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End Users Targeted, and Red Hat and Other Vendors Respond

SCO initially targeted IBM but also repeatedly threatened to sue individual users of both Linux and AIX. In December 2003, SCO raised the stakes by sending letters to some of the largest companies in the world, informing them that Linux is an "unauthorized derivative of UNIX." On March 2, 2004, SCO made good on these threats, suing AutoZone for copyright infringement based on AutoZone's use of Linux. The next day, SCO sued DaimlerChrysler for breaching a UNIX System V licensing agreement and possibly contributing UNIX source code to Linux. Both defendants have yet to respond to these claims.

Through a bug in Microsoft Word that exposes a file's "metadata," it was discovered from SCO documents that SCO initially planned to sue Bank of America instead of DaimlerChrysler. No explanation has been offered for why SCO changed its mind.

Recognizing its end users' potential liability, Linux distributor Red Hat, Inc. sued SCO. Red Hat claims that its software does not infringe and that SCO's claims of ownership amount to false advertising, deceptive trade practices, unfair competition, and trade libel. SCO moved to dismiss the complaint, but SCO's motion was denied. Instead, the judge has put the case on hold until the SCO/IBM litigation is resolved. Red Hat has requested that the judge reverse that decision and instead move the case forward independently from the SCO/IBM litigation. Red Hat's motion is currently pending.

To assuage customer fears, several software vendors, including Novell, Red Hat, IBM, and Hewlett-Packard, have promised to indemnify their customers for SCO's claims. An industry-wide legal defense fund, established by the Open Source Development Labs (OSDL) consortium, is raising $10 million from companies such as Intel, IBM, and MontaVista Software.

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