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SCO revokes Sequent’s UNIX license


The SCO Group on Tuesday terminated a UNIX license granted to Sequent Computer Systems, which is now owned by IBM. The move marks the latest move in a bitter battle between SCO and IBM over an alleged breach of SCO's rights in the UNIX operating system.
In March, SCO filed a $1 billion court action against IBM – later upping its claim to $3 billion – alleging that IBM gave UNIX rights away to Linux, another operating system, in breach of a contract between SCO and IBM.

In May, SCO went further, claiming that Linux is an unauthorised derivative of UNIX and that legal liability for the use of Linux may extend to commercial users. SCO suspended all of its future sales of the Linux operating system until further notice – and terminated IBM's license to sell AIX, IBM's version of UNIX.

Last week, IBM lodged a counterclaim against SCO, arguing 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 alleges that SCO has itself infringed IBM's patents. IBM has therefore asked 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.

SCO has gone further by terminating the Sequent licence. In a statement, SCO explained:

"The Sequent (IBM) contract was terminated for improper transfer of Sequent's UNIX source code and development methods into Linux. As a result, IBM no longer has the right to use or license the Sequent UNIX product known as 'Dynix/ptx.' Customers may not acquire a license in Dynix/ptx from today's date forward."

According to SCO, the license agreement between it and Sequent was breached when Sequent "contributed approximately 148 files of direct Sequent UNIX code to the Linux 2.4 and 2.5 kernels, containing 168,276 lines of code", along with UNIX-based development methods.

SCO gave Sequent/IBM two months' written notice prior to termination, as required by the agreement, but as IBM has not cured the breach, or offered any solution that may cure the breach, SCO has now completed the termination process.

Whether this will affect IBM's practice with regard to Dynix is another matter, as it has up its sleeve two letters from Novell, which owns other rights in the UNIX system.

In February 1985, IBM entered into a licence agreement with the then owner of the UNIX system, AT&T, in order to produce its own AIX operating system. In 1993 AT&T assigned its rights to Novell, and two years later Novell handed over some of these rights to the company that is now known as the SCO Group.

The complicated system of agreements set up at the time included a right for Novell to force SCO to waive SCO's rights under the agreement, and in June this year Novell appears to have done just that.

Part of the evidence lodged by IBM in its counterclaim includes two letters from Novell chairman and CEO, Jack Messman, to SCO president and CEO, Darl McBride, dated 9th and 12th June. In the letters Messman first orders SCO to waive any right it may have to terminate the AIX license. After receiving no response, Messman then says that Novell is waiving the right to termination on SCO's behalf.

Commenting on the termination, IBM spokeswoman Trink Guarino told InternetNews.com, "SCO has not shown us any evidence that we've violated our agreements in any way."

She added, "IBM withdrew Dynix/PTX and associated NUMA hardware systems from the market long ago, long before this suit was filed."

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