September 24, 2003 9:44 AM PDT

HP outlines Linux indemnity plan

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Hewlett-Packard on Wednesday announced the details of its plan to take on legal liability for Linux customers in lawsuits filed by the SCO Group.

The company said it would protect new customers who buy Linux through HP, who agree not to make unauthorized changes to the Linux source code and who sign a standard support contract. Existing customers who have not altered their Linux distribution and who sign an amended contract can also be protected by HP, the company said.

"We're giving the green light to customers to go ahead with their Linux deployments," Martin Fink, an HP vice president, said during a conference call with reporters.

As earlier reported, HP has decided to indemnify its customers from liability from lawsuits launched by The SCO Group, which has warned that companies and individuals who use Linux could face legal consequences. SCO maintains that its proprietary Unix code was improperly added into the Linux code base.

Fink said that HP's indemnification applies only to potential lawsuits filed by SCO.

SCO has already sued IBM and sent letters to 1,500 companies warning them of potential liability. Meanwhile, IBM has countersued, and Linux provider Red Hat has also sued SCO.

HP said it is not commenting on whether SCO has a case.

"The courts will decide the outcome," Fink said.

At the same time, HP noted that it looked at the issues, evaluated several options and decided that it is a risk worth taking.

"We went through our internal due diligence process and made a conscious decision (that) there was a risk we were willing to take on behalf of our customers," Fink said.


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Fink said its indemnification did not stem from any new Linux-related business deal with SCO, but declined to comment on whether it has a Unix-related license agreement. A SCO representative said that HP has a long-standing Unix license covering its HP-UX version of Unix.

However, Fink said that the move relieves customers from having to decide between paying a license fee to SCO or risking liability.

There are limits to HP's legal protections. One limit is that customers have to agree to only update their operating systems with changes made by their Linux provider, such as Red Hat or SuSe.

"If you modify the source code you lose indemnification," Fink said.

Even with the limits, HP says its move is something many of its rivals have not done.

"Our competitors aren't there," Fink said. "They are not willing to step up to the plate on behalf of customers."

Sun Microsystems, though, has agreed to indemnify a limited set of customers--those who use its Linux-based Java desktop system. Those who run the Solaris operating system are also protected, but customers who use Linux on Sun servers do so at their own risk, the company has said. Sun is also considering whether to indemnify Java customers that use Linux along with Java on cell phones and other portable gadgets, Sun executive vice president Jonathan Schwartz told CNET News.com earlier this month.

In a statement, SCO praised HP's move and called on other companies, such as Red Hat and IBM, to do the same.

"HP's actions this morning reaffirm the fact that enterprise end users running Linux are exposed to legal risks," SCO said. "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."

In response to the statement, Fink said: "It was an interesting spin," but he again declined to comment on the merits of SCO's case.

Blaney Harper, a Washington, D.C.-based intellectual property lawyer for Jones Day, said HP's move is largely just a way to keep customers happy, although it could also reflect a belief by HP that SCO's case is weak.

"To the extent you can read anything, they probably have looked at SCO's case and think they have the better end of the case," he said.

Assuming that SCO's claims are valid, Harper said it is not clear who would be most liable--the companies that distribute Linux; those, like HP, that sell it; or the customers who use it.

"There probably isn't a simple answer," Harper said. "There are so many different versions of what's going on--of Linux being used. Sorting through that is going to be quite a mess."

 

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