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SCO Confronting Its Creation

Company's CEO is taking precautions as the head of the 'most despised' tech firm.

March 05, 2004|From Bloomberg News

Darl McBride, chief executive of SCO Group Inc., says he sometimes carries a gun because his enemies are out to kill him. He checks into hotels under assumed names. An armed bodyguard protected him when he gave a speech last month at Harvard Law School.

Linus Torvalds, creator of the Linux operating system, calls SCO "the most despised company in technology."

The reason: SCO Group is claiming rights to the Linux open source software code that thousands of users and supporters say should have no owner. SCO filed a $50-billion suit against IBM Corp. last year and on Wednesday turned on Linux users DaimlerChrysler and AutoZone Inc., seeking an injunction and unspecified damages.

For The Record
Los Angeles Times Sunday March 14, 2004 Home Edition Main News Part A Page 2 National Desk 1 inches; 68 words Type of Material: Correction
SCO lawsuit -- Articles in the Business section about SCO Group Inc.'s suit against IBM Corp. over Linux software have reported different dollar amounts that SCO is seeking. A Feb. 7 story referred to a $5-billion lawsuit against IBM; a March 5 article described it as a $50-billion suit. The amount varies depending on how punitive damages are calculated. SCO is suing for $5 billion plus punitive damages.

"We are fighting the big battle," McBride said in a telephone interview from his office at SCO headquarters in Lindon, Utah, 40 miles south of Salt Lake City.

McBride, 44, is pitting SCO against an industry it once helped develop. Less than two years ago SCO, formerly Caldera International Inc., was helping to form a standard version of Linux to compete with Microsoft Corp.'s Windows. Once McBride took the helm in June 2002, SCO changed tack, hired attorney David Boies -- who won the government's antitrust suit against Microsoft -- and began claiming that Linux users infringed SCO's intellectual property.

Linux has attracted thousands of individuals and firms, some of whom see it as the only credible threat to Windows. Others use it because it's cheaper.

The software is now being used by companies ranging from DaimlerChrysler, the world's largest maker of luxury cars, to Lehman Bros. Inc., the fourth-largest U.S. securities firm by capital, to Google Inc., the world's most widely used Internet search engine. Lockheed Martin Corp., the world's largest defense contractor, also has servers that run on Linux as part of its computer network.

IBM pushes computers that run on the Linux operating system. Shipments of Linux-powered server computers, fast machines used to run websites, rose 53% in the fourth quarter, more than double the rate of Windows servers, according to market researcher IDC.

McBride and SCO are more hated than Microsoft, the world's largest software maker, and its Chairman Bill Gates, according to some Linux backers. That's because SCO, once a backer of Linux, has turned around and attacked the essence of the system: its free source code.

"SCO are just complete hypocrites," said Jeremy Allison, co-author of Samba, an open source software that runs a file and print service that SCO sells.

SCO says it owns the copyright to the Unix system and that parts of the Unix code have been copied into Linux. SCO is demanding payment from each user of Linux. Novell Inc. separately is disputing SCO's claim to Unix.

SCO claims IBM is distributing the Linux software containing its copyrighted Unix code. It claims companies such as Red Hat Inc. are building products using the same code.

DaimlerChrysler spokesman Han Tjan said he had no comment on SCO's lawsuit. AutoZone CEO Steve Odland declined to comment on the claims. IBM spokeswoman Trink Guarino said the lawsuit is groundless and the company will contest it.

"The real reason why people don't like SCO, and Darl McBride in particular, is that he is so dishonest," Torvalds, 34, said in an e-mail.

Shares of SCO rose 4 cents Thursday $11.63 on Nasdaq.

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