From the NY Times:
================================================================

SCO Revokes I.B.M.'s License for Operating System Software

June 17, 2003
By STEVE LOHR


In an escalating legal battle, the SCO Group announced
yesterday that it was revoking I.B.M.'s license for
software essential to a multibillion-dollar business and
that it had asked a federal court to block that business
permanently.

The SCO action focused on the license for AIX, the I.B.M.
version of the Unix operating system. But the legal dispute
is stirring wider concerns in the computer industry because
it has the potential to affect the many corporations now
using the GNU Linux operating system, a close relative of
Unix.

Linux is distributed free, improved and debugged by a
far-flung network of computer programmers, guided by Linus
Torvalds, who wrote the software engine, or kernel, of the
operating system. I.B.M. is a leading big-company supporter
of Linux.

SCO sued I.B.M. in March, contending that the company had
copied Unix code into Linux, violating SCO's contract
rights. SCO, based in Lindon, Utah, bought the license
rights and source code to Unix from Novell in 1995. But
legal experts say the extent of SCO's contract rights are
murky.

The SCO suit gave I.B.M. 100 days to settle the dispute, a
deadline that expired Friday at midnight. Unless I.B.M.
settled, SCO said in recent weeks, it would revoke I.B.M.'s
Unix license.

SCO maintains that its Unix license restrictions also
restrain the behavior of the other commercial versions of
Unix - "derivative works" - like AIX.

"I.B.M. has clearly demonstrated its misuse of Unix source
code and has violated the terms of its contract with SCO,"
said Mark J. Heise, a partner at Boies, Schiller & Flexner,
the law firm representing SCO.

SCO is also asking a federal court in Salt Lake City to
issue a permanent injunction that prohibits I.B.M. from
using or distributing products with its AIX operating
system. Last year, I.B.M. sold about $3.6 billion worth of
computers running its AIX operating system.

"I.B.M. no longer has the authority to sell or distribute
AIX, and customers no longer have the right to use AIX
software," Darl C. McBride, the chief executive of SCO,
said.

For its part, I.B.M. issued a statement rejecting SCO's
legal claims. I.B.M. portrayed SCO's campaign as an effort
to extract a big payday from I.B.M. by raising legal
concerns about Linux and other free software that uses
so-called open-source development.

"Since filing its lawsuit against I.B.M.," the statement
said, "SCO has made public statements and accusations about
I.B.M.'s Unix license and about Linux in an apparent
attempt to create fear, uncertainty and doubt among
I.B.M.'s customers and the open-source community."

The I.B.M. statement added that its Unix license "cannot be
terminated," and that "I.B.M. will defend itself
vigorously."

The statement ended with words of assurance for customers.
"I.B.M. will continue to ship, support and develop AIX
which represents years of I.B.M. innovation, hundreds of
millions of dollars of investment and many patents," it
said. "As always, I.B.M. will stand behind our products and
our customers."

To date, industry analysts said, most of I.B.M.'s customers
seem willing to accept the company's assurances at face
value. "Most I.B.M. customers are taking the view that
I.B.M. will take care of this problem, however it turns
out," said Amy Wohl, president of Amy Wohl Associates, a
research firm in Narbeth, Pa.

A. M. Sacconaghi, an analyst at Sanford C. Bernstein &
Company, said, "It may cause concern for some of its Linux
and AIX customers, but the sense is that this is a nuisance
factor for I.B.M."

Clearly, SCO made itself even more of a nuisance yesterday.
"They have to keep the pressure on," said Jeffrey D.
Neuburger, a technology lawyer at the firm of Brown Raysman
Millstein Felder & Steiner.

With I.B.M. refusing to settle, the chances are higher that
the SCO-I.B.M. dispute will come to trial. No court date
has yet been set.



http://www.nytimes.com/2003/06/17/technology/17LINU.html?ex=1056855199&ei=1&en=e23ab9b04d16c992

Copyright 2003 The New York Times Company


--
Tom Brandt
Northtech Systems, Inc.
130 S. 1st Street, Suite 220
Ann Arbor, MI 48104-1343
http://www.northtech.com/

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