Lawyers: SCO action serious for IT

The SCO Group Inc.’s legal action against IBM Corp. on Linux code, now broadened to include other Linux users, has serious implications for the IT industry, say lawyers.

SCO alleges that Linux includes some of the code it created for its version of Unix, in possible breach of copyright or trade secrets.

The allegation would not normally be a threat to the agile open source industry, which would simply recode those portions of Linux alleged to be in breach, said lawyers Michael Wigley and Stuart van Rij, speaking at a seminar on IT contracts last week. The trouble is, SCO is not revealing which parts of Linux its threatened action relates to, other than to selected parties under strict nondisclosure agreements.

The implications are not limited to open source, they say. Traditional closed source software almost always contains components obtained from third parties, van Rij and Wigley pointed out.

“The customer is very reliant on the software developer/supplier getting a proper licence for its use. That’s one reason why a good IT contract contains an unlimited indemnity as to intellectual property.”

However, the problems do not end there. Under many countries’ law, the claimant may “in theory at least” be able to get an injunction stopping the customer from using software allegedly in breach of its intellectual property rights.

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