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AT&T lawsuit helps to launch Linux into mainstream

In real estate it's "location, location, location". In software it's "timing, timing, timing" ;-). Recent publicity for Linux as an open source operating system has tended to obscure the fact that AT&T was a major contributor to the success of Linux by virtue of its legal actions against BSD. This artificial weakening of the major competitor was an important prerequisite of early Linux success.

BSD originally stood for Berkeley Standard Distribution. 386 BSD was the product of the UCB. Actually work on 386 BSD was largely parallel to Linux.  Net2  tape which was a complete OS minus six files was released in June 1991 (portion of BSD which requires no USL copyright).   As Wes Peters aptly noted BSD movement has a critical mass on the Usenet before Linux, so without external support Linux was doomed:

"In late 1991 there were 100 programmers on UseNet producing improvements for (BSD)," said Wes Peters, a BSD user from the beginning. "If not for the AT&T lawsuit at the worst moment.... Because of that, people said, 'I don't want to go with BSD now.' That was the time Linux was gaining functionality."

Anyway, the strange fact is that the support to Linux came from the birthplace of Unix: AT&T.  And the reason was a company called BSDI, which stands for Berkeley Software Design, Inc., formed in 1992 by several former members of BSD project.   Here are some bits of history of BSDI, the company which tried to commercialize BSD on Intel, as reported by Peter Salus.  It looks interesting to note that BSDI people essentially controlled Usenix (at that time Kirk McKusick was President of USENIX):

While several Berkeley developers were involved in the formation of BSDI in 1990-91, none left the University of California to join Berkeley Software Design, Inc. at the outset. BSDI was founded by Rick Adams, who told me: "It was my idea and my funding. I also handled the logistics (via UUNET) and the little matter of the lawsuit."

Donn Seeley related:

The first organizational meeting occurred at a bar in Boulder during the Boulder Berkeley Workshop in October 1990. I was invited to the meeting without any advance warning and to my surprise, I was offered a job. My recollection is that Rick, Mike, Kirk, Keith, and Bill J[olitz] were present at the meeting. I believe that a more formal meeting was held in early December 1990 at Kirk's house [in Berkeley], where we voted to go ahead with the proposal. I think this meeting was when we came up with the name BSDI.

We decided to work under UUNET's wing for a while so that we would not alert any potential competition; that continued until the summer of 1991. I was to start work as soon as possible; I took an extended vacation from my job at the University of Utah, and set up shop in my parents' basement in Bellingham, WA, with a PC provided by Rick, running mt Xinu Mach/BSD (I think). (I don't remember exactly when I gave notice at Utah, but I set things up so that my employment terminated shortly before the Winter Usenix [21-25 January 1991; Dallas].) I couldn't actually work directly on the OS, since it still contained licensed code at that point.

The BSD distribution was still hung up on the issue of certain possibly licensed files, so my job was to work on freely available software. I started with the compiler toolchain (based on GCC 1). Once it was clear that there would be missing files, I went ahead and wrote a replacement for the Berkeley init(8) program. I'm not sure whether Bill was working on BSDI-related stuff at this point, but I'm pretty sure that he had started by the time of the 1991 Winter Usenix, where we all met again.

At that time Kirk McKusick was President of USENIX, Rick was in Dallas to report on UUNET and recruit, Trent Hein was chairing the session on File Systems, and Keith Bostic and Mike Karels were part of the CSRG. It wasn't hard to call a meeting.

Trent was a student at the University of Colorado, where he was a co-author of both the UNIX and the Linux system administration handbooks. He worked on the 4.4BSD port to the MIPS architecture. More recently, he was co-founder of Applied Trust Engineering. He said:

I can concretely say that the original engineering team "hired" by BSDI (Spring, 1991) consisted of Donn Seeley, Bill Jolitz and myself. Bill left BSDI later that year. Rob Kolstad joined the BSDI team much later. [Kolstad was Secretary of USENIX at that time.]

Mike Karels told me:

I'd say that the founders were Rick Adams, Keith Bostic, Kirk McKusick, me, Bill Jolitz and Donn Seeley, in approximately that historical order. This group was involved at the time of formation. Bill and Donn were the first two full-time employees, and Trent started about the same time at just less than full-time. They worked for UUNET temporarily until the company started operations, which I think was about July 1991. Bill left at the end of November '91, and Rob [Kolstad] started December 1. The proximity of the dates is not a coincidence. I started February 1, 1992, at which time two Russians had also started, and also Jeff Polk. My departure from Berkeley and position at BSDI were announced at USENIX in January '92 [San Francisco], at which Bill made a famous appearance.

I asked Rick to clarify and he affirmed:

The first employees were Donn Seeley and Bill Jolitz. Peter Collinson signed on very early for European sales and Bob Kummerfeld for Australia.

We picked up Vadim Antonov and Igor Belchiskiy from USSR that fall (1991). Rob Kolstad came on as president in December 1991.

Donn Seeley provided yet more detail.

Bill believed that he deserved a larger role as systems architect, press contact and marketer. His coding contributions mainly came before he started working for UUNET/BSDI, by porting to PCs the drivers we'd written at Utah for HP 68k systems, and writing the locore assembly source and related files. As for Bill's departure, the straw that broke the camel's back was an issue with Bill's unauthorized expenses for a trip to Europe, if I recall correctly, but it was clear long before this point that Bill was not happy. Rick was BSDI's original president, but he was asked to separate UUNET from BSDI by UUNET's first big investors, so he enlisted Rob to replace him.

[There is a long and complex tale concerning Jolitz' departure and his appearance at the January 1992 USENIX meeting. I do not think it relevant to this narrative. One view may be found here.]

Insofar as Keith Bostic was concerned, he said:

I joined much later than Mike and the founders, though. I stayed at UC Berkeley for quite some time after BSDI was founded.

Another person mentioned by Rick was Peter Collinson. In 1980-81, Collinson (then at the University of Kent in Canterbury) was offered a USENET feed by Teus Hagen at the CWI in Amsterdam. They couldn't dial out, but the CWI would dial in, via a modem brought into the UK by Martin Levy. In April 1982, he was instrumental in the formation of EUnet.

"I think it was the Fall of 1993 that Rick asked me to sell things in Europe," Collinson told me.

The earliest date on a file that I have is September 1993. I think I was at a BSDI meeting at the Usenix conference in San Francisco in January 1994 [January 21-24].

When did I leave? -- we were forced out by the sales department at the end of 1995 -- we had the fax in September -- we settled and were gone by Jananuary 1996.

We in Europe did OK -- but we were not that good at Sales -- and would have had to think hard about Sales-led sales rather than Techy-led sales very soon anyway.

In 2000, BSDI merged with Walnut Creek CDROM and then with Telenet Systems. The next year, Wind River Systems purchased the software business. Renaming itself iXsystems with plans to specialize in hardware, the server business was acquired by Offmyserver in 2002.

BSDI main product was " an enhanced" BSD Unix called BSD/OS. They did not enter into any agreement with the University of Berkeley (as AT&T complaint stated "BSDI is not affiliated with the Regents, nor has it entered into any license agreements with USL pertaining to UNIX brand software, computers or related products.").
 
As it often happens with startups, BSDI using/abusing its Usenix influence went too far in their efforts to commercially distribute Unix and AT&T felt threatened.  For example, BSDI  chose 800-ITS-UNIX as their phone number. Here is how Marshall Kirk McKusick describes the events in his paper Twenty Years of Berkeley Unix published in Open Sources Voices from the Open Source Revolution. In his opinion, Keith Bostic was the pioneer of using Usenet cooperation for development Unix utilities. He did it well before Richard Stallman:

During one of our weekly group meetings at the CSRG, Keith Bostic brought up the subject of the popularity of the freely-redistributable networking release and inquired about the possibility of doing an expanded release that included more of the BSD code. Mike Karels and I pointed out to Bostic that releasing large parts of the system was a huge task, but we agreed that if he could sort out how to deal with reimplementing the hundreds of utilities and the massive C library then we would tackle the kernel. Privately, Karels and I felt that would be the end of the discussion.

Undeterred, Bostic pioneered the technique of doing a mass net-based development effort. He solicited folks to rewrite the Unix utilities from scratch based solely on their published descriptions. Their only compensation would be to have their name listed among the Berkeley contributors next to the name of the utility that they rewrote. The contributions started slowly and were mostly for the trivial utilities. But as the list of completed utilities grew and Bostic continued to hold forth for contributions at public events such as Usenix, the rate of contributions continued to grow. Soon the list crossed one hundred utilities and within 18 months nearly all the important utilities and libraries had been rewritten.

Proudly, Bostic marched into Mike Karels' and my office, list in hand, wanting to know how we were doing on the kernel. Resigned to our task, Karels, Bostic, and I spent the next several months going over the entire distribution, file by file, removing code that had originated in the 32/V release. When the dust settled, we discovered that there were only six remaining kernel files that were still contaminated and which could not be trivially rewritten. While we considered rewriting those six files so that we could release a complete system, we decided instead to release just what we had. We did, however, seek permission for our expanded release from folks higher up in the University administration. After much internal debate and verification of our method for determining proprietary code, we were given the go-ahead to do the release.

Our initial thought was to come up with a whole new name for our second freely-redistributable release. However, we viewed getting a whole new license written and approved by the University lawyers as an unnecessary waste of resources and time delay. So, we decided to call the new release Networking Release 2 since we could just do a revision of the approved Networking Release 1 license agreement. Thus, our second greatly expanded freely-redistributable release began shipping in June 1991. The redistribution terms and cost were the same as the terms and cost of the first networking release. As before, several hundred individuals and organizations paid the $1,000 fee to get the distribution from Berkeley.

Closing the gap from the Networking Release 2 distribution to a fully functioning system did not take long. Within six months of the release, Bill Jolitz had written replacements for the six missing files. He promptly released a fully compiled and bootable system for the 386-based PC architecture which he called 386/BSD. Jolitz's 386/BSD distribution was done almost entirely on the Net. He simply put it up for anonymous FTP and let anyone who wanted it download it for free. Within weeks he had a huge following.

In addition to the groups organized to freely redistribute systems built around the Networking Release 2 tape, a company, Berkeley Software Design, Incorporated (BSDI), was formed to develop and distribute a commercially supported version of the code. (More information about BSDI can be found at http://www.bsdi.com.) Like the other groups, they started by adding the six missing files that Bill Jolitz had written for his 386/BSD release. BSDI began selling their system including both source and binaries in January 1992 for $995. They began running advertisements touting their 99% discount over the price charged for System V source plus binary systems. Interested readers were told to call 1-800-ITS-Unix.

After BSDI began their massive sales campaign, they received a letter from Unix System Laboratories (USL) (an AT&T subsidiary specifically formed to develop and sell Unix). The letter demanded that they stop promoting their product as Unix (Unix was AT&T trademark) and in particular that they stop using the deceptive phone number. It looks like the number was still used for some time (as complaint stated "In response to USL's objections, BSDI, through its attorneys, represented that 'BSDI has taken steps to discontinue advertising containing the mark, UNIX, as part of a telephone number.' However, BSDI has failed or refused to discontinue its use of the 1-800-ITS-UNIX telephone number.").  USL was unhappy with the reaction and on April 20, 1992 filed suit to enjoin BSDI from selling their product. The suit alleged that:

This is an action for trademark infringement, false advertising and unfair competition under the federal Lanham Trademark Act, 15 U.S.C. Section 1051, et seq., and under the statutory and common law of New Jersey and of each State in which BSDI has engaged in the conduct detailed below. USL seeks injunctive relief and damages to redress BSDI's ongoing unauthorized use of the UNIX(R) trademark in BSDI's toll-free
telephone number, 1-800-ITS UNIX, and its inclusion in its advertising and promotional materials of materially false and misleading statements in violation of the rights of USL.

USL sought to get an injunction to halt BSDI's sales until the lawsuit was resolved, claiming that they would suffer irreparable harm from the loss of their trade secrets if the BSDI distributions continued.

It's important to understand that AT&T lawsuit wasn't originally about 386BSD, or even UCB. It was about BSDI, a small company that was founfed to commercialize BSD (BSD/386 was the original name of BSD/OS), which was a complete BSD system based on the then widely-available Net2 sources, along with additional 386 specific code from UCB, which had been written by Bill Jolitz. (Jolitz's later 386BSD system was a reimplementation of the work he had done, because his work at Berkeley was locked up till 4.4BSD.).  So the first attempt to commercially sell the University of Berkeley code harmed the academic community in a big way.

Also the reasons for the lawsuit were valid: USL (Unix System Labs) sued BSDI because of trademark violation connected with the unfortunate phone number 800-ITS-UNIX. Although BSDI always claimed that BSD/386 was Unix-compatible, such a phone number was really an invitation to troubles. Much like waving a red flag at a bull. As in any divorce, things became worse pretty soon after the beginning: As BSDI claimed that that they only rewritten six files in the NET/2 distribution, USL also sued UCB shortly afterwards, claiming that the Net-2 release contained some USL code. UCB countersued and thus set a California jurisdiction for the litigation. This move by the University (as well as the fact the Novel soon bought USL and considered this lawsuit as a nuisance) most probably saved BSDI folks scalps.

At the preliminary hearing for the injunction, BSDI contended that they were simply using the sources being freely distributed by the University of California plus six additional files. They were willing to discuss the content of any of the six added files, but did not believe that they should be held responsible for the files being distributed by the University of California. The judge agreed with BSDI's argument and told USL that they would have to restate their complaint based solely on the six files or he would dismiss it. Recognizing that they would have a hard time making a case from just the six files, USL decided to refile the suit against both BSDI and the University of California. As before, USL requested an injunction on the shipping of Networking Release 2 from the University and on the BSDI products.

With the impending injunction hearing just a few short weeks away, preparation began in earnest. All the members of the CSRG were deposed as were nearly everyone employed at BSDI. Briefs, counter-briefs, and counter-counter-briefs flew back and forth between the lawyers. Keith Bostic and I personally had to write several hundred pages of material that found its way into various briefs.

In December 1992, Dickinson R. Debevoise, a United States District Judge in New Jersey, heard the arguments for the injunction. Although judges usually rule on injunction requests immediately, he decided to take it under advisement. On a Friday about six weeks later, he issued a forty-page opinion in which he denied the injunction and threw out all but two of the complaints. The remaining two complaints were narrowed to recent copyrights and the possibility of the loss of trade secrets. He also suggested that the matter should be heard in a state court system before being heard in the federal court system.

The University of California took the hint and rushed into California state court the following Monday morning with a counter-suit against USL. By filing first in California, the University had established the locale of any further state court action. Constitutional law requires all state filing to be done in a single state to prevent a litigant with deep pockets from bleeding an opponent dry by filing fifty cases against them in every state. The result was that if USL wanted to take any action against the University in state courts, they would be forced to do so in California rather than in their home state of New Jersey.

The University's suit claimed that USL had failed in their obligation to provide due credit to the University for the use of BSD code in System V as required by the license that they had signed with the University. If the claim were found to be valid, the University asked that USL be forced to reprint all their documentation with the appropriate due credit added, to notify all their licensees of their oversight, and to run full-page advertisements in major publications such as The Wall Street Journal and Fortune magazine notifying the business world of their inadvertent oversight.

Soon after the filing in state court, USL was bought from AT&T by Novell. The CEO of Novell, Ray Noorda, stated publicly that he would rather compete in the marketplace than in court. By the summer of 1993, settlement talks had started. Unfortunately, the two sides had dug in so deep that the talks proceed slowly. With some further prodding by Ray Noorda on the USL side, many of the sticking points were removed and a settlement was finally reached in January 1994. The result was that three files were removed from the 18,000 that made up Networking Release 2, and a number of minor changes were made to other files. In addition, the University agreed to add USL copyrights to about 70 files, although those files continued to be freely redistributed.

With the lawsuit dragging for almost two years, a lot of people became nervous about using any of the Net-2 code, even the networking support, which was actually completely implemented at Berkeley. This effectively stalled the freeware BSD efforts until after the lawsuit was resolved. An additional problem was that Bill Jolitz, after making a couple of 386BSD releases, did not produce any release for almost two years (a pause between the release of v. 0.1 and v.1.0 was 18 months), which effectively removed 386BSD from the scene. One of the reasons that he was a real volunteer and has a demanding day job (as we can see later this was almost never true for Linus Torvalds). When the lawsuit was finally settled in February of 1994 the damage to BSD was already done.

The lawsuit was very damaging to BSD community, but incredibly beneficial to Linux as it did the necessary PR job for Linux (it also directly and indirectly helped Microsoft NT, but that's another story).  I sometimes wonder if Linux would be popular  today, if the lawsuit hadn't happened.

The lawsuit was very damaging to BSD community, but incredibly beneficial to Linux as it did the necessary PR job for Linux (it also directly and indirectly helped Microsoft NT but that's parallelism and synergy between Windows and Linux in attacking commercial Unixes is another story).  I sometimes wonder if Linux would be popular  today, if the lawsuit hadn't happened. Here are historical e-mails about the settlement.

Subject: UCB/USL lawsuit settled
From: (Keith Bostic), <bostic@vangogh.CS.Berkeley.EDU>, 02/08/94

UNIX System Laboratories, Inc. and the University of California, Berkeley have announced they have reached an agreement resolving their disputes. The settlement clears the way for the University to release a new, unencumbered
version of the Berkeley 4.4 BSD operating system software, to be called 4.4 BSD-Lite.

The University of California was one of the earliest licensees of UNIX operating system software, originally developed at AT&T's Bell Laboratories. In the 1980s, Berkeley's Computer Systems Research Group issued a series of "Berkeley Software Distributions" containing modifications to the UNIX software. However, because of licensing restrictions, public access to the source code for many of those modifications has been limited to firms holding
licenses from USL, which acquired the rights to the UNIX system from AT&T.

In July 1991, the University issued the "Second Networking Release," also known as Net2, which was intended to make available to the public those portions of the Berkeley Software Distributions which were not subject to license restrictions. However, USL brought a lawsuit against the University, claiming that portions of the release contained restricted material. The University denied USL's claims. It also brought a separate action against USL alleging that USL had violated the terms of its Berkeley Software Distribution, also known as BSD, license agreements by failing to give the University credit for certain material in the UNIX release.

Over the past several months, attorneys and computer scientists representing the University and USL have worked together in an effort to reach a compromise on their disputes. The result of these efforts will be a new, unencumbered version of the latest Berkeley Software Distribution called 4.4 BSD-Lite which will retain virtually all of the functionality of the Second Networking Release along with a number of enhancements from the University's latest 4.4 BSD release.

The settlement restricts further use and distribution of certain files in the Second Networking Release and requires that certain files in 4.4 BSD-Lite include a USL copyright notice. In addition to providing several enhancements, the new 4.4 BSD-Lite Release will replace most of the restricted files and incorporates all the agreed-upon modifications and notices. Thus, 4.4 BSD-Lite will not require a license from nor payment of royalties to USL. The University strongly recommends that 4.4 BSD-Lite be substituted for Net2.

Although it has denied the University's claims, USL has also agreed to affix the University's copyright notice to certain files distributed with future releases of the UNIX system and to give credit to the University for material derived from BSD releases which have been included in the UNIX system.

Copies of the source code for 4.4 BSD-Lite may be obtained from the University at nominal cost. Source code copies and further information on 4.4 BSD-Lite and the restrictions on Net2 may be obtained from the Computer Systems Research Group at (510) 642-7780. Information may also be obtained from USL's licensing offices at 1-800-828-UNIX.

From: (Rob Kolstad), <kolstad@BSDI.COM>, 02/07/94
Subject: USL vs. BSDI Lawsuit Settled

The USL vs. BSDI lawsuit was settled on Friday, February 4, 1994. The text of the joint press release reads:

UNIX System Laboratories, Inc./Novell Corporation (Novell) and Berkeley Software Design, Inc. (BSDI) announce the settlement of litigation based upon BSDI's distribution of its computer software product known as BSD/386.

BSDI has agreed to substitute a port of the University of California's forthcoming new release to be known as 4.4 BSD(Lite) for BSD/386. For a limited period of time, BSDI may continue to distribute its BSD/386 product, although certain portions of the code may be distributed in binary form.

All other terms of the settlement are confidential.



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