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Open source IP case puts spotlight on patents (SearchOpenSource)
SearchOpenSource has an
interview with lawyer Tom Carey about the FireStar lawsuit. "An
interesting twist is that because under terms of the JBoss merger
agreement, Red Hat is holding $43 million of the purchase price in escrow,
which is supposed to protect Red Hat from breach of warranties and other
such protections. So, Red Hat in a sense has $43 million in house money to
play with -- to potentially pay to FireStar or pay to the shareholders of
JBoss. At some level, Red Hat probably doesn't care very much who [the
money] goes to. FireStar may be very skillful, or very lucky, but it has
found a defendant that has free money available to make the problem go
away." Red Hat also has a strong interest in not
encouraging patent trolls, however.
(Log in to post comments)
Open source IP case puts spotlight on patents (SearchOpenSource) Posted Jul 11, 2006 15:43 UTC (Tue) by kirkengaard (subscriber, #15022) [Link] Mmm ... escrow != free money. Escrow is subject to contractual obligations. Red Hat is obliged to care what happens to the money. "Item 1.01 Entry into a Material Definitive Agreement. ... Pursuant to the Merger Agreement, at the closing, $43 million of the cash consideration to be paid at the closing will be deposited into an escrow fund to secure certain indemnification obligations of the holders of capital stock, warrants and vested options of JBoss and to satisfy certain obligations of such holders to adjust the base consideration. The balance of the escrow fund in excess of any amounts held for unresolved claims will be distributed the holders of capital stock, warrants and vested options of JBoss at various times over the 18-month period after the closing." (RED HAT INC 8-K 10 April 2006) So if it is the case that JBoss infringed, the money held for them is available for this purpose. I suppose I'm picking nits, since the money is being held for indemnification purposes, for Red Hat to pay out on behalf of JBoss should there be anything lurking under the table like this. It just depends on how credible a threat this turns out to be as to whether the JBoss shareholders lose their money.
Open source IP case puts spotlight on patents (SearchOpenSource) Posted Jul 11, 2006 15:51 UTC (Tue) by kirkengaard (subscriber, #15022) [Link] (I suppose this really depends on internal politics and how much love is lost on this account as to whether Red Hat takes up this litigation or just drops JBoss money in the pot and says, "Happy now?" I could be wrong on how obligated Red Hat should feel here.)
Liability to Seller, not to Buyer Posted Jul 11, 2006 16:08 UTC (Tue) by AnswerGuy (guest, #1256) [Link] The point of this escrow account is that it's spent money to RH Inc. Iteither goes to the sellers (from whom RH bought JBoss) or to handle any of these sorts of liabilities.
So, from the perspective of RH Inc's management it doesn't cost any more or less if they use this 43 mil to pay off one patent troll.
(However, they might not be able to use the $43M to pay legal fees for defending it --- don't know for sure).
Now, as the article points out, there are the longer term strategic considerations. Obviously if you pay off one troll, you make yourself a more attractive target for the rest of them. (This is a corollary to a "no negotiations" policy with host takers; it might cost a few lives at first --- but it will rapidly make hostage taking very unattractive. It makes the prospect into the logical equivalent of a murder/suicide --- with no upside potential).
Another, less dramatic, strategic concern would be a matter of customer perception. RH Inc may want to discreetly survey a small and carefully selected sample of their customer base to find out how settling might affect customer perception. This factor might cost them alot more than 40 million ... perhaps an order of magnitude more over the course of the next five years or so. (Beyond five years it probably wouldn't have any effect either way -- this particular case will be a distant memory by then).
JimD
Open source IP case puts spotlight on patents (SearchOpenSource) Posted Jul 11, 2006 17:10 UTC (Tue) by wilreichert (subscriber, #17680) [Link] The most concerning thing about this case is the precident it will set.
Red Hat's options are limited Posted Jul 11, 2006 17:21 UTC (Tue) by JoeBuck (subscriber, #2330) [Link] Red Hat cannot pay off the patent troll and continue to distribute the software under the GPL, unless the patent troll agrees to license its patent freely for use in GPL code. Otherwise Red Hat will itself be in violation of clause 7 of the GPL:7. If, as a consequence of a court judgment or allegation of patent infringement or for any other reason (not limited to patent issues), conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all. For example, if a patent license would not permit royalty-free redistribution of the Program by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution of the Program. The troll could, I suppose, agree to sell its patent to Red Hat for a sizable chunk of that $43 million, allowing Red Hat to then continue distribution (Red Hat could then forbid non-GPL implementations of the patent) but that would set a very bad precedent. Of course, IANAL.
Red Hat's options are limited Posted Jul 11, 2006 20:46 UTC (Tue) by jayorke (guest, #10685) [Link] That clause of the GPL definitely seems key in this case. If RedHat/JBoss contributed the code which is disputed to the GPL'd project which it turns out they did not have the legal right to give, it would seem they loose all rights to all the other GPL code in the product (at least the parts they did not contribute). It reads as if JBoss server would cease to exist as a product RedHat can distribute unless there is a separate codebase for JBoss somewhere which has never been GPL'd and has no GPL code brought into it. I imagine the community would then go and rip out the offending pieces and presumably and perhaps ironically Novell, IBM, and Oracle would be allowed to distribute JBoss and RedHat would not. I'm not sure if the interpretation is correct but that is how it seems to read.
Red Hat's options are limited Posted Jul 12, 2006 1:25 UTC (Wed) by drag (subscriber, #31333) [Link] I am pretty sure that the GPL allows modifications of programs, dontcha think?
Redhat would be forced to modify Jboss to the point were it's not violating patents.
That way it would be legal to distribute if they loose the patent suite or whatnot and they'd be able to satisfy the legal requirements of the GPL.
But you also have to realise it doesn't matter if it's GPL'd or BSD'd or Redhat owns the copyright or not. They would be forced to modify it or obtain the rights to the patent in some way for any true open source license.
Unless you want Jboss to end up like the BS 'open source' licenses used by Microsoft and Sun (some of their licenses, not all of them, obviously) and such were you allowed to see the code, but you can't use it for anything.
Red Hat's options are limited Posted Jul 13, 2006 0:49 UTC (Thu) by JoeBuck (subscriber, #2330) [Link] Until either a court says that Red Hat is infringing a valid patent, or Red Hat accepts a deal with the troll, then clause 7 doesn't impede distribution. At this point, someone is saying that a patent is violated. Others have claimed that the Linux kernel infringes several hundred patents.
Red Hat's options are limited Posted Jul 13, 2006 6:25 UTC (Thu) by drag (subscriber, #31333) [Link] Linux does infringe patents. It's a fact.
So does Mozilla. So does Jboss. So does most of the software you use. That's why the system is so broken. You can't avoid violating patents.
You could hire a army of lawyers to go over your code with a paraniod comb and you would still likely be taken to court if somebody felt like taking you to court. Plus if it does turn out that you violated patents the simple act of examing patent documentation can triple your damages! If the court suspects (civil case has different rules then criminal) you knowingly violated a patent that should of known about then it's triple the damages.
That's why it's stupid for some kernel developer to go and try to avoid violating patents. If your caught violating patents without knowledge of patents then you get X damages. If it looks like you searched for patent violations, but looked like you skipped some then it's 3(X) damages.
It's so screwed up.
The only way big companies like IBM and Microsoft can survive is that they own hundreds of patents each. If some software company sues them, then Microsoft or IBM can turn around a destroy them in a heartbeat by raining counter lawsuites down on them.
Then to protect themselves against major company being sued by major company they just do a crapload of cross licensing deals.
The only reason small businesses and open source software survives is because they are too small or too poor to care about. That is, until recently.
The major damage is real patent trolls (which this company isn't since they actually make software and thus is liabled to be sued right back by the patent pool companies have setup for open source software). These guys don't produce software so they don't violate patents.
People like Eolas/University of California who successfully sued Microsoft. The only reason they get away with it is because they don't produce anything themselves. They are parasites.
Those are the ambulance chasers that open source folks should be most scared of because the 'patent pool' technique won't protect you from them.
As for the Redhat thing, I doubt seriously it will ever go to court. It will be settled. Maybe even have that company's own patents being added to the 'patent pool' thingy. If that happens I would not be suprised at all.
Note that it's virtually impossible to defeat a patent. The courts all the way up to the supreme court have shown a huge bias towards patent litigators. If you take them to court you have a 90% chance of loosing.
Red Hat's options are limited Posted Jul 13, 2006 1:13 UTC (Thu) by jayorke (guest, #10685) [Link] Yes you are probably right. It seems a bit of an oversight that the wording doesn't state "versions of the program" when dealing with conflicting code. Not being able to distribute "the program" reads differently than not being able to distribute "that version of the program".
Red Hat's options are limited Posted Jul 14, 2006 15:05 UTC (Fri) by pimlott (guest, #1535) [Link] Sorry to turn this into a GPL spat, but that interpretation of section 7 makes no sense to me (and nobody has been able to make it make sense, even though it seems to be the intended interpretation). "Your obligations under this License" are to grant certain permissions as far as you are concerned. It's absurd in general to require you to ensure that no third party places any restrictions on these permissions. If you interpret section 7 that way, it means I cannot distribute GPL software if I am aware (maybe even if I am unaware) of any country where it is illegal or encumbered, or if there might be some recipient who is barred from redistributing by his employment agreement, etc. The "for example" in section 7 does not follow from the preceding text, and so should be ignored.In short, as long as my settlement with the patent holder doesn't directly prohibit me from distributing under the GPL, I claim I can go right ahead, even if it may put my recipients at risk. (I'm talking only about GPL 2; I know that GPL 3 will change this.)
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