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SCO–Linux disputes

From Alfawiki
SCO Group
Company typePrivate
IndustrySoftware
PredecessorCaldera International
Founded2003; 23 years ago (2003)
Headquarters
United States
ProductsUNIX System V, UnixWare

In a sequence of legal confrontations, SCO Group asserted that its licensing agreements with IBM granted it rights over the source code IBM contributed to Linux, accusing IBM of breaching SCO's contractual entitlements. The Linux community, alongside corporations such as IBM, Novell, and Red Hat, challenged SCO's assertions and submitted counterclaims.

On August 10, 2007, a federal district court delivered a verdict in SCO v. Novell confirming that the copyrights to the Unix operating system belonged to Novell rather than SCO Group. The court further determined that SCO was bound to accept Novell's waiver of SCO's claims against IBM and Sequent. Subsequently, Novell declared it had no intention of pursuing litigation over Unix copyrights and did not consider Unix code to be present within Linux. The district court's final judgment on November 20, 2008, upheld this decision while adding interest payments and establishing a constructive trust.

On August 24, 2009, the U.S. Court of Appeals for the Tenth Circuit partially overturned the ruling, sending back issues concerning copyright ownership and Novell's waiver rights for further trial proceedings but maintained a $2.5 million award granted to Novell connected to a 2003 agreement with Sun.

A jury on March 30, 2010, unanimously affirmed Novell as the rightful owner of the UNIX and UnixWare copyrights. Despite this outcome, SCO—through bankruptcy trustee Edward Cahn—persisted in litigation against IBM over alleged financial damages.

The lawsuit SCO filed against IBM was dismissed with prejudice on March 1, 2016; nevertheless, SCO lodged an appeal later that month.

Overview

Unix is a prominent computer operating system originating from the United States of America. Prior to these disputes, the intellectual property rights (IP) related to Unix were controlled by Unix System Laboratories (USL), a division of AT&T, although ownership was legally intricate. By 2003, these rights had changed hands multiple times, sparking disagreements regarding legal entitlement. Portions of Unix code either predated the Copyright Act of 1976, were authored by third parties, or were governed by different licensing terms. The software firm SCO Group (formerly known as Caldera International) asserted ownership of Unix in 2003 and claimed that other Unix-like platforms—particularly the free Linux OS and competing Unix variants—were infringing its intellectual property by incorporating Unix code without authorization.

Initially, SCO aimed to initiate lawsuits against all end-users and providers of these systems to generate widespread market uncertainty. However, due to weak Unix copyright protections, absence of patent claims, and limited trade secret grounds, this strategy was curtailed and SCO ceased pursuing broad litigation against users.

These allegations met significant resistance. SCO faced accusations of copyright infringement and violating the GPL license under which it operated. Additionally, claims surfaced that Microsoft and affiliated investors funded and encouraged SCO’s actions amid Microsoft's aggressive efforts to challenge Linux as a rival to its Windows operating systems.

Ultimately, SCO focused on several pivotal lawsuits: targeting IBM for alleged copyright violations related to its AIX system; contesting Novell over ownership disputes; suing DaimlerChrysler for failing to comply with Unix usage certification requirements; and litigating against Linux user AutoZone for rights infringements. In parallel, Linux distributor Red Hat filed suit against SCO for making false assertions damaging its business interests and sought a legal declaration denying SCO’s ownership claims over Linux code.

In 2007, a court decision in SCO v. Novell established that Novell—not SCO—held the Unix copyrights. , most legal actions have concluded without rulings favoring SCO.

Timeline and significant legal actions

In early 2003, SCO accused others of "improper use of its UNIX System V source code within Linux" but declined to specify which portions, citing confidentiality and promising disclosure only through court proceedings. They indicated that the contested code resided in areas such as SMP, RCU, and additional segments of the Linux kernel.

On March 6, 2003, SCO initiated a lawsuit against IBM demanding $1 billion in damages, alleging IBM had transferred SCO’s trade secrets into Linux; this claim was subsequently raised to $5 billion. In May 2003, Novell publicly asserted ownership of the AT&T Unix intellectual property that SCO alleged IBM had infringed upon, thereby challenging SCO's infringement assertions.

Legal analysts observed that the USL v. BSDi litigation had demonstrated the fragility and limited enforceability of Unix copyrights. SCO did not pursue claims of patent infringement, as no patents from AT&T or Novell were assigned to them. Additionally, SCO did not possess the UNIX trademark. This left trade secret allegations, which proved difficult to extend beyond a contractual breach between SCO and IBM, effectively narrowing the claims primarily to IBM. Although SCO aimed for wider implications affecting the Linux ecosystem, they ultimately withdrew all trade secret accusations.

With a constrained legal foundation, SCO proceeded to file multiple lawsuits and issued threats against key industry entities including IBM, Hewlett-Packard, Microsoft, Novell, Silicon Graphics, Sun Microsystems, and Red Hat.

By mid-2004, five principal lawsuits had been initiated:

Within these proceedings, SCO suggested copyright violations by various developers and users within the Linux community.

UNIX SVRx

The foundation of SCO's assertions stems from contractual transfers of intellectual property related to UNIX System V Release 4 originally held by Unix System Laboratories (USL), an AT&T division. In 1993, USL divested UNIX rights—including copyrights, trademarks, and licensing agreements—to Novell. Subsequently, Novell sold certain rights and assets to the Santa Cruz Operation in 1995. Santa Cruz Operation developed and sold PC-based UNIX products until 2000 before selling its UNIX assets to Caldera Systems. Caldera later restructured as Caldera International and rebranded itself as SCO Group.

Through this sequence of transactions, SCO claims ownership over UNIX intellectual property. These claims have been contested by various parties. SCO maintains copyright over all UNIX code developed by USL (SVRx) along with licensing agreements originating from AT&T and inherited through these transfers. The primary document cited is the "Asset Purchase Agreement" outlining the sale between Novell and Santa Cruz Operation. SCO interprets this agreement as encompassing all UNIX copyrights and licensing rights; however, this interpretation is disputed by others.

Ownership of UNIX copyrights

Determining ownership of copyrights from USL involves complexity because the UNIX codebase includes components with diverse copyright histories. Some elements predate the Copyright Act of 1976 and may reside in the public domain. Other parts are influenced by the USL v. BSDi case and governed under the terms of the BSD License.

Information disclosed by Groklaw revealed a settlement between USL and the UC Berkeley, resolving the USL v. BSDi lawsuit. This settlement concluded USL’s infringement claim over freely distributed BSD source code, while UC Berkeley countered that USL incorporated BSD code into UNIX System V without proper attribution. This agreement complicates SCO’s assertions regarding critical portions of the UNIX source code central to SCO’s disputes involving Linux, which contains some BSD-derived code.

Novell challenges SCO’s interpretation of their purchase agreement. After SCO sent a letter on May 12, 2003 to approximately 1,500 companies, Novell responded with correspondence asserting that fundamental UNIX System V copyrights were excluded from the asset sale and remain under Novell’s control. In October 2003, Novell officially registered these copyrights with the US Copyright Office.

In retaliation, SCO filed a "slander of title" lawsuit against Novell (SCO v. Novell), accusing them of interfering with their business interests by casting doubt on UNIX copyright ownership. Initially, SCO’s claim for special damages was dismissed due to insufficient detail but was permitted to be amended later. The court expressed doubts about whether the Asset Purchase Agreement (APA) clearly transferred relevant copyrights because of ambiguous wording.

After amending its complaint, SCO faced denials from Novell who also filed a slander of title counterclaim alongside several breach of contract allegations under the APA terms. The APA granted Santa Cruz Operation (later known as SCO) rights to market Unixware and retain all revenues but obligated them to remit licensing revenues to Novell, who would then return 5% as an administrative fee. Novell alleges that SCO executed Unix SVR4 licenses with Microsoft, Sun Microsystems, and Linux users but failed to pass on payments owed. As a result, Novell seeks full recovery of these revenues and requests funds be held in escrow due to concerns about SCO’s financial stability.

Additionally, Novell retained audit rights over SCO’s Unix Licensing Business under the APA but claims that SCO has consistently refused to provide requested details regarding licensing agreements despite multiple demands. Consequently, Novell petitions for judicial intervention compelling compliance with these audit provisions.

On August 10, 2007, Judge Dale Kimball ruled in favor of Novell in SCO v. Novell, declaring "Novell is the owner of the UNIX and UnixWare Copyrights," thereby affirming Novell’s proprietary rights over these assets.

Management of existing licenses

The Asset Purchase Agreement between Novell and Santa Cruz Operation encompassed the administration of approximately 6,000 active UNIX licensing contracts involving academic institutions, software developers, and hardware manufacturers. SCO's assertion of control over these licenses became a focal point in the SCO–Linux disputes, particularly highlighted by the revocation of IBM’s license, SCO’s legal action against DaimlerChrysler (SCO v. DaimlerChrysler), and the claims concerning derivative works in SCO v. IBM.

In May 2003, SCO revoked IBM's SVRx license for its UNIX-based AIX platform, claiming full ownership of the System V licenses acquired from USL. IBM dismissed this move, referencing a contractual amendment that rendered the license "irrevocable." Following the asset transfer, Novell maintained certain administrative rights over these licenses and exercised them by overturning SCO's cancellation of IBM’s license. SCO challenged these interventions and updated its complaint in SCO v. IBM to include allegations of copyright infringement due to IBM’s continued distribution of AIX without a valid SVRx license.

By December 2003, SCO required UNIX license holders to certify compliance with terms concerning Linux usage that were not part of their original agreements. DaimlerChrysler’s failure to provide such certification resulted in the initiation of SCO v. DaimlerChrysler in March 2004; however, all claims related to certification were ultimately dismissed by the court.

Authority over derivative works

A significant aspect of the UNIX licensing agreements centers on SCO’s assertions regarding derivative works. Numerous UNIX licensees created enhancements incorporating code absent from the original SVRx base system. Ordinarily, ownership of such newly developed code resides with its creator or their employer; nevertheless, SCO argues that the initial licenses categorize this code as derivative works subject to SCO’s control and distribution limitations.

These contentions form the foundation of SCO v. IBM. SCO accused IBM of violating confidentiality obligations by contributing IBM-developed code to Linux. Conversely, IBM maintains that the agreements assign ownership of derivative works to their developers, thereby granting IBM full rights over its newly created software components.

In August 2004, IBM sought partial summary judgment affirming its rights over software unrelated to SVRx; however, this motion was denied as premature in February 2005 due to incomplete discovery processes. IBM subsequently refiled this motion alongside others in September 2006.

Claims of copyright and trade secret infringements by SCO

SCO alleges that Linux infringes upon its copyrights, trade secrets, and contractual entitlements, which underpin the SCOsource initiative requiring Linux users to obtain licenses through SCOsource. The exact Linux code implicated remains undisclosed publicly since many allegations are sealed within the SCO v. IBM proceedings.

Initially, SCO accused IBM of trade secret violations; however, these claims were withdrawn in an amended complaint and did not extend to Linux distributors or end users.

SCO charged that Linux contained direct line-by-line copies from UNIX source files as well as obscured copying practices but initially refrained from publicly identifying specific infringing code segments. Much of the evidence submitted under seal was excluded following IBM’s challenge regarding its lack of specificity.

The purported infringements fall into two categories: fragments or complete files derived from UNIX SVRx source code (such as the errno.h header file) and files contributed by IBM originating from its AIX and Dynix UNIX operating systems.

To establish copyright infringement, SCO must demonstrate ownership of relevant copyrights, presence of substantial source material within Linux, and a significant degree of similarity indicative of direct copying.

Disputed Ownership of SVRx Code in Linux

The proprietorship of the SVRx code remains a contentious issue, particularly regarding which segments Novell transferred to Santa Cruz Operation. Portions of the SVRx code fall under BSD licenses or exist within the public domain.

During the August 2003 SCO Forum, SCO publicly pointed to allegedly infringing components: specifically, the Berkeley Packet Filter and memory allocation routines—both governed by BSD licenses permitting free use. Notably, the memory allocation code has since been excised from Linux.

SCO further asserted that UNIX API-related code had been duplicated; however, these APIs and standards are either in the public domain or subject to rights that USL sold to The Open Group. Subsequent allegations targeted code associated with the ELF file format, which was created by the Tool Interface Standard Committee and released into the public domain—an authority SCO contests.

SCO’s assertions concerning UNIX SVRx copyright infringements within Linux have shifted depending on the legal context. The IBM litigation centers on derivative works rather than SVRx code ownership, which is addressed separately in the Novell case. The DaimlerChrysler matter pertains to contractual adherence.

In the AutoZone dispute, SCO claimed damages for AutoZone’s use of Linux but later implied that the core issue involved copying certain UNIX libraries outside the kernel to facilitate internal application migration; AutoZone denies these allegations. If accurate, this situation does not implicate Linux kernel code or its distributors.

Copyright disputes are pivotal in two lawsuits: IBM’s counterclaim in SCO v. IBM, which denies any copyright infringement by IBM related to Linux; and Red Hat’s action against SCO alleging false claims of infringement under the Lanham Act, seeking both an injunction against unsubstantiated accusations and a ruling absolving it from infringement. A hearing on IBM’s motion took place on September 15, 2004, with Judge Kimball reserving judgment. The Red Hat case remains pending.

Claims of Reverse Engineering

EWeek reported accusations that SCO might have incorporated elements of the Linux kernel into SCO UNIX's Linux Kernel Personality feature. Should this be true, it would represent a violation of Linux kernel copyrights. SCO has denied these allegations, though a deposition reportedly included confirmation from a SCO employee.

IBM-Originated Code Within Linux

SCO alleged that IBM breached contracts by contributing Linux-related code involving symmetric multiprocessing (SMP), Journaled File System (JFS), Read-copy-update (RCU), and Non-Uniform Memory Access (NUMA). This code was developed and copyrighted by IBM and may have been submitted through standard kernel contribution channels. SCO claims "control rights" over this code based on licensing agreements with IBM, likening these rights to an easement that limits IBM’s ability to publicize the code despite IBM retaining copyright ownership. This claim is connected to confidentiality provisions in their original licensing agreements.

The SCO Group and GPL

Prior to adopting the name The SCO Group, the company operated as Caldera International, a prominent Linux distributor between 1994 and 1998. In 1998, Caldera divided into Caldera Systems (focused on Linux systems) and Caldera Thin Clients (targeting embedded solutions). Caldera, Inc. ceased operations in 2000 following settlement of the Caldera v. Microsoft lawsuit. Caldera Systems restructured as Caldera International in 2001 before rebranding as The SCO Group in 2002.

Some commentators, including Eben Moglen, argued that because Caldera distributed allegedly infringing code under the GNU General Public License (GPL), this act effectively licensed any proprietary code incorporated into Linux. SCO contested this interpretation, asserting they were unaware their code was present in Linux and thus could not have granted GPL licensing. Nevertheless, as late as mid-2006, SCO continued distributing ELF files under GPL terms.

At the outset of litigation, SCO challenged both the validity and enforceability of the GPL license. Advocates for the GPL maintained that SCO’s authorization to distribute Linux depended upon recognizing the GPL as a legitimate license. Subsequent court documents revealed SCO asserting compliance with the GPL as part of its defense against IBM’s counterclaims.

The GPL played a crucial role in SCO v. IBM. Under U.S. copyright law, unauthorized distribution is prohibited; however, the GPL provides permission under defined conditions. IBM argued that SCO violated the GPL by denying its legitimacy and claiming incompatibility with U.S. law. Additionally, IBM contended that SCOsource licensing conflicted with the GPL requirement that redistributions be free from copyright licensing fees—permitting charges only for duplication and support services. IBM’s counterclaims accused SCO of breaching the GPL and infringing upon IBM copyrights by collecting licensing fees while distributing materials owned by IBM.

SCO v. IBM

On March 7, 2003, SCO initiated legal action against IBM, accusing them of contract breaches and initially alleging theft of trade secrets, although the trade secret claim was subsequently withdrawn. SCO also introduced a copyright infringement allegation specifically related to IBM’s utilization of AIX, excluding Linux. The court acknowledged that SCO had asserted copyright violations by IBM concerning Linux. IBM responded with counterclaims, including allegations of patent infringement, which were later dismissed.

On February 8, 2005, Judge Kimball determined that IBM’s requests for summary judgment were premature but observed that SCO had not submitted sufficient evidence to substantiate its copyright claims regarding IBM’s Linux-related activities.

Judge Brooke Wells partially granted IBM’s motion on June 28, 2006, to restrict SCO’s claims by excluding 186 out of 294 alleged intellectual property items due to SCO’s failure to clearly identify the pertinent source code or concepts. Approximately 100 items remained under contention.

Following partial summary judgments in the connected SCO v. Novell matter, Judge Kimball sought status reports by August 31, 2007.

The dispute ultimately concluded with a settlement reached in 2021.

Red Hat v. SCO

On August 4, 2003, Red Hat filed a lawsuit against SCO accusing it of false advertising and deceptive trade practices while seeking a declaratory judgment confirming noninfringement of SCO’s copyrights. This case has been put on hold pending the outcome of related litigation involving IBM.

SCO v. Novell

In response to SCO’s campaign asserting ownership over UNIX rights through its Linux claims, Novell disputed these assertions and maintained its own ownership. After registering copyrights for significant UNIX products, Novell was sued by SCO on January 20, 2004; Novell promptly moved the case to federal court.

On July 29, 2005, Novell rejected SCO’s claims and filed counterclaims demanding that SCO remit UNIX licensing revenues minus a 5% administrative fee. Novell also sought establishment of a constructive trust to secure payments amid SCO’s diminishing assets.

Judge Dale Kimball ruled on August 10, 2007, affirming Novell’s ownership of UNIX and UnixWare copyrights. The court granted summary judgment in favor of Novell on multiple claims and ordered SCO to account for income derived from SCOSource licenses granted to Sun Microsystems and Microsoft. Some matters remained unresolved.

On July 16, 2008, the court awarded Novell $2.55 million and found that SCO lacked authorization in its 2003 agreement with Sun Microsystems. The final judgment issued November 20, 2008 upheld this decision with additional interest and imposed a constructive trust exceeding $625,000.

The Tenth Circuit Court of Appeals partially overturned the summary judgment on August 24, 2009, sending issues related to copyright ownership and contractual waivers back for trial but upheld the $2.55 million award to Novell regarding the Sun agreement.

Following a three-week trial in March 2010, a jury confirmed Novell’s ownership of UNIX copyrights. On June 10, Judge Ted Stewart denied SCO’s motion for a new trial and ruled entirely in favor of Novell on outstanding matters.

SCO filed an appeal on July 7, 2010; however, on August 30, 2011, the Tenth Circuit Court of Appeals fully affirmed the District Court’s decision, dismissing SCO’s efforts to reopen the case.

SCO v. AutoZone

AutoZone, a corporate user of Linux and former customer of SCO OpenServer, faced a lawsuit from SCO on March 3, 2004, accused of infringing SCO's copyrights through its use of Linux. The proceedings were put on hold pending the resolution of related cases involving IBM, Red Hat, and Novell.

On September 26, 2008, Judge Robert C. Jones ordered the stay to be lifted as of December 31, 2008, with discovery set to begin on April 9, 2010. SCO submitted an amended complaint on August 14, 2009; AutoZone responded and filed a motion for partial dismissal on August 31. Later, on October 22, 2009, Edward Cahn, SCO's Chapter 11 trustee, requested approval from the bankruptcy court for a confidential settlement that would resolve all claims with AutoZone.

SCO v. DaimlerChrysler

In December 2003, SCO required UNIX licensees to confirm their use of Linux; DaimlerChrysler, a former UNIX licensee and current Linux user, did not reply. SCO initiated litigation on March 3, 2004, alleging breaches of license agreements. Most allegations were dismissed through summary judgment. The remaining issue concerning the timeliness of DaimlerChrysler’s response was resolved by mutual agreement in December 2004, allowing SCO to reinstate the case if it covered DaimlerChrysler’s legal expenses.

SCO’s commitment not to litigate against its own customers

On June 23, 2003, SCO announced it would refrain from suing its Linux customers. The company pledged ongoing support for clients and partners using SCO Linux and OpenLinux products and guaranteed protection against any SCO intellectual property claims related to Linux.

SCO and SGI

In August 2003, SCO accused unauthorized copying of UNIX code into Linux by citing two instances. One example (Berkeley Packet Filter) was unrelated to UNIX, while the other appeared linked to UNIX code contributed by vendor Silicon Graphics. However, analysis by the Linux community revealed:

  • The code originated from an earlier UNIX version previously released by Caldera, undermining copyright assertions.
  • The code was inactive and part of a Linux kernel segment designed for a Silicon Graphics architecture that was never launched.
  • It had been removed from the kernel two months prior.
  • The disputed portion was minimal (80 lines) and insignificant.

SCO and BayStar Capital

In October 2003, BayStar Capital along with Royal Bank of Canada invested $50 million in SCO to finance its legal efforts against Linux. BayStar’s participation was influenced by Microsoft’s recommendation since Microsoft’s proprietary Windows OS competes directly with Linux. Lawrence R. Goldfarb of BayStar acknowledged Microsoft's interests in this matter.

By April 2004, BayStar sought to recover $20 million of its investment while Royal Bank held onto the remaining funds. SCO contested BayStar’s claim. The disagreement was settled by August 27, 2004.

SCO and Canopy Group

The Canopy Group, controlled by the Noorda family—founders of Novell—held shares in SCO until February 2005. A severe internal conflict emerged when the Noorda family attempted to remove board member Ralph Yarro III over accusations of misappropriation. This dispute involved undisclosed internal challenges as well as tragic deaths among Canopy leadership.

Ultimately, Canopy agreed to buy back all its shares in SCO in exchange for cash plus shares in Canopy itself. Since then, SCO and Canopy have operated largely independently, although SCO continues leasing office space from Canopy in Utah.

Controversy over Microsoft’s financial support of SCO

On March 4, 2004, an internal SCO email that had been leaked disclosed that Microsoft had facilitated raising up to $106 million through BayStar referrals and other methods. Blake Stowell, representing SCO, acknowledged the existence of the memo but described it as "a misunderstanding." BayStar clarified that the arrangement was initiated by Microsoft, although no direct funding originated from Microsoft itself. Beyond BayStar’s role, Microsoft also paid SCO $6 million in May 2003 for a license covering "Unix and Unix-related patents," despite SCO lacking ownership of such patents. According to SEC disclosures, licensing agreements between the two companies may have amounted to at least $16 million. This influx of capital was widely interpreted as enhancing SCO’s financial capacity to pursue its legal action against IBM.

SCOsource initiative

In response to their allegations of copyright violations within the Linux kernel, The SCO Group introduced the SCOsource program, which involved selling licenses for software SCO claimed copyrights over, extending beyond their existing OpenServer and UnixWare licenses. After several notable transactions—one of which was repudiated by the buyer—SCO set a price of US$699 per Linux processor for corporate users seeking licenses. SCO maintained that entities participating in SCOsource would not be held accountable for any claims SCO asserted against Linux users.

The Michael Davidson Email

An email dated July 14, 2005, sent by Michael Davidson to Reg Broughton (both employees of Caldera International) in 2002 was made public. In this correspondence, Davidson explained that the company had engaged an external consultant due to SCO’s senior management’s conviction that Linux and much GNU software contained copied proprietary UNIX source code owned by SCO. The objective was to uncover definitive evidence within Linux codebases used by companies such as Red Hat, enabling SCO to leverage this discovery by potentially marketing licenses to corporate Linux users as a form of "insurance policy" against copyright infringement claims.

Despite this, Davidson anticipated no substantial discoveries based on his expertise and regarded the project as "a waste of time." After approximately four to six months, he reported:


See also

External links

sv:SCOs rättstvister

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