SCO group puts brakes on Linux invoice scheme

The SCO Group has decided not to send invoices to Linux users, despite the company’s claim that the operating system (OS) is unlawfully employing its intellectual property.

“A couple of months ago, we as a company suggested that one of the things we were willing to do was send out invoices,” said Blake Stowell, spokesperson for SCO in Lindon, Utah. “It wasn’t something where there were invoices sitting waiting to be sent – not a single invoice had been printed. We have chosen at this point not to send out invoices because we have been pleased with the progress we’ve had with our licensing program to date.”

On Aug. 5 SCO announced it would sell Intellectual Property Licenses for Linux, which would allow Linux users to run the OS on their servers in binary form only, without violating SCO’s patents, the company said.

SCO claims IBM Corp. illegally submitted its Unix System V code and Unix System V derivative code into the Linux open source project to benefit IBM’s business. SCO claims its code is contained in Linux 2.4 and 2.5 kernels, and is requesting US$3 billion in damages.

While the company has not ruled out the possibility of invoicing Linux users for Intellectual Property Licenses in the future, Stowell said that plan is now on the backburner. One industry analyst said if SCO decided to invoice Linux users without winning the patent infringement lawsuit, it could find itself facing class action lawsuits from users it had invoiced, said Nick Petreley, analyst with the Evans Data Corp. in Kansas City, Mo.

“They are basing these invoices on something they have failed to demonstrate is true,” he said. “I think [SCO is] going to continue talking a big game because that’s helping to drive up its stock price, but as for actually sending out the invoices, they can’t do it until something substantial happens.”

SCO’s Intellectual Property Licenses for Linux cost US$699 for a single processor server, US$1,149 for a dual-processor server, US$2,499 for a four-processor server, US$4,999 for an eight-processor server, US$199 for a desktop computer and US$32 for an embedded device.

SCO also announced Wednesday that it plans to double the price of these licenses after Oct. 31, an increase which was initially slated for Oct. 15.

However, adoption of Linux hasn’t slowed according to a study released by the Evans Data Corp. in August. In fact the study shows that Linux developers are overwhelmingly unconcerned about the SCO lawsuit.

Of more than 400 developers polled worldwide, 70 per cent said the SCO lawsuit would probably not or absolutely not impact their companies’ decisions to use Linux. Twelve per cent said the lawsuit would affect adoption plans and 17 per cent had no opinion.

So far, SCO has remained mum on how many companies have purchased the Linux Intellectual Property license, but did go as far as saying one Fortune 500 company has signed a license, but no names were given, according to Stowell. At press time SCO would not say how many Canadian companies had purchased licenses, but Stowell said there have been multiple inquiries from firms in Canada.

Petreley remains unconvinced that SCO has sold any, if at all.

“They’re talking a really big game, but I have yet to see a single [piece of] concrete, I would say evidence, but there’s more to this than evidence,” Petreley said. “Even the Fortune 500 company, [SCO] won’t reveal who it is. It’s a game to them.”

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