In March, SCO accused IBM of infringing its rights in UNIX. SCO sued IBM for $1 billion, although this has since been increased to $3 billion. Then in May, SCO claimed that Linux is an unauthorised derivative of UNIX and that legal liability for the use of Linux may extend to commercial users. It suspended all of its future sales of Linux.
Since then, SCO has registered copyrights in critical UNIX source code (in the US, unlike the UK, there is a system of copyright registration), and in July it announced that it would begin contacting companies about their use of Linux and offer them the chance to purchase a UnixWare license – or risk facing an infringement suit.
SCO has argued that if Linux distributors are so confident that no infringement has occurred, they should indemnify their end users for any liability. Sun Microsystems has already agreed to indemnify those customers who use its Java desktop system or its Solaris operating system, and now HP has announced a more extensive indemnity.
Yesterday the Linux distributor announced that it would indemnify customers against possible lawsuits lodged by SCO. According to CNet News.com the indemnity would be on certain conditions:
In a conference call with reporters, Martin Fink, an HP Vice President, told CNet News that the company had no comment on SCO's case, but added:
"We went through our internal due diligence process and made a conscious decision [that] there was a risk we were willing to take on behalf of our customers."
SCO's response, described by Fink as "an interesting spin", was to say,
"HP's actions this morning reaffirm the fact that enterprise end users running Linux are exposed to legal risks. Rather than deny the existence of substantial structural problems with Linux as many Open Source leaders have done, HP is acknowledging that issues exist and is attempting to be responsive to its customers' request for relief."
SCO called on the other major Linux vendors to follow suit.