Subject: Re: Text of SCO's complaint
From: "Karsten M. Self" <>
Date: Mon, 10 Mar 2003 10:28:54 +0000

on Fri, Mar 07, 2003 at 10:11:37PM +0000, Karsten M. Self ( wrote:
> text format.  Posted in the interest of an informed discussion.

OK, some commentary....

    THIS IS A DRAFT -- it's long, but unpolished.  Likely dozens of
    stupid typos, to say nothing of twisted thinking.  Not sure I'll
    have a chance to revisit it over the workweek though...

    You're welcome to edit, critique, or comment on this (or do nothing
    at all).

I'm going to follow my usual style, which is a full quote of the piece,
prefaced by a summary of comments.

I'm also going to make the following statement:

   IBM, its agents, legal counsel, supporters, and those defending IBM
   and/or any other parties against SCO in this matter, have full and
   unlimited rights to use, modify, adapt, copy, and distribute this
   work.  I'm not a laywer, and this is not intended in any way to be
   taken as legal advice, but if there's any possible way I can help out
   in this effort, I'd like to do so.  As someone who's devoted a fair
   portion of time since 1997 to understanding legal, economic, and
   social aspects of free software, I'd like to put this information to
   some practical use.  I encourage all others engaged in free software
   support and development to do similarly.

   Additionally:  I expressly withhold any grants under copyright to
   this work to SCO, Caldera, its agents, legal counsel, supporters, or
   any other parties acting on their behalf in this matter.  Violations
   of my copyrights will be pursued.

If IBM cares to acknowledge this effort on my part (done with no intent
of direct benefit), I'll merely note that my current computing platform
consisting of a ThinkPad 560 could stand an upgrade....


This case, above and beyond all else, is about the business hazards,
evindenced here by a $1 billion law suit by SCO against IBM, of entering
into proprietary, NDA codesharing arrangements.  On the basis of
contracts dating as far back as 1975

The readers digest version for those of you who don't care to read all
19,000 or so words:

    Industry Briefs: SCO: We're after IBM, not Linux Developers
    Doc Searls
    Friday, March 07, 2003

    [I]n the face of the fact that [IBM] have agreements with SCO in
    terms of their licensing of UNIX System 5 technology, not to make
    any of those transfers, even of derivative works. They cannot even
    show the source code to anyone except those who have a valid license
    to view that source code, from us. I'll give you an example. Every
    time IBM wants to show the source code to any of their customers,
    they have to send their customer to SCO, and we make arrangements
    for them to obtain a UNIX System 5 license, so they can view the
    System 5 source code. Once they have that license, then they have
    the ability to view IBM AIX source code. And we do this several
    times a month.

Or as Don Marti put it in a post to linux-elitists:

    The long-term effect here should be a disincentive to accept "Shared
    Source" and other NDA-based access to code because of the risk of
    tainting future projects. 

Beyond this issue, the substance of the complaint is that:

   - IBM supported GNU/Linux with code and/or knowledge derived from the
     original AT&T Unix (now owned by SCO).  Largely in the form of
     printer drivers (presumably the IBM Omni printer drivers) and
     unspecified linux kernel code enhancements, largely supported on
     the basis of IBM marketing or press statements..

   - Much of the degree and value of this alleged misappropriation
     depends on the scope of section 7.10 of the AT&T agreement,
     defining "SOFTWARE PRODUCT".  SCO seeks a broad interpretation,
     substantially encompassing all later works, it would appear (I'm
     shocked, shocked...).

   - The complaint generally grossly distorts SCO's significance.
     Despite the property the company owned, it was never more than a
     blip in the Unix marketplace, and was stumbling badly, with some
     exceptionally poorly timed R&D bets, in the late 1990s, at which
     time it was aquired by a similarly shaky Caldera Linux.

   - The complaint is riddled with factual errors, particularly as
     applies to the GPL and GNU/Linux's genesis and capabilities in
   - The complaint fails to consider that the trade secret status, and
     availability of source code, for both AT&T Unix and independently
     derived code has greatly weakened any position of exceptional
     expertise or proprietary exclusivity of knowledge over Unix SCO
     might lay claim to.

   - Several actions of SCO may have directly contributed to its loss of
     rights to claim trade secret status, and may have opened SCO itself
     to claims of IP rights infringement on the part of IBM and other
     parties.  (Sorry, you'll have to read the whole thing -- I can't
     give away everything ;-).

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


> David Boies
> 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)


> 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
> -------------------------------------------------------------------------------
>                                  STATE OF UTAH
> -------------------------------------------------------------------------------
> a Delaware corporation d/b/a THE SCO GROUP,


> Plaintiff,
> vs.
> Defendant.
> (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.

The Unix market in 2002 breaks down as:


As the historical perspective may be significant here, in 1995, the
breakdown was:

Point:  While SCO directly inherited the Unix trademark and property,
it's been a bit player in the market for ages.  It was long seen as one
of the first Unix flavors likely to capitulate to GNU/Linux.  Throughout
the complaint there is much portrayal of UNIX (and hence:  SCO) as major
enterprise software, when in fact SCO's place in the market has been at
best marginal.

> 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.

I'm going to point out a few things here, most of them likely obvious,
but that makes my job easier:

  - The claim here is to "UNIX and SCO/UNIX software".  That would be a
    work under copyright.  In which case claims regarding these
    "properties" are based on copyright, and would involve copyright
    infringement, and or possible noncompliance with licensing terms of
    the copyright work, which would be a matter of contract law.  SCO
    presents no material supporting evidence that IBM has committed
    copyright infringement of specific works in this matter.

  - "UNIX" in conventional use has several meanings, among them a
    trademark and brand (both held by The Open Group, not the SCO Group,
    though the complaint goes to some length to make this distinction
    vague); loosely, a set of commands and protocols for managing files,
    data, users, and processes; and a standard generally refered to as
    the POSIX standard.

        Unix trademark:

  - Both the original source code and the standard in general are very
    well and broadly known.  Enough so that one of the more popular
    hobby projects for some time has been to reimplement Unix or some
    portion of it.

  - SCO has substantially *no* patent holdings:

        Don Marti:  SCO Group has no patents:

> 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.

Note the theme of "sweat of the brow" and intrinsic market value which
are made in numerous places throughout the complaint.

Though it may sway the layman, "sweat of the brow" is _not_ a defense in
copyright, see Feist v. Rural Electric.

Nor is it a sufficient defense in trade secret -- the holder of a trade
secret must take appropriate measures to protect this secret.

By way of example:  the various developers of GNU/Linux have certainly
invested the equivalent of millions of dollars (IBM and HP each account
for $1b in direct expenses, a fair portion of which to be fair is
marketing activity).  This doesn't diminish the freely available nature
of the Linux kernel iteself, which is dictated by its license.

For more on this topic (though not legal advice itself), see Nolo
Press's Trade Secrets FAQ:

> 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.

It's somewhere between annoying and pathetic to see lawyers presumably
familiar with software, licenses, the IT industry, and with five years'
spotlight exposure to GNU/Linux, free software licensing, continue to
make grossly inaccurate statements about free software.  This particular
sentence wasn't too bad.  Just wait.  It gets much worse.

The same lack of familiarity with the GNU GPL may also significantly
harm SCO, and SCO's complaint.

> 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)

I'll just point out that the first argument is specious and the second

OK, I won't just point that out.

Matter of fact, there are a number of pathelogical incentives which
might well cause the quality of proprietary software to be markedly
_worse_ than free software:

    Why Information Security is Hard - An Economic Perspective
    Ross Anderson

    More generally, see:

Too:  FSF Free Software refers to freedoms as in liberty, not
(necessarially) price.  Some, including IBM, prefer the term "Open
Source Software" to help distinguish these points.  I feel this doesn't
help the understanding significantly, and more importantly, misses the
real significance of securing freedoms to use, practice, modify, and
distribute software -- a freedom SCO is directly attempting to abridge
in its actions.

> 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.

OK, so without specifying particular, the complaint breaks down to
copyright and contracts, it would seem.

> 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

SCO appear to be strong adherents to Lewis Carrol, in particularly _The
Hunding of the Snark:  An agony in eight fits_, from which the most
famous line is:  What I say three times is true.  David Boies wrote
"Alice in Wonderland".

The repeated and unsubstantiated assertion of SCO that IBM has misused
and misappropriated does not make it so.  This is simply argumentum ad
absurdum.  The main thrust appears to be "we say it's so, because they
couldn't have made GNU/Linux so good otherwise".

> a)       misusing and misappropriating SCO's proprietary software;
> b)      inducing, encouraging, and enabling others to misuse and
> misappropriate SCO's proprietary software; and

Including, it would appear, the mainstream GNU/Linux distributors, we'll
note in passing.

> 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.

While *Unix* is widely used, both in proprietary flavors deriveved from
AT&T and BSD sources, and in various free software versions (GNU/Linux,
FreeBSD, OpenBSD, and NetBDS), SCO itself has been a bit player in the
x86 market.  Its traditional strengths have been small servers,
point-of-sale systems, and the occasional research workstation.  All of
these are markets in which GNU/Linux and various BSD variants have made
significant inroads.  SCO has seen declining sales for many years, and
was fingered early on as one of the likely first casualties of GNU/Linux
among the proprietary Unix distributions.  SCO's sale to Caldera was
seen by many as the final chapter in this transition, an opinion which
now appears premature.

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

*Initially*, Unics (note spelling) was used to play a game (Space
Travel) ported from the abandoned MULTICS project.  AT&T's first use of
Unix was text processing (hence the troff and nroff text formatting

Unix's early growth was largely the result of its liberal distribution
terms, mandated by a consent agreement reached with AT&T due to an
anti-trust settlement in the 1950s, which forbade it from entering the
software or operating systems market.   In particular, development
rocketed at UC Berkeley in 1970s, where a team of arguably
undisciplined, random, and underexperienced computer science undergrad
and grad students added to the capabilities of the system.

Widespread use of Unix to directly support telecoms didn't follow for
quite some time.

> 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.

AT&T was expressly _prohibited_ from commercially distributing Unix.  It
was introduced to UC Berkeley in 1976-77 when Ken Thompson took a
sabbatical from Bell Labs to teach at Cal.

This didn't occur until after AT&T's final settlement with the US DoJ in
the early 1980s.  AT&T Computer Systems was formed in 1984.  One of the
first immediate results was a prolonged lawsuit between AT&T and UC
Berkeley over who owned what parts of Unix.  One of the results was an
"untainted" AT&T-free codebase.  Another was that GNU/Linux had a
crucial several years to establish itself as an independent, free,
untainted, and viable alternative to any AT&T-derived Unix.

SCO's own history begins with company formation in 1979.  Its initial
product was Xenix, a Unix system developed by Microsoft.  SCO's first
AT&T-based Unix was shipped in 1989.   SCO bought AT&T/s Unix sources in
1995, and was aquired by Caldera in 2001.

For a more colorful version of this history, and additional links, see
Nick Moffitt's $7 History of Unix:

> 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.

Just how principal?  Let's look at some marketshare statistics for major
Unix vendors (dollar sales):

            Sun    HP     DEC     IBM     SGI     SCO    Linux
    2003:   34.9 | ~25  |       |       | ~10   |      |
    2000:        |      |       |       |       |      |
    1998:        |      |       |       |       |      |
    1995:        |      |       |       |       |      |
    1992:        |      |       |       |       |      |
    1990:        |      |       |       |       |      |
    1985:        |      |       |       |       |      |

    (Note:  I'm clearly looking to complete this chart but have no data
    on marketshare for the period(s) indicated.  Data appreciated).

> 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.

AIX also has an x86 port, noted below.

> 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.

While it's a minor nit, a desktop platform need not be less powerful
than a workstation or server.  Technical rigor in the complaint is poor.

> 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.

This is flat wrong.

The presence of other x86 Unices is acknowledged directly here, with a
head-to-head against Solaris on identical x86 iron:

   The UnixWare System Leads Performance Stakes in AIM Technology's "Hot
   Iron Awards", Dominates Intel Category and Powers Five of the 10 Top

   SANTA CRUZ, CA (September 9, 1998) - SCO announced today that its
   UnixWare operating system dominated AIM Technology's Hot Iron Awards,
   which were held on Tuesday, September 8, 1998 at the Palace Hotel in
   San Francisco, California.

Xenix, which SCO helped develop, and later purchased from Microsoft, is
arguably the first x86 Unix, though QNX was developed nearly
simultaneously.  IBM, Sun, UC Berkelely, and others, have all produced
x86 Unix variants, as have numerous other proprietary and free software
development efforts.

A partial list of Intel / x86 Unix systems:

    - QNX:  an embedded OS for use on x86 hardware, was originally
      released for 8086 and 6809, in 1980.

    - Xenix:  though this _became_ SCO, it was actually developed by
      Microsoft (the later sale of Xenix resulted in the formation of
      SCO in 1985).  Some early development was performed by SCO on
      behalf of Microsoft.  First development commenced in or about

    - Solaris x86:  Mid 1990s or prior.
      I'm forwarded the following:

        The first port of AT&T  5.4 for Intel that I am aware of was
        Interactivei386 product which shipped for a short time before
        being purchased by sun and repackaged as Solaris.  My memory
        isn't the best but I installed the interactive product in the
        fall of either 1991 or 1992, so Solaris 86 would have been
        available in either 1992 or 1993.

    - IBM was marketing PC/IX in the early 1980s to run on PC-XT.

        PC/IX - Personal Computer Interactive eXecutive
        Based on System III with ISC enhancements
        Single User operation, but 20 users were configured
        Required 256 KB RAM, 1 floppy, 10 MB disk
        Included ISC C compiler
        came on 19 diskettes and consumed 6 MB of disk
        cost $900

      The major drawbacks at the time were:
        not System V
        max 64 KB size for process
        no memory protection

   - AIX/x86:  In addition to PC/IX, IBM produced an x86 port of AIX in
     the late 1980s.  The first release was for 386 PS/2 systems --
     Intel architecture.

   - Minix:  Released January, 1987.

   - 386BSD:  This was the Jolitz BSD port which launched both the BSD
     wars and the *BSD projects.  It dates from April, 1990.

   - Esix, an SVR4 release for 80286, which a friend tells me:

        Yes, originally Esix was a division of Everex, but when their PC
        business collapsed it was spun off. Esix was appointed by Intel
        as THE OFFICIAL UNIX FOR THE INTEL PLATFORM, but Intel wouldn't
        allow Esix to advertise that fact (who the hell knows why) which
        made them rather bitter. Intel used a lot of Esix, but the
        biggest user was the Federal Government. Esix published fully
        AT&T compliant System V r3.2 and r4.0.x for intel 386.

   - Coherent:  80286 Unix

   - Generics UNIX:  80386, SVR4.03

   - Interactive SVR3.2:  80x86 Unix.  I believe this was the foundation
     of Solarisx86.

   - Mach386:  adapted by NeXT and Hurd, among others.

   - Microport 80x86, SVR4

   - UHC: 80x86, SVr4.

As a consequence:  SCO's claim to being a sole font of expertise in x86
hardware functionality is greatly weakened, particularly in the face of
fully independent implementations (*BSD, GNU/Linux, Minix, QNX).

> 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.

These same challenges and design issues were addressed by several
independent development teams.  SCO cannot complain exclusive expertise
over this domain.

> 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.

As several others have observed, McDonald's is one of the few remaining
large enterprise clients of SCO.

> 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.

Observe that timeframe isn't specified here.  In many ways, this
complaint hedges on the side of vagueness rather than specificity in
describing time, dates, properties, capabilities, marketshare, dollar
and unit volumes, and other statistics.  Largely because the facts
revealed by same might hurt SCO's argument?

> 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.

By comparison, the latest stable release of Debian GNU/Linux includes
over 8,000 software packages, and the current development branch
includes over 12,000 packages.  This for a free, collaboratively
developed, "hobbyist" project.

> 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.

Several issues are raised by this claim:

  - Unix itself is the basis of a standards specification, POSIX, first
    released in 1988.  Claims to trade secrecy status of any components
    of the contents of the POSIX standard, or the Unix branding
    certification, are specious.  The POSIX standard itself was released
    in 1988:

  - Unix has a history spanning more than thirty years, with numerous
    competing firms developing rival proprietary implementations for
    over two decades, and several prominant free software or
    collaborative, source-available implementations over the past
    fifteen years.

  - The original AT&T source documentation was long distributed in
    samizdat fashion by John Lions, an Australian university professor,
    in 1975-76.  Arguably any trade secret status dating from this
    period or prior has long since been lost.

    Incidentally, if you haven't kept up to date, John passed away after
    a long illness in 1999:

> 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.

Paragraph 41 very nearly, but not quite, accuses IBM of copyright
violation by copying software libraries.

The statement is vague enough that if it concerns the _functional_
aspects of a library, it is repudiated by a large body of industry
practice and case law pertaining to reverse engineering.  In the
GNU/Linux world, the most signicant instance of this would be WINE, a
set of libraries intended to provide the ability to run software written
for Microsoft Windows systems on GNU/Linux.  Despite the moving target
and deliberatly obfuscated architecture, WINE has progressed to the
point that much legacy MS Windows software can be successfully and
usefully run on GNU/Linux.  Another notable example would be SCO's own
reverse-engineering of Microsoft's RDP protocol:

    SCO crosses Microsoft's Maginot line
    Annie Kermath
    Posted: 13/12/1999 at 09:03 GMT

    SCO has reverse-engineered Microsoft's RDP protocol used by Windows
    NT Terminal Server (and from February on, all Windows 2000 Server
    editions) to display multi-user NT apps on thin clients

For case law, see MAI v. Peak.

The statement _also_ fails to demonstrate that if there were
unauthorized access to or use of SCO source code, that IBM was the
negligent party.

> 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.

For branding purposes, Novell _also_ ceded the Unix trademark to The
Open Group.

> 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.

OpenServer (the Xenix derived product) was a lesser and generally
inferior Unix.  It was also SCO's own initial work -- as SCO had
participated in the original development of Xenix.

SCO's flagship product was UnixWare, derived from the AT&T code.

This distinction again belies the assertion that SCO had an exclusive
lock on talent capable of developing x86 Unix.  By the time SCO aquired
UNIX from Novell (1995, though typically, SCO's complaint doesn't
specify this), numerous other x86 unices had been under development for
some time, including four years' GNU/Linux development.  By my own
research, there had been over 80 media references to GNU/Linux at the
time -- fewer than would occur in the heyday of the Microsoft trial in
1998, but significant interest.

> 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.

It could be argued that SCO's R&D investments in this regard were
grossly unsound.  SCO had developed a prototype UnixWare release for
Intel's "upcoming" Merced 64-bit chip, widely known informally as the
Itanic, as the chip has yet to emerge commercially, or even secure a
shipping date.  This, five years after SCO's product release:

    SCO release UnixWare for IA-64
    30/09/1998 at 15:11 GMT

    SCO has begun shipping its version of UnixWare for Intel's
    forthcoming 64-bit Merced processor to selected SCO OEMs and ISVs.

> 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.

At the same time, this same objective was being met by several other
free alternatives, including GNU/Linux and the *BSDs.  One such
GNU/Linux distributor was Calder GNU/Linux, who announced its OpenLinux
1.3 product with the following release:

    Orem, UT - September 28, 1998 - Caldera® Systems, Inc. today
    announced the release of OpenLinux 1.3. This new Linux-based
    business solution includes the KDE® desktop interface and Adaptive
    Server Enterprise from Sybase® Inc. With the release of OpenLinux
    1.3, Caldera System Inc. expands their commitment to business
    customers by providing a stable, fully tested and integrated

> 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.

As previously noted, this is half the application count _specifically
packaged for a completely free and collaboratively developed project,
Debian_, and is *one third* the packages available for the development
branch of the project.

By this measure, proprietary developments are 50% to 33% as effective as
free software development methodologies.

> 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.

Given the timeline is (deliberately?) obscured in the complaint, it's
difficult to tell what time period is being discussed.  As an arbitrary
point, let's choose 1998, the date at which SCO claims to have finished
its UnixWare product.

Documented speculation of SCO's future in the face of GNU/Linux is rife,
as has been SCO riduculing and FUDding of GNU/Linux:

    A GNU/Linux distribution from SCO? 
    June 15, 2000

    It has been clear for years that SCO's core business is
    threatened by Linux. Why bother with a proprietary Unix
    for the PC when the alternative is not only free, but also
    unmatched in quality?

    SCO Statements on Linux 
    September, 1999

    This month's SCO Benelux information bulletin (a 3 sheet flyer,
    targeted at SCO partners and customers in the Netherlands, Belgium,
    and Luxemburg) is mostly devoted to slamming down on Linux in a
    rather unpleasant way. Full of innuendo, half truths, and

    GNU/Linux to surpass Unix 'within five years' - Caldera
    Andrew Orlowski
    21/08/2001 at 18:09 GMT

    Indeed. When Caldera launched in the UK four years ago, it aimed
    both barrels at SCO's Open Server, telling us that it represented
    ndeed. When Caldera launched in the UK four years ago, it aimed
    both barrels at SCO's Open Server, telling us that it represented
    the low hanging fruit for its own OpenLinux distro.  the low hanging
    fruit for its own OpenLinux distro. 

    Traditional firms showing Linux the money
    By Stephen Shankland
    October 13, 1999, 6:45 PM PT

    Several analysts have observed that Linux threatens SCO because Linux is
    a clone of Unix and, like SCO's UnixWare, runs on Intel hardware.

    SCO boss blows stack over Linux, Linus
    John Lettice
    Posted: 27/04/1999 at 09:44 GMT

    Casting doubt on the viability of the Linux licensing model and, as
    far as we can make out, Torvalds' parentage, maturity and integrity,
    Mouthie Mikey says: "The last thing [major companies] want is some
    kid from Norway to sue for $100 million for misappropriation of
    intellectual property."

Pity I've an underdeveloped appreciation for irony....

> 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.

False: Absent timelines, it's not clear when this was written.  However,
AIX 1.x was released in 1990 for the Intel (386 PS/2) architecture.
Marketing of x86 AIX may have been discontinued by 1998.

> 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.

Absent specification of specific copyrighted works or trade secrets
covered, it's impossible to assess this statement.

> 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.

As previously discussed, the AT&T Unix code has been substantially
published several times:

   - 1976:  John Lions annotated Unix source code.
   - 1980s: BSD Unix was widely available in source format.
   - 1990s: BSD Unix was released as 386BSD, initiating the BSD wars.

Several of these disclosures substantially postdate IBM's contracts with
AT&T (dated 1985 in the attached exhibit).  Disclosures of trade secrets
based on these works can't reasonably be attributed to IBM, regardless
of the legality of the initial disclosures.

Note that this speaks to trade secrets, which can be lost if not
properly maintained, not copyright interest in the sources.

> 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);

Such disclosures had occured, independent of IBM, at several instances,
extending substantially to the _entire_ Unix source code, both prior to
and after this agreement.

Additionally, as previously noted, Unix sources were used by numerous
competing interests to develop their own variants of the original
system, with much hiring of employees and contractors among firms, as
well as development at academic institution.  Additionally there were
severalas fully independent implemnetations.  The POSIX specification
and Unix branding also substantially disclose core aspects of the Unix
operating system standard.  General, and even highly specialized
knowledge of Unix cannot reasonably be considered to be a trade secret.

> 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
> 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
> 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.

We'll just let these paragraphs stand as a cautionary note to any
organization contemplating entering into a similar agreement.  You too
could be at the recieving end of a $1b lawsuit.

> 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;

Note mulitiple disclosures above.  Trade secrets would reasonably be
supposed to include only such technologies as were developed by SCO and
not leaked to the general community, particularly due to lack of
reasonable protections on the part of SCO.

> 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.

Value and price commanded are of course a matter of utility, and supply
and demand.  Oxygen is valuable (it provides great utility).  It's also,
absent specific niches, worthless as a market product as it's freely
available to all.  The market value of Unix in the presence of freely
available alternatives is nil.

SCO here pleads for pity, but fails to make a legal point.

> 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.

By comparison, IBM and HP have each contributed over $1b in direct
investement in GNU/Linux development and marketing.  Each company claims
to have fully recovered its initial investment within two years.

> 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.

It should also be noted that very few of these functions, either as a
dollar volume of server sales, or in aggregate computing power, are
provided by _SCO_ Unix.  Sun dominates the enterprise Unix server space,
followed by HP and IBM.  SCO remains a niche player on x86 systems.

> 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

Virtually every claim in the next two sections is flawed, often
fundamentally false.

> 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.

Typically, timelines are absent.

The first public release of a prototype Linux kernel was 1991.  It was
the descendent in some ways of Minix, introduced in 1987, and of the GNU
project (GNU's not Unix), initiated by Richard M. Stallman of MIT in
1984, and dedicated to producing a freely available, Unix-like operating

> 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.

...which has precisely what to do with this complaint?

It might also be noted that this follows a long line of similar names:
QNX, Minix, Xenix, Linux, and even (in a recursive, negated sort of a
way) GNU.

> 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.


As a nonproprietary project, the inital stated goal of Linux was "a
better Minix than Minix", then "a better Unix than Unix", and finally
"world domination" -- all meant somewhat tongue-in-cheek.  But that's
just GNU/Linux as a project.

In addition to hobbyists, personal, experimental, and not-for-profit
applications, GNU/Linux found itself being used by researchers,
academics, governments, and commercial enterprises.  By 1996, industry
publications were seriously proposing GNU/Linux had hit the big time:

    Linux joins the big leagues
    Fri, 14 Jun 1996
    InfoWorld Electric

    Let me tell you what might kick the corporate market for Linux wide
    open. Linux for the PC is, culturally speaking, the new DOS/Windows
    generation. Most mini and mainframe administrators didn't wake up
    one day and say, "Gosh, let's all retrain and retrofit our
    enterprise for PC client/server!" Instead, a generation of PC
    amateurs worked their way up to IS through PC LANs. They essentially
    infiltrated IS and made it their own.

    Now, consider this. Next time you interview a fresh college graduate
    for the position of LAN administrator or desktop support, ask what
    operating systems he or she prefers. I'll lay odds that most honest
    applicants will include a version of Linux.

Shortly after GNU/Linux emerged, several companies were formed to sell
packaged distributions (or "distros").  These consisted of the kernel
(the OS) itself, and various other bits of software and material that
make a computer useful:  system libraries, documentation, editors,
compilers, shells, graphical environments, etc, many of which are
themselves free software.  Among the leading distros are Red Hat,
Debian, SuSE, Mandrake, and...Caldera, which might be familiar to some.
Each was aggressively pitching GNU/Linux to the enterprise, largely
starting with R&D, workstation, and low-end server applications.  One
early GNU/Linux success was the Burlington Coat Factory's migration to a
GNU/Linux-based point-of-sale (PoS) system.  All of these applications
are core to SCO's market.

Caldera's GNU/Linux offering has always been pitched at the enterprise.
A typical review from the 1998/99 period is:

    OpenLinux 2.2 Continues Linux's March to Enterprise Acceptance 
    June 14, 1999

    If you've painted yourself into a corner on your enterprise
    network--and you're in dire need of an inexpensive panacea--you
    might consider Linux as a mature solution. And if you want to
    implement Linux with as little pain as possible, Caldera's OpenLinux
    2.2 provides the answer.

Caldera described itself at the time as:

    Caldera Systems, Inc. is the Linux for Business technology leader in
    designing, developing and marketing Linux-based business solutions
    including OpenLinux, NetWare for Linux, Linux technical training,
    certification and support.


In 2001, Caldera itself was proclaiming that GNU/Linux would surpass
Unix within five years (previously noted).

By 2001, GNU/Linux was ranking ahead of proprietary Unices in
comparative rankings:

    News: GNU/Linux becomes a contender vs. Unix
    Stephen Shankland
    September 27, 2001

> 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.

Richard Stallman was a researcher at MIT.  He never held a faculty

> 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.

    The GNU Project was launched in 1984 to develop a complete Unix-like
    operating system which is free software: the GNU system.

The impetus for creating the GNU project at the time was actually to
_return_ to a period in which operating systems were free and freely
available, for most intents.  Unix had not yet becomre a "valuable
commercial software" product.  At the time the Linux kernel was begun,
there were several other free or liberally available Unix clones
available or under development -- Minix, GNU Hurd, 386BSD.  A free Unix
was seen by many as an inevitability.

> 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 ).

More specifically, the _GNU_ General Public License.

> 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.

Incorrect:  GPL'd software (software licensed under the GPL) is
copyrighted.  It is then licensed under terms that ensure it is, and
will continue to be, kept free of restrictions to run, study and adpat,
redistribute, improve and release improvements, to the original source. 

One would suggest high-powered lawyers (or their staff) might read the
FSF's own descriptive literature on this subject:

> 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

This is deliberately misleading.  While the GNU GPL specifies that no
warranty is granted with the license of software, it does so for several
sound reasons, the gist of which is similar to Good Samaterian laws:  if
someone's doing you a favor without expectation of remuneration, the
least you can do is not turn on them for it.  The no warranty clause
protects developers and distributers of free software.

The GNU GPL also _specifically notes_ that a possible business model for
a free software business might be to provide, as an additional service,
such warranty protection.

> 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.

It might be noted that the early development of Linux closely parallels
that of Unix:  a hobby project, much of which occured in university
environments and collaboratively over the (then new) Internet.

In the case of Unix, many former graduate students went on to join (or
form) Unix companies.  Similarly, getting started with GNU/Linux in
college today is a bootstrap into joining or founding a bleeding-edge
technology company.

Linux also rapidly attracted the attention of many Unix professionls,
some of whom had long desired, or actively campaigned for, a free Unix
as a way to re-unify a fragmented Unix market, and address the
Microsoft NT threat:

    "The Sourceware Operating System Proposal"
    Larry McVoy, 1993

The perception of GNU/Linux as the domain of scruffy, pimply-faced youth
is simply wrong.  Studies of free software developers show the typical
participant is a male his mid-thirties with over ten years' professional
IT experience (hey, I'm bog-average).

"Gumby" Henkel-Wallace, one of the founders of Cygnus, writes of his
experience in free software development of the era, indicating the level
of support and experience typical of free software development (Cygnus
didn't directly engage in kernel development, but did work on compilers
and much of the GNU toolchain):

    I don't know how much "unixness" (fork, suid, no revisons in the FS,
    etc) matters; we didn't do this sort of development at Cygnus.

    We had access to Cray and SGI hardware from the get go with our
    first customer, NASA.  Michael developed g++ on Sun workstations at
    MCC, Stanford and later Sun (remember, these were 68K sun
    workstations).  However, despite these being "enterprise class" as
    the term was probably known at the time, I don't think that helps

    As far as testing goes we had lots of gear at various times over the
    years: Suns of all sorts, HP, IBM, SGI...Sconix was one of the few
    we rarely encountered.

    The Hurd, and most of the initial other GNU development done at MIT
    was done on a TI nu machine.  That was an enterprise workstation

    Better to focus on the Vax: that was an "enterprise" machine.  At
    MIT, because of how we worked, there was only one vax in the AI lab,
    and nobody used it (even it's name, prep, was an obscure joke).  It
    was only a 750, but that might be good enough for your purposes.
    RMS used it because nobody else wanted it (the rest of us used "real
    machines" like PDP-10s and lispms.  There were other vaxes at MIT of
    course).  At UCB the vax was the machine of choice and there were
    lots of them, including the biggies.  I first installed a BSD
    distribution on a Vax 11/780 in 1982 in Paris.

> 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.

Are you still beating your wife?

There's cited documentary evidence that GNU/Linux was percieved as a
direct threat to SCO in the period 1998 - 2000, if not before.

Linux's development is no more random and uncoordinated than the
processes which, over time, have lead to the diverse and successful
forms of highly evolved life now frequently encountered on a planet
known as Earth.  It's no coincidence that the free software development
model has been called evolutionary, or darwinian.

> 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.

This is straight out of Microsoft's playbook, grossly mistaken, vague to
the point of irrelevance, and, well, let's just stop there.

Addressing points:

 1. The Unix architecture tends toward modularity and clean design,
    even in the absense of a tightly integrated development team.  While
    good code doesn't "just happen", the likelihood for developing same
    is increased when working with the Unix philosophy.  And, by all
    reports, Linus is an able project leader.

 2. Such access has been present.  Those with an interest in furthering
    GNU/Linux development have at times committed resources to the task.

 3. "Unix" (whether AT&T or independent project) code, methods, and
    concepts are widely available.  This is one of the reasons Unix is
    one of the most frequently reinvented operating systems.  Along with
    reason 1.

 4. Architectural experience is also generally available.  Larry McVoy,
    for example, worked with both Sun and SGI.

 5. Financial investements, both direct and indirect (personal time,
    academic projects, investment capital, corporate sponsorship) have
    also been forthcoming.  Studies estimtaing the development costs of
    the 200 or so core linux kernel developers over 5 years have been
    made, they are not insubstantial.  Sponsored in a distributed
    fashion, they are not unfeasible either.

With the exceoption of some implications of item 3, I don't see how
these assertions strengthen SCO's assertion of IP infringement or
misappropriation on th epart of IBM.

> 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.

IBM has not inconsiderable experience with SMP processing:

    OS/2 can handle 64-way SMP.  IBM was doing SMP long before Unix, and
    long before SCO every came along.  The experience IBM would have
    needed came from decades of designing SMP hardware, and the software
    necessary to use it.  They certainly wouldn't have needed the help
    of SCO's UNIX source code to implement SMP into Linux, if this is
    what they're claiming. 

    (Brad Barclay, IWE mailing list)

This claim also discounts both GNU/Linux's and Unix's capabilities.
Though typical Unix enterprise systems fall into the range described in
the complaint, high-end systems can run as high as 256 processors.

GNU/Linux conventially scales to 8-16 processors.

Work by SGI has extended this range as high as 64 processors:

    Scaling GNU/Linux to New Heights: the SGI Altix 3000 System
    January 15, 2003<F4>teve Neuner

    With 64 processors and 512GB of memory, SGI claims the title of
    world's most powerful Linux system.

The article also notes SGI's contribution of one (of several)
journalling filesystems to the GNU/Linux effort.    

More interestingly, Caldera itself provided enterprise support for SMP
development in GNU/Linux:

    At the moment I am developing using a Caldera provided ASUS P54PNIP4
    motherboard with 32Mb of RAM. This has been deliberately loaded down
    with as much junk hardware for testing as I can lay my hands on. 

Alan Cox (#2 kernel developer) did his SMP development on hardware
contributed by none other than Caldera.

> 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.

This assertion appears to be at the heart of SCO's claim.  It's
unsubstantiated.  It's contradicted by both experience and theoretical
underpinnings.  The accusation of misappropriation is generalized, and
though IBM is mentioned by name, the phrasing of this claim neither
implicates IBM specifically, nor exculpates other potential plaintiffs.

While it's true that GNU/Linux has benefitted greatly from individuals
and organizations from many walks, there is no generally available
direct evidence to suggest missappropriation of code.

Similarly, the experience of other free software projects suggests the
capabilities of this development methodology:

  - OpenBSD ( has produced a Unix-like operating
    system capable of running much standard Unix software, including
    GNU/Linux binaries, while providing one of the best security records
    of _any_ operating system, free or proprietary.

  - FreeBSD ( provides very solid x86
    performance, and in particular excelled in the area of network
    performance to the point that Yahoo! adopted FreeBSD for its network

  - OpenBSD ( provides a highly portable
    operating system (though some GNU/Linux distros now challenge it in
    this regard), slogan "Of course it runs NetBSD", running on 17 CPU

  - Debian GNU/Linux ( provides a Linux
    distibution suitable for use on embedded, server, workstation, or
    desktop systems, with a distributed software distribution and update
    mechanism allowing systems to be updated live, without reboots
    (excepting kernel updates). 

Each of these projects is a _noncommercial_, free-software effort.
Though there are commercial products and services based on each, these
are not themselves commercial activities.  The capabilities of the free
software, collaborative development model are staggering.  There are
reasons software companies unable or unwilling to adapt, such as
Microsoft and SCO, fear free software.

Another landmark testament to the quality of free software is "Fuzz
Revisited", which demonstrated that the quality of free software was
consistently higher than proprietary products.  These results have been
confirmed in numerous studies.

This assertion might even be seen as libelous and slanderous on the part
of the developers, organizations, and companies involved in GNU/Linux

> IBM's Scheme

First, let's discuss some general background involving IBM's involvement
in free software.

I've addressed some of the issues here in a post archived at:

Most significantly:  IBM is one of the few major technology players to
have over a century of industry knowledge.  At least for the present,
the company appears to understand the gross cyclic nature of IT, of the
significance of open standards, of the perils of vendor lock-in, and of
its own ability to succeed as a services-based organization working with
open technologies.  Not to mention the benefits of staying out of the
DoJ's gunsights.

More specifically:  IBM embarked on an open source (their term, not
mine) strategy after assessing that this would provide it a competitive
advantage over its two major IT competitors, Microsoft, and Sun.  SCO,
self-inflated image notwithstanding, is invisible as far as IBM is
concerned.  Perhaps moreso after this charade is over.

> 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:

IBM might argue (and many might agree) that its adoption of a free
software policy restored a balance to an IT market grossly distorted by
Microsoft's illegaly monopoly abuse.  There is nothing about free
software which intrinsicly keeps other businesses from participating in
the market.  There _are_ products, such as general comodity server and
desktop operating systems, whose market price will decline.  This is not
of itself anticompetitive.

> 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;

SCO's presence in the Unix market was sufficiently small that it fails
to rate mention on most marketshare surveys and reports.  I've found it
difficult or impossible to find statistics on SCO's share, despite
research by myself and other professionals for this response (limited to
publicly, web-accessible reports).  What figures are present emphasize
SCO's unit shipments, which are inflated relative to other enterprise
server Unix vendors.  However, the 900,000 units claimed shipped by SCO
in the late 1990s was a fraction of the 7-10 million GNU/Linux systems
thought to be deployed at the same time.

SCO consistently overstates its market position.  SCO was threatened, if
not by GNU/Linux, then by other free Unix variants.

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

...and academic, and government, and business, and for-profit...

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

IBM has a balanced revenue model involving a mix of software, hardware,
and services, which is the envy of much of the IT industry.

> 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.

Or is it possible that IBM saw the direction the winds were blowing, and
sought to be in the right place at the right time?

It's been a long-established fact of the IT sector that nine of ten
programmers don't work for a software vendor, but for a company's
internal development staff.  This is a sensible market to tap.

(Various sources, Steve McConnell's _Code Complete_ and various of ESR's

And for another perspective:

    There have long been movements and efforts inside IBM to make it
    easier for customers to transition from their lowest-end systems
    (the Intel boxes), up to higher-level systems (all the way up to the
    mainframes)....  Linux makes it easier to handle transitions from
    one platform to the other because it runs on all of them.  The code
    you write on your IBM Intel Linux boxes can be rebuilt quickly and
    easily on your S/390 Linux system (and yes' I got to do Linux
    development on one of these -- very, very nice :) ).

    (Brad Barklay, IWE mailing list)

> 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.

GNU/Linux was well on its way to this already.

Note that the major database vendors, including Oracle, had announced
GNU/Linux ports well before IBM announced its GNU/Linux initiative.  IBM
was following, or at best moving with, not leading the marketplace.  Not
to say the interest of IBM, HP, SGI, and other major vendors hasn't
boosted GNU/Linux considerably. 

> 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.

Again, the Intel market was already sceded to GNU/Linux and FreeBSD.
SCO was actively trashing Linux, Linux developers, and Linus, well
before this time.

Repetition of a lie does not make it a truth.

> 91.         Among other actions, IBM misappropriated the confidential
> and proprietary information from SCO in Project Monterey.  

SCO has yet to present a specific manifest of works it believes to be

> 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.

Marketing or publicity statements are not of themselves proof of
infringement.  SCO plays this coy thing just a little too much.

> 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.

SCO has argued that GNU/Linux isn't scalable (and misstated Linux's
scalability in doing so), and general polish (despite evidence of free
software projects which attain high levels of performance for specific
goals).  And then presents printer drivers as the primary area of

I suppose SCO believes "SMP" stands for "SCO's Misappropriated

> 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.  

The project announce date was October, 1998.  This was some seven years
after the first release of the Linux kernel.  Or does SCO care to
present documentation showing this effort was in development for this
entire period.  Not impossible, but not substantiated from the current
record.  Preperatory discussion and a launched, active project are
distinctly different beasts.

>   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.

The thrust of this statement would appear to be that IBM is piecing out
AIX code to the GNU/Linux kernel.  This statement has been met by
several developers, from both IBM and linux development, as highly

One kernel developer's comment on this suggestion was:

    Giving the code to the Linux community? Yeah right, those AIX
    engineers don't even give the Linux engineers the time of day, let
    alone even let them so much as sneak a peak at the AIX code. SCO
    doesn't stand a chance of proving what never happens.

> 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.

First, SCO hasn't demonstrated IBM open sourced encumbered code.  SCO
has implied this.  It's danced around the particulars.  Software
independently developed by IBM may be free to distribute.  The crux of
this would seem to be Section 7.10 of Software Agreement Number

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

SCO's contention would appear to be that "SOFTWARE PRODUCT" as defined
in the AT&T agreement includes not only the form of the work licensed to
IBM in 1985, but of all derived works, in whole or in part.  This would
appear to be a broad claim.

Second, as noted repeatedly here:  SCOs claims to exclusive rights and
trade secret status are likely greatly diluted.

Third, is SCO _really_ encouraging security through obscurity?  It's a
well-established principle in security and cryptographic circles that
publishing and testing methods makes them _more_, not less, secure:

    Secrecy, Security, and Obscurity
    Bruce Schneier
    May 15, 2002

    A basic rule of cryptography is to use published, public, algorithms
    and protocols.  This principle was first stated in 1883 by Auguste
    Kerckhoffs: in a well-designed cryptographic system, only the key
    needs to be secret; there should be no secrecy in the algorithm.
    Modern cryptographers have embraced this principle, calling anything
    else "security by obscurity." Any system that tries to keep its
    algorithms secret for security reasons is quickly dismissed by the
    community, and referred to as "snake oil" or even worse.

An interesting appeal that might work on an unsophisticated jury (time
for IBM to sophisticate the jury), but counter to accepted best

Much of the discussion that follows either:

 1. Alleges malfeasance on IBM's part, often on hearsay or indirect
    evidence, or

 2. Hinges on a very broad claim of what rights IBM was sceding in its
    initial agreement with AT&T.

The second issue is merely tiresome.  The first is downright odd when it
would be trivially simple for SCO to determine if its works had been
appropriated by IBM for use in GNU/Linux.  SCO need look no further than
the SRPMS directory of its own FTP server, which houses full sources for
its distribution, and look for verbatim quotations.  Unless SCO are
frightened at what they might find there?

> 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.

Investement in free software isn't a crime.  Much of IBM's $1b was
marketing (Peace, Love, & Linux).  Much was also substantial

Regarding the prospect that IBM is indiscriminately opening AIX sources,
a former employee notes:

    Not a good statement on the IBM VP's part, and not true either.
    Open Sourcing something within IBM requires jumping through a _ton_
    of legal hoops -- I tried it with something as simple as with the
    jSyncManager (aka IBM ManplatoSync for Java), and *I* owned the
    copyright to _all_ of the sources on that.  It took me two years of
    going through various sets of lawyers and legal teams at IBM to get
    the necessary permissions (and was released from IBM before it was
    ever finished).  They go over everything with a fine-toothed comb to
    ensure that nothing goes against any of their licenses they have
    from other companies.  

> 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 

I'm glad to see I'm not the only person who gets punchy wading through
this stuff.

> 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.

What I say three times is true:  David Boies wrote "Alice in

> 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 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,
> 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:

What I say three times is true:  David Boies wrote "Alice in
Wonderland".  So now you know it's true.

Again:  SCO was in rapid decline before the incidents alleged in this

> 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.

Just a note:  enterprise Linux is now illegal.

>       (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.

SCO alleges improper disclosure of trade secrets.

The actions alleged include releases of source code into the GNU/Linux
kernel and drivers by IBM over the period August 17, 2000, to January
23, 2003.

During this same time, SCO shipped both production and beta versions of
its OpenLinux products as both box-sets and with significant software
available from its public FTP site.  Caldera touts its expertise in
preparing GNU/Linux for the enterprise, and in carefully testing and
modifying the software it packages for suitability in enterprise
applications.  At the same time, SCO Linux 4.0, released 2002-11-19,
sports a 2.4.19 kernel.

I'd suggest IBM might care to check that SCO hasn't itself been
disclosing its own trade secrets by lack of dilligence in protecting
them.  Such actions can lead to loss of trade secret status, if such
status in fact existed in the first instance.

Moreover:  by distributing work under the GPL, LGPL, or several other
free software licenses, while requiring additional obligations on the
part of recipients or other distributers of the same work, a party may
find itself in violation of licensing terms.

Section 17 USC 504 provides for damages from copyright.  Parties with an
interest in copyright in the works SCO is discussing may wish to consult
an attorney or look to guidance from an authority on free software
licensing law to see if this is an appropriate action.  Note again:  I'm
not a lawyer, and this isn't legal advice.  I've studied licensing
issues for several years, and it appears to me and others that there may
be GPL violation issues if SCO's trade secrets and contract violation
claims have any validity.

>                              (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.

As for significant harm:  SCO was suffering significantly prior to 2000,
as was Caldera as evidenced by losses, mass layoffs, and other actions
atypical of thriving, successful business concerns.  It was common
knowledge that SCO would be a likely early victim of GNU/Linux

Its future financial health would have been precarious in the best of
circumstances.  I'm not alone in feeling SCO has committed the coup de
grace itself in undertaking the present action.

> 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.
>                          (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.

Given SCO's erratic (at best) behavior over the past half-decade, a
panicked flight for the doors might not be unwarranted.

> 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)

General comment:  this is possible, but implies an inconceivably broad
interpretation of rights ceded by IBM in its 1985 agreement with AT&T.
SCO's complaint also grossly overstates the degree of propriety in
either source code or trade secrets of its work.

> 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
>                                                          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

Karsten M. Self <>
 What Part of "Gestalt" don't you understand?
    By failing to protect the public interest in free access to the
    products of the inventive and artistic genius -- indeed, by
    virtually ignoring the central purpose of the Copyright/Patent
    Clause [in the Constitution] -- the Court has quitclaimed to
    Congress its principal responsibility in this area of the law."
    -- Justice Stevens, J., dissenting, "Eldred v. Ashcroft"