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MS and Indemnification
Thursday, November 11 2004 @ 04:30 PM EST

I'm sure you've heard the news. Microsoft is offering its customers indemnification, across the board, except for embedded products. And you will never believe what a coincidence it is, but Laura DiDio has simultaneously come out with what Microsoft calls an independent report on how horrible Linux users have it without Microsoft's wonderful indemnification. Oh, and Jeffrey P. Kushan, an attorney at the law firm, Sidley Austin, has a paper for you too, in which he does his level best to terrify you on the subject of patent litigation.

Laura's paper is called, "Indemnification Becomes Open Source's Nightmare and Microsoft's Blessing", which just reeks of independence to me. She's got a little video you can watch too, on MS's Get the Facts page, which is a hard phrase to type with a straight face, with its 1984 overtones and all. I think we'd need to define the word "facts". Of course, you can only view it on Microsoft's media player. I hope the EU Commission reads Groklaw.

Her report is there for free as well, and her view is simple: no Linux vendor can offer the breadth of indemnification Microsoft can:

Corporations that use proprietary Microsoft Windows and Office software get the broadest, most comprehensive indemnification coverage in the industry because it’s bundled into the cost of the license. Corporations that use open source and Linux distributions receive only conditional, limited indemnification protection—or in some cases, none at all—because they don’t pay for the license. That leaves them with several options:

• Assume the risk and manage without indemnification

• Use the limited indemnification provided by the Linux vendor

• Purchase outside indemnification from a firm such as Open Source Risk Management (OSRM) at a premium, which will significantly add to the open source TCO.

Logic may not be Ms. DiDio's strong suit, but does she really think that the cost of the indemnification from Microsoft is actually free? Surely she realizes that whether it is "bundled" into the license or you pay for it directly, your indemnification will cost you something. The difference is, with Microsoft you don't get the choice of whether you wish to pay or not. Everybody pays now. Microsoft isn't a charity. With Linux, you can get indemnification if you want, but if you are in a low-risk category, you may decide you don't really need it. Lots of folks don't need it, as David Berlind points out in his article on Microsoft's announcement. Lots of Microsoft customers don't need it either, actually, but they will be paying for it anyway.

She doesn't mention that nobody in the Linux world needed indemnification until MS started sending money SCO's way. Neat trick. First, create an environment in which people will worry about needing indemnification from a Microsoft-funded attack. Then FUD about how you don't have any worries about your own product in comparison. Now, is that any way for a monopoly to behave?

Why now? Maybe because SCO's case is going down the toilet, and it was all about leading up to this marketing ploy? And they want their money's worth quick, before it's too late? How fascinating to remember that it was Ms. DiDio from the earliest days of the SCO story who sang arias about indemnification and how IBM needed to indemnify, blah blah. She is still singing that song in her report. This, I gather, is what it was all leading up to. Marketing for Microsoft.

Here's a little detail from Microsoft:

"'Microsoft's volume licensing indemnification commitment covers damages costs, in addition to legal defence costs,' said the Microsoft spokewoman. 'To truly stand behind its software, Microsoft pays for damages, settlement costs, and, if there were an injunction, Microsoft would either obtain for its end-users the right to use the software, fix or replace the infringing code, or, as a last resort, refund to the end-user the amount they paid for the software.'"

Refund the full amount they paid for the software? How can you resist a generous offer like that? Maybe we need to look at the fine print here. Let's take a look at Microsoft's offering in more detail:

Microsoft's Intellectual Property Commitment for End Users of Covered Software

1. Microsoft's commitment to defend infringement and misappropriation claims. This commitment covers any Microsoft software licensed for a fee for your end use, except for embedded (industry or task-specific) software. When we refer to "covered software" within this commitment, we are referring to those Microsoft software offerings only.

For any covered software, we will:

  • defend you against any claims made by an unaffiliated third party that the covered software infringes its patent, copyright, or trademark or misappropriates its trade secret, and

  • pay the amount of any resulting adverse final judgment against you (after any appeals) or settlement to which we consent.

Sounds good so far. But what is that "to which we consent" part? Ms. DiDio explains:

Microsoft’s new Volume License Indemnification provision provides full indemnification with no liability cap and outlines several specific remedies or actions the Redmond, Wash., software giant will take on its customers’ behalf, including:

• Removing the infringing code

• Replace the infringing code with compliant code

• Rewriting the infringing code to make it compliant

• Litigating on the customer’s behalf—if Microsoft feels there is no infringement

So, if they say there is no infringement, they'll fight your case for you. But if they are guilty and they know it, they'll maybe just remove the code and its functionality for you. That is one of the options they elect for themselves. So, if I get sued, who do I call?

You must notify us promptly in writing of the claim. You also must give us sole control over its defense or settlement. You agree to provide us with reasonable assistance in defending the claim. We will reimburse you for reasonable out-of-pocket expenses that you incur in providing that assistance. The claim might fall outside the scope of our commitment, but send it to us anyway. We may choose to treat it as if it were covered by this commitment.

So, I call Microsoft and then they take sole control of my legal claim. Hmm. Giving Microsoft sole control over my computer didn't work out so well for me. Maybe I need to think about this a bit. Sidley Austin, in their paper which I got from Microsoft's Get the Facts page says this:

"Consider as well who will control any litigation. An indemnity provision may state that the vendor has no obligations or liabilities unless it is 'given the sole right to control and direct the investigation, preparation, defense, and settlement of such a claim.' A user may find this lack of control unappealing and unacceptable, particularly if the user would prefer to settle quickly while the vendor is determined to litigate to the bitter end."

What are the limits, if any to this coverage? They say there is no pre-set cap, so what's the catch?

Our obligations will not apply to the extent that the claim or adverse final judgment is based on:

(i) your running of the covered software after we notify you to discontinue running due to such a claim;

(ii) the combination of the covered software with a non-Microsoft product, data, or business process;

(iii) damages attributable to the value of the use of a non-Microsoft product, data, or business process;

(iv) your altering the covered software;

(v) your distribution of the covered software to, or its use for the benefit of, any third party;

(vi) your use of our trademark(s) without express written consent to do so; or

(vii) for any trade secret claim, your acquiring a trade secret (a) through improper means; (b) under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (c) from a person (other than us or our affiliates) who owed to the party asserting the claim a duty to maintain the secrecy or limit the use of the trade secret.

You will reimburse us for any costs or damages that result from these actions.

Anybody else see any loopholes here? How about (ii) and (iii)? If you use a firewall product with your Microsoft software, and you'd be nuts not to, that would seem to be a loophole. If you have a special application you like to use that doesn't come from Redmond, there's that loophole. Like to run an anti-virus application? Oops. Fell into the loophole, and it's a mighty big hole they've dug for you. Of course, you can't expect that they will cover someone else's product, but to say that if you use their software you are totally indemnified without limitation would be to forget the Timeline case. And notice that you aren't covered if you've altered the code. Unless you live in a 100% Microsoft world, I think you just fell down the loophole.

If we receive information about an infringement claim related to covered software, we may do any of the following, at our expense and without obligation to do so:

  • procure the right to continue its use; or

  • replace it with a functional equivalent, or modify it to make it non-infringing (including disabling the challenged functionality). If we do that, you will stop running the allegedly infringing software immediately.

So, you might have to quit using a certain piece of the software and lose that functionality altogether. That's understandable, but it's not exactly my idea of total indemnification. What if a court decides the software is infringing, and there is an injunction ordering you to stop using it while the trial goes forward or permanently?

If, as a result of an infringement claim, a court of competent jurisdiction enjoins your use of covered software, we will do one of the following, at our option:

  • procure the right to continue its use,

  • replace it with a functional equivalent,

  • modify it to make it non-infringing (including disabling the challenged functionality), or

  • refund the amount paid for the infringing software and terminate the license for it.

This commitment provides your exclusive remedy for third-party infringement and trade secret misappropriation claims.

Microsoft gets the election as to which remedy you must accept, and their choice includes refunding your money paid for the software as your full and exclusive remedy.

Like all legal agreements, a lot depends on how much you trust the other side of the bargain to play fair. Or as Mr. Austin so ably puts it, "Even the most favorably worded indemnity provision will not immunize an end user when a vendor has no intention of paying for any infringement caused by use of its software." We're talking Microsoft, people. Playing fair is their middle name, right? Mr. Austin suggests asking for "the vendor’s litigation history, including the number of indemnity demands, why they were made, who made them, and how they were resolved. Ask as well what the vendor does to ensure that its products do not infringe anyone else’s intellectual property . . . " Do you think that the nonstop barrage of lawsuits against Microsoft here and abroad is an expense the company just swallows on your behalf, and that its products' costs will not reflect their litigation history?

But what if they always did play fair, and they really do indemnify across the board, no caps, all expenses paid? Then what does Linux do? It will probably feel that it has to do something, because business types are not geeks, and all they want to know is a one-sentence promise that they are not at risk. Ms. DiDio says that "in specific vertical markets that are subject to heavy regulatory considerations such as healthcare, legal, government, insurance, finance and defense firms . . . indemnification may not be an option— it may be mandated by law."

There are two things I see. One is to continue the antiFUD campaign, pointing out that Microsoft does get sued all the time, so it needs to offer some indemnification. They've been paying out millions in settlements all over the place. Ms. DiDio says they paid out "$1.4 billion in 2003 alone on licensing third-party patent rights and settling lawsuits." This year, there have been more payouts, and there will be more in the future. RealNetworks and Burst are ongoing. Another is to correct Ms. DiDio, who claims no one offers protection if you modify the code:

Additionally, a major allure of Linux and open source software is the ability for developers, corporate and consumer customers to modify the core kernel. This is actually a double-edged sword. The upside of modifying the core code base is getting the exact functionality you want. The downside is that once the code is modified, none of the Linux software distributors or hardware OEM vendors will assume the risk and responsibility for indemnification: You are on your own.

That is simply not true. OSRM's coverage does allow for modifying the code. I hasten to disclose that, while I am not on the board of the company and have no personal stake in its success in that sense, I have been hired by them to work on a specific research project. That is how I know what they offer, of course, and someone has to correct her misinformation.

Do you see Linux paying anybody for anything? See infringement lawsuits left and right? I suppose it's possible, as Berlind notes, that this is all leading up to an infringement lawsuit that only Microsoft knows about, but so far, Linux software is probably the least litigated software on planet earth. The openness of the code plus the GPL are the best indemnification anybody could ask for when it comes to copyright claims. And that's the truth. But for business types and for those who are required to get indemnification of some kind and to deal with patent worries, what I think all the vendors should do is pool together. No single vendor can afford to cover the way Microsoft can. You have to have been an illegal monopoly to accumulate that kind of money, I guess. But together, it could happen. Protecting modification of the code is important.

Nobody asked me, but why not have all the vendors and all the companies and organizations that care about GNU/Linux systems set up a nonprofit organization to run an indemnification or insurance program, so that they can offer coverage equivalent to what Microsoft is saying they are offering? With the extremely low risk of Linux ever being found guilty of infringement -- as the SCO case so ably demonstrates -- does anyone see a down side?


  


MS and Indemnification | 432 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here, Please
Authored by: BrianW on Thursday, November 11 2004 @ 04:34 PM EST
Let's fix 'em.

---
//Brian
#define IANAL

[ Reply to This | # ]

Get the FUD
Authored by: gnutechguy99 on Thursday, November 11 2004 @ 04:39 PM EST
I remember when Microsoft launched their "Get the Facts" site, Steven
J. Vaughan-Nichols called it "Get the FUD."

Wouldn't www.gettheFUD.com be great site for publishing information about
Microsoft's disinformation?

Just a thought.

[ Reply to This | # ]

OT: Indemnification and more.
Authored by: Anonymous on Thursday, November 11 2004 @ 04:46 PM EST
Microsoft has found (Reported today) that its own employees have been selling MS
products right under MS's eyes. The employees have taken a number of copies of
software right from inside MS's own doors.

[ Reply to This | # ]

I don't get it...
Authored by: Anonymous on Thursday, November 11 2004 @ 04:47 PM EST
I buy a book honestly. It turns out that the book is the exact
copy of a copyrigthed work. Am I the one to be responsible
for this? Or is it the author of the plagiarized work? The answer
to this question seems pretty obvious to me.

Why isn't this obvious for all the people out there?

If if turns out that MS is guilty of copyright infringment for, say,
Word's source code, what do you - as the legal copyright owner -
will do? Sue MS or sue the millions of individuals using Word?
The answer to this question seems pretty obvious to me.

Why isn't this obvious for all the people out there?

What am I missing?


[ Reply to This | # ]

MS and Indemnification and malware
Authored by: Anonymous on Thursday, November 11 2004 @ 04:48 PM EST
What their customers need is indemnification against spyware, adware, viruses,
pop-ups, home page hijacking, dial-around, spam, and ms-hosted zombie networks.

[ Reply to This | # ]

MS and Indemnification
Authored by: earthforce_1 on Thursday, November 11 2004 @ 04:52 PM EST
I guess they feel that if you are using a non-MS video player that you are
already a lost cause. They just want to keep more people from jumping ship, and
keeping you as locked in as possible.

[ Reply to This | # ]

MS and Indemnification
Authored by: tredman on Thursday, November 11 2004 @ 04:52 PM EST
...

(ii) the combination of the covered software with a non-Microsoft product, data,
or business process;

(iii) damages attributable to the value of the use of a non-Microsoft product,
data, or business process;

(iv) your altering the covered software;

...

Does anybody else see the profoundly ludicrous nature of this?

Okay. Let me state it this way. According to DShield (www.dshield.org), a
malicious piece of code attempts to intrude upon an Internet host about once
every 15 minutes, on average. Go web surfing or read email and you're exposing
yourself to a plethora of spyware and online viruses. The five most virulent
online threats, according to the US Computer Emergency Readiness Team
(www.cert.org) are MyDoom, Bagle, the Microsoft GDI exploit, Sasser, and an
Outlook Express XSS vulnerability.

I may be jumping to conclusions here, but I'm going to take a guess and say that
none of those five threats are Microsoft products (all jokes aside). Therefore,
I think it's safe to say that EVERY Windows user, from Windows 95 all the way up
to the pending Longhorn have at least one non-Microsoft product interacting with
their OS. This is not even mentioning the connection to (iv), in which all of
these products almost certainly alters the "covered software" to one
extent or another.

That's not a loophole. It's the Mariannas Trench.

Tim

[ Reply to This | # ]

MS and Indemnification - what I think
Authored by: dyfet on Thursday, November 11 2004 @ 04:58 PM EST
I believe Microsoft very much wishes to change the very nature of the software business into one where smaller and independent players, as well as new companies in general, simply can no longer commercially participate. That there is no high capital cost to produce software certainly means anyone anywhere can potentially write world class code. A monopolies natural desire is to limit competition, and one of the best ways is to find, as hinted, "legally enforced" artificial mandates (I am of course referring to the comments about some vertical industries being pushed to require indemnification).

I think such a strategy can work only if it is followed up on by artifically creating a legal climate driven by fear where the cost of providing indemnification is actually a meaningful consideration. SCO suing end users could have been an excellant example of this if they had any success at all, but not for the entirely bungling way SCO went about it. Perhaps next time Microsoft will choose to sue some competitors customers more directly through its patent portfolio, or simply find a more able stooge? Hmm...speaking of Sun (joke).

Being from Jersey, naturally, this form of indemnification marketing through fear and intimidation makes me think very much of the mob. What it may well do if they are actually successful is drive the entire future of the software industry out of the U.S., and all for the sake of maintaining an ancient business model of a monopoly that is no longer relevant. If Europe is smart, it will run away from software patents as fast as it can!

[ Reply to This | # ]

The Emperor's Clothes
Authored by: Anonymous on Thursday, November 11 2004 @ 04:59 PM EST
For those who were not following the case from the beginning, she was the same
"analyst" who could see the emperor's clothes - the thousands of lines
of infringing code in Linux. She must have special wisdom - she and McBride!

Makes you wonder about "analyst" companies like Yankee Group.

[ Reply to This | # ]

OT: Here
Authored by: PolR on Thursday, November 11 2004 @ 05:03 PM EST
Please keep with th good habits.

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Thursday, November 11 2004 @ 05:12 PM EST
I don't think we should concern ourselves too much with Laura DiDio. She is
simply an independant sales rep for Microsoft. When you take that into
consideration, everything she says becomes internally consistent.

ie, consider the source.

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Thursday, November 11 2004 @ 05:17 PM EST
(i) your running of the covered software after we notify you to discontinue
running due to such a claim;

How about I start early, and simply stop running the software now? Wait, I have
a business to run. I had better find some substitute. Where or where shall I
look????

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Thursday, November 11 2004 @ 05:25 PM EST
Not: 'get the facts'
but: 'gut the facts'

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Thursday, November 11 2004 @ 05:29 PM EST
You know, during the whole 2 minute jabber fest, I never once saw Bills' lips
move!



G. Durre (not logged on)

[ Reply to This | # ]

MS and a Lack of Indemnification?
Authored by: ine on Thursday, November 11 2004 @ 05:44 PM EST
I note that Microsoft limit their indemnification to software that you licence
*for a fee*: "This commitment covers any Microsoft software licensed for a
fee..." in section 1 of their "Commitment".

So does this cover: downloads of Internet Explorer? Free software updates that
may change large slabs of your existing operating system? Downloaded media
players? Use of their search engine (what if their search engine infringes? Are
you, the user, covered?). Etc. Etc.

Microsoft gives away large amounts of software as part of its monopoly
maintenance program (free as in bait). This software could leave you vulnerable
... provided you buy into the whole indemnification scare in the first place.

And if you don't - fight monopoly, use Linux.

----------------------------------------------------------
My comprehensive offer to give you all my money is limited to the contents of my
right pocket. I keep no money in my right pocket.

[ Reply to This | # ]

What about development tools (Visual Studio, VB, C#, etc.)?
Authored by: Anonymous on Thursday, November 11 2004 @ 05:48 PM EST
(ii) the combination of the covered software with a non-Microsoft product, data, or business process;

So...if I write a program using Microsoft's Development tools (their compilers, their libraries, their widgets, etc.) which musts of necessity mean that my program falls under the provision above, I am at risk? This seems like an especially big loophole since anything written for Windows USES the Windows DLLs, API, MFC, etc. and that leaves a galaxy of room for not being covered by MS-IndemniFUDcation.

A pox on their house.

[ Reply to This | # ]

Ms. D'Idiot has been misunderstood
Authored by: eckenheimer on Thursday, November 11 2004 @ 05:49 PM EST
What happened to your sense of humor?

It's clearly obvious that Ms. D'Idiot is one of the funniest humorists currently in technical journalism (to use that term ver r ry loosely) and that her articles are simply hilarious. I can't believe anyone actually takes her writing seriously. Nobody could truly be that dense and obtuse. It's all a joke, folks! So, laugh and enjoy.

---
You can complain because roses have thorns,
or you can be happy because thorns have roses.

[ Reply to This | # ]

A possible Downside
Authored by: starsky on Thursday, November 11 2004 @ 05:50 PM EST
I don't think that creating an indemnity organisation to battle on behalf of
end-users would be very smart.

As developers we think we would win these fights, and I agree. We all know that
if an opponent of FOSS attacked a developer directly, the agressor would lose,
and badly (think Auto-Zone).

But if we implement an indemnity organisation, you would open the door to
indirect attacks on developers. The agressor (think MS) just chooses to sue an
end-user (think Autozone) through an intermediary (think Sco). The indemnity
organisation jumps to the defence, and wins, expending lots of cash in the
process.

Now who is damaged by this outcome ?

You create an environment where you encourage attacks on end-users as a means of
indirectly damaging FOSS developers. You get the same end result (wasted cash
and effort) without having to fight directly.

If you were an agressor, you would choose to do it this way as it would
re-inforce the thought "if I use FOSS, I might get sued". At the same
time an agressor (MS) could distribute funds to multiple shells (Sco + ?) and
keep your name out of the press.

In the end, I actually think that such indemnification will encourage this
behaviour, and not discourage it. And that argument is more important than the
indemnity itself.

We need to change the rules of the game with software and the law.

We need to ensure that end-users can't (under ANY circumstances) be sued for the
infringements of a developer!

Can you imagine a world where I get sued by Phillips for using a Samsung LCD
Monitor if Samsung infringed on a patent? No, Phillips would sue Samsung ad
would never sue the end user. And so it should be with software.

An end-user should never be in a position to need indemnity, and companies
attacking end-users should be dealt with promptly and harshly by the courts as
wasting judicial resources!

[ Reply to This | # ]

MS and Indemnification
Authored by: rsteinmetz70112 on Thursday, November 11 2004 @ 05:52 PM EST
I'm not sure that I agree that conditions of indemnification are so onerous.

You can hardly expect Microsoft to indemnify you from your modifications, and
from software other that theirs.

Since it says "arising out of" it seems they would only get a free
pass if the combination of their software and some third party software created
the infringement. If the infringement existed in Windows, without the third
party software, you should still be covered.

The remedies are something of a problem, they could easily simply give you a
check or tell you not to use the software.
The one aspect of their remedies you did not mention was that they have
strengthened the inability of users to sue Microsoft for any damages cause by
Microsoft's infringement. This has always been in their EULA, but I always
suspected it would not withstand a legal test, especially against small users or
individuals. Against large corporations they have probably got a better case,
since these corporations are able to take care of themselves.

However Microsoft's software is so ubiquitous that any infringement would likely
cover millions of users and refunding every single user would be a significant
dent in their cash, plus damage their future sales.

Assuming there are only twenty million users of Windows affected with a cost per
seat of only $100 each, that would be two billion dollars, not to mention the
cost of future sales. Refunds don't seem a good business move.

This indemnification push seems to me a low cost way for them to make hay from
SCOG's suits and take shots at Linux, although Novell, IBM, SUN and HP, even
Dell have the resources to back their Linux products if they wish to. RedHat may
not be in such a good position themselves but they are only one company.

Also since Linux is out in the wild, it will be hard to stomp out. If one
distribution gets squashed, others will crop up and fix whatever the current
problem is. remember there were people talking about making a SCO proof kernel
just a little while ago. Linux will be a moving target and anyone wanting to go
after Linux users must find them first, then prove their case and prove the
specific version of Linux they are running infringes on something real.

Microsoft is acting like Linux is one of the little start-ups they have squashed
in the past. It far more difficult than that. It more like trying to eradicate
influenza, every mutation will have to be tracked down, isolated and eradicated.
The method they use on one strain likely won't work on the next one and in any
event the thing will keep evolving faster than the courts can act.

---
Rsteinmetz

"I could be wrong now, but I don't think so."

[ Reply to This | # ]

What are the risks?
Authored by: cricketjeff on Thursday, November 11 2004 @ 05:53 PM EST
I would have though Micro$oft could offer this indemnification completely
freely, after all where would be the point in suing an individual?
Even in that descendant of the Las Vegas slot machine empire otherwise know as
the US court system the damages awarded against any individual for using a piece
of software are unlikely to be astronomical, far better bet to sue the extremely
wealthy company that actually occassioned the breach. That would be Micro$oft.
In the case of Open Source software the risk is lower still. Although, unlike in
copyright cases, there is no obligation to bring actions as soon as you know of
a breach there is still a general duty on plaintiffs not to tempt potential
defendants to stray further so given that the software is open it is surely very
likely any court will take into account that it was easy for the patent holder
to ask for a licence payment early in the piece and so reduce any damages
accordingly. If you use a normal piece of software in the normal course of your
business how much damage is it possible to do to a patent holder? If a court
acts reasobably it will require you to pay some modest multiple of a reasonable
licence fee, and if you used Micro$ofts products you would have to do that
without even losing the case!
It seems to me to be so hugely unlikely that any one is ever going to lose
enough money to this sort of case to make the $strategy worthwhile, but for the
billites anything has to be better than spending the billions on fixing the
code!

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Thursday, November 11 2004 @ 06:05 PM EST
It strikes me that the basic probem is due to the Law. I am not a US resident
and have only a limited understanding of your legal system. The way I understand
it is that when a company wants a law passed it buys one or more congressmen who
then do a deal with other congressmen to pass each others laws. The problem here
is that everyone except M$ and a few other companies actually want to be free to
use OS software if they so choose. Now what is needed is a law to do away with
the so obviously flawed patent laws. I know that your companies are severely
restricted in how they can take join action, but would it not be possible for
the major companies to each buy a senator or two (perhaps the biggest could buy
a president or vice president) and pass a law to reform the patent system.

Another thought. M$ will give you the price of your software back if it is
infringing someones patents. I have just downloaded a copy of Ubuntu (very good
it is too) and, do you know, you get the price of that back too. Just as good as
the M$ offer.

[ Reply to This | # ]

Pants.
Authored by: Nick_UK on Thursday, November 11 2004 @ 06:08 PM EST
I have said this before, and a lot of other people have
over this.

Open source is open source. Many eyes. Sure, any
corporation can file an IP idea... like to push down a
lever and flush a toilet.

But open source is open. There is nothing in the way of
law (other than Uri Geller or the ilk) to ascertain if
code from open source was used in an IP projection from
Microsoft. No one can SEE IT.

And if you really, really need to, you sign you life away
in a NDA. Closed doors.

But how can anybody sue a Microsoft user for laden IP in
Microsoft code? You can't get the code, or if you do, you
can't say naff all anyway. So how do you know they used
{heh}?

A bit like Schrödinger's Cat...

Nick

[ Reply to This | # ]

  • Pants. - Authored by: ikocher on Thursday, November 11 2004 @ 10:29 PM EST
  • Pants. - Authored by: Anonymous on Friday, November 12 2004 @ 05:20 AM EST
  • Pants. - Authored by: Anonymous on Saturday, November 13 2004 @ 09:38 AM EST
MS and Indemnification
Authored by: drh on Thursday, November 11 2004 @ 06:09 PM EST
"Nobody asked me, but why not have all the vendors and all
the companies and organizations that care about GNU/Linux
systems set up a nonprofit organization to run an
indemnification or insurance program, so that they can
offer coverage equivalent to what Microsoft is saying they
are offering? With the extremely low risk of Linux ever
being found guilty of infringement -- as the SCO case so
ably demonstrates -- does anyone see a down side?"

I do. It gives MS a single target to shoot at. Remember
that is IS Microsoft who is starting their own patent war.
They began ositioning their "troops" years ago, and have
been winning a few "border skirmishes" lately.

Basically, because of all the lawsuits they have settled
and teh cross licensing agreements they have made, only
Microsoft CAN defend you against claims. They will assume
control of the lawsuit, go to the plaintiff, and advise
them that under the cross licensing agreements the
plaintiff has, they cannot sue this end user. However,
should the user decide not to accept Microsoft, then they
lose that protection, and since they have no access to the
supposedly infringing code, they have no way to prove
their innocence.

Of course, even if Microsoft is indemnifying you, a
plaintiff can commit "murder by lawyer" on your company by
a barrage of motions, discovery requests, and more that
are beyond Microsofts indemnification. Basically they will
bleed you dry in legal fees before the case can begin much
less finish. If your company collapses, Microsoft is off
the hook, without so much as lifting a finger.

Now, place your imaginary indemnification program in
between a doomed company, Microsoft, and a plaintiff, and
guess who will end up paying all the money out without
seeing a courtroom? OK, maybe it's not that bad, but it's
not too far fetched either.

This reminds me a lot of "Trusted Computing" where it is
who Microsoft trusts, not the end user. MS Indemnification
is about indemnifying Microsoft, not the end user.

---
Just another day...

[ Reply to This | # ]

New operating system of the future - nonya
Authored by: Anonymous on Thursday, November 11 2004 @ 06:17 PM EST
Interviewer: Your company has proven a smashing success with your online services and [insert here] software engine. What operating system is your company using?

CEO: nonya

Interviewer: nonya?

CEO: ya nonya as in nonya business.

If they don't know what a company uses, how do you sue for patent infringement.

stingbot (I lost my password sniff sniff)

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Thursday, November 11 2004 @ 06:23 PM EST
"She's got a little video you can watch too, on MS's Get the Facts page, which is a hard phrase to type with a straight face"

I chuckled too, when I clicked to watch the stream, and the WMP ever so briefly Splashed "Didio_Video" on the screen.

[ Reply to This | # ]

Tell you to stop using it
Authored by: darkonc on Thursday, November 11 2004 @ 06:29 PM EST
It looks like, if MS tells you to stop using their software after someone informs them of a litigatable infringement, they may not be required to refund your purchase price.

At that point, you're out the cost you paid for the software, don't have the right to modify it, yourself, to make it non infringing, don't have the right to use it, and don't have any recourse for refund.
In other words, you have:

A $1000 Frisbee!!!

(And that presumes that you even got a CD for all your money).

---
Powerful, committed communication. Touching the jewel within each person and bringing it to life..

[ Reply to This | # ]

Unilateral Licence Termination
Authored by: Anonymous on Thursday, November 11 2004 @ 06:29 PM EST
"refund the amount paid for the infringing software and terminate the
license for it"

Was Microsoft able to unilateraly terminate your licence for one of their
products before this new "indemnification" scheme?

From the perspective of a business owner relyant on Microsoft software this
appears to be quite a risk.

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Thursday, November 11 2004 @ 06:40 PM EST
What Microsoft needs to do is indemnify against losses due to malfunctioning
software.

[ Reply to This | # ]

MS and Indemnification
Authored by: radix2 on Thursday, November 11 2004 @ 06:40 PM EST
It has probably been said somewhere in these comments, but the ONLY entities who
might need indemnification are those selling products that embed MS software as
part of their product. And of course, that is specifically excluded from the
licence.

Imagine this. A large corporation (XYZ Inc) is using MS Windows. A patent or
copyright holder identifies an issue with Windows. Who are they going to sue?
XYZ Inc or Microsoft directly? On the other hand imagine a company called
HP&Friends Inc who sell a handheld device called "ePaq" which uses
and MS sourced OS. Said "IP" owner identifies an issue. My guess is in
this case they are more likely to go for HP&Friends Inc as the volume is
higher. Unfortunately HP&Friends are on their own.

In other words, there is a reason why embedded Windows is excluded. The risk is
too high for MS to carry...

[ Reply to This | # ]

I think you have misinterpreted part (ii)
Authored by: Anonymous on Thursday, November 11 2004 @ 06:40 PM EST
Our obligations will not apply to the extent that the claim or adverse final judgment is based on:
...
    (ii) the combination of the covered software with a non-Microsoft product, data, or business process;

PJ, I think you have misinterpreted what (ii) is excluding. It appears to me that if a combination of MS and non-MS products causes infringement of (say) a patent, then they won't cover you. But if an MS product infringes by itself, they will cover you.

It's not an attempt to avoid liability just because you have some non-MS software running on your system. The non-MS software would have to be an integral part of the infringing functionality for this exclusion to apply.

[ Reply to This | # ]

All non MS drivers invalidate Indemnification
Authored by: WildCode on Thursday, November 11 2004 @ 07:06 PM EST
Considering, MS state that non-ms software invalidates the indemnification, any
non-ms supplied driver (and driver package that usually accompanies the driver)
effects this.

[ Reply to This | # ]

MS Indemnification and the EU.
Authored by: Brian S. on Thursday, November 11 2004 @ 07:10 PM EST
"Our obligations will not apply to the extent that the claim or adverse final judgment is based on:

..........

(ii) the combination of the covered software with a non-Microsoft product, data, or business process;

..........."

It seems to me this clause may already have a problem in the EU and may fall foul of the current ruling of the EU Court. What does this imply for anyone running Real Player on Windoze?

In fact, I think anyone with any connection to the Court should point this out in view of M$ current appeal against the fine. Yet another case of M$ saying you must use only "our" software.

Brian S.

[ Reply to This | # ]

How linux users watch DiDio video
Authored by: Anonymous on Thursday, November 11 2004 @ 07:12 PM EST
Open this link with xine or mplayer or almost any other player with current codecs on linux.

[ Reply to This | # ]

Breadth of indemnification
Authored by: inode_buddha on Thursday, November 11 2004 @ 07:14 PM EST
Perhaps what they really mean is "Depth of bank account". Of course, that bank account wouldn't exist without cross-patent and sublicensing agreements.
I submit that it is important to "get the word out" that FOSS also has indemnification. I also sumbit that the perceived risk is quite low due to the nature of FOSS licensing, as compared to MS. The FOSS community and customers simpley may not need the legel of indemnification that MS is talking about.

The only other thing that struck me immediately about all this is "Wow, what a bait-and-switch! Wasn't too long ago that MS was saying "They have none!" "

---
"When we speak of free software, we are referring to freedom, not price." -- Richard M. Stallman

[ Reply to This | # ]

well, I'm just happy to be reading all this on my Firefox browser (n/t)
Authored by: Anonymous on Thursday, November 11 2004 @ 07:22 PM EST

[ Reply to This | # ]

FUD, indeed
Authored by: RealProgrammer on Thursday, November 11 2004 @ 07:44 PM EST
Here is what I wrote on Slashdot (italicized text added for Groklaw):
This is just FUD, I think.

Intellectual property falls into the following general areas. Infringement is completely different for each area:

  1. Patents
    Anyone using patented technology (even in a "device" they didn't make) can infringe. However, the idea that some patent holder would sue Microsoft customers for patent violation strains the imagination. I suppose as a business tactic someone might do it to hurt MS, but the negative feedback they would get would dwarf any harm done to MS. Maybe after they sue Microsoft first, but I can't imagine Microsoft a) letting it get that far and b) leaving the patented technology in place.

    Note: It turns out that both Timeline and Acacia (not a very topical link) have sued Microsoft users already over patented ideas used in Microsoft code.

    Has anyone sued Linux users yet?

  2. Copyrights
    FUD. Unless you make copies and distribute them to others (and groklawyers will know that putting them up for distribution is distributing under the law) and harm the owner of the copyright in doing so, you don't infringe. I see no way a Microsoft customer can be liable for copyright infringement without also infringing against Microsoft.
  3. Trademarks
    FUD. If you just use Microsoft products, and don't display the products to others, I don't see how you can violate some hypothetical third party's trademark.
  4. Trade secrets
    FUD. The only person who violates a trade secret is the one who reveals it. The person who learns the secret is not liable for trade secret violation. They may be guilty of doing illegal things to get the secret, such as breaking and entering, but they aren't on the hook for trade secret violations.

    Note: I know this glosses a lot, but I think the main point is valid.

  5. Contracts and licenses
    FUD. If you don't sign a contract or click through someone else's EULA to run a MS product, these don't affect you.
  6. (What The SCO Group Has)
    It's not known what this is, since it occupies a different reality from our own. OT: the Novell Board of Directors understood in 1995 that they retained the copyrights to UNIX after the sale of the UNIX business to the Santa Cruz Operation.

---
(I'm not a lawyer, but I know right from wrong)

[ Reply to This | # ]

The Didiot for Linux users
Authored by: Anonymous on Thursday, November 11 2004 @ 08:20 PM EST
mplayer
mms://wm.microsoft.com/ms/windowsserversystem/facts/videos/yankee_group_laura_di
dio.wmv

[ Reply to This | # ]

The devils in the small print - LOOPHOLES
Authored by: NZheretic on Thursday, November 11 2004 @ 08:51 PM EST
See The devils in the small print - LOOPHOLES
Even Microsoft's 2004 May 27th changes which apply only to customers under enterprise licensing contracts, which Microsoft claims grants greater immunity, contains many loop holes which greatly negate Microsoft's liability.

[ Reply to This | # ]

How far does indemnification REALLY go?
Authored by: whoever57 on Thursday, November 11 2004 @ 08:59 PM EST
There is an interesting article on Yahoo about employees being charged with theft for obtaining employee-discounted software (intended for personal use) and reselling it. An interesting snippet from the article is: "Prosecutors would not say whether charges would be brought against those who received the software."

Now, tell me again, under what circumstances could the recipients of GPL software be prosecuted? Here is an example of how GPL software carries less risk.

Obviously the recipients could be either conspirators or innocent victims. However, proving their status as victims is likely to be costly!

[ Reply to This | # ]

This aspect troubles me the most
Authored by: DaveF on Thursday, November 11 2004 @ 09:40 PM EST
If, as a result of an infringement claim, a court of competent jurisdiction enjoins your use of covered software, we will do one of the following, at our option:[my emphasis]

...

* modify it to make it non-infringing (including
disabling the challenged functionality)

So, if I understand this correctly, if you build a business around a particular function of Microsoft software and that function is found to be infringing, then Microsoft's indemnification can be, at their option, to rip the guts out of the software that you're relying upon?

Do I have to swallow a specific pill to make this sound right?


---
Imbibio, ergo sum

[ Reply to This | # ]

IMHO Novell is an Honourable Company!
Authored by: Anonymous on Thursday, November 11 2004 @ 09:48 PM EST
Without reading the small print I have a much greater respect for Novell's word
and ethics than Microsoft. The fact that you are probably reading this and
saying 'yeah, what else is new' is Microsoft's biggest problem -- themselves.

ls

[ Reply to This | # ]

Question re: MS and Indemnification
Authored by: inode_buddha on Thursday, November 11 2004 @ 09:49 PM EST
Now that I think about it (Duh!), how would this indemnification square away with MS "non-assertion of patents clause? Art icle here. [InformationWeek]

In this case, it seems the Japanese FTC has a problem with a license clause which forbad manufacturers and developers from asserting patents against MS (IIUC). I'm not sure of the extent of this clause world-wide, and I'm trying to get my head around the ramifications of indemnification in this scenario. Ideas?

---
"When we speak of free software, we are referring to freedom, not price." -- Richard M. Stallman

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Thursday, November 11 2004 @ 10:10 PM EST
I find it very hard to distinguish between the old fashioned protection racket,
"You better pay me in case something should happen to your
business..." and the SCO, M$ FUD which says "you better pay me in case
someone might sue you..." How exactly does this differ from extortion?
The Hobbs Act defines "extortion" as "the obtaining of property
from another, with his consent, induced by wrongful use of actual or threatened
force, violence, or fear, or under color of official right." 18 U.S.C. S
1951(b)(2).
Stephen Lewis

[ Reply to This | # ]

  • Thank you... - Authored by: Anonymous on Friday, November 12 2004 @ 12:05 AM EST
  • MS and Indemnification - Authored by: Anonymous on Monday, November 15 2004 @ 03:25 PM EST
this is just ridiculous!!
Authored by: Mecha on Thursday, November 11 2004 @ 10:15 PM EST
Microsoft writes/steals the code. They hide it and we cannot see it to even
check if it is compliance. We have NO idea what code is in their "covered
software." They expect a third party to come after US for using infringing
code that THEY included? With open source we can see if the code infringes.
But NO way can we with their closed source software. What judge would pass
judgement on a Microsoft end user/customer who has no idea that the code was
stolen and has no power what so ever to even investigate? I am serious, but
this indemnification policy of Microsoft is ridiculous. Microsoft would be the
only viable target for any infringements their code has done. The average user
wouldn't even have a clue. It is Microsofts responsibility. They hold 100%.
Were those who received bunk tires to blame because the manufacturer screwed up.
NOPE, the manufacturer. Microsoft is the Manufacturer of the software and if
anyone sent me a letter suing me because I use windows (at work, sad huh), I
would let them attempt litigation and sue right back for any legal fees becasue
they were targeting people who hold no responsibility.

---
LINUX! Because Microsoft should have no business in your business!

[ Reply to This | # ]

The MS Threat and Selling Protection
Authored by: voxclamatis on Thursday, November 11 2004 @ 10:23 PM EST
Hmm. In 2005 is Linux 'killable' at all? This horse that MS may want to
shoot has probably already left the barn. It may be too Pollyanna-esque,
but it seems plausible that any _specific_ attack on Linux can be routed
around. In this model selling protection against an imagined enemy is
good business. Especially if hordes of outraged F/OSS programmers will
work diligently to lessen your liability as the underwriter of protection. It
is a win/win: pointy-haired purchaser of insurance sleeps well,
enterprising risk-taker collects premiums and pools the risk.

(And any information yielded up by projects such as the grokline patent
research effort help both to quantify the risk _and_ to reduce the effort
to route around potential liability. Actuaries _like_ facts. You can set
premiums more accurately and at less risk when you know more.
Insurance companies can make money on both high risk and low risk
situations -- as long as they can identify what it is. And I buy insurance
for very low probability events myself. They are just risks I would rather
pay someone else to take.)

I take it that MS mostly wants to increase the FUD factor. This is a
delaying tactic, while they search desparately for a real strategy. I can
even imagine Bill emerging one day, as he's done before, to announce
that he's discovered a new business model, and this time it is based on
free (as in speech) software. He just hasn't figured out how to monetize
it yet, so for now "indemnify!"

[ Reply to This | # ]

Official "The SCO Group" Positions - Twenty-seven days without an official post
Authored by: AllParadox on Thursday, November 11 2004 @ 10:37 PM EST
Main posts in this thread may only be made by senior managers or attorneys for
"The SCO Group". Main posts must use the name and position of the
poster at "The SCO Group". Main posters must post in their official
capacity at "The SCO Group".

Sub-posts will also be allowed from non-"The SCO Group" employees or
attorneys. Sub-posts from persons not connected with "The SCO Group"
must be very polite, address other posters and the main poster with the
honorific "Mr." or "Mrs." or "Ms.", as
appropriate, use correct surnames, not call names or suggest or imply unethical
or illegal conduct by "The SCO Group" or its employees or attorneys.
This thread requires an extremely high standard of conduct and even slightly
marginal posts will be deleted.

P.J. says you must be on your very best behavior.

If you want to comment on this thread, please post under "O/T"

---
All is paradox: I no longer practice law, so this is just another layman's
opinion. For a Real Legal Opinion, buy one from a licensed Attorney

[ Reply to This | # ]

MS and Indemnification
Authored by: moosie on Thursday, November 11 2004 @ 11:44 PM EST
I may not be reading this right, but:

(v) your distribution of the covered software to, or its use for the benefit of,
any third party;

Does this cover M$ software purchased from Dell, Gateway, etc..?

- Moosie.

[ Reply to This | # ]

M$ MUST have IP problems?
Authored by: Anonymous on Friday, November 12 2004 @ 01:03 AM EST
According to this article, our friend McBride claims:
"We believe Novell's indemnification announcement is significant for a couple of reasons. By announcing the program, they are acknowledging the problems with Linux."

Similar reasoning suggests they MUST be acknowledging problems with M$ products.

[ Reply to This | # ]

Maybe an idea for an answer to the FUD
Authored by: Anonymous on Friday, November 12 2004 @ 02:40 AM EST
Compare the amounts of $$$ MS had to pay the last ten years for IP breaches
and other bad behaviour with the amount of $ Linux vendors or developers
have had to pay and the chance it will have to in the near future based on
how the current court cases go.

That will make it very clear that MS indeed should offer some buffer between
the results of its mafia practices and the paying customer, and that likewise
Linux shouldn't bother too much.

Cheers

Zpok

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Friday, November 12 2004 @ 02:51 AM EST
Well, if M$ stands behind their software, why not indemnify me when I am hit by
a virus, worm, DoD or by the 'blue screen of death'. Just reimburse my cost
please to get everything up and running again. That would be some
indemnification.(the cost for companies releated to the last major virus was
> $10Billion world wide) . Their current offer is just for marketing.
Marc

[ Reply to This | # ]

End user liability
Authored by: drh on Friday, November 12 2004 @ 02:59 AM EST
Here's another thought...

In the United States, it is illegal to be in possession of
stolen property. It does not matter if you are the one who
stole it. You may have even purchased said property in
good faith from a reputable dealer. But if someone equates
stolen IP with stolen property, then the end user is at
risk by possessing stolen property/IP.

In general the remedy is to have the property confiscated
by the proper authorities and returned to the owner. The
buyer is out any funds used to pay for that property, and
no longer has use of it. The owner may then press a civil
lawsuit to attempt to show the buyer knowingly purchased
stolen property and may receive compensation.

In the above scenario, if X Corp sued an end user over
stolen IP in a Microsoft (or Linux) product, they could
have all your software (and the data produced by it)
confiscated, thus ruining your current business. By
denying your use of their software, they have stopped the
future of your business along with any hope of salvaging
the past data. It will take a minimum of a year to work
this through a court.

What business can afford to pay lawyers fees while at the
same time they cannot do business?

It looks to me like this whole thing is going to blow up
in their faces. If this is the risk associated with using
software in business, what business would use software at
all? It would be much cheaper and carry a lower risk to
simply return to pencil and paper. Microsoft makes no
money at all that way.

---
Just another day...

[ Reply to This | # ]

MS, Please indemnify us against viruses, worms and other malware
Authored by: Anonymous on Friday, November 12 2004 @ 03:09 AM EST
Dear, microsoft,

Please (please, please...) indemnify us against
viruses, worms and other malware.

Pretty please...


[ Reply to This | # ]

Software reliability
Authored by: Anonymous on Friday, November 12 2004 @ 03:16 AM EST
Maybe it's time for the big Linux/Unix vendors to offer a
kind of (and low scale) product reliability. Small enough
so it will not be a possible big expense, but large enough
to embarrass MS.
For example:
Linux has only to be restarted when the kernel is adapted.
In all other cases, (security updates, new software,
removal of software, restarting services/daemons, etc...)
Linux should not be restarted. In other terms, when we use
Linux/Unix, the downtime is minimal.
So it must be easy to offer a kind of downtime
reliability, but for MS a real hell.

[ Reply to This | # ]

Indemnification, TCO, accountability
Authored by: ile on Friday, November 12 2004 @ 03:17 AM EST
Up somewhere in a nested comment a point is raised that got me asking more
questions: if you rely on a MS product for a given process, and it gets hit by
litigation (after or before a virus, i dunno), why does MS _not_ provide
indemnification for Total Cost of Deployment, _plus_ erosion of productivity?

In the EU at least it is impossible that a seller completely waives warranty,
accountability, what have you, just with a standard licence/contract; and it
would appear to me that if a product is sold to me, the seller represents that
it has carried out due diligence in that it has the full right to selling you
that, and must be responsible if you are taken to court for infringement of
patents.

If you get sold something by a fence (reseller of stolen goods, just in case
it's not of current use accross the pond), your infringement of the rights of
the owner cannot be laid at your feet if you have done your right diligence in
assessing whether the seller is legitimate, by the usual standard.

And I would say that if I buy the right to use a software program from an
established company with a proven track of having produced software (forget
about the quality of the said software, not relevant for this argument), _I_
have carried out my due diligence, and all responsability lies squarely in front
of them.

So, all in all, it does look to me that this "indemnification" scheme
is trying to take our teeth out: if I got sued because I was using an MS product
(which I do not unless I'm filling in my tax returns, when I _have_ to use MS
Windows), I'd surely incorporate MS as a co-plaintiff, and try to get the case
against me dismissed (can be done in our local law, that of the plaintiff moving
for a joinder -- do not know about other jurisdictions). I would not be able to
do that if I tried to use MS' "indemnification" scheme.

Nasty trick, methinks

[ Reply to This | # ]

And we're back to the patent issue:
Authored by: Anonymous on Friday, November 12 2004 @ 04:35 AM EST
Of course, indemnification is only required because of the absurd situation of
patents applying to prose.

Take away the software patent issue and what you're left with is FOSS's greatest
asset - fully exposed copyrighted code - with the given assurance that any
copyright infringement will be resolved (i.e. code re-written) without any need
to resort to the courts.

[ Reply to This | # ]

OT : Patent editorial & article in this week's Economist
Authored by: k9 on Friday, November 12 2004 @ 04:35 AM EST
Editorial (open viewing); Article (subscription req'd).

Quotes :

"But most of all, patent offices need to find ways of applying standards more strictly. This would make patents more difficult to obtain. But that is only right. Patents are, after all, government-enforced monopolies and so, as Jefferson had it, there should be some “embarrassment” (and hesitation) in granting them." (editorial);

"... the scale and central importance of the patent system are also coming under assault. “The innovation system is broken in that there is too much emphasis on intellectual-property rights,” says Suzanne Scotchmer, the author of “Innovation and Incentives” (MIT Press), a book on the role of patents to be published soon. More than ever, she says, inventions that would otherwise go into the public domain because they are funded by taxpayers or charities become “cordoned off” by the patent system. If so, perhaps the patent system not only needs to be repaired, but shrunk?" (article)

[ Reply to This | # ]

Off Topic: Vote for the Europeans of the year
Authored by: TobiasBXL on Friday, November 12 2004 @ 04:54 AM EST
Hi everybody,

I hope this post is not too intrusive but some might still be interested:

http://www.ev50.com/ is looking for the Europeans of the year. The have
nominated 50 persons for different achievements.

Frits Bolkestein is also nominated. Well, who is Frits Bolkestein? He is the
commissioner who wrote the draft proposal for the European directive proposal
that is supposed to introduce software patents in Europe. Take a look at the
FFII webpages (swpat.ffii.org) for more information.

I guess the funny thing about Bolkesteins nomination is the explanation why they
nominated him:

Commissioner of the Year

Frits Bolkestein
Internal Market
For being prepared to take on national governments in the cause of free markets
and economic liberalism, with some refreshingly plain speaking

So, someone who wants to introduce exclusive monopolies on abstract ideas like
software for a period of 20 years is fighting the cause of "free"
markets and has an "economic liberal" approach. Amazing stuff.

Teach the guys better and vote for Mario Monti instead. Monti is the one who did
what the US legal system couldn't achieve: convict Microsoft for their illegal
behavior.

Everybody with a valid email is allowed to vote so go over there and have your
say!

thank you and again my apologies if this post was too intrusive.

regards,
Tobias

[ Reply to This | # ]

MS and Indemnification
Authored by: Anonymous on Friday, November 12 2004 @ 05:15 AM EST
Why hasn't anyone mentioned LICENSE AUDITING

<sarcasm>Will Microsoft indemnify you against the risk of accidently
installing 2 extra copies of Windows and then being audited and ending up with a
fine of $200,000?</sarcasm>

Someone should set up a web site listing every "license audit" and how
much Microsoft has racked up in fines from the audits.

The amount would far outweigh the total legal costs incurred by Linux users
(legal fees for DC and Autozone are the only expesnes I'm aware of).

Could someone please setup a web site that lists ALL the "license
audits" and how much they have claimed in $$$$ (not to mention down time
etc).

[ Reply to This | # ]

Down side
Authored by: Anonymous on Friday, November 12 2004 @ 05:26 AM EST
You'd be out of a job.

Honest to diddly, sooner or later, OSRM are going to can your heiny for
basically encouraging people to either not use their service or go elsewhere.

[ Reply to This | # ]

  • Down side - Authored by: PJ on Friday, November 12 2004 @ 07:35 PM EST
M$ forgot some fine print
Authored by: Anonymous on Friday, November 12 2004 @ 05:54 AM EST
- Removing the infringing code
- Replace the infringing code with compliant code*
- Rewriting the infringing code to make it compliant*
- Litigating on the customer’s behalf—if Microsoft feels there is no
infringement

* Compliant code= code that is non-infringing and compliant with Micro$ofts
product-line (e.g. we will lock you in)

[ Reply to This | # ]

why exclude embedded product?
Authored by: Anonymous on Friday, November 12 2004 @ 06:38 AM EST
why have they excluded embedded products?

[ Reply to This | # ]

OT: are we there yet?
Authored by: DannyB on Friday, November 12 2004 @ 09:41 AM EST
PJ wrote... ...SCO's case is going down the toilet, and it was all about leading up to this marketing ploy? And they want their money's worth quick, before it's too late? How fascinating to remember that it was Ms. DiDio from the earliest days of the SCO story who sang arias about indemnification and how IBM needed to indemnify, blah blah. She is still singing that song in her report...

How fascinating to remember from sometime after the earliest days, wondering how long this fiasco is going to take, and reading over and over... "It ain't over until Laura DiDio sings." Hmmmm. Signs and portents? I can only hope.

---
The price of freedom is eternal litigation.

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MS Indemnification - Why?
Authored by: clark_kent on Friday, November 12 2004 @ 11:02 AM EST
Okay, so we are at the point where, if you use open source software, this is
your responsibility to take care of the legal matters. I have always understood
that, at least that is what I hear from Microsoft. But depending on the license,
that does not necessarily mean I am responsible and therefor liable.

However, If I am using a Microsoft product, I do not feel I need indemnification
AT ALL, in principle, especially as defined by the way Microsoft defines it for
"Open Source." Because I must place an emmense trust in Microsoft by
not knowing what is in it, they should take 100% responsibility for the matter
and leave me out of it completely.

But they don't. Indemnifaction means they will go to bat for me in court. But
maybe I want out of the game altogether, still having the benefits of the
software. That is what I don't get. If Microsoft makes the claims it does about
itself and it's products, leave me out of your problems completely (Microsoft.)

Isn't there some direct litigation against Microsoft database users going on?
And if so, why are the users involved? I would not want Microsoft to go-to-bat
for me in court. That's what lawyers are for. Let Microsoft deal directly with
the problem %100.

Now, if this is what I get for my money when I buy Microsoft, it is not worth
it. Sounds like, you get involved weither you use Microsoft or Open Source.
Basically, the levels of involvement are the same from the user. And that costs
my time. What a bunch of crap Microsoft is giving us, if what I say here is
accurate and true.



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MS and Indemnification
Authored by: gard on Friday, November 12 2004 @ 12:04 PM EST
Hi,
Microsoft gets the election as to which remedy you must accept, and their choice includes refunding your money paid for the software as your full and exclusive remedy.

Whoa ... that is just diabolically underwhelming ...

Actually, if that is all Didio is looking for, then many Linux distros do that already. For the ones you can get for gratis, the part about "refund the amount paid for the infringing software" is done before you even get started! And, you don't have to disclose anything about your business, and no restrictions on using 3rd party wares. Zero paperwork!

The gratis distros should start putting this on their banner pages ...
"Linux - Now with built-in MS level indemnification!"

gard

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Crippled by Indemnification?
Authored by: Dr.Dubious DDQ on Friday, November 12 2004 @ 02:26 PM EST
"Our obligations will not apply to the extent that the claim or adverse final judgment is based on:

(i) your running of the covered software after we notify you to discontinue running due to such a claim;"

Consider, now, the relatively recent case of the patent lawsuit over browser plugins...

Consider, now, how long that case went on (and is still going on?)

If the plaintiff had chosen to sue a vulnerable end-user instead of Microsoft themselves, and Microsoft was offering this kind of "indemnification" then, does this mean Microsoft would have called the user and said "hey, you'll have to stop using Internet Explorer for a couple of years while we deal with this in the courts. Oh, and no using other browsers either, because that would be mingling non-Microsoft products..."

Can you go for a couple of years without a web browser interface? Some "indemnification" they have there...

And that's WITHOUT wondering if just not running the browser is enough. Microsoft has worked so hard to intermingle, mutually embed, and make all of their OS components interdependent on each other - how many places could a patent/copyright infringement claim aim and take out, effectively, the ability to do anything with the OS at all?...

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MS and Indemnification
Authored by: Anonymous on Friday, November 12 2004 @ 02:45 PM EST
Microsoft wants SCO to delay, delay, delay to run up IBM's legal bills. Not
only does this cause uncertainty regarding the cleanlines of linux, but it also
gives them a target to point to and say, "Look how many million dollars IBM
spent defending themselves against a frivolous lawsuit. Can your business
afford to do the same?" And then they kindly suggest you use legally-safe
software like Microsoft.

(Though hope BSA/Microsoft doesn't raid you.)

MS can argue that only Microsoft software has indemnification, and people won't
argue too much since the majority simply doesn't know about linux
indemnification.

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Microsoft and copyright violation?
Authored by: worst-case on Friday, November 12 2004 @ 02:50 PM EST
Like all legal agreements, a lot depends on how much you trust the other side of the bargain to play fair. Or as Mr. Austin so ably puts it, "Even the most favorably worded indemnity provision will not immunize an end user when a vendor has no intention of paying for any infringement caused by use of its software." We're talking Microsoft, people. Playing fair is their middle name, right?
Errrm. Yes. Kind of. Look at these words in german. I tried a translation:

If you view the end of the files in c:WINDOWSHelpToursWindowsMediaPlayerAudioWav (e.g. WMPAUD1.WAV) with an hexeditor, you see a strange signature: "Deepz0ne". (Screenshot: http://untergrund.net/winwarez.jpg)
The explanation of this signature is quite simple: its the signature of Deepz0ne which is a member of the software cracking group Radium.
To edit these files, Microsoft used a illegal copy of Soundforge which has been cracked by Radium. Obviously, the use of cracked software within Microsoft is quite common: the signature appears not only in the englisch version of Windows XP but as well in localised versions as the german. Quite a shame for Microsoft.
Time to call the BSA?

Any comments on this? Ooops! some slashes got mangeled

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A bit off topic, but...
Authored by: Slimbo on Friday, November 12 2004 @ 03:54 PM EST
I've been following this case for about a year and a half on Groklaw. I know
SCO has a twisted since of logic, but there are a couple obvious issues that
seem to get lost in all the nit picking of contracts, legal cases and opinions.
They are:

1) Quoting Darl McBride "If SCO didn't get the copyrights to UNIX, what did
they pay all of that money for?" They purchased the right to sell UNIX
licenses for which they get 5% of the transaction. This why they are required
to pay 95% of each transaction to Novell. This is the same set up that real
estate agencies use to rent/lease property. Who in their right mind would buy
an apartment building where they must give 95% of their income to the previous
owner even though they own the property lock stock and barrel? Additionally
they purchased the right to develop their own brand of UNIX. They have the same
rights to do as they please with their code that every other business who
licensed from AT&T or Novell has.

2) SCOX claims it's a contract case because IBM continued to distribute AIX
after SCOX
terminated IBM's license. How can SCOX terminate a non-terminatable license?
If I recall correctly the non-terminatable status of this license was not
conditional, which would have made it a terminatable license.

3) Something else that bugs me is how can SCOX simply ignore Novell's pardoning
of IBM and others for any alleged violations when it's in black and white that
Novell has the right to act on their behalf, regardless of who owns the copy
rights. This alone should be more than enough to toss just about every one the
cases out of the courts. I don't recall SCOX ever presenting any reason for
ignoring this other than they own the copyrights. The contract and APA fail to
specify that Novell required the copyrights to exercise this option. Again,
another poor business decision if SCO was purchasing UNIX.

So to use the real estate metaphor again let sum this fiasco up. SCO purchased
an apartment building for a lot of money that for some strange reason they agree
to give full say so in how they will manage their own property and pay 95% of
their income from rent back to the previous owners. Now they have a dispute
with a tenant who has a paid unbreakable indefinite lease that allows them to
redesign the apartment and sublet as they see fit from the previous owners.
They decide to toss them out and bill them for letting someone else stay rent
free in the apartment. The previous owner exercises it rights and says no you
can’t do that because we say it’s ok. SCO sue the previous owner for Slander of
Title to the land because apparently they didn’t buy the land the apartment
building is sitting on. In doing so they demand the title to the land they are
claiming that they are being slandered against because they already have the
title (This sentence makes my head hurt). They follow up by threatening and
suing other tenants for allowing others to stay in their apartments. This
includes tenants in the other buildings in the neighborhood because they look
like SCO’s building. A tenant who has not even lived in the building for over
seven years is sued because they didn’t reply to a demand to inspect the
apartment. As a side note, the letter demanding the inspection was sent to an
old address that the tenant no longer uses.

Now if we were to take this court as a real estate dispute, would a judge let
the lunacy last this long?

Thanks for letting ramble on,
Randy

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MS and Indemnification
Authored by: Anonymous on Friday, November 12 2004 @ 08:40 PM EST
You also must give us sole control over its defense or settlement. You agree to provide us with reasonable assistance in defending the claim. We will reimburse you for reasonable out-of-pocket expenses that you incur in providing that assistance. The claim might fall outside the scope of our commitment, but send it to us anyway. We may choose to treat it as if it were covered by this commitment.

While it does sound onerous, this is standard language in any indemnification clause. No company is going to say "ok, we'll indemnify you no matter how you mess up the lawsuit." I've negotiated lots of similar agreements, and this clause is always in.

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"[...] distribution [...] to, or its use for the benefit of [...]"
Authored by: Anonymous on Saturday, November 13 2004 @ 08:51 AM EST
Whoops, no cover for developers using MS products.

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MS and Indemnification
Authored by: Anonymous on Saturday, November 13 2004 @ 01:56 PM EST
I wonder if MS' Indemnification Program might be prompted by some internal activities...

It's worth noting that the sound files shipped with MS Media Player were edited using a pirated version of SoundForge version 4.5. If you open any of the sound files in notepad or some other text editor, and look at the last line, you will see a reference to SoundForge 4.5 and to a peson called deepzOne, who is apparently a member of a well-known software audio cracking group. (PC-Welt broke the story and Slashdot carried it.)

It doesn't matter that the specific product isn't shipped with Windows, because it makes it clear that at least some at Microsoft aren't too strong in the ethics department. Given how protective of IP companies are becoming, and given how powerful copyright laws have become, Microsoft must see itself as a seriously inviting target. This is only a guess, but based on this new information, I'm guessing Microsoft are expecting the trickle of lawsuits to become a flood, and for the lawsuits to aim at individuals (a-la recent MPAA and RIAA tactics) as they're going to be softer targets.

If people become too scared to run Windows, they're going to switch. FUD has gone full-circle and is threatening its greatest user. The Indemnification now would appear to be a way to cripple the FUD as much as possible, without Microsoft having to actually pay anyone.

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MS and Indemnification
Authored by: blacklight on Saturday, November 13 2004 @ 08:14 PM EST
I'd like to see Microsoft idemnify for for the two weeks I spent getting rid of
an IE-specific piece of scumware that was particularly tenacious. But somehow, I
suspect it's not going to happen.

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MS and Indemnification
Authored by: sbungay on Saturday, November 13 2004 @ 11:46 PM EST
This entire indemnification fiasco was played out at the turn of the century
(the 1899-1900 century that is) between the automobile manufacturers and a
lawyer who had patented a "hydrocarbon fueled road engine" (pretty
broad definition huh?)... but of course he had never built one... he was
patenting the IDEA so he could collect royalties on it, as opposed to the idea
made manifest. Anyway... there was a good article on it all in the December 2003
issue of Road & Track magazine. The parallels are astounding.
The more things change the more they remain the same.

---
Programmer: A red eyed mumbling mamal that converses with inanimate objects.

IANAL IAAP

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MS and Damnification
Authored by: Anonymous on Sunday, November 14 2004 @ 04:51 PM EST
Non-microsoft programs?

Whoops, what about my graphics card driver, my Intel Application accelerator,
the data on my hard drive which wasn't there when I installed Windows?

What about the computer's BIOS, what about all my favourite games (none of which
come from Microsoft)?

Non-microsoft data??

What about the label on my Hard-drive? What about my name and address I have to
enter to register Windows?

If it wasn't really so sad and dangerous at the moment, I'd laugh.

Shame on you Bill.

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What about INDUCE?
Authored by: Anonymous on Monday, November 15 2004 @ 07:54 PM EST
If O'Hatches INDUCE act was to pass, and with Microsoft effectively admitting
they are the end of the line with respect to indemnity for software, I must ask:
could someone sue Microsoft, under the INDUCE act, for providing a system that
is known to enable others to violate copyrights? (in other words, Windows)?

Would the M$ tacit admission of responsibility (via the offer of indemnity),
open the door to some clever lawyers to fry Billy and his gang of thieves?

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