Update: SCO sues IBM over Linux

Unix developer The SCO Group has filed a lawsuit against IBM charging it with misappropriation of trade secrets, unfair competition and other illegal actions related to IBM's Linux business. The suit seeks at least $1 billion in damages.

IBM obtained its Unix license in 1985 from AT&T, which developed the operating system, SCO said in a statement. In 1995 SCO purchased the rights and ownership of Unix and thus became the "successor in interest" to the Unix licenses doled out by AT&T to IBM, Hewlett-Packard and others, SCO said.

In its suit filed Thursday in the State Court of Utah, SCO alleges that IBM tried to destroy the economic value of Unix, particularly Unix on Intel Corp.-based servers, in order to benefit its Linux services business. It charges IBM with misappropriation of trade secrets, tortious interference, unfair competition and breach of contract, said SCO, in Lindon, Utah.

IBM said in a statement Friday that although it had not had time yet to sufficiently study the complaint, "based on a quick read the compliant is full of bare allegations with no supporting facts."

The company added that it has been "openly supporting Linux and open standards for several years and neither SCO nor any of its predecessors ever expressed these concerns to us."

All commercial Unix flavors in use today are based on the Unix System V Technology, whose software code and licensing rights are owned by SCO, SCO said in its complaint.

SCO also said it sent a letter to IBM demanding that it cease its allegedly anti-competitive practices. If IBM doesn't meet its demands within 100 days of receiving the letter, SCO said it has a right to revoke IBM's license for the AIX Unix operating system.

However, IBM said Friday that SCO never approached it to raise this complaint and did not inform the company in advance that it was filing a lawsuit.

SCO claims in its suit to have been injured in the marketplace by IBM's actions and has asked the court for damages of at least $1 billion, with the amount to be proven at a trial.

SCO announced in January that it had hired the law firm of Boies, Schiller and Flexner to investigate possible violations of its intellectual property. Partner David Boies is famous in the IT world for the work he did as special trial counsel for the U.S. Department of Justice in its antitrust suit against Microsoft Corp. The hiring of such a high-profile firm led to speculation that SCO was gearing up for litigation, and prompted concerns among Linux advocates.

"This case is not about the debate about the relative merits of the proprietary versus open- source software models. This case is also not about IBM's right to develop and promote open-source software, so long as they do that without SCO's proprietary information," said Darl McBride, SCO's president and chief executive officer, during a conference call late Friday morning.

"This case is about SCO's right to not have its proprietary software misappropriated and misused," he added.