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Best Buy's Double Hit: Outlook and Lawsuit


Retailer was among many that allegedly violated licensing agreement.

While Best Buy (BBY) executives may have enjoyed third-quarter earnings of $0.53 per share and lamented a 7% drop in share price Tuesday morning due to a lower than expected fourth-quarter profit margin, the company's involvement in a copyright-infringement lawsuit loomed overhead. (See also: Best Buy in Wrong Business at Wrong Time.)

Best Buy, Samsung, Western Digital (WDC), and Westinghouse (CBS) were among the 14 corporate defendants named in a lawsuit regarding the companies' alleged breaching of the GNU General Public License (GPL) -- which marks the largest number of defendants in a GPL-enforcement suit. The plaintiff, The Software Freedom Law Center (SFLC), claimed each company violated the very term to the agreement that allows a GPL product to be free to share.

According to the complaint, the companies sold items which were embedded with a set of Unix-based and modifiable utilities called BusyBox. The versatile tool set is free to use as long as the source code and subsequent modifications are made available to the customer -- which the defendants neglected to do.

SFLC lawyer Aaron Williamson said in a statement, "You have to provide the source code, whether or not you modified the program. Just distributing the program, even if you haven't made any changes yourself, you still have an obligation to provide the source code."

Making matters worse, the companies failed to meet GPL requirements despite repeated requests by the firm, according to Williamson. "We brought this suit as a last resort after each of these defendants ignored us or failed to meaningfully respond to our requests that they release the source code."

Some of the specific BusyBox products in question are Best Buy's Insignia Blu-ray DVD player, Samsung HDTVs, and Westinghouse's 52-inch LCD television.

The SFLC has worked directly with Linux developers on more than a hundred GPL-compliance situations, a majority of which end before the violation becomes a legal matter. However in 2007, the non-profit firm sued six companies -- which included Verizon (VZ) and Cisco (CSCO) -- for a similar violation to the current suit.

Neither Best Buy nor any of the callers during its earnings conference addressed the lawsuit, and the violation fees haven't been finalized.
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