SCO–Linux disputes Timeline and Background

The SCO-Linux disputes were a series of lawsuits filed by SCO Group against various companies, including IBM and Novell.

SCO Group, a company that owned the Unix operating system, claimed that IBM and others had infringed on its intellectual property by using Unix code in Linux.

In 2003, SCO Group sent letters to major Linux users, including IBM, Novell, and AutoZone, claiming that Linux contained Unix code and demanding that they stop using it.

The letters were a major escalation of the dispute.

SCO Group's claims were based on a contract between SCO Group and IBM, which dated back to the 1980s.

Under the contract, IBM was allowed to use Unix code in its own operating system, but SCO Group claimed that IBM had also shared the code with Linux developers.

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In 2003, SCO claimed that Linux misappropriated its UNIX System V code, but refused to specify the exact segments of code.

SCO announced a $1 billion lawsuit against IBM on March 6, 2003, alleging that IBM transferred SCO trade secrets into Linux. The lawsuit's amount later rose to $3 billion and then to $5 billion.

Novell stated in May 2003 that it owned the AT&T Unix intellectual property, which SCO claimed IBM violated, a claim later confirmed by a jury trial in 2007.

SCO's infringement suit against IBM was effectively demolished by Novell's statement.

SCO began multiple lawsuits and threats against major computer industry names, including IBM, Hewlett-Packard, Microsoft, Novell, Silicon Graphics, Sun Microsystems, and Red Hat.

By mid-2004, SCO had filed five major lawsuits:

SCO demanded that all UNIX licensees certify certain items, including some related to Linux, in December 2003, but this was not provided for in the license agreement language.

Unix and Linux are two operating systems with a complex history. SCO claimed to be the owner of UNIX, but the validity of their claims was contested by others.

The UNIX IP rights originated with Unix System Laboratories (USL), a division of AT&T, and were later sold to Novell in 1993. Novell then sold the rights to the Santa Cruz Operation in 1995, which later resold them to Caldera Systems.

SCO's claims were based on a chain of sales, but the other parties disagreed. SCO claimed copyright to all UNIX code developed by USL, referred to as SVRx, and licensing contracts originating with AT&T.

The SCO-Linux disputes have been ongoing for years, with SCO claiming that Linux violates their UNIX intellectual property. However, in 2010, TLD gave up all rights and interests in all litigation claims pending or that may be asserted in the future against IBM and Red Hat.

Xinuos, which bought SCO's Unix products and intellectual property (IP) in 2011, sued IBM and Red Hat for "illegally Copying Xinuos' software code for its server operating systems".

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Unix Svrx refers to the UNIX System V Release 4 intellectual property assets. These assets originated with Unix System Laboratories (USL), a division of AT&T, and were sold to Novell in 1993. Novell then sold some of these rights and assets to the Santa Cruz Operation in 1995.

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The Santa Cruz Operation claimed to be the "owner of UNIX" but their claims were contested by others. SCO claimed copyright to all UNIX code developed by USL, referred to as SVRx, and licensing contracts originating with AT&T.

SCO's primary document as evidence of these claims was the "Asset Purchase Agreement", which defined the sale between Novell and the Santa Cruz Operation. However, the court ultimately found that Novell, not SCO, owned the copyrights to the SVRx code base.

Some of the SVRx code base is covered by BSD copyrights or is in the public domain. SCO's first public disclosure of allegedly infringing code was at its SCO Forum conference in August 2003, but much of this code was in the public domain or covered by BSD licenses.

SCO also claimed that code related to application programming interfaces was copied from UNIX, but this code and the underlying standards are in the public domain and covered by rights USL sold to The Open Group.

Here are some examples of code that SCO claimed was infringing:

It's worth noting that SCO's claims of infringement were often vague and lacked specificity, which led to many of their claims being excluded from the case.

The SCO Group's license administration standing was a complex issue. SCO claimed ownership of over 6,000 standing licensing agreements between UNIX users and the previous owners.

These licenses were with universities, software corporations, and computer hardware companies. Novell, the previous owner, retained certain rights of control over the administration of the licenses.

SCO canceled IBM's license to its version of UNIX, AIX, in May 2003. IBM ignored the cancellation, claiming an amendment made the license irrevocable.

Novell exercised its retained rights by revoking SCO's cancellation of the IBM license. SCO disputed the validity of this action and amended its complaint against IBM to include copyright infringement.

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SCO claimed to be the owner of UNIX, citing a chain of sales that started with Unix System Laboratories (USL) selling all UNIX rights and assets to Novell in 1993.

The licensees included universities, software corporations, and computer hardware companies, with SCO canceling IBM's SVRx license to its version of UNIX, AIX, in May 2003.

SCO's cancellation was based on their claim of unrestricted ownership of the System V licensing contracts inherited from USL, but IBM ignored the cancellation, citing an amendment to the original license that made it "irrevocable".

Novell retained certain rights of control over the administration of the licenses, including the right to act on SCO's behalf in some cases, which they exercised by revoking SCO's cancellation of the IBM license.

SCO disputed the validity of both actions and amended its SCO v. IBM complaint to include copyright infringement based on IBM's continued sale and use of AIX without a valid SVRx license.

SCO claimed copyright to all UNIX code developed by USL, referred to as SVRx, and licensing contracts originating with AT&T, saying that those were inherited through the same chain of sales.

The primary document SCO presented as evidence of these claims was the "Asset Purchase Agreement", defining the sale between Novell and the Santa Cruz Operation.

SCO claimed that the sale included all copyrights to the UNIX code base and contractual rights to the licensing base, but other parties disagreed with the validity of their claims.

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SCO claimed to have the right to control and restrict the use and distribution of derivative works, which were developed by other companies and added to the core UNIX SVRx system.

These claims were the basis of SCO v. IBM, where SCO claimed that IBM violated the original licensing agreement by not maintaining confidentiality with the new code, developed and copyrighted by IBM.

IBM replied that the license agreement defined derivative works as the developer's property, leaving IBM free to do as it wished with its new code.

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SCO made several claims about Linux infringing on their copyrights and trade secrets, but they failed to provide specific information or code samples to support their claims. SCO claimed that Linux infringed on their copyrights, trade secrets, and contractual rights, but they never disclosed which parts of Linux were involved.

SCO's claims included allegations of line-for-line literal copying of code from UNIX to Linux kernel files, as well as obfuscated copying of code. However, they refused to publicly identify which code was in violation. SCO submitted evidence of their claims under seal, but much of it was excluded from the case after being challenged by IBM as not meeting the specificity requirements.

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SCO also claimed that code related to application programming interfaces was copied from UNIX, but this code and the underlying standards are in the public domain and covered by rights USL sold to The Open Group. SCO's claims were later contradicted by their own statements, and they were unable to provide sufficient specificity in their claims to support their allegations of infringement.

SCO's copyright and trade secret allegations against Linux and other companies were a major part of the controversy. SCO claimed that Linux infringed on their copyrights, trade secrets, and contractual rights, but they failed to provide specific information or code to support their claims.

In fact, SCO refused to publicly disclose which parts of Linux were allegedly infringing, leading some to doubt their proof of infringement. They eventually dropped their trade secret claims against IBM, which would not have involved Linux distributors or end users.

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SCO's allegations fell into two groups: segments of files or whole files alleged to originate in UNIX SVRx code, and files and materials contributed by IBM that originated with IBM development work associated with AIX and Dynix.

Here are some specific examples of SCO's alleged copyright infringement claims:

In the end, SCO's lack of specificity and evidence led to many of their claims being excluded from the case or dismissed by the court.

Microsoft's involvement in the SCO controversy is a notable aspect. Microsoft paid SCO $6 million in May 2003 for a license to "Unix and Unix-related patents", despite SCO not owning any such patents.

This deal was seen as a financial boost to SCO, helping them with their lawsuit against IBM. The total amount of license deals between Microsoft and SCO may have reached at least $16 million, according to U.S. Securities and Exchange Commission filings.

Microsoft also funded SCO through a BayStar referral, raising up to $106 million.

SCO's lawsuits against Linux users and companies were a significant part of the SCO-Linux disputes. SCO lost every lawsuit it filed, or that was counter-filed against it, by 2021.

SCO initially announced it would not sue its own Linux customers in a letter sent on June 23, 2003. The company stated it would continue to support its SCO Linux and OpenLinux customers and hold them harmless from any SCO intellectual property issues regarding Linux.

One notable lawsuit was SCO v. IBM, filed in March 2003 for $1 billion. The lawsuit involved SCO suing IBM for allegedly contributing SCO's proprietary UNIX code to Linux. The case was settled in 2021 for $14,250,000, with IBM and Red Hat being released from any future litigation claims.

SCO also sued Novell, claiming ownership of UNIX. However, Novell proved in court that it still owned the rights in question. Novell was awarded $2,547,817 and a constructive trust of $625,486.90.

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SCO's lawsuits against AutoZone and DaimlerChrysler were also notable. AutoZone was sued for violating SCO's copyrights by using Linux, but the case was settled confidentially. DaimlerChrysler was sued for failing to respond to a certification request regarding their use of Linux, but the case was dismissed.

Xinuos, a software company that acquired SCO's Unix products and intellectual property in 2011, sued IBM and Red Hat for allegedly stealing Xinuos' software code for its server operating systems. Xinuos claimed IBM and Red Hat engaged in a conspiracy to divide the market and use their growing market powers to victimize consumers and competitors.

Here's a summary of the key lawsuits and settlements:

BayStar Capital invested $50 million in The SCO Group in October 2003 to support SCO's Linux campaign.

This investment was arranged in part by Royal Bank of Canada, which also contributed $30 million. BayStar was referred to SCO by Microsoft, which had a competing operating system.

Lawrence R. Goldfarb, managing partner of BayStar Capital, acknowledged Microsoft's influence in the investment, stating "It was evident that Microsoft had an agenda".

BayStar Capital was a private hedge fund that invested $20M in SCO in October 2003, part of a $50M deal co-arranged for SCO.

They were referred to SCO by Microsoft, whose proprietary Windows operating system competes with Linux. BayStar's managing partner, Lawrence R. Goldfarb, noted that "It was evident that Microsoft had an agenda".

In April 2004, BayStar was asking for its $20M back, claiming SCO didn't meet their investment expectations. SCO, however, stated they believed BayStar didn't have grounds for making this demand.

The dispute between SCO and BayStar was resolved on August 27, 2004.

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The Canopy Group was involved in a dispute with SCO over misappropriation claims that led to a significant change in their relationship.

Canopy held SCO shares until February 2005, and SCO held shares of Canopy.

The two parties became embroiled in a bitter dispute, which was further complicated by internal problems within Canopy.

The internal problems included the suicides of two key individuals: Robert Penrose, Canopy's director of information systems, and Val Kriedel, the daughter of Ray Noorda.

Canopy ultimately agreed to buy back all the shares that SCO had in Canopy in exchange for their SCO shares and cash.

This agreement made SCO and Canopy mostly independent, although SCO did continue to rent their Utah office space from Canopy.

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On June 23, 2003, SCO sent out a letter announcing that it would not be suing its own Linux customers.

SCO stated in the letter that it would continue to support its SCO Linux and OpenLinux customers and partners who had previously implemented those products.

This decision was a significant one, as it meant that SCO's customers would be held harmless from any SCO intellectual property issues regarding Linux.

SCO's customers had previously implemented SCO Linux and OpenLinux products, and this announcement provided them with a sense of security and stability.

In the letter, SCO also emphasized its commitment to supporting its customers and partners.

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