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.'"

Comments

A little late

[LostCluster]

Sure, now they offer insurance as it starts to become clear that SCO is going bankrupt.

Re:A little late

[bill_mcgonigle]

Well, it is an insurance company - they're betting they're going to make money doing this, so with SCO on its way out they stand a better chance of making said money. Not to say SCO has any merit, but they can still cost a company money regardless of merit.

This is actually a very good sign from some of the best actuaries in the business that Open Source is a sound bet. But they'll sell you insurance anyway.

Re:A little late

[morleron]

Actually, I suspect that the fact that SCO has been absolutely unable to show any infringing code is part of the driver behind this. Insurance companies don't make money by paying out claims, so they're not usually in a hurry to bet on anything short of a certainty. The fact that both Lloyds' and OSRM are beginning to develop this market tells me that not only do they feel that there isn't much risk of them having to pay out large amounts in claims, but it also demonstrates that the Linux market is maturing. Only a reasonably mature, and thus stable, marketplace will attract organizations willing to offer insurance within that market.

What's even more interesting is that, so far as I know, there is no similar insurance offered to MS software users. I realize that MS indemnifies its users to a degree, but I wonder if that would be enough if some suitably large copyright or patent violation were found in MS' software.

Just my $.02,
Ron

Lloyds is not...

[Anonymous Coward]

...an insurance company, it provides a market place where several companies (or syndicates) can sell insurance.

Re:Lloyds is not...

[epiphyte(3)]

I have always (possibly mis)understood that most of Lloyds business is in underwriting, which is to say spreading the risk associated with high-value policies issued by an individual insurer. In the above context, the proposed scheme with OSRM looks eminently sensible - OSRM provides "indemnity services" which shield their customers from Open Source-related liability. OSRM's services are in turn made credible by virtue of the fact that their potential liability is underwritten by Lloyds. The overall effect is hopefully that: - Any attempted son-of-SCO is denied the opportunity to put the squeeze on thousands of individual companies, but instead has to defeat a well-funded organization whose only purpose is to thwart such attacks. - The likelihood that any such attack will be mounted is massively decreased because an attacker knows that OSRM and the underwriters will spend any amount of money to defeat the attack. The upshot it that the underwiters make a ton of money over time out of insuring against a contingency which is itself obviated by the very fact that they are insuring against it. Sweet.

Lloyds history

[augustz]

It was interesting. When I saw that lloyds was offering this I was surprised, as I thought they'd almost been bankrupted in the past.

Their main website and about us timeline make no mention of any major financial issues (were covered by Time / BW etc at the time).

A little digging of course did turn up an interesting read.

http://www.truthaboutlloyds.com/fraud.html

Still, nice to see insurance coming out for this type of thing. Hopefully some more players get involved in the future.

Re:Lloyds history

[rstultz]

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

Re:Lloyds history

[DogDude]

I was also surprised to see your post, considering that I pay them quarterly for insurance for one of my special vehicles.

Re:Lloyds history

[Anne Thwacks]

If/when When the claims come in, Lloyds members pay up what they owe. even if it does bankrupt them personally. That is why Lloyds is still in businesss - you do a deal with them, they keep their side of the bargain. (American Insurance companies are Limited Liability - if the claims exceed the value of the company, they dont get paid in full.)

But when can we get tiger-attack insurance?

[mcc]

For whatever reason, this is all I can think of right now.

Lisa: By your logic, this rock keeps tigers away.
Homer: Oh? How does it work?
Lisa: It doesn't work.
Homer: Uh-huh.
Lisa: It's just a stupid rock.
Homer: Uh-huh.
Lisa: But I don't see any tigers around here, do you?
    [pause]
Homer: Lisa, I want to buy your rock.

Re:But when can we get tiger-attack insurance?

[SirSlud]

Yee old giraffe scarecrow metaphor. An oldie but goodie.

Re:But when can we get tiger-attack insurance?

[jesterzog]

I think the article sums up this area quite nicely:

Arguably, one of the worst-case scenarios is the so-called "colorable case" - where there is no substance to an IP claim, but a company is forced to waste millions of dollars to defend the claim or settles early for a large sum to make the case go away. The average US patent action is estimated to cost $2m, according to the American Intellectual Property Lawyers' Association.

I'm glad the author included this note. It indicates quite clearly why a lot of companies see it as being so important to be cautious of lawsuits. It's not the possibility of losing that matters, it's the cost of fighting. If the cost of fighting is more than a company can afford, it just make sense to settle, and then the overly litigous company wins. Even enlightened CEO's often want indemnification--not because they think a company like SCO has a hope of winning a lawsuit, but because they're concerned about how much it might cost if they're even targeted.

Personally I think there need to be some changes to the system so that those who abuse it in this way are penalised much more, and also more quickly. The fact that SCO was both able to be so noticed in the first place, and can even continue dragging its corpse around today to threaten people with its stench without the likelihood of serious charges being brought against it, its executives or its legal team, suggests that not quite enough measures yet exist.

Re:But when can we get tiger-attack insurance?

[Seumas]

We captured the 19 9/11 bombers on video cameras in an airport, too. They still got on an airplane and blew shit up. (They had IDs too, mind you).

See, here's the problem:

+ Cameras do not PREVENT crime.
+ Valid IDs, RFIDs, national ID cards and so on do not PREVENT crimes.
+ Police do not PREVENT crime.

+ Cameras help identify what happened or who committed a crime AFTER THE FACT.
+ Valid IDs help identify the criminals AFTER THE FACT.
+ Police help capture criminals AFTER THE FACT.

These things all aid in finding and prosecuting criminals, but they don't prevent the crimes or save victims (how many rapes in progress does a phone call to the police prevent?).

Re:But when can we get tiger-attack insurance?

[Raypeso]

I think it was vampires actually.

Re:But when can we get tiger-attack insurance?

[Badfysh]

+ Cameras do not PREVENT crime

Yes they do. Most criminals play the odds, and if they think there is a high likelihood of being caught then they don't do it. Cameras, ID, Jail etc. are a *deterrent*. Unfortunately there can be no figures for the amount of times cameras have prevented crime, but if it were possible I'd bet the figure would be pretty high.

I know you meant directly prevent crime, but tell me, what in the world can do that? Banks have guards and vaults, but they still get robbed.

Re:But when can we get tiger-attack insurance?

[Master of Transhuman]

The point is, surveillance only prevents certain kinds of crimes - namely, those intended for profit.

Terrorists aren't criminals in that sense. If they can't get to some place under surveillance, they will either go somewhere that isn't, or take the cameras out or evade them in some way - or just ignore them and go ahead and blow everything up including themselves.

The point is that most of the "War on Terror" measures are utterly useless against terrorists. The ONLY effective measure against terrorists is to infiltrate their organization, find them before they strike, and take them out. And this is really hard to do if their organization is tight-knit and properly designed for counterintelligence.

Randomly looking around for terrorist activity by looking at people on the subway or the street is an utter waste of time. It works for keeping down minor street crime but that's it. Terrorists don't work like street dope dealers or pickpockets or idiot niggers and rednecks with tattoos on their foreheads and guns bulging out of their pockets. Those guys might as well wear a sign.

Of course, you can do racial profiling and just search and surveil everybody who even remotely looks like a Muslim. And the US is apparently doing that, given the number of complaints from Muslims in the US about harassment.

That will work until the Muslim groups start outsourcing US operations to Germans or South Americans or Asians or whoever. That was done before by the PLO or one of the other Middle Eastern groups - that's who Carlos the Jackal was working for, if you remember. He was a Latin working for Arabs. Try to pick him out of a crowd in New York.

Woohoo!

[Norfair]

Free Open-Source insurance! Er, wait, that was free as in beer, right?

Re:Woohoo!

[RAMMS EIN]

``Free Open-Source insurance! Er, wait, that was free as in beer, right?''

It'd be even better if it were free as in software. You get the cheapest package you can find, and then you're free to share and improve as you like!

Smart Move?

[nurb432]

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.

Re:Smart Move?

[meringuoid]

Considering things really havent been truly tested, one bad judgement could cost billions..

Actually, this is a really positive sign. Lloyds of London know all about risk. They've watched the SCO circus go around and have concluded that

- SCO don't have a leg to stand on
- However, they've made some people think there's a risk
- Sell insurance
- Profit!

This is not quite as much a case of free money as the insurance policies you can buy against abduction by aliens, but it's pretty close...

Re:Smart Move?

[bersl2]

That's called "insurance fraud." It's usually highly illegal. It's also not unusual at all for individuals and groups to try their luck at getting away with it. Believe me, I'm sure they've taken a good look at what they're getting into.

Re:Smart Move?

[nurb432]

Yes, i realize its fraud. But that doesnt stop thousands from trying it each year.

And a few get away with it.

Re:The end of OSRM?

[narf]

Please read the article next time.

K, thx.

Finally

[VonSkippy]

Now if they would only bundle in Alien Abduction insurance with their Linux scam I could sleep soundly at night.

Re:The end of OSRM?

[X43B]

" This probably spells the end for that organization that PJ of Groklaw fame used to work for, OSRM that offered a similar product."

I've seen you post insightful comments in the past so I don't think this is a troll, but doesn't the article summary state that OSRM will be the sole insurance agent for Lloyd's in the US? I'm sure if people are worried about buying only from the Big Names, OSRM will be OSRM: Backed by Lloyd's of Lodon!

LoL..

[Anonymous Coward]

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.

Open source insurance

[FidelCatsro]

But if you modify the source of a claim and compile it yourself likely to get arrested

Not just against SCO

[RAMMS EIN]

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?

Re:Not just against SCO

[Otter]

You mean you're thinking of buying this for yourself?

The chance of even a corporate Linux user being sued over patent violations is essentially zero. The chance of a individual user facing any risk is absolute zero. This whole thing is FUD to scare users into giving money to OSRM and Bruce Perens for absolutely no reason.

Look at this way -- how much insurance are you carrying now in case an evil corporation hauls you into court over some invented patent infringement in your car, your refrigerator or your medicine cabinet?

Re:Not just against SCO

[RAMMS EIN]

``The chance of even a corporate Linux user being sued over patent violations is essentially zero. The chance of a individual user facing any risk is absolute zero. This whole thing is FUD to scare users into giving money to OSRM and Bruce Perens for absolutely no reason.''

I don't agree with you there. I am confident that I am small enough to slip under the radar, but I could see some cases popping up in the future. Regardless of whether this will actually happen or not, and regardless of who will win these cases if they happen, it might help some people sleep better to know that they're insured. I think there's value in that, and it's probably worth paying for to some people.

For the rest of the open-source world, it's free publicity. Even pure FUD can be beneficial. It gets some people to wonder what it's all about, see through the FUD, and expose the FUDsters. BAM! Two birds with one stone!

Re:Not just against SCO

[Zevets]

Aren't they insuring servers? Linux usually runs (from what I know) database applications and Apache. The LAMP stack doesn't have much to do with media, and they usually don't do a lot of media encoding.

Re:Not just against SCO

[OneFix]

I'm pretty sure they will be cautious in the way they word this.

They wouldn't want to say insure you against something like DeCSS (or so they would claim)...they are betting that the insurance they are selling will never be needed or they wouldn't offer it...that's why the whole idea of life insurance has seemed kind of odd/ironic to me...I mean I see the need for it, but essentially you are betting that you're going to die tomorrow and the life insurance company is betting that you're going to live...

I'm sure the standard insurance contract will spell out exactly what is insured...probably the Linux kernel, Apache, MySQL, Perl, PHP (as mentioned in the article), probably Sendmail, maybe Samba, probably Firefox, OpenSSH, a standard set of GNU utilities (probably even spells out things like ggrep, gawk, gsed, vim, etc)...I doubt they would be insuring everything that was listed under the GPL, LGPL, and every other GPL-like license...it's just not smart...

Doesn't this suck?

[visualight]

If a company has insurance wouln't that just make it more likely for them to get sued?

"There is a risk, but it's a material risk," Egger said of Linux and open source. "We are trying to make sure we are not exposing corporates to risk that makes using Linux uneconomic."

Or would the insurance company put up a good fight in court and maybe make suing companies that use Linux uneconomical?

Re:Doesn't this suck?

[Anonymous Coward]

Or would the insurance company put up a good fight in court and maybe make suing companies that use Linux uneconomical?

That is what Lloyds is offering to do -- for a fee. And they're betting that, on avareage, people who are worried about being sued will pay them more than they'll loose from paying settlements and/or fighting court battles.

In other words, Lloyds has confidence that defending Open Source will Make Them Money.

As a Libertarian who grew up in a small business, and a Linux geek, I think that rock!

Re:Doesn't this suck?

[FidelCatsro]

It is most defiantly against the interests of an insurance firm to pay out on claims , and they will do all within their powers to stop it , or delay it long enough to cover the costs of the claim via trading and general interest rates acquired through the policy .
Insurance is gambling , but a rather accepted and certainly in most cases a sensible form of gambling .
Perhaps its the most successful form of gambling in the world , that or the stock market .

You get protection in the off chance that something unfortunate happens , and they get to rake in billions upon billions . They would not be offering this insurance if they thought that they would have to pay out on a lot of claims .

Re:Doesn't this suck?

[DogDude]

You get protection in the off chance that something unfortunate happens , and they get to rake in billions upon billions . They would not be offering this insurance if they thought that they would have to pay out on a lot of claims .

No, they would not be offering insurance if the total amount they expect to pay in claims is moer than they'd take in in premiums. I haven't seen a single number concerning cost. Who says that Lloyd's isn't charging $1,000,000/year/seat for Linux use? Lloyds is known for insuring very expensive, high risk items. I should know. One of my special, very expensive business vehicles is insured through Lloyd's. They simply mitigate their risk through very high premiums. So, your assumption isn't quite correct.

Re:Doesn't this suck?

[FidelCatsro]

The true beauty(subjectively so ) of what they do is making people think the risk is higher than it really is. I did rather simply and you are quite correct , I was being a touch cynical .

Re:Doesn't this suck?

[slashdot.org]

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...

Re:Doesn't this suck?

[damiam]

Lloyds may be known for insuring high-risk items, but that doesn't mean that everything it insures, or even a majority, it high risk. 100,000 Americans have Lloyds policies against being abducted by aliens.

Re:Doesn't this suck?

[iabervon]

If you actually do something wrong, you're likely not to be covered, for the same reason you aren't allowed to intentionally destroy your stuff for the insurance money. This means that the insurance agency wants to fight out any lawsuit, such that they either win it (and can generally recover costs from the plantiff, leaving only the hassle and the delay on the money, both of which they're set up well to deal with) or they accumulate evidence they can use if they want to refuse to pay your claim. When OSRM started out, they made it explicit that the reimbursement could only be used for legal fees and such, not for a settlement or penalty.

Re:The end of OSRM?

[richg74]

From the article:

OSRM will assess both the risk of the software in use and the individual company, before passing on the risk to the appropriate insurance company on the Lloyds market. OSRM expects to announce the first customers this Fall, and will initially charge organizations $60 per server.

As the article summary indicates, OSRM is going to be the US agent for the insurance. Some arrangement like this was more or less inevitable if OSRM's insurance concept was going to work. OSRM itself almost certainly doesn't have the resources (read, deep pockets) to underwrite the coverage.

Linux Uneconomical?

[RAMMS EIN]

"We are trying to make sure we are not exposing corporates to risk that makes using Linux uneconomic."

I can't really parse that sentence very well, but it sounds like he's saying using Linux is uneconomical. Now, here's some news for nerds!

Free system that allows you to be productive while others are busy updating their virus definitions and removing spyware is uneconomical!

Re:Linux Uneconomical?

[DogDude]

Free system that allows you to be productive while others are busy updating their virus definitions and removing spyware is uneconomical!

Free system that has many, many unknown authors and copyright holders that takes the US Supreme Court to determine copyright validity is uneconomical. Although my sentence, like yours, still isn't correct English, is more realistic than yours.

Re:Linux Uneconomical?

[benjamindees]

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.

While we're at it....

[archangel85j]

Time for some cloud insurance.

Cue the Family Guy quote:

Peter: Look at them up there just plotting... picking their moment. Cloud 1: So Bill, we attack tomorrow! Cloud 2: Yes, tomorrow. Cloud 1: I mean it this time. Cloud 2: I do too.

Former cases of coverage include...

[D4C5CE]

...the Titanic - so from an insurer's point of view, it makes perfect sense to ascertain they bet on something that's really unsinkable this time.

hope they keep it going around

[Anonymous Coward]

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.

Re:hope they keep it going around

[timmyf2371]

It would be a nice gesture, but I don't imagine Lloyds are in the business of being "nice".

It's not like you see them paying vehicle manufacturers or house builders for creating the markets for car and home insurance is it?

Makes sense...

[Adult film producer]

These guys are always looking for ways to make money... how much risk would be involved in this endeavor ? That would be the first question they would ask, I would guess... Would Lloyd's involve themselves in a high-risk investment? If anything, this move shows how much faith they have in the GPL+all oss licences .... It's a good thing in my opinion... they could care less about how it benefits society, as long as they're making money from it.

I'm confused

[Raul654]

You seem to be missing the obligatory ?????

Re:I'm confused

[JonasH]

You seem to be missing the obligatory ?????

Presumably, this is because selling insurance against unlikely occurances is a real and working business model (compared to, say collecting underpants).

I guess.

Re:I'm confused

[Anarke_Incarnate]

dood, if I had a bunch of "natalie portman" underpants covered in dried grits, do you KNOW how much money I would make on slashdot selling those puppies?

Libre, not Gratis

[einhverfr]

Or so I was thinking. I mean, I can modify this insurance and pass it on to anyone else who needs it free of restrictions, right?

Re:The end of OSRM?

[Saeed al-Sahaf]

Actually you are right, I am guilty of NRTFA. But thinking about it now, it might not be far off. Consider that now that Lloyds is jumping on the boat, so might others with more insurance industry "oomph" than ORSM. In my opinion, ORSM has a bit of that "dirty hippie Open Source" feel to it in the minds of traditional management thought, and make no mistake, traditional management thought will be the driving force behind if Big Money Corporate Enterprise buys into indemnification at all.

Re:Microsoft!

[neurokaotix]

It was a fsking joke. Asshole mods...

Re:Microsoft!

[slashflood]

It was a fsking joke. Asshole mods...

We know, but it wasn't fsking funny...

Just sounds weird

[darthgnu]

I saved a whole bunch on my open source insurrance by switching to Geico

Sounds like a good business to me.

[Marcion]

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.

Re:Sounds like a good business to me.

[xmath]

You're forgetting one thing: If they just settle the case, it may be cheaper that time, but then they might as well put up a big sign: "for free money - sue a Lloyds insured company!"

To avoid having to pay up often, they'll want to discourage such lawsuits as much as possible. That means making an example out of the fool who has the audacity to initiate a lawsuit that is covered by the insurance policy.

Re:Sounds like a good business to me.

[Marcion]

>"but then they might as well put up a big sign: "for free money - sue a Lloyds insured company!""

Well sometimes it good not to have money so no-one will bother to sue you!

>"they'll want to discourage such lawsuits as much as possible."

More seriously though, I agree with you. Once something has been decided in court then it tends to stick around.

Eventually free software(/open source) such as LAMP servers (to continue the example) will so be prevalent and so much part of the infrastructure that spurious lawsuits will drop off once the pressure has been released, although that may be ten years away yet.

A lot of course depends on GPL v3 and whether most free software and open source licences of the future include a patent and lawsuit etc self-destruction clause (think of the CDDL).

SCO's latest offering that they have excremented, OpenServer 6, contained KDE, Apache, Mozilla, Samba, Perl, PHP, MySQL, as well as other free/open source software.

If all the above had a "Intellectual Property" self-destruction clause then SCO would have had to choose between either (mis)claiming that Linux kernel contained 'their' "Intellectual Property" or using these packages.

This seems fair to me. Currently they are claiming that GPL is invalid and wrong yada yada, yet they are taking full advantage of it - weasels!

Who is up for the 'SCO went-bust mega-party'?

Re:Sounds like a good business to me.

[Vengie]

I'm afraid that isn't what a Giffen Good is. You're correct in that it has a similar price/demand curve (price goes up, demand goes up -- and the reverse) but Giffen goods are meant to be inferior quality goods, e.g. bread in lieu of meat or fruit. The canonical example is that the rising price of the basic staple, bread, forces families to abandon buying fruits and meats, since they are more expensive foods. However, they must now buy more bread to supplement their diet. Price has gone up, but so does their need for bread, since they can no longer afford to purchase non-bread foods.

Re:Sounds like a good business to me.

[Vengie]

Apologies for the double post -- I realized I left this out. You're referring to a Veblen Good with the "CEO wanting to claim they bought the most expensive solution..."


cheers
-b

Re:Sounds like a good business to me.

[Anne Thwacks]

I cannot see how an IP infringement claim agains a USER could succeed. As someone else pointed out - if your Ford infringes a Mercedes patent, YOU don't get sued, FORD does.

Before that happens, Mercedes have to tell Ford that there is an infringement, and Ford has to stop doing it in cars produced after that time In the case of product already sold, Ford could get sued for losses if Mercedes can show that people actually bought Ford cars instead of Mercedes as a result of the patent infringement. Other than that, Mercedes could demand, and sue for, licence fees for the patented technology. These would have to be credible. Ie could not exceed the value of the patent to Ford. thus: If the patent saves Ford $1 in making a car, or adds $1 to the value of the car, a plausible royalty would 12.5c, and not $50.

So if the "stolen" IP adds $0 to the value of the free software, a credible royalty would be 12.5% of $0. I don't see an real world company persuing this type of claim for monitary gain. (They might for other evil reasons [See SCO]).

As almost everyone has said on Groklaw: Users are not at risk. The Author of the offending package may be required by the (perported) IP owner to withdraw his software, or rewrite it so that it does not offend the IP in question.

Nevertheless, the likes of IBM might want to insure againsf frivolous lawsuits. How much has the SCO case cost them to date?

caveat: I am not a lawyer, but I play one on /.

Re:Bad-weather friends

[pete6677]

Your car is dangerous to use, which is why you have insurance. Does that mean you don't use it? This is the purpose of insurance: mitigating known risks. Few things are truly risk free; insurance makes the risks manageable and less catastrophic.

Trust the insurance industry

[0-9a-f]

Whoever said there was no money to be made in Open Source?

Lloyd's

[sd_diamond]

This insurance gig seems to be working out well for them, but their coffee has really gone downhill in the last few centuries.

SCO Already offers insurance...

[PenguinBoyDave]

It's called a License. Oh...wait, say what Mr. McBride...no UNIX code in Linux? In that case, "I don't need no stinking license...or insurance!"

Re:SCO Already offers insurance...

[mjtg]

SCO's licence only insures you against getting sued by SCO. Any other litigious jerk can still have a go at you.

A Lloyds insurance policy would presumably insure you against everyone.

So Lloyds will...

[DoktorSeven]

offer llitigation protection for Llinux in Llondon?

Abduction by aliens

[tepples]

This is not quite as much a case of free money as the insurance policies you can buy against abduction by aliens

Of course I'll take out such a policy. I don't want some stranger from outside the USA kidnapping anyone in my family and taking them to Canada or Mexico or somewhere and then having to pay the ransom out of my own pocket.

Re:The end of OSRM?

[ozmanjusri]

OSRM is going to be the US agent for the insurance.

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=05/08/13/17 17255&tid=155

Insurance Industry : last thing we want..

[unclocked]

In open source, last thing we want is an Isurance intruder

Re:Bad-weather friends

[droleary]

Lloyds is basically saying that Linux is dangerous to use. If they said it was safe, who would buy their insurance? So, what's the truth? Well, whatever it is there's no point in asking Lloyds.

The truth of insurance is that it is a business intended to generate profit. Nobody offers you coverage unless they think they're going to sucker you out of some dough. It goes without saying the profit margins can be higher if you target a phobia, and there are all kinds of irrational fears surrounding things, like open source, you get for free.

Abducted by what kind of aliens?

[tepples]

100,000 Americans have Lloyds policies against being abducted by aliens.

I think any family should have a policy that pays for the cost of recovering a child who has been kidnapped by a foreigner.

Re:Abducted by what kind of aliens?

[damiam]

If you're gonna go that far, why limit it to foreigners? You're much more likely to have a child kidnapped by someone nearby.

Insurance for Windows

[Anonymous Coward]

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.

Re:Insurance for Windows

[Anne Thwacks]

You might want to read the small print very carefully. Someone I know is suing an insurance compay which refused to paaay becase "You neglected to tell us that your computers had software on them!" ($6,000,000 claim)

Insurance companies are slimy bastards at the best of times, I suggest that e-mail retailers of 10" poles might be a good investment. (I am sure your spam will confirm this).

Could be good or bad...

[Anonymous Coward]

This is really about those companies who want to use open source software in their products (because it's free) but are scared someone might sue them, a risk which isn't really quantifiable. These guys can be pretty greedy and dumb.

My company, for example, won't touch anything with GPL or even LGPL, even though at least LGPL is supposedly targetted (among others) towards companies wanting to use FOSS stuff in commercial products. The reason they're so paranoid is that a) their legal department's default position on anything they don't understand is to say no and b) they're afraid of one of their competitors, wearinng a rubber Richard Stallman mask, might sue them. (by this I don't mean that Mr Stallman himself would be involved, just some front organization)

Now the 'good' is that these firms might get this service and suddenly find some balls when it comes to adopting FOSS technologies, so wider adoption for FOSS in the commercial world.

The 'bad' is that they might take this further than the community intended or is comfortable with. Commercial development houses like free software in principal, it is software they don't have to pay to have developed themselves. Given blanket protection, they might start pushing the limits of the licenses, getting as much as they can. If the little guy was scared to sue Sun or whoever, immagine how scared they'll be to sue Lloyds, who let me tell you are one old, mean firm, no strangers to a courtroom. Right now the onus of complience with FOSS licences seems to effectively lie with the software houses, for whatever reason. What if this insurance made it so that the onus for proving someone has violated your licence became the FOSS developer's problem? Could make these licenses de-facto unenforcable...

Lies, damn lies, and insurance policies

[tepples]

why limit it to foreigners?

Exactly. The policy that covers being abducted by aliens covers that as a consequence of covering being abducted by anyone. I was just pointing out that any statistician can lie and change "families with kidnapping insurance" into "families with a policy against alien abduction".

Re:Lies, damn lies, and insurance policies

[damiam]

While that's true, and an excellent point, I believe the original source (linked somewhere higher up in the discussion) was actually referring to people insuring against space-alien abduction of themselves, not the kidnapping of their children.

Re:Bad-weather friends

[nagora]

Your car is dangerous to use, which is why you have insurance.

I can get independent figures on how safe cars are; what stats can Lloyds or anyone else point me to about Linux?

TWW

Re:Bad-weather friends

[chowells]

On the contrary, Lloyds consider Linux to be safe enough to use that they are going to be able to make a profit out of it.

No insuarance company is going to insure extremely risky things and make a loss is it?

Excellent news

[starling]

We can argue about whether the insurance is needed or not, but the fact that Lloyds is offering it means that they see a demand in the marketplace. A firm like Lloyds goes where the money is so they must see an awful lot of companies using Linux in ways that are worth insuring.

Another sign that Linux has hit the big time.

Grain of salt...

[OneFix]

This is the same bank that has a history of selling unusual insurance policies to anyone with the money...

Someone probably got freaked out at a major company and asked them how much it would cost to insure them against litigation...this is par for course in the insurance industry...it's just making news because it's OSS we're talking bout now.

File this in the same place as a "Happiness Policy" insuring against "Worry Lines" on a model's face (from previous link)...

Re:Grain of salt...

[RotateLeftByte]

LLoyds of London HAS NOTHING to do with LLoyds Bank Plc so you are totally wroing to call them a bank.

OTOH, Lloyds of London have a reputation of actually being able to insure those things that conventional insurance companies would not touch with a 3000 mile barge pole naturally, subject to an appropriate premium.
For example, In 1976 I wanted to take my Triumph Bonieville to Tehran to attend a wedding. No insurance company would touch me for cover in places like Romania & Bulgaria (both communist) and Syria and Iran but after some consideration, a syndicate at Lloyds did cover me for the parts of the trip that other companies would not do so.
And no, I didn't have to make a claim.

Re:Grain of salt...

[OneFix]

Since there isn't a single word for Lloyds of London, "bank" was the closest I could come to...it's not really a company...and it doesnt really fit in with other insurers because, as you mention, they will insure things other insurers will not...it's really a society, but it's not even that, it's more like a market...kind of like the stock market, but instead of stocks they are dealing in insurance policies...but as I said, it's not even that...

As for someone insuring you in a communist country, I'm sure they charged a heafty premium for the policy and I'm sure many insurance companies would question why you even needed to take your vehicle into a communist country...most people would have simply called a cab or rented a vehicle or even caught a ride with friends...I'm not questioning your reasons for wanting to do this, just pointing out how unusual it is...

Re:Grain of salt...

[RotateLeftByte]

The cost of insuring in the Comunist countries was actually not that high. The reason? There were hardly any other vehicles on the road apart from trucks and busses. To get a car in Russia around this time (A Lada== Fiat 124) would take and average joe citizen at least 10 years of waiting.
I think you lost the plot when you said
"Most people would have imply called a cab or rented a vehicly"
This was the 1970's. This sort of thing (cabs & rentals) did not exist in those places(apart from Tehran). The main reason for tranelling overland was to see the places on the journey. Belive me, travelling in Communist Eastern Europe in those days was a fantastic experience. I got to meet the people and experience life as they lived it. The real people were fantastic and very friendly indeed.
The following year I took the bike by air to Totonto and rode it to Vancouder in 5 days. 9Great Journey apart from the flatlands in the middle.)
Last year I drove from London to Kamchatka with my new Russian born wife to meet her parents.
All I can put this down to is that I'm a traveller and not a tourist.

Asbestos

[xixax]

Actually, this is a really positive sign. Lloyds of London know all about risk.

I don't know about "all", they still get it wrong sometimes.

Xix.

Don't feed lawyers and insurance

[bigberk]

People, this is a game made by lawyers and insurance companies for lawyers and insurance companies. Don't feed them... even if the situation arises in which case the insurance should kick in, do you really think the insurer is going to be that easy about paying up? No, they won't be. You'll have to get more lawyers, and even more work is created in their little cesspool.

If you think something like this is worth paying for, sit down and do a thorough analysis of cost and benefit, including a worst case scenario in case the insurance company does not cooperate and you have to spend even more time and money.

Is this good or bad ?

[Alain Williams]

I find myself wondering:

• Predatory patent sharks will tell their victims: ``pay up, don't fight: we will accept a sum that Lloyds will pay'', it is best for them if they can get their money quickly and without having to get their parasitical lawyers out of bed.
  If this happens to any extent Lloyds will pull out of the market.
• Lloyds has plenty of friends with a lot of influence, if they see it to their benefit they will get the law changed - this might mean no patents in Europe at least.

I can't make my mind up which this might be...

Punctuation makes all the difference

[bettyfjord]

Just a small bit of British nerdishness:

Lloyds is an ancient insurance house.
Lloyd's is an ancient bank.

Re:Punctuation makes all the difference

[TorKlingberg]

You reversed the two.

Stats

[NoOneInParticular]

Linux 1 - SCO 0

Re:Stats

[nagora]

Linux 1 - SCO 0

Huzzah! We win!

I'm all for letting market forces work

[serutan]

But the whole concept of IP seems like legalizing assault and battery to create a market for bodyguards.

Well, the story says . . . .

[Gallowglass]

You asked, "who says that Lloyd's isn't charging $1,000,000/year/seat for Linux use?"

The story pointed to says, "... will initially charge organizations $60 per server."

This is standard marketing by Lloyd's

[karlandtanya]

Lloyds has often insured against events where the risk is negligable (to Lloyds), but the item or event to be insured is large in the public eye. The point is to make a splash in the media and promote the perception that no matter what you want to insure, Lloyds can insure it, and has done so since the beginning.

Some Examples from various websites:

A grain of rice with a portrait of the Queen and the Duke of Edinburgh engraved on it was insured at Lloyd's for $20,000.

Cutty Sark Whisky offered a one-million-pound prize for proof of an extra-terrestrial device, insuring against loss at Lloyd's.

Food critic and gourmet Egon Ronay insured his taste buds for 250,000 pounds.

Fred Astaire's legs were insured for $650,000

Betty Grable's legs were insured for $250,000

Jimmy Durante's nose was insured for $140,000

Target?

[JoeGTN1]

Why do I feel like I've just had a large target drawn on my forehead? It seems like most open source programmers aren't the richest people around and are therefore not worth suing. Now I can go out and get a billion dollar insurance policy and go broke going to court every three days.

Re:Whaaa?

[Master of Transhuman]

I got the news from some article sent to me by a guy who sends me emails with various news articles. I don't have the link anymore, I delete this stuff after reading. I tried a Google search but didn't find anything.

The guy sounded like some cantakerous old guy who got on some local talk radio and called Bush a liar, etc. No actual threats or anything except maybe a demand to impeach Bush. Next thing he knows eight local cops run onto his property with no search warrant or anything, and they wander around looking for pot, apparently. He said they eyed one of his bushes which doesn't even remotely resemble pot. Then he gets the local game warden coming onto his place.

It's probably just local cops overreacting or trying to intimidate him into keeping his mouth shut, but this sort of thing seems to be happening at least in red states.

Re:Whaaa?

[Master of Transhuman]

Actually this reminds me of the time a few years ago when San Francisco had this Chief of Police who used to be a Supervisor. A gay paper published a cartoon of him being sodomized with a nightstick or something. So he shows it to one of his officers and makes some comment about getting this stuff off the street.

So the officer gets a bunch of cops together and they run around removing the papers from all the street distribution boxes and destroy them.

Well, of course, the gay paper found out about this, and the Police Chief got blamed and fired.

This is probably the same sort of deal - some local cop who's a Bush supporter got offended by this guy's remarks and decided to overstep his authority. Cops do this crap all the time.

Re:Microsoft!

[WilliamSChips]

There's a c in fsck. It's a UNIX command.