Re: warranties
At 07:45 PM 1/30/01 -0800, David Johnson wrote: On Tuesday 30 January 2001 05:23 am, Carol A. Kunze wrote: Implied warranties on open source software do not make sense because there is no license income to support granting a warranty. Why do warranties have to depend on license income? Why can't they depend on support, media, or even *sales* income? All good points. Let me reiterate that this is not intended as legal advice. Requiring suppliers to subsidize software warranties through income from other sources (media, services, etc.) puts them at a competitive disadvantage regarding the profit from those other sources compared to those who command a proprietary profit from the software, the medium and the services. This is doubly disadvantageous for the open source supplier as not only do they grant everyone the right to compete in the distribution of the product, by distributing the source code they also put everyone in the position of being able to compete in servicing the software. The distributor/servicer is disadvantaged compared to one who merely services the product. The implied warranty of merchantability is that the product "is fit for the ordinary purpose for which such computer programs are used." No one really knows what this means in the context of software. Everyone (at least within my knowledge), proprietary and open source alike, disclaims this warranty. This has been the bit that has always bugged me. By not warranting merchantibility, Redhat (as an example) is telling me that their software is UNFIT for the ordinary purpose for which unix-like operating systems are used. I disagree. I know of no software product that does not disclaim this warranty. Does anyone? And yet they all believe in their products. This is really a question of legal and financial risk and has nothing to do with what suppliers think of their software. Market economics will not tolerate a profit on the software under this competitive scenario. In fact, Red Hat is selling the medium, printed documentation and services for $29.95, but the software is free. The media, printed matter, services *and* software all combine into a single product. They are indeed selling the software. If you think about it, you'll have to agree that they couldn't sell a shrinkwrap box with blank CD, manual and support package for the same price as one that actually includes the software. The question is, could a supplier provide a free download version of Linux, and then "sell" printed documentation and installation service together for $29.95. Based on what I just paid for a book on how to use one of my software programs that looks like a good deal to me. However, whatever the rule is, it also has to make economic sense for when the software is being provided alone. Compare this to a small business which "buys" a copy of Linux for $29.95 and makes 9 more copies. Has the supplier warranted 10 copies or 10 users? The supplier only warranties what was sold. If one box was sold then only one box gets warrantied. It doesn't work like that. A warranty on software warrants the operation of the software, not some physical item. If it only applied to a physical copy then the copy installed in the computer would not be warranted because it is not the copy that is on the disk. With proprietary software if the license grants the right to make a copy for a laptop the warranty would apply to that copy also. So what happens when an unlimited number of copies can be made? I don't know. Given that open source software does not generate license income, implying a warranty is not reasonable. Put another way, open source software cannot even afford to win a warranty lawsuit. Remember, we aren't talking about liability here. If Redhat is so stupid as to not honor returns (which is what the standard limited warranty is in every other industry), they deserve any class action lawsuit brought against them. The warranty is not attached to the IP, it's attached to the product. It's Redhat that sold Redhat, not Linus Torvalds or Bruce Perens. They have nothing to worry about. Yes, we are talking about liability. You've conflated the issue of whether there is an implied warranty with what the remedy is for breach of that warranty. I should note that physical disks are generally warranted, and the remedy usually provided in licenses is to get a refund or a replacement. I do not discuss this warranty, but a warranty on the software. Setting aside what the parties may agree to differently in a license, the law would imply a warranty and provide that in the event of breach the user is entitled to direct, indirect, and consequential damages. Again, setting aside whether the licensor can disclaim the warranty and limit damages with the licensee's agreement, the question is whether the above is an appropriate default rule for software which is in fact free, or at least on which the supplier does
Re: warranties
Carol A. Kunze wrote: The question is, could a supplier provide a free download version of Linux, and then "sell" printed documentation and installation service together for $29.95. Based on what I just paid for a book on how to use one of my software programs that looks like a good deal to me. Sure. In fact, one could package the download/installation, or the first part thereof, as a Windows program, and sell it to people who have Windows preinstalled (i.e. nearly everyone). In that case the box would contain a floppy disk, but would not contain "Linux" as such. This business method is dedicated to the public domain; I disclaim all patents on it. Remember, we aren't talking about liability here. If Redhat is so stupid as to not honor returns (which is what the standard limited warranty is in every other industry), Indeed, the Microsoft EULA provides for replacement within 90 days if the product does not conform to its documentation, though it disclaims all other warranties including implied ones (insofar as local law permits). Here is the relevant passage from the EULA packaged with Word 95: # LIMITED WARRANTY. Microsoft warrants that (a) the SOFTWARE PRODUCT # will perform substantially in accordance with the accompanying written # materials for a period of ninety (90) days from the date of receipt, # and (b) any Support Services provided by Microsoft shall be # substantially as described in applicable written materials provided to # you by Microsoft, and Microsoft support engineers will make # commercially reasonable efforts to solve any problem issues. Some # states and jurisdictions do not allow limitations on duration of an # implied warranty, so the above limitation may not apply to you. To the # extent allowed by applicable law, implied warranties on the SOFTWARE # PRODUCT, if any, are limited to ninety (90) days. # # CUSTOMER REMEDIES. Microsoft's and its suppliers' entire liability # and your exclusive remedy shall be, at Microsoft's option, either (a) # return of the price paid, if any, or (b) repair or replacement of the # SOFTWARE PRODUCT that does not meet Microsoft's Limited Warranty and # which is returned to Microsoft with a copy of your receipt. This # Limited Warranty is void if failure of the SOFTWARE PRODUCT has # resulted from acident, abuse, or misapplication. Any replacement # SOFTWARE PRODUCT will be warranted for the remainder of the original # warranty period or thirty (30) days, whichever is longer. Outside the # United States, neither these remedies nor any product support services # offered by Microsoft are available without proof of purchase from an # authorized international source. # # NO OTHER WARRANTIES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE # LAW, MICROSOFT AND ITS SUPPLIERS DISCLAIM ALL OTHER WARRANTIES AND # CONDITIONS, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, # IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR # PURPOSE, TITLE, AND NON-INFRINGEMENT, WITH REGARD TO THE SOFTWARE # PRODUCT, AND THE PROVISION OF OR FAILURE TO PROVIDE SUPPORT SERVICES. # THIS LIMITED WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS. YOU MAY HAVE # OTHERS, WHICH VARY FROM STATE/JURISDICTION TO STATE/JURISDICTION. Setting aside what the parties may agree to differently in a license, A shaky business anyhow, considering that shrink-wrap licenses are plainly contracts of adhesion. E.g. I suspect (IANAL; TISNLA) that shrink-wrap covenants that purport to waive the normal rule that construes the language of a contract strictly against the drafting party (in the ATT public license, e.g.) are void because against public policy. -- There is / one art || John Cowan [EMAIL PROTECTED] no more / no less || http://www.reutershealth.com to do / all things || http://www.ccil.org/~cowan with art- / lessness \\ -- Piet Hein
Re: warranties
on Tue, Jan 30, 2001 at 05:23:14AM -0800, Carol A. Kunze ([EMAIL PROTECTED]) wrote: I do not believe implied warranties should apply to open source software. IAAL, however, IANYL and this is not intended, nor should it be construed as legal advice. I will confine my remarks to one point, although there are others. Implied warranties on open source software do not make sense because there is no license income to support granting a warranty. I think you'll find general agreement with this viewpoint here, once all parties understand you're talking about _implied_, not _explicit_ warrantees. I believe there's confusion on this point in David Johnson's response. Free software is more or less predicated on the principle that a free software license can disclaim implied warrantees and laibility. With the slate wiped clean, _express_ warrantees or service contracts can be provided, as value-added service, and a revenue stream. I also suspect I know where this is headed. I know Carol from the CNI-COPYRIGHT mailing list and her work with UCITA (she graciously offerred assistance as I prepared my licensing presentation at last summer's O'Reilly Open Source Conference). I suspect a UCITA plug in the offing, though I doubt it will be warmly received here. Let me first note that this view does not include express warranties, described in statutes as "an affirmation of fact or promise, . . . including by advertising, . . . any description . . . . " Exactly. There can be no license income because every copy carries with it the right for the user to make more copies and to distribute those copies in competition with the original supplier. One cannot extract a profit on software under this scenario - at least not for long. So in practice, it is free beer. Business-issue quibble: I don't know that this is the case. Risk-averse organizations themselves (e.g.: businesses) typically benefit from the service, support, and guarantees available through commercial distribution of free software. Last I heard, Red Hat was still generating significant revenues on "direct software sales" -- shrinkwrap and service-bundled sales. Red Hat's standard Linux product sells on disks for $29.95 with printed documentation and installation service. It competes with Red Hat's own free download version. It also competes with the Red Hat Linux version distributed on disks by Cheapbytes for $4.99. ...and with various other bundles ranging in price to several hundreds of dollars, possibly thousands, per sale. The bits are free. The chrome, services, and support, are not. Note also that it isn't necessary for RH to support the development effort for all software under its lable, but merely the aggregation, anciallary documentation, and administrative support tools RH itself provides. Market economics will not tolerate a profit on the software under this competitive scenario. In fact, Red Hat is selling the medium, printed documentation and services for $29.95, but the software is free. If Red Hat could extract a profit, someone would immediately set up a competing business to undercut its price, and then that price would be undercut by another distributor and so on until the price was reduced back to zero. Effectively the cost floor appears to be ~$10-20 (including shipping and handling) for a delivered disk set for a distro. Or free download. Keep in mind, Windows operating system sells for what, about $200? $319 for the professional version last time I checked. OT: The Register did a rough valuation of what the "fair market cost" of a GNU/Linux distro would be, some years ago, arriving at something on the order of $5000, IIRC. There are also unanswered questions with respect to open source and warranties. Microsoft gets paid for every user of Windows (discounted price of $1,199 for 10 users). Compare this to a small business which "buys" a copy of Linux for $29.95 and makes 9 more copies. Has the supplier warranted 10 copies or 10 users? Given the present disclaimers in most free software licenses, the correct answer is, barring explicit warrantee, zero. The issue is worse when it comes to the actual authors who may sell some free software basically for the price of the disks: "If free-software authors . . . find themselves getting sued over the performance of the programs they've written, they'll stop contributing free software to the world. It's to our advantage as users to help the author protect this right." -- Bruce Perens, Open Sources: Voices from the Open Source Revolution, 1999 Given that open source software does not generate license income, implying a warranty is not reasonable. Put another way, open source software cannot even afford to win a warranty lawsuit. Again, no argument, this is commonly accepted fact. It is *not*, AFAIU, any rationale for adoption of UCITA. There are existing conventions, if not legal doctrines,
Re: warranties
on Wed, Jan 31, 2001 at 12:58:46PM -0800, Carol A. Kunze ([EMAIL PROTECTED]) wrote: on Tue, Jan 30, 2001 at 05:23:14AM -0800, Carol A. Kunze ([EMAIL PROTECTED]) wrote: Given that open source software does not generate license income, implying a warranty is not reasonable. Put another way, open source software cannot even afford to win a warranty lawsuit. Again, no argument, this is commonly accepted fact. David seems to have a different opinion. It is *not*, AFAIU, any rationale for adoption of UCITA. There are existing conventions, if not legal doctrines, restricting the imposition of implied warrantees for freely performed services -- e.g.: good samaterian laws -- and, I'm given to understand, for advice, instructions, recipies, technical data, etc., published in books and magazines. This might be an area to explore. If specific carveouts for free software are required, there are far better vehicles than UCITA to accomplish this task. As you're stating what I believe is a commonly accepted truth in the free software world, I have to ask: what's your point? I'm not sure how I can be any more clear. As I said in the beginning, "I do not believe implied warranties should apply to open source software." OK. Just, knowing your background, thought I'd raise the other flag. Surprising as it may seem, people have been known to post here with agendas. How about this: I think a more appropriate rule would be that there is no warranty on open source software unless one is expressly offered. I'll ponder this. I'm not sure it's necessary, or even advantageous. The present regime appears to work, you suggest as much. Blanket license might open avenues for abuse, though frankly no specifics come to mind at the moment. My bandwidth will likely be greatly reduced over the next few weeks, don't expect rapid response. -- Karsten M. Self [EMAIL PROTECTED]http://kmself.home.netcom.com/ What part of "Gestalt" don't you understand? There is no K5 cabal http://gestalt-system.sourceforge.net/ http://www.kuro5hin.org PGP signature
Re: warranties
on Tue, Jan 30, 2001 at 05:23:14AM -0800, Carol A. Kunze ([EMAIL PROTECTED]) wrote: I do not believe implied warranties should apply to open source software. IAAL, however, IANYL and this is not intended, nor should it be construed as legal advice. I will confine my remarks to one point, although there are others. Implied warranties on open source software do not make sense because there is no license income to support granting a warranty. I think you'll find general agreement with this viewpoint here, once all parties understand you're talking about _implied_, not _explicit_ warrantees. I believe there's confusion on this point in David Johnson's response. He didn't sound confused to me. David? This is not the first time I have heard the viewpoint that imposing warranties on open source/free software is a reasonable thing to do. Free software is more or less predicated on the principle that a free software license can disclaim implied warrantees and laibility. With the slate wiped clean, _express_ warrantees or service contracts can be provided, as value-added service, and a revenue stream. I also suspect I know where this is headed. I know Carol from the CNI-COPYRIGHT mailing list and her work with UCITA (she graciously offerred assistance as I prepared my licensing presentation at last summer's O'Reilly Open Source Conference). I suspect a UCITA plug in the offing, though I doubt it will be warmly received here. Let me first note that this view does not include express warranties, described in statutes as "an affirmation of fact or promise, . . . including by advertising, . . . any description . . . . " Exactly. There can be no license income because every copy carries with it the right for the user to make more copies and to distribute those copies in competition with the original supplier. One cannot extract a profit on software under this scenario - at least not for long. So in practice, it is free beer. Business-issue quibble: I don't know that this is the case. Risk-averse organizations themselves (e.g.: businesses) typically benefit from the service, support, and guarantees available through commercial distribution of free software. Last I heard, Red Hat was still generating significant revenues on "direct software sales" -- shrinkwrap and service-bundled sales. Red Hat's standard Linux product sells on disks for $29.95 with printed documentation and installation service. It competes with Red Hat's own free download version. It also competes with the Red Hat Linux version distributed on disks by Cheapbytes for $4.99. ...and with various other bundles ranging in price to several hundreds of dollars, possibly thousands, per sale. The bits are free. The chrome, services, and support, are not. Note also that it isn't necessary for RH to support the development effort for all software under its lable, but merely the aggregation, anciallary documentation, and administrative support tools RH itself provides. Market economics will not tolerate a profit on the software under this competitive scenario. In fact, Red Hat is selling the medium, printed documentation and services for $29.95, but the software is free. If Red Hat could extract a profit, someone would immediately set up a competing business to undercut its price, and then that price would be undercut by another distributor and so on until the price was reduced back to zero. Effectively the cost floor appears to be ~$10-20 (including shipping and handling) for a delivered disk set for a distro. Or free download. Keep in mind, Windows operating system sells for what, about $200? $319 for the professional version last time I checked. OT: The Register did a rough valuation of what the "fair market cost" of a GNU/Linux distro would be, some years ago, arriving at something on the order of $5000, IIRC. There are also unanswered questions with respect to open source and warranties. Microsoft gets paid for every user of Windows (discounted price of $1,199 for 10 users). Compare this to a small business which "buys" a copy of Linux for $29.95 and makes 9 more copies. Has the supplier warranted 10 copies or 10 users? Given the present disclaimers in most free software licenses, the correct answer is, barring explicit warrantee, zero. Warranty disclaimers can be challenged on a number of grounds - the clause was not conspicuous, the user did not agree, the user did not have notice of the disclaimer, etc. There is still risk here, particularly with open source which is more likely to be distributed informally. But in fact, I'm discussing what the appropriate default rule is in the first place, not whether it can be changed by disclaimer. The issue is worse when it comes to the actual authors who may sell some free software basically for the price of the disks: "If free-software authors . . . find themselves getting sued over the performance of the
