Are Linux Users Infringing on SCO’s Property?

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 GPL.”

“Anybody that does not have intellectual property issues related to SCO can sleep well at night, but for anyone violating our IP we are going to be more aggressive enforcing our rights than we have in the past,” Chris Sontag, SCO senior vice president for operating systems, told

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 said.

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 Research.

“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, told . “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 software.

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 downloaded.

SCO’s chief executive, McBride, has played it somewhat coy, acknowledging that Boies was hired (Boies is known for taking on Microsoft on behalf of the Justice Department in its 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 be taking.

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 operating systems.

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.