The SCO Group is believed to be preparing to launch legal action within the next few days against at least one large IT company in the U.S. for unlicensed usage of SCO Unix technologies.
SCO CEO Darl McBride on Wednesday declined to confirm or deny reports eWEEK has received that SCO is preparing to launch such legal action. But he did confirm that the Lindon, Utah-based firm is expecting to make at least $10 million in revenue in the current financial quarter from its SCOsource licensing initiative.
SCO, formerly Caldera International Inc., recently created the SCOsource division to create new licensing programs and products for its intellectual property.
That move followed news last month that the firm 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 its 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 environment.
“There has never been a mechanism in place to license the libraries to individuals and companies until now. In fact, the SCO OpenServer and UnixWare licenses expressly said that the libraries could not be used outside of those two operating systems,” McBride said at the time.
At that time he also confirmed to eWEEK that the company had hired high-profile attorney David Boies and his legal firm to investigate whether Windows, Mac OS X, Linux and versions of BSD infringed on the Unix intellectual property it owned. As SCO was concerned about a number of other issues relating to its IP, it had approached Boies to deal with the matter.
“We wanted to find a guy who was used to dealing with complicated legal issues,” SCO CEO Darl McBride said.
In an interview with eWEEK on Wednesday, McBride said the company had received a lot of positive response to its SCOsource initiative, including calls from companies who were concerned they could be infringing on its intellectual property.
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“We have very positive programs for working through these issues as they arise. Some 95 percent of the companies we are in discussions with are co-operating well, but there are a handful of cases where the discussions are not as amicable,” he said, declining to be more specific about which companies were being uncooperative.
While SCO expected to get at least $10 million in revenue from SCOsource-related activities in the current quarter, “we cannot predict at this point what happens to that revenue stream in coming quarters. Its very early on in the process and things are mostly moving forward well for us in that regard,” he said.
But the unlicensed use of its Unix shared libraries was just the “tip of the iceberg as there are so much IP were dealing with here, ranging from copyright, trade secrets, patents, source code and licensing issues.
“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. We dont want to start running before we can walk. Were trying to take things in the right order,” McBride said.
However, he declined to confirm or deny reports eWeek has received that SCO is preparing to launch legal action over the next few days against at least one of the largest IT companies in the U.S. around its unlicensed usage of SCO Unix technologies.
SCO on Wednesday also reported a net loss of $724,000 or 6 cents a share for the first quarter of fiscal 2003 ended January 31, 2003. That loss came on the back of revenue of $13.5 million, and compared to a net loss of $11 million or 77 cents a share on revenue of $17.9 million for the same quarter the prior year, McBride told reporters during a teleconference.
“But, for the first time in our history we generated positive earnings before interest, taxes, depreciation, and amortization of $361,000 this past quarter compared to negative $9.2 million in the comparable period a year ago,” he said.
McBride said SCO expected revenue for the second quarter, ending April 30, 2003, to be in the range of $23 million to $25 million. That forecast was based on anticipated revenue from its current operating platforms of $13 million to $15 million, and from $10 million in revenue from its SCOsource licensing initiative.
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