Linux sued over intellectual property

SAN JOSE, Calif. -- It's touted as the high-tech world's best hope against Microsoft Corp. domination. Built largely by volunteer programmers worldwide, the Linux operating system is cheap, reliable and doesn't pad Bill Gates' wallet.

But just as Linux is catching on with business and governments, a small Utah company is claiming that some of its intellectual property has been copied into Linux without permission.

If courts agree, SCO Group could undermine the foundation of the open-source software movement.

SCO is demanding a slice of the action, which could turn into a juicy revenue stream for the company, a big loss to businesses that sell or run Linux systems touted as low-cost, and a windfall for Microsoft's proprietary offerings.

SCO's tactics -- a $3 billion lawsuit against IBM Corp. and warning letters to 1,500 of the world's largest corporations -- are ruffling more than a few feathers of Linux fans, whose mascot is a penguin named Tux.

Specifics not revealed

Linux activists, whose faith in open source is as strong as their hatred of proprietary software companies, say it amounts to an old-fashion shakedown.

SCO hasn't publicly revealed what specifics from its Unix operating system might be illegally copied. So its critics wonder whether SCO is merely trying to extract cash from nervous companies before the courts force it to reveal an empty hand.

SCO is not just targeting system builders like IBM or distributors like Red Hat. Taking a page from the recording industry's tactics against music swappers, SCO says it can go after individual users -- whether it's a company running a server or someone with a device embedded with Linux such as a TiVo personal video recorder.

"For the first time in the history of the industry, we have a major operating system platform that's being pushed on end users and at the same time the users take it, they're being told buyer beware -- you own all the inherent intellectual property risks with this product," said Darl McBride, SCO's chief executive.

The charge stems from the GNU General Public License, which has been adopted by Linux and countless other open-source projects. The license ensures that code is not kept secret and is freely distributed.

Matthew Szulik, chief executive of Red Hat, a leading Linux distributor, says that openness is the only protection users need. He says anyone can see -- and remove, if necessary -- any offending code.

The ultimate arbiter will be federal courts in Utah and Delaware. That offers little solace to the Linux movement since the IBM case isn't scheduled until April 2005. In the meantime, uncertainty and doubt could discourage major migrations to Linux by corporations and governments.

And even if SCO's allegations are baseless, the company has opened up the possibility that Linux might contain other baggage.

Wall Street certainly hasn't written off SCO, which was trading above $10 per share on Thursday. That's up from $2.21 in March, the day before it sued IBM.

Before SCO sued IBM, it was known for its now-discontinued Caldera Linux and what seemed a moribund Unix variant. It posted a net loss of $24.9 million in fiscal 2002.

Yet the 330-employee company understandably casts a long shadow over this week's LinuxWorld convention in San Francisco, where analyst reports showed Linux spreading like wildfire.

First Red Hat sued SCO to try to make it put up or shut up. Then IBM -- accused of using protected code in its Linux version -- fired back Thursday, saying SCO devised a "campaign of falsehoods" in its claims, violated the General Public License and infringed on IBM patents.

McBride has offered the Linux world the chance to "clean up" its copies of the operating system by paying SCO. Galling Linux adherents, SCO offered licenses starting at $699 for server versions of the operating system and $199 for desktop computers.

A new copy of Microsoft's Windows XP Home, by comparison, is available at Amazon.com for $189.

At least giant vendors of Linux-based servers -- Sun Microsystems and Microsoft -- recently bought SCO licenses, but they and a third vendor, Hewlett-Packard Co., deny that business is down because of the sticky situation.

"There are risks in any environment, anyone's software that you buy," said Mike Balma, HP's Linux systems strategist. "People have choices, and we're seeing that they're continuing to vote with their feet."

On the Net

www.sco.com

www.ibm.com