[Fwd: Germany]

[Ben Tilly]

"Ravicher, Daniel B." <DRavicher at brobeck.com> wrote:
>
> > -----Original Message-----
> > From: David Johnson [mailto:david at usermode.org]
> > Sent: Saturday, January 27, 2001 3:20 PM
> > To: Angelo Schneider; license-discuss at opensource.org
> > Subject: Re: [Fwd: Germany]
> >
> >
> > On Saturday 27 January 2001 07:48 am, Angelo Schneider wrote:
> >
> >>  AND sure we have more than one leg to stand on. The same is true in 
>the
> >>  united states. Of course you have implied warranties. Or do you think
> >>  you can say: "Here is software, I have written it. Pay me some dollars
> >>  and you may use it. But I OWN it, still. Nope, I'm not liable if it
> >>  hurts your computer :-)"
> >
> > It is my own private opinion, and IANAL, that all commercial software
>should
> > have the basic warranty of fitness of merchantibility. Even commercial
>Open
> > Source Software should be warrantied. If the seller wishes to absolve
>himself
> > of all warranty and liability, this should be made explicitly clear to 
>the
>
> > buyer at the time of purchase.
>
>A few thoughts from someone who has passed the Bar for the wonderful state
>of NY.  First, there is no, nor can there ever be any, meaningful
>distinction between commerical and non-commerical software.  It's all
>involved in commerce, just at different points of the stream (far upstream
>is education and research and far downstream is product purchased by end
>users).  [...]

I mainly agree except for noting that open source
software may show up at the end-user level (see
Mozilla) and commercial software may show up well
upstream (Matlab comes to mind).

However that notwithstanding, I think a useful
distinction might be drawn between traditional
proprietary software and open source software.
Conceptually if you are the only one who can audit
the source, then it really is your responsibility
to validate that the software does something
reasonable and you should be liable if it is not
appropriate for what you try to sell it as.

>And, you are right, default rule is that sales of goods (software probably
>included) do come with warranties.  And your intuition is also right, that
>they are always disclaimed or absolved explicitly at the time of purchase.
>This used to mean simply telling the purchasor in writing that they are
>getting no warranties with the softaware, but because some judge thought
>this wasn't "explicit enough", now this language has to be in ALL CAPS.  
>[To
>which my response is, if people aren't going to read the warranty 
>disclaimer
>which is part of every single license agreement such that we have to make 
>it
>ALL CAPS, what does that say about the importance of the other parts of the
>license agreement?  Can we assume that since the rest of the license isn't
>in ALL CAPS the purchasor won't read it?  This means, eventually, the 
>entire
>license will have to be in ALL CAPS and thus we're back to the starting
>point with the warranty disclaimer not being explicit enough.]

If I put a grenade inside a bowling ball, and sell it to
you, should I be liable?  Even if I handed you a license
agreement that absolved me of all claims that it was
suitable for any purpose?

What about if it is a car with a marked tendancy to
explode?  A fault I knew about, and could have fixed for
$1/car?

You know, implicit warranties exist for a reason.

>Second point, software companies should be able to sell whatever they want
>for what ever price they want and with or without any warranties they want.
>IF I want to sell BS Office without any warranty and you want to sell MS
>Office with warranties, then let us compete in the market.  If consumers
>want warranties, they'll pay a premium for your product and I'll lose
>business.  If they don't then you'll lose profit by providing warranties 
>for
>product you have to sell at the same price I do.  In reality, the 
>difference
>in price between our products will be approximately the market's valuation
>of those extra warranties that you provide (assuming the Office program you
>and I sell are exactly alike).  When courts come in and regulate the
>marketplace and tell consumers what they are not allowed to buy, it only
>causes societal waste by preventing goods from moving to their highest
>valued user.  This societal waste raises costs for everyone involved.

This assumes symmetric information.  In the real world,
*PARTICULARLY* in the real world with a proprietary design
and tests that the vendor has access to and nobody else
does, this assumption is seriously broken.

To provide a real example, your *EXACT* argument was
repeated with regards to sanitation after the proof by
John Snow based on the epidemic of 1848-1849 that cholera
was carried in water and could be prevented by proper
attention to good sewage and clean water supplies.  We
can point to the very day that this argument became
unacceptable in England.  That day was December 14, 1861
and the event was the death of Prince Albert from typhoid.

In every industrialized country today, proper sanitation
does more to extend the average lifespan of the population
than the entire medical establishment.

>To make my point, assume that I want to sell you my 1971 Pinto with rust
>stains.  I value the car at $100 because I now live in manhattan and don't
>need it.  You are a Pinto afficianato and this car will round out your
>collection.  As such you value my Pinto at $1000.  If the government was
>going to come in and say "NO SELLING OF PINTOS WITHOUT A WARRANTY," I'd
>never sell it to you because the cost of insurance to cover the warranty I
>have to give you costs $1200.  So, I get stuck keeping this car that you
>want because the government has regulated the market instead of stayed out
>of it and assumed educated consumers.  Under this scenaio without govermnet
>regulation, you and I could chat and I'd say that there's no warranty and
>you'd say you don't care because you ain't goin' to drive the stinkin' car
>anyways.  Now, admittedly, this is just me and you, but I could come up 
>with
>an example in much larger commerce which describes the same sort of
>"Transaction doesn't happen because government prevents people from buying
>what they want," scenario.

Saying that there is a case for regulation does NOT imply
that regulation can be carried too far, and also does
NOT imply that regulation has no cost.

For instance I am very glad that when I turn on the tap it
is not my responsibility to ensure that this water is
appropriate for washing my hands.  I likewise appreciate
not having to determine whether the restaurant I am going
to prepares food in a sanitary manner.  (A determination
that I am not really prepared to make, nor would they like
having me wander through their kitchen trying to make it.)

> > Non-commercial software is a complete different matter. And this 
>warranty
> > should be provided by the seller, and have no repercussions to the 
>author
> > (unless the author is the seller) or any contributors. If I buy a
>toothbrush,
> > I want recourse if the bristles fall out in a week. Likewise, I want the
> > software I have paid money for to actually do what it says it is going 
>to
>do.

If I may offer a subtle variation on the above point, I
think that if you advertise a product being used for
something, that should be taken as a statement that you
are claiming it is *appropriate* for that, there should
be an implicit warranty, and the *advertiser* should be
liable.

If the person who created MySQL is not advertising its
use for key financial applications, they should not be
liable because it does not satisfy the widely accepted
ACID criteria.  But if I choose to market it for that
market, I should be liable!  (And if I don't understand
the product well enough to know whether it is appropriate
for that market, then I shouldn't be IN that market!)

[...]
>Now, for software.  Let's assume that I have a program which everyone in 
>the
>world could benefit from.  Big busness wants to license it with warranties
>because they've got money at stake.  Fine, I sell it to them for $5.  But,
>assume the school down the block wants the program to teach it's advance
>computer class, but they can't afford $5.  In fact, they can only afford 
>$1.
>Well, if I sell them the same thing I sold the Big Business (warranties
>included), then I'm going to run a loss.  [Note, I could just raise the 
>cost
>to big business to subsidize the school's warranties, but then a competitor
>of mine who doesn't sell to schools will be able to undercut my price to 
>Big
>Business and I go out of business.]  However, I can sell the school the
>progrm without warranties for $1 and stay in business.  Is it really better
>to have the government force me to sell to the school (or non-profit
>organization or small business or the government itself) with warranties?

I disagree with the example.

With software what matters for many customers is that
someone has enough confidence to offer it with a
warranty more than the actual warranty.  Now compare
two situations.

1. There are two similar products competing.  As the
   vendor of one of them I audit it and decide that
   I am willing to sell it with a warranty.

2. As one of several vendors of a product I analyze
   it and decide that I am willing to sell it with a
   warranty.

In both situations my background research costs me
the same.  In the first I am in a position to capture
the market of people who need that warranty *AND* to
capture the market of people who would like to have
the confidence that the software was audited.

In the second situation I only capture the one market,
and am forced to recover my costs from a much smaller
group.

I don't think that open source is doing a very good job
on security.  (See the recent worm that hit Red Hat.)  I
don't claim to have good ideas on how to get it to do a
better job.  But certainly making vendors care more about
is an obvious thing to wonder at.  And as I just pointed
out, unless vendors who care about security go well out of
their way to *brand* their product as different in
non-trivial ways, they are likely to have trouble
recovering revenue from the non-trivial effort they have
to put out.

So to market having a warranty when competing with other
vendors you need to fork and forgo many of the benefits
of open-source development?  Ouch...

[...]

Cheers,
Ben
_________________________________________________________________
Get your FREE download of MSN Explorer at http://explorer.msn.com