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IBM sues SCO as Linux battle intensifies

OUT-LAW News, 08/08/2003

IBM lodged a counterclaim against the SCO Group on Wednesday, in response to its $1 billion action filed against IBM in March over the Linux operating system. SCO quickly made light of the claim, saying that if IBM has such confidence in its product it should indemnify users against any patent infringement risk.

The filing represents a new twist in an already complex case. It relates to allegations, made in SCO's March filing, that IBM gave UNIX rights away to Linux.

In May, SCO went further, claiming that Linux is an unauthorized derivative of UNIX and that legal liability for the use of Linux may extend to commercial users. It suspended all of its future sales of the Linux operating system until further notice – and sought prohibited IBM from distributing its AIX system.

Since then, SCO has registered copyrights in critical UNIX source codes (in the US, unlike the UK, there is a system of copyright registration), and in July it announced that it would begin contacting companies about their use of Linux and offer them the chance to purchase a UnixWare license. The implication with this was that those companies that did not purchase such a license would find themselves on the wrong end of an infringement suit.

Then, early this week, Linux distributor Red Hat lodged a pre-emptive court action against SCO, arguing that Red Hat's technologies do not infringe any intellectual property of SCO and seeking to hold SCO accountable for "unfair and deceptive" actions.

SCO also released details of its UnixWare license this week, to major criticism of the price – $1,399 for a server license, from 15th October this year.

According to CNet News.com, IBM's new filing claims that SCO cannot sue over patents that may have been used in Linux, because it was distributing Linux products itself under the GPL (General Public License - an open source license set up in the 1980s). The counterclaim reads:

"By distributing products under the GPL, SCO agreed, among other things, not to assert - indeed, it is prohibited from asserting - certain proprietary rights (such as the right to collect license fees) over any source code distributed under the terms of the GPL. SCO also agreed not to restrict further distribution of any source code distributed by SCO under the terms of the GPL".

It continued:

"SCO has taken source code made available by IBM under the GPL, included that code in SCO's Linux products, and distributed significant portions of those products under the GPL. By so doing, SCO accepted the terms of the GPL, both with respect to source code made available by IBM under the GPL and with respect to SCO's own Linux distributions".

SCO has therefore lost its right to uphold its patents in the Linux system, according to IBM's argument.

In a statement, SCO rejected this:

"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's counterclaim goes further, alleging that SCO has itself infringed on IBM's patents. It has therefore requested the court to stop SCO distributing any of the infringing software, and has added a claim for damages, as yet unspecified. The damages claim also relates to the losses incurred by IBM over the AIX prohibition.

In its statement, SCO said that it had shipped the products in question for many years and this is the first time that IBM has ever raised an issue about patent infringement in these products. "The continuing refusal to provide customer indemnification is IBM's truest measure of belief in its recently filed claims," said SCO's statement.

 

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