SMBs in the middle of SCO Linux dispute

The battle began in March when SCO launched a $3 billion lawsuit against IBM claiming that it had infringed intellectual property rights, specifically its UNIX contracts with SCO, by illegally copying SCO controlled UNIX source code into its Linux platform. IBM hit back with a counter lawsuit in August with four patent infringement claims which was swiftly followed by Red Hat which sued SCO claiming that the company’s intended to harm Red Hat and discredit Lennox. Red Hat’s lawsuit claims damages and seeks a judgment barring SCO from continuing with its assertions that Red Hat is infringing SCO’s intellectual property rights. In response SCO filed to dismiss the Red Hat lawsuit.
While the IBM court case is not expected to be heard until the summer of 2005, Red Hat hopes that its legal action will be completed by the end of next year at the latest. Not the least reason for Red Hat’s urgency is that Linux is making an impression in the SMB marketplace and delays and uncertainty could give Windows an advantage. The most recent survey from Jupiter Research showed an impressive 19 percent of SMBs were using Linux on the desktop. Senior analyst, Joe Wilcox, said that Linux server successes were well documented by the desktop usage was a surprise. Red Hat has six percent of the SMB desktop in the Jupiter survey of several hundred businesses. On other battlefronts SCO has also cited the example of SGI misappropriating copyrighted attributions from UNIX System V code into Linux and in an open letter from the SCO Group CEO, Darl McBride, criticized the open source community for running a development process that does not check that IP are legitimate.

Prepared to take legal action

In the meantime, in the belief that it has grounds to do so, SCO is pressing ahead in a bid to recover license fees from Linux corporate users to the tune of several hundred dollars each. SCO has even stated that it will be prepared to take legal action against those end-users who refuse to pay up in order to recover license fees from them. According to Chris Sontag, senior vice president and general manager of SCOsource, the corporate users are responding positively to SCO’s pursuit of licensees and he is confident they will pay up. Customers are demonstrating a willingness to having a dialogue and after SCO had laid out its case, “I would say with about 90 percent plus, there is a desirability to move forward and discuss terms of contract that are specific to the requirements of that organization,” he said.
“We have decided that the approach of meeting with customers and providing information to them has been so well received and so positive that we view that that is the most appropriate means by which to move forward. “We are not going to be sending out invoices or other things but are having discussions with the customers and allow them to ask questions answered face-to-face. That is an approach that we’re finding most effective,” he continued.
Sontag said that SCO already has a number of Linux users who are “very close” to signing up to its license program but declined to reveal names citing confidentiality agreements prevented him from doing so. He said that he is “extremely optimistic” that companies are going to pay Linux license fees to SCO even if it means taking them to court.

So far minimal impact on Linux

Conversely, Stacey Quandt, principal analyst at the Open Source Development Labs, a global consortium of technology companies dedicated to accelerating the adoption of Linux, said she thinks it highly unlikely that users will hand over money to SCO. “I don’t see any end-users paying [SCO] for licenses. (Corporate users) are waiting this out because why would you to pay a license fee for something that hasn’t been proven? It’s possible for customers may get an invoice but why would you pay it?” she said. Quandt noted that, so far, SCO’s actions have had minimal impact on Linux end users nor the overall adoption of the OS. “I have not spoken with one customer who has delayed the deployment of Linux or decided to deploy a different operating system so I think it has had a minimal impact on users,” she said. Users should continue to deploy Linux and there is no need for them to wait for a conclusion to the IBM court case, she added.
Bryan Sims, associate legal council and VP of Linux distributor, Red Hat, demurred however and said he felt that waiting for the legal ruling would be prudent. Nevertheless, he said: “We believe that we are confident we are going to prevail in our lawsuit against SCO so we are not sure why any end user would, in the face of both the IBM lawsuit and our lawsuit, want to pay SCO for anything.”

Is there really no case?

Corporate users are not taking the SCO claims seriously, according to Don Marti, president of the Silicon Valley Linux User Group. “A big reason for this is that everybody who is in a position to actually check the SCO claims seems to feel there is not much of a threat.” Members of the Silicon Valley Linux User Group’s members have called SCO to try to find out what the situation is, he said. They have done so more in the spirit of trying to establish the legality of SCO’s action rather than in an attempt to seriously want to give them any money, he added. “It would be ludicrous for a user to pay for something on the basis of what SCO has said so far. Every time when SCO has said some statement of fact that you can actually check it has turned out to be either wrong or misleading,” said Marti. Few businesses were delaying implementations based on SCO’s actions, he said. “I know of two companies, one of them put a Linux migration project on hold and. the other which ended up raising some questions about a Linux project early in the sales cycle, but those two are definitely the exception not the rule. Most of the Linux customers are treating this case as a sideshow amusement, not as a serious case,” he said.
European users also are not worrying too much about SCO’s claims either, according to Paul Sladen, the organizer of the UK’s GNU/Linux Users’ Group. “I’ve seen people at LUG meetings, just laughing about SCO and wondering what story they’ll try on next week. Everyone but SCO is saying the same thing about the case. “There is no case”, he said. “People ask me about SCO. We talk about the case and after being given both sides of the story, people often feel embarrassed, even upset, at being deceived.”

Elspeth Wales
Elspeth Wales