Some Linux Users Violate Sarbanes-Oxley

Goyuix writes "According to the IT Observer, publicly owned companies who are using Linux, could be violating the federal securities laws as part of Sarbanes-Oxley. The article goes on to say that companies are required to "disclose ownership of intellectual property to their shareholders." How are these companies supposed to really list out all the IP owners if they were to install a full desktop or server environment - there could be literally thousands of parties listed! What are the current Fortune 500 companies doing, as many of those use Linux in one form or another?" update several people have pointed out that this is about companies who are violating the GPL, not everyone.

Comments

Not just Linux

[balster neb]

It appears that this would apply to any free software, not just Linux. It would apply to at least all GPL'd software, including gcc, etc.

Re:Not just Linux

[Hal_Porter]

As a certified Internet Lawyer I can advise you that it doesn't apply to FreeBSD. That's right, use Linux and go a federal pound me in the ass prison, or use FreeBSD and stay, well Free.

Hence the name.

Here's an Operating System fud^H^H^Hfact sheet

1) Windows. Expensive. Not FreeBSD. You may BURN in HELL forever if you use it.
2) Linux. Free Unix type OS, unquantifiable risk of prison rape. No strlcat.
3) NetBSD. Let's face it do you really need all those platforms? Why not concentrate on optimising for today's mainstream hardware. My friend Bob installed it on his new box, and it caught fire and burned down his house.
4) OpenBSD. Kick ass security. Theo seems a bit odd. Lags a bit feature and driver wise. There are reports that OpenBSD users may die of untreatable brain cancer.
5) MacOs. Slick. Good for clients. Expensive. You may have to grow a goatee, wear black polo necks. Mac OS users won't accept you as one of them, they will mock your dress sense behind your back.

Face it, FreeBSD is the best choice for every person in the world. Fact.

Re:Not just Linux

[Marillion]

The article is really focused on GPL violators.

This really seems to apply to companies that incorporate Linux into a product. Well known examples include Tivo and the Linksys WRT54G (v4 and below). In such a case, Linux is an important part of those companies' product portfolio and thus and important factor in assessing the tangible and intangible worth of that company. For the companies that only use Linux in operational capacities, it wouldn't have any impact unless SCO wins. (yea, right)

Put another way: ownership of a patent on a hammer is important for a tool maker, but not for the construction company that uses it.

Ownership != utilization

[SIGALRM]

companies are required to "disclose ownership of intellectual property to their shareholders." How are these companies supposed to really list out all the IP owners if they were to install a full desktop or server environment - there could be literally thousands of parties listed!

There's a big difference between ownership and utilization. For example, if McDonalds employs the use of WinXP workstations in their facilities, that does not mean that they own, but instead license Microsoft's IP.

Re:Ownership != utilization

[bedroll]

There's a big difference between ownership and utilization. For example, if McDonalds employs the use of WinXP workstations in their facilities, that does not mean that they own, but instead license Microsoft's IP.

I completely agree. Just to expand on that, it should also be noted that the GPL does not transfer ownership of IP unto you, it merely gives you license to modify and reuse it. A company would then have to disclose their IP after they changed that code.

Reading the article, it appears that the author is a little confused. The second sentence talks about violating the GPL. You don't violate the GPL by simply using Linux. So maybe the real issue is with companies that release GPLed software without proper attribution and GPL compliance, but that's not the way the article reads.

GPL violators are at risk

[crumley]

The synopsis above is misleading. Its is GPL violators, not simply GPL users who are at risk. From the article:

"Linux is a powerful operating system," says Jay Michaelson, an author of the study and Wasabi Systems' General Counsel. "But if companies violate the license, the consequences can be more severe than they think. If companies are violating the GPL, they don't have the right to use that software. And if they don't have the right to use the software, they're violating federal law if they claim that they do."

What article did the OP read?

[mattbelcher]

Did the OP even read the article he submitted? It says that if a company violates the GPL, that this might also be a violation of Sarbanes-Oxley if they claim that they still have a right to use Linux despite the GPL violation. There is nothing about listing the IP holders. On an aside, I didn't think there was any violation to the GPL that could stop you from being able to use Linux. A GPL violation would make you lose your right to distribute it, right?

Re:What article did the OP read?

[Hope Thelps]

There is nothing about listing the IP holders.

Yes there is. The article says:

According to the study, the problem lies with the requirements of the Sarbanes-Oxley Act that companies disclose ownership of intellectual property to their shareholders.

It does go on to say:

The study indicates that dozens of companies are discovered each year to have violated the terms of GPL, and if they are public companies, they are violating Sarbanes-Oxley.

But that doesn't negate the first statement and the article never explains the connection between the two statements.

Article Title Misleading

[hattig]

Instead of "Might Linux Violate Sarbanes-Oxley?" which it doesn't, it should be "Non-compliance to terms of GPL might violate Sarbanes-Oxley".

Which makes sense.

I.e., if you claim to have the right to use Linux for your product, but you aren't complying with the license, you might be violating Sarbanes-Oxley.

I am a SOX IT auditor

[kalpol]

Rather new at it, it's true, but so far if we find a company has a problem of this sort, it's generally not a very big deal especially if they rectify it before their fiscal year ends. This is just one little piece of the huge SOX pie and often there are other controls in place that mitigate the effect of a finding anyway. Now if the company practiced systemic licensing violations then that's a different matter.

Yum yum yum, I love FUD

[MoxFulder]

The title of the post is pure FUD, "Some Linux Users Violate Sarbanes-Oxley!!! TFA is only slightly better...

Why stop at Linux, or free software in general? If a company makes an embedded device that uses a pirated copy of a proprietary RTOS, that would violate the Sarbanes-Oxley law too.

This seems to me a fundamentally good law (at least this provision): companies must not claim to have rights to use or distribute software, unless they actually do have those rights!

So why is anyone linking this provision to Linux?????? The only reason is because it's easy to get Linux for free, so incompetent people think they can do whatever they want with it. No one would make the same mistake with Microsoft software, simply because it's wrapped in a menacing 10 page EULA.