Mark Street
Mark Street
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Mark Street

Should software buyers beware?

As vendors sue each other - and threaten users - how can IT managers protect their companies against legal entanglement?

IT Week, 27 Jun 2003
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Imagine it's the year 2020. You are debating whether to use a new enterprise software package, but you are deeply worried because you have not had time to run your choice of software past the IT department's crack team of 25 lawyers, and there are currently 16 outstanding lawsuits surrounding your technology of choice.

The ITCL (IT chief lawyer) is telling you that you may be infringing four claims of intellectual property just by taking the software out of the box. Meanwhile, a consultant is advising you to put the project on hold until some form of indemnity is offered by at least three of the leading players.

It may sound ridiculous, but as the SCO and IBM case reaches new levels of vitriol, this scenario might not be far-fetched. Many UK IT directors already face the threat of legal action, following SCO's attempts to sue IBM and its customers for using code over which SCO says it has rights because of its ownership of Unix.

The software industry makes its money out of intellectual property, and as customers rein in spending, it is likely that such cases will become more common. In the highly competitive world of software, the trouble is that the physical product is limited - just a disc containing a whole load of clever ideas - so arguments over who has used which code in what are bound to escalate.

And as lawyers and share prices have come to dominate proceedings, we have seen the Oracle/PeopleSoft/JD Edwards bids become beset by claims and counter-claims, leaving customers caught well and truly in the middle.

There is little doubt that the IT industry is heading for a civil - or extremely uncivil - war, fought by lawyers. And as with all wars, there are going to be innocent victims. In this case, casualties are likely to be IT directors trying to deliver their projects on time and on budget.

If a war is to be fought, software vendors should develop their own set of rules - akin to the Geneva convention - and the first rule they should adopt is that the end user will never be held liable, no matter how ill-tempered the argument becomes. In what other industry could the user face legal action for buying a product from a respected supplier and using it in exactly the manner it was prescribed for?

What really irks is that users are facing this problem as they come under growing pressure from bodies such as the Business Software Alliance and the Federation Against Software Theft to ensure that they play by the vendors' rules.

As our society becomes increasingly litigious, perhaps it is time for users to exert their own form of legal pressure on vendors. Industry groups should band together to launch test cases against manufacturers if they have been forced to put projects on hold because of legal uncertainty. There is nothing like the threat of justified legal action to stop bluffers dead in their tracks. At the very least IT managers should ensure the highest powers within their organisation are made aware of why projects may face delays.

The quicker IBM resolves this issue and offers compete indemnity for all users of its AIX systems the better, because the whole principle of software use is at stake in this sordid affair.

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