By Michael Peeters, Head of Technology & Media and Ben Murphy, Assistant Solicitor at Pinsents
"Prior to IBM's involvement, Linux was the software equivalent of a bicycle. Unix was the software equivalent of a luxury car. To make Linux of necessary quality for use by enterprise customers, it must be re-designed so that Linux also becomes the software equivalent of a luxury car. This re-design is not technologically feasible…without…access to Unix code, methods and concepts.."
This may sound like a marketing campaign for Unix but is in fact an extract from the SCO Group's recent claim against IBM which few in the IT community will have missed. There have been a number of articles concerning the merits of SCO's complaint and its subsequent letters to over 1,500 companies concerning their use of Linux. Some have cynically argued that the suit is without merit and represents an attempt to resolve some cash flow problems. These cynics may also argue that SCO has had some success, as even Microsoft has recently signed up for a Unix licence. Others have argued that the claim is irrelevant to the wider community as it is based on unfounded allegations of anti-competitive behaviour by IBM. Nonetheless, the large players are likely to face an increasing reluctance on the part of customers to adopt Linux which may be devastating to companies such as Red Hat and SuSE.
Copyright (and, to some extent, patents) exist as a means of protection for the underlying rights in software. However, SCO's complaint does not focus on infringement of its intellectual property but is based around allegations of misuse of trade secrets and unfair competition by IBM. However the claim does raise a number of issues which should always be borne in mind by a potential licensee of an open source software product :
- Open source licences usually contain only limited warranty and no IPR indemnity protection. Whilst a licensor of a proprietary software product would be expected to assume the risk that a product is non-infringing, open source licensees have limited recourse if faced with an IPR infringement claim from a third party. Extensive technical and legal due diligence is required to review the software components to reduce the level of risk. The extent to which this is feasible will depend on the product – for example, there have been over 200 individual contributors to Linux and checking for infringing code would be a huge task.
- Open source licences seek to guarantee certain basic freedoms and ensure conditions imposed by the author. For example, under the GNU General Public Licence licensors agree not to enforce their copyright in the usual way to promote the distribution of software in a manner which gives more freedom to the user. However, this freedom comes without some of the usual extras offered with a licence for a proprietary product, such as support, although open source suppliers are increasingly offering support.
- Most open source licences place restrictions on the owner's ability to limit the use of source code of developments commissioned in any onward licensing. Whilst SCO's complaint relates to the underlying code which it claims should not have been distributed, a person who commissions developments should be aware of the licence conditions for software made available to the developer, particularly where open source software is used. The commissioner's ability to market the developed software will be affected if the licence states that it must be made available to licensees without restriction.
Whether or not the SCO claim should deter prospective users of open source software will be a question of assessing the risk in each particular instance. Whilst there will inevitably be less risk involved with long-established products, SCO's claim has shown that even the big brands may be the subject of challenge. Some companies (e.g. Sleepycat) are now starting to offer a dual licensing strategy whereby, if customers do not want to take a product under an open source licence, they can pay for a traditional licence which may include more of the normal protections. Whilst this goes against the whole spirit of open source, it may well be the best way of keeping the SCOs of this world away from your door.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.
