SCO Group Raises Battle Cry Again - InformationWeek

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Software // Enterprise Applications

SCO Group Raises Battle Cry Again

It's official: The company says it will in the next three months target a large Linux user for legal action.

SCO Group has once again applied pressure to the market to pay it for its Unixware licenses or face legal action. CEO Darl McBride said Tuesday that within 90 days his company plans to identify a large Linux end user who hasn't properly paid for the SCO Group intellectual property that he claims is underlying Linux, and "vigorously" pursue legal action against that company.

SCO's strategy for most of this year has been to incrementally increase the pressure on the Linux community to recognize its claims of alleged intellectual property violations.

"We've been meeting with large Linux end users to get them to sign up for licenses," McBride said. He won't name the users or say how many have signed up for SCO Group's Unixware licenses. "We told people it was license or litigate," he said. "This is our move into the next phase."

The story unfolded on another front this week as well: McBride claims that when Novell sold its rights to Unix System V source code to SCO Group, the contract included a clause that barred Novell from selling technologies competing with Unix. But Novell has announced plans to acquire Linux vendor SuSE Linux. Since Linux is a variation on Unix, it's now possible that Novell could find itself faced with legal action by SCO Group once the SuSE acquisition is complete. "When the Novell-SuSE deal is complete, we will take measures to enforce the noncompete agreement with Novell," McBride said. "I don't know that it will turn into a lawsuit. That depends upon how they respond and if they put a competitive product in the marketplace."

McBride confirmed Tuesday that SCO Group has paid Boies, Schiller & Flexner, the attorneys it hired to pursue its lawsuit against IBM, an additional $1 million and given the law firm 400,000 SCO Group shares to cover current and future litigation. Boies, Schiller & Flexner now owns about 3% of SCO Group, says company CFO Bob Bench. As a result of the payout and transfer of shares, SCO Group will take an $8.9 million charge for its fourth fiscal quarter, ended Oct. 31. The company expects revenue of between $22 million and $25 million for the quarter.

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