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SCO claims Unix copyrights, offers special Unix licenses to Linux users

The company is ramping up its intellectual property rights fight

By Todd R. Weiss
July 21, 2003 12:00 PM ET

Computerworld - As it continues its legal fight to enforce its ownership claims for Unix System V source code, The SCO Group Inc. today said it has now received U.S. copyrights for the code.
In a related move, SCO said it will begin selling special UnixWare licenses to enterprise Linux users that will allow them to bring their Linux use into conformance with what SCO claims are its legal rights to the Unix source code.
The announcement will be the topic of a news briefing later today with SCO officials, including CEO and President Darl McBride.
Lindon, Utah-based SCO said the copyright registrations are a "jurisdictional pre-requisite to enforcement of its UNIX copyrights" as it proceeds with its $3 billion lawsuit against IBM. That suit, filed in March (see story), alleges that IBM misappropriated SCO Unix trade secrets by putting some of the code into Linux.
The specially tailored UnixWare licenses will support run-time, binary use of Linux for all commercial users of Linux based on kernel Version 2.4.x and later, according to the company. Buying a license would allow users to comply with SCO's copyrights, the company said, adding that if enterprise Linux users do so, SCO won't pursue legal challenges against them related to the code. Pricing hasn't yet been announced.
"For several months, SCO has focused primarily on IBM's alleged UNIX contract violations and misappropriation of UNIX source code," McBride said in a statement. "Today, we're stating that the alleged actions of IBM and others have caused customers to use a tainted product at SCO's expense. With more than 2.4 million Linux servers running our software, and thousands more running Linux every day, we expect SCO to be compensated for the benefits realized by tens of thousands of customers. Though we possess broad legal rights, we plan to use these carefully and judiciously.
"Today, we're delivering a very clear message to customers regarding what they should do," McBride said. "Intellectual property is valuable and needs to be respected and paid for by corporations who use it for their own commercial benefit. The new UnixWare license accomplishes that objective in a fair and balanced way."
In May, SCO warned all commercial Linux users that they could be using its code illegally and recommended that commercial users seek legal advice to help them decide what to do about their use of Linux (see story).
Chris Sontag, senior vice president and general manager of SCO's SCOsource intellectual property division, said in a statement that "while using pirated software is copyright infringement, our first choice in helping Linux customers is to give them an option that will not disrupt their IT infrastructures. We intend to provide them with choices to help them run Linux in a legal and fully-paid for way."
Dan Kusnetzky an analyst at market research company IDC in Framingham, Mass., said the latest SCO moves could make the company's already tenuous relationship with IT users and the Linux, Unix and open-source communities even more difficult. "I think that all of these moves are based on the presumption that they will win in their litigation," Kusnetzky said. "And I don't know if that presumption will happen" because it hasn't been heard yet or decided in court.
"I believe it is an attempt to use the fear, uncertainty and doubt ... to increase their revenues and their position," Kusnetzky said. "I'm not so sure it will end up endearing SCO to the open-source community, to the Linux community or to the Unix community ... but that doesn't seem to be something that bothers them at all."
Jonathan Eunice, an analyst at Illuminata Inc. in Nashua, N.H., said the new SCO licensing offer to enterprise Linux users sounds similar to what SCO announced back in January, when it launched the SCOsource division to enforce its intellectual property rights. But that was before SCO sued IBM and sent warnings to enterprise Linux users about their continued use of the contested code, he said.
"I think that from a legal point of view, we're in the incredibly early days" of this legal fight, Eunice said.
For some users, the offer may be enticing, depending on the cost of the special Unix licenses, he said. Some may see it as a "cheap insurance policy" to protect them against eventually being sued by SCO, he said. On the other hand, because the case isn't even yet in the courtroom, the risk for users is essentially unchanged from recent months, Eunice said.
"I don't see it as something that should incite an enterprise Linux customer to do any more than they did last week," he said. "The threat level increases a bit, but mainly because the perception that SCO is a psycho killer, not that the case has changed."
Harry Roberts, the CIO at Reading, Pa.,-based Boscov's Department Stores, said he remains in a "wait-and-see mode" on SCO's allegations.
"We are right now working through this like everybody else," Roberts said. Boscov's uses IBM's AIX Unix operating system on an RS/6000 mainframe and also runs versions of Linux from SuSE Linux AG and and Red Hat Inc., he said. "We are awaiting direction from IBM. We are, quite frankly, assuming that IBM is going to take whatever measures they need to take to protect their customer base, including us."
Roberts said he is also waiting to see how SuSE and Red Hat handle the case as it unfolds. "We don't have an opinion yet as to the validity of the claims of SCO. We don't think we're going to be at any risk. But having said that, we're not going to assume anything until we see what's happening."



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