updated 3/3/2004 1:57:23 PM ET 2004-03-03T18:57:23

Taking a page from the music industry, SCO Group Inc. sued AutoZone Inc. and DaimlerChrysler Corp. on Wednesday to force them and other companies to respect the software copyrights that SCO claims ought to apply to the Linux and Unix operating systems.

“We have now taken the significant next step,” said SCO President Darl McBride, who said his company will “vigorously protect and enforce” its intellectual property.

The copyright infringement lawsuit against AutoZone alleges the auto-parts chain runs versions of the Linux computer operating system that SCO says contains its programming code.

The lawsuit, filed in Nevada, demands AutoZone immediately stop using or copying any part of SCO’s copyrighted code. It also seeks unspecified damages.

AutoZone spokesman Ray Pohlman said the company hadn’t seen the lawsuit and would not comment. He also refused to say how the company uses Linux.

Lindon, Utah-based SCO also filed a lawsuit in Michigan against DaimlerChrysler, alleging the automaker refused to comply with terms of its software agreement with SCO.

It asks that the automaker immediately certify compliance and seeks damages, including legal fees. DaimlerChrysler said it would respond later Wednesday.

“These are not just two users we randomly picked,” McBride said. Instead, he said, they represent two classes of Linux users who are violating either SCO’s agreement or copyright.

SCO is attacking the issue along the same lines as the music industry, hit hard financially by people it claims illegally downloaded music off the Internet.

Since September, the Recording Industry Association of America has sued 1,445 people who allegedly downloaded copyrighted songs. The music industry says its tactics are slowing the tide of free downloads.

“We believe the legal actions we have taken ... will have a similar impact,” McBride said.
Over the past year, SCO has sent letters to about 1,500 companies demanding they pay licensing fees of about $700 for each server running Linux or face legal action.

SCO holds the rights to key elements of the 30-year-old Unix operating system from which Linux was inspired, and claims parts of it have been incorporated in Linux. Those claims are disputed by, among others, IBM Corp. and Novell Inc. IBM and SCO have traded lawsuits over the matter.

Unlike Unix or Microsoft Corp.’s Windows, Linux is developed by a worldwide community of programmers and is free to copy or download, making it attractive to many corporations.

IBM, Intel Corp. and others have contributed to a legal fund that will help companies running Linux defray the cost of defending themselves against lawsuits.

Also Wednesday, SCO said it lost $2.25 million, or 16 cents a share, in its fiscal first quarter, which ended Jan. 31. It lost $724,000, or 6 cents a share, in the same quarter last year.
Revenue fell 16 percent to $11.4 million from $13.5 million.

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