Here's another oldie but goldie we somehow didn't get done in text, SCO's 100-day notice letter [PDF] sent to IBM regarding "termination" of IBM's AIX license back in March of 2003. What is interesting to me is that it references all five of the agreements, including the one that clearly says that code IBM writes is theirs. The other interesting thing I note is that they terminated, according to them, primarily based on IBM allegedly failing to protect SCO's trade secrets. But SCO later dropped its trade secrets claim, very possibly because it is seriously doubtful that there are any trade secrets left in UNIX, and the contractual agreement specified that any trade secrets that became public knowledge were no longer under any contractual requirement of confidentiality. So, what's left? The other thing I noticed is that in this letter, they don't claim ownership of copyrights.
**************************************
Exhibit
E
VIA FEDERAL EXPRESS
[SCO LOGO]
March 6, 2003
Mr. Sam Palmisano
Chief Executive Officer
INTERNATIONAL BUSINESS MACHINES CORPORATION
[Address]
Re: Software Agreement Number
Soft-00015,
Sublicensing Agreement Number Sub-00015A
Substitution Agreement Number XFER-00015B
Side
Letter dated February 1, 1985
Amendment
X dated October 16, 1996
Dear Mr. Palmisano:
We are successors in interest to the above-referenced
Agreements pursuant to that certain Asset Purchase Agreement by and
between the Santa Cruz Operation, Inc. and Novell, Inc. dated as of
September 19, 1995 (the "Asset Purchase Agreement"), having received
under the Asset Purchase Agreement all rights and ownership of UNIX and
UnixWare, including source code, source documentation, source listings
and annotations, all rights pertaining to UNIX and UnixWare under any
software development contracts, licenses and any other contracts which
pertain to UNIX-related business, and including without limitation:
Software and Sublicensing
Agreements - This includes the source code and sublicensing agreements
that Seller has with its OEM End User and Educational customers. The
total number of these agreements is approximately 30,000. [Schedule
1.1(a) to Asset Purchase Agreement, ¶III (L).]
We have rights to enforce any violation of our trade secrets
by
International Business Machines Corporation ("IBM"). These rights are
secured by certain agreements between AT&T and IBM dated as of
February 1, 1985, designated as Software Agreement Number Soft-00015,
Sublicensing Agreement Number Sub-00015A, Substitution Agreement Number
XFER-00015B, Side Letter dated February 1, 1985, and Amendment X dated
October 16, 1996 (collectively the AT&T/IBM UNIX Agreements).
IBM is obligated under the AT&T/IBM UNIX Agreements as
follows:
a. Paragraph 11 of the Side Letter contains the following
language
regarding the intent of the parties to prevent unrestricted disclosure
of UNIX:
You [IBM] recognize the
proprietary nature of SOFTWARE PRODUCTS and the need to protect
SOFTWARE PRODUCTS from unrestricted disclosure.
b. IBM is prohibited under §7.10 of the Software
Agreement from
transferring or disposing of UNIX in a way that destroys its economic
value. The applicable contract language reads as follows:
Except as provided in Section
7.06(b), nothing in this Agreement grants to Licensee the right to
sell, lease or otherwise transfer or dispose of a SOFTWARE PRODUCT in
whole or in part.
c. IBM has a duty of confidentiality to protect the
confidentiality of
our trade secrets. Side Letter ¶9 provides, in part, as follows:
LICENSEE [IBM] agrees that it
shall hold SOFTWARE PRODUCTS subject to this Agreement in confidence
for AT&T. LICENSEE further agrees that it shall not make any
disclosure of such SOFTWARE PRODUCTS to anyone, except to employees of
LICENSEE to whom such disclosure is necessary to the use for which
rights are granted, LINCENSEE shall appropriately notify each employee
to whom any such disclosure is made that such disclosure is made in
confidence and shall be kept in confidence by such employee.
d. IBM is prohibited under Section 2.05 of the Software
Agreements from
using UNIX for others. The applicable language provides:
No right is granted by this
Agreement for the use of SOFTWARE PRODUCTS directly for others, or for
any use of SOFTWARE PRODUCTS by others.
The cumulative effect of these provisions requires IBM to
protect our
valuable UNIX trade secrets against unrestricted
disclosure, unauthorized transfer or disposition and unauthorized use by others.
Notwithstanding these provisions, IBM has subjected our UNIX
trade
secrets to unrestricted disclosure, unauthorized transfer and
disposition, unauthorized use, and has otherwise encouraged others in
the Linux development community to do the same.
One of our remedies for such breaches (in addition to remedies
at law
and in equity) is specified in §6.03 of the Software Agreement
(SOFT-00015), as follows:
If LICENSEE fails to fulfill one
or more of its obligations under this Agreement, AT&T may, upon its
election and in addition to any other remedies that it may have, at any
time terminate all the rights granted by it hereunder by not less than
two (2) months' written notice to LICENSEE specifying any such breach,
unless within the period of such notice all breaches specified therein
shall have been remedied; upon such termination LICENSEE shall
immediately discontinue use of and return or destroy all copies of
SOFTWARE PRODUCTS subject to this Agreement.
Section 6.03 is modified by ¶5 of the Side Letter to
extend the
notice period from 60 days to 100 days. This letter is notice of your
material breaches of the AT&T/IBM Agreements identified above.
Pursuant to §6.03 of the Software Agreement, you are
hereby put on
notice to cure the above breaches within 100 days by eliminating the
acts and conduct specified above. Should you fail to do so, your rights
under the AT&T/IBM Agreements will be terminated as of Friday, June
13, 2003, and you will be required to immediately discontinue use of
our Software Products and return or destroy all copies of software
products subject to the AT&T/IBM UNIX Agreements.
Sincerely yours,
THE SCO GROUP
By: ____[Signature]_____
Darl McBride
President and Chief Executive Officer
cc: David Boies
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