The operating system Linux has been one of the most famous examples of open-source software in the global technology industry.

China is no exception, and the government has thrown substantial weight behind Linux. Recently, however, an industry association has urged the Chinese Government to review its policy supporting it.

The government's "excessive preference" for Linux is not beneficial to the country's software industry, says the government-backed China Software Industry Association (CSIA).

The government has been a strong supporter of the Linux platform and has hoped to use the open-source software to build a robust domestic industry.

The strong support for the free operating system has been detrimental to the development of software products in the country, says Zou Bian, a researcher at the CSIA.

"Many people in China are under the mistaken impression that software products should be free of charge," Zou says.

"Indifference to knowledge-based products is the major obstacle to China's software industry as well as the major source of rampant piracy."

The business model of Linux is flawed, the CSIA said in a report last week.

The open-source software adopts the General Public Licence (GPL) scheme, under which developers can only charge users for the costs and services of the software, instead of licencing fees.

This model has largely thwarted the profitability of open-source software.

Sun Yufang, a Chinese scholar who has long been researching Linux software, says most Linux developers cannot make a living under the current business model.

Most of these developers "either have died or have focused on other businesses in past years," Sun says.

Chen Chong, the CSIA president , says the government should change its mindset about support for open-source software.

The government and Chinese firms should be wary of the increasing potential risks related to open-source software, says Chen, a former senior official with the Ministry of Information Industry (MII), which has long been the software industry watchdog.

There has been a misunderstanding that open-source software is not subject to copyrights.

The term "copyleft" has been coined to refer to "free" software products. Linux developers are increasingly locked in lawsuits over copyright infringements, however.

The Linux community supports co-ordinated global development of the software. The CSIA says that copyright ownership is very complicated for software that is not "organizational work."

Two years ago, US-based SCO Group, owner of several key copyrights related to the Unix operating system, filed a lawsuit against IBM. SCO claimed Linux development infringed the copyright of Unix and demanded compensation as high as US$3 billion.

SCO accused IBM of stealing trade secrets and breaching a contract for allegedly using proprietary Unix source code in its Linux-based products.

"Software patents were issued but not court-validated for 283 products that, if upheld, could potentially be used to support patent claims against Linux," said the vendor-neutral provider of open-source risk mitigation and management solutions last August.

"Patents pose a financial risk to corporate Linux users - just like they do to corporate users of almost any software - because whether or not a patent is truly violated, it costs US$3 million on average to defend a patent lawsuit," says Dan Ravicher, founder and executive director of the Public Patent Foundation and senior counsel to the Free Software Foundation.

"This heavy cost of proving even weak patents invalid could fall on unprepared end-users - who until now have often been forced to pay settlements to avoid risking millions (of dollars) on litigation."

The CSIA warns many Chinese Linux firms could soon be hit with patent lawsuits. Some Chinese firms call their Linux systems "Chinese operating systems with fully owned copyrights," says Zou.

"That is groundless and they could be sued at any time."

If the original Linux publishers abolish or modify the licences, these Linux developers could face patent risks, Zou says.

Duan Yuping, an official with the National Copyright Administration, says the government has already noticed the potential patent risks with Linux. The CSIA's report will also offer an important reference for the government in instituting related policies.

Chen says that the government is working on a set of new policies for the country's software industry.

The new regulations are being drafted and could be released before the end of this year, he says, without providing details.

The CSIA is asking the government to let the market decide.

"It's of no significance to the government to necessarily support open-source software," the CSIA reports.

A previous survey by Beijing-based CCW Research found a weak application environment and shortage of Linux engineers has resulted in a high TCO for Linux adoption. TCO refers to the total cost of owning hardware and software. It is the price paid for a product and the cost of maintenance, upgrades and downtime.

The survey shows the TCO of Linux is much higher than the Windows platform.

The TCO for Linux is 41.3 per cent higher than Windows on application and database servers.

Some people in China have also proposed a national standard for Linux to compete globally. The CSIA says this could backfire.

It is unreasonable for the government or companies to force other companies to accept a standard that has yet to become popular or to kick de facto standards out of the market, the CSIA says.

(China Daily 08/29/2005 page6)