Novell offers indemnification to SuSE customers

On the same day it completed its US$210-million acquisition of SuSE Linux AG, Novell Inc. also announced a plan to support enterprise Linux customers with a new Linux indemnification program.

The program was designed by Novell to offer additional protection to SuSE Linux’s enterprise server customers against what the company calls “certain intellectual property challenges to Linux.”

One major example of these intellectual property challenges comes from The SCO Group, which claims that it holds the rights to the Unix operating system software which, in SCO’s opinion, Linux is based on.

In a letter written by Darl McBride, president and CEO of The SCO Group on May. 12 of last year and addressed to Novell’s chairman and CEO, Jack Messman, McBride called Linux a “Unix-like operating system” that has emerged in recent years and has been distributed in the marketplace.

McBride went on to say that SCO believes that Linux is, “in material part, an unauthorized derivative of Unix.” He added that many Linux contributors were originally Unix developers that had access to Unix source code distributed by AT&T Corp., which were subject to confidentiality agreements including confidentiality of the methods and concepts involved in software design.

SCO claims that it has evidence that portions of the Unix System V software code, which SCO owns, has been copied into Linux and that additional portions of the Unix System V software code have been modified and copied into Linux.

Stemming from its belief that the Unix System V software code is now being used as a part of the Linux code, SCO filed charges against IBM Corp. on Mar. 7 of last year for “alleged unfair competition and breach of contract with respect to [its] Unix rights.”

In response to SCO’s letter, Novell’s Messman sent a letter to McBride chastising him for his vagueness and leaving many critical questions unanswered. Examples of these questions included: what specific code was copied from Unix System V?; where can we find this code in Linux?; who copied this code?; and why does this alleged copying infringe SCO’s intellectual property?

“SCO continues to say that it owns the Unix System V patents, yet it must know that it does not,” Messman noted. “A simple review of U.S. Patent Office records reveals that Novell owns those patents.”

Nonetheless, along with the completion of its purchase of SuSE Linux on Tuesday, Novell said its indemnification program will provide enterprise customers with additional reassurance about deploying Linux within their organizations and reducing adoption barriers for Linux.

Customers will be protected for up to 1.25 times the cost of their support contract and licensing fees with Novell, according to the company.

Novell’s indemnification program is offered for copyright infringement claims made by third parties against registered Novell customers that obtain SuSE Linux Enterprise Server 8 and that after Jan. 12, 2004, obtain upgrade protection and a qualifying technical support contracts from Novell or a participating Novell or SuSE Linux channel partner.

The company also said that it holds “unique contractual and intellectual property rights” due to its position in the historical ownership chain of Unix and UnixWare. These rights include Novell’s right to license Unix technology pursuant to a technology license agreement between SCO and Novell, including Novell’s right to authorize its customers to use that Unix technology in their internal business operations.

It is unclear whether Hewlett-Packard Co.’s indemnification program — which the company put in place last September — has actually helped its Linux sales, said Bill Claybrook, vice-president of Linux strategy with industry research firm Harvard Research Group Inc. But indemnification of any software — proprietary or open source — is good business, Claybrook said.

“Anybody that sells code should indemnify their customers,” he said. “If they’re selling software products…then they should stand behind their products. I don’t care if they’re proprietary or open source.”

Linux vendors such as IBM and Red Hat Inc. — both of whom are currently engaged in lawsuits with SCO — should also indemnify their customers, Claybrook said.

Novell said it is also planning a special program for Linux users that are not currently Novell SuSE Linux customers, whereby they can become Novell SuSE Linux customers and participate in the indemnification program.

– With files from IDG News Service

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