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HP to Indemnify Linux Customers - InternetNews.
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HP to Indemnify Linux Customers

Hewlett-Packard Wednesday said it will indemnify its Linux customers should SCO Group bring a copyright infringement suit against them.

The hardware giant's bold move is a reaction to SCO's decision to demand that enterprises that utilize Linux buy a license, because it claims that Linux is an unauthorized derivative of its UNIX intellectual property.

HP initially considered a counter suit against SCO, but decided to avoid the legal cloud if possible and offer protection to its customers instead. The Palo Alto, Calif.-based company will offer indemnification to any customer that has acquired any Linux distribution on an HP server or workstation as of Oct. 1. The company said current customers would not have the same type of blanket protection, but could be taken on a case-by-case basis.

"As this has been going on, we have been watching and considering our options. It takes time, but our conclusion was the most pragmatic difference we could make instead of lawsuits and counter lawsuits would be to look into what it would take to indemnify our customers," HP vice president of Linux Martin Fink said during a conference call to reporters. "We've done our risk analysis and due diligence internally and decided this was a risk we decided to take."

Fink said HP would supply an addendum agreement to the standard GPL when customers purchased their HP product and signed up for the standard service contract. The company said its support contract pricing varies depending on the distribution and type of service. Some basic versions start as low as $30. Fink commented that new customers would not be paying anything above what current customers are paying for the legal protection. HP said it is contacting a large amount of its Linux customers and is in the process of putting the Web sites in place for more information.

HP originally identified only Linux distributions from Red Hat and SuSE Linux as those protected under the identification contract, but Fink said it would be extended to any distribution purchased through HP even if it is later installed on a competitor's device.

Fink said HP's legal protection would become nullified if the customer made any changes to the source code, even the parts that are not covered by SCO's claims.

"The vast majority 99.999 percent of our customers will not change the source code," he said.

Meantime, SCO Group hailed the news Wednesday morning, saying HP's decision signifies acknowledgement that issues exist in Linux.

"HP's actions this morning reaffirm the fact that enterprise end users running Linux are exposed to legal risks," SCO said in a statement Wednesday. "Rather than deny the existence of substantial structural problems with Linux as many Open Source leaders have done, HP is acknowledging that issues exist and is attempting to be responsive to its customers' request for relief. HP's actions are driving the Linux industry towards a licensing program. In other words, Linux is not free."

SCO praised HP for standing up to protect its customers against potential litigation, and encouraged IBM, Red Hat and other Linux vendors to do the same.

"We think their customers will demand it," SCO said.

HP typified SCO's comments an "interesting spin" even though the company has never before indemnified third party software.

"We have not signed any deal with SCO and have not paid them any money to protect ourselves," Fink said. "We're going to provide indemnification whether SCO's claims are valid or not."

Ironically, HP does still have a working relationship with SCO Group in that it continues to offer its software. Fink was amused but declined to state when asked how well that particular third party software was selling since SCO began its legal actions.

SCO's crusade against Linux began with IBM . On March 6, the company sent a letter to IBM Chairman and CEO Sam Palmisano, warning him that IBM had allegedly breached its contract with SCO by contributing portions of its UNIX-based AIX code to the open source movement, and by introducing concepts from Project Monterey, a joint effort by SCO and IBM to develop a 64-bit UNIX-based operating system for Intel-based processing platforms, into Linux. IBM scrapped Project Monterey in May 2001. SCO has since leveled a multi-billion dollar lawsuit at IBM over the issue.

But in the meantime, while maintaining that its problems were with IBM and the alleged violation of its contract, SCO has also been giving customers notice. In May, it sent a letter to some 1,350 companies that use Linux, warning them, "similar to analogous efforts underway in the music industry, we are prepared to take all actions necessary to stop the ongoing violation of our intellectual property or other rights."

It also issued a statement that "Linux is an unauthorized derivative of UNIX and that legal liability for the use of Linux may extend to commercial users."

The company has already taken a first step toward enforcing that claim, having received U.S. copyright registrations in July for its UNIX System V and UnixWare source code, just the firepower it needs to pursue copyright violation suits. Copyright registrations are often a prelude to legal action, according to intellectual property attorneys.

"SCO now has broad legal rights against end-users," Darl McBride, president and CEO of SCO, said in July. "We intend to use these rights carefully and judiciously."

Editor's note: internetnews.com editor Michael Singer contributed to this report.