IBM losing its Unix license?
SCO says Big Blue violated licensing agreement
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IBM has sold billions worth of Unix servers, which use AIX, Big Blue's version of Unix. Many Fortune 500 companies and government agencies depend on the servers including Boeing, the National Weather Service and the Federal Reserve Bank.
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 Our license is irrevocable, perpetual and cannot be terminated. 
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-- Trink Guarino, IBM spokeswoman
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SEATTLE, Washington (Reuters) -- SCO Group raised the stakes in its lawsuit against International Business Machines Monday by revoking the computer company's right to use and distribute software based on the Unix operating system, a move that was immediately challenged by IBM.
Lindon, Utah-based SCO said that it decided to take action against IBM after the world's largest computer company failed to respond to a lawsuit before a Friday deadline, which claimed that IBM had illegally used parts of its Unix software in AIX, a version of Unix that IBM developed for its clients.
IBM responded almost immediately, saying that SCO has no right to revoke its AIX software license. "As we have said all along our license is irrevocable, perpetual and cannot be terminated," IBM spokeswoman Trink Guarino said, reading from a prepared statement.
Roots of the dispute
SCO said that IBM violated its original agreement to license Unix technology by adapting some parts of AIX to Linux, the free version of Unix that can be copied an modified freely. IBM is also a major backer of Linux software.
Unix is a widely-used operating system for networked computers that was first developed by AT&T Corp.
Various versions of Unix are now used to run corporate and government computer systems for serving up Web pages, accounting, manufacturing and storing information.
SCO said that it is filing for a permanent injunction against IBM that requires them to "cease and desist all use and distribution of AIX" and to return all copies of Unix source code as part of an amended complaint filed in the U.S. District Court of Utah.
Hundreds of companies involved
Almost every Fortune 1000 firm would use IBM's AIX operating system. ... The potential impact is very far reaching.
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-- Laura DiDio, software analyst for Yankee Group
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SCO sued IBM in March for $1 billion in damages for violating SCO's intellectual property rights because parts of its Unix software code are being used in the open-source Linux operating system. SCO also warned 1,500 other companies last month that they may be infringing on SCO's intellectual property rights for Unix.
IBM's lack of response was seen as a sign that SCO would have difficulty extracting a settlement. Investors had bid up SCO's shares in the hope that a financial settlement with IBM would help boost SCO's bottom line, which had been in the red before it started an initiative to boost licensing fees from its Unix rights.
Copyright 2003
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
