AT&T Unit Sues UC Berkeley

Business

University accused of infringing copyrights on Unix software

Don Clark, Staff Writer
The San Francisco Chronicle

August 11, 1992

A subsidiary of American Telephone & Telegraph Co. has sued the University of California at Berkeley for infringing copyrights on Unix software, which the two institutions helped build into a kind of common language for the computer industry.

The subsidiary, Unix System Laboratories, also accuses the university of breach of contract and theft of trade secrets by distributing a program illegally copied from technology developed by AT&T.

University officials deny USL's allegations. But the suit has nonetheless caused sharp divisions in a tight-knit community of researchers and entrepreneurs surrounding the 23-year-old Unix operating system. Some programmers think the company's litigious stance could slow development of advanced software that the industry needs.

The suit also casts a spotlight on ties between members of a small research group at the university and a tiny Falls Church, Va., company, Berkeley Software Design Inc., which is also named as a defendant in the lawsuit. USL alleges that company officials, which include some members of the university research group, improperly exploited technology licensed to the university for educational purposes.

AT&T, which invented Unix in 1969, once viewed the university as a partner. The operating system, which performs basic internal housekeeping chores on computers, was not widely used until Berkeley scientists developed improved versions that were used and modified by scores of computer makers.

Companies such as Mountain View-based Sun Microsystems, whose founders included former Berkeley Unix programmers, helped build a market for Unix-based computers estimated last year at $17.9 billion by International Data Corp.

USL, based in Summit, N.J., was spun off by AT&T in April 1991 to try to build a broader commercial market for Unix. It continued a long-standing agreement between AT&T and the university, which requires that anybody who buys the university's Unix software also must pay royalties to the company.

But there was a key change last summer. The university's Computer Systems Research Group, in charge of Unix development for more than a decade, introduced a program called Networking Release 2 that carries out many of the functions of the Unix operating system. The group contends the program was independently developed and did not make use of AT&T's programming, and therefore requires no royalty payments to USL.

The new university-developed program was licensed by Berkeley Software Design, the Virginia software company. BSDI created a complete operating system from Networking Release 2 and sold it through phone orders for just $995; for an equivalent license, USL charges educational researchers $5,000 and companies up to $100,000.

USL responded this spring by suing the software company for infringing the trademark on the Unix name, unfair competition and false advertising. The new allegations of copyright infringement, which name university regents for the first time as well as the company, are contained in an amended complaint filed July 24 in federal court in New Jersey.

Theodore Weitz, a USL senior corporate counsel, contends his company analyzed Networking Release 2 and BSDI's products and found many elements that provide proof of copyright infringement.

Responded university attorney Mary MacDonald: "I don't believe that we violated any proprietary right of AT&T or USL." A spokeswoman for BSDI, which contends that AT&T is simply trying to squash a tiny competitor, dismissed the suit as "absolutely without merit."

Dick Dunn, an independent software consultant who has used BSDI's software, said the threat of USL litigation could deter programmers from developing other advanced software based on Unix.

USL and others, meanwhile, criticize ties between the university research group and BSDI. According to Virginia state records, the company's directors include Marshall K. McKusick and Keith Bostic, who still work in the university group, and Michael Karels, who has left the university to join BSDI.

University regulations say that university employees should excuse themselves from making decisions about matters in which they have a financial interest. Weitz contends that it appears that people who made the decision to release Networking Release 2 without paying royalties to USL may have violated that rule.

"There was a conflict of interest," asserted Bill Jolitz, an Oakland programmer who worked on Networking Release 2 and worked temporarily for BSDI.

University attorney MacDonald would not comment on that issue. McKusick, however, said Networking Release 2 was shipped before BSDI was founded, so he and other group members made decisions about that product before they had ties to the company.

USL's suit does not specify damages. It does ask, among other things, for the court to order the return of all BSDI and university software that violates USL copyrights.