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SCO Targets DaimlerChrysler, Autozone in Linux Suits

UPDATE: The SCO Group has filed lawsuits against auto giant DaimlerChrysler Corporation and auto parts retailer Autozone as part of its intellectual property challenges over parts of Linux.

The latest actions follow up on letters that SCO had sent to major Linux users late last year asking them to certify their agreements over the use of UNIX System V code, which SCO Group is claiming in separate litigation has been leaked to select Linux kernels.

But SCO's lawsuit against DaimlerChrysler makes similar claims: that the company has allegedly violated a contract with SCO by "by refusing to provide the certification of compliance with the 'provisions' of the agreement" that the two companies struck regarding UNIX System V code.

SCO Group said the lawsuit would be filed in Oakland County Circuit Court in Michigan.

Earlier in the day, SCO said it has targeted Autozone in a lawsuit, claiming that "AutoZone violated SCO's UNIX copyrights by running versions of the Linux operating system that contain code, structure, sequence and/or organization from SCO's proprietary UNIX System V code in violation of SCO's copyrights."

AutoZone, based in Memphis, Tenn., calls itself the number one auto parts retailer in the United States. It operates 3,000 stores in 42 states, as well as 21 stores in Mexico. Neither Autozone nor DaimlerChrysler officials were immediately available for comment on the charges.

The suits were not unexpected. In Las Vegas late last year, SCO chief executive Darl McBride said the company planned legal action against Linux end-users within 90 days. SCO has been trying to get Linux users to take out licenses since last fall, based on claims that its copyrighted UNIX code is included in Linux.

SCO is offering intellectual property license at $699 per server processor and $199 per desktop processor. However, so far only one company, EV1servers.net, has publicly announced it is taking a license.

Separately, SCO on Wednesday reported a net loss of $1.5 million, or 16 cents per share, during its first quarter ended January 31st. The loss was about double its net loss of $724,000 (6 cents per share) during the same, year-ago quarter.

Revenues were $11.4 million for the quarter, down 16 percent from the same time last year when it took in $13.5 million, the company said Wednesday.

Although its overall loss was listed as $5.2 million, the Lindon, Utah-based SCO Group said its net loss was reduced by $3.6 million because of the change in fair value of some of its securities.

"Our revenue and results of operations for the first quarter were consistent with our expectations," said SCO Group CEO Darl McBride.

"In coming quarters, we will continue to expand our SCOsource initiatives, with an ongoing campaign to defend and protect SCO's intellectual property assets, which will include continued end-user lawsuits and negotiations regarding intellectual property licenses. As for what kind of guidance it might expect from its SCOsource initiatives, which is leading the way for SCO Group's pursuit of licensing fees for parts of select Linux kernels it claims are pilfered intellectual property, the company was not clear. But overall, it is expecting revenue in the second quarter in the range of $10 million to $14 million.