Subject: RE: Legal soundness comes to open source distribution
From: "Lawrence E. Rosen" <lrosen@rosenlaw.com>
Date: Tue, 6 Aug 2002 08:51:13 -0700

Very interesting.  Thanks for describing this.  Yet another reason to be
careful to form a contract and to appropriately disclaim warranties and
liability.  /Larry

> -----Original Message-----
> From: Rod Dixon [mailto:rod@cyberspaces.org] 
> Sent: Monday, August 05, 2002 11:26 PM
> To: Russell Nelson; license-discuss@opensource.org
> Subject: Re: Legal soundness comes to open source distribution
> 
> 
> This is not intended as legal advice. I wanted to point out a 
> case that has been recently reported, and might have helpful 
> implications for those who use disclaimers in their licenses.
> 
> I am unsure if the litigation against AOL (and its software 
> bugs) has been discussed here, but the cases may have some 
> relevance to the discussion on the use of disclaimers in open 
> source licenses. There are 2 cases related to the litigation: 
> AOL's users are suing the company in Florida and AOL is suing 
> its insurer in Virginia. (In re America Online Inc., Version 
> 5.0 Software Litigation, No. 00-1341-MD-GOLD (S.D.FL.). 
> AOL'ers sued AOL claiming that the online service's software 
> version 5.0 caused users' computers to "crash."
> 
> For whatever reason, AOL's insurer refused to pay any 
> liability on successful claims because software-based 
> computer crashes do not constitute tangible property damage, 
> which is the only type of damages the insurer agreed to 
> cover. (This must have shocked AOL, of course.) The Virginia 
> court reportedly agreed and opined that where software causes 
> a computer to crash, the crash, the loss of computer use, and 
> the accompanying destruction of data are "intangible" losses. 
> Denominating the losses as "intangible" rather than 
> "tangible" is significant in states that follow the common 
> law rule that bars consumer claims of economic loss related 
> to computer use (i.e. under tort theories); in these states, 
> the claimant may recover only for losses based on contract theory.
> 
> The case in Florida is still pending, but the Virginia court 
> opined that the consumers' claims are barred because only 
> intangible losses were alleged (i.e. no contract theory 
> claims). Although there is reason to view the Virginia 
> court's decision with some caution, it does provide some 
> perspective on this disclaimer issue. First, some states may 
> cabin software off in an intangible loss category...at least 
> under circumstances similar to software-caused computer 
> crashes. Second, in these states, claimants will not be 
> successful in tort-based claims (see above), and 
> contract-based claims will be subject to contract terms, 
> which would include the disclaimer provision in the license.  
> This looks like a particularly good development for open 
> source developers whose disclaimers are appropriately drafted 
> (albeit, not very good thing for consumers of software).
> 
> Rod Dixon
> Visiting Assistant Professor of Law
> Rutgers University Law School - Camden
> rod@cyberspaces.org
> http://www.cyberspaces.org/dixon/
> My papers on the Social Science Research Network (SSRN) are 
> available through the following url: 
> http://papers.ssrn.com/author=240132
> 
> 
> > John Cowan writes:
> > 
>  > Russell Nelson scripsit:
> >  >
> >  > > Imagine, if you will, that a large
> >  > > proprietary software firm (or consortium) wishes to 
> destroy open  
> > > > source software.  If they can require that all software 
> come with 
> > a  > > warranty, the job is done -- time will cook the soup.  >
> >  > Only if they are willing to shoot off their own feet.  
> No software
> >  > product I know of, Open Source or proprietary, does anything but
> >  > disclaim every conceivable warranty.
> >
> > Depends on how desperate they get.  They just *might* be willing to 
> > shoot off their own feet, if they think they can live without feet.
> >
> > --
> > -russ nelson              http://russnelson.com |  New 
> Internet Acronym:
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> > Potsdam, NY 13676-3213  | +1 315 268 9201 FAX   |  I Am Not 
> An Economist
> > --
> > license-discuss archive is at http://crynwr.com/cgi-bin/ezmlm-cgi?3
> >
> 
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