BSDi was formed to develop and distribute a commercial version of BSD. They rewrote the six remaing unclean1? files from 4.3BSD_Net/2 and released BSD/386 in January of 1992 (Just like Bill Jolitz did when releasing 386BSD).
Shortly after BSD/386 was released and advertised as UNIX, Unix System Laboratories sued BSDi. Even if BSDi promptly stopped calling BSD/386 UNIX (and dropped the phonenumber 1-800-ITS-UNIX) UCL continued to hunt BSDi and now sued claiming BSD/386 contained proprietary code. BSDi claimed they only used code freely distributable by University of California so UCL resued both BSDi and UC, requesting an injunction on the shipping of Networking Release 2 from the University and on the BSDi products.