SCO to fed Linux users: Pay up

Tony Stanco of the Center for Open Source and Government: Agencies should wait to see more evidence of SCO Group's intellectual property claim on Linux.

Henrik G. de Gyor

A Utah software company is pushing government agencies to pay it up to $699 for each copy of the Linux operating system they use.

The SCO Group Inc. of Lindon, Utah, claims the 2.4 and 2.5 versions of the Linux kernel is embedded with code on which SCO holds intellectual property rights.

"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, an SCO senior vice president. Using any Linux distribution can cause liability, regardless of vendor, the company claimed.

The company has started a new licensing program to collect the fees. However, other parties are still contesting SCO's intellectual property claims over Linux.

"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 in Washington.

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 Corp. of Armonk, N.Y., for $3 billion over misuse of the intellectual property rights to the Unix operating system. The company claimed IBM inappropriately added some of SCO's Unix proprietary code to Linux.

The scheduled court date is April 11, 2005, according to Blake Stowell, director of corporate communications for SCO.

On Aug. 6, IBM filed a countersuit against SCO, claiming SCO lost its intellectual property rights when it distributed its own version of Linux, because it released the software under the open source General Public License.

The public license grants users the right to redistribute freely copies of the software it covers. SCO, then called Caldera, marketed its own distribution of the Linux operating system in the late 1990s.

Stanco said SCO's licensing program is unusual in that a court of law hasn't yet determined the intellectual property clearly belongs to SCO.

"You don't try to get money until the issues are resolved in your favor," he said.

Stowell said 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, he 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 institute was founded in 2001 to promote government use of open-source software, in which the source code is included with the software package.

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

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

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

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

At least one agency, the Defense Department, warned its users of possible licensing issues surrounding Linux. In a May 28 memorandum, John Stenbit, Defense Department chief information officer, instructed the services to review carefully the licensing requirements of any open-source software they used.

Linux is developed under a free software licensing agreement, in which volunteers worldwide contribute to its code base.

According to SCO's 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 .

For instance, the 2,300-processor Linux cluster installed for the Lawrence Livermore National Laboratory, built by Linux Networx Inc., Bluffdale, Utah, potentially could cost the Energy Department an additional $1.7 million in licensing fees under this pricing plan.

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 government sales office, but does have representatives solely doing 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.

Staff Writer Joab Jackson can be reached at

About the Author

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

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