Red Hat Attacks, Sues SCO

UPDATE: The Linux distributor files suit against SCO, proclaiming itself innocent of Unix copyright violations.

Red Hat Inc. on Monday fired a warning shot at The SCO Group with a pair of legal actions aimed at disarming SCOs claims of copyright violation over Linux.

Red Hat announced it has requested a pre-emptive judgment to find it innocent of all potential copyright violations. The Linux vendor also announced the formation of a legal fund designed to help smaller Linux firms with their own defenses.

On Monday, Red Hat filed suit in a federal court in Delaware seeking pre-emptive relief against SCO, and its claims that the Linux code base has illegally copyrighted Unix code to which SCO now owns the rights. SCO has yet to file a copyright infringement motion against Red Hat.

Instead, SCO has done Red Hat and other Linux firms damage in the marketplace through repeated "unfounded rumors and innuendo," according to Matthew Szulik, chairman and CEO of Raleigh, N.C.-based Red Hat.

In a statement, SCO said it had not been spreading FUD.

"SCO has consistently stated that our Unix System V source code and derivative Unix code have been misappropriated into Linux 2.4 and 2.5 kernels," the company said in a statement. "We have been showing a portion of this code since early June. SCO has not been trying to spread fear, uncertainty and doubt to end users. We have been educating end users on the risks of running an operating system that is an unauthorized derivative of Unix. Linux includes source code that is a verbatim copy of Unix and carries with it no warranty or indemnification. SCOs claims are true and we look forward to proving them in court."

Szulik said that in addition to the approximately 1,500 letters Santa Cruz, Calif.-based SCO sent to Linux customers warning them they could be in violation of SCOs copyright, SCO had made vague statements to the press alleging that code in Red Hats products violated SCOs copyrights. However, SCO has not allowed a public examination of the code to determine the alleged violations.

"We have tried to resolve these issues in a public way" but have been unable to do so, Szulik said.

Red Hat apparently had tried to negotiate privately with SCO, according to letters between the two companies released by SCO late Monday. In a letter dated July 31 that was written by SCO Chief Financial Officer Robert Bench to Red Hat General Counsel Mark Webbink, Bench states:

"Based on the posture of our litigation and your revised risk disclosures, it is unclear to us the purpose of your July 18, 2003, letter," Bench stated, noting that Red Hat had recently restated its disclosure of risk statements in its financial reports to reflect the possibility that Red Hats code infringed other parties copyrights. "If you desire to enter good-faith discussions to address SCOs intellectual-property claims against Linux, either on behalf of a wider consortium of Linux companies or solely on behalf of Red Hat, we are willing to meet with you for that purpose.

"In any such meeting, we will provide example after example of infringement of our intellectual property found in Linux," Bench added. "Of course, any such demonstration must be pursuant to an acceptable confidentiality agreement and must be intended to further good-faith discussions about resolving the differences between us."


In response, Red Hat filed a seven-count complaint, asking for a declarative judgment that Red Hat had not infringed SCOs copyrights or its trade secrets. Red Hat also charged SCO with violating the Lanham Act, accusing it of unfair advertising and acting in bad faith. Finally, Red Hat said SCO violated four instances of Delaware state law, governing deceptive trade practices, interference and trade libel.

Next page: Red Hat seeks financial damages.