The SCO Group raised the stakes last week in its bid to get money for its Unix System V source code, which it says was illegally used to make Linux an enterprise-class operating system. The company is focusing a litigious eye on Linux users, giving them the choice to either buy licenses for UnixWare or possibly face legal action.

SCO Group didn't directly threaten users with lawsuits. But the vendor said it will "hold harmless commercial Linux customers that purchase a UnixWare license against any past copyright violations and for any future use of Linux."

The UnixWare licenses in question support run-time, binary use of Linux based on kernel version 2.4 and later and shelter Linux users from any legal fallout resulting from SCO Group's multibillion-dollar lawsuit against IBM. SCO Group is suing IBM for allegedly using SCO's copyrighted Unix System V code to enhance Linux. "IBM shared derivative works with the Linux community," says Chris Sontag, senior VP and general manager of SCO Group's SCOsource division. "That's been very damaging to SCO. It was not IBM's code to contribute."

SCO Group last week said other Unix licensees also may be guilty of leaking source code or software derived from that source code to the Linux kernel and that it might pursue similar lawsuits against them. Sontag wouldn't mention names, although he says Sun Microsystems and Hewlett-Packard are in good standing and won't face legal threats. Unix licensees Fujitsu, NEC, and Silicon Graphics could be in the line of fire, speculates Bill Claybrook, the Aberdeen Group's open-source research director.

SCO Group has taken its case a step further by obtaining the Unix System V source-code copyright registrations needed to pursue its lawsuit. The registration of the copyrights was a formality, but SCO Group couldn't get a legal case into court without them, says Melise Blakeslee, a partner with law firm McDermott, Will & Emery.

Users, meanwhile, need to understand that Linux end-user license agreements are an "as is" contract, meaning Linux users aren't protected from copyright or intellectual-property infringement claims, Blakeslee says. Potential liability "is one of the things an end user must consider with using open-source code," she adds.

SCO Group's claims and its UnixWare licensing proposal haven't changed some business-technology managers plans to deploy Linux. "My CIO and I have had conversations about what SCO is doing, but we have no plans to change our direction," says John Weeks, director of technology for Mutual of Enumclaw, a division of Enumclaw Insurance Group. The insurance company's financial database runs on SuSE Enterprise Linux on a four-processor IBM xSeries server. "We're even thinking about adding Linux partitions to our mainframe," he says.

The legal tussle also hasn't scared Unilever, a joint venture of Unilever Plc and Unilever NV. The $49 billion-a-year consumer-products company last week joined the Open Source Development Lab, a global consortium that previously included only technology vendors pushing Linux adoption. Unilever in January revealed plans to migrate IT systems in the 80 companies it operates from Unix to Linux.

Analysts are skeptical of SCO Group's move to get businesses to buy UnixWare licenses. "They're trying to scare people into buying these licenses as protection," Aberdeen's Claybrook says. SCO Group "may have been wronged. But I don't know why everyone in the world has to pay for it, even before they've won their lawsuit."

SCO Group has a lot to gain by convincing Linux users to invest in UnixWare licenses. UnixWare costs about $1,000 per server, and there are about 2.5 million servers using Linux. That could add up to billions of dollars in additional revenue.