Microsoft was an AT&T licensee just like every one else. What SCO claims to have control of (but actually doesn't, as Novell has pointed out) is the original AT&T System V code base which was used in most everything that called itself UNIX (including AIX, A/UX, Solaris, HP-UX and Xenix).
It was no different than any other flavor other than the fact that it was from Microsoft.
Actually, Gates was under the impression in the late 80s that Xenix was going to be the future of Microsoft... and said as much on a number of different occasions.
Further, SCO dropped it's claims of System V code in Linux in their case against IBM. They are now claiming that code made by IBM (and Sequent) and included along with System V code in these flavors is
derivative work. Novell has pointed out that that is not the case and has shown that AT&T made this clear. If SCO's ideas were how the license worked, then Apple's System 7 would be considered
derivative work because it was included in A/UX (just to put a Mac perspective on this).
Here is IBM's lawyer, David R. Marriott's view of where the case of System V code in Linux now stands:
In response to that order, SCO does essentially three things. First, Your Honor, they abandon any claim that IBM misappropriated any trade secrets. They fail to cite a single trade secret allegedly misappropriated by IBM
Second, they fail to identify a single line of Unix System V code which IBM is alleged to have dumped into Linux. Third, what they do is they clarify their theory of the case. The theory of the case appears to be, Your Honor, from the supplemental submissions, not that IBM dumped code from Unix System V into Linux, but rather that IBM took code out of its flavor of Unix known as AIX and Dynix and dumped that code into the Linux operating system.
This case no longer (from SCO's perspective) involves System V code. On the other hand, IBM is pressing forward with discovery of System V code in Linux due to it's counter claims and comments by SCO in the media...
This has been a fun case to watch. SCO is twisting in the wind currently.