The company now known as SCO is an amalgam of two firms: the original Santa Cruz Operation, a company founded in 1979 that mainly sold Unix software; and Caldera, which came along in 1994 and was chiefly a Linux vendor. For much of their lives, both firms were thought of as also-rans in their respective businesses. During the '80s and '90s, the old SCO tried to compete with the major Unix vendors like IBM, Hewlett-Packard, and Sun, but it didn't do very well; it settled into what some have called the niche business of offering Unix on Intel servers. In the late 1990s, Caldera pitted itself against the host of Linux firms popping up during the brief period of stock-market enthusiasm for open-source software. Caldera didn't do terribly -- at least it survived, which is more than can be said of many other Linux companies. But the firm, which went public in March 2000, the very month in which the Dow and NASDAQ peaked, has been overshadowed by bigger Linux vendors like Red Hat.

In 2001, Caldera purchased SCO's Unix business. The move puzzled many industry analysts -- why was a Linux company buying a supposedly outdated Unix company? -- but Caldera thought SCO had some unique assets that could be leveraged for its Linux business. SCO had cultivated an extensive list of Unix resellers who Caldera hoped could be switched to Linux. SCO's Unix servers could also serve as a bridge, Caldera thought, for customers who had more high-end needs and who were wary of Linux's then not-stellar performance. In effect, then, Caldera was trying to set itself up as a complete software shop for Intel users, one that catered to fans of both Unix and Linux. The combined company called itself Caldera International, but -- in a way that tech firms sometimes do -- it decided to change its name in 2002. It would now be called the SCO Group. (For folks keeping score, "SCO" doesn't stand for "Santa Cruz Operation" any longer, and it's to be pronounced not as three separate letters but as a word that rhymes with "fiasco.")

A key question that has arisen in the SCO fight against IBM concerns the ownership of Unix code. This is a complicated issue, as it involves both a messy dispute of fact and a more philosophical argument over the very concept of owning software. The dispute of fact is this: SCO says that in 1995, it purchased the rights to the Unix source code from Novell, which had itself bought the code from AT&T, the original developer of Unix. Blake Stowell, a SCO spokesman, says that SCO enjoys all legal rights stemming from its purchase of Unix -- the copyright to the Unix code as well as contracts with various Unix firms, including IBM, that spell out what can be done with the Unix code. In its lawsuit against IBM, SCO is only claiming a violation of those contracts, not of copyright, Stowell says.

Novell, though, sees the situation differently. "SCO is not the owner of the Unix copyrights," Jack Messman, Novell's CEO, wrote in a letter to SCO on Wednesday. "To Novell's knowledge, the 1995 agreement governing SCO's purchase of Unix from Novell does not convey to SCO the associated copyrights. We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently, you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected."

Determining which of the firms is right isn't easy. SCO says that the document it has from its 1995 deal with Novell indicates that SCO acquired all rights to the Unix code. So why would Novell say otherwise? According to SCO's Stowell, there's one section of this 1995 document that lists certain Novell assets that were to be "excluded" from the agreement, and the word "copyright" is listed in that section. The two companies disagree on the interpretation of this section of the 1995 agreement. SCO says this section is not important, and Novell says it is. It is a hyper-technical, legalistic fight, one that seems destined to be decided, in the end, by a cadre of expensively dressed lawyers. Stowell says SCO's attorneys will be in touch with Novell's attorneys to discuss the issue. But when asked about this claim, Bruce Lowry, a spokesman for Novell, said, "That's the first we're hearing of this."

SCO says that the outcome of the fight over who owns the copyright for Unix code will have no bearing on its case against IBM, which concerns contracts, not copyrights. There is, though, a more substantive debate over Unix. Is it possible for any firm to claim complete ownership of an operating system that, as many veterans note, has always been marked by collaboration across organizations? This idea was most eloquently explained by Eric Raymond, the president of the Open Source Initiative, in a recent position paper he wrote on the SCO case.

"Even during the early days of Unix commercialization, the Unix code base was widely regarded as a commons worked by many hands," Raymond wrote. "As time went on and Unix evolved, possession of an AT&T source license came to be seen as more a pro-forma gesture in the direction of history than a concession that AT&T's intellectual property still contributed a dominating part of the value ... Thus, the community of Unix hackers that had grown up around the pre-commercial releases never lost the conviction that, ethically, the Unix code belonged to them -- the people who had the ideas and wrote the code -- regardless of what the legal paperwork said."

But when he was presented with this view, Chris Sontag, SCO's vice president, rejected the idea. Invoking the recent Jayson Blair scandal at the New York Times, Sontag asked, "Is it appropriate for someone to take your work that you do for Salon and put it in another publication without attribution and with someone else's name on it? The obvious answer is no. What if someone takes your research and the effort you put into your work and then munges it around -- changes the paragraphs and the words around so it doesn't look like it's the same work, although it's effectively your work? Is that appropriate? Still the answer is no." Sontag says that this is essentially what happened to SCO -- all the work that it had put into Unix has been compromised by Linux.

SCO's case against IBM hinges on the idea that in the late 1990s, Linux seemed to get very good very fast. Too good, too fast -- Linux, which could run only on single-processor machines when it was created in 1991, worked on high-performance platforms by the decade's end. Open-source software developers take pride in such speedy development; it's one of the main advantages of the open-source model, they say. But in SCO's view, the fact that Linux evolved so quickly speaks to darker forces at work. Linux could simply not have improved the way it did without the help of IBM, SCO says, and everything IBM knew, it learned from SCO.

SCO's attorneys lay out this argument in paragraph 84 of the company's complaint: "Prior to IBM's involvement," they write, "Linux was the software equivalent of a bicycle. Unix was the software equivalent of a luxury car. To make Linux of necessary quality for use by enterprise customers, it must be re-designed so that Linux also becomes the software equivalent of a luxury car. This re-design is not technologically feasible or even possible at the enterprise level without (1) a high degree of design coordination, (2) access to expensive and sophisticated design and testing equipment; (3) access to Unix code, methods and concepts; (4) Unix architectural experience; and (5) a very significant financial investment."

The complaint also says that engineers at IBM had access to SCO's intellectual property because the two firms had once worked together on something called Project Monterey, a joint effort to create a Unix OS for a 64-bit Intel chip. The companies worked on the Monterey for a few years, but in 2001, SCO says, IBM told SCO it wanted out. Then, SCO says, "in violation of its obligations to SCO, IBM chose to use and appropriate for its own business the proprietary information obtained from SCO." The complaint adds: "It is not possible for Linux to rapidly reach Unix performance standards for complete enterprise functionality without the misappropriation of Unix code, methods or concepts to achieve such performance, and coordination by a larger developer, such as IBM."

An IBM spokesman declined to comment on the SCO case. The company's legal response to SCO, however, leaves little doubt about IBM's feelings: The filing is an almost comically terse list denying all but the most indisputable claims that SCO makes. For example, one line reads that IBM "denies the averments of paragraph 19, except admits that IBM markets a Unix software product under the trade name 'AIX.'" IBM also candidly admits that its principal place of business is in New York, that it maintains an office in Salt Lake City, and that some of its microchips are more powerful than chips made by Intel. It gives no more ground than that, however.

"I'm no lawyer, but I suspect there is a little bit of aggressive flippancy in that response," says Jonathan Eunice, an analyst at Illuminata, a technology research firm in New Hampshire. Eunice has been closely following the SCO case, and he says that IBM's response "does signal a feeling that they think this is not a serious lawsuit. If IBM thought, 'We may have a material problem here -- golly, they may have a point!' I think IBM would take it more obviously seriously."

But Eunice does not believe that IBM has anything to worry about. He says there's one word for SCO's argument that Linux needed IBM to help it get where it is today: "Bullshit." He continues, "Let's say that IBM never touched Linux. So Linux would probably be less successful because IBM's stamp of approval was key in getting corporate approval for it -- but IBM doesn't deserve much credit for the quality of the Linux kernel as its stands today. Both HP and IBM have contributed to the 2.6 version, the forthcoming version, so you could make a claim about a future version of Linux if you like. But for the current version -- Linux got good fast long before IBM had a broad systematic commitment to it."

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