Subject: Text of SCO's complaint
From: "Karsten M. Self" <kmself@ix.netcom.com>
Date: Fri, 7 Mar 2003 22:10:02 +0000

...in text format.  Posted in the interest of an informed discussion.

For some of us, this is simply the best form to present material in for
accessibility (I'm ssh'd to a host a continent and an ocean away), and
comment.

Origional source:

   http://www.sco.com/scosource/complaint3.06.03.html

Note that SCO have several related materials, including several scanned
PDF docs I can't transcribe at the moment, at:

    http://www.sco.com/scosource/

Specifically:

    http://www.sco.com/scosource/ExhibitA.qxd.pdf
    http://www.sco.com/scosource/ExhibitB.qxd.pdf
    http://www.sco.com/scosource/ExhibitC.qxd.pdf
    http://www.sco.com/scosource/ExhibitD.qxd.pdf
    http://www.sco.com/scosource/ExhibitE.qxd.pdf



In the "what can you do" departement, a boycott has already been
launched.  You can get a list of local SCO resellers in your area by
phoning, on SCO's dime:

    1-888-GO-LINUX (1-888-465-4689)

...and selecting the reseller option.  I'd encourage you to do so,
inform the reseller of SCO's action, of the SCO boycott, and why you are
recommending the boycott be extended to SCO's resellers as well.

You can also hang on the line and give SCO themselves an earful, or call
back if you're disconnected....



For the complaint, I'll try to pick this apart later, I've only read it
topically.  Others don't be shy ;-).   SCO seems to do a lot of alleging
of "intellectual property" without specifying just what this property
is.  My understanding is that they hold no patents (thanks Don, for that
legwork), no trademark (the Open Group controls this, my own TESS (the
USPTO's engine sucks) search earlier today turned up "Unix System
Laboratories", whoever they are:

    http://tess2.uspto.gov/bin/jumpto?f=doc&state=7tq0e6.3.56





Translation from HTML via w3m.

------------------------------------------------------------------------
Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE, P.C.
10 West Broadway,
Suite 400
Salt Lake City, Utah
84101
Telephone:  (801) 363-6363
Facsimile:  (801) 363-6666

David Boies
BOIES, SCHILLER & FLEXNER LLP
333 Main Street
Armonk, New York
10504
Telephone:  (914) 749-8200
Facsimile:  (914) 749-8300

Stephen N. Zack (Florida Bar No.  145215)
Mark J. Heise ( Florida Bar No. 771090)

BOIES, SCHILLER & FLEXNER LLP

100 Southeast Second Street
Suite 2800
Miami, Florida
33131
Telephone:  (305) 539-8400
Facsimile:  (305) 539-1307

Attorneys for Plaintiff Caldera Systems, Inc. d/b/a The SCO Group

-------------------------------------------------------------------------------

              IN THE THIRD JUDICIAL DISTRICT OF SALT LAKE COUNTY               

                                 STATE OF UTAH                                 

-------------------------------------------------------------------------------
CALDERA SYSTEMS, INC.,

a Delaware corporation d/b/a THE SCO GROUP,

Plaintiff,

vs.

INTERNATIONAL BUSINESS MACHINES CORPORATION, a Delaware corporation,

Defendant.

COMPLAINT

(Jury Trial Demanded)

Case No. ____________________

Judge _______________________

_______________________________________________________________________________

                                               

Plaintiff, Caldera Systems, Inc., a Delaware corporation doing business as The
SCO Group ( SCO ), complains of Defendant International Business Machines
Corporation ( IBM ) and alleges as follows:

                             Nature of This Action                             

1.             UNIX is a computer operating system program and related software
originally developed by AT&T Bell Laboratories ( AT&T ).  SCO/UNIX is a
modification of UNIX and related software developed by SCO and its
predecessors.  UNIX and SCO/UNIX are widely used in the corporate, or  
enterprise,  computing environment.

2.             As a result of its acquisition of the rights to UNIX from AT&T
and its own development of UNIX and SCO/UNIX, SCO is the present owner of both
UNIX and SCO/UNIX software.  UNIX and SCO/UNIX are valuable software programs
and SCO and its predecessors have invested hundreds of millions of dollars in
their development and enhancement.  SCO (which, as used herein, includes its
predecessor) has licensed UNIX and SCO/UNIX both to software vendors such as
IBM and computer end-users such as McDonald s.  The UNIX and SCO/UNIX licenses
granted to software vendors and end-users are limited licenses, which impose
restrictions and obligations on the licensees designed to protect the economic
value of UNIX and SCO/UNIX.

3.             UNIX and SCO/UNIX compete with other proprietary programs and
with  open source  software, which is software dedicated to the public.  There
are advantages of proprietary programs to end-users (including their
proprietary functions in which their developers have invested large amounts of
time and money).  There are also advantages to open source programs to
end-users (including that they do not have to pay for the program itself) and
to software vendors (whom market the additional products and services that
end-users who use open source programs ordinarily require).  This case is not
about the debate about the relative merits of proprietary versus open source
software.  Nor is this case about IBM s right to develop and promote open
source software if it decides to do so in furtherance of its independent
business objectives, so long as it does so without SCO s proprietary
information.  This case is, and is only, about the right of SCO not to have its
proprietary software misappropriated and misused in violation of its written
agreements and well-settled law.

4.             As set forth in more detail below, IBM has breached its own
obligations to SCO, induced and encouraged others to breach their obligations
to SCO, interfered with SCO s business, and engaged in unfair competition with
SCO, including by

a)       misusing and misappropriating SCO s proprietary software;

b)      inducing, encouraging, and enabling others to misuse and misappropriate
SCO s proprietary software; and

c)       incorporating (and inducing, encouraging, and enabling others to
incorporate) SCO s proprietary software into open source software offerings.

                        Parties, Jurisdiction and Venue                        

5.             Plaintiff SCO is a Delaware corporation with its principal place
of business in Utah County, State of Utah.

6.             Defendant IBM is a Delaware corporation with its principal place
of business in the State of New York.

7.             This Court has general jurisdiction of this action pursuant to
Utah Code Ann. 78-3-4(1).

8.             Venue is properly situated in the Third Judicial District
pursuant to Utah Code Ann. 78-13-5-7 in that plaintiff s action arose in the
State of Utah and IBM maintains an office or place of business in Salt Lake
County.

9.             This Court has in personam jurisdiction over IBM pursuant to
Utah Code Ann. 78-27-24 on the bases that IBM (a) is transacting business
within this State, (b) is contracting to provide goods and services within this
State and (c) is causing tortious injury and breach of contract within this
State.

Background Facts

The UNIX Operating System

10.         UNIX is a computer software operating system.  Operating systems
serve as the link between computer hardware and the various software programs
( applications ) that run on the computer.  Operating systems allow multiple
software programs to run at the same time and generally function as a  traffic
control  system for the different software programs that run on a computer. 

11.         By way of example, in the personal computing market, Microsoft
Windows is the best-known operating system.  The Windows operating system was
designed to operate on computer processors ( chips ) built by Intel.  Thus,
Windows serves as the link between Intel-based processors and the various
software applications that run on personal computers.

12.         In the business computing environment for larger corporations
(often called the  enterprise  environment), UNIX is widely used. 

13.         The UNIX operating system was built by AT&T Bell Laboratories. 
Initially, UNIX was used to power AT&T s telecommunications business. 

14.         After successful in-house use of the UNIX software, AT&T began to
license UNIX as a commercial product for use in enterprise applications by
other large companies.

15.         Over the years, AT&T Technologies Inc., a wholly owned subsidiary
of AT&T, and its related companies licensed UNIX for wide-spread enterprise
use.  IBM, Hewlett-Packard, Inc. ( HP ), Sun Microsystems, Inc. ( Sun ) and
Silicon Graphics, Inc. ( SGI ) became some of the principal United States-based
UNIX licensees.

16.         IBM, HP, Sun, SGI and the other major UNIX vendors each modified
UNIX to operate on their own processors.  Thus, HP-UNIX, for example, started
identically to SGI-UNIX, excepting only that HP-UNIX was designed to interface
with, and operate on, a different processor chip set than SGI-UNIX. Over time,
each of the major vendors has included its own  value added  layer to help
distinguish its marketplace offerings.  These various versions of UNIX are
sometimes referred to as UNIX  flavors. 

17.         All commercial UNIX  flavors  in use today are based on the UNIX
System V Technology ( System V Technology ). 

18.         SCO is the present owner of all software code and licensing rights
to System V Technology.

19.         IBM has branded its version or  flavor  of the UNIX software as  
AIX.   All references hereinafter to AIX are so defined.  AIX is a modification
of AT&T/SCO s licensed UNIX that is designed to run on IBM s processor chip
set, currently called the  Power PC  processor.

20.         There are multiple variants of processor chip sets in the
industry.  Most chip sets will not operate with the processor chip sets
designed for other UNIX vendors.  Thus, while the Intel chip set is commonly
known to consumers because of Intel s aggressive advertising campaign, it is by
no means the only chip set used in the industry.  Further, processor chip sets
manufactured by Intel are not inter-operable with the IBM Power PC processor
chip set or other chip sets, such as Sun Microsystem s  SPARC. 

21.         In the computing industry, the term  desktop computers  is
sometimes used to refer to the less powerful computers used by individuals and
some businesses and the term  workstation  is sometimes used to refer to the
more powerful computers used primarily by enterprises. 

22.         The personal computing market for relatively low-priced desktop
computers came to be dominated by the Windows operating system software
operating on Intel-based processor chip sets.  Thus, the acronym  Wintel 
became known in the industry as the combination of Windows and Intel for
relatively low-priced desktop computers for the personal computing market.

23.         The enterprise computing market for high-performance (and higher
priced) workstation computers came to be dominated by UNIX and the primary UNIX
vendors identified above, each operating on a different processor chip set, and
each using UNIX pursuant to licenses from AT&T/SCO.  Except for SCO, none of
the primary UNIX vendors ever developed a UNIX  flavor  to operate on an
Intel-based processor chip set.  This is because the earlier Intel processors
were considered to have inadequate processing power for use in the more
demanding enterprise market applications.

SCO s Creation of a Market for Intel   The Genesis of SCO OpenServer

24.         As computers grew in popularity to perform business functions, the
processing power of Intel-based processor chips also began to increase
dramatically.  Consistent with Intel founder Gordon Moore s famous prediction,
computer chips remained inexpensive while exponentially increasing in power and
performance. 

25.         Seeing this emerging trend, it became evident to SCO that Intel
chips would gradually gain widespread acceptance for use in the enterprise
marketplace.

26.         Therefore, while other major UNIX vendors modified UNIX for their
own respective non-Intel computing platforms, SCO developed and licensed SCO/
UNIX for Intel-based processors for enterprise use.

27.         SCO s early engineers faced difficult design challenges in
modifying UNIX for effective use on an Intel processing platform.  The
principal design constraint centered around the limited processing power the
Intel chip possessed in the early 1980 s.  The Intel chip (designed as it was
for personal computers) was not nearly as powerful as the enterprise chips used
by IBM, Sun, SGI and others in their respective UNIX offerings. 

28.         Based on the early design constraint of Intel s limited processing
power, SCO found an appropriate enterprise market niche for the early versions
of SCO UNIX single-purpose applications such as point-of-sale control,
inventory control and transactions processing, with the highest possible
reliability.  Intel processors were fully capable of performing these
relatively simple, repetitive tasks, and could do so at a lower cost and as
reliably as the more powerful enterprise processing platforms sold by the other
UNIX vendors, such as Sun and IBM.

29.         One example of a customer well-suited to the earlier version of SCO
UNIX software is McDonald s Corp.  McDonald s has thousands of stores worldwide
and needs all stores to operate on an integrated computing platform for ease of
use, immediate access to information and uniformity.  However, the actual
computing requirements for each individual McDonald s location are functionally
simple sales need to be tracked and recorded, and inventory functions need to
be linked to sales.  SCO s UNIX reliably fulfills McDonald s computing
requirements at reduced cost.

30.         SCO s business model provides enterprise customers the reliability,
extensibility (ease of adding or changing functionality), scalability (ease of
adding processors or servers to increase processing power) and security of UNIX
 but on inexpensive Intel processor chips.  This combination allowed customers
to perform an extremely high number of transactions and, at the same time,
gather and present the information from those transactions in an economical and
useful way for enterprise decision makers.

31.         The simplicity and power of this  UNIX on Intel  business model
helped SCO grow rapidly.  SCO gained other large enterprise customers such as
CitiGroup, K-Mart, Cendant, Target Stores, Texas Instruments, BMW, Walgreens,
Merck, Sherwin Williams, Radio Shack, Auto Zone, British Petroleum, Papa John s
Pizza, Costco and many others. 

32.         As Intel s prominence grew in the enterprise computing market, SCO 
s early version of UNIX also grew into the operating system of choice for
enterprise customers who wanted an Intel-based computing solution for a high
volume of repetitive, simple computing transactions.

33.         SCO s software offering based on its early development of UNIX for
high volume, repetitive computing transactions is known in the market as  SCO
OpenServer. 

34.         SCO OpenServer is based on the original UNIX Software Code
developed by AT&T, but was modified by SCO for the functionality described
above.  Thus, while performing single-function applications, SCO OpenServer did
so, and continues to do so, with the 99.999% reliability of UNIX.

35.         Over 4,000 separate applications have been written by developers
around the world specifically for SCO OpenServer.  Most of these applications
are vertical applications for targeted functions, such as point-of-sale control
for specific industries, inventory control for specific industries, and funds
transfer for the financial industry.  Collectively, these various applications
(software programs) are referred hereinafter as the  SCO OpenServer
Applications. 

The SCO OpenServer Libraries

36.         In creating the thousands of SCO OpenServer Applications, each
designed for a specialized function in a vertical industry, software developers
wrote software code specifically for the SCO OpenServer shared libraries
(hereinafter the  SCO OpenServer Shared Libraries ).

37.         A  shared library  is a common set of computer code inside an
operating system that performs a routine function for all the applications
(software programs) designed to run on that particular operating system.  Thus,
Microsoft Windows has its own set of shared libraries.  SCO OpenServer (UNIX
designed for Intel chips) has its set of own shared libraries.  Sun Solaris
(UNIX designed for SPARC chips) has its own set of shared libraries. 

38.         The shared libraries of all operating systems are designed with  
hooks.   These  hooks  are computer code that trigger the operation of certain
routine functions.  A software developer can shorten the development effort for
any new software program and create a more efficient code base by writing
programs that access the various  hooks  of the operating system, and thereby
use a shared set of code built into the operating system to perform the
repetitive, common functions that are involved in every program.

39.         Every one of the specialized applications (software programs)
designed by various third-party software developers for use on the SCO
OpenServer operating system was written to access the various  hooks  built
into SCO OpenServer; and therefore designed to access the SCO OpenServer Shared
Libraries. 

40.         The SCO OpenServer Shared Libraries are the proprietary and
confidential property of SCO.  SCO OpenServer has been licensed to numerous
customers subject to restrictions on use that prohibit unauthorized use of any
of its software code, including without limitation, the SCO OpenServer Shared
Libraries.

41.         Shared libraries are by their nature unique creations based on
various decisions to write code in certain ways, which are in great part random
decisions of the software developers who create the shared library code base. 
There is no established way to create a specific shared library and the random
choices in the location and access calls for  hooks  that are part of the
creation of any shared library.  Therefore, the mathematical probability of a
customer being able to recreate the SCO OpenServer Shared Libraries without
unauthorized access to or use of the source code of the SCO OpenServer Shared
Libraries is nil.

SCO s Development of UnixWare on Intel

42.         While the original SCO OpenServer operating system performs with
all the reliability and dependability of other UNIX systems, it was originally
designed for the initially low processing power of Intel chips.  Therefore, SCO
OpenServer does not contain, or require, the same level of scalability and
extensibility that other versions of UNIX offer.

43.         During or about 1992, SCO s predecessor in interest, Novell, Inc.
( Novell ), acquired all right, title and interest in and to the UNIX Software
Code from AT&T for $750 million in Novell stock.  For branding purposes, Novell
renamed UNIX as  UnixWare. 

44.         Upon SCO s acquisition of the UNIX assets from Novell, SCO owned
the rights to all UNIX software designed for Intel processors.  SCO retained
its original UNIX product, SCO OpenServer, which remained dedicated to the
relatively low-power computing tasks identified above.  SCO also had acquired
UnixWare from Novell, which was designed for high-power computing tasks, and
competed directly against the related UNIX products of Sun, IBM, SGI and
others.

45.         Existing UnixWare customers include large companies, such as
NASDAQ, Lucent Technologies, Daimler Chrysler, K-Mart, Goodyear, Comverse, and
numerous others.  These customers all have highly sophisticated computing needs
that now can be performed on an Intel processor chip set.

46.         From and after September 1995, SCO dedicated significant amounts of
funding and a large number of UNIX software engineers, many of whom were
original AT&T UNIX software engineers, to upgrading UnixWare for
high-performance computing on Intel processors.

47.         By approximately 1998, SCO had completed the majority of this
task.  That is to say, UnixWare had largely been modified, tested and  
enterprise hardened  to use Intel-based processors in direct competition
against IBM and Power PC chips, the Sun SPARC chip and all other
high-performance computing UNIX platforms for all complex computing demands. 
The term  enterprise hardened  means to assure that a software product is fully
capable of performing under the rigorous demands of enterprise use.

48.         SCO was ready to offer large enterprise customers a high-end UNIX
computing platform based on inexpensive Intel processors.  Given the rapid
growth of Intel s performance capabilities and Intel s popularity in the
marketplace, SCO found itself in a highly desirable market position.  In
addition, SCO still has its SCO OpenServer business for retail and
inventory-targeted functions, with its 4,000 applications in support. 

49.         Prior to the events complained of in this action, SCO was the
undisputed global leader in the design and distribution of UNIX-based operating
systems on Intel-based processing platforms.

Project Monterey

50.         As SCO was poised and ready to expand its market and market share
for UnixWare targeted to high-performance enterprise customers, IBM approached
SCO to jointly develop a new 64-bit UNIX-based operating system for Intel-based
processing platforms.  This joint development effort was widely known as
Project Monterey. 

51.         Prior to this time, IBM had not developed any expertise to run UNIX
on an Intel chip and instead was confined to its Power PC chip.

52.         In furtherance of Project Monterey, SCO expended substantial
amounts of money and dedicated a significant portion of SCO s development team
to completion of the project.

53.         Specifically, plaintiff and plaintiff s predecessor provided IBM
engineers with valuable information and trade secrets with respect to
architecture, schematics, and design of UnixWare and the UNIX Software Code for
Intel-based processors.

54.         By about May 2001, all technical aspects of Project Monterey had
been substantially completed.  The only remaining tasks of Project Monterey
involved marketing and branding tasks to be performed substantially by IBM.

55.         On or about May 2001, IBM notified plaintiff that it refused to
proceed with Project Monterey, and that IBM considered Project Monterey to be  
dead.   In fact, in violation of its obligations to SCO, IBM chose to use and
appropriate for its own business the proprietary information obtained from SCO.

AT&T UNIX Agreements

56.         AT&T Technologies originally licensed the UNIX operating system
software code to approximately 30,000 software licensees, including defendant
IBM, for the UNIX operating system software source code, object code and
related schematics, documentation and derivative works (collectively, the  UNIX
Software Code ).  To protect the confidential and proprietary source code
information, these license agreements, as detailed below, contained strict
limitations on use and dissemination of UNIX Software Code.

57.         When SCO acquired the UNIX assets from Novell in 1995, it acquired
rights in and to all (1) underlying, original UNIX software code developed by
AT&T Bell Laboratories, including all claims against any parties relating to
any right, property or asset used in the business of developing UNIX and
UnixWare; (2) the sale of binary and source code licenses to various versions
of UNIX and UnixWare; (3) the support of such products and (4) the sale of
other products that are directly related to UNIX and UnixWare.

58.         As a result of this acquisition, SCO became the authorized
successor in interest to the original position of AT&T Technologies with
respect to all licensed UNIX software products.

59.         There are two primary types of software licensing agreements
between AT&T Technologies and its various licensees:

a)      The AT&T-related software agreements are collectively referred to
hereinafter as the  AT&T UNIX Software Agreements.  

b)            The AT&T-related sublicensing agreements are collectively
referred to hereinafter as the  AT&T UNIX Sublicensing Agreements.  

The AT&T UNIX Software Agreements and the AT&T UNIX Sublicensing Agreements are
sometimes collectively referred to hereinafter as the  AT&T UNIX Agreements. 

60.         Plaintiff is successor in interest to, and owner of, all
contractual rights arising from the AT&T UNIX Agreements.

61.         On February 1, 1985, AT&T and IBM entered into certain AT&T UNIX
Agreements:

a)  Software Agreement Number Soft-00015 ( AT&T / IBM Software Agreement 
attached hereto and incorporated herein as Exhibit A);

b) Sublicensing Agreement Number Sub-00015A ( AT&T / IBM Sublicensing Agreement
  attached hereto and incorporated herein as Exhibit B).

62.         In addition, AT&T and IBM entered into a side letter on that date 
( AT&T / IBM Side Letter  attached hereto and incorporated herein as Exhibit
C). 

63.         Thereafter, Amendment X to Software Agreement SOFT-00015, as
amended, was executed on or about October 16, 1996 by and among IBM, The Santa
Cruz Operation, Inc. ( SCO ) and Novell, Inc. ( IBM Amendment X  attached
hereto and incorporated herein as Exhibit D).

64.         Collectively these agreements, side letter and amendment are
referred to hereinafter as the  AT&T / IBM UNIX Agreements. 

65.         Pursuant to the AT&T / IBM UNIX Agreements, the parties agreed,
inter alia, to the following terms and conditions:

a)      IBM recognizes the proprietary nature of the Software Products (defined
to mean the UNIX Software Code) and the need to protect against its
unrestricted disclosure (Side Letter, 9);

b)      IBM may not transfer or dispose of the UNIX Software Code in whole or
in part (AT&T / IBM Software Agreement 7.10);

c)      IBM is required to hold all UNIX Software Code subject to the AT&T /
IBM Agreements in confidence (Software Agreement 7.06(a) as amended by Side
Letter 9); and

d)      IBM may not use the UNIX Software Code directly for others or allow any
use of the UNIX Software Code by others (Software Agreement 2.05).

66.         The cumulative effect of these provisions requires IBM to protect
the UNIX Software Code against unrestricted disclosure, unauthorized transfer
or disposition and unauthorized use by others. 

67.         In addition, IBM s ability to sublicense UNIX Software Code for the
use of others is restricted under 2.01 of the Sublicensing Agreement as
follows:

AT&T grants to LICENSEE personal, nontransferable and nonexclusive rights:

a)      To make copies of SUBLICENSED PRODUCTS and to furnish, either directly
or through DISTRIBUTORS, such copies of SUBLICENSED PRODUCTS to customers
anywhere in the world (subject to U.S. government export restrictions) for use
on customer CPUs solely for each such customer s internal business purposes,
provided that the entity (LICENSEE or a DISTRIBUTOR) furnishing the sublicensed
products obtains agreement as specified in section 2.02 from such a customer,
before or at the time of furnishing each copy of a SUBLICENSED PRODUCT, that:

i)        Only a personal, nontransferable and nonexclusive right to use such
copy of the SUBLICENSED PRODUCTS on one CPU at a time is granted to such
customer;

ii)       No title to the intellectual property in the SUBLICENSED PRODUCT is
transferred to such customer;

iii)     Such customer will not copy the SUBLICENSED PRODUCT except as
necessary to use such SUBLICENSED PRODUCT on such one CPU;

iv)     Such customer will not transfer the SUBLICENSED PRODUCT to any other
party except as authorized by the entity furnishing the SUBLICENSED PRODUCT;

v)      Such customer will not export or re-export the SUBLICENSED PRODUCT
without the appropriate United States or foreign government licenses;

vi)     Such customer will not reverse compile or disassemble the SUBLICENSED
PRODUCT;

b)      To use SUBLICENSED PRODUCTS on LICENSEE S CPUs solely for LICENSEE S
own internal business purposes; and

c)      To use, and to permit DISTRIBUTORS to use, SUBLICENSED PRODUCTS without
fee solely for testing CPUs that are to be delivered to customers and for
demonstrating SUBLICENSED PRODUCTS to prospective customers.

This sublicensing limitation prohibits, among other things, transfer of title,
transfer of the software by a customer, and free use of the UNIX Software Code
except for demonstration purposes.

68.         As a result of the foregoing, SCO s rights include the following
five separate and distinct enforcement rights:

a)      Rights under trade secrets and developer agreements involving SCO
OpenServer;

b)      Rights under customer licensing agreements involving SCO OpenServer;

c)      Rights under trade secrets and developer agreements involving SCO
UnixWare;

d)      Rights under customer licensing agreements involving SCO UnixWare; and

e)      Rights under all other original UNIX licenses issued by AT&T
Technologies and its successors.

Marketplace Value of UNIX

69.         UNIX s value in the enterprise marketplace is largely a function of
its reliability, extensibility, and robust performance capability.  That is to
say, it virtually never needs repair, it performs well under a wide variety of
adverse circumstances, and it can be extended throughout an enterprise and
across multiple processors to perform unified or disparate tasks in a seamless
computing environment.  Because of these features, UNIX-based equipment has
replaced mainframe computers for all but the most demanding computing tasks. 
And, because UNIX-based equipment is far cheaper than mainframe computing
equipment, a customer who cannot otherwise justify the cost of mainframe
computers can otherwise gain the advantages of  supercomputing  operations
through use of UNIX-based equipment.

70.         One or more of the different versions of UNIX-based operating
systems sold by Sun, IBM, SCO, SGI, and others, is the operating system of
choice for large enterprise computing operations in virtually 100% of the
Fortune 1000 companies. 

71.         UNIX gained this prominence in the computing marketplace because of
twenty years of development and over one billion dollars invested by plaintiff
and its predecessors to create a stable, reliable operating system to perform
the mission critical work required by large enterprises.

72.         The recent rise of the global technology economy has been powered
in large part by UNIX.  Virtually every mission critical financial application
in the world is powered by UNIX, including electronic transfers of funds.  Real
time stock trades are powered by UNIX.  Inventory controls and distributions
are powered by UNIX.  All major power grids and all major telecommunications
systems are powered by UNIX.  Many satellite control and defense control
systems are powered by UNIX.  Virtually every large corporation in the world
currently operates part or all of its information technology systems on a UNIX
operating system.

73.         Based on its value in the marketplace, UNIX has become the most
widely used and widely accepted operating system for enterprise, institutional
and manufacturing applications throughout the world.

The Introduction of Linux

74.         A new operating system derived from and based on UNIX recently has
become popular among computer enthusiasts for use on personal,
educational-based, and not-for-profit projects and initiatives.  This operating
system is named Linux. 

75.         The name  Linux  is commonly understood in the computing industry
to be a combination of the word  UNIX  (referring to the UNIX operating system)
and the name  Linus.   The name  Linus  was taken from the person who
introduced Linux to the computing world, Linus Torvalds. 

76.         The initial market positioning of Linux was to create a free
UNIX-like operating system to be used by developers and computer hobbyists in
personal, experimental, and not-for-profit applications.  As such, Linux posed
little, if any, commercial threat to UNIX.

The General Public License

77.         Related to the development of the open source software development
movement in the computing world, an organization was founded by former MIT
professor Richard Stallman entitled  GNU.  

78.         The primary purpose of the GNU organization is to create free
software based on valuable commercial software.  The primary operating system
advanced by GNU is Linux.

79.         In order to assure that the Linux operating system (and other
software) would remain free of charge and not-for-profit, GNU created a
licensing agreement entitled the General Public License ( GPL ). 

80.         Any software licensed under the GPL (including Linux) must, by its
terms, not be held proprietary or confidential, and may not be claimed by any
party as a trade secret or copyright property. 

81.         In addition, the GPL provides that, unlike SCO s UNIX operating
system or IBM s AIX operating system or Sun s Solaris operating system, no
warranty whatsoever runs with its software.  The GPL includes the following
language:

                                  NO WARRANTY                                  

BECAUSE THE PROGRAM IS LICENSED FREE OF CHARGE, THERE IS NO WARRANTY FOR THE
PROGRAM, TO THE EXTENT PERMITTED BY APPLICABLE LAW THE ENTIRE RISK AS TO THE
QUALITY AND PERFORMANCE OF THE PROGRAM IS WITH YOU.  SHOULD THE PROGRAM PROVE
DEFECTIVE, YOU ASSUME THE COST OF ALL NECESSARY SERVICING, REPAIR OR
CORRECTION.

Limitations of Linux Before IBM s Involvement

82.         Linux started as a hobby project of a 19-year old student.  Linux
has evolved through bits and pieces of various contributions by numerous
software developers using single processor computers.  Virtually none of these
software developers and hobbyists had access to enterprise-scale equipment and
testing facilities for Linux development.  Without access to such equipment,
facilities, sophisticated methods, concepts and coordinated know-how, it would
be difficult or impossible for the Linux development community to create a
grade of Linux adequate for enterprise use.

83.         As long as the Linux development process remained uncoordinated and
random, it posed little or no threat to SCO, or to other UNIX vendors, for at
least two major reasons: (a) Linux quality was inadequate since it was not
developed and tested in coordination for enterprise use and (b) enterprise
customer acceptance was non-existent because Linux was viewed by enterprise
customers as a  fringe  software product.

84.         Prior to IBM s involvement, Linux was the software equivalent of a
bicycle.  UNIX was the software equivalent of a luxury car.  To make Linux of
necessary quality for use by enterprise customers, it must be re-designed so
that Linux also becomes the software equivalent of a luxury car.  This
re-design is not technologically feasible or even possible at the enterprise
level without (1) a high degree of design coordination, (2) access to expensive
and sophisticated design and testing equipment; (3) access to UNIX code,
methods and concepts; (4) UNIX architectural experience; and (5) a very
significant financial investment.

85.         For example, Linux is currently capable of coordinating the
simultaneous performance of 4 computer processors.  UNIX, on the other hand,
commonly links 16 processors and can successfully link up to 32 processors for
simultaneous operation.  This difference in memory management performance is
very significant to enterprise customers who need extremely high computing
capabilities for complex tasks.  The ability to accomplish this task
successfully has taken AT&T, Novell and SCO at least 20 years, with access to
expensive equipment for design and testing, well-trained UNIX engineers and a
wealth of experience in UNIX methods and  concepts. 

86.         It is not possible for Linux to rapidly reach UNIX performance
standards for complete enterprise functionality without the misappropriation of
UNIX code, methods or concepts to achieve such performance, and coordination by
a larger developer, such as IBM.

IBM s Scheme

87.         As market awareness of Linux evolved, IBM initiated a course of
conduct with the purpose and effect of using Linux to unfairly compete in the
enterprise market.  At that point in time, four important events were occurring
simultaneously in the enterprise software computing marketplace: 

a) Intel chips were becoming widely demanded by enterprise customers since
Intel s processing power had increased and its cost had remained low;

b)      SCO s market power in the enterprise marketplace was increasing based
on the combined capabilities of SCO OpenServer, SCO UnixWare and SCO s unique
position as UNIX on Intel;

c)      Free Linux had carved a niche in not-for-profit and non-business uses;
and

d)      IBM was in the process of evolving its business model from products to
services.

88.         In the process of moving from product offerings to services
offerings, IBM dramatically increased its staff of systems integrators to
120,000 strong under the marketing brand  IBM Global Services.   By contrast,
IBM s largest historic competitor as a seller of UNIX software, Sun
Microsystems, has a staff of approximately 12,000 systems integrators.  With
ten times more services-related personnel than its largest competitor, IBM
sought to move the corporate enterprise computing market to a services model
based on free software on Intel processors. 

89.         By undermining and destroying the entire marketplace value of UNIX
in the enterprise market, IBM would gain even greater advantage over all its
competitors whose revenue model was based on licensing of software rather than
sale of services.

90.         To accomplish the end of transforming the enterprise software
market to a services-driven market, IBM set about to deliberately and
improperly destroy the economic value of UNIX and particularly the economic
value of UNIX on Intel-based processors. 

91.         Among other actions, IBM misappropriated the confidential and
proprietary information from SCO in Project Monterey.  IBM thereafter misused
its access to the UNIX Software Code.  On or about August 17, 2000, IBM and Red
Hat Inc. issued a joint press release through M2 Presswire announcing, inter
alia, as follows:

 IBM today announced a global agreement that enables Red Hat, Inc. to bundle
IBM s Linux-based software. 

IBM said it would contribute more than 100 printer drivers to the open source
community.  With these announcements, IBM is making it easier for customers to
deploy e-business applications on Linux using a growing selection of hardware
and software to meet their needs.  The announcements are the latest initiative
in IBM s continuing strategy to embrace Linux across its entire product and
services portfolio.

Helping build the open standard, IBM has been working closely with the open
source community, contributing technologies and resources. 

92.         Thereafter, on December 20, 2000, IBM Vice President Robert LeBlanc
disclosed IBM s improper use of confidential and proprietary information
learned from Project Monterey to bolster Linux as part of IBM s long term
vision, stating:

 Project Monterey was actually started before Linux did.  When we started the
push to Monterey, the notion was to have one common OS for several
architectures.  The notion actually came through with Linux, which was open
source and supported all hardware.  We continued with Monterey as an extension
of AIX [IBM UNIX] to support high-end hardware.  AIX 5 has the best of
Monterey.  Linux cannot fill that need today, but over time we believe it
will.  To help out we re making contributions to the open source movement like
the journal file system.  We can t tell our customers to wait for Linux to grow
up. 

If Linux had all of the capabilities of AIX, where we could put the AIX code at
runtime on top of Linux, then we would.

Right now the Linux kernel does not support all the capabilities of AIX.  We ve
been working on AIX for 20 years.  Linux is still young. We re helping Linux
kernel up to that level.  We understand where the kernel is.  We have a lot of
people working now as part of the kernel team.  At the end of the day, the
customer makes the choice, whether we write for AIX or for Linux.

We re willing to open source any part of AIX that the Linux community considers
valuable.  We have open-sourced the journal filesystem, print driver for the
Omniprint.  AIX is 1.5 million lines of code.  If we dump that on the open
source community then are people going to understand it?  You re better off
taking bits and pieces and the expertise that we bring along with it.  We have
made a conscious decision to keep contributing.  

93.         IBM, however, was not and is not in a position legally to  open
source any part of AIX that the Linux community considers valuable.   Rather,
IBM is obligated not to open source AIX because it contains SCO s confidential
and proprietary UNIX operating system and, more importantly, the code that is
essential for running mission critical applications (e.g., wire transfers) for
large businesses.

94.         Over time, IBM made a very substantial financing commitment to
improperly put SCO s confidential and proprietary information into Linux, the
free operating system.  On or about May 21, 2001 IBM Vice President Richard
Michos, stated in an interview to Independent Newspapers, New Zealand, inter
alia:

 IBM will put US $1 billion this year into Linux, the free operating system.

IBM wants to be part of the community that makes Linux successful.  It has a
development team that works on improvements to the Linux kernel, or source
code.  This includes programmers who work in the company s Linux technology
center, working on making the company s technology Linux-compatible. 

That team of IBM programmers is improperly extracting and using SCO s UNIX
technology from the same building that was previously the UNIX technology
center.  

95.         In a news article issued by e-Business Developer on or about August
10, 2001, the following conduct was attributed to IBM regarding participation
in the open source software movement:

 Another example is when IBM realized that the open-source operating system
(OS) Linux provided an economical and reliable OS for its various hardware
platforms. However, IBM needed to make changes to the source to use it on its
full range of product offerings.

IBM received help from the open-source community with these changes and in
return, released parts of its AIX OS to open source.  IBM then sold its
mainframes running Linux to Banco Mercantile and Telia Telecommunications,
replacing 30 Windows NT boxes and 70 Sun boxes respectively - obviously a win
for IBM, which reduced its cost of maintaining a proprietary OS while
increasing its developer base.  IBM's AIX contributions were integrated into
the standard Linux source tree, a win for open source. 

96.         Again,  IBM s AIX contributions  consisted of the improper
extraction, use, and dissemination of SCO S UNIX source code and libraries, and
unauthorized misuse of UNIX methods, concepts, and know-how.

97.         In a news article issued by IDC on or about August 14, 2001, the
following was reported:

 IBM continued its vocal support of the Linux operating system Tuesday, saying
the company will gladly drop its own version of UNIX from servers and replace
it with Linux if the software matures so that it can handle the most demanding
tasks.

IBM executives speaking here at the company's solutions developer conference
outlined reasons for the company's Linux support, pointing to features in the
operating system that could push it past UNIX for back-end computing. While
they admit that Linux still has a way to go before it can compete with the
functions available on many flavors of UNIX, IBM officials said that Linux
could prove more cost-effective and be a more user-friendly way to manage
servers.

 We are happy and comfortable with the idea that Linux can become the
successor, not just for AIX, but for all UNIX operating systems,  said Steve
Mills, senior vice president and group executive of the IBM Software Group,
during a news conference. 

98.         Continuing with its  happy and comfortable  idea that Linux
succeeds at the expense of UNIX, on or about January 23, 2003, IBM executive
Steve Mills  gave a keynote speech at LinuxWorld, a trade show, which was
reported by Computer Reseller News, IBM s Mills: Linux Will be on Par with UNIX
in No Time, January 23, 2003, inter alia, as follows:

 IBM will exploit its expertise in AIX to bring Linux up to par with UNIX, an
IBM executive said Thursday.

During his keynote at LinuxWorld here, IBM Senior Vice President and group
executive Steve Mills acknowledged that Linux lags behind UNIX in scalability,
SMP support, fail-over capabilities and reliability--but not for long.

 The pathway to get there is an eight-lane highway,  Mills said, noting that
IBM's deep experience with AIX and its 250-member open-source development team
will be applied to make the Linux kernel as strong as that of UNIX.  The road
to get there is well understood. 

                                    *  *  *                                    

Mills hinted that the company's full development capabilities will be brought
to bear in engineering the Linux kernel to offer vastly improved scalability,
reliability and support for mixed workloads--and to obliterate UNIX. 

99.         The only way that the pathway is an  eight-lane highway  for Linux
to achieve the scalability, SMP support, fail-over capabilities and reliability
of UNIX is by the improper extraction, use, and dissemination of the
proprietary and confidential UNIX Software Code and libraries.  Indeed, UNIX
was able to achieve its status as the premiere operating system only after
decades of hard work, beginning with the finest computer scientists at AT&T
Bell Laboratories, plaintiff s predecessor in interest.

100.     Based on other published statements, IBM currently has over 7,000
employees involved in the transfer of UNIX knowledge into the Linux business of
IBM, Red Hat and SuSE (the largest European Linux distributor). On information
and belief, a large number of the said IBM employees currently working in the
transfer of UNIX to Linux have, or have had, access to the UNIX Software Code.

IBM s Coordination of Linux Development Efforts

101.     On information and belief, IBM has knowingly induced, encouraged, and
enabled others to distribute proprietary information in an attempt to conceal
its own legal liability for such distributions:

 What is wrong about this [Linux] distribution, is basically the millions of
lines of code that we never have seen.  We don t know if there are any patent
infringements [in this code] with somebody we don t know.  We don t want to
take the risk of being sued for a patent infringement.  That is why we don t do
distributions, and that s why we have distributors.  Because distributors are
not so much exposed as we are.  So that s the basic deal as I understand it. 

Karl-Heinz Strassemeyer, IBM The Register, 11/19/2002, www.theregister.co.uk/
content/4/28183.html

102.     IBM is affirmatively taking steps to destroy all value of UNIX by
improperly extracting and using the confidential and proprietary information it
acquired from UNIX and dumping that information into the open source
community.  As part of this effort, IBM has heavily invested in the following
projects to further eliminate the viability of UNIX:

a) The Linux Technology Center was launched in 2001 with the advertised intent
and foreseeable purpose of transferring and otherwise disposing of all or part
of UNIX, including its concepts, ideas, and know-how, into an open source Linux
environment; 

b)      The IBM Linux Center of Competency was launched to assist and train
financial services companies in an accelerated transfer of UNIX to Linux with
the advertised intent and foreseeable purpose of transferring and otherwise
disposing of all or part of UNIX, including its concepts, ideas, and know-how,
into an open source Linux environment;

c) A carrier-grade Linux project has been undertaken to use UNIX code, methods,
concepts, and know-how for the unlawful purpose of transforming Linux into an
enterprise-hardened operating system;

d)      A data center Linux project has been undertaken to use UNIX code,
methods, concepts, and know-how for the unlawful purpose of transforming Linux
into an enterprise-hardened operating system; and

e) Other projects and initiatives have been undertaken or supported that
further evidence the improper motive and means exercised by IBM in its efforts
to eliminate UNIX and replace it with free Linux.

103.     But for IBM s coordination of the development of enterprise Linux, and
the misappropriation of UNIX to accomplish that objective, the Linux
development community would not timely develop the quality or customer support
necessary for wide-spread use in the enterprise market. 

FIRST CAUSE OF ACTION

      (Misappropriation of Trade Secrets Utah Code Ann. 13-24-1 et seq.)      

104.     Plaintiff incorporates and re-alleges by reference paragraphs 1-103
above.

105.     Plaintiff is the owner of unique know how, concepts, ideas,
methodologies, standards, specifications, programming, techniques, UNIX
Software Code, object code, architecture, design and schematics that allow UNIX
to operate with unmatched extensibility, scalability, reliability and security
(hereinafter defined as  SCO s Trade Secrets ).  SCO s Trade Secrets provide
SCO with an advantage over its competitors.

106.     SCO s Trade Secrets are embodied within SCO s proprietary SCO
OpenServer and its related shared libraries and SCO s UnixWare and its related
shared libraries.

107.     SCO and its predecessors in interest have expended over one billion
dollars to develop SCO s Trade Secrets.

108.     IBM, through improper means acquired and misappropriated SCO s Trade
Secrets for its own use and benefit, for use in competition with SCO and in an
effort to destroy SCO.

109.     At the time that IBM acquired access to SCO s Trade Secrets, IBM knew
that it had a duty to maintain the secrecy of SCO s Trade Secrets or limit
their use.

110.     SCO s Trade Secrets derive independent economic value, are not
generally known to third persons, are not readily ascertainable by proper means
by other persons who can obtain economic value from their disclosure and use,
and are subject to reasonable efforts by SCO and its predecessors to maintain
secrecy.

111.     The acts and conduct of IBM in misappropriating and encouraging,
inducing and causing others to commit material misappropriation of SCO s Trade
Secrets are the direct and proximate cause of a near-complete devaluation and
destruction of the market value of SCO OpenServer and SCO UnixWare that would
not have otherwise occurred but for the conduct of IBM.

112.     Pursuant to Utah Code Ann. 13-24-4, plaintiff is entitled to an award
of damages against IBM in the following amounts:

a) Actual damages as a result of the theft of trade secrets; together with

b)      Profits from IBM s Linux-related business on account of its
misappropriation through the time of trial; together with

c) Additional foreseeable profits for future years from IBM s Linux-related
business on account of its misappropriation in an amount to be proven at the
time of trial.

113.     Because IBM s misappropriation was willful, malicious, and in reckless
disregard of Plaintiff s rights, SCO is entitled to an award of exemplary
damages against IBM in an amount equal to two times the amount of damages,
pursuant to Utah Code Ann. 13-24-4(2).

114.     Plaintiff is also entitled to an award of attorneys  fees and costs in
an amount to be proven at the time of trial pursuant to Utah Code Ann. 
13-24-5.

SECOND CAUSE OF ACTION

                             (Unfair Competition)                              

115.     Plaintiff incorporates and re-alleges by reference paragraphs 1-114
above.

116.     Plaintiff and its predecessors have built the UNIX System V
Technology, the Unix Software Code, SCO OpenServer, UnixWare and their
derivatives through very substantial efforts over a time span in excess of 20
years and expenditure of money in excess of $1 billion.

117.     IBM has engaged in a course of conduct that is intentionally and
foreseeably calculated to undermine and/or destroy the economic value of the
UNIX Software Code anywhere and everywhere in the world, and to undermine and/
or destroy plaintiff s rights to fully exploit and benefit from its ownership
rights in and to UNIX System V Technology, the Unix Software Code, SCO
OpenServer, UnixWare and their derivatives, and thereby seize the value of UNIX
System V Technology, the Unix Software Code, SCO OpenServer, UnixWare and their
derivatives directly for its own benefit and indirectly for the benefit of its
Linux distribution partners.

118.     In furtherance of its scheme of unfair competition, IBM has engaged in
the following conduct:

a)   Misappropriation of trade secrets and confidential information of
plaintiff;

b)      Violation of confidentiality provisions running to the benefit of
plaintiff;

c) Inducing and encouraging others to violate confidentiality provisions and to
misappropriate trade secrets and confidential information of plaintiff;

d)      Contribution of trade secret protected software code for incorporation
into one or more Linux or other free UNIX-like software releases, intended for
transfer of ownership to the general public and distribution to the enterprise
software market under the General Public License, with the effect and intent of
transferring ownership thereto;

e) Use of deceptive means and practices in dealing with plaintiff with respect
to its software development efforts; and

f)        Other methods of unlawful and/or unfair competition.

119.     IBM s unfair competition has directly and/or proximately caused
significant foreseeable and consequential harm to plaintiff in the following
particulars:

a) Plaintiff s revenue stream from UNIX licenses for Intel-based processing
platforms has decreased substantially;

b)      As Intel-based processors have now become the processing platform of
choice for a rapidly-increasing customer base of enterprise software users,
plaintiff has been deprived of the opportunity to fairly exploit its
market-leading position for UNIX on Intel-based processors, which revenue
opportunity would have been very substantial on a recurring, annual basis but
for IBM s unfairly competitive practices;

c) Plaintiff stands at imminent risk of being deprived of its entire stream of
all UNIX licensing revenue in the foreseeably near future;

d)      Plaintiff has been deprived of the effective ability to market and sell
its new UNIX-related improvements, including a 64-bit version of UNIX for
Intel-based processors (based on Project Monterey) and its new web-based
UNIX-related products, including UNIX System VI;

e) Plaintiff has been deprived of the effective revenue licensing opportunity
to transfer its existing UNIX System V customer base to UNIX System VI; and

f)        Plaintiff has been deprived of the effective ability to otherwise
fully and fairly exploit UNIX s market-leading position in enterprise software
market, which deprivation is highly significant given the inability of
Microsoft Windows NT to properly support large-scale enterprise applications.

120.     As a result of IBM s unfair competition and the marketplace injury
sustained by plaintiff as set forth above, plaintiff has suffered damages in an
amount to be proven at trial, but no less than $1 billion, together with
additional damages through and after the time of trial foreseeably and
consequentially resulting from IBM s unfair competition in an amount to be
proven at the time of trial.

121.     IBM s unfairly competitive conduct was also intentionally and
maliciously designed to destroy plaintiff s business livelihood and all
opportunities of plaintiff to derive value from the UNIX Software Code in the
marketplace.  As such, IBM s wrongful acts and course of conduct has created a
profoundly adverse effect on UNIX business worldwide.  As such, this Court
should impose an award of punitive damages against IBM in an amount to be
proven and supported at trial.

THIRD CAUSE OF ACTION

                         (Interference with Contract)                          

122.     Plaintiff incorporates and re-alleges by reference paragraphs 1-121
above.

123.     SCO has contracts with customers around the world for licensing of
UNIX Software.

124.     IBM knew and should have known of these corporate software licensing
agreements between SCO and its customers, including the fact that such
agreements contain confidentiality provisions and provisions limiting the use
to which the licensed code can be put.

125.     IBM, directly and through its Linux distribution partners, has
intentionally and without justification induced SCO s customers and licensees
to breach their corporate licensing agreements, including but not limited to,
inducing the customers to reverse engineer, decompile, translate, create
derivative works, modify or otherwise use the UNIX software in ways in
violation of the license agreements.  These customers include Sherwin Williams,
Papa John s Pizza, and Auto Zone, among others. The licensees include
Hewlett-Packard, Fujitsu, NEC and Toshiba, among others.

126.     IBM s tortious interference has directly and/or proximately caused
significant foreseeable damages to SCO, including a substantial loss of
revenues.

127.     IBM s tortious conduct was also intentionally and maliciously designed
to destroy plaintiff s business livelihood and all opportunities of plaintiff
to derive value from the UNIX Software Code in the marketplace.  As such, this
Court should impose an award of punitive damages against IBM in an amount to be
proven and supported at trial.

                            FOURTH CAUSE OF ACTION                             
                                                                               
                             (Breach of Contract)                              

128.     Plaintiff incorporates and realleges by reference paragraphs 1-127
above.

129.     IBM has numerous obligations under the AT&T / IBM UNIX Agreements,
some of which are detailed below.

130.     Paragraph 11 of the Side Letter contains the following language
regarding the intent of the parties to prevent unrestricted disclosure of UNIX:

You [IBM] recognize the proprietary nature of SOFTWARE PRODUCTS and the need to
protect SOFTWARE PRODUCTS from unrestricted disclosure.

131.     IBM is prohibited under 7.10 of the Software Agreement from
transferring or disposing of UNIX in a way that destroys its economic value. 
The applicable contract language reads as follows:

Except as provided in Section 7.06(b), nothing in this Agreement grants to
Licensee the right to sell, lease or otherwise transfer or dispose of a
SOFTWARE PRODUCT in whole or in part.

132.     IBM has a duty of confidentiality to protect the confidentiality of
SCO s trade secrets.  The Side Letter 9 provides, in part, as follows:

LICENSEE [IBM] agrees that it shall hold SOFTWARE PRODUCTS subject to this
Agreement in confidence for AT&T.  LICENSEE further agrees that it shall not
make any disclosure of such SOFTWARE PRODUCTS to anyone, except to employees of
LICENSEE to whom such disclosure is necessary to the use for which rights are
granted, LINCENSEE shall appropriately notify each employee to whom any such
disclosure is made that such disclosure is made in confidence and shall be kept
in confidence by such employee.

IBM is further required by 2.01 of the Sublicensing Agreement to obtain
confidentiality agreements from its distributors and customers, and by 3 of
the Side letter to obtain the same from contractors. 

133.     IBM is prohibited under Section 2.05 of the Software Agreement from
using UNIX for others.  The applicable language provides:

No right is granted by this Agreement for the use of SOFTWARE PRODUCTS directly
for others, or for any use of SOFTWARE PRODUCTS by others.

134.     The cumulative effect of these provisions requires IBM to protect SCO 
s valuable UNIX trade secrets against unrestricted disclosure, unauthorized
transfer or disposition and unauthorized use by others. 

135.     Notwithstanding these provisions, IBM has subjected SCO s UNIX trade
secrets to unrestricted disclosure, unauthorized transfer and disposition,
unauthorized use, and has otherwise encouraged others in the Linux development
community to do the same.  SCO, therefore, has terminated IBM s license to use
UNIX-based software products.  (See letter dated March 6, 2003, attached hereto
and incorporated herein as Exhibit E).

136.     As a result of IBM s breaches, SCO has suffered substantial damages in
an amount to be proven at trial.

                               Prayer for Relief                               

WHEREFORE, having fully set forth its complaint, plaintiff prays for relief
from this Court as follows:

1.      For relief under the First Cause of Action for misappropriation of
trade secrets arising from Utah Code Ann. 13-24-1 et seq., and damages for
violations thereof, together with additional damages through and after the time
of trial;

2.      For relief under the Second Cause of Action for unfair competition
arising from common law, and damages for violations thereof, together with
additional damages through and after the time of trial;

3.      For relief under the Third Cause of Action for tortious interference,
and damages for violations thereof, together with additional damages through
and after the time of trial;

4.      For damages under the Fourth Cause of Action for breach of contract of
the AT&T / IBM UNIX Agreements together with additional damages through and
after the time of trial foreseeably and consequentially resulting from IBM s
breach of contract in an amount to be proven at the time of trial;

5.      For punitive damages under common law for IBM s malicious and willful
conduct in an amount to be proven at trial;

6.      For exemplary damages under Utah Code Ann.  13-24-1 in an amount equal
to twice the award under the First Cause of Action for misappropriation of
trade secrets;

7.      For attorneys  fees as provided by Utah Code Ann. 13-24-5 and by
contract in an amount to be proven at trial; and

8.      For all other relief deemed just and proper by this Court.

Jury Trial Demand

Pursuant to U.R.Civ.P. Rule 38(b), plaintiff demands trial by jury of any issue
triable of right by jury and tenders the statutory jury fee upon the filing of
this Complaint.


DATED this _____ day of March, 2003.

                                                                        HATCH,
JAMES & DODGE

Brent O. Hatch

Mark F. James

BOIES, SCHILLER & FLEXNER

                                                                        David
Boies

                                                                        Stephen
N. Zack

Mark J. Heise

 

                                                                 By: 
________________________________________

                                                                       
Attorneys for Plaintiff Caldera Systems, Inc. d/b/a

The SCO Group

 

Plaintiff s address:

355 South 520 West

Lindon, Utah 84042

------------------------------------------------------------------------

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Karsten M. Self <kmself@ix.netcom.com>        http://kmself.home.netcom.com/
 What Part of "Gestalt" don't you understand?
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