In a series of legal disputes between SCO Group and Linux vendors and users, SCO alleged that its license agreements with IBM meant that source code IBM wrote and donated to be incorporated into Linux was added in violation of SCO's contractual rights. Members of the Linux community disagreed with SCO's claims; IBM, Novell, and Red Hat filed claims against SCO. On August 10, 2007, a federal district court judge in SCO v. Novell ruled on summary judgment that Novell, not the SCO Group, was the rightful owner of the copyrights covering the Unix operating system. The court also ruled that "SCO is obligated to recognize Novell's waiver of SCO's claims against IBM and Sequent". After the ruling, Novell announced they had no interest in suing people over Unix and stated "We don't believe there is Unix in Linux". The final district court ruling, on November 20, 2008, affirmed the summary judgment, and added interest payments and a constructive trust. On August 24, 2009, the U.S. Court of Appeals for the Tenth Circuit partially reversed the district court judgment. The appeals court remanded back to trial on the issues of copyright ownership and Novell's contractual waiver rights. The court upheld the $2,547,817 award granted to Novell for the 2003 Sun agreement. On March 30, 2010, following a jury trial, Novell, and not The SCO Group, was unanimously found to be the owner of the UNIX and UnixWare copyrights. The SCO Group, through bankruptcy trustee Edward Cahn, decided to continue the lawsuit against IBM for causing a decline in SCO revenues. On March 1, 2016, SCO's lawsuit against IBM was dismissed with prejudice; SCO filed an appeal later that month. The case was finally settled in 2021.
Overview Unix is a major computer operating system, developed in the United States of America. Prior to the events of this case, the intellectual property rights (IP) in Unix were held by Unix System Laboratories (USL), part of AT&T, but the area of IP ownership was complex. By 2003, the rights in Unix had been transferred several times and there was dispute as to the correct owner in law. Also, some of the code within Unix had been written prior to the Copyright Act of 1976, or was developed by third parties, or was developed or licensed under different licenses existing at the time. The software company SCO Group (SCO), formerly Caldera International, asserted in 2003 that it was the owner of Unix, and that other Unix-type operating systems—particularly the free operating system Linux and other variants of Unix sold by competitor companies—were violating their intellectual property by using Unix code without a license in their works. SCO initially claimed, and tried to assert, a legal means to litigate directly against all end-users of these operating systems, as well as the companies or groups providing them—potentially a very substantial case and one that would throw fear into the market about using them. It was unable to formulate such a case, however, because the Unix copyrights were weakly worded, there was no basis in patent law, and breach of trade secrets would only affect the one or few companies who might have been alleged to have disclosed trade secrets. Lacking grounds to sue all users generally, SCO dropped this aspect of its cases. The assertions were heavily contested. Claims of SCO's own copyright violations of these other systems were raised, along with claims related to SCO being bound by, or violating, the GPL licence, under which SCO conducted business related to these systems. Claims were also made that the case was substantially financed and promoted by Microsoft and investment businesses with links to Microsoft; around that time (1998–2004 onwards), Microsoft was fiercely engaged in various FUD tactics such as its Get the facts campaign, that sought to undermine or discredit Linux as a possible competitor to its own Windows operating systems and server systems. In the end, SCO launched only a few main legal cases—against IBM for improper disclosure and breach of copyright related to its AIX operating system, against Novell for interference (clouding the issue of ownership), against DaimlerChrysler for non-compliance with a demand to certify certain matters related to Unix usage, and against Linux business and former client AutoZone for violating SCO's rights by using Linux. Separately, the Linux company Red Hat also filed a legal claim against SCO for making false claims that affected its (Red Hat's) business, and to seek a court declaration that SCO had no ownership rights in Linux code. In 2007, a court ruled in SCO v. Novell that Novell and not SCO was the owner of the Unix copyrights. As of 2016, most of these cases have been resolved, or largely resolved, and none of the rulings have been in SCO's favor.
Timeline and major cases
At the beginning of 2003, SCO claimed that there had been "misappropriation of its UNIX System V code into Linux". The company refused to identify the specific segments of code, claiming that it was a secret that they would reveal only to the court. They did say that the code could be found in the SMP, RCU and a few other parts of the Linux kernel. On 6 March 2003, they announced that they were suing IBM for $1 billion, claiming that IBM transferred SCO trade secrets into Linux. That amount later rose to $3 billion, and then again to $5 billion. Later that year in May 2003, Novell stated publicly that it owned the AT&T Unix intellectual property that SCO claimed IBM violated, a statement confirmed by a jury trial in 2007, and that demolished SCO's infringement suit. Some educated parties noted that the USL v. BSDi case had shown that the Unix copyrights are weak and unenforceable. SCO did not claim patent infringement, as according to the US Patent and Trademark Office database, no AT&T or Novell patent was ever assigned to SCO. The UNIX trademark was not owned by SCO. That left arguing over trade secrets, which, after some opposition, proved hard to take beyond a breach of contract between SCO and IBM, and consequentially, a claim only against IBM. That left SCO with little legal ground, and therefore it began multiple legal claims and threats against a number of the major names in the computer industry, including IBM, Hewlett-Packard, Microsoft, Novell, Silicon Graphics, Sun Microsystems and Red Hat. By mid-2004, five major lawsuits had been filed:
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