You do not expect to get sued when you buy IBM software,
but that is exactly what happened to one US customer.
The story reported last week in Computer Weekly should ring
alarm bells for IT managers. Internet retailer
Harry and David received a writ for using IBM software after
another software supplier claimed the IBM software infringed its
patents. The retailer settled and has now filed a £3m countersuit
against IBM for failing to protecting it.
IT directors have enough on their plate without having to deal
with legal surprises. So how can you protect your IT department
from similar ligitation?
UK IT supplier group Intellect said IT managers should check
that their contracts include terms and conditions covering
warranty, indemnity and damages. A licence agreement should set out
the amount of protection a user has from a supplier against patent
infringement claims from other companies.
"If the supplier is aware of any current or potential claims
against its software, it is usual for the supplier to disclose
them, and for the licence to refer to a disclosure letter," said
Jenny Carlton, programme manager at Intellect.
Where a patent is in dispute or there is an ongoing case,
Carlton said that customers should look for specific terms that say
something like, "We have a claim from third-party X dated Y that we
have infringed their intellectual property rights, but we deny
this."
This way, a user can clarify what protection they will get if
the software supplier loses the case.
Even if something comes up that is not mentioned in the
disclosure letter, it should be covered by the warranty. However,
IT managers should be aware that a warranty is usually time limited
by between 12 and 24 months, said Carlton.
Forrester analyst John Rymer said that IT managers should check
that when conditions change, for example, when an IT department
upgrades to a new version of software, that the terms of the
agreement stay the same or offer greater protection. They must also
clarify how protection works, for example, who they contact, the
amount of protection they are entitiled to and whether there are
any exceptions to protection.
IT managers worried that they are at risk from third-party suits
after purchasing software should work with the supplier to audit
software. They should check the components that are in dispute from
ongoing or established patent and copyright claims.
This will give businesses an understanding of the risks they
face from patent suits and can help influence decisions to
uninstall components that are in dispute or place in workarounds,
said Gartner analyst Gene Alvarez.
"IT managers will also have to determine if they will still be
at risk for owning the product even thought they may not have used
the functionality, too," he said.
Alvarez said that IT departments may be liable to make back
payments to companies whose patents they have inadvertently
infringed for the length of time they have used software. But that
prevention at the customer agreement stage would inevitably save
time and money.
"Should IBM lose the case, it could be possible that existing
customers will have to pay just as Harry and David did to bring
themselves into compliance," he said.