SCO hunts for Linux scalp

Pressure is growing on IBM and other vendors to indemnify users of their Linux products, after the SCO Group last week turned its lawyers on IT buyers, saying it would sue at least one large Linux user by mid-March. The firm also cast a shadow over Novell's agreement to buy Suse Linux, saying it may take legal action against Novell when the deal goes through.

SCO created resentment in the open-source community when it sent warning letters to 1,500 blue-chip firms in May. It said that they could be liable for charges arguing that Linux uses Unix elements that infringe SCO copyrights.

"In August we announced a period of time for firms to license [Linux systems]," said Darl McBride, SCO chief executive. "Now we are moving to the litigation phase."

Lawsuits against other companies are likely to follow but the first case will be key. "We will look to identify a defendant that will illustrate the nature of the problem," said David Boies, managing partner of SCO's law firm Boies, Schiller & Flexner. "It will be a significant user that has not paid licensing fees and so is using proprietary and protected material illegally."

SCO has a licensing scheme for Linux users priced at $1,399 (£820) per server, but offered a 50 percent discount for those who signed up by October, and recently extended this offer to the end of the year.

SCO is also considering legal action against Novell, arguing it holds a no-competition contract with Novell from the time it purchased Unix System V code from the firm. SCO said that its key product is SCO Unix and that Linux is a derivative, competitive product. Novell said SCO's description of the agreement is inaccurate.

SCO's actions against users and vendors have put pressure on other Linux vendors to follow HP's lead in offering to indemnify customers in case SCO's claims are upheld. IBM has so far held out against offering indemnification, arguing that the dispute is contractual rather than relating to patents.

Ray Titcombe, chairman of the IBM Computer User Group, said, "Lobbying IBM would not seem to get us anywhere. It has a perpetual licence and considers it rock-solid. The interesting thing will be if SCO levels its guns at anybody else - that could create enough FUD to exert pressure on IBM to change its position."