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Novell Offers Linux Users Legal Indemnity 271

Anonymous Coward writes "Novell today said it intends to indemnify its enterprise Linux users against possible legal action by The SCO Group and/or others. According to eWeek Novell's new Linux Indemnification Program is designed to provide its SUSE Enterprise Linux customers with protection against intellectual-property challenges to Linux and to help reduce the barriers to Linux adoption in the enterprise. Under the terms of the program, Novell will offer indemnification for copyright infringement claims made by third parties against registered Novell customers who obtain SUSE Enterprise Linux 8 after January 13, 2004, upgrade protection and a qualifying technical support contract from Novell or a Novell channel partner."
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Novell Offers Linux Users Legal Indemnity

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  • does it seem like.. (Score:4, Interesting)

    by Anonymous Coward on Monday January 12, 2004 @09:41PM (#7958446)

    Novell is using this as a chance to get support contracts thrown in with this protection?
    • by Rosco P. Coltrane ( 209368 ) on Monday January 12, 2004 @09:49PM (#7958521)
      And you think they bought SuSE because ...?
      • by Pharmboy ( 216950 ) on Monday January 12, 2004 @09:59PM (#7958596) Journal
        And you think they bought SuSE because ...?

        I would agree. Its ironic. Everyone is talking roses about them because even Novell says they are smoking crack. Then they put their money where their mouth is and offers protection for their customers (they can't offer protection for NON customers, there is no contract to protect, duh).

        And now everyone is comparing them to MS.

        It doesn't strengthen SCOs case, it demonstrates that SCO doesn't have one. They just called SCO's bluff because they can, for free. Indemnifying customers of legal action against SCO is like offering life insurance for your pet rock: There is little fear you will ever need to exercise the right and collect on it.

        If they make some money, too, great. Since they just invested $210 million in open source software, I hope they make a wad.
        • by cbreaker ( 561297 ) on Monday January 12, 2004 @10:36PM (#7958854) Journal
          You're right man.

          Seriously, where do people think companies are going to make money? Everyone says "support contracts" but then when a company tries to sell them, people claim they are no better then Microsoft.

          Why would Novell protect someone that does not purchase their support? I think it's a pretty good idea, good business practice, and throws this back in the face of SCO.
  • by thorgil ( 455385 ) on Monday January 12, 2004 @09:42PM (#7958456) Homepage
    The promise is only about new SUSE support subscribers.
    • And I quote:

      Under the terms of the program, Novell will offer indemnification for copyright infringement claims made by third parties against registered Novell customers who obtain SUSE Enterprise Linux 8 after January 13, 2004, upgrade protection and a qualifying technical support contract from Novell or a Novell channel partner.

      Sheesh, the slashdot summary even mentions this point. I don't think you're really being insightful. I guess the idea is that they want to prevent their revenue base from shri

  • Let me guess:

    Novell's trying to cash in on SCO's bad manners!

    Well, you can't indemnify someone without contract of some sort, and buying and installign software with a EULA that has that clause would be a good way to do it.

    But in all fairness I officially downgrade Novell from an alert level of Double Plus Good to Plus Good. The SCO alert level remains fixed at Double Plus Ungood. Verner's is still tasty. Further news as events warrant.

  • by dogas ( 312359 ) on Monday January 12, 2004 @09:45PM (#7958480) Homepage
    so it starts January 13th? otherwise you have to buy an 'upgrade package'?

    they're just trying to make a sale. It would be better if they offered this protection to all of their customers, rather than forcing companies to buy an 'upgrade', that will most likely prove worthless anyhow,

  • Jeez, at some point, do you think that M$ dirty tactics will hurt it in that realm of enterprise business where handshakes still matter?
  • Under the terms of the program, Novell will offer indemnification for copyright infringement claims made by third parties against registered Novell customers who obtain SuSE Enterprise Linux 8 after January 13, 2004, upgrade protection and a qualifying technical support contract from Novell or a Novell channel partner

    In other words, Novell bought any old Linux distro to make money out of people's fears of SCO (or rathe, fear of having to deal with the SCO annoyance). Some surprise ...
    • Re:What a surprise (Score:5, Interesting)

      by rendler ( 141135 ) on Monday January 12, 2004 @09:57PM (#7958579)
      What happens if SCO wins? No one at the moment can say that they won't. If that happens Novell stands to loose A LOT of money from the indemnification alone. No business, especially not one as big as Novell would do something like this just to get a few extra upgrade sales from a few of their customers.
      • What happens if SCO wins?

        Since I am not a lawyer, and I don't even claim to fully understand what SCO wants/says, I will therefore assume that if big names such as IBM, Novell and HP decide to put their reputation and money against SCO, they probably have legions of very qualified lawyers that say SCO doesn't stand a chance, or such a small chance that it's a safe bet to invest money in anti-SCO tactics.
      • by El ( 94934 ) on Monday January 12, 2004 @10:17PM (#7958725)
        Since SCO is essentially a sublicensee of Unix from Novell, then if SCO wins, Novell pays itself, minus a small cut to SCO. Sounds pretty much win-win for Novell to me...
      • Well... (Score:3, Informative)

        by Kjella ( 173770 )
        ...since Novell still claims to be the copyright holder, doesn't that mean that *they* would get the money from any *copyright* lawsuit? Remember that the IBM case is all about breach of contract, not copyright. There is no "SCO IP" case. They've never filed for one. The only case they've filed is against IBM putting IBMs IP in SCO, in breach of a *contract* with SCO.

  • by aufecht ( 163961 ) on Monday January 12, 2004 @09:47PM (#7958501) Homepage Journal
    Correct if I am wrong, but doesn't such an action just legitimize the claims of the SCO group? Or, does it just mean that in the unlikely even that SCO actually win this lawsuit that Novell will absorb the costs of it's customers Linux deployments, as far as liscensing?
    • Re:Just asking (Score:2, Insightful)

      by jacobdp ( 698004 )
      Correct if I am wrong, but doesn't such an action just legitimize the claims of the SCO group?

      Actually, it refutes some of them.

      SCO has said "if you're so sure your code doesn't infringe on our IP, why aren't you indemnifying customers?" Novell is now doing just that and, in a way, standing up for the community as well as saying "nanny nanny boo boo" to SCO.

    • No, it's not just about SCO. Basically, businesses that don't spend hours a day reading Groklaw and /. just know that they won't be sued, by SCO or anyone else. Just knowing that makes them feel better.

      Indemnification is also there to show how much Novell thinks of SCO's claims. If Novell didn't offer Indemnification, that might be saying something. The fact that they are means they are pretty damn sure of what rights they have.

      IBM doesn't necessarily have to do this, because they have the push of bei
  • In other words... (Score:3, Insightful)

    by AndroidCat ( 229562 ) on Monday January 12, 2004 @09:51PM (#7958534) Homepage
    Novell: Me too!

    Sure why not. What SCO's chances of winning past IBM, Redhat and the rest to actually sue a SUSE user? Isn't think like selling "The Moon landing on your head" insurance?

  • by phr1 ( 211689 ) on Monday January 12, 2004 @09:52PM (#7958538)
    If SCO (and imagine Microsoft doing the same thing later on) have managed to create enough FUD for users to be afraid of using free software unless identified by some company, that already undermines the goals of free software pretty badly. Being able to download, modify, and redistribute software with the author's permission isn't all that attractive if SCO has made you feel threatened by legal hassles for doing it. You no longer get the freedom from bureaucracy, hassles, per-seat fees, and so forth that the free software developers labored to bring you.

    We shouldn't celebrate just because indemnification is available and say it solves the problem. That SCO has created demand for such indemnification is already a big problem. And of course companies offering indemnification have a vested interest in creating more such demand. They're not doing anything bad by offering it, but neither is it completely in the interests of free software for everyone to jump on it. It's more complicated than that and we have to keep the issues clear.

    • by phr1 ( 211689 )
      Meant "indemnified", not "identified" in above message. Doh.
    • by gcaseye6677 ( 694805 ) on Monday January 12, 2004 @10:04PM (#7958634)

      If indemnification makes people more likely to adopt open source software in the short term, it is a good thing. Yes, it will suck for smaller software companies that can not afford indemnification, but as more companies realize that open source is not as scary as Microsoft wants them to believe, its usage will pick up dramatically. For large companies, the savings in software licensing fees could pay for all the legal representation they need to defend their open source usage and distribution. Once the SCO case falls apart and potential copycats realize that extorting money out of free software users is harder than it appeared at first, such lawsuits, along with the fear of being sued, will drop off.
      • If indemnification makes people more likely to adopt open source software in the short term, it is a good thing.

        Why do you say that? If they think they're asking for lawsuits unless they write some company a check for every copy of the program they use, how is it different from using proprietary software?

        • by Pharmboy ( 216950 ) on Monday January 12, 2004 @10:45PM (#7958910) Journal
          I think his main point, and I would agree, is that indemnification is only a short term solution to a short term problem. Once all this played out with SCO in court, indemnification will not be needed. If a company has enough faith that SCO is wrong, it is worth the risk to them for "insurance" policy to gain new customers. If the support contract isn't a good value by itself, then the temporary freebee of an indemnification clause will make little difference in their sales.

          Obviously to any group that is not profit group distributing Linux (Debian, etc.) indemnification is not possible, but most people who use Debian aren't buying support contracts from anyone, at any price. Most Debian (or Gentoo, or Slackware...) users are more aware of the problem, and feel confident that SCO can't win because they have no claim. Its also a different culture, with a bigger focus on "free as in speech/beer", rather than "how will this generate profits and create jobs to grow the business" concerns.

          Corporate users are different because decisions are made by committee, not a single hacker, and done for the benefit of shareholders, employees, managers and customers. They have entire departments for IT, and they are more interested in running stable, reliable, supported networks than cutting edge. The needs, culture and expectations are just different.

          I have used RedHat for several years, and paid for the support, on a few servers. Their recent policies are forcing me to consider changing vendors. Indemnification alone would not get me to switch, but I can see how it is a benefit on alongside SuSe, a very popular corporate distro, and one that I am considering. If its "icing on the cake" and SuSe puts out the best _product_, and they are honest in how they market indemnification, then I see this as a good move to push Linux in the mainstream, by removing barriers in the marketplace, ie: concern over the future of Linux.
          • My concern is that the problem indemnification addresses is a LONG-term problem. The SCO suit is just a short-term instance of the long term problem. Wait til Microsoft tries something similar.

            An organization like Debian can't itself offer indemnification, but perhaps it could work with an insurance policy to offer indemnity policies to people wanting to buy them. However, the closest to a real solution would be for Darl and company to see jail time and dissuade others from running similar scams. But

            • I think the fact that indemnification is being offered at all is rather convincing for a lot of corporate executives, even if their company is not actually indemnified by a vendor. What I mean is, when a CxO sees that respected industry leaders like IBM, Intel, Novell, RedHat and others say that they will cover the legal bills of any customer that gets sued, they assume that the SCO case must be weak. Why else would these companies put themselves on the hook for what could otherwise be millions of dollars i
    • I don't think this is the end of the world. While I, too, would love to live in a perfect world, sometimes extra protection is a nice "feature" that comes bundled with the product.

      Also, keep in mind this does not affect Linux users, per se. It affects Novell customers. There's a great deal of overlap, to be sure, but I think it's a company's right to take the extra step to protect customers from legal B.S. like this.

      Unfortunate this has to happen? Maybe. Indemnification (I think) usually involves con
    • by pla ( 258480 ) on Monday January 12, 2004 @10:11PM (#7958694) Journal
      We shouldn't celebrate just because indemnification is available and say it solves the problem.

      I don't think we need to look at this situation in that particular light...

      SCO tried going off on yet another FUD tangent (presumeably since as of today, their legal case should cease to exist) by pointing the finger at various Linux-related companies, asking why, if so confident in SCO's lack of a case, they didn't offer to indemnify their clients.

      Novel has yet again spiked the ball back, and taken up SCO's challenge.

      IMO, the entire situation has gone from legal harassment to playground pissing-contests. "You sound sooooo sure your dog can beat up my dog, why won't you bet on it, you little pussy?". Nothing more, nothing less. In this case, Novel responded by tossing in a quarter and letting its rottweiler off the leash to play with SCO's toy poodle.
    • by LinuxMacWin ( 79859 ) on Monday January 12, 2004 @10:12PM (#7958695)
      It is not that Novell suddenly decided to indemnify because of FUD. If you read the article, it says that Novell expects to complete its purchase of SUSE Linux today. If Novell did not own SUSE earlier, it could not have offered the indemnity.

      "Novell executives are also expected to announce on Monday that the SuSE deal has been completed. That will mean that SuSE's Linux distributions join the Novell family of products and allow Novell to offer customers a complete Linux-solution stack and global technical Linux support."

      However, I understand your concern for the FUD maybe becoming successful, and maybe one of the reasons for indemnity.
  • it seems (Score:5, Insightful)

    by toddhunter ( 659837 ) on Monday January 12, 2004 @09:52PM (#7958541)
    That everyone now is using SCO to cash in a little. No doubt Novell, IBM et al have made these funds knowing full well that SCO will never see any of that money because they will never really challenge anyone in court if they can help it.
    Meanwhile, these companies get free good publicity.
    • Re:it seems (Score:3, Interesting)

      by plierhead ( 570797 )
      No doubt Novell, IBM et al have made these funds knowing full well that SCO will never see any of that money because they will never really challenge anyone in court if they can help it.

      IBM and Novell want to see this SCO bullshit hit the courts as soon as possible. What they don't want is this albatross hanging around the necks of their linux business. Up until now, SCO could just sit there and let the FUD fester - now IBM and Novell have neutralised the FUD.

      The key to understanding all of these corpor

  • by ikekrull ( 59661 ) on Monday January 12, 2004 @09:53PM (#7958548) Homepage
    Am I wrong, or would 95% of each $699 SCO license fee go to Novell, since they retain ownership of Sys V UNIX?

    Theres something fishy going on with SCO and Novell, with Novell coming out of this smelling like roses - I have to wonder if this whole SCO sham is simply a way to boost Novell's image as ' a good guy' at the expense of a company that was insignificant and dying anyway (SCO).

    Anyone else finding it difficult to understand these dealings?

  • by beforewisdom ( 729725 ) on Monday January 12, 2004 @09:55PM (#7958567)
    Was not a court order for SCO to present their "evidence" supposed to have come due today 1/12/04?

    If so will not this issue be dieing soon..?

    ( assuming they really do not have a claim )


    • by futuramarama ( 687115 ) on Monday January 12, 2004 @10:22PM (#7958758)
      As usual, check Groklaw [groklaw.com] for the lastest.

      Seems that SCO did indeed submit (so we wait while IBM reads it).

      Now its their turn to put a motion to compel discovery, asking for all modifications ever made by IBM to the System V source code.

      It seems that if SCO doesn't give in (and its unlikely they will), they can drag this out for quite some time.

    • Yes, but we won't know anything about it for a while:

      "I have been seeing a lot of expectations about Monday, but personally, I don't expect to know much until the next court date on the 23rd, if SCO is being truthful and actually does turn over significant answers and documents. SCO may have media pronouncements to make, but IBM has to look over what they are given and evaluate it and that takes time. They aren't given to trying this case in the media, so my best guess is that our next event in the IBM mat
  • by Camel Pilot ( 78781 ) on Monday January 12, 2004 @09:59PM (#7958600) Homepage Journal
    You gotta love how Forbes always get it wrong. This Forbes article [forbes.com] by Reed Stevenson


    SCO also warned companies that they must pay to use Linux, which is based on the proprietary Unix operating system, or face litigation.

    Emphasis mine of course.

    Where does Forbes hire their journalist from? The local high school.

    • Well, Linux does have a lot in common with Unix. This is the main reason it has become so popular. I think its accurate to say that Unix is the basis for the creation of Linux, but that does not mean that SCO has a case against Linux users. You might infer that from reading the article, but otherwise, this seems to be one of the more balanced Reuters/Forbes articles I have seen about this issue. I still pity any poor loser who has bought SCO stock based on Forbes articles.
    • Yeah, Forbes doesn't have a single good technology writer who knows what Linux actually is. Its a damn shame.
    • by Anonymous Coward
      Lyons used troll posts from previous articles as sources (I don't remember if the trolls were on Groklaw, Yahoo, here, or elsewhere offhand). I don't consider what he's been doing of late to be anything resembling journalism. First he swallowed SCO's press releases hook, line & sinker. Then when he was corrected for not doing any research, he got pissed and did that "FSF are the Open Source Hitmen" article (that phrasing may not be quite right, but I believe that he did call the FSF "hitmen"). After
  • Novell (Score:4, Funny)

    by stefanmi ( 699755 ) * on Monday January 12, 2004 @10:01PM (#7958611)
    CO: No one will indemnify users against us because they know that we're right! There's no defense against our cliams! later... SCO: Novell is indemnifying users against us because they know we're right! So, let me get this straight... According to SCO, Novell is voluntarily indemnifying users because it knows that by doing so it will end up paying out big cash to SCO to make reparations for using SCO's code? Sure. Makes sense to me. (Can you spot the sarcasm?) That's some really SCO'ed up logic for you!
  • Got Linux = Tux Lingo

    So I Teach - I Hate SCO
  • by ChowyChow ( 149961 ) on Monday January 12, 2004 @10:03PM (#7958624) Homepage
    Nearly all the posts on Slashdot so far point to Novell and say that they're trying to cash in on SCO.

    While it seems that Novell is feeding the fear of users, they're really not. It simply says that Novell is willing to spend big $$$ in legal fees to fend off SCO just as IBM is. However, they are doing this volentarily in order to make extra sales. This helps Linux/open source. Notice that they are not charging extra ($600) for this service.

    Think of SCO as the terrorists of Linux. Novell is offering protection, just as if some airline started carrying on board guards. Whether or not you think it's useful, its there for those companies who are not buying into Linux because of SCO's allegations.
    • by zurab ( 188064 ) on Monday January 12, 2004 @10:16PM (#7958718)
      Think of SCO as the terrorists of Linux. Novell is offering protection ...

      So ... either pay Novell the "protection" or SCO will "blow up" your workplace? I am a SuSE user but, quite frankly, this indemnification business is getting too messy. Nobody that I know of has started becoming scared of SCO or paying their license fees, or ditched Linux. If Novell believes SCO is making false accusations, they can follow RedHat and simply sue SCO right there in Utah! They now own SuSE and they have every right to shut SCO up.
      • by 0x0d0a ( 568518 )
        Look, there are two categories of companies. Those that think that SCO is completely full of it (and I suspect that Novell is among this group) and those that think that there is some actual chance that SCO might be right.

        The first group of companies doesn't give a damn about Novell's indemnification, and will happily use whatever Linux distro they want.

        The second group of companies has been avoiding Linux because they're unsure. As it happens, they're probably just uninformed, but Novell will happily t
  • It's as risky as...well...eating a melon with a spoon.
    • It's as risky as...well...eating a melon with a spoon.

      For your information, I tried eating a melon with a spoon. The melon wasn't ripe, so I had to push the spoon quite hard. As a result, bits of melon went flying off to the table next to mine, where an escaped convicted serial murderer happened to be sitting. He grabbed the spoon and proceeded to stab me violently with it. Then he shoved the melon up my..well nevermind the rest.

      So you see, I resent that remark!
  • Business move... (Score:3, Insightful)

    by AndyFewt ( 694753 ) * on Monday January 12, 2004 @10:05PM (#7958644)
    If you have had a hand in development of Unix, now own suse and know probably where most of the source code came from in unix (development history too).. wouldnt you make this move and hopefully cash in on some sales.

    People might see that Novell have been part of unix development, add that to the current copyright dispute with SCO and that Novell do have some rights. This could swing it for those companies wanting to use linux but dont want the risk. They might go with suse now, get some legal protection and have the perception that novell knows SCO's claims are utter BS and have now covered you from any lawsuit SCO may or may not file.

    Just a thought.
  • by SuperBanana ( 662181 ) on Monday January 12, 2004 @10:05PM (#7958645)
    Under the terms of the program, Novell will offer indemnification for copyright infringement claims made by third parties against registered Novell customers who obtain SUSE Enterprise Linux 8 after January 13, 2004, upgrade protection and a qualifying technical support contract from Novell or a Novell channel partner

    Wow. I smell a great conspiracy theory here. SCO's actually the puppet of Novell etc, to get businesses to buy Linux distros from vendors who will indemnify them from the big bully SCO.

    I'd discuss my theory more, but I just heard a click on my telephone line and that sounds like a black helicopter nearing the house!

  • Looks like SCO got their wish.... wonder what their FUD tomorrow will be.
    • Re:Looks like (Score:2, Insightful)

      by rlillard ( 571012 )
      This fight is best fought with legal defense pools such as recently established. Indemnification is what SCO wants, because it narrows their focus to the indemnifiers. It would be better to force SCO to fight these actions one at at time rather that aggregate the users for them.

      Novell has a different agenda. It appears to me they are simply trying to buy support contracts.

      I am reminded of the story of Brer Rabbit (SCO) and Brer Fox (Novell).

      "Drown me just as deep as you please, Brer Fox," says Brer Ra
  • So, dish it to me if I'm wrong, but all this is a bead bargain: Novel offering indemnity to those who *upgrade* for their supported SuSE package.

    While on the face, I can say this snubs the homebrew community, it does make practical business sense... to a very narrow degree... assuming that Marketing accounts for the Enterprise to heed their offer first while the homebrew crowd trickles in over the next 12 months.

    I suggest the /. community just accept this without crying foul. If only for support of a kin
  • by Saeed al-Sahaf ( 665390 ) on Monday January 12, 2004 @10:24PM (#7958775) Homepage
    I think understanding this whole IBM / Novel thing from a business perspective, it is inescapable that we are asked to choose the lesser of two evils, but at least in this case the decision is not a hard one. Keep in mind that IBM and Novel are not really friends of Open Source unless it benefits them in a business sense. This does not mean we should not support them in this case, because it benefits us too. But just keep in mind, down the road they may bite us.
  • by rsilvergun ( 571051 ) on Monday January 12, 2004 @10:28PM (#7958798)
    must be laughable. Why else would there be all these indemnification announcements today? I figure Novell knows some things we don't (yet). I'm looking forward to the end of SCO.
  • by mrscott ( 548097 ) on Monday January 12, 2004 @10:28PM (#7958799)
    SCO has been saying for quite a while that companies should indemnify their users if everything thinks that SCO doesn't really have a case. Novell did it, albeit with some catches, which I think are completely reasonable. While Novell has been lauded as of late as the good guy (which I still think they are), it's important to remember that they are still a business, just spent a whole lot of money buying Ximian and SuSE and need to make money to keep going. Yeah - Linux is "free" and all that, but when a company like Novell puts their support behind it, there IS going to be a cost.
  • by Fefe ( 6964 ) on Monday January 12, 2004 @10:29PM (#7958802) Homepage
    They have now missed over a dozen opportunities to do something very stupid! Has someone removed the alien face huggers there or what is happening here?

    This would have never happened with the old Novell we all loved to loathe.

    I find this deeply disturbing. Stupidity does not simply go away just like that. Where is my tinfoil hat again?
  • legality? (Score:2, Funny)

    by Barumpus ( 145412 )
    I am not in the legal field and have a question. If a company such as SUSE did in fact infringe upon the itellectual copyright of SCO, is it legally possible to take the users of the software to court? If I went out and purchased a CD package of SUSE and I am not able to decipher the actual code, would I have enough knowledge to determine if parts of it were obtained in a questionable matter? Something like this would hold strong in most courts (IMHO). With out prior knowledge of any wrong doing, I don't th
  • by soren42 ( 700305 ) * <jNO@SPAMson-kay.com> on Monday January 12, 2004 @10:34PM (#7958842) Homepage Journal
    Why is everyone attacking Novell for this? Why are you all claiming they are in bed with SCO for offering enterprise customers what we have been asking for?

    I can only speak for my large enterprise (Fortune 50, 70,000+ employees, billons of US$ in revenue, etc.), but our biggest obstacle to buying Linux was our legal department, demanding "I can get indemnity from everyone else, why can't someone offer me indemntiy for Linux?"

    Large organizations (particularly ones that have large sums of other people's money to protect) only have one issue here - it's not open source politics, it's not SCO's pump and dump, and it's not who's right or wrong - it's risk mitigation. It's a question of how much money are we going to lose if SCO is right, and who is going to protect us from this?

    I, for one, am glad to see Novell offering the opportunity for real Linux indemnity - goodness knows, I've asked everyone in the industry for it.
    • by stewball ( 83006 ) on Monday January 12, 2004 @10:49PM (#7958950)
      I wish I had some mod points to give you, but hopefully someone will take care of that.

      I've seen the inside of a fair number of discussions on whether and to what extent to provide indemnification in contract, and the calculus is pretty damn simple.

      1) How much are we making on this deal/this product?

      2) How big would the exposure be (including legal fees, etc.) if we provided x kind of indemnity? (There are a LOT of different ways to structure indemnification provisions, and I don't know what Novell has in mind.)

      3) What is the likelihood that we'll have to pay out?

      If revenue is less than risk magnitude multiplied by exposure estimate, you don't indemnify unless you're willing to play craps with the future of your company. Period. Punto. End of story.

      Now, Novell is saying it will indemnify people on a PROSPECTIVE BASIS if those people contribute to Novell's revenue stream. This is a pretty reasonable bargain. I don't think there's a CFO or institutional investor alive who would agree to let their company go BACK to the customer base and add risk to the company's profile when all of the pricing to those customers was calculated using a lower risk profile.

      In other words, there's no such thing as a free lunch.
    • by spitzak ( 4019 ) on Monday January 12, 2004 @10:54PM (#7959002) Homepage
      Because such actions reinforce stupid decisions by legal departments such as yours.

      If it becomes standard that you cannot buy or use code without "indemnity" then you have made it impossible for an independent code writer to write a program and have people use it. This is irrelevant to open source, what you have pretty much said is that writing code is the realm of big business and that start-ups and free enterprise and just the desire to tell people about solutions you have figured out have become illegal.

      This goes far beyond Linux. Linux is now being protected by big money interests in the same way Windows is. But the next genius grad student who writes the "Linux-killer" operating system is going to be out of luck, as everybody who he shows it to is going to say "but you have no idemnity, so I'm going to have to stick with Linux..."

      Even people who think Linux is the end-all of software should realize that this means the death of applications for Linux from independent authors, since they cannot "idemnify" their code. And Windows fans should realize this means the death of all the Shareware and Freeware and open source software, and also the few remaining tiny software vendors, all of who cannot afford "idemnification" either.

      I don't care if this action causes SCO to go bankrupt tomorrow, this is a bad precedent for Novell to do this.
      • I love it when two bit whiny geeks with no experience in the business world post this stuff. I know because I've been doing work with medium sized companies, like 100 employees or so, that have been looking at Linux and its something they have to consider.

        Especially at the smaller end of the scale where you'll meet the most resistance from people. The most common arguement I hear is, "At least with Microsoft, if they would get sued, its their Ass, not mine". And its pretty damn hard to combat that ment

      • In this case, however, it's genuinely needed.

        We, the Slashdot-reading public, know that SCO is blowing smoke, and that their claims are baseless. The problem, however, isn't the techies. It isn't even Joe Average-User. It's Joe Management. They probably don't know that everything is fine. All they'll see is "SCO goes after Linux" and they'll wonder if it's safe to go for. And probably go for something else. With Novell giving this indemnity, it's not only showing Novell's confidence in SCO blowing smoke,

  • If I were Microsoft (Score:4, Interesting)

    by mcc ( 14761 ) <amcclure@purdue.edu> on Monday January 12, 2004 @10:40PM (#7958873) Homepage
    Right now, I would do an incredibly happy little dance.

    Then I'd wait six months for the SCO thing to blow over.

    Then I'd sue, for tiny, legally incoherent reasons, a large quantity of different Novell linux customers. The reasons would be randomly selected, and different in each case, and occationally perhaps be pumped through shell companies. But Novell, having offered legal indemnification, would have to research and respond to each one at great cost on its customers behalf. Then I'd just sit back, attempt to stall these cases as long as possible, and quietly drop every single one just before it actually got into a courtroom.

    I'd piss money down the drain by doing so, but hey, I'd force Novell to piss as much or more away in the process-- and since I'd be Microsoft, I'd be able to afford this. Possibly to the point where Novell would take serious damage without me having to break a sweat. Meanwhile, Novell's Linux customers would inevitably be a bit spooked by this, and some number would ask Novell if they could use one of Novell's linux-free, more antiquated alternate products instead.

    MS might not do this, and it might not really be something that is realistic from their viewpoint (since someone might notice them perofrming widespread abuse of the legal system, which might get them the dreaded 'vextatious litigant' label). But if you don't think that it's something they'd be WILLING to do, then you probably also believe that line about "It doesn't MATTER if the Xbox is staggeringly unprofitable! This isn't a trust-like, illegal, or maliciously anticompetitive action! They're just taking the sound business strategy of taking massive losses now so that someday later, the XBox-3 can be somewhat profitable (or perhaps the XBox-4)!"
    • by stewball ( 83006 )
      I would bet a big chunk of my liquid assets (that's right folks, my BEER) that the nature of the indemnification will be limited to claimed infringements of intellectual property by third parties holding rights to the original Unix (for lack of a better term), and relating specifically to intellectual property rights associated with the original Unix, and not much else.

      Nobody, and I mean nobody, provides indemnification for claims of any kind by any party, no matter how they arise. That's a really damn fi
  • by gmac63 ( 12603 ) <<moc.liamg> <ta> <36camg>> on Monday January 12, 2004 @10:55PM (#7959012) Homepage
    I had a question regarding "derivative works" and googled "Xenix". Here's what I found:


    (Redirected from XENIX)

    Xenix was Microsoft's version of UNIX for microprocessors. Microsoft called it Xenix because it could not license the "UNIX" name.

    Microsoft purchased a license for UNIX 7th Edition from AT&T in 1979, and announced on August 25, 1980 that it would make it available for the 16-bit microcomputer market. Xenix was not sold directly to end users; Microsoft licensed it to computer manufacturers who then ported it to their systems. The first ports of Xenix were to the Zilog Z8001 16-bit processor.

    Altos shipped a version for their computers early in 1982, Tandy Corporation shipped one for their 68000-based systems in January 1983, and Santa Cruz Operation (SCO) released their port to the Intel 8086 processor in September 1983.

    Xenix varied from its 7th Edition origins by incoporating elements from BSD, and soon possessed the most widely installed base of any Unix flavor due to the popularity of the inexpensive x86 processor, even though the port created for Tandy computers proved to be more robust.

    When Microsoft entered into an agreement with IBM to develop OS/2, it lost interest in promoting Xenix. Microsoft transferred ownership of Xenix to SCO in an agreement that left Microsoft owning 25% of SCO. However, Microsoft continued to use Xenix internally, submitting a patch to support functionality in UNIX to AT&T in 1987, which trickled down to the code base of both Xenix and SCO UNIX. Microsoft is said to have used Xenix on VAX minicomputers extensively within their company as late as 1992.

    SCO released a version of Xenix for the Intel 286 processor in 1985, and following their port of Xenix to the 386 processor, a 32-bit chip, renamed it SCO UNIX.

    What if......

  • by coolmacdude ( 640605 ) on Monday January 12, 2004 @10:56PM (#7959030) Homepage Journal
    The fact that stuff like this is even being considered shows that SCO's tactics are working, and that is not a good thing. Think about it, companies would not take steps like this unless they thought there was a credible threat to Linux. Everyone on Slashdot knows that SCO's claims are such utter bullshit they stand no chance of ever prevailing in a court of law. To the average Joe however, SCO might own half the Linux kernel. Heck look at the "experts" on Wall Street. We've seen it before though. Keep up a constant drumbeat of lies in the press and people will believe it.

    In a larger context, this is just one of the symptoms of the copyright witchhunt of the past few years. The RIAA, MPAA, etc. have attempted to curtail freedoms in media by publishing absurdly inflated loss figures due to unauthorized use and threatening legal action to those who don't use media exactly the way they want. Now SCO threatens to bring the same restrictions to open source software by scaring people with even more ridiculous claims than the media giants and shoving "PIRACY!!!" down everyone's throat.

    The only way this is going to stop is to educate more people on why SCO poses no real challenge to Linux and has no right to any of its components. And instead of continually putting out a deluge of SCO press releases, the major media outlets need to play a little more fairly and let the other side speak a little louder.
  • Nope (Score:3, Insightful)

    by Lobo_Louie ( 545789 ) on Monday January 12, 2004 @11:03PM (#7959110)
    It says go ahead and implement Linux at your site. We (the open source community) think these charges are *so* baseless, we'll pay for your defense.
  • At the corporate SuSE, level just state that SCO has no case. Be honest and state again why SCO has no case. Why are you grabbing for bucks with this non-sense. If there is no violation, then there is nothing to indemnify in SuSE Linux (speaking as a programmer from a company that just did 5 SuSE 9.0 purchases/installs within two weeks). As a SuSE buyer (I didn't say downloader) since 6.4, why are you not concered about the end user? Are you stating that SCO is correct?

    If you want to indemnify customers,
    • Well, in corporate sales, as in poker, money talks and bullshit walks.

      Novell can say over and over and over again in excruciating detail why they think that SCO is full of it, but unless and until they put their money on the line and actually stand up to take some risk with their customers, no-one will really believe them.
  • Pick 'em (Score:3, Interesting)

    by mrkurt ( 613936 ) on Monday January 12, 2004 @11:29PM (#7959363) Journal
    Novell's move will turn out to be either brilliant or incredibly stupid. They will either get the jump on migration to Linux by small and medium enterprises, or they make themselves very vulnerable to litigation if SCO prevails. But they are calling SCO's bluff of "if we're wrong, how come nobody is indemnifying their customers?" Call me a karma whore, but I admire their chutzpah.
  • by arrianus ( 740942 ) on Tuesday January 13, 2004 @03:38AM (#7960707)
    From the Novell-SCO sale agreement, section 4.16b (source: Groklaw):
    (b) Buyer shall not, and shall not have the authority to, amend, modify or waive any right under or assign any SVRX License without the prior written consent of Seller. In addition, at Seller's sole discretion and direction, Buyer shall amend, supplement, modify or waive any rights under, or shall assign any rights to, any SVRX License to the extent so directed in any manner or respect by Seller. In the event that Buyer shall fail to take any such action concerning the SVRX Licenses as required herein, Seller shall be authorized, and hereby is granted, the rights to take any action on Buyer's own behalf.
    In other words, if SCO sues a Novell customer for violating SVRX copyright, Novell may simply compell SCO to issue them a SVRX license permitting them to keep using the SVRX code. The indemnity for Novell is pretty much full-proof for Novell. The question we should be asking is why Novell doesn't exercise this option to grant full rights to IBM and others. My guess is that they are trying to maintain a bargaining chip. Once this card is played, Novell/SuSE will be in a very weak position, due to the non-compete in the original Novell-SCO agreement. SCO would lose the war with IBM, but would have no reason not to squash Novell. That leaves SCO and Novell are in a bit of a cold war, where either can destroy the other completely, resulting in mutual annhilation. In the meantime, both sides are supporting their own versions of Afghanistan and Vietnam against the other.
  • by Craig Maloney ( 1104 ) * on Tuesday January 13, 2004 @07:25AM (#7961371) Homepage
    Just a few stories up SCO was blasting the Linux vendors for not poviding legal indemnity. Their take was "Look, if you're so sure your code isn't infringing, give your users legal peace of mind". They thought no Linux company would take them up on it. Novell with this move has stepped up to the table, anteed up, and put the ball right back in SCO's corner.
  • Overreaction (Score:3, Interesting)

    by salesgeek ( 263995 ) on Tuesday January 13, 2004 @07:53AM (#7961442) Homepage
    After reading a few posts here, if you are thinking that Novel's indemnity somehow helps SCO you are very wrong. Here is the situation:

    SCO is trying to sell people property that belongs to someone else. If you buy a Linux licence from SCO you are buying a share of swampland in a national park or a share in the Brooklyn Bridge.

    Novell and HP are simply playing to the market. Buy from us because we will defend you from the biggest con in the computer industry since... since British Telecom tried to claim they owned the hyperlink. It's a marketing ploy and HP and Novell both know they'll never have to deal with more than one lawsuit.

"Conversion, fastidious Goddess, loves blood better than brick, and feasts most subtly on the human will." -- Virginia Woolf, "Mrs. Dalloway"