SCO upsets industry with Linux battle

SCO's decision last week to send warning letters to 1,500 international Linux customers, informing them of their potential legal liability for using the open source product, has added a new edge to its $1bn lawsuit battle with IBM.

The consensus among analysts has been that SCO, in a weak financial position, is making a desperate move to cast around for money or to be bought, perhaps by IBM itself. The claim, they thought, was dubious and very unlikely to succeed.

SCO is confident of proving that IBM has put SCO Unix code into Linux without permission. SCO owns the licences for Unix software, provided to around 6,000 companies, including IBM.

In its lawsuit against IBM launched in March, SCO claims that its Unix code has been inserted into Linux by IBM, and that the code is contained within all commercial distributions of Linux, including the kernel itself.

Chris Sontag, senior vice president and general manager of SCO Source, told vnunet.com that all commercial distributions of the operating system shared "equal liability" with IBM if its code is being misused. And SCO has said that Linux customers could also be liable for using its Unix code.

In its alarming letter to Linux customers, Darl McBride, president and chief executive of SCO, warned that "legal liability that may arise from the Linux development process may also rest with the end user".

SCO has suspended sales of its own Linux software while it attempts to prove that its intellectual property has been stolen.

The company has also said that it will not provide any more marketing, business development and financial resources for UnitedLinux.

In an interview with vnunet.com just days before the letters were sent out, Sontag said that "Red Hat, SuSE or any other commercial distribution would have equal liability" if they are using its intellectual property.

This came as a shock for UnitedLinux partner SuSE, which worked closely with SCO to develop a version of Linux, and said it would be safe from any action.

Not so, according to Sontag, who has reviewed its agreements with SuSE. "I would not characterise them in any form whatsoever as providing SuSE with any rights to our Unix intellectual property. They are dead wrong on that issue," he said.

Understandably, SuSE reacted angrily, but denied UnitedLinux without SCO was under threat. Joseph Eckert, SuSE Linux vice president of corporate communications, said SuSE was "re-evaluating" its relationship with SCO.

He added: "I am not a lawyer but what I've said I stand by. How can they sue us for a product we have jointly developed?"

Red Hat also dismissed SCO's claims, pointing out that the code was released to the Linux community under the GNU General Public License (GPL), which SCO's own Linux version uses. SCO promptly suspended sales and distribution of SCO Linux.

But all secondary action is dependent on SCO winning its lawsuit and resolving the intellectual property issue. This seems unlikely and, in any event, the case could drag on for years.

"They are not going to win the case. If there was any real chance of them winning the case, the case would go away," said Gary Barnett, principal analyst at Ovum.

Even so, the confusion that has been whipped up will benefit Linux's arch-rival Microsoft.

Dan Kusnetsky, vice president of systems software research at analyst IDC, said: "Microsoft will declare victory and say: 'We told you so. We said this was a possibility with intellectual property and because it was us saying it everyone thought it was sour grapes.'"

The result would be to send a chill through companies starting to see Linux show up as a mainstream choice. "It won't stop [installations] but it will lengthen the decision cycle," said Kusnetsky.

But Barnett insisted that, even if SCO was successful in court, it would be very unlikely to stop Linux because the open source community would fix any doubts over code.

"Linux might have to take a step back, but the large number of smart people will figure out a way of getting round it," said the analyst.

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