Put the Penguin on Ice

Organisations should minimise their use of Linux to run complex, mission-critical applications until legal claims against the open source community are clarified, according to a warning, issued by market research firm Gartner. This follows a decision by the SCO Group to send a letter to some 1,500 large companies in May, cautioning them that using Linux may constitute a violation of intellectual property rights relating to its Unix operating system (OS).

Both the Unix and Linux OSs operate large servers from suppliers such as IBM and Sun Microsystems and run applications such as databases. They also compete heavily with Microsoft’s Windows 2000. The problem centres around SCO’s claims that Linux, which is a Unix clone, contains chunks of code that have been taken from Unix by the open source community – programmers who collaborate in building software in cyberspace and licensing it to users for free, although commercial Linux providers do charge for service and support.

SCO Group itself has a foot in both camps as it was formed in August 2000 out of a merger between Caldera Systems, a commercial Linux distributor, and a division of the Santa Cruz Operation, which owns the source code rights to Unix. SCO has subsequently withdrawn its own version of Linux from the market.

As a result of the move, George Weiss, research director for Gartner Research, cautioned FDs to seek advice from their legal departments and to “perform due diligence on Linux or other open source code by exploring its source, integrity and any encumbrances as a prerequisite to adoption in the enterprise”.

He also advised them to “seek a comprehensive support contract, including pre-installation, configuration and operating system certification” if they planned a major Linux deployment on systems from large vendors such as IBM or Hewlett-Packard.

Simon Halberstam, partner and head of e-commerce law at Sprecher Grier Halberstam, confirmed the potential seriousness of the situation. “We represent some major IT users and they’re quaking slightly now. They’ve put a lot of money into migrating to Linux and don’t want to find they can’t necessarily continue to use it if they’re breaching SCO’s intellectual property rights. It’s an added consideration when purchasing because people don’t want to buy something that may be fraught with legal issues so FDs are thinking more about it before they sign cheques.”

But Michael Bywell, a partner in the technology media and communications group at lawyers DLA, advised FDs to stay calm. “There is a risk of legal claims against Linux and I’m advising my clients to keep an eye on the case as a precaution and put systems in place to track its development.

CFOs should check their existing contracts to see what liability and indemnity provisions there are, just in case there’s a problem,” he said.

Bywell also recommended that FDs put down legal markers in correspondence with distributors or suppliers, indicating that they do not expect to have to meet the cost of any potential rights breach. “On the face of, it these are serious complaints, but I’d advise people to stay calm until more particulars emerge on how the alleged breach occurred,” he concluded.