SCO Considers Linux License Fees

Moves to bring large global enterprise customers into compliance.

The SCO Group is moving to intensify the pressure on IBM and Linux vendors by demanding a royalty fee from businesses for every copy of Linux they use.

SCO, in the middle of a $1 billion-plus lawsuit with IBM, has sent letters to 1,500 of the largest global enterprises, warning them that it believes Linux infringed on SCOs Unix intellectual property rights.

Now SCO is considering asking business users for a fee for every copy of Linux they run distributed by any of the vendors, including Red Hat Inc., SuSE Inc., Debian GNU Linux and Turbolinux Inc., sources said, adding that individual users would likely not have to pay.

The licensing fee would be targeted at all Linux distributions based on the 2.4 kernel; that is where SCO alleges most of the unauthorized Unix code resides. Sources said the price of such a fee or license is expected to be several hundred dollars each.

"SCO CEO Darl McBride is going to take another shot across the bow over the next few weeks," said a senior executive at a major software company. "We know its coming, and theres nothing we can do but wait."

Another source told eWEEK SCO is going to tout the license fee as a way to "legitimize" Linux usage.

Lawyers and others in the open-source community, however, contend the latest SCO move has no merit, is not enforceable and is merely another attempt by the Lindon, Utah, company to boost its revenue and to force a settlement or buyout with IBM.

Since the SCO suit has not yet been heard by the courts, the company cannot legally demand payments from users or vendors, said Tom Carey, intellectual law attorney at the Bromberg & Sunstein LLP law firm, in Boston.