The Empire Strikes Back

IBM, Red Hat sue SCO

By Yvonne L. Lee

September 1, 2003 —

The action scenes were as complex as in a Star Wars movie, as Red Hat Inc. and IBM Corp. sued The SCO Group, and SCO followed by unveiling a pricing plan for corporate users to purchase Unix licenses for their Linux servers.

On the first day of IDG's LinuxWorld Conference, held in San Francisco in early August, Red Hat announced it was suing SCO for unfair competition, false advertising, unfair and deceptive acts, trade libel and interference with prospective economic advantage. At the same time, Red Hat announced the Open Source Now Fund to cover legal expenses associated with infringement brought against companies developing software under the GNU General Public License, and donated the first $1 million to the fund.

Later that week, IBM, the subject of SCO's $3 billion trade secrets suit, filed a countersuit against SCO, charging that SCO violated the GPL, that it improperly claimed the right to revoke IBM's Unix license, and that SCO directly infringed on "no fewer than four" of IBM's patents.

Meanwhile, SCO announced that it planned to sell a special SCO Intellectual Property License for Linux (www.sco.com/scosource/linuxlicense.html) for US$699 per processor to companies that wanted to run Linux and avoid the possibility of being sued. That license price is set to increase to $1,599 per processor after Oct. 15. SCO announced it had a single unnamed Fortune 500 customer.

Red Hat filed its legal complaint because SCO had named it as a possible target for future lawsuits, said CEO Matthew Szulik at a conference announcing the suit and legal fund.

"For the past two months, we have listened to innuendo and rumor and unfounded claims that have been launched against our customers in face-to-face meetings with investment analysts, [and] in face-to face meetings with other analysts regarding unfounded claims associated with Linux and the Linux community," he said. "In a recent conference, Red Hat was mentioned by name and threats were launched on behalf of the SCO organization against the entire Linux industry. We've been patient. We've listened, but when our customers and the entire industry is threatened, it's time to act."

Red Hat filed its complaint in federal court in Delaware, where SCO is officially organized as a corporation. Red Hat, which is based in Raleigh, N.C., expects the legal process to flow more quickly through the Delaware courts, said spokesperson Leigh Day.

Red Hat is seeking a declaratory judgment that its Linux does not infringe on any copyright owned by SCO and that it does not use any trade secret owned by SCO. It further seeks actual and triple damages under Delaware's Deceptive Trade Practices Act.

IBM COUNTERSUES
In its countersuit, IBM is seeking compensatory and punitive damages and an injunction requiring SCO to stop misrepresenting its rights and infringing on IBM's patents.

"SCO will continue to look for ways to create fear, uncertainty and doubt," said IBM's vice president of system sales, Bob Samson, in a memo to the company's sales force. "FUD, not facts, remains the focus of SCO's efforts. As the lawsuit continues, understand that the industry will resolve it."

IBM appended its lawsuit with two letters Novell Inc. sent to SCO that indicated IBM's license to its Unix variant, AIX, could not be revoked. Novell sold SCO certain rights to Unix in 1994, while it sold the trademark and the specification itself to The Open Group.

In mid-August, SCO issued a press release that it was revoking IBM's contract to use or license the Dynix operating system. Dynix was the version of Unix used by Sequent Computer Systems, which was purchased by IBM in 1999. SCO claims that Sequent improperly copied code that belongs to SCO into Linux. In June, SCO had issued notice that it was revoking IBM's license to sell AIX, a claim that IBM has rejected.

A spokesperson for Novell said that the company's legal team was looking into SCO's action.

In other SCO news, the Salt Lake Tribune reported that executives began selling off $1.2 million in shares since the company filed its suit against IBM in March. CFO Robert Bench began the sales four days after SCO filed the suit. The report said that before Bench's sale, SCO insiders had not sold shares in more than a year.

Share this link: http://www.sdtimes.com/link/27394

From the Editors: Looking back at 2009 The big stories of 2009: the cloud, Java and mobile development. For 2010, all those will be big and more

Zeichick's Take: Borland back in the frying pan VMware is happy about taking in Tod Nielsen, but what about Borland, the company he is leaving behind? All signs point to trouble with the former software development powerhouse.

Zeichick's Take:Looking forward, looking back Today is the first day of December, and although the year’s not over yet (there’s still more than 8% of 2008 left on the calendar), the start of this month always puts me into an odd mood. On one hand, it’s natural to look back on all that happened in the year that’s about to end. On the other hand, it’s equally natural to look forward to what’s coming in the year ahead.

Add comment

Name*
Email*
Country

Comment
Preview

News on Monday
more>>
SharePoint Tech Report
more>>

Download Current Issue
ISSUE 3/15/2010 PDF

Need Back Issues?
DOWNLOAD HERE

Receive the print Edition?

Google Code turns 5
Google Code Turns 5, and adds a Paxos Algorithm to make the system more stable and reliable.
03/17/2010 11:16 AM EST

Test your Visual Studio 2010 know-how
Microsoft is offering free beta certification exams for Visual Studio 2010.
03/17/2010 11:08 AM EST

Microsoft lifts the hood on IE9
Microsoft is previewing IE9.
03/16/2010 01:10 PM EST