After many months of threats, SCO today revealed that its first end-user Linux victim in the courts will be Memphis-based Fortune 500 auto parts chain AutoZone.

SCO’s claim, which it announced on the back of wider than expected first quarter losses and was filed in the U.S. District Court in Nevada, says: “AutoZone violated SCO's Unix copyrights by running versions of the Linux operating system that contain code, structure, sequence and/or organization from SCO's proprietary Unix System V code in violation of SCO's copyrights.”

SCO also said that it would be naming a second victim as iNEWSWire went to press**. Many analysts had predicted that major Linux user Google would be the first to be sued but, worryingly for firms that use larger midrange computers, it has gone for a traditional company with nearly 3,000 stores in the U.S. and Mexico that employs over 40,000 people and uses IBM’s HTTP Server (on Unix) to power its website.

The SCO case is a fallout from its ongoing $5 billion legal dispute with IBM over Linux. Although SCO has changed some of the details of its argument, it essentially claims that Big Blue allowed parts of its own Unix operating system, AIX, to seep into Linux, thus infringing its intellectual property. AIX was based on an original Unix licence from AT&T, which SCO bought in 2001.

IBM denies all of this and is counter-suing. Both Red Hat and Novell, who now own SuSE Linux, are also involved in the flurry of lawsuits with SCO surrounding the row. However, if SCO is right, its argument is that all Linux users, including iSeries users, should buy a separate licence from it and has been making threats to that end for months.

In January, SCO sent letters to 6,000 Unix licence holders demanding that they certify that they were in full compliance with its license terms over the use of Unix with Linux. The move was a variation on its tactic last year to force enterprise Linux users and developers to pay for an extra licence with SCO to use the open source operating system. The only developers to do so have been Microsoft and Oracle.

However, on Monday SCO claimed its first named corporate scalp as Houston, Texas-based hosting giant Everyone’s Internet (the last firm to allegedly cough up remained anonymous). EV1.net, as it is also known, revealed that it had bought the requisite licences from SCO in a deal probably worth about a million dollars to protect it from any claims. EV1 relies heavily on Red Hat and FreeBSD and the move brought howls of protest from the open source community.

This prompted an EV1 CEO Robert Marsh, who refers to himself online as “Head Surfer”, to post a statement on his firm’s website’s message board explaining that: “as a result of this action, our customers can be assured that as these cases work their way through the legal system, that they have no worry that SCO will take action against them for servers in our data centres”.

The comments posted after that by disgruntled EV1 customers would have given him little solace. Many have threatened to take their business elsewhere and argue that EV1 should have waited for the outcome of the original IBM/SCO case and that, in any case, firms threatened by SCO have access to a $10 million Linux Legal Defence Fund, backed by IBM and Intel.

Interestingly, while all eyes are on SCO’s actions in the States, a little-reported story about a lawsuit it was fighting in Germany doesn’t bode too well for similar actions in Europe. Although it has reached an out-of-court settlement with German NT-to-Linux migration specialist Univention, which was outraged by its claims, it now has to stop repeating some of its claims or else get fined €10,000 euros per offence.

According to a report on the Groklaw web log, which is devoted to the SCO situation, details of the settlement include that SCO Group GmbH (the German branch of SCO) has agreed not to allege any more that Linux contains SCO's unlawfully acquired intellectual property unless it can prove it within 30 days of the claim.

The settlement also forbids SCO from claiming that if end users are running Linux they might be liable for breaches of SCO's intellectual property. Furthermore, SCO cannot say that Linux is an unauthorised derivative of Unix. It also says that SCO is not allowed to threaten to sue Linux users unless they bought SCO Linux or Caldera Linux, which is owned by SCO. **Editor's note: SCO did, indeed, announce a second target, automotive giant Daimler Chrysler Corp.