First RedHat, now IBM, SCO is reaping the whirlwind. From the NYTimes:

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I.B.M. Files Countersuits in Dispute Over Linux


August 8, 2003
  By BARNABY J. FEDER

I.B.M., the biggest corporate backer of Linux, the free
computer operating system, has filed a barrage of
counterclaims against the SCO Group, the software company
that has put the computer industry on edge by asserting
that users of Linux must pay it a license fee.

In papers filed late Wednesday in Federal District Court in
Utah, I.B.M. argued that SCO had illegally interfered in
its relationships with customers by making threats and
false claims in connection with the intellectual property
dispute over the Linux code.

SCO, which is based in Lindon, Utah, filed suit against
I.B.M. in March. The company argues that I.B.M., which is
licensed by SCO to use its Unix operating system source
code, improperly transferred some of that proprietary code
into Linux. SCO acquired various intellectual property
rights in Unix in 1995.

I.B.M. issued a counterattack against SCO's software
business in its court filings, saying that SCO products
infringed on at least four I.B.M. software patents.

In addition, I.B.M. charged that SCO's claims violate
license agreements controlling the free distribution of
Linux, which SCO packages and includes in various software
products. I.B.M. asked the federal court to bar SCO from
demanding that Linux users take a license.

SCO said on Tuesday that users needed to pay a one-time fee
of $699 for every processor running Linux.

"This demonstrates that I.B.M. understands its
responsibilities not just to its shareholders but to the
free software community," said Eben Moglen, a Columbia
University law professor who criticized SCO on the Web site
of Open Software Development Labs, a nonprofit Linux
oversight organization run by Linus Torvalds, who created
the core of Linux.

SCO said yesterday that I.B.M.'s actions were an attempt to
"distract attention from its flawed Linux business model."

Over the last two decades, I.B.M. has developed and widely
marketed a proprietary version of Unix called AIX. As part
of its lawsuit, SCO has asked that I.B.M. be barred from
selling computers that run AIX, a category that accounted
for about $3.6 billion in I.B.M. sales last year. In June,
SCO said that it had terminated I.B.M.'s right to market
AIX.

I.B.M. described the Unix license it holds for AIX from SCO
as irrevocable and permanent in the court documents filed
Wednesday.

Lawyers who have been following the dispute said that the
I.B.M. counterclaims raised questions about how thoroughly
SCO had considered its exposure before taking on such an
opponent. Analysts said they have not seen any obvious
impact on I.B.M.'s sales or the spread of Linux as a result
of the SCO lawsuit. But lawyers say they are fielding
numerous questions from investors and large computer users
about how the legal dispute may unfold.

SCO has sent letters to 1,500 large companies demanding
that they seek licenses for any Linux systems they use
because Linux makes unauthorized use of its Unix code. So
far, the only major company to publicly endorse SCO's
claims by taking a license is Microsoft, the company that
analysts say has the most to lose from the spread of Linux.


http://www.nytimes.com/2003/08/08/technology/08LINU.html?ex=1061348703&ei=1&en=0014184489a99d45


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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