2004-05-26 OSRM announces Patent FUD Risk Insurance

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The business information service Newsforge released an interview of Joe Barr with Daniel Egger today.

Daniel Egger from OSRM (Open Source Risk Management) explains his insurance business model that is based on other's FUD.

• Like a lot of people, I had not thought about the risks of using Linux until the SCO suits happened. Because I was a lawyer and a litigator, I thought it would be interesting to look at their legal papers. I got ahold of them and I was struck by how weak their argument was right away. But I was also struck by the huge amount of fear and concern and uncertainty that their claim had caused. It occurred to me that what we are dealing with here is a a kind of structural vulnerability in the legal system, where you can sue end users for copyright or patent infringement who have been acting completely in good faith, and have no reason to know that anyone might think they are infringing anything. Then they are faced with the cost of defending themselves, even if the suit had no merit. And that seemed to me the kind of problem that in other areas gets resolved by insurance.

Insurance programs against patent risks are a way to describe the market risk of FUD or real patent litigation risk in monetary terms. So the external effects of patents can be easily depicted.

Egger continues:

• Linus Torvalds himself said at a speech at Brainshare a couple of months ago that he thought the biggest risk to Linux in the next year is software patent litigation. And I agree with

  that, and do a bunch of other people: Jeremey Allison said the same thing in an article I read, and Bruce Perens has been saying that for months and months. That kind of risk is not even addressed in the SCO suit; they didn't bring any patent claims. But the same problem exists, which is if you're an end user, and you get sued for patent infringement, the fact that you relied on the software in good faith and did nothing wrong doesn't protect you from liability for the use of the software.

Recently FFII announced his own European insurance program that is called: Talk to your MEP candidates!