Unix System Laboratories

~ the last words ~

AT&T had been handing Unix to universities for nearly twenty years, largely because an antitrust consent decree kept the company out of the computer business, and by the late eighties the decree was gone and the handing-out looked like a mistake that needed correcting. In January 1989 AT&T announced the Unix Software Operation as a distinct business unit, and in November 1989 it became a proper subsidiary called Unix System Laboratories, headquartered in Summit, New Jersey. The point was to sell the source license as a product rather than let it stay an accident of research policy.

USL was never fully AT&T's for long. In April 1991 about twenty-two percent of it went to eleven outside computer vendors for roughly $65 million, Novell and Sun among them, the stated aim being to persuade the industry that Unix was not simply one telephone company's asset. That December, USL and Novell formed a joint venture called Univel to get Unix onto commodity Intel hardware, and the result was announced on 12 October 1992 as UnixWare 1.0. By that point the company had about five hundred employees, twenty-four hundred customers, and revenue near $100 million a year.

Then it sued the University of California. In 1992 USL filed against Berkeley Software Design and the university regents, claiming that the freely distributable BSD release contained AT&T code and that BSDi's advertising infringed the Unix trademark. The federal judge in New Jersey threw out most of the copyright claim that December, and the university countersued on the grounds that AT&T had been shipping Berkeley code inside System V for years without the credit its own license required. The settlement arrived in January 1994. Of roughly eighteen thousand files in the Berkeley distribution, three came out and about seventy had copyright notices added.

The company did not live to see it settled. Novell announced the purchase on 21 December 1992 and closed on 14 June 1993 in a stock swap worth around $335 million. USL stopped existing and became Novell's Unix Systems Group. Novell held the asset for about two years before handing the operating system business to Santa Cruz Operation, which is the first link in the chain that ends with the SCO Group suing IBM a decade later.

My first Unix was Linux, on university machines around 2003, and I never once wondered why it was Linux rather than BSD. Part of the answer is this company. The two systems were roughly comparable in 1992, and one of them then spent two years under enough legal uncertainty that no business and no student project wanted to build on it. People deciding where to spend unpaid evenings noticed.

~ the record ~

~ the fall ~

The strategic problem was visible from the first day. AT&T owned the source license, which meant its own customers were also its competitors: Sun, IBM, HP and everyone else shipping a Unix bought the license and then sold against whatever AT&T sold. Charging them for source and then competing with them using UnixWare was never going to hold together.

The 1991 minority sale was an attempt to defuse exactly that, and it did not work, because twenty-two percent sold still leaves seventy-eight percent in the hands of a telephone company that has decided it wants to be in software. The vendors took their stakes and kept building their own variants anyway, and the fragmentation that everybody blamed on Unix in that decade was partly just a description of who held the paper.

~ the actual end ~

Both endings landed within a year of one another. The company went first, sold into Novell in June 1993 for $335 million in stock that Novell would spend the following two years regretting. The lawsuit went second, settling in January 1994 with a result so lopsided that it now gets quoted as arithmetic rather than argument: three files out of eighteen thousand.

Ray Noorda, Novell's chief executive, made that settlement possible by deciding he would rather compete in the market than in court. He was almost certainly right, and he was also about two years late for BSD, which had spent the window in which a free Unix could have become the default under a cloud that Linux was not under.

~ the next chapter ~

The copyright question USL raised in 1992 did not disappear when the case settled. It went dormant, changed hands twice more, and came back in 2003 as the SCO Group's claim that Linux contained Unix code, which took years of litigation to answer and ended with a ruling that Novell had never sold the copyrights to begin with.

So the line runs straight from a New Jersey subsidiary in 1992 to a Utah bankruptcy in 2012, and it is one continuous argument about who owned a thing Bell Labs had spent the seventies giving away for free. USL is the point where the giving away stopped and the owning started, and almost everything unpleasant in Unix's legal history dates from there.

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