The SCO Group has begun sending written notices to its 6000 Unix licensees requiring them to certify that they are in full compliance with their Unix source code agreements and aren’t using Unix code in Linux.
In addition, SCO said it was sending a second set of letters outlining additional evidence of copyright infringement to a subset of 1500 global Linux users that SCO first contacted in May about copyright infringement. And the company predicted that it could spend up to $US16 million in its current fiscal year on legal fees associated with its legal fight over Linux.
Senior vice-president of SCO, Chris Sontag, said the notices “formally communicate to Unix source code licensees and certain commercial Linux end users that they must utilise SCO intellectual property within the bounds of their existing legal agreements and the Digital Millennium Copyright Act”.
SCO has also announced its first full year of profitability, reporting $US5.3 million in net income for fiscal 2003, which ended October 31, despite legal fees paid out to wage its Unix copyright fight. That fight began when SCO, in March, filed a $US1 billion lawsuit against IBM for allegedly breaching its Unix licensing contract.
The company would have reported net income of $US14.3 million for the year had it not reported a charge of nearly $US9 million to pay law firms involved in the lawsuit and related efforts to “enforce its intellectual property rights”, SCO officials said.
The profit for the year came on $US79.3 million in revenue, up 23 per cent from $US64.2 million in the prior year.
For the fourth quarter, SCO reported $US24.3 million in revenue, a 57 per cent increase over revenue of $US15.5 million for the same quarter a year earlier.
The fourth-quarter revenue included $US14 million from sales of Unix products and services, with an additional $US10.3 million from licensing agreements with Microsoft and Sun Microsystems signed earlier in the year.
The $US9 million charge for legal fees kept the fourth quarter in the red; the company reported a net loss of $US1.6 million but said it would have seen net income of $US7.4 million without the legal expenses.
SCO CEO, Darl McBride, noted that the company’s financial position had been strengthened by a $US50 million investment in SCO by BayStar Capital. Accounting for that investment had delayed the release of the yearly and quarterly financial results by two weeks.