Lloyd's to provide open source IP indemnity

Lloyd's to provide open source IP indemnity

Summary: Syndicates at Lloyd's of London have finally woken up and smelled the coffee - they may soon begin underwriting open source software

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TOPICS: Government UK
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Lloyd's of London, the oldest insurance organisation in the world, is to underwrite open source software against claims of intellectual-property (IP) infringement.

The insurance will be available through brokers to companies and organisations who are worried about being sued over their use of open source software such as Linux by companies who would claim it violates their intellectual-property rights.

John St Clair, the chief operating officer of insurance firm Open Source Risk Management (OSRM), said on Friday that OSRM is working with "a number of" Lloyd's syndicates, who will start offering open source insurance "within the next few months".

A Lloyd's spokeswoman was unable to confirm details, but St. Clair said the insurance will initially cover the open source LAMP stack, which consists of the Linux operating system, the Apache Web server, the MySQL database and the Perl, PHP and Python scripting languages. Other open source products may be added in future depending on market demand.

The insurance will be cover all Linux distributions, unlike the Linux IP indemnification policies offered by HP, Red Hat and Novell, which only cover specific distributions.

"It will cover the basic commonality among all Linux distributions — at present this is the main legal target because it has the widest use. It might not cover distribution-specific packages," said St Clair.

St Clair was unwilling to give details on the expected pricing of the IP insurance, but said the costs would not deter companies from adopting open source software.

"We are very confident that even with the cost of insurance it will still be less costly to adopt an open source than a proprietary solution," said St Clair.

Last year the OSRM commissioned an analysis of Linux, which found that the open source operating system potentially infringes 283 patents. The results of this study were later used by Microsoft to discourage customers from switching to the open source operating system.

St Clair said last week that the likelihood of IP infringement in open source and proprietary software are similar, but customers may worry about being the target of an IP infringement case if they are using open source software that is not linked to a single vendor.

"Open source does not present a greater risk than proprietary software. But because it doesn't have one owner, there's no single owner that stands between the customer and the IP owner. This can be a challenge for medium to large-sized enterprises that are considering open source," said St Clair.

Topic: Government UK

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3 comments
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  • Wow, so ZD believes a portion of open source to be ripped off? I'd say it's ZD, not Lloyd's, who have 'woken up'.
    anonymous
  • I'm not sure what your point is here, 'Anonymous' above...

    There seems to be no indication in the above article that ZD think anything of the potential legal risks of open source software, and neither do Lloyd's.

    As the chap says, there is no greater chance of IP violation in the actual code of open source software than in proprietary systems... but there is demand for insurance since the most cost-effective targets for IP laywyers might become big users if there are no big firms responsible for the software itself.
    anonymous
  • "All your patents are belong to us!!! Muhhahahahaha "chuckles microsoft.

    Captain Gates to PFY, arm the litigation cannon!
    If it moves they'll sue it. If it doesn't move they'll sue it in case it moves later and then claim they owned the intellectual rights to it's CEO's breakfast since last year.

    Did you know you can now get insurance, that protects you against is litigation by microsoft over core linux technology patent infringement???
    You get get insurance that only pays if microsoft sues you. Unfortunately in this day and age thats not wonderfully unlikely. Thank god the European Patent Directive got thrown out!

    Rather scarily I've written this exact talkback on ANOTHER microsoft related story!
    anonymous