CA named as SCO licensee

Software giant Computer Associates Inc. has licensed The SCO Group Inc.'s Intellectual Property License for Linux, SCO Chief Financial Officer Bob Bench confirmed on Wednesday. Two other companies, natural gas supplier Questar Corp. and manufacturer Leggett & Platt Inc. have also signed up for the controversial licensing plan, Bench confirmed, bringing the total number of publicly announced licensees to four.

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SCO maintains that the Linux operating system contains numerous violations of its intellectual property, and in August, the Lindon, Utah, company began offering the IP License for Linux to select companies, saying that they could avert the risk of future litigation by paying $699 for each of their computer processors running Linux.

On Monday, SCO revealed that EV1Servers.Net, the hosting division of Houston's Everyones Internet Ltd. had signed up for the IP License for Linux.

Computer Associates (CA) was one of three companies named as IP License for Linux licensees in a February 4, 2004 letter written by SCO's attorney, Mark J. Heiss of the firm Boies, Schiller & Flexner LLP and addressed to David R. Marriott of the firm Cravath Swaine & Moore LLP, who is representing IBM Corp. in a lawsuit between the two companies. The letter was submitted into evidence by IBM and published on the Groklaw.net Web site.

In an interview on Wednesday, SCO's CFO confirmed that the three companies were licensees, and claimed that his company had now signed up somewhere between 10 and 50 IP License for Linux customers.

The company's SCOsource program, which seeks licensing fees for SCO's intellectual property, booked US$20,000 in revenue for its most recent quarter, Bench said, all of it from sales of the IP License for Linux. SCO's CFO could not predict how much SCO expected to make from the licenses during its next quarter, however. "We have many companies that we're talking to right now," Bench said. "We don't know how quickly they will move."

Questar, one of the licensees mentioned in Heiss's letter, said that its decision to purchase the IP Licence for Linux was a matter of simple economics. "Our usage of (Linux) is so small and isolated that's why we went ahead and signed the contract.," said Chad Jones a spokesman with the Salt Lake City company. "This was small enough that we made a business decision based on the modest cost of SCO's claim that it was in our interest to settle rather than litigate this thing," he said.

Observers were puzzled about CA's decision to purchase the license, suggesting that by supporting SCO, CA might hurt its image as a supporter of Linux.

"What were they thinking?" said Bruce Perens, one of the founders of the Open Source Initiative. "I think this sends a very strange message and I'd like to hear a real explanation out of CA."

Charles King, an analyst with Sageza Group, said it made little sense for any company to purchase SCO's license. "The IP (intellectual property) that SCO claims has still not been proven or upheld in court, so what are you buying? As far as I can see it's the equivalent of giving the neighborhood bully 25 cents so he doesn't steal your lunch next week."

CA declined to comment on this story. Representatives from Leggett & Platt did not return calls seeking comment.