At least $3 bn and no Unix: SCO

SCO wants more from IBM. In an amendment to its earlier suit against IBM, SCO
is now asking for more than $3 billion in damages and has also sought an
injunction prohibiting IBM from selling Unix. In early March, SCO had sued IBM
for $1 billion saying the company had breached its contract by misappropriating
Unix trade secrets for use in Linux.

Now, SCO has terminated IBM’s license to use certain Unix components in
AIX, IBM’s version of Unix.

IBM officials, however, responded by saying that their license to sell Unix
products is still valid. "Our Unix license is irrevocable, perpetual and
fully paid up. It can’t be terminated," an IBM spokesperson was quoted as
saying. SCO has sought at least $1 billion in damages from IBM for an alleged
breach of its contract with SCO and another $1 billion for breach of the Unix
contract it signed with Sequent (which IBM acquired in 1999). SCO is also
seeking $1 billion alleging unfair competition. SCO believes that the case it
filed against IBM can prove to be a costly affair. "Pursuit of the
litigation against IBM and, potentially, others will be costly, and management
expects the costs for legal fees could be substantial," reads a recent SEC
filing of SCO.

The company is also expecting "a decrease in revenue as a result of the
loss of sales of Linux products and initiatives previously undertaken jointly
with IBM and others affiliated with IBM". Meanwhile, Sun Microsystems hopes
the spat will encourage IBM’s customers to switch over to its computing
platform - Solaris. Sun is running an advertisement campaign targeted at
organizations using AIX.

"Unfortunately, our friends in Blue have a problem with licensing
contracts that could make things very expensive for anyone running AIX,"
reads the advertisement. "Fortunately, Sun is ready to help."

Sun CEO Scott McNealy was reported saying, "There’s no question we’re
going to go after the AIX base and say Solaris is free and clear, with no legal
or intellectual cloud hanging over it." Meanwhile, a former Indian
distributor of SCO, Sunray Computers, has filed a claim in a Bangalore court
claiming that SCO owes it a sum of $1.4 million. SCO officials in India refused
to comment.

"A former Indian distributor of the company filed a claim in the city
court of Bangalore, India, requesting summary judgment for payment of $1,428,000…
the distributor claims that the company is responsible for the repurchase of
certain software products and to reimburse the distributor for certain other
operating costs," reads a recent SEC filing of the company.

TV Mahalingam in Bangalore