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SCO update: indemnification anyone?

Posted 01/15/2004 @ 2:24 PM
by Eric Bangeman

Linux vendors are increasingly thumbing their collective noses at SCO. The lastest one to do so is also the newest: Novell (which this week completed its November 2003 US$210 million acquisition of SUSE) has decided to indemnify customers of SUSE LINUX against any possible legal action by SCO.

Novell spokesperson Bruce Lowry told internetnews.com the decision was not motivated by any particular company. "What indemnification does is address the problem and give our enterprise customers a measure of protection against copyright challenges," Lowery said. "We have a distribution and now we have unique legal rights over that issue of the business." Novell also said it plans on announcing a special program where Linux users who are not currently its SUSE LINUX customers can stand under the company's umbrella indemnification program.

Novell is now the second major vendor (the first being HP) to offer its customers protection against future legal saber-rattling by SCO. Those so inclined can read Novell's correspondence (Zip file) with SCO, which they have recently made available. Another indication of how seriously the industry is taking SCO's legal threats is the decision by IBM and Intel to contribute to a Linux legal defense fund. The fund is the creation of Open Source Development Labs, a not-for-profit organization working to further the adoption of Linux. Thus far, they have received US$3 million in contributions towards a goal of US$10 million. The market is not reacting kindly towards SCO right now, as its stock lost nearly 10% of its value upon the announcement of IBM's and Intel's contribution. For its part, SCO is taking a hard line against the moves of Novell, IBM, and Intel, stating

"We believe Novell's indemnification announcement is significant for a couple of reasons. By announcing the program they are acknowledging the problems with Linux. Through the restrictions and the limitations on the program, they are showing their unwillingness to bet very much on their position."

That is a fascinating bit of spin from a company that once claimed that no one would offer any sort of indemnification because of the overwhelming truth of SCO's claims. In the meantime, SCO must still fully comply with a judge's mandate that they produce the exact Linux code claimed to be in violation of their Unix ownership rights. SCO has posted a Notice of Compliance on its web site, but upon closer reading, it turns out that they are actually not yet done complying. Indeed, they have failed to produce all documents requested by IBM, including the kicker

4. To identify and state with specificity the source code(s) that SCO is claiming form the basis of their action against IBM. This is to include identification of all Bates numbered documents previously provided.

SCO is blaming their failure to cough up everything required by the court order on a number of factors, including the busy holiday season. Apparently, they were a little tardy on their Christmas shopping and all the time spent running back and forth to Wal-Mart distracted them from more important things like . . . say . . . pointing out the exact code they claim as the basis for their complaint. As we reported last month, SCO's complaint against IBM cannot go forward until they have fully complied with the court order, and it is unlikely the judge will be impressed with its excuse. Perhaps we are nearing the point where the world will see that SCO is like the foolish man who built his house on a foundation of sand.

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