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SCO's next target: SGI?

SCO Group, which has sued IBM for more than $3 billion for allegedly moving Unix code into Linux, may also have Silicon Graphics in its crosshairs.

SCO Group, which has sued IBM for more than $3 billion for allegedly moving Unix code into Linux, may also have Silicon Graphics in its crosshairs.

SCO on Friday declined to comment on future legal action, but Chris Sontag, the senior vice president in charge of SCO's effort to derive more revenue from its Unix intellectual property, has said two things that suggest SGI is a likely target.

First, Sontag said in June that SCO is contemplating legal action against another major North American hardware maker besides IBM. Second, in an August presentation at which SCO detailed some of its complaints about Linux code, Sontag described SGI file system software called XFS in a list of "examples of significant infringing derivative works" contributed to versions 2.4 or 2.5 of the heart, or kernel, of Linux.

SGI said its conversion of XFS into an open-source program is permitted. "We believe our release of XFS as open source to Linux was consistent with our Unix contract with SCO," SGI spokeswoman Marty Coleman said. She declined to comment on whether SGI is in discussions with SCO.

A new SCO lawsuit against SGI would mean significant new work to shoulder in addition to the Lindon, Utah-based company's case against IBM and its campaign to get all commercial Linux users to pay SCO hundreds of dollars per server to use the software. But a lawsuit is not the only avenue open to SCO: The company has shown a recent preference for more moderate courses of action, such as sending invoices to Linux users rather than taking them to court.

A file system is the part of an operating system that's in charge of reading and writing data on hard drives. is one of several file systems available for Linux, and it comes with the higher-end "journaling" ability that keeps logs of its actions to make recovery from crashes less troublesome.

SGI originally wrote XFS for its Unix servers, which run the Irix version of the operating system that originally was developed at AT&T. In 1999, SGI declared it would release an open-source XFS version for Linux as part of a plan to embrace the new operating system.

Another journaling file system available for Linux, an IBM project called JFS, is part of SCO's case against Big Blue. In its case, SCO says IBM's contracts permitted it to make modifications to Unix code it licensed from SCO, but not to release those derivative works as open-source software, which anyone can see, modify or distribute. SCO alleges IBM breached its contract when it moved JFS and several other technologies developed at Big Blue to Linux.

Though SGI continues to struggle with business problems, its XFS plan was a success: Linux founder and leader Linus Torvalds merged the software with the standard Linux development kernel in September 2002.

In his August presentation, Sontag said XFS in Linux includes 173 files and 119,130 lines of code that infringe the company's intellectual property. That's a significant portion of the 1,549 files and 1,147,022 lines the company says infringes.

Given the complexity of contracts, companies and actions involved in the cases, it's not clear that SCO would be able to parlay a victory against IBM into one against SGI, said Gray Cary intellectual-property attorney Mark Radcliffe.

"The facts for each defendant seem to be different enough that it's a bit of a challenge to use the prove-it-in-one-case, use-it-in-the-other approach," Radcliffe said.

Intellectual-property-infringement cases most often are pursued simultaneously, said attorney Jeffrey Osterman, a partner at Weil Gotshal & Manges. "Generally when you've got an entire industry infringing, the strategy is to go after everybody else at once," unless the plaintiff is short of cash or very confident of winning.

Although a victory in one case might not make the next case easier, the same is not true for a loss, Osterman said. "If you lose one case, chances are you'll lose in a way that's going to make it a heck of a lot harder" to win future cases, he said.