SCO pulls IBM's AIX license in Unix dispute

Accuses IBM of not complying with its license agreement

The SCO Group Inc. today followed through on a threat it made in March and ordered IBM to stop using, selling and distributing its AIX operating system, which SCO claims is an "unauthorized derivative" of SCO's protected System V Unix code.

In an announcement today, Lindon, Utah-based SCO said that it had "terminated IBM's right to use or distribute any software product that is a modification of or based on Unix System V source code."

SCO said it was taking the action under the "right of termination granted under the original 1985 Unix Software and Sublicensing Agreements between IBM and AT&T," which previously owned Unix before SCO obtained the software rights.

In March, SCO sued IBM for $1 billion, alleging that IBM misappropriated SCO Unix trade secrets by putting some of the code into Linux (see story). In the lawsuit, SCO gave IBM a 100-day notice, as required under the licensing agreement, saying it would terminate IBM's AIX license if the company didn't correct violations of the agreement.

The deadline for compliance was June 13 at midnight. SCO said IBM failed to comply under the terms of the agreement, which triggered today's termination.

Trink Guarino, a spokeswoman for IBM's systems group, said today that there's nothing new in the latest salvo from SCO. "SCO continues to make these claims," Guarino said. "As we have claimed all along, our license is irrevocable, it's perpetual, and it can't be terminated" based on IBM's interpretation of its license. "We are standing by that position," he added.

SCO also said today that it's filing an amendment to its complaint against IBM seeking a "permanent injunction" that would require IBM "to cease and desist all use and distribution of AIX and to destroy or return all copies of Unix System V source code."

In addition, SCO is now seeking monetary damages based on IBM's noncompliance, the company said. The amended complaint, filed in the U.S. District Court of Utah, where SCO's court case against IBM was originally filed, seeks all money IBM earns from AIX after the June 13 deadline.

A ruling hasn't yet been issued by the court on today's request, and Chris Sontag, general manager of SCO's SCOsource intellectual property division, said the court can rule on the latest filing quickly -- or it could be a matter of months or years. "The point is we don't actually care if it takes long" because the longer it takes, the more IBM will have to pay SCO if the court rules in SCO's favor, he said.

"Certainly, we have laid this at the feet of the courts to enforce our rights," Sontag said.

Darl McBride, SCO's CEO and president, in a statement reiterated that his company is pursuing its recent legal actions to protect its intellectual property.

"IBM has chosen to continue the actions that violate our source code and distribution agreements," McBride said in the statement. "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 and customers no longer have the right to use AIX software."

Mark J. Heise, an attorney at Boies Schiller & Flexner LLP who represents SCO in the case, said in a statement that the agreement his client has with IBM "includes clear provisions that deal with the protection of source code, derivative works and methods."

By allegedly "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," Heise said. "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."

The center of SCO's legal fight is its position that it owns Unix, along with all the contracts, claims and copyrights associated with the operating system. The company also alleges that portions of its System V code are found in Linux, as well as portions of resulting derivative code.

Last month, SCO warned all commercial Linux users that they could be using its code illegally and recommended that commercial users seek legal advice to help them decide what to do about their use of Linux (see story).

Three weeks ago, Novell Inc. called for SCO to put up or shut up over its allegations (see story). In a letter from Novell CEO and President Jack Messman, the company lashed out by challenging SCO's assertion that it owns the copyrights and patents to Unix System V.

Novell, which had previously acquired the Unix systems business of AT&T Corp., broke up and sold its Unix properties in 1994 and 1995. One of those deals was with the former Santa Cruz Operation, which was bought by Caldera International Inc. and later became The SCO Group.

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