Software // Enterprise Applications
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10/30/2003
04:12 PM
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SmartAdvice: Strategic Value, Employee Retention

Here's what The Advisory Council recommends you look at in three key areas of business technology: proving IT's strategic value; what to do about SCO's lawsuit involving Linux; and IT employee retention

Topic B: Do The SCO Group's legal actions mean we should halt deployment of Linux?

Our Advice: While we're not intellectual-property lawyers, we believe it's unlikely that SCO's legal actions will prevail. As such, we wouldn't discourage you from continuing Linux deployments.

SCO has raised several different legal issues, of which two are central. First, the subject of its suit against IBM is that IBM allegedly violated its Unix license agreements by copying code from Unix into Linux. This is a breach-of-contract issue, including trade secret misappropriation and/or copyright infringement, and directly involves nobody except SCO and IBM. Until the facts of the case are presented in court, any predictions of the outcome are pure speculation. That said, IBM is a company with a deeply ingrained culture of strict enforcement of intellectual-property rights which, in our opinion, makes SCO's allegations unlikely.

Related Links

SCO Scuttles Sense, Claiming GPL Invalidity

Questioning SCO: A Hard Look At Nebulous Claims

SCO Intellectual Property License For Linux

Red Hat Takes Aim At Infringement Claims



Second is the claim that if Linux does include code that was illegally copied from Unix as alleged, then Linux users need to purchase Unix licenses. Given that Linux is licensed under the GNU General Public License (GPL), which SCO itself had used for its now-discontinued Linux distribution, we find it unlikely that SCO could make this stick, even if code was copied. Moreover, we expect that the Linux development community would quickly replace any code found to be illegally copied. Your CFO might want to establish a "Linux license contingency account," but we certainly wouldn't recommend actually paying SCO anything unless the IBM suit is resolved in SCO's favor.

Bottom line, we believe that SCO's legal actions are motivated by the desire to (successfully so far) boost its stock price in the face of declining UnixWare and OpenServer revenues, or to get IBM or another major vendor to purchase the company, rather than by a realistic expectation of Linux intellectual property license revenues prevailing in court.

-- Peter Schay

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