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SCO so despised that chief is armed

Published: Monday, March 8 2004 11:04 a.m. MST

Darl McBride () Darl McBride ()
Darl McBride, chief executive of SCO Group Inc., says he sometimes carries a gun because his enemies are out to kill him. He checks into hotels under assumed names. An armed body guard protected him at Harvard Law School when he gave a speech last month.
Linus Torvalds, creator of the Linux operating system, calls SCO "the most despised company in technology."
The reason: SCO is claiming rights to the Linux open source software code that thousands of users and supporters say should have no owner. SCO brought a $50 billion suit against International Business Machines Corp. last year and last week turned on Linux users DaimlerChrysler AG and AutoZone Inc., suing for an injunction and unspecified damages.
"We are fighting the big battle," McBride said in a telephone interview from his office at SCO headquarters in Lindon.
McBride, 44, is pitting SCO against an industry it once helped develop. Less than two years ago SCO, formerly Caldera International Inc., was helping to form a standard version of Linux to compete with Microsoft Corp.'s Windows. Once McBride took the helm in June 2002, the company changed tack, hired attorney David Boies and began claiming that Linux users infringed on SCO's intellectual property.
Linux has attracted thousands of individuals and companies, some of whom see it as the only credible threat to Windows. Others use it because it's cheaper.
The software is now being used by companies ranging from DaimlerChrysler, the world's largest maker of luxury cars, to Lehman Brothers Inc, the fourth-largest U.S. securities firm by capital, to Google Inc., the world's most widely used Internet search engine. Lockheed Martin Corp., the world's largest defense contractor, also has servers that run on Linux as part of its computer network.
IBM pushes computers that run on the Linux operating system. Shipments of Linux-powered server computers, fast machines used to run Web sites, rose 53 percent in the fourth quarter, more than double the rate of Windows servers, market researcher IDC said.
McBride and SCO are more hated than Microsoft, the world's largest software maker, and its chairman, Bill Gates, according to some Linux backers. That's because SCO, once a backer of Linux, has turned around and attacked the essence of the system: its free source code.
"SCO are just complete hypocrites," said Jeremy Allison, co-author of Samba, an open-source software that runs a file and print service that SCO sells.
SCO says it owns the copyright to the Unix system and that parts of the Unix code have been copied into Linux. SCO is demanding payment from each user of Linux. Novell Inc. separately is disputing SCO's claim to Unix.
SCO claims IBM is distributing the Linux software containing its copyrighted Unix code. It claims companies such as Red Hat Inc. are building products using the same code. The company broadened its legal attack by suing AutoZone for using software that contains the code, and DaimlerChrysler for not certifying that Unix, which it obtained via license with SCO, has been used inappropriately.
DaimlerChrysler spokesman Han Tjan said he had no comment on SCO's suit. AutoZone Chief Executive Steve Odland declined to comment on the claims. IBM spokeswoman Trink Guarino said the suit is groundless and the company will contest it.
Linux, invented in 1991 by Torvalds as a student in Finland, found converts in part because it was a free, publicly shared operating system. Anyone can work on and modify the source code of Linux. By contrast, Microsoft licenses its Windows code only to select partners, which don't have permission to make changes.
McBride is getting the most heat from the thousands of volunteers who have worked on Linux over the past 13 years. They say SCO has no claim on the code.
"The real reason why people don't like SCO, and Darl McBride in particular, is that he is so dishonest," Torvalds, 34, said in an e-mail.
McBride has done battle before. He compares his fight with Linux supporters to the time when his family caught thieves stealing cattle from their ranch in Utah.
"We brought those guys to justice," he said. "It's very similar to what we are dealing with here."
As a young man, McBride participated in rodeo events and helped perform chores with his cowboy father, Pat. Together, they tamed wild horses. He graduated from Brigham Young University after serving as a missionary with The Church of Jesus Christ of Latter-day Saints in Japan.
In January, McBride's unlisted home telephone number was placed on Slashdot.org, a pro-Linux Internet site, which led to harassing phone calls on Super Bowl Sunday. Hackers also targeted the company's Web site with the Mydoom virus earlier this year, causing the company to shut down the site.
McBride said he sometimes carries a gun, declining to specify the type, and travels with armed guards. The gun is licensed, he said. Security officials have told him that convicted felons are behind the death threats, McBride said.
"When those are the types of people who are making threats on your life, you tend to take it more seriously," he said.
As he steeled for battle in the courts, McBride brought in lawyer Boies, who won the government's antitrust suit against Microsoft, to see whether it could sue Linux users. His firm, Boies Schiller & Flexner LP, and other law firms associated with the case have received $1 million in cash and 400,000 SCO shares.
By March last year, SCO had sued IBM, and on May 14, less than a year after announcing the collaboration on a standard Linux program, SCO stopped selling its Linux products.
"The lawsuit has touched a nerve with a community of people who work very, very hard for something they believe very deeply in," said John Palfrey, executive director of Harvard Law School's Berkman Center for Internet and Society. "These are people who take what they do extraordinarily seriously."
SCO, then known as Caldera Systems, first sold shares to the public in March 2000. They doubled on their first day of trading, giving the company a market value of $1.1 billion as investors bet the company would benefit from Linux.
SCO didn't turn a profit until it started its crusade against Linux last year. It had $17.9 million in revenue and net income of $5.43 million in 2003. SCO said last week its first-quarter loss widened to $1.5 million on sales of $11.4 million.
SCO will have a difficult time proving its case, especially facing an adversary such as IBM, said James Pooley, a partner at Milbank, Tweed, Hadley & McCloy in Palo Alto, Calif. IBM, based in Armonk, N.Y., has as many attorneys specializing in intellectual property as there are private law firms in the field.
"Suing IBM is not something that should be taken on by the faint of heart," said Pooley, who has litigated in cases with and against IBM. "IBM has the resources and the track record for fighting for its positions."
Shares of SCO rose more than tenfold last year as investors bet the company would profit from the IBM lawsuit. The shares have declined 32 percent this year.
Former SCO Chief Executive Ransom Love, who hired McBride in June 2002, wasn't among the buyers. Love said he sold all his SCO shares after the company filed suit against IBM.
"It's tragic," Love said in an interview. "A company that helped build that whole industry has now turned against it."

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