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IBM Offers New Suits, Not Indemnity, in Linux Dispute

Big Blue files counterclaims against SCO, saying indemnity isn't the way to go.

Days after

Hewlett-Packard

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said it would

indemnify Linux customers, rival

IBM

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reiterated that it would not take such a move and filed new counterclaims against

SCO Group

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(SCOX)

in the legal battle over the open-source software.

In a flash notice to IBM's sales force Friday morning, Bob Samson, the company's vice president of system sales, said Big Blue filed new legal claims late Thursday. One counterclaim charges that SCO infringed IBM's copyrights by copying and distributing IBM contributions to Linux without permission. IBM's position is that SCO's rights to Linux were terminated when SCO claimed some parts of the open-source software.

The amended complaint comes after SCO filed a lawsuit earlier this year against IBM, charging that the behemoth misappropriated some of SCO's Unix code in its Linux business.

"Since day one, the IBM strategy in the SCO lawsuit has been to defend against SCO's unfounded claims vigorously in court," Samson wrote. "Our belief is that the best way to deal with the SCO campaign is where it can truly be resolved -- in court."

Accordingly, IBM is sticking by its decision not to indemnify Linux customers, Samson wrote. That's in contrast to H-P, which opted last week to assuage customer concerns over Linux by offering indemnification.

"The typical approach to indemnity, and apparently H-P's approach as outlined in the press, we believe runs fundamentally counter to the Linux value proposition," Samson wrote. He suggested that's because customers buy Linux in part because of the ability to modify source code. However, he added, most indemnifications are often invalidated by such customer activities as modifying or combining indemnified product with other codes, which he said is "central to the vitality of open source."

SCO issued its own press release in response to IBM's amended countersuit and urged the company to indemnify customers. While IBM charged that SCO violated the general public license under which Linux is distributed (and consequently IBM copyrights), SCO called the GPL a "shaky foundation" on which to build a legal case.

"By so strongly defending the controversial GPL, IBM is also defending a questionable licensing scheme through which it can avoid providing software indemnification for its customers," SCO said.

Shares of SCO declined 29 cents, or 2%, to $14 in recent trading. Shares of IBM were up $1.05, or 1.2%, at $90.10, and shares of H-P inched up 6 cents, or 0.3%, to $19.46 in recent trading.