August 4, 2003

Red Hat Fires Back (Updated)

- by Joe Barr -
Red Hatannounced today a
two-pronged attack against the SCO Group. Red Hat filed a claim for two
declaratory judgements: that they had not infringed on SCO's copyright
material and that they didn't misappropriate SCO trade secrets. The
complaint also seeks a permanent injunction against SCO for their
"campaign" against Linux and Linux customers.

Red Hat also announced a one milliar dollar donation to
a fund for the defense of
open source developers against open source developers for infringement
and invited other companies to follow suit.

Red Hat came out swinging in the 27 page complaint filed in the U. S.
District Court in Delaware against The SCO Group. The opening sentence
of the complaint states that Red Hat "has commenced this action in
response to the unfair, untrue and deceptive campaign now being waged by
the defendent, The SCO Group, Inc. ("SCO"), to harm the market for Red
Hat's highly successful operating system based on the open source LINUX

In addition to asking for declaratory judgement of two items (that Red
Hat did not infringe upon SCO's copyrights or misappropriate SCO's trade
secrets), the complaint asks "damages, trebled, as well as injunctive
relief, attorneys' fees and costs, for harm caused by SCO's unfair
competition and false advertising in violation of Section 43(a) of the
Lanham Act... unfair and deceptive acts or practices in violation of the
Delaware Deceptive Trade Practices Act... as well as for violations of
common law, including trade libel, unfair competition, and tortious
interference with prospective economic advantage".

In the press conference announcing the suit held this morning at the
Linux World Conference and Expo being held in San Francisco, a Red Hat
spokesman said the aim of the suit "is to help our customers. Customers
were brought into this process and received threatening letters from
SCO. Customers have been threatened and extorted that if they don't
ante up X amount of money, they will face legal consequences." Shares
in The SCO Group fell over two dollars on the news, but have rebounded
slightly and are now trading at $11.32 a share, down from its high for
the day of $13.75.


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