Linux almost died 20 years ago due to the lawsuit between IBC and SCO

On March 7, 2003, the financially troubled SCO Group filed a lawsuit against IBM, claiming that Linux’s success was the result of stealing SCO technology.

SCO accused that the source code contributed to the Linux kernel by IBM and other vendors used its System V source code, which violates copyright.

The lawsuit, which lasted nearly 20 years and was once considered a threat to the survival of Linux, ended with IBM paying a settlement .

Looking back on this lawsuit 20 years later, one might dismiss it as a hilarious interlude in the evolution of Linux. But at the time, it seemed like a shock to the entire Linux community.

 In a way, this ridiculous lawsuit has had an effect on shaping the Linux community as well.

At that time, SCO claimed to be the owner of the UNIX system, and its core business was to sell a private UNIX system running on x86 hardware. 

At that time, the golden age of private UNIX systems had passed, and SCO’s UNIX products were not particularly good, so sales were relatively bleak.

SCO deduces that the reason behind this is the growth of Linux (which is somewhat correct). But it also believes that Linux has not yet reached the point where it threatens UNIX. According to SCO:

Before IBM got involved with the Linux project, Linux was the bicycle and UNIX the luxury car. For Linux to have the necessary qualities for enterprise customers, it had to be redesigned so that Linux became the software equivalent of a “luxury car.”

Such a redesign is not technically feasible, not even at an enterprise level, unless:

(1) High degree of design coordination
(2) Acquisition of expensive and complex design and test equipment
(3) Acquisition of UNIX codes, methods, and concepts
(4) Acquisition of UNIX architecture experience
(5) Large-scale capital investment

Therefore, SCO believes that IBM, which represents Linux, has stolen UNIX technology and embezzled UNIX codes, methods or concepts.

Here is some background. In 1998, IBM and Santa Cruz Operation (SCO – a vendor that provides UNIX for x86 CPU devices) jointly created the “Monterey” project with other companies, hoping to create a version of UNIX that could run on multiple hardware platforms-this was the Linux community at the time. 

By 2001, IBM believed that Linux was the future, and withdrew from the “Monterey” project, and also acquired some of the companies involved in the project. By this time, IBM had created its own experimental UNIX-like operating system, AIX, which used parts of SCO’s code. 

When the “Monterey” project was abandoned, IBM contributed some of the project’s intellectual property to Linux. SCO objected to IBM’s contribution because SCO believed that IBM was handing over assets that belonged to it to the open source Linux code base.

On March 6, 2003, SCO announced that it was suing IBM for a $1 billion claim, claiming that IBM transferred SCO’s trade secrets to Linux . 

This amount was later raised to $3 billion and finally to $5 billion. As the lawsuit dragged on, SCO also began suing Linux users, seeking to recover damages from users of the system.

Although not confirmed, it was widely believed at the time that SCO’s real purpose was to force IBM to acquire SCO . 

Because the move would both resolve SCO’s long-standing business and financial problems, and allow IBM to settle the lawsuit for less than the court sought. 

Clearly, though, IBM refused to play the game. After all, IBM at this time has invested a lot of money in Linux, and it doesn’t want Linux to have any intellectual property stains.

 To that end, IBM will devote a handful of legal resources to suppressing SCO’s attacks.

Although SCO was later ruled not to own the UNIX trademark, it certainly created a great deal of fear, uncertainty, and doubt in the industry during that time. 

Linus Torvalds, who witnessed this incident, suggested at the time that in order to avoid such problems in the future, the community should develop a process to clarify the source of the patch code.

The lawsuit began in 2003, but the events behind it date back as far as 1998. At that time, IBM and Santa Cruz Operation (SCO – a vendor that provides UNIX for x86 CPU devices) jointly created the “Monterey” project with other companies, hoping to create a UNIX version that can run on multiple hardware platforms-this is what the Linux community was doing at the time. 

By 2001, IBM believed that Linux was the future, and withdrew from the “Monterey” project, and also acquired some of the companies involved in the project. By this time, IBM had created its own experimental UNIX-like operating system, AIX, which used parts of SCO’s code. When the “Monterey” project was abandoned, IBM contributed some of the project’s intellectual property to Linux.

SCO objected to IBM’s contribution because SCO believed that IBM was handing over assets that belonged to it to the open source Linux code base. Since then, a long and shocking lawsuit has begun.

In 2003, SCO filed a series of lawsuits against Linux suppliers such as IBM , alleging that the source code contributed by IBM and other manufacturers to the Linux kernel used its System V source code, which violated copyright. However, SCO declined to identify the specific code snippet, claiming it was a secret they would only reveal to the courts. SCO says the “stolen” code can be found in SMP, RCU, and the Linux kernel.

On March 6, 2003, SCO announced that it would sue IBM for a claim of US$1 billion, claiming that IBM transferred SCO’s trade secrets to Linux. That amount later rose to $3 billion and then to $5 billion.

Since then, SCO has also sued HP, Microsoft, Novell, Silicon Graphics, Sun Microsystems, and Red Hat, seeking substantial monetary damages. The five more well-known lawsuits include:

• SCO sues IBM
• Red Hat sues SCO
• SCO sues Novell (not directly related to Linux, this lawsuit has more to do with UNIX copyrights)
• SCO Sues DaimlerChrysler
• SCO sues AutoZone

In these cases, SCO publicly implied that others were infringing copyright, not only Linux developers but also Linux users.

The reason the case lasted so long is that the rewards for winning the case were so high — SCO’s eventual victory would mean the chance to take partial ownership of Linux. 

Given that Linux is used by billions of smartphones each year and is at the heart of countless other devices, the resulting royalties could be enormous. And if SCO really wins the lawsuit, not only IBM will pay 5 billion in compensation, but all enterprises will be caught in huge compensation for using Linux.

But this “dream” of SCO seems to have been shattered. After 18 years, the related litigation is finally coming to an end. Documents filed last week in Delaware bankruptcy court show that IBM only needs to pay a $14.25 million settlement to end the matter.

The custodian of SCO, which filed for bankruptcy earlier, and IBM filed a settlement agreement with Delaware bankruptcy court on August 26 . 

The Settlement Agreement is the result of arm’s length negotiations between the Custodian and IBM.

Pursuant to the settlement agreement, the trustee and IBM agreed to resolve all disputes between them, and the parties reached a settlement to resolve all remaining claims in their Utah litigation, with IBM paying the trustee $14.25 million. 

The trustee believes that the settlement is in the best interests of the bankrupt party and creditors.

It believes that even if it wins the lawsuit and confirms that the incident more than ten years ago has caused harm to SCO, the compensation amount may not be higher than the settlement amount.

Although the SCO custodians believe they will ultimately prevail in their claim against IBM, IBM also has the possibility of successfully defending or counterclaiming, so a settlement is the best option.