Editing SCO Group (section)

=== Lawsuits begin ===
{{SCO Controversy}}
On March 6, 2003, SCO filed suit against IBM, claiming that the computer giant had misappropriated trade secrets by transferring portions of its Unix-based [[AIX]] operating system into Linux, and asked for at least $1&nbsp;billion in damages.<ref>{{cite news | url=https://www.newspapers.com/clip/88379283/ | title=Suit Alleges IBM Is Abusing Trade Secrets | agency=Bloomberg News | newspaper=Los Angeles Times | date=March 7, 2003 | page=C3| via=Newspapers.com}}</ref>{{notetag|The amount was subsequently raised to $3&nbsp;billion,<ref name="bw-hated"/> and later still to $5 billion.<ref name="slt-yarro"/> The suit initially coincided with SCO's existing relationship with IBM to sell UnixWare on [[IBM Netfinity]] systems.<ref name="ci-earnings-1999">{{cite news | title=SCO Ends Four-Year Slump With $17m Profits, New Business | work=[[Computergram International]] | date= October 27, 1999 | via= Gale General OneFile <!-- (accessed April 17, 2021). --> | url=https://link.gale.com/apps/doc/A56955961/ITOF?u=wikipedia&sid=ITOF&xid=6a741805 }}</ref>}} The complaint also alleged [[breach of contract]] and [[tortious interference]] by IBM against the Santa Cruz Operation for its part in the failed [[Project Monterey]] of the late 1990s.<ref name="cnet-ibm-suit">{{cite news | url=https://www.cnet.com/news/sco-sues-big-blue-over-unix-linux/ | title=SCO sues Big Blue over Unix, Linux | author-first=Stephen | author-last=Shankland | publisher=Cnet | date=March 11, 2003}}</ref>  Overall, SCO maintained that Linux could not have caught up to "Unix performance standards for complete enterprise functionality" so quickly without coordination by a large company, and that this coordination could have happened through the taking of "methods or concepts" even if not a single line of Unix code appeared within Linux.<ref name="cnet-ibm-suit"/>  The ''[[SCO v. IBM]]'' case was underway; it would come to be considered one of the top technology battles of all time.<ref>{{cite news | url=https://www.itnews.com.au/news/top-10-technology-tussles-154995 | title=Top 10 technology tussles | author-first=Iain | author-last=Thomson | publisher=IT News | date=September 7, 2009}}</ref>

Many industry analysts were not impressed by the lawsuit, with one saying: "It's a fairly end-of-life move for the stockholders and managers of that company [...] This is a way of salvaging value out of the SCO franchise they can't get by winning in the marketplace."<ref name="cnet-ibm-suit"/> Other analysts pointed to the deep legal resources IBM had for any protracted fight in the courts, but McBride professed to be nonplussed: "If it takes a couple of years, we're geared to do that."<ref name="nyt-profit"/>  For his part, Boies said he liked [[David versus Goliath]] struggles, and his firm would see a substantial gain out of any victory.<ref name="bw-hated"/>

In mid-May 2003, SCO sent a letter to some 1,500 companies, cautioning them that using Linux could put them in legal jeopardy.<ref name="nyt-profit"/>  As part of this, SCO proclaimed that Linux contained substantial amounts of Unix System&nbsp;V source code and that, as such, "We believe that Linux is, in material part, an unauthorized derivative of Unix."<ref name="ap-unauth">{{cite news | url=https://apnews.com/article/0f48e3656783defbf5818999ebab1fe7 | title=SCO Group Warns Linux Users of Violations | author-first=Matthew | author-last=Fordahl | work=Associated Press | date=May 14, 2003}}</ref><ref name="nyt-profit"/><ref name="pr-copyrights"/>  As [[CNET]] wrote, the move "dramatically broaden[ed]" the scope of the company's legal actions.<ref name="cnet-letters">{{cite news |url=https://www.cnet.com/news/sco-targets-linux-customers/ |title=SCO targets Linux customers |author-first=Stephen |author-last=Shankland |publisher=CNET |date=May 15, 2003}}</ref>

At the same time, SCO announced it would stop selling its own SCO Linux product.<ref name="ap-unauth"/>  A casualty of this stance was SCO's participation in the United Linux effort, and in turn United Linux itself.<ref name="eweek-united"/>  While the formal announcement that United Linux had ended did not come until January 2004, in reality the project stopped doing any tangible work soon after SCO filed its lawsuit against IBM.<ref name="eweek-united">{{cite news | url=https://www.eweek.com/servers/unitedlinux-rip/ | title=UnitedLinux, RIP | author-first= Steven J. | author-last=Vaughan-Nichols | magazine=eWeek | date=January 23, 2004 }}</ref>

A few days later, Microsoft{{snd}} which had long expressed disdain for Linux{{snd}} said that it was acquiring a Unix license from SCO,<ref name="cnet-ms-lic">{{cite news | url=https://www.cnet.com/tech/services-and-software/microsoft-to-license-unix-code/ | title=Microsoft to license Unix code | author-first=Scott | author-last=Ard | publisher=CNET | date=May 19, 2003}}</ref> in order to ensure interoperability with its own products and to ward off any questions about rights.<ref name="nyt-myclip-2003"/>  The action was a boon to SCO, which to this point had received little support in the industry for its licensing initiative.<ref name="nyt-myclip-2003">{{cite news | title=New Economy: A Unix company hopes a Microsoft deal will strengthen its legal case against Linux. | author-first=Laurie J. | author-last=Flynn | newspaper=The New York Times | date=May 26, 2003 | page=C3}}</ref>  Another major computer company, [[Sun Microsystems]], bought an additional level of Unix licensing from SCO to add to what it had originally obtained a decade earlier.<ref name="fortune-2003"/>

On May 28, 2003, Novell counterattacked, saying its sale of the Unix business to the Santa Cruz Operation back in 1995 did ''not'' include the Unix software copyrights, and thus that the SCO Group's legal position was empty.<ref name="nyt-profit"/>  Jack Messman, the CEO of Novell, accused SCO of attempting an extortion plan against Linux users and distributors.<ref name="nyt-profit"/>  Unix has a complex corporate history,<ref name="cnet-ibm-suit"/> with the SCO Group a number of steps removed from the [[Bell Labs]] origins of the operating system.  Novell and the SCO Group quickly fell into a vocal dispute that revolved around the interpretation of the 1995 asset-transfer agreement between them.<ref name="IW_Confusing_2003"/>  That agreement had been uncertain enough at the time that an amendment to it had to be signed in October 1996, and even that was insufficiently unambiguous to now preclude an extended battle between the two companies.<ref name="IW_Confusing_2003">{{cite news | url=https://www.informationweek.com/sco-novell-deal-was-confusing-from-the-start/d/d-id/1019435 | title=SCO-Novell Deal Was Confusing From The Start | author-first=John | author-last=Foley | magazine=Information Week | date=2003-06-06}}</ref><ref name="dn-verdict"/>

In July 2003, SCO began offering UnixWare licenses for commercial Linux users, stating that "SCO will hold [as] harmless [any] commercial Linux customers that purchase a UnixWare license against any past copyright violations, and for any future use of Linux in a run-only, binary format."<ref name="pr-copyrights">{{cite press release |title=SCO Registers UNIX Copyrights and Offers UNIX License |url=http://ir.sco.com/releasedetail.cfm?ReleaseID=114170 |date=July 21, 2003 |archive-url=https://web.archive.org/web/20100102232443/http://ir.sco.com/releasedetail.cfm?ReleaseID=114170 |archive-date=January 2, 2010 |url-status=dead}}</ref>
The server-based licenses were priced at $699 per machine, and if they were to become mandatory for Linux users, would represent a tremendous source of revenue for SCO.<ref name="bw-hated"/>  The potential for this happening was certainly beneficial to SCO's stock price, which during one three-week span in May 2003 tripled in value.<ref name="nyt-myclip-2003"/>

Another counterattack came in August 2003, when ''[[Red Hat, Inc. v. SCO Group, Inc.]]'' was filed by the largest of the Linux distribution companies.

[[Image:TRAX courthouse.jpg|thumb|left|The Frank E. Moss United States Courthouse in downtown Salt Lake City, where many of SCO's legal battles played out, as seen in 2004]]

The SCO Group received a major boost in October 2003 when [[BayStar Capital]], a technology-focused venture capital firm, made a $50&nbsp;million [[private placement]] investment in SCO, to be used towards the company's legal costs and general product development efforts.<ref name="slt-baystar">{{cite news | url=https://www.newspapers.com/clip/91046282/ | title=SCO gets infusion of $50M | author-first=Bob | author-last=Mims | newspaper=The Salt Lake Tribune | date=October 17, 2003 | page=D8 | via=Newspapers.com}}</ref>  In December 2003, SCO sent letters to 1,000 Linux customers that in essence accused them of making illegal use of SCO's intellectual property.<ref name="bw-hated"/>

Novell continued to insist that it owned the copyrights to Unix.  While Novell no longer had a commercial interest in Unix technology itself, it did want to clear the way for Linux, having recently purchased [[SuSE Linux]], the second largest commercial Linux distribution at the time.<ref>{{cite news | url=https://www.cnet.com/news/sco-sues-novell-over-copyright-claims/ | title=SCO sues Novell over copyright claims | author-first=David | author-last=Becker | publisher=CNET | date=January 21, 2004}}</ref>  On January 20, 2004, the SCO Group filed a [[slander of title]] suit against Novell, alleging that Novell had exhibited bad faith in denying SCO's intellectual property rights to Unix and UnixWare and that Novell had made false statements in an effort to persuade companies and organizations not to do business with SCO.<ref name="nw-slandertitle">{{cite news | url=https://www.networkworld.com/article/2329813/sco-sues-novell-for-slander-of-title-over-unix.html | title=SCO sues Novell for slander of title over Unix | author-first=Grant | author-last=Gross | agency=IDG News Service | magazine=Network World | date=January 20, 2004}}</ref>  The ''[[SCO v. Novell]]'' court case was underway.

Lawsuits against two Linux end users,<ref name="fortune-2004"/> ''[[SCO Group, Inc. v. DaimlerChrysler Corp.]]'' and ''[[SCO v. AutoZone]]'' were filed on March&nbsp;3, 2004.<ref name="scs-az-dc">{{cite news | url=https://www.newspapers.com/clip/91040800/ | title=SCO Group reports 16-cent loss, more lawsuits | author-first=Jennifer | author-last=Pittman | newspaper=Santa Cruz Sentinel | date=March 4, 2004 | page=D-6 | via=Newspapers.com}}</ref>  The first alleged that Daimler Chrysler had violated the terms of the Unix software agreement it had with SCO, while the second claimed that AutoZone was running versions of Linux that contained unlicensed source code from SCO.<ref name="nw-surviveiflose"/>  As a strategy this move was met by criticism; as ''[[Computerworld]]'' later sarcastically wrote: "Faced with a skeptical customer base, SCO did what any good business would do to get new customers: sue them for money."<ref name="cw-chap7"/>

In any case, the stage was set for the next several years' worth of court filings, depositions, hearings, interim rulings, and so on.