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Thursday 17th February 2005

Microsoft to license SCO Group Unix rights
Scott Ard, CNET
May 19, 2003, 07:33 GMT
The Windows maker has stepped into the fray surrounding SCO Group's efforts to increase its revenues from its Unix intellectual property, which include accusations against Linux

Microsoft is acquiring the rights to Unix technology from SCO Group, a move that could impact the battle between Windows and Linux in the market for computer operating systems.

According to a statement from Microsoft, the company will license SCO's Unix patents and the source code. That code is at the heart of a high-stakes, billion-dollar lawsuit between SCO and IBM, which is aggressively pushing Linux as an alternative to Windows in corporate back shops.

Microsoft's Windows has a monopoly in the market for desktop operating systems, with a market share greater than 90 percent. Linux, which has been developed by thousands of contributors and can be freely obtained, has caught on as a worthy competitor in the market for corporate servers. In the past two years, Microsoft has repeatedly labelled Linux a threat to the Redmond, Washington-based computing giant, partly because of its low cost.

Late on Sunday, Microsoft general counsel Brad Smith said acquiring the licence from SCO "is representative of Microsoft's ongoing commitment to respecting intellectual property and the IT community's healthy exchange of IP through licensing. This helps to ensure IP compliance across Microsoft solutions and supports our efforts around existing products like services for Unix that further Unix interoperability."

Unix was invented more than 30 years ago by AT&T;'s Unix Systems Laboratories. In many ways Linux works similarly to Unix, making it relatively easy to translate Unix software to Linux.

AT&T; sold the Unix intellectual property to Novell Networks, which in turn sold it to the Santa Cruz Operation. Caldera International, a seller of Linux, then acquired from SCO the Unix rights and two SCO products, OpenServer and UnixWare. Then last year, Caldera changed its name to SCO Group to reflect the fact that most of its revenue came from its SCO business and not from the Linux products.

But SCO has recently alleged that parts of the Unix source code have been copied into Linux, and it is seeking fees from Linux users. In March, SCO sued IBM for $1bn, or about �650m, alleging that the company had used SCO's Unix code in Linux. IBM, along with Hewlett-Packard, has been a major backer of Linux. Last week, SCO escalated the battle by sending hundreds of letters to large corporations warning them that their use of Linux could infringe on SCO's intellectual property.

SCO's letter stated, in part, "We believe that Linux infringes on our Unix intellectual property and other rights. We intend to aggressively protect and enforce these rights. Legal liability that may arise from the Linux development process may also rest with the end user."

Some analysts said the move was an attempt by SCO to be acquired by another company -- possibly Microsoft, IBM or another firm with a stake in the matter. "I guess suing IBM wasn't enough to get them acquired, so (the letters are) the next stage," Illuminata analyst Gordon Haff said.

Microsoft's public comments against Linux stretch back more than two years.

In March 2001, Microsoft senior vice president Craig Mundie said releasing source code into the public domain is "unhealthy" and causes security risks. He added, "as history has shown, while this type of model may have a place, it isn't successful in building a mass market and making powerful, easy-to-use software broadly accessible to consumers."

A few months later, in an interview with CNET, Microsoft chairman Bill Gates sought to warn corporate users about the GNU General Public License, which Linux is distributed under. "Some of our source codes are out there and very available, like Windows CE," Gates said. "Some generally require a licence, like Windows itself. We have no objection to free software, which has been around forever. But we do think there are problems for commercial users relative to the GPL, and we are just making sure people understand the GPL.

"Unfortunately, that has been misconstrued in many ways. It's a topic that you can leap on and say, 'Microsoft doesn't make free software.' Hey, we have free software; the world will always have free software. I mean, if you characterise it that way, that's not right. But if you say to people, 'Do you understand the GPL?' And they'll say, 'Huh?' And they're pretty stunned when the Pac-Man-like nature of it is described to them."

The next stage in the fight between SCO and IBM could occur next month -- SCO has threatened to revoke IBM's Unix licence on 13 June.'s Michael Kanellos contributed to this report.

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