SCO Sues First Linux Users

The SCO Group has filed suit against Memphis-based auto parts chain AutoZone and automaker DaimlerChrysler AG for violating SCO's Unix copyrights through their use of Linux.

SCO has threatened to sue Linux users in the past, and is currently involved in Linux-related lawsuits with IBM, Red Hat, and Novell. But until Wednesday, it had not launched legal action against a Linux customer.

The Lindon, Utah, company sued IBM in March of 2003, claiming that IBM illegally contributed SCO's intellectual property to the Linux source code. It has since claimed that Linux contains code copied directly from the AT&T Unix software SCO acquired in 2000, and has warned Linux users they could be sued unless they purchase $699-per-server software licenses from SCO.

The suit against AutoZone, filed in the U.S. District Court in Nevada, asks for injunctive relief and damages to be determined in a trial.

The suit against DaimlerChrysler will be filed in Oakland County Circuit Court in Michigan. That lawsuit seeks undetermined damages and alleges that DaimlerChrysler violated its software licensing agreement with SCO by refusing to provide a requested "certification of compliance" as part of a software audit. The suit asks the court to permanently bar the automaker from further violations of the software agreement and seeks an injunction requiring it to "remedy the effects of its past violations" of the agreement.

Ray Pohlman, a spokesman for Memphis-based AutoZone, said the company has not yet seen the lawsuit so he could not comment. "It is our understanding, however, that SCO has sent letters to hundreds of companies, making similar allegations," he said. Pohlman would not discuss how AutoZone uses Linux inside its business.

Mary Gauthier, a spokeswoman for DaimlerChrysler, declined to comment because the company has not yet received the lawsuit. But information on IBM's Web site indicates that DaimlerChrysler has been using Linux and a 108-node IBM server cluster for vehicle crash analysis and simulation since 2002.

Legal Battles

SCO's critics say that the company has yet to prove its case, and that SCO's license, called the Intellectual Property License for Linux, amounts to little more than extortion.

In November, SCO claimed to be just 90 days away from launching a lawsuit against an end user, but the deadline passed recently without a suit having been filed. The company was late in filing the suits because it had hoped to settle with customers before bringing litigation, says Blake Stowell, an SCO spokesperson. "Our hope as a company was that litigation would be a last resort," he says. "In the end, I think we took a little bit more time to work things through with customers rather than go ahead with litigation.

Though SCO is engaged in lawsuits with Linux distributors Red Hat and Novell, it has not sued either company over the alleged copyright violations. When asked why his company had decided to sue end users rather than Linux distribution vendors, Stowell says: "If we did that, in some cases it could really hurt Linux, which is not necessarily something we want to do as a company. ... If you go and sue a Linux distributor, that could potentially hurt the Linux marketplace."

"Frankly, the GPL pushes all of that liability to the end user," Stowell adds.

Proving Its Case

If Linux does illegally contain SCO's copyrighted code, the company could have a copyright infringement case against Linux users, because users inevitably copy software when they use computers, says Jeffrey Neuberger, a partner with Brown Raysman Millstein Felder & Steiner LLP, who has been following the case. "If you buy something preinstalled on your hard drive, you're making a copy of that by installing your software into RAM," he says.

Should SCO prove its case, the company could seek statutory damages that range anywhere from $200 per infringement to $150,000 per infringement, Neuberger says.

Lawsuits against Linux customers could also further SCO's case against IBM, which was recently amended to include copyright infringement claims. "It's sort of a classic way of putting a pressure on a company like IBM," says Neuberger.

The suits could also create liabilities for SCO, he says. "If their lawsuit isn't well founded, they could at a minimum be subject to sanctions," he says. "If IBM feels that the SCO claim isn't well founded, they could actually sue SCO for tortious interference."

Todd R. Weiss of Computerworld contributed to this report.

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