SCO is threatening to sue commercial Linux users, charging that Linux is an "unauthorized derivative" of Unix. The company also says it plans to suspend Linux sales, and focus on Unix and its Web services technology, SCOx, introduced in April.

"With this announcement, we are letting people know that Linux is an unauthorized derivative of our Unix system V source code. We need to let people know that legal liability will rest with the Linux users," said Chris Sontag, senior VP and general manager of SCOsource, the company's intellectual property licensing and protection program.

SCO said it will continue to support existing SCO Linux and Caldera OpenLinux customers and hold them harmless from SCO intellectual property issues regarding SCO Linux and Caldera OpenLinux products.

SCO sued IBM in March, charging that IBM violated SCO's intellectual property by including Unix source code in Linux. The widely criticized lawsuit seeks more than $1 billion in damages. IBM denied the claims.

While SCO didn't explicitly say it plans to sue Linux users, it dropped some broad hints.

In a letter it sent to 1,500 of the world's largest companies, SCO said, "We believe that Linux infringes on our Unix intellectual property and other rights. We intend to aggressively protect and enforce these rights. Consistent with this effort, on March 7, we initiated legal action against IBM for alleged unfair competition and breach of contract with respect to our Unix rights."

The letter adds, "Similar to analogous efforts underway in the music industry, we are prepared to take all actions necessary to stop the ongoing violation of our intellectual property or other rights."

Bruce Perens, an open source consultant, scoffed at SCO's threat. He said Linux users have nothing to fear, and should continue using the operating system

"These last couple of press releases have followed a pattern. They have been written to FUD Linux," Perens said. He noted that earlier this month, SCO blamed unnamed open-source supporters for a denial-of-service attack on the company's Web server, citing as evidence the fact that the attacks occurred soon after developments in the IBM lawsuit. "It just sounds like a lot of air to me," Perens said.

He noted that SCO's own distribution of Linux might hurt its chances in a lawsuit, since SCO released that code into open source. Any Unix code contained in SCO's Linux would also be part of the open source license, Perens said.

If identical code appears in both Linux and Unix, it's more likely to have made its way from Linux to Unix than vice versa, if only because the source code for Linux is public while the source code for Unix is proprietary, Perens said. "We've had the best engineers working on Linux for three years now. I can't believe that SCO knew things about Itanium that Hewlett-Packard, that originated the Itanium architecture, didn't know," Perens said.

SCO has presented no evidence to support its claims, because it doesn't have any, Perens said.

Some observers have speculated that SCO is angling for a big settlement from IBM, perhaps even to be bought out by IBM. But Perens said that outcome is unlikely. "IBM has had a chance already, so why didn't they buy the company? One reason is that IBM is not afraid that they'll lose, so why buy SCO when you can grind them into the Utah dirt. Also, IBM does not want the message out that they can be blackmailed."

Perens predicted SCO will lose in court.

SCO's Sontag said that even if Unix code is in SCO's own Linux--which he did not say is the case--it would not invalidate SCO's claim. Some of Unix intellectual property may have found its way into SCO's own Linux, but if it was there it would have been placed there by "third parties who violated their contract and licenses," and "inadvertently distributed for a period of time" by SCO.

He added, "The issue is that SCO's intellectual property is in Linux, and that's where we have to stay focused."

SCO has kept its evidence in the case confidential until now, but will be willing to share the information under nondisclosure agreements, Sontag said. "We have to be careful in terms of how we lay the evidence out. This is a legal proceeding," he said.