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The Empire Strikes Back

IBM, Red Hat sue SCO

By Yvonne L. Lee

September 1, 2003 — (Page 1 of 2)
The action scenes were as complex as in a Star Wars movie, as Red Hat Inc. and IBM Corp. sued The SCO Group, and SCO followed by unveiling a pricing plan for corporate users to purchase Unix licenses for their Linux servers.

On the first day of IDG's LinuxWorld Conference, held in San Francisco in early August, Red Hat announced it was suing SCO for unfair competition, false advertising, unfair and deceptive acts, trade libel and interference with prospective economic advantage. At the same time, Red Hat announced the Open Source Now Fund to cover legal expenses associated with infringement brought against companies developing software under the GNU General Public License, and donated the first $1 million to the fund.

Later that week, IBM, the subject of SCO's $3 billion trade secrets suit, filed a countersuit against SCO, charging that SCO violated the GPL, that it improperly claimed the right to revoke IBM's Unix license, and that SCO directly infringed on "no fewer than four" of IBM's patents.

Meanwhile, SCO announced that it planned to sell a special SCO Intellectual Property License for Linux (www.sco.com/scosource/linuxlicense.html) for US$699 per processor to companies that wanted to run Linux and avoid the possibility of being sued. That license price is set to increase to $1,599 per processor after Oct. 15. SCO announced it had a single unnamed Fortune 500 customer.

Red Hat filed its legal complaint because SCO had named it as a possible target for future lawsuits, said CEO Matthew Szulik at a conference announcing the suit and legal fund.

"For the past two months, we have listened to innuendo and rumor and unfounded claims that have been launched against our customers in face-to-face meetings with investment analysts, [and] in face-to face meetings with other analysts regarding unfounded claims associated with Linux and the Linux community," he said. "In a recent conference, Red Hat was mentioned by name and threats were launched on behalf of the SCO organization against the entire Linux industry. We've been patient. We've listened, but when our customers and the entire industry is threatened, it's time to act."

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