The Four Hundred

The Unix and Linux communities were sitting on pins and needles, waiting to see what The SCO Group would do in its escalating legal battle with IBM. SCO then filed an amendment to its original lawsuit last Monday, asking the U.S. District Court of Utah to compel IBM to stop using and distributing AIX and to destroy or return all copies of Unix System V to SCO after revoking its license to Unix.

When SCO filed its $1 billion lawsuit against IBM back in March alleging, among other things, that IBM had illegally been moving SCO's Unix intellectual property and coding methodologies, which it had access to through its licensed AIX variant of Unix, into the open source Linux operating system, the company gave IBM 100 days to settle the lawsuit or it would revoke its license to Unix. The 100 days were up on Friday the 13th. This is probably not a good omen, and it may not even be an accident of timing, depending on how clever you think people are.

SCO is now seeking $2 billion in additional damages from IBM. One of those billions covers the alleged breach of contract for Unix licensing between SCO and Sequent Computer Systems, which IBM bought in 1998 and then promptly mothballed. The other billion covers what SCO has called unfair competitive practices. The original claim for $1 billion in damages was against IBM's AIX-based workstation and server businesses, which are sold under the brand names IntelliStation, RS/6000, and pSeries. SCO is also seeking unspecified punitive damages and costs related to theft of trade secrets and lost Unix sales, and says further that the new damages began accruing June 13. A judge and jury would reckon the monetary value of these damages.

The crux of the amended complaint is that IBM has not only allegedly allowed AIX technology based on SCO's Unix System V to get into Linux, but also that key SMP and NUMA technologies, developed by Sequent and based on Unix System V, have gone into making the current production Linux 2.4 and the development Linux 2.5 (which will be released within a few months as Linux 2.6 for production use). SCO contends that the error logging, clustering, performance measurement, journaled file system, and other technical features of its Unix source code have been leaked into Linux, and it is blaming IBM for this. It may eventually get around to blaming other IT firms, too.

"The Software and Sublicensing Agreements and related agreements that SCO has with IBM includes clear provisions that deal with the protection of source code, derivative works and methods," said Mark Heise, of the law firm Boies Schiller, & Flexner, which is representing SCO in the IBM suit. His comments came in a statement posted on SCO's web site. "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."

"IBM has chosen to continue the actions that violate our source code and distribution agreements," Darl McBride, SCO president and CEO said in the same 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."

IBM's press relations staff did not say anything any different than what Bob Samson, vice president of systems sales at IBM's Systems Group, said in a memo to the his sales staff on Friday, June 13. Samson said that SCO had "sent IBM a letter purporting to 'terminate' IBM's license for Unix code used in AIX on June 13," but he then tried to calm the sales force by saying that IBM's license is "irrevocable, perpetual and fully paid up." After settling that matter, he went on to say that IBM "will continue to ship, support, and develop AIX as our strategic Unix operating system." Samson had put together a Q&A for the staff, which was to be shared with concerned customers, and reiterated that it was important for the sales people--who have direct contact with customers--to make it clear that IBM was fully committed to AIX. Samson also encouraged IBM's sales people to work with IBM's local legal offices to address customer concerns.

Just because you are on the AS/400 or iSeries, don't think that this does not affect you. The dispute over AIX could spill over into the entire eServer line, not just affecting the RS/6000 and pSeries RISC-Unix server line and IntelliStation workstations that IBM sells. The fact that SCO has not asked for injunctions against the iSeries and zSeries lines shows how little it or its lawyers seem to understand about the IBM eServer product lines.

While IBM doesn't make a lot of noise about it, the z/OS and OS/390 environments have all the APIs and functionality necessary for them to be branded as a variant of Unix, and these features are very likely based on IBM's AIX implementation. The AS/400 and iSeries midrange line, which has OS/400 as its primary operating system, has a special AIX runtime environment in it that allows these machines to run AIX applications virtually unchanged on the PowerPC and Power4 servers that bear the AS/400 and iSeries label. And while IBM has killed off AIX on the 32-bit Pentium and 64-bit Itanium platform--some might say that the killing of the Project Monterey unified AIX-SCO Unix by IBM for these two chips is what got SCO all riled up in the first place--the xSeries of Intel-based machines do support Linux, and SCO is widely expected to go after commercial Linux distributors next in enforcing its Unix intellectual property and contractual rights. Linux is a big driver of mainframe MIPS sales in the zSeries line these days, too, and while it is not exactly taking the iSeries base by storm, Linux is supported within logical partitions on these machines and an injunction against AIX and Linux could hamper sales of all of the lines peddled by IBM's Systems Group.

The affect on IBM's software sales could be dramatic as well, if the courts uphold the injunction that SCO is requesting. IBM's middleware and database sales are increasingly dependent on Unix, Windows, and Linux platforms, and on mainframes in particular, this software is sold on a rental basis per month. An injunction that was expanded to force IBM to stop selling AIX-compatible and Linux-compatible software--a possible future ploy by SCO--would be extremely painful to IBM. It would take some fast-talking lawyers and a slow-listening judge to make that happen, of course. But SCO has home court advantage in Utah, which is why it didn't file its lawsuit in the Southern District of New York.

So many key government facilities and industrial giants--including Big Blue--depend on IBM iron that it is hard to imagine that any court would grant an injunction that forced IBM's customers to stop using AIX or, if it comes to it, Linux. The effect on the economy would be devastating, and enforcement would be nearly impossible, particularly outside of the US. That doesn't mean that SCO's legal fight with IBM is not winnable. It just means that the best SCO can hope for is an injunction that messes up IBM's sales to the point that the pain is so great that it says uncle. If IBM ever did that, it would only agree to do so with a public declaration that it did nothing wrong in the first place.

IBM will spend a lot more money on lawyers and fighting bad publicity--not to mention spending lots of goodwill with customers--if this case proceeds than it would cost to launch a hostile takeover of SCO Group and then put all of Unix into the open source community. IBM could save face by saying it was acquiring SCO and therefore Unix for the good of both the Unix and Linux communities, which would in turn benefit the entire IT community. If the Utah courts grant the injunction, it may be too late for this. Heaven only knows what the US Supreme Court would do to IBM if it tried to buy a relatively small company that had launched a $1+ billion lawsuit against it just to get out of trouble. But who knows? It could start a whole new wave of similar settlements. Microsoft could, for example, buy Massachusetts to settle its ongoing antitrust lawsuit. As Fujitsu Siemens says in its ads, the possibilities are infinite.

In the meantime, there is all kinds of talk and speculation that SCO will go after another dominant hardware vendor with a lawsuit similar to the one that it launched against Big Blue--Hewlett-Packard is the obvious target, but there is no reason to believe that HP has any liabilities or licensing issues with SCO relating to its Unix licenses. There is plenty of talk and hints about how a case might be made against the commercial Linux distributors. These companies are not exactly rolling in cash, but SCO might yet go after them, particularly if it can demonstrate that chunks of Unix have been copied into Linux and programming methodologies and practices unique to Unix have been co-opted by the Linux community.