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Software: Microsoft's new weapon against Linux questioned
Posted Nov 01, 2004 - 11:10 AM
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"Microsoft says its IP indemnification provides better protection than that offered by rivals Red Hat and Novell - but not all lawyers agree

Microsoft's latest defence of the Windows in which its chief executive Steve Ballmer claimed it provides better protection against legal action over patent violations than its open source rivals, has been questioned by a legal expert.

In his email, sent to Microsoft customers and partners on Wednesday, Ballmer claimed that Windows was a better choice than Linux. His reasons included Microsoft's old favourites of total cost of ownership and security, but also included a relatively new weapon, IP indemnification.

Ballmer said that Microsoft offers uncapped protection for legal costs associated with an alleged IP infringement, something which he claimed is not offered by Linux vendors.

"Today, when a volume licensing customer - a business or organisation ranging from as few as five computers to many thousands - licenses a Microsoft product, we provide uncapped protection for legal costs associated with a patent, copyright, trademark or trade secret claim alleging infringement by a Microsoft product," said Ballmer. "No vendor today stands behind Linux with full IP indemnification."

But Richard Penfold, a partner in the IP practice of law firm DLA, told ZDNet UK that this email suggests that Microsoft is only providing assistance with legal costs, not damages.

"Microsoft's indemnity is really only half an indemnity," said Penfold. "It appears to only be offering assistance with legal costs, not damages."

Microsoft UK was unable to provide ZDNet UK with more information on its IP indemnification policy and whether this includes damages. It was not able to direct ZDNet UK to any public section on its Web site which went into more detail on the terms and conditions of its IP indemnification policy. Microsoft in the US is currently considering its response to a request for more detailed information about the issue of IP indemnification in relation to damages.

Penfold claimed that providing legal costs is not as costly as providing damages, as IP cases are generally settled out of court, while damages could be unlimited.

"An IP case will generally not go to court trial -- they will usually settle, in which case the legal costs are relatively small," said Penfold. "The potential damages in an IP case are almost unquantifiable -- if a large US corporation is using software and has to stop using it, it could bring some part of their business to a halt."

The main Linux vendors -- Red Hat and Novell -- both have IP indemnification policies which include damages and legal fees, although neither offer uncapped protection."

more at zdnet
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