18 August 2005 Users of open source software are to be offered insurance against claims of intellectual property infringement, underwritten by the world’s largest insurance broker Lloyd’s of London.
Details of the insurance package are currently being finalised between Lloyd’s and US risk mitigation group Open Source Risk Management (OSRM).
The insurance is expected to be available for users of the most common open source software: the Linux operating system; the Apache web server; MySQL database; and Perl/PHP scripting language – the so-called ‘Lamp’ stack.
The potential for open source software to infringe intellectual property rights first gained publicity after software maker The SCO Group issued writs against software vendors, including IBM. SCO claimed to own portions of the source code that had been incorporated into the Linux kernel.
Several vendors, such as Novell and Red Hat, already offer protection for customers using their Linux-specific products, but this indemnification does not extend to third party software.
Lloyd’s underwriting could provide vendor-neutral insurance covering the major Linux and open source distributions.
Dan Ravicher, founder and executive director of the US Public Patent Foundation and senior counsel to the Free Software Foundation, estimates that whether or not a patent is truly infringed, it can cost corporate Linux users an average of $3 million to defend a patent lawsuit.
“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,” he explained.