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SCO Group Widens Loss, Legal Action

The suit against Linux users was widely expected. After suing IBM (IBM - Get Report) in March over intellectual property rights to Linux, McBride has repeatedly said the company might pursue a Linux user in court, and indicated Monday in a speech that the suit was imminent.

"We are aggressively moving forward to enforce our rights," McBride said in the conference call Wednesday.

He said the latest steps targeting end users follow a model used by the Recording Industry Association of America in which the association sued end users of music file sharing programs to stop illegal music downloads. Ironically, the attorney that unsuccessfully fought the RIAA on behalf of Napster, high-profile lawyer David Boies, is now working for SCO.

SCO claims that Linux software is improperly using SCO's Unix code. In March, SCO charged Big Blue with misappropriating SCO's Unix code in IBM's Linux business. A trial is scheduled for April 2005.

After filing that suit, SCO launched a campaign to convince users of Linux, an open-source software available free online, to pay SCO for licenses. Only an odd set of bedfellows -- including archrivals Microsoft (MSFT - Get Report) and Sun Microsystems (SUNW), which both stand to gain from slower Linux adoption -- have forked over money to SCO.

More recently, SCO announced Monday that EV1Servers.Net, a dedicated hosting division of Houston-based Everyones Internet, bought a license from SCO to run business operations on Linux servers.

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