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HP Offers Indemnification If You Give up Freedom to Modify
Wednesday, September 24 2003 @ 01:51 PM EDT

Hewlett Packard is announcing that they will provide indemnification for its customers against any SCO lawsuits:
"We will provide full indemnity across the entire suite for any SCO-related action," said Martin Fink, HP's vice president of Linux. "If (customers) were to get sued by SCO, we would take over their defense and assume liability on their behalf."

The indemnification program is limited to customers who receive a Linux distribution from HP, run it on HP hardware and have a support contract with HP. There's no additional charge for the protection.

Fink said HP is not paying any Linux-related licensing fees to SCO.

They indicate it was a toss-up between suing SCO or providing customer indemnification, and they chose the latter.

According to this poston Yahoo! SCOX message board, the WSJ quotes McBride as saying: "It's laudable that HP is stepping up to protect its users, but this will put a huge burden on the company."

HP isn't charging for this indemnification, actually, saying the company is "in a position to take that risk" of any legal bills. Fink says "HP will take over any litigation and defend against any claims on behalf of its clients. He added that this will apply to any customer that has acquired Linux on an HP server or workstation as of Oct. 1."

SCO immediately put out a self-serving press release saying that this proves HP thinks there are IP issues in Linux and that Linux is not free:

HP's Actions Support SCO's Position That Linux is not Free

LINDON, Utah, Sep 24, 2003

HP's actions this morning reaffirm the fact that enterprise end users running Linux are exposed to legal risks. Rather than deny the existence of substantial structural problems with Linux as many Open Source leaders have done, HP is acknowledging that issues exist and is attempting to be responsive to its customers' request for relief. HP's actions are driving the Linux industry towards a licensing program. In other words, Linux is not free.

We are gratified that, alone among the major Linux vendors, HP has taken a strong stand to protect their customers by indemnifying them against possible legal difficulties stemming from their use of Linux. We believe that this action signals that HP recognizes their Linux users could, in fact, face litigation because of copyright violations and intellectual property problems within Linux. As a company that strongly supports its customers, HP has done something about this.

Now that HP has stepped up for its customers, SCO once again encourages Red Hat, IBM and other major Linux vendors to do the same. We think their customers will demand it.

They should take a little more time on those press releases, methinks. As it happens, Fink's statement said exactly the opposite:
"HP is not acknowledging anything related to SCO's actions," he said. "The validity of that is for the courts to decide."
So now we know why SCO has been pushing IBM to indemnify its customers. They wanted to be able to say, as they did today, that offering indemnification is proof that there are IP issues in Linux, and that Linux isn't free. That's a really good reason not to offer it in the current climate. Here'swhat one analyst said in reaction to SCO's press release:
Dan Kusnetzky, an analyst at IDC in Framingham, Mass., said he expected one of the large IT vendors to indemnify its customers and protect its business interests. "Now that HP has done that, I suspect that IBM will make a similar move," he said.

Kusnetzky disagreed with SCO's analysis that the indemnification is proof of the alleged legal problems with Linux.

"I don't think HP is admitting that problems exist in Linux," he said. "It's admitting that the SCO Group might attack its customers and rather than lose a budding business ... they are taking steps to reassure customers that if The SCO Group does attack them, that they have a big friend, a big partner."

"It's kind of like HP stepping forward and saying, 'If SCO Group is attacking you, they're attacking us,'" Kusnetzky said. "I don't think that HP in any way, shape or form is agreeing to the original premise of The SCO Group's litigation that somehow their intellectual property ended up in Linux."

Linus, Bruce Perens and Eric Raymond weighed in here. Linus said this:
"As a 'we don't believe SCO has a case, and we're willing to put our money on it,' indemnification is wonderful. It might be a cynical marketing tactic, but if people are asking for it, why not?

"But I haven't got any inside scoop in what went on. I'd be disappointed in HP if they made some agreement with SCO. It's the old 'we don't negotiate with terrorists thing."

If offering indemnification is proof of IP problems, I'd say Microsoft's recent announcement that they intend to offer expanded indemnification must mean the same thing. And what about SCO? Do they offer their customers indemnification? If so, is it proof they have problems with their software? And if they don't offer it, why should IBM? What kind of silliness is this?

HP isn't offering indemnification against all IP problems. It offers protection against SCO and only SCO. Unfortunately, SCO has demonstrated a willingness to sue regardless of the merits of its position. So HP is saying it is going that extra step to protect its customers, none of whom asked for that indemnification, according to HP's teleconference call today. They acknowledge their customers aren't worrried about Linux, yet they decided to offer what their customers haven't asked for but SCO has? Here's Fink's statement today about customers not asking for indemnification:

"We have not found customers are worried about long-term viability of Linux and the lawsuit, but we developed this [plan] to mitigate the risk of choosing Linux."
Here's the worst part. You're only indemnified if you give up certain GPL freedoms, specifically the freedom to modify, according to this report on Newsforge:
You aren't allowed to freely modify your source code and still be covered by HP's warm & fuzzy legal security blanket.

Fink claims that "only one in 10,000" users ever modify source code, and that if you get your binaries -- for any distribution -- through HP and use it on HP hardware, you're covered. If you buy a new HP unit that comes with Linux and install that same version of Linux on that old HP laptop you have in the shed, you're still covered. (However, if you install it on your Toshiba laptop, you're not.)

During a conference call at noon today, Fink said they'd check modifications "on a case-by-case basis." . . .A few moments later, respected tech journalist (and NewsForge contributing writer) Steven J. Vaughan-Nichols asked if security patches would void the indemnification. Fink said, "If you take them from an unknown third party" it's a case-by-case thing, but if you get your patches as binaries from a distribution publisher that works with HP, you're covered.

Again with the binary-only baloney. What is with these people? Those of us who use GNU/Linux choose it because we can do whatever we want with it on our own computers. Try to get that through your heads. It's the freedom part that matters to GNU/Linux users. It's what we abandoned proprietary software to obtain.

HP said they took this step to show their support for Linux. But what they do not understand is that the freedom to modify is a vital part of GNU/Linux. We aren't willing to give up any of the freedoms the GPL grants. Coming up with an indemnification plan that tells customers they can't modify source code tells us how much HP still doesn't get it. HP may imagine it is supporting Linux, and it may be sincere in wanting to, and that's putting the best interpretation on today's events, but it is actually in effect pressuring customers to abandon it. So, thanks but no thanks, HP. You need to go back to school and learn about the GPL, the freedoms it offers, and why it matters. Maybe you should consider hiring some staff members who understand all this, if you really want to support Linux. If you have such staff members currently, you should have listened to them warn you against making the mistake you made today, as I know they must have, if they are there.

Here's my message to IBM and Red Hat on the subject of indemnification: Please don't offer indemnification across the board. If a corporate customer wants it and wishes to pay for it individually, go right ahead. But I don't want it. I don't need it. Openness is my indemnification anyway. I especially don't want you to offer it in the current circumstances.

I've seen the indemnification corporations offer, and it offers next to nothing. You can see what I mean by reading what I wrote earlier on why I don't want indemnification here in an article entitled "An Answer to the Indemnification FUD," if you are interested. Bruce Perens got it right in his statement:

Indemnification is really meaningless. All of the various parties offering it will only refund your purchase price for their software, not your real damages. So, you get nothing that you would not get just by downloading the software from one of the sites that distribute Open Source without charge. Then again, SCO's rantings are just as meaningless, and they have zero chance of prevailing in court, so indemnity is easy to offer.

People who consider indemnity important need to look more deeply into it.

By offering indemnification for free, HP has just publicly evaluated SCO's chances and rated them zero or at least inconsequential, despite SCO's desperate effort to spin it their way. That doesn't change the fact that what HP did today was join SCO in pressuring IBM into offering indemnification, and they should be ashamed of that. Here's Fink's statement:
"Today's announcement is about accountability and protecting the customer, while the other vendors sit on their haunches," Fink said. "By doing this, HP is showing its leadership and demonstrating its true commitment to Linux."
I beg to differ. By doing this, HP shows it isn't a true friend of the community, at least not yet. Even if it isn't a deliberate act of support for SCO, at a mimimum HP has demonstrated it doesn't even understand, let alone support, Linux.

What I really wish is that businesses that don't grok what open source/free software is all about would stop offering it, go back to fighting among themselves over "IP" as if it were the Holy Grail, and leave us alone. Alternatively, hire people who do get it, and let them show you how to become a real contributing member of the open source/free software community. IBM made that effort, and that's why it has our support. We are happy to help you, if you are sincere about wanting to support Linux.

A final word to the wise: get your own lawyer any time you enter the legal arena, if you can afford to. You always need someone who has your interests at heart exclusively. I'm not saying this is the case, but let's just imagine for a moment a worst-case scenario. Let's imagine that SCO and HP did do a deal. This is make-believe, remember, so we can imagine whatever we wish to make a point about needing your own lawyer. Let's say the deal was that SCO is painted into a corner. It has announced it will send out invoices, but then it figures out the GPL and various consumer protection laws stand in their way and they're afraid to go ahead. What to do? How about getting HP to say it will indemnify, then SCO can safely sue a customer of HP, who then steps in, doesn't countersue, and makes sure it loses on behalf of that poor customer who was naively relying on HP to defend Linux and the customer. I wish to stress I am not saying this is what is happening, because, like Linus, I have absolutely no inside information, but if something like that ever were to happen, you can surely see the wisdom of getting your own legal representation, someone you are sure is looking out for your interests and yours only. And even in the best-case scenario, judging from today's events, do you really trust HP to defend Linux on your behalf?


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