Legislation may be needed to fix open source IP issues

SAN FRANCISCO — Legislative remedies may be needed to address the murky issues over intellectual property that have arisen out of SCO’s lawsuit against IBM, an attorney said during the Open Source Business Conference 2004 event here on Wednesday.

SCO is suing IBM and DaimlerChrysler over use of Linux code that SCO says it holds rights to under its jurisdiction over Unix. But the issues are not that simple, according to panelists at a session entitled, “Unraveling the Effects of SCO.”

Law has not quite caught up to software intellectual property issues, said attorney Irwin Gross, of Wilson Sonsini Goodrich & Rosata. “Under current copyright laws, software is protected like literature. It’s treated like a book,” Gross said. The law was not made to address the copying of small snippets of code that go into larger projects, he said.

“I think eventually there will be regulatory responses to this,” said Gross.

A private market for risk management insurance will arise for open source, but “I think we’re going to see legislative solutions,” as well, he said.

Another panelist, attorney Mark Radcliffe of Gray Care Ware and Friedenrich, said third-party solutions are needed to provide indemnities. Open source provides an area of risk and uncertainty that is much higher than proprietary software, he said. The definition of copyright infringement in the United States is not even known, he charged.

“In the open source arena, you sue someone and if you win you have an enormous opportunity to collect,” according to Gross. An infringing party would have to pay damages based on all sales made through use of the purloined code, Gross said. Microsoft, according to Gross, has an interest in the SCO lawsuit because Microsoft with its business model cannot compete against open source, he said.

Despite the cloud over use of Linux and increasing concerns about intellectual property violations, no one in the audience of approximately 50 persons raised their hands when asked if they were worried about the SCO lawsuit.

Panelist Lawrence Rosen, attorney with Rosenlaw & Einschlag and general counsel with the Open Source Initiative, stressed the importance of the copyright infringement lawsuit. This lawsuit affects the fundamental open source model, he said. The Supreme Court has never clarified the issue of copyright infringement, he said. 

Rosen also said he believes allegations that Linux copies SCO’s Unix code are “bogus.”

“There’s no literal copying that we found,” with the exception of some un-copyrighted subroutine code, he said.

In an earlier panel session related to open source indemnification, panelist Yusuf Cassim, vice president and associate general counsel with Charles Schwab, noted the company uses open source software for cost savings. But the company is very careful, he said. Charles Schwab makes sure it gets appropriate representations and warranties, Cassim said.

“All this great open source software and he’s terrified to use it,” responded Rosen, who served on both panels.

“One of the things I’m [seeing] is that there is an implication that there is something unsafe about open source and you should approach it carefully, be cautious, don’t use it, use it only with extensive testing,” Rosen said. “Wait a minute. I’ve been in the software business for a lot of years. That’s what you do with any piece of software.”

“We’re not afraid of open source,” Cassim said. “We like it. We use it with caution.”