SCO to government Linux users: Pay up

Government agencies must pay up to $699 for each copy of the Linux operating system that they use, the SCO Group Inc., Lindon, Utah, announced Tuesday in a new licensing program.

However, SCO's intellectual property claims over Linux remain contested by other parties.

"We believe it is necessary for Linux customers to properly license SCO's [intellectual property] if they are running Linux ? for commercial purposes," said Chris Sontag, who is a senior vice president of SCO. Use of any Linux distribution can cause liability, regardless of vendor, the company claimed.

"Government agencies shouldn't be too worried about this until they see more evidence," said Tony Stanco, head of the Center for Open Source and Government and associate director of the Cyber Security Policy and Research Institute at George Washington University.

SCO has claimed that the 2.4 and 2.5 versions of the Linux kernel is embedded with code that SCO holds intellectual property rights on.

At least some of the code in question supposedly comes from the Unix Systems V operating system, a proprietary systems that SCO purchased the rights to from Novell Inc., Provo, Utah in 1995.

In March, SCO sued IBM for $1 billion over misuse of the intellectual property rights to the Unix operating system. The company claimed that IBM inappropriately added some of SCO's Unix proprietary code to Linux.

Other parties remain skeptical of the company's legitimacy to the licensing fees.

Stanco said that SCO's licensing fees are unusual in that a court of law hasn't determined that the intellectual property is clearly SCO's yet. "You don't try to get money until the issues are resolved in your favor," he said.

Blake Stowell, director of corporate communications for SCO said that the IBM suit is unrelated to the present licensing initiative. Although some of the overlapping code comes from IBM, there are other parts of the code that leaked into Linux from other sources, Stowell said.

"We'll be happy to show [agencies] proof, providing they sign a nondisclosure agreement," Stowell said.

John Weathersby, chairman of the Open Source Software Institute said the government clients he works with have no immediate plans to pay the fee. The Oxford, Miss.-based nonprofit Open Source Software Institute was founded in 2001 to promote government use of open-source software, or software in which the source code is included with the software package.

IBM would not comment on if it has plans to pay SCO fees on behalf of its customers using Linux-based IBM solutions.

In May, IBM Corp., Amonk, N.Y., reported that it has more than 75 government customers using Linux solutions, including the Federal Aviation Administration, the Department of Agriculture and the Department of Energy's National Energy Research Scientific Computing Center. Between private and public sector customers, IBM has over 6,300 Linux-based implementations.

"IBM has remains absolutely committed to providing Linux-based solutions to its customers," a spokeswoman said.

In anticipation of lawsuits from SCO, Linux vendor Red Hat Inc., established a $1 million fund to cover legal expenses associated with infringement claims brought against companies from SCO and other companies developing open source software.

"Red Hat has a responsibility to ensure the legal rights of users are protected," said Matthew Szulik, chairman and CEO of Red Hat.

According to the new licensing program, Linux use on a server will cost $699 per central processor unit, or CPU, through Oct. 15. Use on desktop computers cost $199 per copy. Pricing for multiple CPU systems and embedded systems are also available. The pricing structure can be found at

Stowell said the company has no immediate plans to file suit against government agencies using Linux, but rather plans to speak with individual offices about buying licenses first. The company has no dedicated sales office, but does have representatives dedicated to government sales.

SCO reported $64.2 million in revenue for 2002, with a loss of $24.9 million, according to Hoover's Online of Austin Texas.

About the Author

Joab Jackson is the senior technology editor for Government Computer News.

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