SCO Group Litigation

In early 2003 The SCO Group sued IBM. The exact terms of the case are complex, and have since changed, but SCOG basically claimed that IBM placed some of their intellectual property into Linux. As a result they withdrew IBM's licence to distribute AIX. IBM retorted that they had done no such thing and that they had an irrevocable licence. They proceeded to strongly counter-sue. SCO now seem to have dropped all claims except that IBM continued to distribute AIX after their licence was terminated. Since they do not claim any grounds for them to have terminated the licence it is hard to see how this makes any sense.

While their claims in court are based on contract issues, outside court they have claimed that millions of lines of UNIX SVRx code have been found in Linux. They have stated in court that it is "literally impossible" for them to produce these lines. Seems strange? Read on.

Because of their claims outside court, Red Hat then sued SCOG for creating Fear, Uncertainty and Doubt, and harming Red Hat's interests.

Novell pointed out to SCOG in a series of letters that they did not have the copyrights to UNIX SVRx that they were claiming that Linux infringed. They also pointed out that Novell also had the right to waive any licence infringement that they wanted to. They proceeded to do so with IBM, denying SCOG the right to terminate their licence. The letters were published on the Novell web site. SCOG had no option but to sue them. They chose to sue them for "Slander of Title", which has the advantage of not casting immediate doubt on the ownership of the copyrights.

In late 2003 SCOG made a lot of noise about suing Linux users for breach of its copyrights. In order to fulfil this promise, in early 2004 it sued Autozone and Daimler-Chrysler. These suits are only just starting, but as far as it is possible to ascertain they rest on contract issues. Both companies are customers or past customers of SCOG.

Who is The SCO Group

Firstly The SCO Group is not the Santa Cruz Operation. Santa Cruz is still in existence and is currently called Tarantella.

The SCO Group is a new company, created in 2000 by Caldera Systems Inc. and called Caldera International Inc. Caldera Systems is now a wholly owned subsidiary of The SCO Group (and is called SCO Operations Inc.). In its turn Caldera Systems Inc. is a new company formed by Caldera Inc. a couple of years before. Confused? Wait, it gets worse. Here, have a table. Each of these rows is a different company:
Original NameCurrent Name
Caldera Inc.Unknown
Caldera Systems Inc.SCO Operations Inc.
Santa Cruz operationTarantella
Caldera InternationalThe SCO Group

Here is the story in SCOG's own words:

Caldera Systems, Inc. ("Caldera Systems"), was incorporated as a Utah corporation on August 21, 1998, and was reincorporated as a Delaware corporation on March 6, 2000. On May 7, 2001, Caldera Systems was acquired by a newly formed holding company, Caldera International, Inc. ("Caldera"). Caldera Systems developed and marketed software and provided related services that enabled the development, deployment and management of Linux-based specialised servers and Internet devices that extended the eBusiness infrastructure. Caldera Systems sold and distributed its software and related products indirectly through distributors and solutions providers, which include value-added resellers ("VARs"), original equipment manufacturers ("OEMs"), and systems integrators, as well as directly to end-user customers. These sales occurred throughout the United States and in certain international locations.

On May 7, 2001, Caldera acquired all of the assets and operations of the server and professional services groups of Tarantella, Inc. ("Tarantella"), formerly The Santa Cruz Operation, Inc., pursuant to an Agreement and Plan of Reorganization, dated as of August 1, 2000 as amended (see Note 3). Under the Agreement, Caldera acquired the tangible and intangible assets used in the server and professional services groups, including all of the capital stock of certain Tarantella subsidiaries. Additionally, each share of existing Caldera Systems common stock, as well as options to purchase shares of Caldera Systems common stock, were converted into an equal number of shares of Caldera common stock and options to purchase shares of Caldera common stock.

The acquired operations of Tarantella provide server software for networked business computing and is a leading producer of UNIX server operating systems. In addition, these operations provide professional services to implement and maintain UNIX system software products. The acquisition provides Caldera with international offices and a Linux/UNIX distribution channel with resellers worldwide.

Source: The Caldera International Inc 10-Q SEC filing for the period ending July 31, 2001

Note that information on SCOG's website at first sight contradicts this in part. I assume that the SEC filing is telling the truth.

The complex dance that occurred between Santa Cruz and Caldera Systems is detailed on this storyboard.

How did SCOG get the rights to UNIX?

The Santa Cruz Operation bought something from Novell in 1995-96. The first version of that agreement excluded all copyrights. However more than a year after the first agreement was signed an amendment was agreed that may or may not include the UNIX copyrights. Whether or not the parties intended it to do so, it may not be sufficient in law. Currently Novell is arguing that it did not, was not intended to, and is insufficient. SCOG is arguing the reverse.

The wording is as follows:

Schedule 1.1(b) Excluded Assets (Page 2 of 2)

V. Intellectual Property:

A. All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. However, in no event shall Novell be liable to SCO for any claim brought by any third party pertaining to said copyrights and trademarks.

Is that sufficient to detail exactly which copyrights were transferred? If you had a list of Novell's copyrights before the agreement could you decide which were transfered? I know I couldn't.

Why are copyrights important?

Firstly, SCOG's original complaint against IBM was that it contributed to Linux code that had originally been written for AIX. IBM's licence stated that derivative code must be kept secret. The word "derivative" is defined in copyright law. The licence terms were later ammended to state that IBM owned code it wrote. SCOG argued that although IBM owned the code they were still required to keep it secret. This is contested by Novell and IBM. SCO's argument seems to me to be a use of Zeno's Paradox as restated by Lewis Carroll.

Secondly, SCOG has been attacking Linux in the media for containing portions of AT&T UNIX code. The extent to which such code is protected is a matter for copyright law. None of the code that SCOG has so far identified has been copied into Linux from AT&T UNIX. That includes the code that SCOG maintains was removed from Linux when SCOG identified it. It was removed just to be sure and because it was redundant, but it was later found to be in the public domain

The Sealed Settlement

So what copyrights did Novell hold? In some views not very many. Unix was distributed by AT&T as a trade secret. Trade secrets have no protection under law. Once they are out in public view they are out. No copyright notices were attached to the code at a time when that was the only way of asserting copyright. The code was used in many universities and it is unlikely that everyone who had access to it understood and obeyed the non-disclosure agreement.

When AT&T decided to start selling UNIX they sued the University of California at Berkeley for distributing their BSD UNIX. A legal decision was never reached, the parties agreed out of court in a sealed settlement. It is widely understood that they did this to protect both products from further legal scrutiny, since it seemed likely that there was very little legally protected property in either product, and what was there was hopelessly entangled between the parties.

In fact it was Novell that reached the agreement, they bought Unix System Laboratories and with it UNIX System V and its predecessors from AT&T during the court case.

The Open Group

Novell donated the UNIX trademark to the Open Group, which controlled the POSIX standard. POSIX defines a set of standard interfaces that constitute a UNIX system. The name UNIX is not now the name of any single product. Anyone can follow the published POSIX specification to create a new operating system, submit it to certification and thereafter call it UNIX.

It is worthwhile noting that a great deal of what SCOG seems to be claiming in public is actually contained in the POSIX specification.

Further Information

For further information you should visit the Groklaw website. They have a complete set of publicly accessible documents from all of the court cases, and a great deal of informed discussion.


I am not a lawyer, nor a citizen of the USA. I am merely a fallible, informed observer. Everything on this page should be read with this in mind. All trademarks and copyrights are the properties of their owners.

This page was last updated on 13-April-2004

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What is AIX?

When AT&T started to sell UNIX, many companies bought a licence. Most of them just used it to aid their in-house work, but IBM, HP, Sun, Sequent and others bought a licence that allowed them to modify UNIX and sell it as their own. AIX is IBM's version of UNIX. HP's is HP-UX and Sun's is Solaris. IBM subsequently bought Sequent, which had its own version of UNIX called Dynix/ptx.

Intellectual Property?

There are four types of intellectual property, and they have very different characteristics.
SCOG is not claiming that anyone has infringed any trademarks. Unix and UnixWare now belong to the Open Group. Trademarks protect the names and logos that companies use to market their products.
SCOG is not claiming that anyone has infringed any patents. Indeed it does not appear to own any. Patents protect ideas and methods.
SCOG is making a lot of noise about its copyrights. However none of its suits to date depend solely on copyright. They are contract issues. SCOG's rights to the UNIX (SVRx) copyrights are contested by Novell. Copyright protects the expression of a work. It is limited to works that require a creative input, and does not protect ideas and methods.
Trade Secrets
It is believed that SCOG's case against IBM is or was a trade secret matter. AT&T originally used trade secrets to protect UNIX. Trade Secrets can be divulged only under Non-Disclosure Agreements. They have no other protection, so once someone has violated the NDA you can sue them for damages, but the protected property is out, and it cannot be recalled.


Copyright law prevents someone publishing a product that is derived from a copyrighted work. The definition of derivative is complex, but its application to software appears to devolve to a question of whether a substantial amount of copyrightable code from the original appears in the "derivative". Under this interpretation Linux probably has no SVRx code in it. However SCOG has a couple of arguments that challenge this. The first is their reading of the IBM UNIX licence, and this is a non-copyright, contract/trade-secret argument. The second is a broadening of the definition of "derivative" along the lines of the interpretation used in other fields. For example a Russian author was found guilty of copyright infringement of the Harry Potter books although the lead character was female, all the names were changed and the story's plot was different.

Under this new definition we should see Microsoft's command prompt from DOS version 2.0 to Windows XP sued for copyright infringement as a derivative of the UNIX command line. However this reading of copyright law is without precedent in the software arena.

What is UNIX SVRx?

UNIX was developed by AT&T Bell Labs in 1969. At the time AT&T was forbidden by court order from any commercial interests outside the telephone business. They therefore distributed it free of charge under a non-disclosure agreement, largely to universities. At the time it was not considered a good idea to attach copyright notices to materials that were not to be publicly distributed, so none of the files had copyright notices. The universities used the operating system as a basis for courses, and produced many improvements which they distributed widely. When AT&T was broken up the court order lapsed and AT&T created Unix System Laboratories to sell UNIX. The nomenclature for these releases was "System y, Release x", where y was expressed in Roman numerals. The only versions of any modern interest are the releases of "System V". Hence SVRx relates to any release of System V UNIX.
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Groklaw For information about the SCO group law suits.