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IBM Countersues SCO, Seeking to Bring It Down; The GPL will have its day in court for only the second time
IBM Countersues SCO, Seeking to Bring It Down; The GPL will have its day in court for only the second time

By: Maureen O'Gara
Aug. 8, 2003 10:29 AM

IBM has countersued the SCO Group seeking an injunction that would prevent SCO from voicing any claims over Unix and Linux anymore and compensatory and punitive damages stiff enough to put cash-poor SCO out of business. Throwing everything but the kitchen sink at SCO - and definitely playing hardball - IBM's lawyers make 10 charges against it including breach of contract, Lanham Act violations, unfair competition, intentional interference with prospective economic relations, unfair and deceptive trade practices, breach of the GPL and four counts of patent infringement. Alleging that SCO has trifled with four IBM patents, IBM wants SCO enjoined from selling UnixWare, Open Server, SCO Manager and Reliant HA. So, if the untallied compensatory and treble damages IBM is demanding don't bring SCO down, then the absence of anything resembling product line ought to do it. IBM also wants SCO's suit against it dismissed out-of-hand claiming that SCO fails to state a claim on which relief can be granted, that IBM is wholly innocent, that SCO lacks standing, that the statute of limitations applies, that SCO filed in the wrong court, that SCO failed to try to mitigate the damages it alleges IBM committed and the sundry other legal defenses like latches and delay, the doctrine of waiver, estoppel and unclean hands, the economic loss doctrine, the independent duty doctrine and for good measure the contention that SCO's claims are pre-empted by federal law. IBM was overshadowed this week at LinuxWorld by Red Hat, which sued SCO itself on Monday, going it alone there for a while and becoming the consummate good guy, the Linux community's only defense. Well, IBM can hold its head up again. Its suit, which puts the open source community right up front, makes Red Hat's look like selfish claim jumping. In its opening paragraph, the IBM suit declares that IBM's counterclaims "arise from SCO's efforts wrongly to assert proprietary rights over important, widely used technology and to impede the use of that technology by the open source community. SCO has misused, and is misusing, its purported rights to the Unix operating system originally developed by Bell Laboratories...to threaten destruction of the competing operating systems known as AIX and Linux, and to extract windfall profits for its unjust enrichment." That ought to put IBM in good with the community. IBM alleges that SCO can't lift IBM's AIX license as SCO maintains it has, because - on top of IBM's contention that its AIX license is irrevocable and perpetual - it claims SCO rights over the AIX license are trumped by Novell's - Novell retained rights when it sold Unix to the old Santa Cruz Operation which in turn sold it to the SCO Group - and when the SCO Group ignored Novell's quiet June 9 directive to can it about terminating IBM's license, Novell exercised its retained rights "to waive any contractual rights SCO claimed IBM violated," presumably saving IBM's bacon. IBM privately sniffs that SCO, which it describes as a "terrorist," never shared the series of letters documenting this trumping business with the press despite its "far-reaching publicity campaign" and went right on saying things like it could "order the destruction of every copy of AIX." IBM also says SCO never explained to IBM exactly how IBM was breaching the agreements as it was legally required to do despite the letters IBM wrote to SCO asking for clarification, and SCO hereby breached the contract. Sounding a lot like arguments made recently by the Free Software Foundation's lawyer, IBM claims SCO forfeited its right to assert any proprietary rights - like claiming ownership rights over Linux code and the right to collect license fees - because for eight years SCO distributed Linux products under the GPL, which bars such proprietary rights. IBM says SCO took source code that IBM put out under the GPL and put it in SCO Linux and interprets that as meaning "SCO accepted the terms of the GPL." IBM positions the GPL, by the way, as a "conscious public covenant." It wants the court to enjoin SCO from "its continuing and threatened breaches of the GPL." The GPL has only found its way into the court system once before in a MySQL fracas between MySQL's creator and its US distributor Progress Software subsidiary NuSphere. The Massachusetts federal court thought the license was enforceable and binding. IBM may have opened Pandora's Box by dragging the GPL, one of the three foundations of its suit, into this mess. SCO CEO Darl McBride, on vacation when IBM filed suit, has been dying to kick the stuffing out of the GPL, but the subject had to be introduced. IBM has obliged him. The GPL may not survive a close legal appraisal. IBM paints SCO as failing in both its Linux and its Unix business and shifting its "business model to litigation" to save itself by soliciting business and inducing "IBM and others to purchase products and licenses from SCO." IBM accuses SCO of waging a campaign to "create fear, uncertainty and doubt in the marketplace" over its rights, of planting "the false perception that SCO holds rights to Unix that permit it to control not only all Unix technology but also Linux - including those aspects generated through the independent hard work and creativity of thousands of other developers and long distributed by SCO itself under the GPL" and of slandering Linux as an "unauthorized derivative of Unix." It says, "SCO's false and misleading statements have...damaged the reputation and prospects of the entire open source community" and damaged IBM's business, its reputation and goodwill - not to mention tainting customer decisions about whether to purchase products and services from IBM and IBM's relationships with the Linux and open source establishments - and forced IBM to "divert resources to respond to SCO's baseless allegations." IBM wants SCO enjoined from saying it "can, will or has in fact revoked IBM's right to use Unix" or that IBM has no right to distribute AIX or its Linux-related products. It wants SCO enjoined from disparaging AIX or IBM's Linux line or claiming ownership over GPL code. SCO, responding to the suit, immediately disparaged IBM by saying, "We view IBM's counterclaim filing today as an effort to distract attention from its flawed Linux business model. It repeats the same unsubstantiated allegations made in Red Hat's filing earlier this week. If IBM were serious about addressing the real problems with Linux, it would offer full customer indemnification and move away from the GPL license. "As the stakes continue to rise in the Linux battles, it becomes increasingly clear that the core issue is bigger than SCO, Red Hat or even IBM. The core issue is about the value of intellectual property in an Internet age. In a strange alliance, IBM and the Free Software Foundation have lined up on the same side of this argument in support of the GPL. IBM urges its customers to use non-warranted, unprotected software. This software violates SCO's intellectual property rights in Unix, and fails to give comfort to customers going forward in using Linux. If IBM wants customers to accept the GPL risk, it should indemnify them against that risk. The continuing refusal to provide customer indemnification is IBM's truest measure of belief in its recently filed claims." SCO, which indicated it intends to keep pushing its Linux licenses, waved away IBM's infringement claims, saying SCO has shipping some of this stuff for 20 years and this is the first time IBM has ever raised the issue of patent infringement.

Published Aug. 8, 2003— Reads 9,795 — Feedback 3
Copyright © 2003 SYS-CON Media, Inc. — All Rights Reserved.
Syndicated stories and blog feeds, all rights reserved by the author.
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About Maureen O'Gara
Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025.

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#3
Michael commented on 11 Aug 2003

And good riddance to SCO!

#2
David Wall commented on 8 Aug 2003

Is it time to short SCOX?

Why would anybody want to indemnify people who use GPL code? Why indemnify something you didn't create, don't own, and can't control? That's a lame argument. You can call it a risk to use GPL code, but it's a better risk than proprietary code that can be pulled from the market (or as SCOX tried to do with AIX, force it out of the market) and leave you high and dry. When the code is in the public view, risks are automatically mitigated.

David

#1
Phil Britton commented on 8 Aug 2003

Normally I'm not one for hyperbole, exaggeration, alliteration or whatever but all I can comment is SCO put your head between your legs and kiss your arse goodbye :-)


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