Section 9.1. SCO Versus IBM and the Legal Quandary of Open Source

9.1. SCO Versus IBM and the Legal Quandary of Open Source

We will start with the big picture of the SCO dispute, and in later sections, we will explore the details and implications. Until two years ago, CIOs and CTOs could be forgiven for never having heard of the SCO Group, an amalgam of two not particularly successful companies. SCO (rhymes with snow) was formed through a 2002 merger of the Santa Cruz Operation, a small company that had bought from Novell a number of the original patents to Unix, and the commercial Linux reseller, Caldera. SCO was thought of as an also-ran in the open source community, when it was thought of at all.

That changed in March 2003, when SCO dropped a bombshell. Thanks to the Santa Cruz Operation's copyrights and patents, SCO believed it now owned the patents and intellectual property rights to Unix. In addition, those rights were being infringed upon by IBM software engineers, who were deliberately adding chunks of that company's proprietary Unix flavor, AIX, to the open source code base of Linux. SCO promptly sued IBM for $1 billion. Two months later, SCO announced it had discovered more code inside Linuxindependent of whatever it is IBM is alleged to have addedwhich also infringed on its rights. SCO sent a letter to every Fortune 1,000 company, serving notice that SCO was owed a licensing fee for every processor running Linux that was used or sold.

SCO and IBM's original dispute has descended into a morass of litigation and allegations. Evidence then came to light that Microsoft had brokered venture capital investment in SCO so that the company could pay its legal bills, now in the tens of millions of dollars. This prompted open source advocates to wonder aloud whether SCO is the software giant's puppet and whether Microsoft will try to litigate the open source movement to death. Others, such as Sun, are looking to profit from the confusion by playing both sides against each other and preying on corporate users' fears.

Against this backdrop of FUD, many corporations are wondering whether SCO's claims are real, and whether they should go forward with their open source implementations. For example, the city government of Munichwhich had announced it would switch its 16,000 PCs from Windows to Linux in a big PR win for open sourcehas publicly gone back and forth about whether to continue because of patent fears. (Munich's mayor has vowed it will continue.)

While open source advocates are confident they will prevail and legal scholars are not convinced that SCO has a case, the current crisis has turned a spotlight on both the legal issues of open source software and the movement's enemies, who are studying, with varying degrees of openness, how best to exploit these issues. What, if anything, is the threat from SCO? What will future attacks on open source look like? Are any of these threats real, or are they just a nuisance? And if a Microsoft FUD campaign really is behind it all, does that mean open source has truly come of age?

FUD or no FUD, using any software, commercial or open source, involves risk. Copyrights and patents can be unknowingly violated and aggrieved parties can sue. There is no foolproof blanket indemnity that protects a company in all situations. The important task for IT departments it to identify and evaluate real risks and take appropriate steps to manage them. Knowing the details of the disputes that we provide in the rest of this chapter is a good starting point for forming your own opinion.