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SCO Pulls Trigger, Targets Torvalds

But IBM's Not Flinching, Linus is Working Full-Time on Linux

  • June 18, 2003
  • By Steven J. Vaughan-Nichols

On June 16th, Darl McBride, President and CEO of The SCO Group pulled the trigger on IBM. "Over the last several months, SCO has taken all of the steps outlined in the Unix licensing agreements to protect its rights. Today SCO is requesting that the court enforce its rights with a permanent injunction. IBM no longer has the authority to sell or distribute AIX."

To which IBM's spokesperson Trink Guarino replied, "The AIX license is irrevocable and perpetual. We will try this case in the courts and win." Before her official announcement, she also said that AIX customers have nothing to worry about and should have no doubts about continuing to use AIX.

What McBride didn't say in SCO's annoucement was that SCO is now directly targeting Linus Torvalds, Linux's founder. SCO, while not taking direct action against Torvalds at this time, has declared that Torvalds is either unable or unwilling to check that submitted Linux code has not been stolen from SCO's Unix code.

The next day, June 17th, in a move that appears unconnected to SCO's legal actions, Linus announced in that he was taking a leave of absence from Transmeta and joining the Open Source Development Lab, a non-profit consortium of Linux-related companies, to work full-time on Linux. Torvald said, "It feels a bit strange to finally officially work on what I've been doing for the last twelve years, but with the upcoming 2.6.x release it makes sense to be able to concentrate fully on Linux."

SCO has also greatly expanded its suit. In addition to SCO seeking a billion dollars in damages from IBM's alleged contract breach, SCO also wants a billion dollars for IBM's breaking of Sequent's (a company IBM acquired in 1999) Unix contract, and another billion for engaging in unfair competition. Adding insult to injury, SCO is also seeking damages for misappropriation of trade secrets and punitive damages.

While neither company will admit that they had talked over the weekend, sources close to both companies said that talks had occurred. This might explain why SCO waited several hours into Monday before seeking to stop IBM's AIX business.

Officially, what SCO has done is attempt to terminate IBM's right to use or distribute any Unix System V related operating system based on the right of termination granted under the IBM & AT&T's original 1985 Unix agreements. When IBM didn't comply with SCO's demands as of the midnight, June 13, 2003 deadline, SCO declared that the termination happened automatically.

Mark J. Heise, a Miami-based partner in SCO law firm Boies Schiller, & Flexner, and complex commercial litigation specialist, said, "Through contributing AIX source code to Linux and using Unix methods to accelerate and improve Linux as a free operating system, with the resulting destruction of Unix, IBM has clearly demonstrated its misuse of Unix source code and has violated the terms of its contract with SCO. SCO has the right to terminate IBM's right to use and distribute AIX. Today AIX is an unauthorized derivative of the Unix System V operating system source code and its users are, as of this date, using AIX without a valid basis to do so."

This seems to be a shift in SCO policy from last Friday. In an interview with Thor Olavrud of internetnews, SCO director of corporate communications Blake Stowell said, "While revoking of that license would make [IBM's] customers' licenses obsolete, at this point in time we've elected not to take that approach with customers. That's not to say we won't at some point. But we see the customer as an innocent bystander right now." On Tuesday, though, McBride declared that AIX "customers no longer have the right to use AIX software."

To put firepower behind these assertions, SCO also filed an amendment Tuesday to their complaint against IBM, along with the revised demand for $3 billion, for a permanent injunction in the US District Court of Utah. If the court grants this injunction, IBM would be required to "cease and desist all use and distribution of AIX and to destroy or return all copies of UNIX System V source code.

Of course, as Dan Kusnetzky, IDC vice president for system software research, points out, "just because they asked for an injunction doesn't mean that they'll get it. I expect IBM to argue that SCO is trying to move to a punishment phase before they even present any case. Of course, it's all legal posturing. SCO is trying to get IBM's immediate attention. But, it's not at all clear how IBM will respond, except, of course, to defend against this injunction." That said, AIX users who want advice on what to do "should talk to their attorneys."

Steve Milunovich, a Merrill Lynch global technology strategist who is bullish on IBM, wrote in a Merrill research note that he doesn't think that the Utah court would grant SCO's injunction request.

Stacey Quandt, Giga's Linux and open source software analyst, believes that SCO's ultimate goal is shake IBM down to settling the case by 'trying' it in the media and creating fear, uncertainity, and doubt (FUD) in customers." However, despite all the media sound and fury, she doesn't think IBM's customers are paying SCO's dramatic legal moves much attention. "Most customers are sitting on the sidelines and assessing if they're at any risk. Since SCO is not making any evidence publicly available to help them any kind of informed judgement, they're taking a wait and see attitude." Of course, "some AIX customers will want to see how well will IBM continue to support them."

So far, however, AIX users seem completely indifferent to all of this legal wrangling. In a quick survey of half-a-dozen AIX system administrators working in businesses, none of them expressed the least concern about McBride declaring that they no longer had the right to use AIX. In AIX circles, at least, SCO's actions continue to be seen as idle threats.

The stock market, too, seems blas´┐Ż about SCO's vastly expanded claims as the stock dropped from a 28-month high of $11.21 on Friday to $10.58 on Tuesday in light trading.

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