Linux has a global network of developers

It said it will defend its customers against potential threats by SCO Group Inc., and other third parties.

SCO, early distributors of the Linux operating system, has been threatening to sue Linux users since last year.

It said code it owns had been illegally used in Linux by programmers who built the free-to-copy operating system.

Open house

On Monday, another group called OSDL (Open Source Development Labs), said it had managed to raise $3m for a fund to cover the cost of defending users and distributors of the operating system.

Intel and IBM said they had contributed to the pot, but OSDL said it wanted to attract $7m more.

Novell said it hoped its Linux Indemnification Programme would help its newly-acquired SuSe Linux customers feel more at ease about using the operating system, based on open-source code.

"We have issued an indemnity for companies who wish to take advantage of Linux technology, so that if the company creating issues around copyright want to take legal action, basically Novell will pick up the bill or fight on their behalf," Steve Brown, Novell's UK managing director told BBC News Online.

"It will give customers peace of mind, knowing that there is a large multinational company behind them."

Key code

The legal wrangling is over ownership of some of the key elements of the 30-year-old Unix operating system on which Linux is based. SCO has claimed to own parts of the code, and has argued developers and distributors of Linux have violated copyright.

Linux is developed by a global community of programmers, unlike Unix or Microsoft Windows, and distributed with no or minimal cost.

This makes it particularly attractive to developing nations and smaller organisations.

SCO has already taken action against IBM, and has sent out warnings to organisations using Linux.

In August, Linux vendor Red Hat started a fund with a $1m donation to cover the costs of organisations who wanted to hit back at SCO.

In September 2003, Hewlett Packard said it would protect its Linux customers against any legal action.