• United States
by Robert Mcmillan

SCO signs up first IP Compliance licensee

Aug 11, 20033 mins
Enterprise ApplicationsIBMLinux

An unnamed U.S.-based Fortune 500 company has become the first major licensee of The SCO Group’s Intellectual Property Compliance License for SCO Unix, according to the Unix vendor.

An unnamed U.S.-based Fortune 500 company has become the first major licensee of The SCO Group‘s Intellectual Property Compliance License for SCO Unix, according to the Unix vendor.

Few details on the licensee or the terms of the deal were available. SCO declined to reveal the dollar amount of the deal, the number of licenses involved, when exactly the deal was signed, or even what type of company signed the contract.

The license was signed some time last week and the licensee was given a “slight discount” on SCO’s $699 per processor server licensing fee, according to SCO spokesman Blake Stowell. “The company that we did this deal with, the number of servers and the dollar figure we consider to be significant,” he said.

SCO unveiled the license last Tuesday, billing it as a way for Linux users to avoid lawsuits over what the company alleges are intellectual property violations in the Linux source code.

More than 300 companies called SCO to inquire about the new license last week, SCO said.

The company launched a lawsuit against IBM in March of this year claiming that Big Blue violated its Unix license with SCO by inappropriately contributing to the Linux source code. SCO subsequently warned Linux users that they could be legally liable for using Linux without the appropriate intellectual property rights.

Last week IBM and Linux vendor Red Hat Inc launched lawsuits against SCO, saying that the company’s claims were without merit.

Observers were quick to blast SCO’s announcement for its vagueness.

“I think this is a public relations move attempting to bolster their case,” said IDC analyst Dan Kusnetzky. “A single person in a remote office in Halstead, Kansas, could have licensed a single copy, and that could count as a Fortune 500 company.”

It is still early for companies to be licensing IP from SCO, Kusnetzky said, because the Utah company has yet to publicly reveal the exact nature of the alleged Linux violations and because nothing has yet been proven in court. “It would seem more than a little premature for organizations to start spending money before it’s clear what’s actually happening,” he said.

Open Source Initiative President Eric Raymond agreed. “It’s clear that this is just another attempt to pre-try their lawsuit in the media,” he said. “Probably some company’s legal department is going, ‘What the hell, for a thousand bucks, we don’t care.’ “

The mystery company’s deal is, however, worth more than a “couple of thousand bucks,” and is significant for more than public relations maneuvering, Stowell said. “The significance is that a company that values Linux and also values the ability to run it without infringing on somebody’s IP was willing to sign up for a license that allows them to run it free and clear,” he said.

The deal is not with Microsoft or Sun Microsystems, two prominent companies that have already signed other licensing agreements with SCO to cover their commercial products, Stowell said.