Results of First-Ever Linux Patent Review Announced, Patent Insurance Offered by Open Source Risk Management Review of Linux Kernel Reveals No Infringement of Court-Validated Software

Patents; 283 Issued But Not Yet Court-Validated Patents a Conceivable Risk

    SAN FRANCISCO, Aug. 2 /PRNewswire/ -- Open Source Risk Management (OSRM),
 the only vendor-neutral provider of Open Source risk mitigation and management
 solutions, today announced results of the first-ever evaluation of potential
 patent infringement by the Linux kernel, along with a patent insurance program
 for enterprise Linux users.
     Well-known patent attorney Dan Ravicher, founder and executive director of
 the Public Patent Foundation and senior counsel to the Free Software
 Foundation, reviewed all U.S. software patents that have been litigated
 through appeal, examining whether the Linux kernel contains technology that
 could trigger patent claims against end-users.  In conclusion, he found that
 no court-validated software patent is infringed by the Linux kernel.  However,
 Ravicher also found 283 issued but not yet court-validated software patents
 that, if upheld as valid by the courts, could potentially be used to support
 patent claims against Linux.  In response, OSRM will be expanding its risk
 mitigation and insurance offerings to cover this quantifiable risk.
     "Patents pose a financial risk to corporate Linux users -- just like they
 do to corporate users of almost any software -- because, whether or not a
 patent is truly infringed, it costs $3 million dollars on average to defend a
 patent lawsuit," said Ravicher.  "This heavy cost of proving even weak patents
 invalid could fall on unprepared end-users - who, until now, have often been
 forced to pay settlements to avoid risking millions on litigation.  OSRM's new
 patent insurance gives such end-users another way to address the issue, as it
 is a direct competitive alternative to licensing or litigating."
     Ravicher summed up the findings of his review as follows: "Bottom line, we
 confirmed what the community already knew; that Linux, like any other wildly
 successful product, has a patent risk.  But, we also concluded that the Linux
 patent risks are manageable because of the economies of scale achieved by
 bringing together large numbers of end-users through a structured program of
 insurance and loss-control, like that now offered by OSRM.  This patent risk
 is in line with what we expected to find, and likely comparable to the level
 of risk you would find in comparable proprietary software; the only difference
 with open source software being that proprietary software vendors typically
 provide legal backing for their customers.
     "So the news is both good and bad," continued Ravicher.  "The bad news is
 that we identified 283 issued patents that have not yet been litigated, and
 contain claims that could conceivably be brought against Linux end-users and
 create financial exposure if found valid.  And, of course, not-yet-issued
 patents could create similar problems.  But, the good news is that none of the
 fully litigated patents we reviewed contain claims that cover Linux."
     Additionally, Ravicher found that about a third of the 283 issued patents
 are owned by large corporations that are friendly to Linux - ones with some
 current financial interest in broad Linux adoption, including: Cisco, HP, IBM,
 Intel, Novell, Oracle, Red Hat, Sony, and others.  However, to date, no Linux
 vendor has publicly offered its customers legal protection for patent
 liability; nor has any entered into an explicit agreement promising never to
 use its own patents against Linux users.  Also, 27 of the 283 patents are held
 by Microsoft, an outspoken opponent of Free and Open Source software; and
 still others by individuals or shell corporations who may have little to lose
 by making legal threats against enterprise Linux users in pursuit of
 settlement dollars.
     "Current U.S. patent law creates an environment in which vendors and
 developers are generally advised by their lawyers not to examine other
 people's software patents, because doing so creates the risk of triple damages
 for 'willful' infringement," said Daniel Egger, chairman and founder of Open
 Source Risk Management.  "This studied ignorance leaves the field open to
 those who would spread fear and disinformation.  It also means that only a
 vendor-neutral entity, like OSRM, has the freedom and incentive to assess the
 true risks."
     Solutions: Insurance, Risk Consulting and Patent Policy Reform
     OSRM, applying its own proprietary risk-models and pricing heuristics,
 found that, when combined with OSRM's loss-control methods and resources,
 corporate use of Linux kernel versions 2.4 and 2.6 is an insurable patent-
 liability risk.  Thus, OSRM plans to underwrite combined copyright and patent
 insurance for enterprise users by year's end.  As OSRM is limiting capacity
 for the first year, current and potential enterprise Linux users are already
 putting their names on OSRM's confidential waiting list for this coverage,
 which provides for legal defense and damages if sued for Linux use.
     "An enterprise that solely chooses to license patents as a way to deal
 with patent risk will have to deal with every single patent holder, and will
 have no effective way to cap and effectively manage their total patent
 exposure," said Daniel Egger.  "In contrast, OSRM clients are protected from
 any and all patent assertions made against them; either solely through OSRM
 coverage or by supplementing their own patent licensing with OSRM's insurance
 to provide full protection."
     For corporations and outside counsel seeking more specialized answers,
 OSRM offers risk mitigation consulting to help audit, price, manage and
 mitigate the unique risks from enterprise use of Free and Open Source
 Software.  In addition to this underwriting and specialized patent defense
 information developed for its clients, OSRM is active in promoting systematic
 patent policy reforms to address the issue at its roots, patent policies
 themselves.  A free OSRM position paper, titled "Mitigating Linux Patent Risk"
 will be available for download from, providing a more
 in-depth discussion of the specific steps corporations, developers, and the
 Open Source community can take to mitigate Linux patent risk.
     "The most important message to take away -- based on OSRM's proprietary
 research and quantitative models and the best independent legal analysis
 available to us -- is that the core of the Linux operating system appears to
 be a normal, insurable patent risk for the businesses that use it.  And, based
 on our hands-on work with many different types of customers, we have found the
 total cost of ownership of using Linux to still be dramatically lower than
 proprietary alternatives for customers that add in the cost of effective risk-
 management," said Egger.  "What it boils down to is that Linux has patent
 risks; but they can and will become conventional insured risks, just an
 everyday cost of doing business.  OSRM's whole mission is to make the issue of
 Linux liability simple, routine, and manageable."
     About Open Source Risk Management
     Supported by top Open Source leaders and intellectual property (IP) legal
 experts, Open Source Risk Management (OSRM) is the industry's only vendor-
 neutral provider of risk mitigation, indemnification, and management services
 for enterprise Open Source users.  OSRM helps organizations assess potential
 legal risks around their use of Open Source software, and design risk
 mitigation solutions based on a set of best practice protocols.  Additionally,
 OSRM provides indemnification for legal claims against Open Source, by
 underwriting copyright and patent coverage through its affiliates, for the
 Linux kernel versions 2.4 and 2.6.  Through its Open Source Legal Defense
 Center, OSRM also works in tandem with highly specialized software IP lawyers
 to offer coordinated legal defense services.
     For more information, please visit
      Karen Duffin
      Bite Communications for OSRM
      t: 415-365-0459
      This release was issued through eReleases(TM).  For more information,

SOURCE Open Source Risk Management

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