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SCO unveils Linux licensing scheme

The company wants to charge companies $699 per processor for one of its Unix licenses

By Robert McMillan, IDG News Service
August 5, 2003 12:00 PM ET

IDG News Service - One day after being sued by Linux vendor Red Hat Inc. for "unfair and deceptive actions" relating to its claims about intellectual property violations in the Linux source code, The SCO Group Inc. today told Unix users exactly what it would cost to take their systems out of the sights of SCO's lawyers.
SCO's charge: $699 per processor.
SCO claims that the Linux source code contains unauthorized contributions, and in March it sued IBM for $1 billion, claiming that the vendor had made some of those additions in violation of its Unix licensing agreement with SCO. Since then, the Lindon, Utah, company has widened the scope of its claims. It 's now seeking more than $3 billion in damages from IBM and maintains that Linux users themselves could be subject to lawsuits for illegally using SCO's intellectual property.
Today's announcement presents users with the option of paying SCO rather than running the risk of litigation. The $699-per-processor fee applies to server licenses only, said SCO spokesman Blake Stowell. His company also plans to offer less expensive licensing options for desktop and embedded Linux users.
The license, called the SCO Intellectual Property License for Linux, lets Linux users run SCO's intellectual property in binary form only. "It gives you a license to run the software only. You can't view the source, and you can't contribute it to an open-source product for everyone's use," Stowell said.
Open-source advocates have said that such a license would violate Linux's GNU General Public License (GPL), which prohibits the Linux source code from being mixed with a license like SCO's, but Stowell disagreed. "This is a license that is designed to run in addition to the GPL," he said.
SCO's price tag is too high, according to one industry analyst. "That seems pretty steep to me," said Sageza Group Inc. analyst Charles King. "If they made this thing so cheap and so easy that it made more sense to pony up a few thousand bucks and pay it and not think about it anymore, they might actually generate some interest in it."
By pricing its Linux license fee in the same range as its UnixWare license, SCO may prompt Linux users to demand that it first prove its allegations, King said. "The enterprises that are deeply invested in Linux are going to pull out their slide rule and say, 'OK, prove it,'" he said.
Those users might have an additional reason to resist SCO's offer: A single-processor server license will jump to $1,399 after Oct. 15, Stowell said.
In a conference call today, SCO responded to the lawsuit filed against it yesterday by Red Hat in the U.S. District Court of Delaware. Raleigh, N.C.-based Red Hat filed the formal complaint in an effort to show that it hasn't infringed on SCO's intellectual property and to hold SCO accountable for what it called "unfair and deceptive" actions.

SCO President and CEO Darl McBride said today that the lawsuit confirms what his company had been saying all along -- Linux developers are either unwilling or unable to screen the code used in the Linux kernel to remove any infringing code before customers buy and use it.

McBride offered several responses to the Red Hat lawsuit. First, he said, the claims that SCO hasn't shown examples of infringing code in Linux are untrue. "We have shown examples of infringing code in Linux to many different people, including some Linux advocates," he said.

In addition, McBride said, SCO isn't responsible for Red Hat's claim that it has lost business. "Rather, we suggest that Red Hat has adopted a faulty business model," he said.

"At issue here is more than just SCO and Red Hat," McBride said. "What is at issue is whether intellectual property rights will have any value in the age of the Internet, where intellectual property rights can be simply taken without regard for rightful ownership."

Computerworld's Linda Rosencrance contributed to this report.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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