Computer Associates (CA) snapped back at the SCO Group, denying claims by SCO that CA had signed up for that company's claimed Linux licence.

CA replied that SCO is harassing Linux users and misrepresenting the terms of the software licensing arrangement between the two companies that protected CA from a potential SCO lawsuit.

SCO CFO Bob Bench on Wednesday claimed CA was one of four publicly named companies to sign up for SCO's Intellectual Property (IP) License for Linux – a $699 licence that SCO says Linux users must purchase in order to avoid violating its claimed copyrights.

These claims caused a CA executive yesterday to deny his company had purchased that licence, but had instead acquired a large number of licences for SCO's UnixWare operating system as part of a $40 million breach of contract lawsuit settlement in August 2003 with SCO investor The Canopy Group.

Around the time of the settlement, SCO announced that it had signed up the first customer for its Linux licence. Though SCO did not reveal the identity of this customer industry speculation centred around it being CA.

By acquiring the UnixWare licenses, CA indemnified itself against a possible Linux lawsuit from SCO, said Sam Greenblatt, the senior vice president and chief architect of CA's Linux Technology Group: "We did an agreement with the Canopy Group and in the agreement with the Canopy Group, we acquired UinxWare licences," he said. "For every UnixWare licence you acquired, you got indemnified for that number of Linux licences."

SCO spokesman Blake Stowell disagreed with Greenblatt's characterization saying that CA had indeed obtained an IP Licence for Linux: “UnixWare licences allow SCO customers to run UnixWare and the SCO Intellectual Property Licence allows Linux end users to run our Unix intellectual property in binary form in Linux. Today, CA has a licence in place to run our Unix IP in binary form in Linux without fear that they may be infringing on our intellectual property,” he said.

Greenblatt strongly objected to the portrayal of CA as a IP Licence for Linux customer: "To represent us as having supported the SCO thing is totally wrong," he said. Greenblatt had harsh words for SCO and the company's CEO, Darl McBride, whose tactics were "intended to intimidate and threaten customers," he said. "We totally disagree with his approach his tactics and the way he's going about this."

Separately, another company mentioned as a SCO Linux licensee on Thursday denied knowledge of any such agreement. Though SCO's Bench had confirmed Carthage Missouri's Leggett & Platt as a licensee on Wednesday, a spokesman for the company said that he had no knowledge of such a deal: "I have now talked to our people who handle our Linux systems and, at least at a corporate level, we have not bought such a licence from SCO Group," said John Hale, the company's vice president of human resources. "To their knowledge they would not have an interest in doing so," he said.

One financial analyst said that the conditions surrounding the CA licence did not cast a favourable light on SCO, which has claimed that Linux illegally contains some of its Unix code.

"I think it just speaks to the weakness of their case. Why could (CA) have not been convinced to take a licence without legal action?" said Dion Cornett, a managing director with Decatur Jones Equity Partners.