Infringement Insurance For Open Source

Even as SCO Group digests the news that one of its backers, a venture-capital firm, wants its investment back, a risk-assessment firm has launched a service designed to help open-source users defend against copyright and patent-infringement claims involving open source.

Open Source Risk Management LLC on Monday launched the Open Source Legal Defense Center, which will advise companies that find themselves accused of violating intellectual-property infringement whether or not the accuser is SCO. (The company revealed Friday that BayStar Capital wants to redeem its 20,000 shares of SCO series A-1 convertible preferred stock.)

The annual subscription service is priced at $100,000 for companies; individuals are charged $250 annually. Subscribers also get $25,000 for their legal defense if they are named in a lawsuit involving their contribution to Linux. The firm essentially is selling companies and programmers a way to solicit advice confidentially from intellectual-property lawyers throughout the United States.

Open Source Risk Management was formed in 2003 and grew out of SCO's initial lawsuit against IBM last May. Although company founder and chairman Daniel Egger says he doesn't believe SCO has a strong case, "we decided there was a need to mitigate risks."

After screening versions 2.4 and 2.6 of the Linux kernel, "we will certify that it's free of copyright infringements," Egger says. Although Eggers admits his company hasn't seen every line of proprietary Unix code to compare against the Linux kernels, he says it has seen enough to feel confident in launching the center.

Even if SCO Group's case against IBM and other members of the Linux community fails, Egger says he's "positive there will still be a market for this type of insurance." There will continue to be copyright and patent-infringement lawsuits because "it's easier for defendants to settle than for them to defend themselves in court," he says.

Hewlett-Packard, Novell, and the Open Source Development Lab already offer financial assistance to Linux users and programmers in the event SCO Group sues them for infringing on its copyrighted Unix System V source code.