SCO raised the spectre of copyright claims against Linux distributors and users back in March this year when it accused IBM of infringing SCO's rights in the UNIX operating system. SCO sued IBM for $1 billion, although this has now been increased to $3 billion.
In May, SCO claimed that Linux is an unauthorized 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 the Linux operating system until further notice.
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. The implication of this was that those companies that did not purchase the license would find themselves facing an infringement suit.
SCO then announced the terms of its UnixWare license, with a promotional price of $199 for a desktop license, and $699 for a server license with one CPU. The price jumps up dramatically after 15th October, to $1,399 for a server license.
The dispute has become increasingly bitter following the lodging of a pre-emptive action against SCO by Linux distributor Red Hat. This asks the court to declare that Red Hat's technologies did not infringe on any of SCO's rights.
This suit was followed by a counter-action from IBM, refuting SCO's claims and arguing that SCO cannot sue over patents that may have been used in Linux, because it was distributing Linux products itself under the GPL (General Public License - an open source license set up in the 1980s).
SCO then responded by saying that the GPL is invalid, with the result that what started out as a breach of contract case has snowballed into an action that threatens the entire open source movement. The Linux community is therefore in a state of upheaval, as commercial end users try to decide how this will affect their businesses.
SCO argues that if Linux distributors are so confident that no infringement has occurred, they should indemnify their end users for any liability. But most take the line exhibited by Michael Dell, CEO of Dell Computer, at a conference in New York this week when he simply said: "We don't offer it."
So SCO now plans to invoice commercial Linux users. On Tuesday, SCO spokesman Blake Stowell told CNet News.com that invoices would be sent out "probably some time this month".
SCO has been subject to a great deal of criticism as a result of its actions. The SCO web site has been the target of several denial of service attacks – where a server becomes overloaded with page requests to the point that it collapses. In late August, the site inaccessible for several days due to a prolonged attack.
It has been facing difficulties in Germany as well. Almost three months ago the company was ordered by a court not to make claims within Germany about Linux infringements on SCO intellectual property rights without showing proof of these claims. As a result the company shut down its web site, but unfortunately one document – a copy of a letter to SCO's partners – was still available. Consequently, SCO has been fined $10,800 by the German court. The offending page has been removed and SCO is appealing the ruling.