Red Hat forced to provide patent indemnification

By Stan Beer
Saturday, 04 November 2006 08:42

Home IT

Stung by Oracle's entry into its Linux support market space and Novell's partnership with Microsoft, Red Hat has quietly sneaked in an indemnification guarantee for customers against any possible patent infringement claims.

Oracle and Microsoft have stung Red Hat with a double blow, both companies providing Linux users with assurances that they will be protected against intellectual property infringement lawsuits resulting from proprietary software blended with open source Linux.

Oracle, which announced last week that it would offer Red Hat customers support at half the price of Red Hat's services, also announced that it would imdemnify customers against patent infringement legal claims.

Microsoft, which on November 2 rocked the Linux world with the announcement of a partnership with Novell to promote Suse Linux, announced that it would not pursue any patent infringement claims against Suse Linux users.

Until November 3, Red Hat provided no indemnification guarantees for its customers. However, Red Hat has quietly announced through an obscure addition to the FAQ section on its website that it has changed its Open Source Assurance program to include indemnification:

"Q: Has anything changed about Red Hat's Open Source Assurance program?

A: While customers have long purchased with confidence from Red Hat, Red Hat will now provide indemnification as an additional protection in its Open Source Assurance program.

Q: What does the additional protection cover?

A: The indemnification further protects against intellectual property infringement claims."

The Open Source Assurance covers Red Hat Enterprise Linux and JBoss Enterprise Middleware customers.

Red Hat shares tanked by nearly 25% last week, when Oracle CEO Larry Ellison announced that the database and business applications software company would compete with Red Hat for customer support from which Red Hat makes most of its money. Microsoft's announcement of a Suse Linux partnership with Novell a few days later turned up the heat a notch higher.

However, the market is still not convinced that Red Hat will fold under the pressure from Oracle. While the shares have dropped, some investors have seen it as a buying opportunity and provided Red Hat shares with a minor bounce.