer indemnification for IP litigation worldwide according to the Channel Register: 'Lloyd's of London is close to offering independent insurance protection worldwide against potential IP litigation involving Linux and open source software. The financial services giant has agreed to take on the risk associated with open source, and is finalizing arrangements to work through Open Source Risk Management (OSRM) who will become Lloyd's sole U.S. representative.'"
Sure, now they offer insurance as it starts to become clear that SCO is going bankrupt.
Considering things really havent been truly tested, one bad judgement could cost billions..
Though, sounds like easy money to me.
"Steal" code from an insider friend and use it in your application. Get sued, the friend wins and is paid from the insurance package and you split it with him.
---- Booth was a patriot ----
Lloyds has a three-hundred year history or ups and downs, it's the insurance industry (quite literally, the insurance industry was created out of Lloyd's, then a coffee house dedicated to maritime shipping).
While I don't doubt that Lloyds has problems, has had problems, will have problems, they are known as a gold standard. It's not a single entity, it's a market, much like the stock market. There are large syndicates, made up of names (investors) who are the ones who actually are taking the risk. Lloyds is the gold standard because they have shown time and time again that they will not allow themselves to go bust. In whole or part. If a syndicate can not pay it's liabilities, then Lloyds governing body pays, with all of the other names sharing the cost. It's expensive, especially considering that they are covering policies they aren't legally reponsible for. But it's worked for 300 years, I still have faith in them.
Also, the financial fraud/troubles your link points out are from 80s and 90s. Lloyds was either the largest or second largest reinsurer (the ones who actually had to pay) on the World Trade Center, and they paid that claim (billions), so I would assume they're not in that much trouble.
Ryan Stultz
Lloyd's of London insures odd things from porn star's throats to Mick Jagger's lips. I believe Elton John has a teddy bear insured by them and same thing goes for Jamie Lee Curtis' legs. Definitely interesting stuff... LoL indeed.
I know there are going to be lots of SCO-related posts here, but SCO, of course, isn't the only threat here.
Think of all the patents on multimedia. Are you sure your copy of MPlayer doesn't contain any patented algorithms?
How many people do you think have contributed to all the software on your machine? Are you sure none of them have accidentally or purposefully checked in code that someone else owns the copyright to?
Even if your system is completely clean, don't you think there would be corporations out there that would claim otherwise? Are you sure you can convince the court you're innocent when faced with that corporation's ingenious lawyers?
Please correct me if I got my facts wrong.
I hope Lloyds finds a way to promote (read 'pay') the FOSS community members whose efforts create this market niche. I.E. - it would behoove them to promote developers who concienciously avoid IP landmines. Anything that can help FOSS sidestep greedy IP clowns does the world a lot of good.
At $60 a server, say there are 50 million Apache servers out there (some LAMP some FreeBSD-AMP etc) and there is only going to be more over time (growth of the internet etc). If 2% buy the licence from Lloyds (or from someone else) then that is $60 million per year. That money can defend up to 30 small patent infringement court cases (under $2 million) or 2 to 3 SCO size cases per year, every year.
That is far more protection than, say, LAMP will ever need for legal fees, at least in the long run. It will be good profit for Lloyds, and will make CEOs sleep better because they have paid a few more people for GNU/Linux, (no-one values what they get for free).
Software is going in two directions. For technical users (those able to understand software and customize it e.g. Google, Slashdot readers and so on), software has become a commodity. For some others, especially companies with weak management, software is a 'Giffen good'. When the proverbial fæces hits the fan, the CEO wants to explain to shareholders that they bought the most expensive solution possible.
Indeed I have been convinced for a while that the relatively low total cost of ownership has put companies off free software. Adding "Intellectual property" insurance (something you get very little of with proprietary software) will help to increase the cost of free software and speed its adoption.
My little Linux and tech blog
If a company has insurance wouln't that just make it more likely for them to get sued?
I think this is quite a complex subject. It seems to me that the legal system has become just an other tool that companies use to 'get ahead' (in lue of a better description).
What we see a lot today are lawsuits that have seemingly little merit, which are just used to either damage a competitor or leach of the sucess of a large corp.
A large ('flush') company can sue a small/new competitor pretty much crushing it with the sheer cost of defence.
On the other side you see small companies suing large companies, perhaps because they have some silly patent and want to leach of the sucess that a large company had with the technology supposedly covered by the patent.
To get back to the question, all this makes the business lawsuits very different from say the more common lawsuits, for example car accident related ones.
If you are in a car accident and the other person was clearly at fault _AND_ you had significant losses _AND_ the other person has significant assets, then lawyers will tell you it's a great idea to sue. If the other person doesn't have assest, then it's not very interesting to sue, because there's nothing to get. Unless they have insurance, in which case you can start the battle with the insurance company. This of course is a much harder fight because the insurrance company has good lawyers...
So with the more traditional situations having insurrance could perhaps make you more of a target IF you didn't have assets. As I described above, it seems that the enviroment of lawsuits at corporate level are very different, so it's hard to say. If I had a small startup, I'd probably try to get some insurance against lawsuits, but on a general basis, not specific to OSS. I don't think this would make me more of a target, if anything less, because it wouldn't (supposedly) be effective to crush me.
Just my 2 cents; not a lawyer and all...
OSRM is going to be the US agent for the insurance.
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I wonder if this had anything to do with Bruce Perens' attack on the Open Source Development Labs' patent commons project a few days ago.
http://yro.slashdot.org/article.pl?sid=05/08/13/1
"I've got more toys than Teruhisa Kitahara."
You're right, uneconomical isn't very clear. Linux obviously is economical. In fact, Lloyds wouldn't be selling insurance for it if it weren't.
But there are plenty of things that are economical, yet don't happen due to risks that can't be budgeted. How do you budget for terrorist attacks, for instance?
It's perfectly economical to erect a windmill in your backyard and generate your own power. But if the windmill fails, you have to very quickly purchase a new one, or go without power. So most people will happily pay (extra even) for someone else to take that risk. If one windmill fails in a wind farm somewhere, it doesn't affect anyone. If one fails in your backyard, producing your own power may have just become uneconomical.
"I assumed blithely that there were no elves out there in the darkness"
What Lloyd needs to offer is insurance for Windows. Since the maker does not offer any warranties of any kind, there is an ample market to fill in this gap. Damages caused due to crashes, poorly written Windows code prone to virus/trojam/spyware attacks, the whole nine. But they wan't because you can bet your shirt that this is a losing proposition.