SCO ponders hike in 'Linux IP' licence fees

The threat of higher indemnity fees in the future may be the only way to shift more SCOSource licences today, because further lawsuits have been put on ice
Written by Graeme Wearden, Contributor
SCO has hinted that it may soon raise the cost of its intellectual property (IP) licences, which it says companies running Linux need to buy in order to avoid being sued.

Many in the open-source community have been angered by SCO's ongoing claim that its proprietary Unix code has been illegally included within Linux. The company is currently involved in legal action against IBM, Novell and Autozone. Darl McBride, SCO's chief executive, revealed last week that his company weren't planning to bring any more lawsuits anytime soon.

This admission has led to speculation that there is now no incentive for companies to move quickly to protect themselves against SCO's lawyers.

SCO has a plan to try and counter such complacency. According to Blake Stowell, SCO's public relations director, firms that elect to sit tight and see if SCO wins could end up out of pocket.

He told ZDNet UK that SCO was "evaluating" its SCOSource programme, and could decide to make it much more expensive for companies to indemnify themselves against attack from SCO in the future.

"Companies that license now may be able to do so cheaper than if they do so later," said Stowell.

Two types of IP licences are currently on offer from SCOSource: "paid up" licences that give permanent indemnity, and annual licences, which vary between one-fifth and two-fifths of the cost of a full version.

SCO may decide not to offer both options in the future and could, for example, decide to insist on an annual payment that would be more lucrative in the long term.

However, interest in the SCOSource programme appears to be tailing off. Stowell said that the company expected to announce "six-figure" revenue for SCOSource for its most recent financial quarter, representing a far cry from the days when it gathered in many millions of pounds from licensees such as Microsoft.

This decline could suggest that most companies believe that SCO will lose its various court cases. If this happened, then the company's claim that Linux contains its IP would be in tatters, and there would be no need for its SCOSource licences.

IBM, which is fighting the claim that it violated its Unix contract with SCO by moving proprietary Unix technology to open-source Linux, declined to comment on the news that SCO could be hiking its SCOSource fees.

One factor behind IBM's reticence could be that the judge handling this lawsuit has urged both parties not to discuss the issue publicly, amid concerns that the case was being fought in the press. If so, IBM's position is somewhat at odds with that of SCO, given McBride's willingness to discuss the legal position last week.

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