SCO warns Linux users of potential 'legal liability'

Unix and Linux vendor The SCO Group Wednesday warned all commercial Linux users that they could be in the company's widening legal cross hairs until it resolves legal claims related to its Unix intellectual property.

The "legal liability for the use of Linux may extend to commercial users," Lindon, Utah-based SCO said Wednesday in an announcement in which it also said it plans to immediately halt the sales and distribution of its own Linux products because of the company's ongoing legal claims that Linux is an "unauthorized derivative of Unix."

For SCO, which says it has owned the rights to the Unix operating system since 1995, this is the third major Linux industry punch the company has thrown this year.

In March, SCO stunned the Linux world when it sued IBM Corp. for US$1 billion, alleging that the company misappropriated trade secrets related to SCO's Unix products to benefit IBM's Linux strategy. That lawsuit came just two months after SCO announced that it was creating a new SCOsource division that would be charged with strictly enforcing its Unix position as the "majority owner of Unix intellectual property."

In Wednesday's announcement, SCO said "that until the attendant risks with Linux are better understood and properly resolved, the company will suspend all of its future sales of the Linux operating system." That also includes the sale and distribution of its UnitedLinux offering, SCO Linux Server 4.0, Powered by UnitedLinux.

Darl McBride, the CEO of SCO, said in an interview with Computerworld that Wednesday's actions are being taken to warn Linux customers and vendor partners that SCO is continuing to fight to protect its Unix intellectual property. "This is very significant," he said. "These are our crown jewels we're talking about."

Letters have been posted on SCO's Web site to Linux customers and to SCO partners and vendors explaining why the company is taking this new position.

"We've warned them that there's a problem here," McBride said.

The company is advising customers to get their own legal interpretations on how their use of Linux might be affected by SCO's recent legal fight and to make decisions based on their own situations, he said.

For Linux vendors, "the decision to continue to ship (Linux) would be at their own peril," McBride said. SCO is "putting everyone on notice that this is tainted and that users are potentially carrying the risk."

SCO will help its customers through the situation with a hotline and other assistance, he said.

McBride said the company isn't targeting individual Linux users but is going after commercial Linux users who are benefiting from Unix code without paying for its use.

"You will not see us calling on some hacker in a garage," he said. "We're ready to go the distance. We are prepared to take as long as it takes ... to get these IP (intellectual property) rights with Linux resolved."

McBride said he doesn't want to see the end of Linux, but instead wants to see SCO get its just rewards for Unix code that SCO alleges has been taken and used improperly in the Linux operating system.

"The world is not about stealing people's code, laundering it and saying everything's OK," McBride said. "In the end, what you could see come out of this is legal Linux. You will see Linux getting stronger IP roots (that) it will be able to sustain for a long period of time, instead of getting knocked down the first time somebody comes along and blows a little IP wind on it."

SCO said it will continue to support existing SCO Linux and Caldera OpenLinux customers and hold them harmless from any SCO intellectual property issues regarding SCO Linux and Caldera OpenLinux products.

While the legal battles continue, SCO said it will pursue a stronger focus on its Unix products and on its recently announced SCOx Web services offerings.

Al Gillen, an analyst at market research firm IDC in Framingham, Mass., said SCO's action Wednesday "was always possible" after the company took action against IBM in March.

"They're basically rattling their sabers," Gillen said. "I think this effectively ends their position as a member of the Linux community. I don't think the community will accept The SCO Group as a participant in the community anymore in any way, shape or form at this point. It's a one-way trip."

SCO's move to halt its sales of its Linux products isn't a huge sacrifice for the company, he said, because those sales are under $1 million per year, far less than rival Linux vendors such as Red Hat Inc.

Instead, Wednesday's announcement could signal a change in the company's direction, he said. "It could be that they're going to become an IP licensing company with no products," Gillen said. "This sounds like the road they're on."

George Weiss, an analyst at Gartner Inc. in Stamford, Conn., said SCO’s move "could potentially have some sort of dampening effect" in the Linux marketplace, but he noted that he hasn’t seen any such reaction since the company’s lawsuit against IBM.

Weiss said he has asked SCO to show him some examples of SCO Unix code in Linux, but the company hasn’t done so because of its legal fights. "We really only have SCO’s word for it, which they’re attempting to make very compelling," he said.

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