News

HP moves to indemnify its Linux base

• By John K. Waters
• September 29, 2003

Hewlett-Packard (HP) Co. last week disclosed plans to indemnify buyers of its Linux-based systems against any legal actions stemming from the recent intellectual property claims of the SCO Group. "Today HP becomes the first major Linux hardware vendor to offer certain Linux customers indemnification," said Martin Fink, the general manager of HP's Linux systems division, during a press teleconference.

For the past several months, the SCO Group, a Lindon, Utah-based Unix platform provider, has been claiming that portions of its proprietary Unix System V source code have been imported into the latest versions of Linux. SCO claims the right to seek compensation from users of the open-source OS for alleged violations of its copyrights.

Beginning on Oct. 1, certain customers who purchase HP's Linux systems will be indemnified against such claims. Only HP customers who buy Red Hat or SuSE Linux distros directly from HP with a standard support contract will be indemnified, HP officials said. These customers may not make modifications to the Linux source code, and they must agree to make all future Linux purchases through HP.

Customers who fit these criteria would be asked to sign an agreement allowing HP's legal counsel to represent them in court, should they be sued by SCO. HP would then assume any legal liabilities relating to the SCO lawsuit. HP, which claimed $2 billion in Linux-related revenue last year, is promising to protect customers from the SCO Group only, the firm's Fink said, because "that's where the legal cloud is."

The SCO Group responded to HP's announcement pre-emptively with a bit of spin. In a statement issued two hours before HP's scheduled teleconference, SCO asserted that HP's promise to protect its Linux customers bolstered its own claims. "This action signals that HP recognizes its Linux users could, in fact, face litigation because of copyright violations and intellectual property problems within Linux," the statement read.

HP moved almost immediately to respond to SCO's statement. In a quick comeback, HP spokesman Danny Miller insisted that HP had not acknowledged the validity of SCO's legal claims. "That's not the concern here," Miller said. "The concern is simply putting the customers' minds at ease, removing any uncertainties."

HP's announcement puts some pressure on other companies with Linux offerings -- primarily IBM, Red Hat, Dell and Sun Microsystems -- to follow suit. SCO is seeking up to $50 billion in a federal lawsuit against IBM related to its use of Linux. IBM has denied the allegations in a countersuit. Red Hat challenged SCO's claims in a lawsuit of its own. And while IBM, Red Hat and Dell have publicly opposed Linux indemnifications, Sun Microsystems said recently that it was contemplating offering Linux-related protections.

For its part, the SCO Group has offered Linux customers another route to worry-free use of the open-source OS: a SCO Intellectual Property License for Linux. The license permits the use of Linux without violating SCO's copyrighted code, said company reps. Until Oct. 15, each run-time-only license is available for a one-time fee of $699 for a single CPU system, officials said. After Oct. 15, the price goes up to $1,399.