The first big Linux lawsuit [LWN.net]

As most LWN readers have doubtless heard by now, SCO has filed a $1 billion lawsuit against IBM, claiming that IBM has misused SCO's proprietary Unix technology in Linux. LWN posted a look at SCO's complaint on the day it was released. Since then, more detailed analyses (and rebuttals) of SCO's claims have come out. See, for example, Karsten Self's commentary and the proposed response on the opensource.org site. Both are currently in draft form. Rather than try to add to those well-researched responses, we'll take this space to try to ponder some of the implications of this case.

But first, it's worth pointing out that there is some real amusement to be found in Eric Raymond's buyer's guide for Unix on PC hardware, dated 1993. He had a warning for SCO and other proprietary systems vendors:

A complete, working UNIX plus GNU tools plus X is now available for around $60 --- *with sources*. Your prices have to drop by an order of magnitude, or your service has to get a whole hell of a lot better, if you're going to try and compete with that. Adapt or die.

The message clearly was not heard. But, thanks to the net, it still exists to show to anybody who believes that SCO's entitlement to the x86 Unix market was unchallenged until IBM came along.

It remains to be seen how this case will be resolved. What seems like an obvious answer to the technical community sometimes comes across a little differently to a court. Nonetheless, IBM is equipped with relatively fearsome weaponry for the intellectual property battlefield. SCO will not have an easy time of it.

In the mean time, what can we expect?

SCO claims that this suit has nothing to do with the Linux community - it is simply a contract dispute. But that is clearly not true. By claiming that Linux could not have reached a useful state without an illegal stream of proprietary technology provided by IBM, SCO has insulted the Linux community. The alleged ineptitude of those who hack on Linux is at the core of SCO's case. Linux, they say, is a bicycle compared to a luxury car; it is only suitable for hobbyists and non-profit organizations. This display of contempt will not be quickly forgotten.
SCO's Unix business is doomed - they say so themselves in their complaint: "Plaintiff stands at imminent risk of being deprived of its entire stream of all UNIX licensing revenue in the foreseeably near future." (Paragraph 119c). The company has slammed Linux - and its development community - to the point that it is hard to imagine how SCO will attempt to sell Linux-based products and services with a straight face. SCO, in other words, has just signalled its exit from the operating system business. SCOsource is evidently supposed to be the future of the company - if its management sees any future at all.
It is hard to imagine the UnitedLinux consortium remaining intact under this sort of stress. Whether the other members find a way to ease SCO out, or whether the whole thing will simply fragment, remains to be seen.
This case may well affect the Linux market in the near future. People choosing technologies for their businesses have a certain, rational aversion to lawsuits and disputed technology. How big the effect will be depends, certainly, on the perception of SCO's chances of success.
So far, the general view seems to be that (to put it charitably), SCO has an uphill battle ahead of it. Investors have brought about a slight rise in SCO's stock price, but the market capitalization of the company remains under $30 million. That is not the capitalization of a company that has convinced investors it will be receiving a $1 billion judgement. If this perception does not change, the effect of this lawsuit could be relatively small.
If the complaint is to be believed, SCO's biggest grievances have to do with the JFS filesystem and the Omniprint drivers. If Linux were to lose these technologies, it would be a poorer system. But, honestly, the lives of most Linux users would not be affected all that much.
We have been reminded of the dangers of code contamination. Anybody who signs an agreement to view proprietary code, then goes on to work on free software, risks (being accused of) contaminating that software with proprietary technology. That risk exists whether the proprietary code is Windows, Solaris, or something belonging to SCO. Anybody who is contemplating such an agreement should think long and hard about the consequences.

This is the first of the big Linux intellectual property lawsuits; we should not expect it to be the last. Free software is too big a change, and it threatens too many interests, for things to go any other way. We are fortunate that the first attack was against a defendant with the resources and interest to defend itself - though the defendant could conceivably disagree. The burden of defending the next suit could well fall on somebody less able to shoulder it.

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The first big Linux lawsuit

Posted Mar 13, 2003 10:15 UTC (Thu) by addw (subscriber, #1771) [Link]

We are fortunate that the first attack was against a defendant with the resources and interest to defend itself

I think that it is more of a case of going after a defendant that might have the funds to pay a $1 billion judgement. Even then, I don't think that they are really after a win in the courts: they want to be bought out by someone, IBM is just about the only company with a Linux interest that could afford to.

SCO is a company who's product has been overtaken by the competition, it has little to sell, it's shares are in terminal decline. How does the company generate any return to the share holders ? Pursuading another company to buy it out is very much the last chance that they have.

I note that SCO only floated on the stock market in the mid 1990s. The stock has been in decline almost since the IPO. I find the timing of that float interesting: are we to really believe that the SCO directors (and, at that time, major shareholders) were totally ignorant of the potential future impact of Linux on the long term viability of SCO ?

The first big Linux lawsuit

Posted Mar 13, 2003 10:26 UTC (Thu) by brwk (subscriber, #6849) [Link]

For me the most interesting aspect of this is not SCO lashing out at others for the loss of it's former glory, but the threat to withdraw IBM's right to sell AIX within 100 days. It seems unlikely a court would come to any decision in that timespace. While it might open the way to a retaliatory suit from IBM for loss of business, particularly if found innocent of the original suit, it provides a warning shot of significant magnitude across the bows of anyone who licenses a technology and bases a key part of their product range on it. I would have thought that instead of strengthening SCO's business, it will all but destroy it. All UNIX licensees must surely now be wondering if they're the next one to be taken to court over some small technicality, and whether in the process they'll loose the right (or even have to fight for it) to sell their current product.

So where does that put the future of AIX? Surely the threat of being unable to sell it anymore, when Linux provides an effective alternative, may well lead IBM to wind down it's development and even end-of-life it in fairly short order. While UNIX remains in the hands of a struggling company trying to sue anyone they think good for a billion dollars, and who threaten to pull the rug out from under whenever they fancy it, that's not a product any company would wish to pin their colours too - especially not one with the size and reputation of IBM.

Other companies with similar arrangements with SCO over Unix - Sun, HP, et al - should probably look very hard indeed at what would happen to their businesses if they were given 100 days notice of being unable to sell their star operating system any more. It is not a situation any sensible business manager would wish to be in.

This could be a pivotal point for Linux, and open source in general. A rear-guard action by the Unix old guard has highlighted just how dangerous it is to be dependant on licensed rights in the greedy hands of others.

Regards, Bevis.

The first big Linux lawsuit

Posted Mar 13, 2003 16:46 UTC (Thu) by xoddam (subscriber, #2322) [Link]

Score 5, Insightful.

</slashdot>

Thanks for pointing this out. This doesn't so much present
a threat to IBM or to free software, as to the entire business
model of licensing technology. SCO/Caldera can't be expected
to survive this and it will be a significant precedent for
other companies who find themselves with their 'IP' threatened
by innovation.

Not mentioning any names :-)

--
'Larry McVoy ate my hamster!'

The first big Linux lawsuit

Posted Mar 13, 2003 18:01 UTC (Thu) by donstuart (subscriber, #4550) [Link]

This smells like any empty threat. IBM has asserted that their license is perpetual and irrevocable. It is hard for me to imagine that IBM would not have protected themselves from that sort of extortion.

Don

The first big Linux lawsuit

Posted Mar 14, 2003 2:03 UTC (Fri) by gdt (subscriber, #6284) [Link]

"For me the most interesting aspect of this is not SCO lashing out at others for the loss of it's former glory, but the threat to withdraw IBM's right to sell AIX within 100 days."

Bevis, I'm Australian and not across US copyright law. But there's precedent here that a withdrawal of a copyright license must allow customers reasonable time to make migration arrangements. Given that AIX machines run complex applications that directly effect people's well-being (such as payroll, banking and social security systems) 100 days is plainly not adequate. IMHO, the adequate time period is more in the range of years.

It would be interesting to know if this detail of copyright law is similar in the USA.

Also, there's a simple contingency plan for big AIX users: sites purchase UNIX System V source code licenses directly from SCO and AIX source code licenses from IBM and continue to run their current AIX binaries whatever the outcome of the litigation.