Update: SCO Suspends Distribution of Linux Pending Intellectual Property Clarification
May 15, 2003, 06:02 (95 Talkback[s])
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The SCO Group today warned that Linux is an unauthorized
derivative of UNIX and that legal liability for the use of Linux
may extend to commercial users. SCO issued this alert based on its
findings of illegal inclusions of SCO UNIX intellectual property in
Linux. The company also indicated 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
"SCO is taking this important step because there are
intellectual property issues with Linux," said Chris Sontag, senior
vice president and general manager of SCOsource, The SCO Group.
"When SCO's own UNIX software code is being illegally copied into
Linux, we believe we have an obligation to educate commercial users
of the potential liability that could rest with them for using such
software to run their business. We feel so strongly about this
issue that we are suspending sales and distribution of SCO Linux
until these issues are resolved."
SCO 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
Going forward, SCO will have a stronger focus on UNIX and the
company's growth strategy around Web services, SCOx. The company
introduced SCOx in April as the company's Web services framework
and plans to introduce new Web services applications from third
party developers in August at SCO Forum, the company's annual
"SCO remains committed to servicing our customers and as such,
we intend to continue our growth strategy around SCOx-the Web
services framework for small-to-medium businesses and branch
offices," said Darl McBride, president and CEO, The SCO Group.
In a separate announcement released today, SCO gave guidance on
expected results for its 2nd fiscal quarter. The company expects to
report net income of $4.0 million on revenue of $21 million.
In addition, SCO today also posted an analyst report from
Gartner to their Web site at www.sco.com/scosource entitled, "SCO
Lawsuit Sends a Warning to Linux IS Shops." The executive summary
of the report asks whether Linux is safe from encumbrances.
SCOSource: Letter to Linux Customers
[Editor's Note: The SCO Group's letter to commercial Linux
users is excerpted and linked below. -BKP]
"We believe that Linux infringes on our UNIX intellectual
property and other rights. We intend to aggressively protect and
enforce these rights. Consistent with this effort, on March 7, we
initiated legal action against IBM for alleged unfair competition
and breach of contract with respect to our UNIX rights. This case
is pending in Utah Federal District Court. As you are aware, this
case has been widely reported and commented upon in the press. If
you would like additional information, a copy of the complaint and
response may be viewed at our web site at
"For the reasons explained above, we have also announced the
suspension of our own Linux-related activities until the issues
surrounding Linux intellectual property and the attendant risks are
better understood and properly resolved.
"Similar to analogous efforts underway in the music industry, we
are prepared to take all actions necessary to stop the ongoing
violation of our intellectual property or other rights.
"SCOâ€™s actions may prove unpopular with
those who wish to advance or otherwise benefit from Linux as a free
software system for use in enterprise applications. However, our
property and contract rights are important and valuable; not only
to us, but to every individual and every company whose livelihood
depends on the continued viability of intellectual and intangible
property rights in a digital age..."