August 7, 2003

SCO Media Statement Re IBM Counterclaim 08.07.03

- Sent by SCO's PR agency, Schwartz Communications -
We view IBMââ¬â¢s counterclaim filing today as an effort to distract attention
from its flawed Linux business model. It repeats the same unsubstantiated
allegations made in Red Hatââ¬â¢s filing earlier this week. If IBM were serious
about addressing the real problems with Linux, it would offer full customer
indemnification and move away from the GPL license.

As the stakes continue to rise in the Linux battles, it becomes
increasingly clear that the core issue is bigger than SCO, Red Hat, or even
IBM. The core issue is about the value of intellectual property in an
Internet age. In a strange alliance, IBM and the Free Software Foundation
have lined up on the same side of this argument in support of the GPL. IBM
urges its customers to use non-warranted, unprotected software. This
software violates SCOââ¬â¢s intellectual property rights in UNIX, and fails to
give comfort to customers going forward in use of Linux. If IBM wants
customers to accept the risks of the GPL, it should indemnify them against
that risk. The continuing refusal to provide customer indemnification is
the truest measure of IBM's belief in its recently filed claims.

Regarding the patent accusations -- SCO has shipped these products for many
years, in some cases for nearly two decades, and this is the first time
that IBM has ever raised an issue about patent infringement in these
products. Furthermore, these claims were not raised in IBMââ¬â¢s original
answer.

SCO reiterates its position that it intends to defend its intellectual
property rights. SCO will remain on course to require customers to license
infringing Linux implementations as a condition of further use. This is the
best and clearest course for customers to minimize Linux problems.

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