|By Diana Marina Cooper||
|July 9, 2012 07:00 AM EDT||
Open source software has probably been the biggest driver of complex software solutions in the last decade. Access to a large variety of quality, peer-reviewed software has accelerated product development, reduced product introduction intervals and lowered the costs for producers of software and for those of us who leverage third-party software in our projects.
Many of us have heard about the trouble that organizations have come across when using open source improperly... remember Cisco/Linksys, Katzer, and the BusyBox chronicles? You may think that your organization is safe because you are buying proprietary software. However, if your software supplier unknowingly incorporated open source into its product, your organization may face unexpected legal and financial consequences arising from open source licensing obligations and the resulting intellectual property infringement claims. The good news is that there are various tools available at your disposal that can assist your organization in protecting itself from such open source surprises, such as contractual measures such as representations and warranties and indemnities; and extra-contractual tools such as software audits and a structured Open Source Software Adoption Process (OSSAP).
Some Basics About Commercial Contracts Relevant to Software Purchases
Commercial contracts include various provisions that protect and allocate risk among buying and selling parties. Among the most important are representations and warranties ("reps and warranties") and indemnities. Reps and warranties are assurances made by one party that are intended to provide certainty to the other party that relies on them. For example, a hypothetical software company ("Softco Supplier") may represent and warrant that it owns all of the intellectual property rights in the software it sells. If Softco Supplier does not in fact own all of the intellectual property rights in the software, the buyer ("Softco Buyer") has a right to claim damages for Softco Supplier's misrepresentation.
However, in many instances it is impossible for contracting parties to fully guarantee the accuracy of a statement. In these cases, parties opt to provide reps and warranties that are qualified by the knowledge of the party providing them. These types of reps and warranties can be problematic from the perspective of the party that seeks to rely on them. We will return to this in the following section, which specifically deals with the application of reps and warranties, and indemnities to open source.
Indemnities provide security against losses that are triggered by the occurrence of contractually specified events. Unlike reps and warranties, recovery from indemnities is not contingent upon whether a misrepresentation was made. In our example, if Softco Supplier (the "indemnitor") indemnifies Softco Buyer (the "indemnitee") for any intellectual property infringement claims against the software being sold, then in the event that such claims arise, Softco Supplier is obligated to compensate Softco Buyer for its losses.
Reps and Warranties vs. Indemnities in an Open Source World
In the software procurement context, it's important for buyers to determine whether open source code is incorporated into the software that is being purchased. The primary reason for this is that open source license obligations are binding. Failure to comply could have a diminishing impact on software value, as some open source cannot be mixed into products that have trade secret value. In addition, if a buyer purchases software without the knowledge that it includes open source, the buyer runs the risk of commercializing the product in a manner that violates the license that covers the open source code. This can leave the buyer exposed to costly intellectual property infringement claims.
The recent focus on open source reps and warranties and indemnification is linked to the growing instances of intellectual property infringement claims involving open source software. As courts in the United States, Germany and elsewhere have acknowledged the enforceability of open source licenses, notable violators have succumbed to costly settlements, and enforcement organizations such as the Free Software Foundation have become more aggressive in launching suits.
Because of the immense financial and legal implications of intellectual property infringement suits, a software buyer will often require its supplier to represent and warrant that the software being purchased does not contain any open source code. If open source is later discovered in the software, the buyer is entitled to seek damages from the supplier for the breach of the representation. However, as mentioned earlier, it's often difficult for contracting parties to fully attest to the accuracy of a representation. This situation arises in instances in which the contracting party experiences knowledge gaps. In these cases, a contracting party will seek to limit its liability by narrowing the representation to apply to the knowledge that it possesses. Taking our earlier example, if Softco Supplier had acquired code from a third party, or engaged in outsourcing of programming, it may not be positioned to fully attest to the fact that the software it sells does not contain any open source. As a result, Softco Supplier will represent and warrant that ‘to the best of its knowledge, open source is not incorporated into the product.' In this case, Softco Buyer is only entitled to damages if it can show that Softco Supplier knew that its representation was untrue at the time that it was made. If this fact cannot be established, Softco Buyer is left without a remedy for any losses arising from Softco Supplier's misrepresentation.
Unlike reps and warranties, recovery from indemnities is not contingent upon whether a misrepresentation was made. Thus, if Softco Supplier indemnified Softco Buyer for open source infringement claims against the software, Softco Supplier would be obligated to fully cover the losses arising out of any such claims. In this case, it would be irrelevant whether Softco Supplier had knowledge of the presence of open source, as liability is triggered by the occurrence of the contractually specified event (the presence of open source) rather than the misrepresentation made by Softco Supplier.
Another important distinction between reps and warranties and indemnities in our example is in relation to the duty imposed on Softco Buyer to mitigate its own loss. Common law imposes a requirement on parties relying on reps and warranties to take action to mitigate their own losses. In the context of open source reps and warranties, once a software buyer becomes aware that open source is embedded in the software, the buyer must take action to minimize its loss, for example by immediately replacing the code, or making the code freely available. In contrast, there is no parallel requirement for the beneficiaries of indemnities to mitigate their own losses.
Software Audit Can Minimize Exposure
Although open source reps and warranties and indemnities can provide software purchasers with remedies for losses arising from intellectual property infringement suits, they cannot shelter the buyer from being sued in the first place, or from experiencing the loss of goodwill in relation to litigation. As a result, reps and warranties and indemnities should not be regarded as due diligence replacements. Rather than taking the risk of open source surprises, software purchasers can engage resources (internal or external) that have the ability to analyze software to determine the presence of open source prior to executing the purchase.
A software audit entails code scanning aimed at detecting third-party and open source code. After the scanning stage, the purchaser is provided with an audit report detailing the identified code and associated license obligations. Performing such audits at the pre-purchase stage allows the buyer to understand whether the license obligations of the open source code are in line with the intellectual property policies of its organization, and if not, then the buyer is positioned to request the supplier to replace the code in question, or to engage an alternate supplier.
Software Audit in the Supply Chain
One of the contexts in which software audits are particularly beneficial is in the supply chain. Shortly after Cisco acquired Linksys in 2003, it was faced with an infringement suit relating to the use of GPL covered code in its router firmware. It turned out that the infringing chipset was provided to Linksys by Broadcom, which in turn outsourced the development to a third party. As a part of the settlement that was reached, Cisco was forced to make the infringing source code freely available on its website, appoint an open source compliance officer, and make a monetary contribution to the Free Software Foundation. As the Cisco case suggests, software audits can be a helpful tool at the pre-purchase stage when dealing with a supply chain context in which the immediate supplier has little control or knowledge over the code pedigree of the final product.
Review of Available Contractual Tools
Software purchasers have contractual tools (reps and warranties, and indemnities) at their disposal to protect their organizations from open source liabilities; however, it is important to remember that not all tools provide equal protection. While reps and warranties can provide the buyer with a remedy against misrepresentation, in instances where these assurances are qualified by the knowledge of the supplier, the buyer may be left without recourse. From this perspective, indemnities offer increased protection to software purchasers concerned about intellectual property infringement claims in relation to the use of open source.
Open source indemnities are also beneficial in comparison with reps and warranties, as they do not impose an obligation upon the party relying on them to take any action to minimize their own losses in the event of a breach.
Although open source reps and warranties and indemnities can provide software purchasers with means of recovery from intellectual property infringement claims, these contractual measures provide for an imperfect after-the-fact solution to a problem that lends itself well to management practices that would reduce the risk in the first place. Structured open source license management practices and software audits aimed at identifying third-party and open source code and ensuring open source compliance provide an optimal level of protection. These tools provide certainty regarding code pedigree, and enable software purchasers to avoid the negative consequences arising from intellectual property infringement suits.
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
Jul. 31, 2016 05:00 AM EDT Reads: 2,603
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develo...
Jul. 31, 2016 03:15 AM EDT Reads: 1,702
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, explained how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.
Jul. 31, 2016 02:30 AM EDT Reads: 1,226
In today's uber-connected, consumer-centric, cloud-enabled, insights-driven, multi-device, global world, the focus of solutions has shifted from the product that is sold to the person who is buying the product or service. Enterprises have rebranded their business around the consumers of their products. The buyer is the person and the focus is not on the offering. The person is connected through multiple devices, wearables, at home, on the road, and in multiple locations, sometimes simultaneously...
Jul. 31, 2016 01:30 AM EDT Reads: 1,030
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
Jul. 31, 2016 12:45 AM EDT Reads: 2,044
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Jul. 30, 2016 11:30 PM EDT Reads: 1,348
CenturyLink has announced that application server solutions from GENBAND are now available as part of CenturyLink’s Networx contracts. The General Services Administration (GSA)’s Networx program includes the largest telecommunications contract vehicles ever awarded by the federal government. CenturyLink recently secured an extension through spring 2020 of its offerings available to federal government agencies via GSA’s Networx Universal and Enterprise contracts. GENBAND’s EXPERiUS™ Application...
Jul. 30, 2016 10:30 PM EDT Reads: 1,949
"We've discovered that after shows 80% if leads that people get, 80% of the conversations end up on the show floor, meaning people forget about it, people forget who they talk to, people forget that there are actual business opportunities to be had here so we try to help out and keep the conversations going," explained Jeff Mesnik, Founder and President of ContentMX, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 30, 2016 09:45 PM EDT Reads: 1,506
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Jul. 30, 2016 07:30 PM EDT Reads: 1,330
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Jul. 30, 2016 07:00 PM EDT Reads: 2,781
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Jul. 30, 2016 05:00 PM EDT Reads: 1,315
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
Jul. 30, 2016 04:30 PM EDT Reads: 1,129
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 30, 2016 04:30 PM EDT Reads: 2,287
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Jul. 30, 2016 01:30 PM EDT Reads: 999
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
Jul. 30, 2016 11:30 AM EDT Reads: 1,426
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Jul. 30, 2016 10:45 AM EDT Reads: 1,157
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Jul. 30, 2016 10:15 AM EDT Reads: 1,538
ReadyTalk has expanded the capabilities of the FoxDen collaboration platform announced late last year to include FoxDen Connect, an in-room video collaboration experience that launches with a single touch. With FoxDen Connect, users can now not only engage in HD video conferencing between iOS and Android mobile devices or Chrome browsers, but also set up in-person meeting rooms for video interactions. A host’s mobile device automatically recognizes the presence of a meeting room via beacon tech...
Jul. 30, 2016 10:00 AM EDT Reads: 578
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Jul. 30, 2016 10:00 AM EDT Reads: 2,194
It’s 2016: buildings are smart, connected and the IoT is fundamentally altering how control and operating systems work and speak to each other. Platforms across the enterprise are networked via inexpensive sensors to collect massive amounts of data for analytics, information management, and insights that can be used to continuously improve operations. In his session at @ThingsExpo, Brian Chemel, Co-Founder and CTO of Digital Lumens, will explore: The benefits sensor-networked systems bring to ...
Jul. 30, 2016 09:15 AM EDT Reads: 1,675