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SCO sues IBM for $1B in intellectual property fight

By Todd Weiss
March 7, 2003 12:00 PM ET

Computerworld - Three months after launching a campaign to protect its intellectual property rights, The SCO Group is suing IBM for more than $1 billion, charging the computer and software maker with misappropriation of trade secrets and other claims.
In a lawsuit filed yesterday, the Lindon, Utah-based software vendor, which has owned the rights to the Unix operating system since 1995, alleged that IBM has "made concentrated efforts to improperly destroy the economic value of UNIX, particularly UNIX on Intel, to benefit IBM's new Linux services business."
The 31-page lawsuit, filed in District Court in Salt Lake County, also charges IBM with tortious interference, unfair competition and breach of contract.
IBM spokesman Mike Fay said today that the company is still reviewing the lawsuit, which it received this morning. "The complaint is full of bare allegations and no facts to support it," he said. "SCO never approached IBM ... in advance of filing it" to discuss the matter.
Darl McBride, SCO's CEO since June, said in an interview this morning that the lawsuit was inspired by public comments made recently by IBM executives who have allegedly said they're moving features from IBM's AIX Unix into Linux to benefit enterprise customers as part of IBM's Linux strategy. The problem with that, McBride said, is IBM doesn't own AIX, but licenses it through SCO.
"It goes to the heart of confidentiality agreements in AIX contracts," he said. "IBM has been publicly saying that they're OK putting AIX into open source, that it's not a problem for them," he said. "When you take our valuable intellectual property and say you're going to move it into open source, then we have a major problem."
If IBM wants to make its own products, including WebSphere, Tivoli, Lotus and DB2, open source, that's fine with SCO, McBride said. "This case is about IBM making commitments to us and honoring them."
In January, SCO announced that it was beginning an initiative to look into possible violations of its intellectual property rights to protect its interests (see story). The case against IBM is the first major effort in that fight.
SCO had also announced the creation of a new division, SCOsource, to manage its intellectual property assets.
Analyst Bill Claybrook at Aberdeen Group Inc. in Boston said public statements from IBM executives may not be enough to prove SCO's case in terms of what IBM is doing with AIX and Linux. "What they have to prove is there was some code from AIX ... that actually made its way into Linux," Claybrook said. "That may not be hard to



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