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Red Hat: The White Knight vs. SCO?

If you've been waiting for the Linux community to force SCO Group (SCOX) to hold its claims up to the light of truth, the wait may finally be over. On Monday, Aug. 4, Red Hat (RHAT) doffed the kid gloves and came out slugging. The leading U.S. distributor of packaged Linux software filed a complaint in Delaware's federal district court, charging SCO with conducting an "untrue and deceptive campaign" designed to sabotage the market for the Linux operating system. Linux -- a free, open-source operating system -- has been growing rapidly over the past few years, largely at the expense of SCO's Unix software.

In a statement on Aug. 5, SCO denounced Red Hat's move, insisting that it isn't "trying to spread fear, uncertainty, and doubt to end users" of Linux. Rather, it has been "educating" them on the risks of running Linux. SCO also disclosed the letter that CEO Darl C. McBride fired off to Red Hat. "Of course, we will prepare our legal response as required by your complaint," McBride wrote. He also warned Red Hat CEO Matthew J. Szulik "that our response will likely include counterclaims for copyright infringement and conspiracy."

The Linux-Unix tug of war first turned nasty last March. That's when SCO sued IBM for $1 billion, claiming that IBM (IBM) had illegally usurped sections of copyrighted Unix code for insertion into Linux. Big Blue denies any wrongdoing. More recently, SCO has asserted that all recent versions of Linux, including Red Hat's, have been contaminated by IBM's alleged misappropriation of Unix code -- and that commercial Linux vendors and even Linux users are therefore obliged to buy a license from SCO (see BW, 7/7/03, "Will This Feud Choke the Life Out of Linux?").

"GET TO THE TRUTH." The merits of the Lindon (Utah) company's position remain murky, however, in part because SCO won't let software experts openly examine the disputed code. Red Hat's Szulik says "we tried to seek a responsible way to see the code" but didn't like the limitations laid down. SCO told Red Hat it could see examples of code infringements -- but only under a confidentiality agreement that would prevent Red Hat from using what it learned to help prepare any litigation or to provide assistance to IBM.

So Red Hat turned to the courts. "The primary purpose of our complaint is to get to the truth of the matter on behalf of our customers and the open-source community," says Szulik. His Raleigh (N.C.) company is asking the court to make two so-called declaratory judgements: that Red Hat Linux neither infringes SCO's copyrights nor contains the materials that SCO claims were illegitimately contributed to the Linux community by IBM.

"Our complaint will now move to the discovery phase," says Szulik. That could force SCO to put up or shut up. And if the Delaware court finds in favor of Red Hat, ruling that its version of Linux doesn't contain the allegedly illegitimate code contributed by IBM, that would yank the rug from under SCO's lawsuit against IBM. Because all improvements to Linux by any company or person must be made available to all Linux users (a basic tenet of open-source software development), if IBM had added any of SCO's proprietary code, it would be in Red Hat's version of Linux by now. So if Red Hat Linux doesn't violate SCO's copyrights, it would be tough for SCO to argue that IBM did something wrong.

LOOSENED TONGUE. Because a decision on the declarative judgments may take a while, Szulik wants SCO to cease its negative P.R. campaign, including the "veiled threats" that Linux users may face legal liabilities. "We've asked the court to issue a permanent injuction" that stops SCO from airing its grievances in public.

Donning his white hat, Szulik adds: "What's at stake is not the success of our product but the ability of the Linux community to move forward. We felt it was our responsibility to act in defense of the open-source community."

Cynics might point out that Red Hat had been biting its tongue until it was singled out by name at an SCO press conference in mid-July.

Still, Szulik is putting his money where his mouth is. Red Hat is donating $1 million to the Open Source Now Fund, which it has set up to cover the legal expenses of open-source developers targeted by SCO. Szulik says he has "high expectations" that other corporate open-source boosters will chip in additional funds. By Otis Port in New York

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