SCO Mines Licensing Revenue

By Peter Galli  |  Posted 2003-03-10 Print this article Print

SCOsource initiative is aimed at protecting intellectual property.

The SCO Group is expecting to earn at least $10 million in revenue in the current financial quarter from its newly created SCOsource licensing initiative, designed to derive new licensing programs and products from its intellectual property.

While the company expects much of this revenue to be raised amicably, it is willing to litigate to enforce its intellectual property and other rights.

In an interview with eWeek late last month, SCO CEO Darl McBride said the Lindon, Utah, company has received positive response to SCOsource, including calls from companies that are concerned they could be infringing on its intellectual property.

"We have very positive programs for working through these issues as they arise," McBride said. "Some 95 percent of the companies we are in discussions with are cooperating well, but there are a handful of cases where the discussions are not as amicable."

McBride declined to specify which companies were being uncooperative.

The unlicensed use of SCOs Unix shared libraries is just the "tip of the [intellectual property] iceberg," said McBride, with the company holding a range of copyright, trade secret, patent, source code and licensing properties.

SCO evolved out of Caldera International Inc., which acquired server software assets of The Santa Cruz Operation in 2001.

"Because this range of IP-related issues is so broad-based and there is such a wide range of players involved, were just making sure we move forward very sure-footedly," McBride said.

The latest SCO licensing moves follow news in January that the company was planning to make some users pay for some Unix software they were running, unlicensed, on Linux. The first deliverable from SCOsource was the licensing of SCOs Unix shared libraries under a new product license called SCO System V for Linux. That product lets Linux customers run Unix applications, originally written for SCO OpenServer and SCO UnixWare, under Linux in an Intel Corp. environment.

"There has never been a mechanism in place to license the libraries to individuals and companies until now," McBride said. "In fact, the SCO OpenServer and UnixWare licenses expressly said that the libraries could not be used outside of those two operating systems."

The company in January hired high-profile attorney David Boies and his law firm to investigate whether Windows, Mac OS X, Linux and versions of BSD infringed on the Unix intellectual property it owned.

eWeek has also learned that a market research company is conducting a survey among open-source and Linux shops to gauge how they would feel and react if SCO pursues legal action against those companies it believes are violating its intellectual property and technology rights. The president of an exclusively Linux/open-source shop told eWeek last week that he had recently participated in a 20-minute phone survey that began with a statement to the effect that a company named SCO was pursuing legal remedy to protect its intellectual property. McBride said SCO had not commissioned that research.

Spokeswomen for Linux distributor Red Hat Inc. and IBM told eWeek they have not been contacted by SCO about any violations of its intellectual property or other rights. Wim Coekaerts, principal member of Oracle Corp.s technical staff and its Linux specialist, told eWeek that he was not aware of any specific issues regarding Oracles Linux business. Coekaerts, in Redwood Shores, Calif., also said he has not heard of any issues specific to Red Hat, SuSE Linux AG or UnitedLinux LLC. A Microsoft Corp. spokesman declined immediate comment.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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