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Sun, HP: SCO probably won't touch us

The companies say SCO Group's attempt to obtain royalties for Unix won't likely affect them, while Red Hat says it will defend itself against any challenges.

Sun Microsystems and Hewlett-Packard say SCO Group's attempt to obtain royalties for inappropriate uses of Unix won't likely affect them, while Linux specialist Red Hat said it would defend itself vigorously against any challenges.

Sun probably will not be affected because the company signed a comprehensive license for Unix years ago, said Sun chairman Scott McNealy.

"We paid a big, big bag of money a decade ago to get IP (intellectual property) rights to do what we wanted to do with Solaris," he said at a press conference announcing a new line of Intel-based servers on Monday. "We've got a free and clear SCO license. Your audit committee won't get a letter if you are using Solaris."

SCO, which acquired the rights to Unix a few years ago, is alleging that part of the Unix source code was copied into Linux and has sent out letters seeking royalty payments from computer companies and large corporations using Linux. The company is in the midst of a legal battle with IBM.

On Monday, Microsoft said it would pay royalties to insulate itself from any legal proceedings. Microsoft, which sees Linux as competition, doesn't sell the operating system. However, the Redmond, Wash.-based software giant said it wanted to protect itself from potential liability arising out of Unix-Windows interoperability.

Sun, HP and Red Hat's reactions to SCO's actions differ in part because each company has a different legal and commercial relationship with Linux.

Sun, for instance, mostly sells versions of Solaris on its servers. Solaris X86, the version that runs on Sun's Intel-based servers, is also compatible with Linux applications, a situation that will not incur liability, McNealy asserted. On Monday, though, Sun said it would begin to distribute Red Hat's version of Linux.

McNealy said he hoped the legal activity wouldn't chill interest in open-source development, but he emphasized that copyrights need to be protected. Recently, Sun told its employees in an e-mail that they would be fired if they kept unlicensed music on their work PCs, he said.

"We think open source is wonderful and good, but we also believe in copyright and the rule of law," McNealy said.

In any event, Jonathan Schwartz, executive vice president of software for Sun, said the company would indemnify any of its customers running Solaris for liability to SCO.

HP, meanwhile, sells Linux servers. Fifteen percent of all ProLiant servers shipped come with the Linux operating system, and Linux server sales will likely increase by 30 percent a year through 2006, said Hugh Jenkins, vice president of marketing for industry standard servers at HP, in a separate interview on the server market.

Consequently, HP is casting doubt on the validity of the SCO claims and their applicability to HP.

"Based on SCO's recent announcement, it appears that HP was one of 1,500 other companies to receive a letter regarding Linux, the company said in a statement. "HP is unaware of any intellectual property infringement within Linux. The complaint is focused on alleged inappropriate behavior by IBM, it is not about infringement by Linux itself of SCO's IP rights."

Red Hat, which sells a version of the Linux OS as well as Linux consulting services, issued an angry retort in the form of an open letter from chairman Matthew Szulik. The chairman didn't name SCO by name, but said Red Hat had always expected someone to try to wrangle damages through legal machinations and that it would defend itself vigorously.

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"With the commercial adoption of solutions based on open source technologies by enterprises, governments, schools and software innovators, legal challenges were expected from entities who face economic consequence by Red Hat's progress in delivering competing alternative solutions," Szulik's letter stated. "Since 1983, lawsuits have become all too commonplace in the software industry. Innovators who challenged proprietary economic models have faced threats to free enterprise throughout the history of commerce."

Oracle chairman Larry Ellison, meanwhile, broadly indicated that Microsoft's settlement with SCO was calculated to hurt the open-source movement.

"All Bill (Gates) says is, 'Give me the opportunity to innovate,' and once again Bill is innovating," Ellison said during a press conference announcing an alliance between Oracle and Sun to promote Sun's Intel-based servers. "You've seen advanced bundling and now you are seeing extreme litigation...They know a lot about extreme litigation."

Microsoft's decision to settle with SCO--and SCO's legal offensive in general--could create some confusion about the legal issues surrounding Linux, said Phil Windley, an independent consultant and former chief information officer for the state of Utah.

"I do think it muddies the waters," Windley said.

Legal concerns are unlikely to deter the most ardent backers of Linux but could dissuade some CIOs who are undecided about whether to use Linux. "I think it probably gives CIOs some pause," Windley said.

But, he added, "I don't think it would have affected me (as a CIO)."