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.
Shortly after BSDI began their sales campaign, they received a letter from Unix System Laboratories (USL) (a mostly-owned subsidiary of AT&T spun off to develop and sell Unix). The letter demanded that they stop promoting their product as Unix and in particular that they stop using the deceptive phone number. Although the phone number was promptly dropped and the advertisements changed to explain that the product was not Unix, USL was still unhappy and filed suit to enjoin BSDI from selling their product. The suit alleged that the BSDI product contained proprietary USL code and trade secrets. 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.
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.