SCO Group, Inc. v. International Business Machines Corp., commonly abbreviated as SCO v. IBM, was a civil lawsuit in the United States District Court of Utah. The SCO Group asserted, without proof, that there were legal uncertainties regarding the use of the Linux operating system due to alleged violations of IBM's Unix licenses in the development of Linux code at IBM. The lawsuit was filed in 2003, and despite dismissal of most of the claims, lingered on through the bankruptcy of SCO Group and the adverse result in SCO v. Novell, and was reopened for continued litigation by order of a new judge on June 14, 2013. Pursuant to the court order reopening the case, an IBM Motion for Summary Judgment was filed based upon the results of the Novell decision. On December 15, 2014, the judge granted most of IBM's motion, thereby narrowing the scope of the case, which remained open. On March 1, 2016, following a ruling against the last remaining claims, the judge dismissed SCO's suit against IBM with prejudice. SCO filed an appeal later that month. In February 2018, as a result of the appeal and the case being partially remanded to the circuit court, the parties restated their remaining claims and provided a plan to move toward final judgement. In 2021, the case finally ended in a settlement.
Summary On March 6, 2003, the SCO Group (formerly known as Caldera International and Caldera Systems) filed a $1 billion lawsuit in the United States against IBM for allegedly "devaluing" its version of the UNIX operating system. SCO retained Boies Schiller & Flexner for this, and related subsequent litigation. The amount of alleged damages was later increased to $3 billion, and then $5 billion. SCO claimed that IBM had, without authorization, contributed SCO's intellectual property to the codebase of the open source, Unix-like Linux operating system. In May 2003, SCO Group sent letters to members of the Fortune 1000 and Global 500 companies warning them of the possibility of liability if they use Linux.
The claims and counter-claims made by both sides then escalated, with both IBM and Linux distributor Red Hat starting legal action against SCO, SCO threatening Linux users who do not take out SCO UNIX licenses, and SCO suing Novell (see also SCO-Linux controversies), AutoZone and DaimlerChrysler.
On September 30, 2003, Judge Kimball (the presiding federal district judge) granted the SCO Group's request for a delay until February 4, 2004, "to file any amended pleadings or add parties to this action". The schedule was amended again on July 1, 2005. In December 2006 the trial date was vacated pending the resolution of SCO's litigation with Novell, all parties agreeing that SCO v. Novell would resolve issues relating to SCO v. IBM.
In an "Order Granting in Part IBM's Motion to Limit SCO's Claims" dated June 28, 2006, Judge Brooke Wells (the federal magistrate judge presiding over discovery aspects of the case) barred SCO from asserting 187 of the 298 allegedly misused items that IBM had moved to exclude from the lawsuit for lack of specificity, stating "many of SCO's arguments and much of Mr. Rochkind's declaration miss the mark", and comparing SCO's tactics with those of an officer who accuses a citizen of theft, but will not disclose what the citizen is accused of stealing. "Certainly if an individual was stopped and accused of shoplifting after walking out of Neiman Marcus, they would expect to be eventually told what they allegedly stole. It would be absurd for an officer to tell the accused that 'you know what you stole I'm not telling.' Or, to simply hand the accused individual a catalog of Neiman Marcus' entire inventory and say 'it's in there somewhere, you figure it out.'"
On August 10, 2007, Judge Kimball, who also presided over the SCO v. Novell case, ruled that Novell, not the SCO Group, is the rightful owner of the copyrights covering the Unix operating system. The court also ruled that "SCO is obligated to recognize Novell's waiver of SCO's claims against IBM and Sequent". After the ruling Novell announced they have no interest in suing people over Unix and stated "We don't believe there is Unix in Linux".
In an order entered on September 21, 2007, Judge Kimball administratively closed the case of SCO v. IBM due to SCO filing for bankruptcy on September 14, 2007. That means all action in SCO v. IBM was stayed until SCO emerged from bankruptcy proceedings. Ultimately, the bankruptcy trustee sought leave of the court to allow SCO v. IBM to resume where it left off.
On August 24, 2009, the U.S. Court of Appeals for the Tenth Circuit reversed the portion of the August 10, 2007 district court summary judgment in SCO v. Novell that Novell owned the copyright to Unix. As a result, SCO was permitted to pursue its claim of ownership of the Unix copyrights at trial.
On March 30, 2010, the jury returned a verdict in SCO v. Novell, finding that Novell owns the copyrights.
SCO's claims SCO's lawsuit was consistent only in its claim of breach of contract (since the abandonment in early 2004 of its claim of misappropriation of trade secrets). SCO's initial claims were:
Misappropriation of trade secrets Unfair competition Interference with contract Breach of IBM Software Agreement
On July 22, 2003, SCO amended its complaint. It added two new claims:
Breach of IBM Sublicensing Agreement Breach of Sequent Software Agreement
On February 27, 2004, SCO amended the complaint again, dropping the trade secrets claim, but added the following:
Breach of Sequent Sublicensing Agreement Copyright infringement Interference with business relationships
SCO's claims in press releases and interviews changed repeatedly as the affair progressed. SCO both claimed and denied that the alleged copyright violations involved the Linux kernel. Computerworld reported Chris Sontag of SCO as saying:
SCO refused to allow access to the samples of code containing the alleged copyright violations except under a non-disclosure agreement (NDA). SCO's claimed the NDA would not only require that the signer keep confidential which lines of code SCO contested, but would also require that they hold confidential any information SCO told them, even if they already knew that information before being informed of it by SCO; all Linux kernel developers have considered this to be far too restrictive, so none of them have signed it. However, at SCO's annual reseller's convention in August 2003, they revealed two short sections of code they alleged were copyright violations, and images of Darl McBride's presentation of this code were soon after published on German computer magazine publisher Heinz Heise's website.
On May 30, 2003, SCO Group's CEO Darl McBride was quoted as saying that the Linux kernel contained "hundreds of lines" of code from SCO's version of UNIX, and that SCO would reveal the code to other companies under NDA in July. To put this into context, David Wheeler's SLOCCountDWheeler.com estimated the size of the Linux 2.4.2 kernel as 2,440,919 source lines of code out of over 30 million physical source lines of code for a typical Linux distribution. Therefore, as per SCO's own estimate, the allegedly infringing code would make up about 0.001% of the total code of a typical Linux installation. SCO subsequently revised this figure to over a million lines of code, but provided no evidence to support the claim.
Though unsubstantiated, SCO's major claims alleged infringement in the following components of the Linux kernel:
Symmetric multiprocessing (SMP), Non-uniform memory access (NUMA) multiprocessing, the read-copy-update (RCU) locking strategy, This technique is widely believed to have been developed at Sequent Computer Systems, who were then bought by IBM, who holds several patents (including patent ) on this technique. SGI's Extended File System (XFS), IBM's JFS journaling file system
These claims flowed from the accusation of breach of contract. The contract between IBM and AT&T Corporation (to which SCO claimed, an assertion ultimately refuted in court rulings, to be successor in interest) allowed IBM to use the SVR4 code, but the SVR4 code, plus any derivative works made from that code, must be held confidential by IBM. According to IBM's interpretation of the contract, and the interpretation published by AT&T in their "$ echo" newsletter in 1985, "derivative works" means any works containing SVR4 code. But according to SCO's interpretation (which was later shown to be without merit), "derivative works" also included any code built on top of SVR4, even if that does not contain, or even never contained, any SVR4 code. Thus, according to SCO, any AIX operating system code that IBM developed must be kept confidential, even if it contains nothing from SVR4.
Free software and open source community reaction
The lawsuit caused moral indignation and outrage in the free software and open source communities, who considered SCO's claims to be without merit and even cynically dishonest. Open source advocates' arguments, most or all of which were found to be substantively correct in court rulings in this and related cases, included:
that SCO did not even own the code in question. SCO often called themselves "The owner of the UNIX operating system", but as the court ruled in 2007 in SCO v. Novell, that was simply not the case. that the Linux operating system did not contain UNIX code, as it had been written from scratch by hundreds of collaborators, with a well-documented provenance and revision history that was entirely in the public view; that it made no technical sense to incorporate SCO UNIX code in Linux, as Linux had the technical features that are claimed to have been appropriated already implemented before SCO UNIX had them; that even if Linux and SCO UNIX had some code in common, this did not necessarily mean that this code was copied to Linux from SCO UNIX—perhaps the common pieces of code had been legitimately copied from another open source operating system, perhaps a BSD-derived one, or one of the historical UNIX versions previously released by SCO; that Caldera Systems had begun as a Linux company before buying SCO's UNIX business and certain assets related to it, and has added many Linux-like features to SCO UNIX, and any common code may have in fact been copied from Linux into SCO UNIX: and furthermore, that if such reverse copying from Linux itself had occurred, that the distribution of SCO UNIX binaries containing GPL'd contributions may therefore require SCO either to remove their product from the market until GPL'd code has been removed, or to release their source code under the GPL to their users; that even if Linux did contain copied SCO UNIX code, the UNIX source code had already been made widely available without a non-disclosure agreement, and therefore had no trade secret status (as a judge found in USL v. BSDi); that even if Linux did contain some UNIX code, the SCO Group had lost any right to sue IBM for trade secret or other intellectual property infringement by distributing Linux itself (their Caldera OpenLinux distribution) under the GNU General Public License (GPL), both before and after their announcement, which precludes them from pursuing any other user of Linux.
SCO and its officers were the subject of much criticism by the free software community, some of whom have stated that SCO's behavior may amount to illegal conduct. SEC filings show that senior SCO executives dumped their personal holdings in SCO shortly after counter-suits were filed by IBM and Red Hat. SCO Group's CEO Darl McBride was the subject of particular criticism, because of his extreme statements to the press.
On March 10, 2003, the Open Source Initiative (OSI) released a position paper on the SCO v. IBM complaint, written by Eric S. Raymond, president of the OSI and author of The Cathedral and the Bazaar.