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Re: SGI Free SW license 1.1 compatability with Xfree86 style license

Actually Henning's understanding of the nature of the clause is correct.

An indemnity is a different animal than a warranty - they are not synonymous. A (no) warranty clause in a software license typically addresses what a licensor guarantees (or does not guarantee) with respect to the software. If the licensor does not live up to the warranty (if any) e.g. a warranty that the software would comply with the docs was provided and the software does not, the remedy is typically breach of contract/termination (although sometimes other remedies are provided) and the damages would involve the damages suffered by the licensee (subject to limitation of liability clauses). An indemnity however typically goes after a different concern (although it can overlap in coverage in some cases with a warranty e.g. intellectual property infringement and a warranty of title). An indemnity in a software license typically addresses losses caused by third parties to one of the contracting parties. In this case, the clause is trying to protect SGI (licensor) from losses caused by its licensees' "use" of the SGI code e.g. product liability suits brought by third parties against SGI caused by the licensee(s), third-party IP suits against SGI caused by the licensee(s), etc. A warranty provided (or not) by SGI won't get them that protection because the warranty/no warranty clause puts no obligation on the licensee(s). SGI could require a warranty from its licensees but that probably wouldn't give it the remedies it wants i.e. SGI doesn't merely want to terminate the agreement - it wants its losses to be covered. The type of indemnity below is common in OEM/software distribution agreements as well as in redistributables sections of off-the-shelf commercial software licenses.

This is not legal advice, no attorney-client relationship is established, etc. etc.

From: James LewisMoss <jimdres@mindspring.com>
To: Henning Makholm <henning@makholm.net>
CC: James LewisMoss <jimdres@mindspring.com>, debian-legal@lists.debian.org
Subject: Re: SGI Free SW license 1.1 compatability with Xfree86 style license
Date: 05 Jul 2000 22:04:31 -0400

>>>>> On 05 Jul 2000 16:05:56 +0200, Henning Makholm <henning@makholm.net> said:

 Henning> Scripsit James LewisMoss <jimdres@mindspring.com>
 >> On 30 Jun 2000 18:49:01 +0200, Henning Makholm
 >> <henning@makholm.net> said:

 Henning> That is a very broad clause: "Recipient will .. indemnify
 Henning> .. SGI from, .. any loss ... arising out of Recipient's use
 Henning> .. of the Covered Code". That seems to mean that if I use
 Henning> the software in a business that competes successfully with
 Henning> SGI, they could sue me and demand that I pay up for their
 Henning> lost profits. If that's a legal interpretation I'd say this
 Henning> is quite nonfree.

 >> This reads to me just as a no warranty clause.

 Henning> That is probably the intent of it. However, can you refuse
 Henning> that my reading is one of the cases the language actually
 Henning> covers?

Actually yes.  It looks like a standard no warranty clause.  It uses
big words and could have been clearer by just saying NO WARRANTY, but
I don't see your reading in it.


@James LewisMoss <dres@debian.org>      |  Blessed Be!
@    http://jimdres.home.mindspring.com |  Linux is kewl!
@"Argue for your limitations and sure enough, they're yours." Bach

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