Pillsbury Winthrop Attorney Clarifies Latest Open Source Myths Following Government Guidance and Microsoft Posturing

Pillsbury Winthrop Attorney Clarifies Latest Open Source Myths Following Government Guidance and Microsoft Posturing

Demystifying common misconceptions about open source, patents and legal liability

MCLEAN, Va., Dec. 15 /PRNewswire/ -- Recent guidance by a Federal advisory council on the use of Open Source software (OS), along with saber rattling from Microsoft Corp. alleging that over 200 software patents are used in the Linux operating system, have raised fresh concerns over the legal risks for companies using or switching to OS software according to intellectual property lawyers at Pillsbury Winthrop LLP.

"It is crucial that end-users and developers alike understand the reality of legal implications and patent issues surrounding OS software," says James Gatto, an intellectual property partner in the Northern Virginia office of Pillsbury Winthrop. "However, it is important that people not fall prey to unfounded myths or succumb to the fear, uncertainty and doubt (FUD) tactics that some people say Microsoft is using."

In October, the Federal Financial Institutions Examination Council (FFIEC), which sets standards for financial institutions, issued guidance regarding the use of OS. The FFIEC members include the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, among others.

The FFIEC guidance takes a balanced approach, indicating that the use of OS poses many risks similar to those of proprietary software, but cautions institutions that OS necessitates implementation of "unique risk management practices" due to potential licensing, infringement, indemnification and warranty issues. The FFIEC does not take a "sky is falling" approach. Rather, it advises companies involved with OS to be aware of certain strategic, operational and legal issues and to work with knowledgeable attorneys to adopt suitable risk management practices.

Microsoft, on the other hand, has recently made public statements that some say are an attempt to create FUD to slow the amazingly rapid adoption of OS software. For example, Microsoft CEO Steve Ballmer recently commented that the Linux operating system violates 228 separate software patents, suggesting that Linux users are likely to get sued for patent infringement. Not a single, specific patent was identified.

It is no surprise that the company with the most to lose by the adoption of OS would try to slow its adoption. But OS usage is only gaining momentum. A 2004 Forester survey of 140 large North American companies revealed that 46% of these companies already are using OS software and another 14% plan to do so soon. With 60% of the large North American companies using OS software, if the sky is falling, it is not falling on the OS community, but in Redmond.

"Between Microsoft's posturing and the latest guidance from the FFIEC, it is clear that companies migrating to Open Source need to tread carefully," Gatto stated. "However, there are a number of strategies and tactics that can mitigate potential liability."

Gatto noted that some unique legal issues arise with OS software but that there are unique benefits as well. The suggestion that users of OS software are more likely to be sued for patent infringement than those that use proprietary software, like Microsoft's does not appear supported by actual experience. It is interesting to note that while Microsoft has had several dozen patent infringement lawsuits filed against it in the past few years, none have been reported against Linux, the most popular of all OS programs.

It is also not correct that OS software can not be patented. Many companies that are involved with OS have significant patent portfolios and have declared that they will use these patents defensively to protect against patent lawsuits. For example, in October, Novell vowed to use its patent portfolio to protect open source software products and voiced its opposition to proposed changes to the European Union software directive that would ease restrictions on software patents. Jeremy Bevan, a Novell VP, added, "there have been various rumors about the possibility of patents in open source technology and what will happen," saying that the company wanted to reassure its customers that "there's no greater risk" with open source than with proprietary technology.

"Any software, whether Open Source or proprietary, is equally eligible for patent protection," Gatto explained. "Companies need to take steps to patent their software to build a patent portfolio in the event they are accused of infringement. This defensive strategy could ward off lawsuits or if sued, create leverage by being able to counter sue. However, before proceeding along this path careful consideration needs to be given to a number of unique issued raised by OS, and consultation with experienced counsel is crucial."

The use of OS software is only going to increase because some of the business benefits are overwhelming. The legal risks, while not inconsequential, appear manageable. "My recommendation for any company considering the use of an OS solution is the same put forth by the FFIEC -- the company should 'seek qualified counsel regarding the requirements and restrictions of the particular license governing use of the software.'"

James Gatto is a member of Pillsbury Winthrop's highly-rated Intellectual Property practice and the firm's Open Source team. He was recently voted by his peers as one of the top IP/IT attorneys. He frequently advises companies regarding Open Source legal issues, strategic patent portfolio development, Internet business methods, and other software issues. His national practice includes clients ranging from Fortune 500 companies to startups and universities.

About Pillsbury Winthrop

Pillsbury Winthrop is an international law firm with core practices in: litigation, technology, energy, capital markets/finance, and intellectual property. The firm has 16 offices and over 700 attorneys worldwide. For more information, visit http://www.pillsburywinthrop.com/

Contact: Nathan Burgess, nburg@esq.cc, 212-721-3495, 212-721-7468

Crystal Rockwood, crockwood@pillsburywinthrop.com, 800-729-9830


Source: Pillsbury Winthrop LLP

CONTACT: Nathan Burgess, nburg@esq.cc, +1-212-721-3495, or
+1-212-721-7468; or Crystal Rockwood, crockwood@pillsburywinthrop.com,
1-800-729-9830

Web site: http://www.pillsburywinthrop.com/


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