Linux Scare Tactics

Linux Scare Tactics

Daniel Lyons
Forbes

August 2, 2004

NEW YORK - It used to be that enemies of Linux were the ones spreading "fear, uncertainty and doubt" about the free operating system. Now the F.U.D. comes from Linux zealots themselves, who believe they have found a way to make money on it.

A report to be released today says Linux may violate nearly 300 patents, including 27 held by Microsoft, and warns that companies using Linux could become targets of multi-million-dollar lawsuits.

This could be shocking news for thousands of companies that have started using Linux. Now it appears they have a ticking time bomb in their data centers.

But wait. The "analysis" was commissioned by a New York-based outfit called Open Source Risk Management that is hawking insurance to protect Linux users against lawsuits.

Run by a North Carolina venture capitalist named Daniel Egger, the 12-employee OSRM wants to charge companies $150,000 a year for $5 million in legal coverage that kicks in if they get sued for using open-source programs like Linux.

Recently some Linux advocates, including OSRM director Bruce Perens, have been warning that Microsoft is going to launch "patent attacks" on Linux.

By fueling those fears, the new report may help OSRM sell some insurance policies. But the move could backfire by scaring customers into dumping Linux and going back to Unix or Microsoft's Windows--products that you don't usually get sued for using.

"First the Linux folks say there is no risk to using Linux, and now they say there is a lot of risk and you need insurance? And by the way, they're making money selling the insurance? This smells to high heaven," says Robert Enderle, president of the Enderle Group, a market research firm in San Jose, Calif., that tracks the Linux market.

Some corporate customers have viewed Linux as risky to use because the program is written by thousands of volunteers from around the globe, and nobody knows where the code comes from.

Linux distributors like Red Hat and SuSE, a division of Novell, have struggled to dispel those fears, even offering customers some protection against intellectual property-related lawsuits. In their sales offices, the OSRM report will be as welcome as a bag of anthrax.

Novell said Thursday that it wouldn't comment until it had seen the report. Red Hat insisted its code does not violate anyone's intellectual property.

Linux creator Linus Torvalds says he isn't worried by suggestions that Linux may infringe on patents. "Hey, there 'may' be life on Mars. What does 'may' mean?" he says via e-mail, adding that if Linux really does infringe on a patent, he'll just rewrite the code to sidestep the problem.

The OSRM report represents a new chapter in a bitter soap opera that began in March 2003 when the SCO Group of Lindon, Utah, sued IBM, claiming IBM's programmers stole code from Unix, to which SCO holds some copyrights, and put it into Linux, which is distributed free.

SCO claims that because Linux contains SCO code, SCO is owed license fees from companies that use Linux. In March of this year, SCO sued AutoZone and DaimlerChrysler.

Linux advocates howl that SCO is running a shakedown racket. They point out that SCO still won't say which parts of Linux contain stolen SCO code, nor will SCO name Linux users it claims are paying license fees to SCO.

Similarly, OSRM says there are 283 patents that Linux may violate, but won't say what those patents are. (OSRM says it will tell customers who insist, but warns this could make customers vulnerable to claims of "willful infringement," which could lead to triple damages.)

Like SCO, OSRM claims to have lined up customers, but won't say who they are. Egger says OSRM will skirt U.S. regulations on insurers by locating an affiliate company offshore, but won't go into details.

OSRM's team includes "director of legal research" Pamela Jones, a paralegal who runs a SCO-bashing Web site called Groklaw, and "lead patent counsel" Daniel Ravicher, a 29-year-old lawyer in private practice who last year started a foundation that claims half of the patents in the United States are illegitimate.

Ravicher, who performed the patent analysis that turned up Linux's 283 possible patent violations, claims on his Web site that he has "extensive experience litigating, licensing, prosecuting and otherwise counseling clients with respect to patents." In fact, he has three years of experience as an associate at two law firms in New York and has never acted as lead counsel on any patent litigation.

Ravicher's online bio also claims that he "practiced law" at Skadden, Arps, Slate, Meagher & Flom, one of the country's most prestigious law firms. Actually, he spent eight weeks at Skadden as a summer intern while he was still attending law school.

The paradox for open-source software has always been this: How can you make money with programs that are given away for free? Some make money by customizing code, or installing systems, or performing support and maintenance.

And now here comes plucky OSRM, sowing fear and selling insurance--which, if nothing else, takes the prize for chutzpah.