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Novell Claims Ownership of UNIX System V
Bruce Perens writes:
"We knew that SCO's attack on Linux was a lie. But we never dreamed of the big lie behind it.
"This morning, Novell announced some of the terms of the company's 1995 agreement to sell its Unix business to SCO. The shocking news is that Novell did not sell the Unix intellectual property to SCO. Instead, they sold SCO a license to develop, sell, and sub-license Unix. The title to Unix copyrights and patents remains with Novell. To back up this assertion, Novell refers to public records at the Library of Congress Copyright Office and the U.S. Patent Office.
"In their announcement, Novell refers to recent letters from SCO asking Novell to assign the Unix copyrights to SCO. So, apparently SCO's management team knew that they did not own Unix while pursuing their sham campaign against Linux.
"Along with this revelation, Novell is reiterating its support of the Linux and Open Source developer community, and its status as a partner in that community. Novell rejects SCO's accusations of plagiarism. Novell management says they do not intend to stand in the way of the development of the Linux kernel, its companion GNU system, and other Free Software.
"It would be an understatement to say that this leaves SCO in a bad position. The company has loudly and repeatedly asserted that they were the owner of the Unix intellectual property, all of the way back to AT&T's original development of the system 30 years ago. They've lied to their stockholders, their customers and partners, the 1500 companies that they threatened, the press, and the public. Their untruthful campaign caused the loss of sales and jobs, and damaged Linux companies and developers in a myriad of ways. And now, SCO will be the lawsuit target. SCO's quarterly earnings conference call is this morning, at 9 AM MST (11 AM EST, 8 AM PST). Call 800-406-5356, toll-free, to participate. You might even get to ask a question. It should be fun to watch them try to weasel out of this one.
"Microsoft executives also have egg on their faces. The company self-servingly rushed to buy an SCO license one business day after the threat letter, bringing a senior attorney to the office on a Sunday to tell the press how much Microsoft values intellectual property. Microsoft's management could have taken the time to analyze SCO's claims, if the company had wanted this license for practical and technical reasons. Their decision to buy when they did must have been motivated by a desire to add to SCO's fear campaign. Of course they'll grab any opportunity to spread fear about Linux, but this time Microsoft bought a pig in a poke.
"SCO management, if they insist on standing in the way of a train, could still claim that software they developed in the years since 1995 is being infringed by the Open Source developers. That claim, always a dubious one, will be difficult to take seriously now that their prevarication throughout this campaign has come to light. SCO would be well advised to drop their suit against IBM in exchange for IBM's agreement not to counter-sue. But IBM might not feel that charitable toward SCO.
"In contrast to SCO, Novell's made a friend among the Free Software developers. We're always happy to see people using our software. But a real partnership between an IT vendor and our community is an equal partnership, with the company donating services and new software in exchange for the value it receives. Novell has already placed important software under Open Source licenses. Today, the company has done us a tremendous service, by stomping upon an obnoxious parasite."
Business Week has interviewed the CEO of SCO Darl McBride here. McBride gives some tips as to where IBM may have used their code. Specifically:
" In the last 18 months, we found that IBM had donated some very high-end enterprise-computing technologies into open-source. Some of it looked like it was our intellectual property and subject to our licensing agreements with IBM. Their actions were in direct violation of our agreements with them that they would not share this information, let alone donate it into open-source. We have examples of code being lifted verbatim.
And IBM took the same team that had been working on a Unix code project with us and moved them over to work on Linux code. If you look at the code we believe has been copied in, it's not just a line or two, it's an entire section -- and in some cases, an entire program. "
mp3's are only for those with bad memories
That was quick:
The following statement is being issued by SCO (Nasdaq: SCOX - News):
SCO owns the contract rights to the UNIX® operating system. SCO has the contractual right to prevent improper donations of UNIX code, methods or concepts into Linux by any UNIX vendor.
Copyrights and patents are protection against strangers. Contracts are what you use against parties you have relationships with. From a legal standpoint, contracts end up being far stronger than anything you could do with copyrights.
SCO's lawsuit against IBM does not involve patents or copyrights. SCO's complaint specifically alleges breach of contract, and SCO intends to protect and enforce all of the contracts that the company has with more than 6,000 licensees.
We formed SCOsource in January 2003 to enforce our UNIX rights and we intend to aggressively continue in this successful path of operation.
800-946-0719 for the Conference Call
"Last one in is a rotten goblin!" - Kepp
Some stupid-ass language selector JSP is stalled (who uses JSP to put up a press release?!) so here's the text:
Novell Challenges SCO Position, Reiterates Support for Linux
PROVO, Utah -- May 28, 2003 -- Defending its interests in developing services to operate on the Linux platform, Novell today issued a dual challenge to The SCO Group over its recent statements regarding its UNIX ownership and potential intellectual property rights claims over Linux.
First, Novell challenged SCO's assertion that it owns the copyrights and patents to UNIX System V, pointing out that the asset purchase agreement entered into between Novell and SCO in 1995 did not transfer these rights to SCO. Second, Novell sought from SCO facts to back up its assertion that certain UNIX System V code has been copied into Linux. Novell communicated these concerns to SCO via a letter (text below) from Novell® Chairman and CEO Jack Messman in response to SCO making these claims.
"To Novell's knowledge, the 1995 agreement governing SCO's purchase of UNIX from Novell does not convey to SCO the associated copyrights," Messman said in the letter. "We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected."
"SCO claims it has specific evidence supporting its allegations against the Linux community," Messman added. "It is time to substantiate that claim, or recant the sweeping and unsupported allegation made in your letter. Absent such action, it will be apparent to all that SCO's true intent is to sow fear, uncertainty, and doubt about Linux in order to extort payments from Linux distributors and users."
"Novell has answered the call of the open source community," said Bruce Perens, a leading proponent of open source. "We admire what they are doing. Based on recent announcements to support Linux with NetWare services and now this revelation...Novell has just won the hearts and minds of developers and corporations alike."
Text of the letter from Novell to SCO:
Mr. Darl McBride
President and CEO
The SCO Group
Re: SCO's "Letter to Linux Customers"
Dear Darl:
As you know, Novell recently announced some important Linux initiatives. These include an upcoming NetWare version based on the Linux kernel, as well as collaboration and resource management solutions for Linux.
Put simply, Novell is an ardent supporter of Linux and the open source development community. This support will increase over time.
It was in this context that we recently received your "Letter to Linux Customers." Many Novell business partners and customers apparently received the same letter. Your letter compels a response from Novell.
As we understand the letter, SCO alleges that unnamed entities incorporated SCO's intellectual property into Linux without its authorization. You apparently base this allegation on a belief that these unnamed entities copied some UNIX System V code into Linux. Beyond this limited understanding, we have been unable to glean any further information about your allegation because of your letter's vagueness.
In particular, the letter leaves certain critical questions unanswered. What specific code was copied from UNIX System V? Where can we find this code in Linux? Who copied this code? Why does this alleged copying infringe SCO's intellectual property? By failing to address these important questions, SCO has failed to put us on meaningful notice of any allegedly infringing Linux code, and thus has withheld from us the ability - and removed any corresponding obligation - to address your allegation.
As best we can determine, the vagueness about your allegation is intentional. In response to industry demands that you be more specific, you attempt to justify your vagueness by stating, "That's like saying, 'show us the
Bruce
Bruce Perens.
Heh, I submitted this seemingly seconds before it was posted by Michael.
The press release link at Novell in the story appears to have been replaced with a blank page, at least for now. This story at the Inquirer includes a copy of the letter that Novell's CEO sent to SCO's CEO Darl McBride. Good stuff.
I called in and was given a new phone number.
800-946-0719
they then ask for a code after a bit of a wait and will not connect without it.
Code is 728441
Enjoy the call!
They just said that there were 244 people on the conference call vs 17 people last quarter (or was it two quarters ago? -- either way there's a lot more).
:) This ought to be fun. I'll kharma whore with another post on that as it comes...
They are talking about the MS SCO licensing deal. Not much info.
They're talking about the IBM lawsuit.. just that they sued them, didn't specify the amount. Said that in June they'd revoke the AIX UNIX license.
Talking about the Linux letter.. that they sent to everyong. Said they found code violations -- not saying what code. Said 3 teams came back with "significant code problems". Said they were legally advised to send letters to enterprise users of Linux to advise misappropriation of code.
Regarding Linux: "Millions of lines of code without knowing where they came from" -- almost a quote. Very close. Grrr.. pissing me off.
Q&A session coming soon...
Waiting on the Q&A session...
/.'er) -- when are the violations going to be made public?
First question(sounds like a
Only under NDA because of ongoing litigation.
What about the Novell announcement this morning?
Novell called last week re: the letter. Time set up yesterday morning at 11am. They didn't show up for the meeting. Later sent the letter -- saying SCO should publish the offenses.
"Is my linux illegal?"
SCO says people should talk to their own lawyers.
Come June 13 if no resolution with IBM -- revoke AIX license.
Details are not being disclosed. Not saying they can't sell AIX -- no real answer.
Blah blah blah about uninteresting stuff.. web services strategy and stuff.. stuff about acquisitions. Blah blah..
They just said they used to be moving people from UNIX to Linux, but when they did that, they lost a lot of money, and they basically said the customer got the same thing in terms of services. So now they're switching them back for a lot more money. Wow. That's ballsy.
Haha. sorry. Little stuff I find funny.
They say they're sort of looking at buying companies in the 4-5 million dollar (up to maybe 10 million dollars) range. Apparently their stock is doing pretty well.
How much will it cost to go after infringers? Is that being budgeted for?
structure with legal council for staying power -- pursuing and defending claims. First quarter of activitiies -- came in below budgeted amount. Set up for the long haul. Feel good about the legal structure.
Is that legal structure related to contingency?
Yes
Does that include counter suits?
Strucutred so that depending on how those come int hat they may be included in it.
I have no idea what that means.
Novell said SCO execs had asked for UNIX copyrights. It was denied. Why was this denied?
Stuff with IBM isn't related to copyright or patent. Focused on contracts. "By an order of magnitude" more powerful than copyright or patent. Language in contract between novell and SCo was confusing -- as they looked at it and said "this doesn't make sense".. SCO thinks it's confusing -- they call 'em up cuz SCO knows 'em. "If SCO wants it, then we want it too." As SCO brings in attorneys, they do a review on it and read the contract in its entireity -- SCO says they own copyrights -- that they can enforce that and the patents. Talked to all parties in agreement -- two people in NOVELL, two in SCO -- CEOs and legals of each side. Says intent was everything was transferred to SCO. Maybe some little things that are common.. Feel confident that they have the copyright and patent rights.
Suspension of linux sales -- given small amoutn of money from linux sales -- do you forsee SCO returning to selling Linux?
We would only return to Linux once the issues were resolved with Linux and "the community". SCO seems to be getting further away from that path (of selling linux). Claims are very strong and valid and customers are saying "time out here" begfore we do this big linux implementation, we nee to understand what's goign on. Linux leadership -- we like a lot of stuff about open source.. blah blha -- our intellectual property was being abused. Having more problems with that. Fruther from going back to Linux than closer.
What woudl you recommend for previous caldera users looking for an upgrade path? What recomendations?
Linux is "UNIX on Intel" UnixWare, and openserver. UnixWare can go anywhere linux can go. Lost ground while chasing the linux dream?
I'm on now - and it has started.
.net.
8.3 million in revenue from SCO Source licencing.
6000 licences.
They intend to increase these licences as they "agressively protect our intellectual property rights"
1/3rd of their projected earnings is from licencing, the rest is from OS products.
Lots of rah-rah "our best quarter ever" "we have eliminated all long-term debt"
The core business is still selling SCO UNIX
(which as an aside, means that you really cannot afford a wave of consumer hostility, can you?)
Looking to provide "subscription-based" services.
They have cash in the bank.
Their prime focus is defending themselves against Linux.
A nod towards the Novell thing - "SCO owns the UNIX contract rights" not the UNIX trademarks or IP.
A list of customers is presented... British Army just bought an asset/lifecycle management system for helicopters based on SCO UNIX
"SCO Source" is their new shakedown unit. 2 big licencees - one is secret, the other is Microsoft. Microsoft bought a licence for "Microsoft services for UNIX" putting UNIX source into Windows (?)
IBM is NOT the secret licencee.
They claim 3 code teams found violations where their code was in Linux, independantly.
No mention of what code, where.
Ahhhh... something makes sense now. Their Linux sales were tanking hard - they were making more money off SCO UNIX. So they're out to go toe-to-toe with Linux (a big part of which is anti-Linux FUD)
Q&A now starting:
First question mentions Novell release and asks for explicit listing with the code violations. They claim IBM has them (?)
Claim Novell blew them off; that there was a meeting yesterday that Novell skipped.
They refuse to publish the violations publically.
Next question is about how long the SCO Source revenue stream is likely to be. So far, they claim two contracts. No way to quantify how many contracts are in the pipeline.
What is happening Jun 14th re IBM/AIX? They will revoke the AIX licence. Details will follow.
Next question is from a capital company, asking about aquisitions. They want to get into web services, interact with Java and
They claim 2.2 million SCO servers - original business plan was to migrate those to Linux, and they lost money doing that. So now they want to keep those people on SCOX (at $1500 a server)
Nothing about why those people should stay on SCO when they have Linux readily availible....
Mr Wall Street thinks SCO is going to gain some short-term cash.
They think that their stock price spike reflects market confidence in SCO vs Linux
Another venture capitalist.... wants to know if licence deals will drive SCOX product sales.
They used SCO Source to raise capital instead of going to veture capital.
Next question asks for an estimate on legal costs. So far they are below their legal budget, but they are in for the long haul and are ready for countersuits.
Next caller wants to know why SCO was asking for transfer of UNIX copyrights from Novell and why they were denied. SCO doesn't seem to know what they own. They claim they own the UNIX copyrights, based on a contract review of the Novell contracts. They feel they can go toe-to-toe with Novell and win that fight too.
Next question wants to know if SCO has abandoned Linux sales. They claim lots of people are putting Linux implementation on hold, and that Linux "leadership" is dismissive to SCO IP rights. SCO is probably done with Linux. Caldara upgrade path is SCO UNIX.
That's it.
DG
Want to learn about race cars? Read my Book
Are you guys listening to the conference call? The speaker was codemning Linux for having "millions of lines of code"...
... [short answer: no]
...
....
:) ] to pursue claims and defend claims. amount we spent [on legal fees] is less than amouut we budgeted.
... a four party group, 2 SCO, 2 Novell, concluded the contract says SCO has absolute rights to push this in marketplace... [emphasized it's not about copyrights, etc...]
I got in just before the Q/A session. I took rough notes. I'm not skilled in the art of dictation, so you should assume the following is a fictional drama loosely based on reality, which happens to be extremely dificult to read. The part about Novell doing a no show at a scheduled meeting yesterday is interesting... Apologies to non-native-English speakers-- I'm too busy to clean this up.
Questions denoted "Q:", answers denoted "A:".
By the way, SCO is pronounced as one syllable, "sko", with a long "o". Hence SCO X is pronounced "sko-ex" and SCOsource "sko-source". ick...
Q: About the IBM suit: when will you put out info regarding allegations?
A: there are two parts:
1) in discussing with IBM, they've been made aware, we continue to work path with IBM...
2: novell announcment, response from 1500 letters has been significant, lots of companies asking what is going on, "am i running compromised?, is it illegal , who do i talk to?" we have people get their own legal opinions, second, we have invited people that have licenses with us, who are concerned, to come in, under nda, to be glad to go thru things we found. in novell case, they called last week about letter, we said we can sit down with them. set to meet Novell yesterday at 11AM and Novell didn't show up, then they sent out a letter saying SCO won't meet with them, and issues the press release.
Q: the info wrt allegations will not be made public?
A: correct
Q: comment on visibility of SCO source revenue stream. How long expect it to be a contribution to revenue. others?
A: started last quarter, had 8.2 million in revenue. SCOsource 1/3 of this. signed 2 contracts so far...
Q: any way to quantify?
A; range is very broad. for the coming quarter roughly 1/3 of revenue from SCOsource...
Q: will you be able to disclose other contracted party in future?
A:
Q: what happens on June 14th with IBM? About their AIX license?
A: we will revoke their AIX license if no resolution. exact details, not ruling out, can't say definitively,
Q: do ou anticipate coming to a resolution before 6/14?
A; that question is for the other folks...
Q: Nice quarter guys... can you share [question doesn't sound interestng to Linux folk, but is about busines stategy]
A: [Answer is very long-winded-- speaker is happy to answer this one]
Q: [question from same person about business particulars]
A:
Q: [ditto]
A:
Q: [question about SCO X and SCOsource contract values in relation to new products]
A: [... he incidentaly mentions SCO is debt-free and has cash]
Q: [how much money set aside in defending IP claims?]
A: we have a lot of "staying power" [
Q: is legal structure based on contingency [A: yes] and does it include countersuits? [A: yes]
Q: Novell said this morning SCO asked Novell to transfer UNIX IP...
A: We haven't mentioned "copyright" or "patents". Everything we listed is about the contracs [with IBM]... that is our focus. There was confusing language with Novell/SCO agreement... this doesn't make any sense... how do you transfer IP without the copyright?... like selling a book w/o the words... some Novell people said this makes no sense... they concluded "if SCO wants this Novell wants it too"... legal people read contract in entirety... it's clear we [SCO] own the copyrights...
Q: Suspension o
This is from SCO's original complaint off of the SCO website. It seems that they do think they own the code as they state in line item 18. If they don't actually own it they are being purposefully deceptive.
17. All commercial UNIX "flavors" in use today are based on the UNIX System V Technology ("System V Technology").
18. SCO is the present owner of all software code and licensing rights to System V Technology.
SCO is now claiming that Novell is wrong. Check ou this article from Forbes.
0 5/ 28/rtr984048.html
http://www.forbes.com/technology/newswire/2003/
First off, I was able to get in using the original number from Bruce. I had to give my full name, phone number, and company. For company, I said that I was a private citizen and had no problems getting in.
I came in a bit late, but I don't think I missed much, as the SCOSource bit wasn't discussed until later. Also, I got in on all of the questions. I was disappointed that Bruce Perens didn't get to ask a question.
From what they said in the beginning and from the answers to the questions (most of which were fairly typcial financial questions from financial analysts, btw) here is what I got out of it. Be advised that this is just one person's interpretation of what SCO is saying and that IANAL.
1. The suit against IBM doesn't depend upon IP ownership via copyright or patents, per se. It is a suit based on breach of contract between SCO and IBM. The original contract (license) between IBM and the then-owner of the rights included a stipulation against sharing this code or IP. Needless to say that any alleged releasing of this code under the GPL would qualify. SCO has the right to sue, because it purchased the license rights from Novell.
2. The language of the rights transfer from Novell to SCO seems to have been considered rather unclear by SCO about whether the actual IP ownership (copyright and patents) of UNIX(tm) had been transferred. After much research by SCO and it's counsel, they believe that they do, in fact, now own the copyrights and pertinent patents to UNIX(tm). Included in the research was discussions with lower-level contacts within Novell and with the principals of the earlier deal, many of whom no longer appear to be in power at Novell.
3. While it's true that the suit against IBM doesn't derive any legitiamcy from IP ownership (see 1), due to SCO's belief that it owns the IP of UNIX(tm) SCO believes that future lawsuits may be brought against anyone infringing on what SCO believes to be their IP, with or without a license agreement based on copyright or patent laws.
4. SCO now feels confident that a court proceeding to settle any dispute between SCO and Novell would be resolved in their favor.
My personal conclusions:
A. While Novell's stance certainly helps against SCO's activities (at least it buoys morale and adds a corporate voice against SCO), it is not the end of the IP issue. It seems that SCO is prepared to legally assert it's claims to the IP ownership, despite this morning's announcement by Novell.
B. Novell's announcement will marginally help against the FUD created by SCO's actions. However, I believe that only the most ardent and brave Linux supporters in corporate management will feel better enough to proceed if they were at all concerned. The rest will put off any decision to switch because there is still too much uncertainty and risk to their own stature and careers.
C. The FUD about Linux will continue until the alleged violations are made public enough to allow either a solid refutation or code replacement.
PROVO, Utah -- May 28, 2003 -- Defending its interests in developing services to operate on the Linux platform, Novell today issued a dual challenge to The SCO Group over its recent statements regarding its UNIX ownership and potential intellectual property rights claims over Linux.
First, Novell challenged SCO's assertion that it owns the copyrights and patents to UNIX System V, pointing out that the asset purchase agreement entered into between Novell and SCO in 1995 did not transfer these rights to SCO. Second, Novell sought from SCO facts to back up its assertion that certain UNIX System V code has been copied into Linux. Novell communicated these concerns to SCO via a letter (text below) from Novell® Chairman and CEO Jack Messman in response to SCO making these claims.
"To Novell's knowledge, the 1995 agreement governing SCO's purchase of UNIX from Novell does not convey to SCO the associated copyrights," Messman said in the letter. "We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected."
"SCO claims it has specific evidence supporting its allegations against the Linux community," Messman added. "It is time to substantiate that claim, or recant the sweeping and unsupported allegation made in your letter. Absent such action, it will be apparent to all that SCO's true intent is to sow fear, uncertainty, and doubt about Linux in order to extort payments from Linux distributors and users."
"Novell has answered the call of the open source community," said Bruce Perens, a leading proponent of open source. "We admire what they are doing. Based on recent announcements to support Linux with NetWare services and now this revelation...Novell has just won the hearts and minds of developers and corporations alike."
Text of the letter from Novell to SCO:
Mr. Darl McBride
President and CEO
The SCO Group
Re: SCO's "Letter to Linux Customers"
Dear Darl:
As you know, Novell recently announced some important Linux initiatives. These include an upcoming NetWare version based on the Linux kernel, as well as collaboration and resource management solutions for Linux.
Put simply, Novell is an ardent supporter of Linux and the open source development community. This support will increase over time.
It was in this context that we recently received your "Letter to Linux Customers." Many Novell business partners and customers apparently received the same letter. Your letter compels a response from Novell.
As we understand the letter, SCO alleges that unnamed entities incorporated SCO's intellectual property into Linux without its authorization. You apparently base this allegation on a belief that these unnamed entities copied some UNIX System V code into Linux. Beyond this limited understanding, we have been unable to glean any further information about your allegation because of your letter's vagueness.
In particular, the letter leaves certain critical questions unanswered. What specific code was copied from UNIX System V? Where can we find this code in Linux? Who copied this code? Why does this alleged copying infringe SCO's intellectual property? By failing to address these important questions, SCO has failed to put us on meaningful notice of any allegedly infringing Linux code, and thus has withheld from us the ability - and removed any corresponding obligation - to address your allegation.
As best we can determine, the vagueness about your allegation is intentional. In
OS Software is like love: The best way to make it grow is to give it away.