In the latest chapter of an intellectual property battle that threatens to derail the open-source software movement just as it is beginning to catch on among schools, SCO Group—which owns key components of the Unix operating system—has sent letters to Linux customers claiming the software is an “unauthorized derivative” of its property.

The letters, which were sent in mid-May to approximately 1,500 companies around the world, warned that commercial users of Linux might face legal liability for using the operating system without a license from SCO, formerly known as Caldera.

The move follows SCO’s filing of a $1 billion lawsuit in March against International Business Machines Corp. (IBM) for allegedly taking bits of Unix code and transferring them to Linux (see “Lawsuit could threaten open-source movement in schools,” IBM has called the lawsuit unfounded.

Although SCO did not send letters to Linux users in the education community, John Ferell, an intellectual property attorney with Carr & Ferell, said the law makes no exception for schools.

“There is no fair-use clause for educational or nonprofit organizations,” he said. If SCO’s allegations are found to be true, he added, schools could be held just as liable as companies.

If SCO’s latest tactic is successful, it also could undermine the Linux movement, which has been growing in large part because of the software’s very low cost and freedom from the hassles of proprietary software, such as Microsoft Corp.’s Windows.

But even if SCO fails to convince Linux users to pay for licenses, it has raised fear, uncertainty, and doubt—or “FUD”—about Linux and whether end users can be held liable if other portions are found to be what amounts to stolen property, some observers say.

SCO says it was just attempting to clear the air.

“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,” said Chris Sontag, a senior vice president of the company.

Lindon, Utah-based SCO acquired control of Unix intellectual property from Novell, which had bought the rights in 1992 from AT&T. AT&T’s Bell Laboratories created Unix for minicomputers in the late 1960s and commercialized it in the 1980s.

Linux, a Unix derivative first developed in the early 1990s by Finnish college student Linus Torvalds, has in recent years gained in popularity because of its low cost, reliability, and ability to run on inexpensive computer hardware.

In an eMail interview with the Associated Press, Torvalds said he has not heard what components of Linux might be infringing.

“I’d dearly love to hear exactly what they think is infringing, but they haven’t told anybody,” he said. “Oh, well. They seem to be more interested in FUD than anything else.”

SCO officials have declined requests to disclose exactly which lines of Unix code allegedly were copied into Linux, citing proprietary interests in maintaining trade secrets. Some members of the open-source movement say SCO’s refusal makes it impossible to assess the validity of the company’s claims.

SCO also announced it was pulling its own version of Linux, which might be significant because it was distributed under the same license as other versions. That license allows for the free redistribution of the software.

“I suspect the current letter is because their lawyers finally noticed that as long as they ship Linux, they are themselves bound by the license under which it ships,” Torvalds said.

Some observers believe SCO sued IBM in an effort to be bought—a charge SCO denies. SCO’s stock price has nearly doubled since it filed the lawsuit, said Bruce Perens, an open-source software advocate and consultant. He said he believes it’s a tactic of SCO’s investors to recoup their investment.

“They don’t care who or what they hurt,” he said.

Darl McBride, SCO’s chief executive, said the company is not trying to find a buyer but is merely informing users of the problem. He said most Linux distributors leave their customers liable.

“Everyone is protected except the users,” he said. “We’re trying to alert users there are these problems. We’re trying to do this in a favorable fashion. … The hot potato is being passed. We’re trying to keep them from being burned.”


SCO Group