IBM, who has said very little in public about this litigation, here, in answers to SCO interrogatories, straightforwardly lists what it views as some of SCO's actionable misconduct -- its public smears against IBM and Linux, for example -- as reasons why IBM has brought certain of its counterclaims, such as the unfair competition and breach of contract counterclaims. The trash talk by SCO executives comes back to haunt them here, because IBM is asking for money damages for all that they said and did.

The document, one of the recently redacted SCO filings, is Exhibit S-3 [PDF], attached to SCO's Memorandum in Opposition to Defendant IBM's Motion for Summary Judgment on its 10th Counterclaim for Declaratory Judgment of Non-Infringement, refiled in redacted form, and the underlying document is titled IBM's Responses and Objections to SCO's 2nd Set of Interrogatories and 2nd Request for the Production of Documents.

IBM marked their responses to SCO interrogatories "Confidential" on every page. Later, when the parties were asked to unseal whatever they could, SCO refiled a redacted version. The document dates from April of 2004, but I think that if IBM were more SCO-like, interested in PR outside of the courtroom, they'd have found a way to make it public a long time ago, because in it, they set forth a long list of what it calls SCO's misconduct, designed, IBM alleges, to "spread false information about IBM and its products" with the goal of inducing current and prospective customers to take a SCOsource license "where none was required," not to deal with IBM or purchase IBM's products or services, or to do less business with IBM than they otherwise would have, so as to slow customer adoption of Linux and the sale of IBM's products and services related to Linux, and to spread FUD so as to steer "IBM's prospective customers instead towards SCO's own UNIX products and SCO's UNIX and Linux licensing scheme."

IBM telegraphs that it doesn't necessarily believe that SCO even has any rights under the contracts, repeatedly writing that although it is answering SCO's interrogatories and explaining why it is counterclaiming regarding breach of contract, the answers only apply if one assumes that SCO "properly assumed the obligations of its alleged predecessors-in-interest", something IBM pointedly does not concede. IBM will be raising that issue, if this circus ever makes it to trial, I gather. That's a lose-lose for SCO. If they in fact don't have any contract rights, their claims against IBM fail; if they do have rights, they are liable for breach of the contracts, according to IBM's counterclaims. Which of the contracts involve today's SCO? For example, SCO was not a party to the Project Monterey contract, and so what rights, if any, they have to complain about that contract is a fundamental question that will eventually have to be answered.

This is all about damages, about IBM's counterclaims. When you are accused of something in litigation, the first thing you want to know is what, exactly, you are accused of doing, so you can defend yourself. Interrogatories are one way you get the other side to amplify what they have written in their complaint. SCO started this litigation, but IBM has accused SCO in its counterclaims, and here SCO is asking for details. They want to know what IBM's theory is as to damages they are asking the court to award them with respect to their unfair competition and breach of contract counterclaims. How did SCO engage in unfair competition? How did it breach the contracts?

For starters, IBM says it did it by filing a baseless lawsuit against IBM. Then there is the matter of falsely calling Linux "an unauthorized derivative of UNIX." IBM describes, with respect to the breach of contract, SCO's "undertaking and maintaining a course of conduct designed to injure IBM by misrepresenting and seeking to deny IBM its rights under the Agreements (e.g., claiming that SCO had properly terminated IBM's irrevocable and perpetual rights to use certain UNIX code provided to IBM under the Agreements, and further claiming that IBM's AIX and Dynix operating systems were unauthorized derivatives of UNIX System V".

IBM says on the unfair competition claim that "SCO has engaged in unfair competition by intentionally, knowingly, wrongfully and in bad faith engaging in public conduct aimed at depriving IBM of the value of IBM's AIX, Dynix and Linux-related products and services and misappropriating the same for SCO's UNIX licensing business and SCO's competing UNIX operating systems," and engaging in "a campaign of false and misleading public statements about IBM's rights with respect to the intellectual property in AIX, Dynix, and Linux." Then it lists the trash talk, one after another, specific instance of it. SCO's "misconduct" has cost IBM money, at least, and it specifically and by name lists Darl McBride, Christopher Sontag, Blake Stowell and Gregory Pettit as being involved. I didn't immediately remember who Gregory Pettit was. But a little digging reminded me.

Remember when SCO sent dunning letters to two Department of Energy facilities, the Lawrence Livermore National Laboratory and the National Energy Research Scientific Computing Center? Remember those letters threatening legal action if they didn't take a license (remember this part? -- "WE BELIEVE WE CAN PROPOSE SOLUTIONS THAT WILL BE AGREEABLE AND ECONOMICALLY FEASIBLE FOR YOU.")? Mr. Pettit, SCO's regional director of intellectual property, at least back then, sent those letters.

Rereading that old Stephen Shankland article from March of 2004, it reminded me of how terrible it was back then, in the winter of 2003-04, when it seemed possible SCO might actually follow through, and almost everyone in the media took SCO's allegations more seriously than Groklaw or the FOSS community. Shankland wrote, "It's not an idle threat, though many Linux fans dismiss the Lindon, Utah-based company's assertions." Not to pick on Shankland, but may I gently ask journalists to make a note, with the benefit of hindsight, as to which side was correct?

Remember Darl McBride's letter to Congress? Shankland mentioned it in the article, and here's just a bit of what McBride wrote:

"We are firm in our belief that the unchecked spread of open-source software, under the GPL (the General Public License covers Linux and many other open-source programs), is a much more serious threat to our capitalist system than U.S. corporations realize," McBride said.

At the same time that SCO is attacking the U.S. government for its use of Linux supercomputers, it argues that those same types of machines can be used by military enemies.

"Open-source software -- available widely through the Internet -- has the potential to provide our nation's enemies or potential enemies with computing capabilities that are restricted by U.S. law," McBride said. "A computer expert in North Korea who has a number of personal computers can download the latest version of Linux...and in short order build a virtual supercomputer."

SCO sent the letter to every member of the Senate and House of Representatives, said Blake Stowell, a SCO spokesman.

Now SCO will have to answer to the court for saying such things and writing such things. While we wait for that happy day, you might wish to review a January 2, 2003 Department of Defense MITRE Report, that answered the question as to what the effect would be on the DOD if FOSS were banned:

Security:
Banning FOSS in this area would have immediate, broad, and in some cases strongly negative impacts on the ability of the DoD to analyze and protect its own networks against hostile intrusion.

Research:
DoD research would also be seriously damaged by a ban on FOSS.

And I wish to remind you that the National Security Agency has information on its own modifications to Linux, Security-Enhanced Linux, available on its website. It distributes the source code to its SELinux from its website, too, because it distributes it under the GPL, and this is what it said in a press release on the day it first released it to the public:

NSA PRESS RELEASE
2 January 2001
For further information, contact:
NSA Public and Media Affairs,
301-688-6524

National Security Agency Shares Security Enhancements to LINUX

Recognizing the critical role of operating system security mechanisms in supporting security for critical and sensitive applications, National Security Agency (NSA) researchers have been investigating an operating system architecture that can provide the necessary security functionality in a manner that can meet the security needs of a wide range of computing environments. The NSA is pleased to announce that it has developed, and is making available to the public, a prototype version of a security-enhanced Linux system. The prototype includes enhancements to Linux that provide new, stronger protection against tampering and bypassing of application security mechanisms and greater limits on the damage that can be caused by malicious or flawed applications.

The security mechanisms implemented in the system provide flexible support for a wide range of security policies. The currently implemented access controls are a combination of type enforcement and role-based access control. The specific policy enforced by the kernel is dictated by security policy configuration files which include type enforcement and role-based access control components. This release includes a set of sample security policy configuration files designed to meet common, general-purpose security goals.

Both the President's National Coordinator for Security, Infrastructure Protection, and Counter-Terrorism and the President's Information Technology Advisory Committee have recently called for increasing the federal government's role as both user and contributor to open source software. "Open source software plays an increasingly important role in federal IT systems. I'm delighted the NSA's security experts are making this valuable contribution to the open source community," said Jeffery Hunker, Senior Director for Critical Infrastructure at the White House National Security Council.

Since this system is a prototype, there is still much work to be done to develop a complete security solution. Anyone interested in experimenting with the system or getting more information about it, should visit the project web site at http://www.nsa.gov/selinux. This site contains the source to the system as well as some technical documentation about it.

NSA is presenting this system under the terms of the GNU General Public License with the intention to work with the Linux community to refine these enhancements for eventual inclusion into Linux. The system is not intended to be a complete security solution for Linux, nor does it correct any flaws that may currently exist in Linux.

The Information Assurance Research Office of the NSA is responsible for conducting research and advance development of technologies needed to enable the NSA to provide the Solutions, Products, and Services to achieve Information Assurance for information infrastructures critical to U.S. National Security interests. The security-enhanced Linux prototype was developed in conjunction with research partners from NAI Labs, Secure Computing Corporation (SCC), and MITRE Corporation. Researchers at the NSA implemented the security architecture in the major subsystems of the Linux kernel with some refinements provided by NAI Labs. SCC, MITRE, and NAI Labs also assisted the NSA in developing application security policies and enhanced utilities for the system.

So who is right about security, Linux and the GPL? SCO or the NSA? Personally, I will stick with the NSA. When it comes time to go to trial, SCO is going to have to justify its wild allegations in the face of the NSA itself helping to improve Linux and making their security patches to Linux available for download from its website. It's very hard to see how SCO can defend some of the statements it made to the press. For example, IBM lists an article that included a McBride quotation, "IBM has taken our valuable trade secrets and given them away to Linux."

When this litigation began, SCO alleged trade secrets violations, but they dropped that claim after discovery showed it was hopeless. Now that inaccurate statement is hanging in the air, and IBM is asking the court to make SCO pay for the unnecessary damage they caused by saying such things. How can SCO justify it? IBM says such comments caused them at least monetary damage, which they'll have experts quantify after "the full scope of SCO's misconduct is known."

********************************

Brent O. Hatch (5715) Mark F. James (5295) HATCH, JAMES & DODGE [address]	Robert Silver (admitted pro hac vice) Edward Normand (admitted pro hac vice) Sean Eskovitz (admitted pro hac vice) BOIES, SCHILLER & FLEXNER LLP [address]
Stuart H. Singer (admitted pro hac vice) BOIES, SCHILLER & FLEXNER LLP [address]	Stephen N. Zack (admitted pro hac vice) BOIES, SCHILLER & FLEXNER LLP [address]

Attorneys for the SCO Group, Inc.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC. Plaintiff/Counterclaim-Defendant, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant/Counterclaim-Plaintiff.

EXHIBIT S-3 TO MEMORANDUM IN OPPOSITION TO DEFEDANT INTERNATIONAL BUSINESS MACHINES' MOTION FOR SUMMARY JUDGMENT ON ITS TENTH COUNTERCLAIM FOR DECLARATORY JUDGMENT OF NON-INFRINGEMENT [Docket No. 206] (REFILED IN REDACTED FORM) Case No. 2:03CV0294DAK Honorable Dale A. Kimball Magistrate Judge Brooke C. Wells

1

Alan L. Sullivan (3152)
Todd M. Shaughnessy (6651)
SNELL & WILMER LLP
[address]

Evan R. Chesler (admitted pro hac vice)
David R. Marriott (7572)
CRAVATH, SWAINE & MOORE LLP
[address]

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

2

Defendant International Business Machines Corporation ("IBM"), by its undersigned attorneys, hereby responds and objects to Plaintiff's Second Set of Interrogatories (the "Interrogatories") and Second Request for the Production of Documents (the "Requests"), as follows:

GENERAL OBJECTIONS

IBM hereby incorporates by reference all of its General Objections set out in IBM's Responses and Objections to SCO's First Request for the Production of Documents and First Set of Interrogatories. All of the General Objections are incorporated into each of the individual responses set forth below and have the same force and effect as if fully set forth therein. IBM's answers to the Interrogatories are made to the best of its present knowledge, information and belief. IBM reserves the right to further amend and/or supplement its answers, which are subject to such additional or different information as discovery or further investigation may disclose.

SPECIFIC OBJECTIONS AND RESPONSES TO INTERROGATORIES

Interrogatory No. 6:

Please identify, with specificity (by product, file in light of code, where appropriate) all of the alleged contributions to Linux made by IBM, included but not limited to those claimed paragraphs 108, 115 and 120 of IBM's Amended Counterclaims.

Response to Interrogatory No. 6:

In addition to the foregoing general objections, IBM objects specifically to this Interrogatory on the grounds that it is vague, overbroad and unduly burdensome, and seeks information that is irrelevant and not reasonably calculated to lead to the discovery of admissible

3

evidence. IBM also objects to this Interrogatory on the grounds that the Court ruled, in an Order dated March 3, 2004, that IBM need not provide to SCO contributions to Linux insofar as they are a matter of public record. Subject to, as limited by and without waiving the foregoing objections, IBM responds as follows.

While IBM, like many other individuals and entities (including SCO), has made contributions to Linux, all of them are, by nature, a matter of public record. Linux was, and is, being developed publicly via the Internet. Thus, IBM has not made any contributions to Linux that are not public, and SCO is able to identify on its own IBM's contributions by searching the public record.

To the extent SCO seeks the disclosure of material that IBM may have attempted unsuccessfully to contribute to Linux, that material is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. SCO alleges, after all, that IBM injured SCO by improperly "dumping" source code into Linux, not that IBM tried unsuccessfully to contribute to the development of Linux. In any event, to the extent IBM has identified material that may have been unsuccessfully contributed to Linux and is not publicly available, IBM has produced and/or will produce it. Such material can be found at bates numbers 1710089569-1710089572; 1710089869-1710089875; 1710127757-1710128552; 1710132518-1710134552; 1710137835-1710138245; 181595356-181595400; 181595402-181595428; 181595497-181595499; 181595555-181595561; 181595664-181595734; 181595736-181595767;181595769- 181595770; 181595837-181595853; 181595867-518159868; 181595980-181596088; 181596760-181596769; 181596825-181596861; 181596873-181596980; 181596985-181596996; 181596999-181597185; 181597315-181597317; 181597575181597587;

4

181597686-181597744; 181597747-181597748; 181597750-181597820; 181607890-181607892; 181609501; 181609861; 181610175-181610176; 181610232-181610243; 181610250-181610262; 181610413-181610419; 181610422-181610425; 181610428-181610484; 181610489-181610502; 181610600-181610608; and 181617209-181617221.

Interrogatory No. 7:

Please identify all agreements that IBM alleges or contends that SCO has breached, including specific provisions or portions of those agreements that IBM alleges or contends that SCO breached, and describe, in detail, each instance in which IBM alleges or contends that SCO breached those agreements, including but not limited to:

(a) the date of the alleged breach;

(b) all persons involved in the alleged breach;

(c) the specific manner in which SCO is alleged to have breached the agreement;

(d) the type of damage and dollar amount, if any, IBM alleges or contends it suffered as a result of the alleged breaches by SCO.

Response to Interrogatory No. 7:

Based upon IBM's investigation to date, which is ongoing, SCO has breached at least the following agreements (collectively, the "Agreements"), assuming, as SCO alleges, that SCO assumed the obligations of its alleged predecessors-in-interest: the Software Agreement between IBM and AT&T Technologies ("AT&T") dated February 1, 1985 (Agreement Number SOFT-00015) ("IBM Software Agreement"); the Sublicensing Agreement between IBM and AT&T Technologies dated February 1, 1985 (Agreement Number SUB-00015A) ("IBM Sublicensing Agreement"); the letter agreement between IBM and AT&T dated February 1, 1985 ("Side Letter"); the Software Agreement between Sequent and AT&T dated April 18, 1985 (Agreement Number SOFT-000321) ("Sequent Software Agreement"); the Sublicensing

5

Agreement between Sequent and AT&T dated January 28, 1986 (Agreement Number SUB-000321A) ("Sequent Sublicensing Agreement"); and Amendment No. X between IBM, Novell, Inc., and The Santa Cruz Operation, Inc. (now known as Tarantella, Inc.) dated October 17, 1996 ("Amendment No. X").

Again, assuming that SCO properly assumed the obligations of its alleged predecessors-in-interest, SCO's obligations under the Agreements include (but are not limited to) the obligation to: (1) recognize IBM's right to use and distribute certain software products as defined in the Agreements; (2) recognize and respect IBM's right to prepare derivative works, and to use and exercise the full rights of ownership with respect to its alleged derivative works and its own original software code; (3) provide IBM with adequate notice of any alleged breach by IBM of the Agreements and endeavor in good faith to resolve any alleged breach short of any purported termination; (4) recognize that IBM has an irrevocable, fully paid-up, perpetual right to exercise all of its rights under the Agreements beginning January 1, 1996 at no additional royalty fee; (5) act in good faith with respect to and deal fairly with IBM. (See IBM Software Agreement §§2.01, 6.03; Sequent Software Agreement §§2.01, 6.03; IBM Sublicensing Agreement §§2.01, 3.03; Sequent Sublicensing Agreement §§2.01, 3.03; Side Letter §§A.2, A.5; Amendment No. X §1.)

SCO has breached the Agreements, including at least the specific provisions mentioned above, by engaging in the pattern of conduct described in IBM's counterclaims. Specifically, SCO has breached its contractual obligations to IBM (assuming SCO has the obligations of its predecessors-in-interest) by, among other things: (1) bringing and maintaining baseless legal claims against IBM beginning in March 2003; (2) refusing to give IBM proper

6

notice of IBM's alleged breaches of the Agreements and failing to act in good faith to resolve any alleged breach short of any purported termination; (3) failing to recognize and respect IBM's right to prepare derivative works, and to use and exercise the full rights of ownership with respect to its alleged derivative works and its own original software code; (4) purporting to terminate IBM's irrevocable and perpetual rights to use and distribute software to which IBM has rights under the Agreements and otherwise; and (5) refusing to act in good faith or deal fairly with IBM, such as by engaging in the misconduct described immediately above and undertaking and maintaining a course of conduct designed to injure IBM by misrepresenting and seeking to deny IBM its rights under the Agreements (e.g., claiming that SCO had properly terminated IBM's irrevocable and perpetual rights to use certain UNIX code provided to IBM under the Agreements, and further claiming that IBM's AIX and Dynix operating systems were unauthorized derivatives of UNIX System V.)

The breaches of which IBM is aware based upon its investigation to date occurred at least as early as March 6, 2003. They have continued every day since then. And SCO will be in breach of the Agreements so long as it persists in the course of misconduct described here and in IBM's counterclaims. The identity of the persons involved in the breaches is best known to SCO, but include the officers, directors and agents of SCO responsible for the misconduct described here and in IBM's counterclaims. The persons involved in the breaches include Darl McBride, Christopher Sontag, and Blake Stowell.

IBM has suffered and is suffering at least monetary damages as a result of SCO's breaches of the Agreements. The precise amount of these damages is not susceptible to ready determination at this time, as IBM has not yet discovered the full extent of SCO's misconduct

7

and SCO's misconduct is ongoing. When the full scope of SCO's misconduct is known, IBM will undertake to characterize and quantify the full range of damages caused by SCO. Assessment of the damages caused by SCO's breaches is a matter of expert determination, and IBM will disclose the conclusions of its experts on the schedule to which the parties have agreed and which was adopted by the Court in its scheduling order.

Interrogatory No. 8:

Please describe, in detail, each instance in which IBM alleges that SCO engaged in unfair competition as claimed in paragraphs 90 through 94 of IBM's Amended Counterclaim, including but not limited to,

(a) the dates in which SCO allegedly engaged in any unfair competition;

(b) all persons involved in the alleged unfair competition;

(c) the specific manner in which SCO is alleged to have engaged in unfair competition, uncluding but not limited to, as alleged in paragraph 93 of IBM's Amended Counterclaim;

(d) the type and dollar amount, if any, of any damages allegedly caused by SCO's actions.

Response to Interrogatory No. 8:

SCO has engaged in unfair competition by intentionally, knowingly, wrongfully and in bad faith engaging in public conduct aimed at depriving IBM of the value of IBM's AIX, Dynix and Linux-related products and services and misappropriating the same for SCO's UNIX licensing business and SCO's competing UNIX operating systems. SCO's misconduct is likely to result in confusion in the marketplace and has in fact resulted in confusion concerning AIX, Dynix and Linux.

The specific manner in which SCO has engaged in unfair competition includes (but is not limited to): (1) filing a baseless lawsuit against IBM on March 6, 2003; (2) sending a

8

letter in or around May 2003 to approximately 1,500 of the world's largest corporations falsely claiming that Linux contained SCO's intellectual property, with the aim of slowing customer adoption of Linux and the sale of IBM's products and services related to Linux; and (3) sending a letter in or around December 2003 to selected Fortune 1000 companies again falsely claiming that Linux contained unauthorized copying of SCO's intellectual property; and (4) contacting or visiting IBM's current and prospective customers to spread false information about IBM and its products, with the goal of inducing these current and prospective customers to (a) take a license from SCO where none was required; (b) not deal with IBM or not purchase IBM's products or services; and (c) do less business with IBM than they otherwise would have, or act more slowly to do such business with IBM.

SCO has further engaged in unfair competition by engaging in a campaign of false and misleading public statements about IBM's rights with respect to the intellectual property in AIX, Dynix, and Linux, with the goals of spreading unwarranted fear, uncertainty, and doubt in IBM's prospective customers about IBM's products and services, and of steering IBM's prospective customers instead towards SCO's own UNIX products and SCO's UNIX and Linux licensing scheme.

Some examples of SCO's false and misleading public statements include:

• SCO's false statements that IBM improperly used UNIX source code in violation of its licenses. (See 6/16/03 SCO Press Release; see also "Meet Linux's New Public Enemy No. 1", Business Week Online, May 23, 2003 (quoting Darl McBride ("In the last 18 months, we found that IBM had donated some very high-end enterprise-computing technologies into open-source. Some of it looked like it was our intellectual property and subject to our

9

licensing agreements with IBM. Their actions were in direct violation of our agreements with them that they would not share this information, let alone donate it into open-source.")); Robert McMillan, "SCO Shows Linux Code to Analysts", Computerworld, Jule 11, 2003 (quoting Chris Sontag ("IBM's contributions to Linux all constitute breaches of [IBM's] contract.") ).)
• SCO's false statements that IBM misappropriated UNIX trade secrets. (See 3/7/03 SCO Press Release; Andrew Orlowski, "SCO sues IBM for $1 Billion for 'Devaluating Unix'", The Register, March 7, 2003 (quoting Darl McBride ("IBM has taken our valuable trade secrets and given them away to Linux.")).)
• SCO's false statements that IBM does not "own the AIX code". (Peter Galli, "SCO Group Slaps IBM With $1B Suit", eWeek.com, March 6, 2003 (quoting Darl McBride); see also Paula Rooney, "CRN Interview: SCO CEO Defends $1 Billion Lawsuit Against IBM", CRN, April 24, 2003 (quoting Darl McBride ("We're the source of AIX... It all comes from us.")).)
• SCO's false statements that SCO properly terminated IBM's right to use and distribute AIX and that IBM's "customers no longer have the right to use AIX software". (6/16/2003 SCO Press Release; see also John Blau, "Q&A: SCO's Chris Sontag On How Unix Plus Linux Equals Trouble", Computerworld, May 13, 2003, (quoting Chris Sontag ("We have the ability to withdraw or pull the AIX license on June 13, which should cause IBM to expedite this issue as well.")); Stephen Shankland, "SCO Claims IBM Unix Contract Void", CNET News.com, June 16, 2003, http://netscape.com.com/2100-1104-1017719.html (quoting Chris Sontag ("We have terminated IBM's right to use AIX in their business, development, distribution and sales.")).)

10

SCO's false statements that SCO properly terminated IBM's right to use and license Dynix. (See 8/13/03 SCO Press Release; see also James Maguire, "SCO Braces for Long Legal Battle", NewsFactor Network, August 15, 2003 ( quoting Blake Stowell ("We gave them 60 days to secure the contributions from Dynix/ptx, which was a breach of contract, and they chose not to do anything. So by the terms of our contract we terminated their license.")) 2E)
• SCO's false statements that "Linux is an unauthorized derivative of UNIX" and infringes SCO's intellectual property rights. (5/14/03 SCO Press Release.)
• SCO's false statements that licenses from SCO are required for the use of Linux. (See 8/5/03 SCO Press Release (falsely claiming that a Fortune 500 company signed an Intellectual Property License for Linux because it "recognizes the importance of paying for SCO's intellectual property that is found in Linux"); Mike D'Angelo, "Can Hewlett Packard Protect Its Linux Customers from SCO Lawsuits?", MozillaQuest (quoting Blake Stowell ("SCO's position is that anyone running Linux for commercial business purposes, based on the 2.4 kernel or later, should contact SCO to obtain a SCO IP License for Linux. Purchasing Linux from a UNIX licensee like HP, IBM, or any other company doesn't absolve them from having to purchase the SCO IP License for Linux.")).)

SCO's unfair competition began at least as early as the filing of its lawsuit against IBM on March 6, 2003, and has continued every day since that date. The persons involved in SCO's unfair competition are best known to SCO but include the officers, directors and agents of SCO responsible for the misconduct described here and in IBM's counterclaims. The persons

11

involved in the unfair competition include Darl McBride, Christopher Sontag, Blake Stowell, and Gregory Pettit.

IBM has suffered and is suffering at least monetary damages as a result of SCO's unfair competition. The precise amount of these damages is not susceptible to ready determination at this time, as IBM has not yet discovered the full extent of SCO's misconduct and SCO's misconduct is ongoing. When the full scope of SCO's misconduct is known, IBM will undertake to characterize and quantify the full range of damages caused by SCO. Assessment of the damages caused by SCO's unfair competition is a matter of expert determination, and IBM will disclose the conclusions of its experts on the schedule to which the parties have agreed and which was adopted by the Court in its scheduling order.

Interrogatory No. 9:

Please identify each "prospective business relationship" IBM claims to have with "numerous companies and individuals to whom IBM has sold and/or licensed these products and services and/or to whom IBM seeks to sell and/or license these products and services" in which IBM alleges or contends that SCO interfered with, including but not limited to,

(a) the date of the alleged interference;

(b) all persons involved in the alleged interference;

(c) the specific manner in which SCO is alleged to have interfered with such relationship;

(d) the specific actions, if any, that SCO induced or encouraged IBM's prospective business relationships to take;

(e) the specific action, if any, that IBM's prospective business relationships took as a result of the actions allegedly induced or encouraged by SCO;

(f) the type and dollar amount, if any, of any damages from SCO's alleged actions.

12

Response to Interrogatory No. 9:

IBM, a global computer products and services company, has numerous and varied prospective business relationships with companies and individuals for the development, licensing, and sales of IBM's AIX and Linux-related products and services, including prospective business relationships with each of the hundreds of corporations to which SCO sent letters or otherwise approached and spread unwarranted and false fear, uncertainty, and doubt regarding IBM's AIX, Dynix, and Linux-related products and services.

The specific actions taken by SCO to interfere with IBM's prospective business relations include (but are not limited to): (1) SCO's March 6, 2003 filing of its meritless lawsuit against IBM claiming that IBM had breached the Agreements; (2) sending a letter in or around May 2003 to approximately 1,500 of the world's largest corporations falsely claiming that Linux contained SCO's intellectual property, with the aim of slowing customer adoption of Linux and the same of IBM's products and services related to Linux; (3) sending a letter in or around December 2003 to selected Fortune 1000 companies again falsely claiming that Linux contained unauthorized copying of SCO's intellectual property; and (4) contacting or visit ing IBM's current and prospective customers to spread false information about IBM and its products, with the goal of inducing these current and prospective customers to (a) take a license from SCO where none was required; (b) not deal with IBM or not purchase IBM's products of services; and (c) do less business with IBM than they otherwise would have, or act more slowly to do such business with IBM.

SCO has also interfered with IBM's prospective business relationships by making numerous false and misleading public statements about IBM's rights with respect to the

13

intellectual property in AIX, Dynix, and Linux, with the goals of spreading unwarranted fear, uncertainty, and doubt in IBM's prospective customers about IBM's products and services, and of steering IBM's prospective customers instead towards SCO's own UNIX products and SCO's UNIX and Linux licensing scheme. Examples of SCO's false and misleading public statements are described in IBM's above response to Interrogatory No. 8.

REDACTED
AT IBM'S REQUEST

SCO's interference began at least as early as the filing of its lawsuit against IBM on March 6, 2003, and has continued every day since that date. The persons involved in SCO's interference are best known to SCO, but include the officers, directors and agents of SCO responsible for the misconduct described here and in IBM's counterclaims. The persons involved in the interference include Darl McBride, Christopher Sontag, Blake Stowell, and Gregory Pettit.

IBM has suffered and is suffering at least monetary damages as a result of SCO's interference. The precise amount of these damages is not susceptible to ready determination at

14

this time, as IBM has not yet discovered the full extent of SCO's misconduct and SCO's misconduct is ongoing. When the full scope of SCO's misconduct is known, IBM will undertake to characterize and quantify the full range of damages caused by SCO. Assessment of the damages caused by SCO's unfair competition is a matter of expert determination, and IBM will disclose the conclusions of its experts on the schedule to which the parties have agreed and which was adopted by the Court in its scheduling order.

SPECIFIC OBJECTIONS TO DOCUMENT REQUESTS

Request No. 53:

All documents concerning IBM's decision to adopt, embrace or otherwise promote Linux, including but not limited to the following:

a. all such documents in the possession of Sam Palmisano, Irving Wladawsky-Berger, Paul Horne and Nick Bowen;

b. the reports prepared by Nick Bowen, including all drafts and e-mails pretaining thereto, submitted to IBM management on or about December 20, 1999;

c. all presentations made to IBM's top management including its Board of Directors concerning such decision;

d. all documents from all Board of Directors' meetings relating to such decision, including Board notebooks, Board minutes and notes from all persons in attendant at such meetings.

Response to Request No. 53:

In addition to the foregoing general objections, IBM objects specifically to this Request on the grounds that it is overbroad, unduly burdensome, and seeks information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Subject to, as limited by, and without waiving the foregoing general and specific objections, IBM has already produced or will produce non-privileged documents responsive to this Request.

15

Request No. 54:

All documents concerning Hewlet-Packard and/or Compaq in Project Monterey, including but not limited to, all Memoranda of Understanding in all press releases.

Response to Request No. 54:

In addition to the foregoing general objections, IBM objects specifically to this Request on the grounds that it is overbroad and seeks information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Subject to, as limited by, and without waiving the foregoing general and specific objections, IBM has already produced or will produce non-privileged documents responsive to this Request.

Request No. 55:

All documents, including drafts, submitted to the Department of Justice concerning Project Monterey.

Response to Request No. 55:

In addition to the foregoing general objections, IBM objects specifically to this Request on the grounds that it seeks information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Subject to, as limited by, and without waiving the foregoing general and specific objections, IBM has already produced or will produce non-privileged documents responsive to this Request.

Request No. 56:

All business plans for Linux.

Response to Request No. 56:

In addition to the foregoing general objections, IBM objects specifically to this Request on the grounds that it is vague, ambiguous, overbroad, unduly burdensome, and seeks

16

information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. IBM also objects to this Request on the grounds that it does not identify with reasonable particularity the documents plaintiff seeks. Subject to, as limited by, and without waiving the foregoing general and specific objections, IBM has already produced or will produce non-privileged documents responsive to this Request.

Request No. 57:

All source code for AIX and Dynix since 1985 including all instructions, information used and all documentation relating to the use of AIX and Dynix, including but not limited to, all development notes.

Response to Request No. 57:

In addition to the foregoing general objections, IBM objects specifically to this Request on the grounds that it is overbroad, unduly burdensome, and seeks information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Furthermore, this request is inconsistent with the Court's March 3, 2004 Order. IBM has already produced millions of lines of source code for AIX and Dynix, which is more than sufficient for this litigation.

Request No. 58:

All notifications of third parties IBM has obtained since 1985 for providing access to the source code for AIX and/or Dynix.

Response to Request No. 58:

In addition to the foregoing general objections, IBM objects specifically to this Request on the grounds that it is vague, overbroad, and seeks information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. IBM further objects to this request insofar as it is duplicative of SCO's Document Request No. 10, which asks for

17

"documents concerning Prerequisite Source Licenses", and for which IBM has already produced responsive documents.

18

Dated: April 19, 2004

As to Objections:

SNELL & WILMER LLP

[signature]

Alan L. Sullivan
Todd M. Shaughnessy

CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler
David R. Marriott

Counsel for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

As to Responses:

Alec S. Berman
Associate General Counsel
International Business Machines Corporation

Of counsel:

MORGAN & FINNEGAN LLP
Christopher A. Hughes
Richard Straussman
[address]

INTERNATIONAL BUSINESS MACHINES CORPORATION
Donald J. Rosenberg
Alec S. Berman
[address]

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

19

CERTIFICATE OF SERVICE

Plaintiff/Counterclaim Defendant, The SCO Group, Inc., hereby certifies that a true and correct copy of the foregoing was served on Defendant IBM on the 5th day of July, 2005 by U.S. Mail to:

David Marriott, Esq.
CRAVATH SWAINE & MOORE LLP
[address]

Donald Rosenberg, Esq.
[address]

Todd Shaughnessy, Esq.
SNELL & WILMER LLP
[address]

[signature by Laura K. Chaves]

20