Are Linux Users Infringing on SCO's Property?
Jan 23, 2003, 15:00 (33 Talkback[s])
(Other stories by Beth Cox)
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A move by software company SCO Group that hints at possible
legal action against companies that use Linux (or may have
incorporated some of it into their products) has grabbed the
attention of IT execs who thought they were using freely available
open source software.
But at least one Linux expert says it's no big deal.
Lindon, Utah-based SCO markets software solutions for small- to
medium-sized businesses and branch offices; its products include
both UNIX and Linux platforms.
And this week the company said that it has hired noted attorney
David Boies to look into whether some corporate Linux users are
violating any of SCO's intellectual property rights.
SCO chief executive Darl McBride said in a statement that the
company has formed a new business unit, called SCOsource, which
will manage the licensing of SCO's UNIX intellectual property.
"We haven't made any plans to sue Linux vendors, and we
certainly haven't threatened any vendors," he said.
McBride said in the statement that the hiring of Boies is not a
clear statement that lawsuits are imminent.
"SCO is working with David Boies for his expertise at
interpreting intellectual property law, identifying where
intellectual property violations have taken place, and helping
resolve those violations. Resolving intellectual property
violations does not automatically mean litigation," the statement
said. The crux of the matter, according to the statement, is that
"the UNIX shared libraries, owned by SCO, are not Linux products.
They are not open source software and they are not covered by the
"Anybody that does not have intellectual property issues related
to SCO can sleep well at night, but anyone violating our IP we are
going to be more aggressive at enforcing our rights than we have in
the past," Chris Sontag, SCO senior vice president for operating
systems, told internetnews.com.
But it's not all that big a deal, some experts say.
"It doesn't strike me that it's a multimillion-dollar case that
you would hire a name lawyer like David Boies for," said open
source guru Bruce Perens. "The UNIX API is 30 years old--the only
folks who might be in trouble are folks who are using something
that came from SCO. Linux insiders think this is all BS and the
story has been blown out of all proportion."
"This comes down to a piece of really botched PR," Perens
Still, the move had been hinted at earlier, prompting some
observers of the Linux scene to wonder whether SCO wasn't simply
fishing for financial settlements from companies looking to avoid a
lawsuit. What sparks that sort of speculation is that SCO has been
losing money for some time.
"... as of yet there's not a lot of money to be made off Linux
technology, which has been the Achilles heel of many companies in
this space," said Michael Gartenberg, research director at Jupiter
"Linux companies are going to have to scramble to come up with
real business models and revenue streams if they plan on staying in
business," he said.
But not everyone sees it that way.
"SCO seems to be doing what any diligent intellectual property
owner should do, that is, investigating potential acts of
infringement," Doug Isenberg, editor and publisher of GigaLaw.com,
told internetnews.com. "It's too early to tell how wide this net is
really being cast; ultimately, we may know only when or if SCO
begins filing or threatening lawsuits..."
Through a series of corporate buyouts over the past 10 years or
so, SCO (formerly called Caldera International) owns legal rights
to the original development work done on Unix during the 1970s and
1980s by Bell Labs, the research group that first developed the
Linux is based on UNIX and at least in theory, SCO apparently
thinks it might be possible to build a case that says some of its
rights are being violated. Linux is widely assumed to be open
source software developed by volunteers that can be freely
SCO's chief executive, McBride, has played it somewhat coy,
acknowledging that Boies was hired (Boies is known for working to
help Microsoft on the Justice Department's antitrust case and for
defending Napster) but telling the media only that he was "not
prepared to answer" what course of action the company was going to
Published reports elsewhere have hyped the matter, claiming that
companies that might be affected by any potential legal action
could include various other Linux companies, Apple Computer,
Microsoft, BSD versions of Unix and others using the various
SCO stock has not been over $2 a share since last September, and
in December it reported a loss of $2.7 million on fiscal fourth
quarter revenues of $15.5 million. For all of fiscal 2002, the
company reported a net loss of $24.9 million, or $1.93 per common
share, on revenues of $64.2 million,
Meanwhile at LinuxWorld SCO announced development of SCOoffice
Server, a Linux-based backoffice product that is expected to ship
during the second quarter. It will integrate the recently released
SCO Linux 4.0 server, SCOoffice Mail Server 2.0 and SCOoffice Base
Server with file and print services.