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SCO Says SGI Has Until October 14.

By Matthew Aslett

Silicon Graphics Inc has until October 14 to remedy its alleged contract violations or face the termination of its Unix license by SCO Group Inc.

Lindon, Utah-based SCO yesterday confirmed that it has given SGI notice that it intends to terminate the Mountain View, California-based hardware vendor's Unix license. "SCO sent a letter to SGI on August 13 indicating that they had violated their software contract with SCO by making Unix derivative code contributions (specifically XFS) to Linux," the company said in a statement.

"We also indicated that SGI had subjected our source code to unrestricted disclosure, unauthorized transfer and disposition and unauthorized use and copying," the statement continued. "We informed them in this letter that they had two months to remedy all violations of the AT&T/SGI agreements and if they failed to do so, their rights under these agreements would be terminated as of October 14, 2003 and they would be required to immediately discontinue use of the software product and destroy or return all such copies to SCO."

It is not clear what SGI has to do to remedy the violations alleged by SCO, although given SCO's attempt to license its Unix System V code to systems and software vendors, acquiring a new Unix license from the company probably would not hurt.

That appears to be unlikely given SGI's response to SCO's notice. In its annual report, SGI noted: "We believe that the SCO Group's allegations are without merit and that our fully paid license is non-terminable." The company has declined to comment further.

SCO was unable to clarify by press time what remedies it is asking SGI to take, but did add that it will be unable to discuss whether it is likely to launch legal action against SGI until after the deadline has passed.

SGI's response to SCO's termination threat is reminiscent of the stance taken by IBM Corp to the termination of its Unix license by SCO. In March SCO launched what has now escalated to a $3bn lawsuit against IBM for breach of contract and misappropriation of trade secrets, accused the company of contributing Unix System V code into Linux, and gave the company 100 days notice of the termination of its Unix license.

That deadline passed on April 13 without a response from IBM prompting SCO to file an amendment to its original lawsuit asking the US District Court of Utah to compel IBM to stop using and distributing AIX and to destroy or return all copies of Unix System V to SCO.

SCO has subsequently terminated IBM's Unix System V contract relating to the Dynix version of Unix that IBM acquired along with Sequent Computer Systems Inc in 1999. IBM, like SGI, has claimed to have an irrevocable perpetual license on the Unix IP in question.

As the holder of the original AT&T licenses, SCO sees things differently, however. The company claims that under the terms of licensees' contracts with SCO, all derivative works of System V should be treated as being part of the System V code base, and therefore not given to other parties without SCO's permission.

With regards to SGI, SCO claims that its contracts give it the right to terminate SGI's license for breach of contract following SGI's donation of its XFS journaling file system technology to the open source community.
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Author:Aslett, Matthew
Publication:Computergram International
Geographic Code:1USA
Date:Oct 2, 2003
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