SCO's Earning Rev UpSCO's Earning Rev Up

SCO Group Inc. last week fired another shot at IBM, as well as one at the open-source community's General Public License.

Last week, it terminated the right of IBM's Sequent division to license Unix System V source code for its Dynix/ptx operating system, citing the improper transfer of Sequent's Unix source code and development methods into Linux. Dynix/ptx is an aging technology, so the move won't affect many companies.

SCO Group last week denied reports that it plans to argue that the GPL, which stipulates that software created through the open-source process can be freely copied, conflicts with federal copyright law. But during the company's earnings call last week, president and CEO Darl McBride said, "Building company software on the General Public License is like building an enterprise on quicksand. [Linux vendors] can't indemnify that there aren't intellectual-property violations in Linux." Indeed, the GPL was "drafted to weaken the legal rights of the author of the work," says intellectual-property lawyer Thomas Carey, a partner with Bromberg & Sunstein LLP.

Stirring up the Linux market has brought good results for SCO Group. It reported earning $3.1 million on revenue of $20.1 million for its third quarter, ended July 31, a turnaround from a loss of $4.5 million on revenue of $15.4 million a year ago.