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The Linux Liability Problem

Originally published December 7, 2006

The last month has seen both Oracle and Microsoft take their gloves off in their competition with open source software. Where Oracle has taken a seemingly straightforward approach of copying the competition and undercutting their prices, Microsoft's move to invoke intellectual property and the terms of the GNU Public License (GPL) to counter open source competition is much more potentially damaging. What's more, while Oracle's success could be a positive force on open source, Microsoft's success could endanger the existence of the open source movement. Can the Open Invention Network, the Patent Commons or someone else save the day?

The Battle for Commodity OS is Over, and Linux has Won
For years, the challenge for Linux vendors has been to build a case that Linux and other open source software can be as good as or better than proprietary software in solving business problems. Now, Oracle has incorporated Linux into its own product line, and Microsoft has “partnered” with Novell to support Linux compatibility. There can be no question that Microsoft and Oracle have promoted Linux from “hobbyists' plaything” to “viable business solution.”

Until now, commercial operating system vendors (in other words, Microsoft) came up with a variety of arguments to convince their customers that open source software was a bad choice. Reliability, security and total cost of ownership are the big three that Microsoft promotes in its “Get the Facts” page about Windows Server versus Linux. Others that vendors harp on include availability of support services, quality of commercial proprietary code, and so on.

Proprietary software vendors manipulate emotions with charges that “Open source is communism” (Shai Agassi, president of the product and technology group at SAP) or “Open source is a cancer” (Steve Ballmer) to scare customers unfamiliar with open source licenses. Until now, however, legal liability has not been a high priority argument in favor of proprietary software.

But with Oracle and Microsoft both acknowledging and endorsing Linux as a viable alternative OS for server and desktop, the contest for credibility for Linux is over. Anything but a clear win for Windows is a victory for Linux: it means that Linux is at least as good a product as Windows.

Oracle did it by adding Linux to its product line; Microsoft by partnering with Linux vendor Novell. As far as these two leading enterprise software vendors are concerned, the server OS is now a commodity, and while price and functionality are still important, quality of support and other peripheral features are now of greater importance.

Oracle vs. Red Hat, Microsoft vs. Open Source
While Linux has gained credibility as a viable alternative to Windows, this battle is just a first step in what could ultimately become a very ugly war. With Oracle repackaging the guts of Red Hat's flagship product and cutting their price to the bone, Red Hat has very quickly acquired a big and tough competitor, though not an invincible one.

Red Hat has a well-earned reputation for delivering solutions and keeping their customers happy and loyal; Oracle's reputation in these areas is less than stellar. Red Hat can fairly compete against Oracle on the merits of their offerings, and customers can weigh the savings due to lower subscription rates charged by Oracle against the possible higher costs associated with lower quality customer service.

But suddenly, the greatest differentiator between OS vendors is no longer a question of features, function, performance, customer support, security, reliability or any feature of the product itself, but the existence of potential legal liability incurred by anyone who uses Linux.

Microsoft's initial announcement of their deal with Novell explicitly promised that individual users and noncommercial developers would never be subjected to any legal action relating to intellectual property issues with Linux. Of course, the corollary of that statement was made clear shortly in Steve Ballmer's statement that Linux uses Microsoft's intellectual property, and anyone using Linux commercially in any way could expect to be billed for it.

Ballmer at first declined to elaborate on how Linux violated Microsoft's intellectual property rights, but patents are the obvious and most damaging answer. Copyright law is powerful but limited. If Microsoft can prove Linux includes copyrighted Microsoft programs, they can force a rewrite of the offending code under copyright law. Copyright protection protects the expression of an idea, including a computer program.

Can Patents Kill Linux?
Patent protection, however, can be applied to all expressions of a function or solution to a problem. It doesn't matter if you came up with the idea yourself, if someone else patented it, you've got to pay to use it.

For example, if Microsoft happens to hold a patent on the software implementation of a telephone (see Patent # 7,120,140) you've got to come to terms with them if you want to include such an application with your own product. If you include your own software phone without Microsoft's permission, you can be sued; if you knowingly violate the patent, you can be sued for even more.

One might suppose the idea of creating a software version of a phone is a natural and obvious extension of the art of programming, considering other instances of physical devices, such as calculators, filing cabinets, calendar planners, telephone and contact directories, and so on. You are free to argue your case that the patent is not valid, as long as you've got $2 to 4 million, or more – the estimated legal cost of contesting a patent.

If Microsoft enforces its copyrights, compliance is a simple matter of comparing source code and rewriting the offending code. Taking a proactive defense against patent lawsuits is virtually impossible: you'd have to examine Microsoft's entire patent portfolio, compare those patents against each open source program, determine whether they infringe any patents, and systematically remove all offending functionality from every open source program.

Notice that I wrote "remove offending functionality" rather than "replace offending code," because patents cover expressions of the mechanism, not just the patent holders' version. This is not a good option because of the cost and potential cost: if a patent violator can be shown to have willfully violated a patent (that is, with knowledge that he/she is violating the patent), the patent holder can be awarded much higher damages than when the violation is accidental.

One reason high tech companies do R&D is to build a patent portfolio that can be used as protection and leverage in such instances. A company can negotiate cross-licensing deals under which it grants its competitors permission to use its patents in return for permission to use the competitions' patents, rather than asking for payment on each license. This works fine for big companies that have comparable patent libraries, but it can be used to put smaller companies out of business.

The Open Invention Network and Other Potential Saviors
The answer for Linux so far has been to create new approaches to aggregating and sharing patents for the benefit of the open source community. The two most important, so far, are the Open Invention Network and the Patent Commons Project.

The Open Invention Network (OIN) is an intellectual property company launched in 2005 with backing from IBM, NEC, Novell, Philips, Red Hat and Sony to promote Linux by using patents to create a “collaborative environment.” According to the Web site, “Patents owned by Open Invention Network are available royalty-free to any company, institution or individual that agrees not to assert its patents against the Linux environment. This enables companies to make significant corporate and capital expenditure investments in Linux – helping to fuel economic growth.” It also makes it possible for commercial ventures as well as individual users and developers to “...invest in and use Linux with less worry about intellectual property issues. Its licensees can use the company’s patents to innovate freely. This makes it economically attractive for companies that want to repackage, embed and use Linux to host specialized services or create complementary products.”

Open Source Development Labs (OSDL) formed the Patent Commons in 2005 “to provide a central location where software patents and patent pledges will be housed for the benefit of the open source development community and industry.” Founding members include IBM, Sun, Red Hat, even Novell and Microsoft. While OIN currently holds a baker's dozen of patents (and these are referenced at the Patent Commons Web site), the lion's share of patents are provided by IBM, followed by Computer Associates (14); Ericsson kicked in one patent.

Patent Commons includes more than patents, and keeps track of various other pledges and commitments that open source users and developers can use to protect themselves, including open standards, indemnification programs offered by different vendors, and agreements by intellectual property owners to allow no-cost use of their patents.

IBM has been very public in its support for open source, and has pledged 500 patents to be used freely in open source software. However, their response to Microsoft's claims that Linux infringes its intellectual property is less than resounding: IBM, according to Scott Handy, VP of Worldwide Linux and Open Source for IBM, “fully support[s] the OIN statement.” However, does that mean IBM is willing to step in to a fight to the finish with Microsoft?

Open Source Options
One option for Linux vendors is to sell out: pay Microsoft whatever they ask to avoid lawsuits. That's what Novell has done by partnering with Microsoft. If you buy SUSE Linux, Microsoft won't sue you. By extension, if you buy some other vendor's Linux, Microsoft might sue you, or the vendor you bought it from. Given the willingness Microsoft has shown in the past to take their customers to court over licensing issues, an IT executive would be remiss if she did not take the threat seriously.

Clearly, Microsoft's move is intended to do nothing but enrich Microsoft. Rather than rewarding innovation, as the patent system was intended, Microsoft's many un-litigated patents can be used for leverage (some might call it extortion) against anyone they decide to act against. Wouldn't it be the better part of valor for Red Hat, say, to pay $40 million to Microsoft (as Novell is doing) rather than spending the hundreds of millions they might be forced to defend against some as yet undefined number of patent actions?

Perhaps not. To date, no open source software has been found in court to infringe any patent. And Microsoft has yet to be specific about which of their intellectual property is being violated, so for now, their threat is still just that – a threat. Open source developers can do only so much:

  • Lobby for reform and rationalization of the patent system, specifically to eliminate software patents and/or require a higher degree of substantiation that a patent application is truly unique, novel, and not an obvious extension of an existing mechanism. This strategy is already being pursued by the Patent Commons project as well as by others.
  • Align with some company or consortium of companies with its own patent portfolio to gain parity with Microsoft, and give Linux a sporting chance. Again, OIN and the Patent Commons serve as the two most visible possibilities.
  • Proactively remove patent violations from the open source programs. As explained earlier, this is probably not a useful approach.
  • Collect the money and resources to defend against an onslaught of litigation. Microsoft has deep pockets, and victory for Microsoft would mean a virtually limitless flow of income from virtually all software consumers, at no additional cost to them. An open source industry win would be pyrrhic, as the cost of such a defense would be crippling.
  • Give up and sell out. That's what Novell did, and (perhaps because they did so first), it's a net win for them: more money in from Microsoft than money out to Microsoft. Red Hat might not get such a good deal, nor might anyone who puts up a real fight.

Does the GPL Help or Harm Linux?
So far, I haven't mentioned what we could call open source's “secret weapon”: Section 7 of the GPL. It reads in full:

7. If, as a consequence of a court judgment or allegation of patent infringement or for any other reason (not limited to patent issues), conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all. For example, if a patent license would not permit royalty-free redistribution of the Program by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution of the Program.

If any portion of this section is held invalid or unenforceable under any particular circumstance, the balance of the section is intended to apply and the section as a whole is intended to apply in other circumstances.

Open sourcers have been saying, “Let us know what infringes so we can take it out. And by the way, Novell has to stop selling all of our code because they've put a condition on using it.” But Microsoft's deft use of the GPL is that they turn the weight of its enforcement against Linux vendors, while taking on what appears to be no legal liability at all: Novell is the one selling “protection” to their Linux customers, and Novell is the one violating the GPL (if it can be proved by law). Microsoft isn't distributing any open source software, and they aren't bound by any open source license.

The irony of the GPL is that Microsoft is not bound by it, and the only entities that can be harmed by it are those who benefit from it – open source vendors. Enforcing the GPL would mean that Novell, and any other Linux vendor who agrees to Microsoft's terms, could be forced to stop distributing Linux – which is just what Microsoft wants.


  • Pete LoshinPete Loshin

    Pete is Founder of Internet-Standard.com, an open source and open standard computing consultancy providing technology assessment, needs analysis and transition planning services for organizations seeking alternatives to commercial software. Pete has written 20 books, including “TCP/IP Clearly Explained” 4th Edition, Morgan Kaufmann, 2003) and “IPv6 : Theory, Protocol, and Practice,” 2nd Edition (Morgan Kaufmann, 2004).

    Pete can be reached at pete@loshin.com or at 781. 859.9175.

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