Novell Claims Ownership of UNIX System V

Novell has put out a press release this morning unequivocally claiming that they, and not SCO, own the patents and copyrights to UNIX System V. If true, this would torpedo SCO's claims over the last few months about intellectual property infringement in the Linux kernel, GNU/Linux distributions, etc. News.com has a story from last night, prior to this press release. SCO is releasing quarterly financial results today, including their notes about how much they've made from their licensing claims. You can join their conference call (mirror) if you like, and Bruce Perens weighs in below with a strongly-worded statement about SCO and Novell. Update: 05/28 14:22 GMT by M : SCO issued a response.

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."

Comments

Conference Call

[stu_coates]

Oh my god, you /.'ed the conference call.... You bastards! ;-)

Re:Conference Call

[AEton]

Instead of /.'ing the phone lines, try the live Web stream -- it can probably withstand a few more hits:
http://biz.yahoo.com/cc/0/30510.html

Re:Conference Call

[watzinaneihm]

I am listening to the call. They do mention themselves as Unix IP owners many times.
They apparently had a source license deal with Microsoft.
About the current situation, he says check the website.They are going to terminate the license to IBM in 100 days.They blame code violations
They seem totally unapologetic about mailing fortune 500 companies about IP violations.

Re:Conference Call

[samj]

The conference call has just finished, but according to Yahoo:

After the event has finished, the audio will be available
from this page until Fri, May 28, 2004

I only caught the last few questions, but was most amused to hear them asserting that the 4? people involved in the Novell->SCO transfer believed they were transferring the copyrights, but that the document doesn't necessarily reflect that. They also made out that there was some calls made to Novell people, but that the people higher up in the tree thought 'if SCO wants it then we want it too'. It will be interesting to see what happens in the next few hours/days, but given the significant backpedalling (pulling linux from the shelves and now talking about contracts instead of copyright) I'd say they're clutching at straws.

Anyway these are merely my own opinions - go listen to it yourself if you're really interested...

Re:Conference Call

[bsharitt]

Maybe their phone company is AT&T so we can start over again.

real Unix owner

[mschoolbus]

Will the real Unix owner, please stand up, please stand up...

Re:real Unix owner

[gerf]

Will the real Unix owner, please stand up, please stand up...

or, "Who owns the code code to the Unix source? SCO does.

who me?

yes you.

Couldn't be

Then who?

Novell owns the code to the Unix source

who me?

Yes you.

continue...

Ah, shit, why don't we just call it all open source and be happy.

Re:real Unix owner

[Bob McCown]

I'm Sparticus!

Re:real Unix owner

[Anonymous Coward]

May I have your attention please?
May I have your attention please?
Will the real UNIX Owner please stand up?
I repeat, will the real UNIX Owner please stand up?
We're gonna have a problem here..

Y'all act like you never seen linux source code before
Jaws all on the floor like Bruce, like Linus just burst in the door
and started whoopin that SCO's ass worse than before
they were first with the source, throwin it over IBM (Ahh!)
It's the return of the... "Ah, wait, no way, you're kidding,
he didn't just say what I think he did, did he?"
And Novell Man said... nothing you idiots!
Novell Man's dead, he's locked in my basement! (Ha-ha!)
Kernel lovin men love Novell too
SCO UNIX, I'm sick of it
Look at them, walkin around suing users' you-know-what
Flippin the you-know-who, "Yeah, but he's so cute though!"
Yeah, SCO probably got a couple of screws up in the head loose
But no worse, than what's goin on in their corporate boardrooms
Sometimes, I wanna get on Slashdot and just let loose, but can't
but it's cool for Cowboy Neal to spread his lie caboose
"My source is on your lips, my source is on your lips"
And if I'm lucky, you might just give it a little kiss
And that's the message that we deliver to little kids
And expect them not to know what an OS's source code is
Of course they gonna know what linux sourse is
By the time they hit fourth grade
They got the Discovery Channel don't they?
"We ain't nothing but hackers.." Well, some of us are slackers
who cut other people open like smashed crackers But if we can hack a dead OS and take our source
then there's no reason that a man and his penguin can't recourse
But if you feel like I feel, I got the antidote
Men here wave anti-SCO flags, sing the chorus and it goes

I'm UNIX Owner, yes I'm the real Owner
All you other UNIX Owners are just lying loaners
So won't the real UNIX Owner please stand up,
please stand up, please stand up?

Re:real Unix owner

[kenthorvath]

Repeat after me Linux Is Not UniX. Damn Linus couldn't have named it any more perfectly if he had thought of lame recursive acronyms...

Re:real Unix owner

[thogard]

Well... lets count who the players are:
1) AT&T
Easy right? No. There is Bell Labs and AT&T switching (whatever its called this week) who both maintain different versions. There is the terminal company that was spun off (TTY maybe?). Many compaines that came out of the bell breakup do have full rights to use and resell Unix [TM] even tough "main" control was sold off.
2) AT&T and Sun sort of did some cross breeding and Sun did get full rights to that as well. So add Sun to the list.
3) Cray computer company has a full license but they no longer exist but SGI and Sun own the remains. So add Sun to the list again.
4) Sun bought the rights from SCO or Novel for like $80 million. Full unquestionalbe rights. Add them in again but there was a reason they wrote the check.
5) SCO (who bought some rights from Novel or was it the other way around and aren't they related at some level anyway?)
6) All early bell licenses have rights and most of them have different rights. Many schools have rights. OU for example has license rights that few other schools had but the rumor is they used their 1st Unix tape to spiff up a Christmas tree.
7) UCB. They ended up in court. Ended up with rights and still pulled the old stuff out. They might have more rights though since Sys V was a blend between their stuff (through Sun again) and AT&T.
8) M$ had some rights that they blew away because of some pesky judge being insightful to their business model. Just how much those rights were released could be left as an exercise for a new judge but the last ruling may have done away with the 1st ruling. Opps.
9) Cowboy Neil might be in there somewhere too. I'm sure of it...

Finally

[IpsissimusMarr]

For now, we demand that SCO either promptly state its Linux infringement allegations with specificity or recant the accusation made in your letter. Further, we demand that SCO retract its false and unsupported assertions of ownership in UNIX patents and copyrights or provide us with conclusive information regarding SCO's ownership claims.

Finally, SCO being put in its place. I just wonder why this took so long for Novell to bring up.

Re:Finally

[xanadu-xtroot.com]

I just wonder why this took so long for Novell to bring up.

My feeling on that is rather simple, actually. They had to make for 100% damn sure that they were right in what they were gonna say to the public. They've probably dumped millions into lawyers over the past few weeks / months to make for SURE that SCO is / was wrong. THAT is probably what took so long.

Or maybe it's just they're not doing all that well since M$ took over the Network arena.

Oh... right, I forgot... M$ has been giving money to SCO...

Hmmm...

Re:Finally

[RobotRunAmok]

Finally, SCO being put in its place. I just wonder why this took so long for Novell to bring up.

Because SCO's earnings call is THIS morning.

This isn't just a smackdown, this -- today's release, the Perens-for-the-Prosecution piece on Page One of SlashDot, along with the divulging of the Conference Call Phone Number (nice one, that!) -- is a highly-coordinated strike meant to drop a tactical nuke down their shorts. This is calculated to not just damage SCO but make their Corporate Headquarters a Dead Zone for the next Three Thousad Years.

Nice Work, everyone! Proud to be a small part of it, even if only as a witness.

Re:Finally

[pbranes]

This is very interesting. In SCO's response to Novell, they acknowledge that they do not own Unix, and they are only suing IBM for breach of contract:

SCO's lawsuit against IBM does not involve patents or copyrights.

However, in the press release about the stock holder's conference call, they state this:

The SCO Group (NASDAQ: SCOX), the owner of the UNIX operating system...

Sounds like SCO is doing a little backpedaling in the Yahoo article. :-)

Re:Finally

[arivanov]

It was brought up on the day of the earnings call you silly.That is the only reason for the delay ;-)

It is called "Open fire with the main armament from point blank range".

Re:Finally

[MarkGriz]

"And the stock has tripled in value since this whole thing started".

Cool. So now might be a good time to short it, since it will probably fall back to where it was before this whole thing started.

Re:Finally

[earlytime]

If it turns out that SCO's claims against IBM have no validity, and that SCO insiders sold any significant amount of stock since ~April 6, 2003.... SCO will probably be in for some heavy shareholder lawsuits, and SEC action. SCO's stock price was about $1.40 on Feb 3rd, $3.00 on April 3rd, and is now hovering around $8.50.

At this price, the company is now worth about $100 Mil. At $1.40/share, it was worth less than $20 Mil. At either price, SCO is overvalued, but a buyout would be chump change to most SV players. Sun probably would gain the most, they could move anybody left on sco to solaris86, and use sco's customer list/services biz to push new solaris and raq sales. They'd also save a little cash on thier license for UNIX(TM).

Novell's press release

[mj01nir]

Here is Novell's informative press release on the matter. A juicy excerpt:

"SCO continues to say that it owns the UNIX System V patents, yet it must know that it does not. A simple review of U.S. Patent Office records reveals that Novell owns those patents.

"Importantly, and contrary to SCO's assertions, SCO is not the owner of the UNIX copyrights. Not only would a quick check of U.S. Copyright Office records reveal this fact, but a review of the asset transfer agreement between Novell and SCO confirms it."

Of course, this doesn't address the "source code theft" issues, but hopefully this will shut SCO up about the UNIX IP issues.

Re:Novell's press release

[mj01nir]

Of course this address the "source code theft" issue. If Novell has the copyright, Novell must prosecute for copyright infringement.

After turning this over in my head a bit, I think you're right. SCO can go after IBM for breach of contract, but it would be Novell that would need to begin procedings to remove the code from Linux.

This assumes that the code in question is part of the SysV UNIX code that SCO bought from Novell. If it is something that SCO developed after the fact, it could be a different story. But since SCO has been begging Novell for the copyright to the SysV code, I can only assume that isn't the case.

"you repeatedly asked us to transfer ownership"

[crivens]

That's hilarious! Especially the part saying "you repeatedly asked us to transfer ownership over the past three months" (words are my own). If this is true, then it shows what SCO has been doing is extremely, extremely immoral. They knew they had no basis for suing IBM and for demanding that companies license SCO, but they did it anway to try to make some money. All I want to know is, who's idea was it - Microsoft's? ;)

Re:"you repeatedly asked us to transfer ownership"

[bogie]

"All I want to know is, who's idea was it - Microsoft's? ;)"

I know your joking, but once a company lies to the court, fakes videos in court, and has dead people sending letters to the Attorney General of Utah, can you trust them not to do anything that's illegal?

Microsoft has proven without a doubt they are one of the most immoral, corrupt, and untrustworthy companies in the world. After their trackrecord of lies and illegal acts it really couldn't be a surprise to anyone that Microsoft was behind this whole thing.

Re:"you repeatedly asked us to transfer ownership"

[HiThere]

It does sound paranoid. If you don't know their history. Unfortunately, Microsoft has a history that renders the more paranoid suspicions reasonable. Many companies that sign IP deals with them end up mysteriously bankrupt. Versions of software have strange incompatibilities with prior versions. Et multitudinous cetera. Many times nothing can be proved, but nothing being proved also means that they weren't proved innocent of evil intent. And many times they have been found guilty, or they settled at the last minute.

I wouldn't trust them with a broken horse collar. And I don't even have a horse.

AT&T

[budcub]

How long before AT&T makes a statement of being the "real" owner of Unix?

Re:AT&T

[TedC]

How long before AT&T makes a statement of being the "real" owner of Unix?

Why stop there?

According to SCO's response, "SCO has the contractual right to prevent improper donations of UNIX code, methods or concepts into Linux by any UNIX vendor."

Protecting their code is understandable, but "methods and concepts" is dangerous ground. If a court interprets this the way SCO hopes they do, then the owners of Multics IP could turn around and sue SCO. This could work all the way back to the guy who first came up with the idea of binary representation for instructions and data in digital computer systems, at which point no-one can write a simple "hello world" program without violating someone's IP.

And all of this comes to us via a system that supposed to foster innovation. It's not hard to see that something is seriously messed up.

An interview with SCO CEO here

[The Slashdolt]

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. "

Re:An interview with SCO CEO here

[esarjeant]

From this interview, I'm getting the sense that SCO is trying to argue that IBM wrote some code with SCO and took this same code and transfered it to Linux. Assuming the new code was somehow bound to the SCO UNIX license agreement, this argument might tred water if IBM released this same code under another license (ie: GPL).

The real FUD here is that SCO is trying to claim the Linux codebase is fundamentally a copy of UNIX System V. From SCO's original letter:

"We believe that Linux infringes on our UNIX intellectual property and other rights."

Oops... Clearly SCO does not own the IP to UNIX, this belongs to Novell. SCO is a merely a clearinghouse for managing the UNIX licensing. These words may come back to haunt them.

The new code developed jointly between IBM and SCO could be in question here, but this does not warrent a mass mailing to everyone in silicon valley. There will be reparations made, SCO has misstated the facts.

More FUD can be found here. The Stallman quote is most telling, "There is very little new stuff in Linux.". Stallman is not implying that Linux is a copylefted UNIX (as SCO would have you believe), but rather that Linux borrows the UNIX paradigm (pipes, processes, small programs for each command, etc.).

Don't be surprised when IBM, HP, Novell and others slap SCO a classaction lawsuite putting them in violation of their glorified UNIX policeman title.

TV

[DreadSpoon]

This could make an excellent soap opera. All we need now is a love triangle in this SCO/Novell/Linux/UNIX/IBM mess!

This is golden...

[Lumpy]

All I can say is.... this is getting really funny. it's like everyone is coming out of the woodwork with whatever sticks they have to beat the SCO beast into submission.

what's next in this saga?

Re:This is golden...

[TheRaven64]

what's next in this saga?

Novell discovers that they don't actually own the IP anymore. They sold it to MS a while back when they were short of cash.

Next week we'll find out who MS sold it to.

The week after, we'll find the relevant patents on eBay, and an intense bidding war going on between MS and IBM.

W00t!!!

[da' WINS pimp]

This makes me proud to be a Novell admin! After all the years of abuse from *nix and even Windo$e admins I can stand proud behind a company that does the right thing. ;)

Proud Novell Admin, pimpin' to keep Bill in business.

Re:W00t!!!

[watzinaneihm]

Really bad html in my prev. post and a wrong link to boot. So here is the right one
You probably can support Novell by joining Novell Forge and helping write some opensource software.
Thanks Novell. First for UDDI and now for this.just don't change your mind.
Also this development begs the question "What exactly did Microsoft buy from SCO?"

Unix

[gmuslera]

Multiuser, multitasking, and now, multiowner!

At this point, I'm not sure if I want it to be owned by everybody or by nobody, but at least being "owned" by two is better than by (a bad) one.

Only one possible response

[Cally]

ROFLM~F~AO!

Like everyone else I got all got all pissed off with Caldera/SCO for their petty, vindictive & malicious behaviour. But now look at 'em... the management team will never work again in corporate America, the company will be bust quicker than you can say "busted flush", and the shareholders (if there's any justice) will be left with nothing. How hilarious! :))

Re:Only one possible response

[jd142]

the management team will never work again in corporate America

If only that were true. Unfortunately, private enterprise does a poor job of recognizing a loser manager when it sees one. Even if you take your company into the toilet, you've got experience and a bunch of connections to get that next job.

Re:SCO

[will_die]

Santa Cruz but the two are the same.

SCO replies

[prostoalex]

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.

Re:SCO replies

[Drakon]

While this may be true, any and all complaints against the distributors and users of linux is completely and utterly shot down. They also can't even ask for the offending code to be removed, since they don't own the patents or copyrights to it.

Re:SCO replies

[SquareOfS]

In other words, Novell (assuming they do in fact retain copyright) can make this go away for Linux simply by, at whatever point SCO reveals what source was theoretically copied into Linux, slapping a copyright notice on the appropriate files and granting GPL on the code involved.

Unless, of course, what SCO means by having the "contract rights" to Unix involves having the exclusive right to license the source (but if so, why didn't they say so?). And, how exactly would posessing the exclusive right to license be different from copyright itself?

Re:SCO replies

[wrero]

Contracts are what you use against parties you have relationships with.

Funny, I thought "Contracts" were a method for doing business in good faith with people, not just something to be used for frivolous lawsuits....

Re:SCO replies

[Quila]

From SCO's response, it appears they think that although they didn't buy the copyright, they did contract the exclusive distribution rights to the code. This appears to be like how Pixar contracted the exclusive distribution rights to its movies to Disney. Nobody can distribute all or parts of Toy Story except for Disney under the contract.

This wouldn't make it a copyright violation, but a contract violation that could have a serious ripple effect. We can't know until Novell or SCO releases the relevant terms of the contract.

Re:SCO replies

[bobKali]

So if I'm understanding this, SCO can only sue those it has contracts with, like IBM, SuSE, Microsoft, etc...

Well, that's an incentive to NOT do business with them.

Re:SCO replies

[TrentC]

Unless, of course, what SCO means by having the "contract rights" to Unix involves having the exclusive right to license the source (but if so, why didn't they say so?). And, how exactly would posessing the exclusive right to license be different from copyright itself?

It's different because SCO's agreement with Novell is a contract that can be renegotiated or terminated (non-sequitur: I wonder if Novell can use SCO's claims regarding Unix to claim breach of contract and yank those "exclusive rights"?) whereas Novell's rights under copyright are in extent until the expiration of the copyright -- that's 100 years for corporations, thanks DMCA!

When SCO is nothing but a bitter memory, Novell can contract those "exclusive rights" to IBM, Sun, Microsoft, or say "the heck with it" and release the code into the wild under an open-source license.

Jay (=

Number Changed

[mobileskimo]

800-946-0719 for the Conference Call

What did Microsoft buy ?

[flyingace]

So what did MS buy from SCO ?

And most importantly, how much did they buy it for ?

Re:What did Microsoft buy ?

[Bull999999]

M$ bought the rights to use UNIX IP from SCO which is owned (the IP not SCO) by Novell.

Re:What did Microsoft buy ?

[Seanasy]

So what did MS buy from SCO ?

1500 threatening letters to companies using Linux. That amounts to a whole lot of Fear, Uncertainty and Doubt. SCO's claims don't have to be true to do the kind of damage the MicroSoft wants done to Linux. After all, didn't MS warn companies that they might get sued for using Linux? Convenient.

Re:What did Microsoft buy ?

[Drakon]

A license to the UNIX source code, which (see above) Novell granted SCO an exclusive license to sell.
Apparently they have some product in the pipeline which would be easier to create with the unix source... probably interoperability or that text-mode windows server we were hearing about

Re:Fire in the hole...

[Bruce Perens]

You're in the wrong time zone. The conference call is 9 AM Mountain, in 39 minutes as I write this. I suspect the webcast will go up after the call ends.

Bruce

Re:Conference Call - Don't do it

[Dub Kat]

It's useless to call in and try to ask questions about this. I'm sure it'll be brought up by the financial analysts dialed in, and the SCO people will weasel out with something like "This just came to our attention today. We will be looking at the validity of the claims but are confident blah blah blah..."

You won't today be hearing a full-out apology to the OSS community, if ever at all. They might just quietly drop the whole thing while they figure out the next best lawsuit.

Colocated Linux Servers - From $60/mo

Full text of release

[Anonymous Coward]

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

Re:Conference Call - Don't do it

[Bruce Perens]

They only take a few questions, and they probably do filter them for press and analysts (so say who you write for). Shankland was one of the few to get through last time. But it will be fun to listen.

Bruce

Re:Best Kirk Douglas gladiator type voice

[tx_mgm]

I am Spartic^H^H^H^H^H^H^H the UNIX System V IP owner!

Why did Novell wait til now?

[phr2]

IpsissimusMarr already asked that question but I figured it needs a new thread heading. That this didn't come out earlier, even as leaks, is suspicious. Xanadu-xtroot's explanation (they were waiting til their lawyers got the letter phrased absolutely right, that the assertions were correct, etc) reaches for plausibility but isn't entirely convincing.

How the heck did SCO buy "Unix" without buying the copyrights? Why have they been in discussion (dispute?) between SCO and Novell for the past several months? Novell's letter has qualifiers like "to our knowledge" when it says SCO doesn't own the copyrights. It sounds like the Novell-SCO agreement has been flawed all along and nobody knows what the real situation is.

I think there are yet more layers to this madness waiting to be unpeeled.

Inquirer article includes text of Novell letter

[Bootsy Collins]

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.

Stock

[Waab]

Down 4% since the market opened this morning, half of that in the last 20 minutes.

NASDAQ: SCOX

Computing History

[Organic_Info]

This will be one of those saga's that become a part of computing history.

The plot twists and turns are making this into a very intersting story.

does this remind anyone of wrestling?

[Gizzmonic]

You know, where the bad guy (SCO) comes out and talks trash about the good guy (IBM). Then when the good guy comes out to attack him, he gets jumped by another bad guy (Microsoft). And then just as they're about to pummel the hell out of IBM, Novell comes out of the crowd brandishing a folding chair...

Next week they'll be a tag match to determine the UNIX championship...in the cage!

Linux is safe, even if IBM is not

[Anonymous Coward]

Based on SCO's response, claiming that no patent or copyright issues are involved, then Linux and Linux users are safe from any action by SCO EVEN IF SCO WINS AGAINST IBM. I certainly hope SCO doesn't win, but even if they do, since the entirety of their claims are contract based, and NOT copyright or patent based, the Linux code base can't be touched.

Re:future

[Lxy]

While I don't discount the possiblity, I find it hard to believe. Not only has Novell given the linux community its blessing, it's building the new Netware 7 OS on top of linux. If it were to come up that Novell's UNIX code was stolen at some point, Novell would be just as guilty as anyone as distributing copyrighted code under the GPL. They couldn't pull a SCO and sue every corporation, because they'd end up suing themselves.

Re:Learn your metaphors - cat out of the bag!!!

[Bruce Perens]

Hm. I looked around on the net for references when I wrote that in yesterday. "pig in a poke" does refer to purchasing something sight unseen. A poke is a bag. "Cat out of the bag" refers to news escaping one's control, as it is wont to do.

Thanks

Bruce

eniac

[dollargonzo]

This whole thing has really started to remind me of the eniac patent suit. As soon as some technology starts to take off (long after it has actually been created), some larger adversary comes out and tries to threaten the validity of the original claims.

The exact same thing happened when Sperry (the company that bough Eckert and Mauchly's company, which made UNIVAC) was sued for rights to the ENIAC patent (that Mauchly and Eckert at the time held). No one had contested that Eckert and Mauchly had designed the first electronic computer, but instead had hooked onto details in the patent file. Ironically, IBM was in a very similar position as it is with the SCO/Linux problem. IBM has cooperated with open source to a great degree, just as it had licensed Eckert and Mauchly's products and was seen as a supported of the "dark side" by SCO, just as they were seen by those trying to strip E & M of their patents.

History really has a funny way of repeating itself

Re:eniac

[Alien Being]

Sperry (the company that bough Eckert and Mauchly's company...

Actually, it was "Remington Rand" which bought out Eckert and Mauchly. The "Sperry Rand" merger happened later.

No one had contested that Eckert and Mauchly had designed the first electronic computer.

Honeywell claimed that the Univac patent was invalid because the design was derived from the work of Atanasoff and Berry.

hehe....

[notque]

Then Novell and IBM are walking to the ring, accompanied by Bruce Pearns.

IBM and SCO start out, with IBM teasing a test of strength, SCO begins, but gets scared and immediately tags in Microsoft.

Microsoft and IBM go at it, with Microsoft gaining the upperhand. IBM is almost down and out, when a diving tag in to Novell.

HOT TAG!

Novell clears house, and the crowd is going wild, SCO gets back up, and they start double teaming both until

CHAIRSHOT!

Bruce Pearns jumps out from the side, and knocks Novell out!

JIM ROSS: "OH MUH GOD! THEY'VE BEEN DOUBLE CROSSED!"

Re:And....

[squiggleslash]

Indeed it does. SCO has just issued this press release which implies they're withdrawing all of the copyright and patent violation charges (actually they claim it never had anything to do with copyrights and patent violations. Yeah right. If it never did, why were they pretending companies other than IBM may be in the firing line and why were they milking a "licence our IP" scheme out of this?)

SCO can sue IBM for breach of contract. IBM can lose. It'll not make a blind bit of difference to anyone except IBM and SCO and anyone else who signed a contract with SCO.

Anything generically aimed at Linux now is FUD.

Founder confusion?

[linuxislandsucks]

Is not the Founder of Novell also the founder of SCO Group?

You would think he would have warned the SCO Group board about their own stupidity, no?

Re:Founder confusion?

[mj01nir]

Wow, that's a good point. Where's Ray Noorda in all of this? He's the guy that bought UNIX from AT&T while at Novell. I think he also sold it to SCO. Noorda's Canopy Group helped to fund Caldera (and Lineo)*. Surely he must have a pretty good handle on what SCO owns and what they don't. I wonder why he hasn't said anything either way. I guess he doesn't want to see his investment in Caldera go up in smoke, so he willing to play along with a little FUD. But many of Canopy's investments are with Linux companies, so that doesn't make sense either.

Since it's lose-lose for Canopy (and Noorda) I guess the only thing to do was to stay mum. After all, he's really only a VC now.

*Could have knocked me over with a feather to see TrollTech on Canopy's list as well...

Have SCO stolen code from Linux ?

[geirt]

It looks like SCO might have stolen code from Linux, according to this post on the linux kernel mailing list

And in even later news....

[Kjella]

Novell not suicidal.

Going up against IBM in an IP suit means that you have nothing to lose. SCO is a rapidly sinking ship trying whatever they can to stay afloat, last I checked Novell still had something to actually lose.

Kjella

SCO profit due to UNIX licensing

[mzs]

SCO just reported net income of $4.5 million on revenue of $21.4 million for the second quarter. $8.3 million of that revenue came from its UNIX licensing program, SCOsource, CNET. It appears that all of that licensing revenue came from Microsoft and the other licensee that has not been disclosed. If you disregard the income from licensing, SCO would have had another net loss on their hands. In fact they would have pulled in $2.4 million less in net income this quarter than the same quarter last year.

Their stock price is down today, so maybe The Street finally sees that the reality of the situation is that their operating systems division is failing. It is ironic that SCO made a profit selling licences to something that Novell now claims it 'owns' but I really cannot make sense of this mess any more. So maybe I just misundersand how SCO can sell licenses to something that Novell opwns the copyrights to.

SCO Response Contradicts their own website!

[gwappo]

If SCO owns the contracts but not the code, I find the following statement on their website a tad strange:

SCO is the owner of the UNIX Operating System Intellectual Property that dates all the way back 1969, when the UNIX System was created at Bell Laboratories. Through a series of mergers and acquisitions, SCO has acquired ownership of the patents, copyrights and core technology associated with the UNIX System

I.e. they're fucked.

Many kudo's to Bruce Perens for his obvious behind the scenes lobbying and to Novell for trying to pamper the community (hope they succeed, they're a cute, insignificant little friendly, furry, huggable company and deserve a profitable niche in todays market).

Re:SCO Response Contradicts their own website!

[Bruce Perens]

Novell did this on their own initiative. Although I talk with people there and they are an occassional consulting customer, I can't claim to have motivated them to do this.

Bruce

Stock Performance

[Dunkirk]

Did anyone notice this?! I wasn't paying attention.

SCO 's Stock Performance

I think it's high time that the SEC got involved here.

Re:Stock Performance

[Anonymous Coward]

SCO's stock: Down 4%
Novell: Up 5%
IBM: Up 0.36%
Knowing SCO has their head so far up their ass they think they see daylight: Priceless.

There is one valid point left...

[the gnat]

What they're saying is that (supposedly) they own the rights to the contract IBM signed giving it the right to incorporate the SysV code into AIX. Thus, they assume the contractual relationship with IBM, and even if they don't own copyrights/patents over the code they may still enforce the contract terms. So, if IBM did copy SysV code into Linux (still doubtful), SCO would still have a case against them for violation of the contract.

The claim that Linux was ripping off SysV code *before* IBM started doing open-source development is now much shakier, because even if SCO is right about this, they have no legal rights to pursue it- as far as we know, they have no contractual relationship with any of the other Linux companies. Novell might, but they've shown where they stand on the issue. Therefore, SCO's letter to the 1500 companies could get them in huge trouble if they turned out to be lying about the code ownership, and would be construed by the courts as an attempt to extort licensing fees. (We all know this, but what matters is making a judge understand.)

Re:SCO Statement on Novell's Recent Actions

[Jason Earl]

That's just pure unadulterated @#$!!. SCO sent out threatening letters to 1500 companies many of whom don't have contracts with SCO. If this case is about breach of contract then what in the heck is SCO doing intimidating these customers.

The fact of the matter is that SCO is simply trying to run up their share price so that SCO management can make a buck on the implosion of their company.

Lying to their shareholders is an SEC Offense

[FreeUser]

If what Novell claims is true then SCO has more than a few problems to handle. It will have to start with a global apology.

If this is true (and it almost certainly is ... Novel, unlike SCO, may not be thriving, but they aren't facing immenent bankrupcy either), then the fact that SCO lied to their shareholders is an SEC violation. It is fraud (among other things) and the perpetrators could be looking at a prison term (hopefully in a cockroach ridden, butt-slamming Pen, rather than Club Fed).

And, as others have pointed out, the civil damages and liability resulting from this fraudulant deception against SCO and those personally involved in the deception could well be quite staggaring. These people could well end up broke and in prison.

This, of course, assumes the government actually chooses to enforce the law this time. As we saw with the Microsoft Anti-Trust case, that is certainly not a given.

Regardless, however, it does vindicate GNU/Linux and free software in the extreme, and it does demonstrate the depths of depravity that Microsoft (who was quite transparently pushing this and financing it via a license they clearly weren't required to get) and its shills, such as SCO, will sink to.

The best revenge is living well, indeed, living better than those who have wronged you. Even if SCO were to get off scott free (unlikely), clearly, anyone running FreeBSD (which could theoretically have been targeted with a similiar FUD campaign) and GNU/Linux are living quite well (in the technical arena at least), certainly much better than the poor sops running Unixware and SCO, and arguably quite a bit better than those running the product of SCO's master in Redmond. We should take joy in that fact (but not let it slow down the counter suits and prosecutions from those who were more directly wronged by SCO's illegal and unconscionable behavior).

Re:Lying to their shareholders is an SEC Offense

[Pharmboy]

If this is true (and it almost certainly is ... Novel, unlike SCO, may not be thriving, but they aren't facing immenent bankrupcy either), then the fact that SCO lied to their shareholders is an SEC violation. It is fraud (among other things) and the perpetrators could be looking at a prison term (hopefully in a cockroach ridden, butt-slamming Pen, rather than Club Fed).

The first thing the SEC will look at is "WHO sold stock during this time?". Was this lawsuit simply a trick to get the stock price to jump up a little higher, sell and come out, or short it now, and come out?

As Rush would say, follow the money trail....

New Number and Code!

[augustz]

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!

Re:New Number and Code!

[Bruce Perens]

SCO's page says 728447, not 728441. They are asking if you are affiliated with the media, so I just gave the name of one of the media I've written for regularly.

Bruce

Re:New Number and Code!

[zdislaw]

Just say you're a private stockholder, give them your phone number, and you're in.

Re:New Number and Code!

[Just Some Guy]

Crap! I just told them I was Bruce Perens! Hang up quick!

Re:New Number and Code!

[Bruce Perens]

They say there are about 250 people on the call.

Bruce

Re:New Number and Code!

[nolife]

I tried as Cowboy Neal and they said, "Nice try but Mr. Neal is already registered as one of the SCO reps and will be taking questions soon".

Re:Conference Call - Don't do it

[b0r1s]

Wait a minute ....

The SCO claim is that:

" 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. "

They don't actually say they own the code (in this excerpt), but rather, that they have licensed it to IBM. As I'm sure you know, there are often agreements made that allow corporations to sublicense works; although Novell owns the code itself, if they granted SCO the right to license it (as they apparently have), and SCO licensed it to IBM (as they apparently have), IBM is still responsible for using it legally.

So if....

[vondo]

Novell owns the copyright to the Unix source code and Novell is now supporting Free/Open Source software and developing for Linux, why doesn't Novell release Unix under an Open license. There must be good things in that source, even if it is a little old, that F/OSS developers could learn from.

Anyone know how much revenue they derive from licensing the source code?

Re:And....

[squiggleslash]

Looks like it's now here. I guess they're moving the press releases around. Well you can run SCO, but you can't hide!

SCO Conference call - Liston online!

[gatekeep]

In addition to the conference call number, you can listen to the SCO conference call online.

They're Investor Relations Page says, you can listen here.

Here's a blurb from their page;

You may also join via listen-only web cast by clicking on the url located at http://ir.sco.com/conference.cfm or www.companyboardroom.com.

Novell? You listening?

[Asprin]

SCO: "Oh, no, we were NEVER suing for patent infringment - it was ALWAYS a contract dispute over the LICENSING of the code." So, Novell, how'd you like to make about a kajillion new fans? License the code to IBM for a buck. SCO is irrelevant, problem solved. P.S. Didn't I hear somewhere that NW7 is going to be a services based connectivity, authentication and management layer running on Linux? Samba? LDAP? NIS? ACLs? THAT would be cool.

Re:Ransom Love?

[Bruce Perens]

Ransom is no longer connected with the company. I'm not sure he was ever the real manager - it sounds as if Canopy group micromanaged the company and Ransom was the face in front of the press.

Bruce

Re:insider trading

[Fesh]

Well, somebody certainly did some heavy selling at around 10 A.M. EDT... Volume up, price spiked low... It's climbed a bit in the past hour or so, but... *shrug* Draw yer own conclusions.

On the phone with SCO now..

[XaXXon]

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).

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... :) This ought to be fun. I'll kharma whore with another post on that as it comes...

Re:On the phone with SCO now..

[dr.newton]

It seemed at first that he was being pretty careful with his wording, with stuff like: "SCO owns the contract rights to the UNIX platform." But then...: "As the owners of the UNIX operating system..." They just said in their press release this morning that they never said they owned it, just the "contract rights" to it. It seems to me that this guy doesn't really understand the situation, that he was told by his lawyers "You can make money here" and he just believed them. He doesn't understand the difference between "derived from UNIX" and "works like UNIX". He even implicated that Sun might be a licensee of their source code, which, IIUC is false, Sun bought out their UNIX license before SCO got hold of even the limited rights to it they have.

Behold the Power of Slashdot...

[E1ven]

From his Speech, on the Conferance Call-

"Last year we had 7 callers for our earnings, this year we have over.. 240 callers on the line"

Behold the Power of Slashdot.

Slashdotting a Telephone.

-Colin

It's all in the timing Re:Finally

[Black Copter Control]

+1 to the parent. It's like in the song "battle of New Orleans"

The seargent said we could catch 'em by surprise
If we didn't open fire till we looked 'em in the eyes.

I'm guessing that Novell was PISSED about SCO making excessive claims about owning UNIX(TM). It probably did take them a couple of days to verify that SCO was pumping more feces out of their mouth than the NY sewage service then it was a case of deciding when to release the info.

This morning would be the best time to do so because SCO is already comitted to a press conference that they cannot cancel or delay.
lock, stock and two smoking barrels.

Oh, man I sooo want to source a class-action libel suit against SCO.

SCO Letters

[the eric conspiracy]

While IANAL, I hold 12 patents and have been involved in a variety of legal wrangles involving patents.

It would be very interesting to see the letters that SCO sent out. If they weren't worded very carefully, and they include assertions of IP rights that SCO in fact doesn't own they could definitely trigger a rash of lawsuits.

When I was working in this field we were VERY careful when we went trolling for license fees. Something like:

Dear Sirs:

It has come to our attention that you may want to consider licensing the following patents (list numbers here).

Signed
XYX Patent Attorney.

No claims of infringement etc. Just a word to the wise. The recipient would then decide what sort of position they were in and respond with something like:

Dear XYX:

We are interested in #47, and would like to offer a license to our #53 in exchange.

(In other words, yeah, we might be doing #47, but we think you are doing #53)

-or-

We are not interested. (Prove it).

-or-

We invented that long before you patented it and here is a copy of our documentation of the fact.

And so on.

Re:could still be a problem

[stinky wizzleteats]

Migrating away from Linux would be a mistake. This is probably the most concerted, well thought out, and dangerous attack against Linux that has ever been launched. It did not succeed. The people who are adopting Linux for the first time (corporate red-hatters), will not understand the vagaries of the constant gear-changing behavior of the open source community at large. We all use particular software, often for "religious" reasons, such as my use of Mandrake because it's not a US based Linux distro. If you go down the list of why people use BSD, Debian, etc., you'll have a laundry list of geopolitical, IP law, and every other sort of activism expressed in what is installed on our PCs and servers.

I realize that it may be distasteful to some of us to support something precisely because of popularity, but if we truly care about the freedom that open source represents, then we should try to make sure that as many people as possible get a chance to try the red pill. That means sustaining the open source revolution, which is, as far as the rest of humanity is concerned, a Linux revolution.

Indeed, if the open source community retracts from Linux, and kills its gathering market momentum, we will have accomplished what the world's most best IP attorneys bankrolled by the world's most evil corporation could not achieve. How does one defeat Fear, Uncertainty, and Doubt except by choosing to be unafraid?

This could get a WHOLE LOT NASTIER

[LibertineR]

Suppose Microsoft did have a hand in this?

Now, SCO is about to get their asses sued off by some very angry competitors, and what if they decide to squeal that the whole thing was Microsoft's idea in the first place?

Oh brother, this could get NASTY.

Even if Microsoft was just suckered in by the potential to do damage to Linux, SCO can make it very embarassing to Microsoft. This could be a lot more fun to watch than previous lawsuits.

Re:No, _I_ own Unix!

[TheRaven64]

This just in:

Novell reveals that after the SCO license deal, they actually sold the UNIX patents to MS to rais capital.

Tomorrows news:

MS admits that it thought any UNIX IP was worthless, and sold it to a .com startup, which has since gone bust. The UNX IP in question was then awarded to a now out-of-work janitor somewhere in the silicon valley at liquidation, in compensation for a lack of salary. A hunt for this individual is now in progress...

Still

[k98sven]

Even if this is the case; Novell can simply GPL the relevant code (IF there is any) or release it into the public domain.
It is probably of little (business) interest to them anyway.

Of course, SCO might still then have a case against IBM, but Linux would be safe.

Re:Still

[mj01nir]

It is probably of little (business) interest to them anyway.

Except that Novell is betting their future on Linux and OSS. Novell will be releasing NetWare 7 next year (hopefully) and they have stated that you will be able to choose the Linux or NetWare kernel at installation. Novell is working on migrating away from legacy NetWare and on to Linux for their services.

So it is indeed in Novell's business interest to ensure that:

1) Linux is not encumbered with IP issues
2) The reputation of Linux is not tarnished

Novell has a lot riding on this.

Re:Conference Call - Don't do it

[LarsG]

They don't actually say they own the code (in this excerpt), but rather, that they have licensed it to IBM. As I'm sure you know, there are often agreements made that allow corporations to sublicense works; although Novell owns the code itself, if they granted SCO the right to license it (as they apparently have), and SCO licensed it to IBM (as they apparently have), IBM is still responsible for using it legally.

Good point. But this would also make it a pure license/contract issue between SCO and IBM - SCO does evidently not hold copyright or patent rights to the code, so they can't go after SuSE or any other GNU/Linux distributor, vendor or user.

If IBM broke the license, SCO can get damages. But unless I'm missing something it seems like they can not go after any other party for using or distributing said code. That makes the threat letter a bit puzzling, to say the least.

Still on the phone with SCO

[XaXXon]

Waiting on the Q&A session...

First question(sounds like a /.'er) -- when are the violations going to be made public?
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?

Partial "transcript" (not verbatim)

[DG]

I'm on now - and it has started.

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 .net.

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

Re:Partial "transcript" (not verbatim)

[_Sprocket_]

On the basis of OSX being built on BSD, I don't see Apple needing such a license. BSD cleared these hurdles in (I believe) the early 90's. Therefore Apple should be clear of this mess. Unless Apple is re-introducing some odd code (which is possible when you consider NeXT could be in the mix).

I think this says it all

[atheos]

http://netscape.com.com/2102-1104-992345.html

SCO exec sells stock after price surge
By Stephen Shankland
CNET News.com
March 13, 2003, 5:05 AM PT
URL: http://zdnet.com.com/2100-1104-992394.html

SCO Group Chief Financial Officer Robert Bench sold 7,000 of his 245,000 SCO shares Monday, two business days after the Unix software company's stock price surged on news of a billion-dollar lawsuit against IBM, according to a filing with the Securities and Exchange Commission.

SCO's stock closed at $2.21 on Thursday, a few hours before the lawsuit alleging that IBM misappropriated SCO trade secrets was announced. On Friday, the stock surged 40 percent to close at $3.10, and Bench filed to sell shares Monday at $3.06. SCO's stock since then has slipped down to close at $2.40 on Tuesday. SCO formerly was named Caldera International but changed its name to reflect the fact that most of its revenue came from Unix products acquired in 2001

Re:Conference Call - Don't do it

[Quixadhal]

However, directly from their quarterly earnings page...

" About The SCO Group

The SCO Group, Inc. (Nasdaq: SCOX), the owner of the UNIX operating system, helps millions of customers in more than 82 countries to grow their businesses. Headquartered in Lindon, Utah, SCO has a worldwide network of more than 11,000 resellers and 8,000 developers. SCO Global Services provides reliable, localized support and services to all partners and customers. For more information on SCO products and services, visit http://www.sco.com .

SCO and the associated SCO logo are trademarks or registered trademarks of The SCO Group, Inc. in the U.S. and other countries. UNIX is a registered trademark of The Open Group. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners."

I'll assume that "The Open Group" is something which Novell belongs to, so the trademark claim is probably OK. But they clearly claim ownership of UNIX in that opening paragraph.

For years now, I've wondered just why anyone would choose to stick with SCO Unix when so many other versions existed, most of which are cheaper and/or more stable. When I heard that they were releasing their own Linux distro, I figured they had finally seen the end of the tunnel, and were migrating their apps to move into the application market... Of course, I didn't realize they were so bad off that trying to sue the next quarter's revenue was all they had left!

SCO should be given the same respect that they so clearly show the rest of the community. I hope IBM's 400-pound gorilla legal-team squashes them into jelly.

Re:Conf. call stats

[BJH]

OK, the call just finished...

Summary of the salient points that affect Linux:

"We looked at the agreement with Novell, we think we own the UNIX copyrights, they think they own it, we think we've got the better claim. We've got good legal backing, we're prepared for countersuits, we intend to see this through. We're not interested in going back into the Linux market, and intent to recommend our other products to Caldera Linux users as an upgrade path.
We like Open Source, we think it's great, but we don't like how the code just turns up out of nowhere [sort of defeats the point if code can't just turn up out of nowhere...].
We intend to retract IBM's AIX UNIX license at the expiry of our contract with them."

SCO's Response sounds Juvenile

[brandido]

The text of SCO's response sounds like a junior high student wrote it:

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.

Normally, press releases try to sound businesslike and professional - the use of "you" in this announcement makes it sound like an entreaty to the reader to "please take our side, please believe us!" For me, it ended up making the press release sound rushed, unprofessional, and like they are starting to loose their cool.

To emphasize: SCO says they *do* own copyrights

[Bootsy Collins]

I also listened in on the conference call; wanted to ask a question but didn't get a chance.

The parent poster already said this, but given the size of the post and the fact that it was being written during the call (and thus somewhat stream-of-consciousness in style), I wanted to emphasize one thing: SCO's CEO McBride stated during the call that they're confident that they do own the copyrights (which would mean Novell's claim of ownership in the press release must therefore be false, if SCO were correct).

Staying Power

[Anonymous Coward]

Are you guys listening to the conference call? The speaker was codemning Linux for having "millions of lines of code"...

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: ... [short answer: no]

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" [ :) ] to pursue claims and defend claims. amount we spent [on legal fees] is less than amouut we budgeted.

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... ... 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...]

Q: Suspension o

Novell responds to SCO responds to...

[theolein]

SCO's response to Novell's Unix IP claims by saying that this is ,surprise, a contract violation, and not a copyright violation, although I could pull out half a dozen direct SCO quotes, right now, showing SCO's claim to "owning UNIX IP", which, in the version of the english language I speak, means that they're talking about IP copyrights.

Their current claim about contract breaches means that Linux is not part of their suite, which means that they are open to being sued in Europe for libel(sp?).

I would so dearly love to hear what the Lawyers are going to say about their claims that Contracts are stronger than copyrights, given that copyrights are a binding and do form a kind of contract.

Conference call highlights

[lunenburg]

I dialed into the conference call, secure in the knowledge that I may have cost SCO $0.50 for using their 800-number. Highlights (Lowlights?)

• They got $8.8M in revenue this quarter from their SCOsource licensing program. All the revenue came from two agreements - one with Microsoft, another with an unnamed company.
  
  
• Aside from the extortion racket, their other big plan for future revenue is "SCO/X" - a "web services" platform running on SCO. They somehow see a huge demand for ASP stuff (they mention salesforce.com as an example) running on their third-rate platform.
  They mentioned potential $3B in revenue from SCO/X, based apparently on everyone who owns a SCO server buying an equiavelent number of SCO/X boxes at $1500
  
  
• There is "confusing" language in the Unix agreement between Novell and SCO. Novell is taking a hard line on ownership of Unix, but all four people who signed the transfer agreement (two for SCO, two for Novell) say that the intent was to transfer all rights to SCO.
  
  
• If IBM doesn't pay up by June 13th, SCO will terminate their AIX license.
  
  
• The financial impact from terminating the SCO/Caldera Linux business was "minimal" - no shit.
  
  
• They won't be making the disputed bits public, but they welcome affected people to check it out at SCO's office under an NDA.
  
  
• They have a legal team working on a contingency basis with respects to the extortion - minimal cost to SCO if they lose.
  
  
• The chance of SCO getting back into Linux is small. (Awwwww)
  

Re:Conference Call - Don't do it

[Anonymous Coward]

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.

Just in .. new SCO claim

[EvilBudMan]

SCO is now claiming that Novell is wrong. Check ou this article from Forbes.

http://www.forbes.com/technology/newswire/2003/0 5/ 28/rtr984048.html

Re:Just in .. new SCO claim

[slipstick]

Note the difference in language. SCO is being extremely weasly here. Novell is talking Patent and Copyright rights, SCO is talking "contract" rights. Presumably they have the right to subcontract their rights to IBM and others. However, this isn't what SCO has been complaining about mostly.

Their problems with IBM may be a contract dispute but they've been actively claiming IP rights to all kinds of things to discourage Linux use. This may have something to do with the Monterey project and IBM pulling out of that. If so SCO may have a case if IBM used some of that work in Linux but this has nothing to do with System V work previous to that project. As such Linux wouldn't be in any bind except with respect to work provided by IBM with regards to the Monterey project. If SCO is claiming IBM violated rights with respect to Unix System V work, the IP rights of which are held by Novell, than SCO is going to get crushed like a bug.

Re:Just in .. new SCO claim

[bwt]

Novell is talking Patent and Copyright rights, SCO is talking "contract" rights.

SCO's reply states: "Copyrights and patents are protection against strangers. Contracts are what you use against parties you have relationships with."

This gives them no possible cause of action against anyone in the Linux community other than organizations that willingly entered into a contract with SCO. Moreover, it means that their entire case here can only be against IBM, for trade secret infringement of code that SCO itself published, which is not going to work. Yet SCO, by trying to claim trade secret protection on elements of the version of linux that they were shipping still violates the GPL clause 6 "You may not impose any further restrictions on the recipients' exercise of the rights granted herein."

Would some kernel contributor wake up and sue SCO for copyright infringement, please.

Re:Just in .. new SCO claim

[bwt]

I am not talking about infringement of SCO owned IP, but infringement **BY** SCO of the linux GPL terms on code that is independently owned by its authors.

The GPL requires SCO, as a DISTRIBUTOR of object code versions or modified source versions on linux, to licence the work as a whole under the GPL. The GPL and trade secrets are not compatible because GPL section 6 forcloses any additional restrictions such as an NDA and the GPL grants the whole world a licence to have the unmodified source. SCO's lawsuit is completely frivolous unless they have not agreed to waive the trade secret status on the unix code that is incorporated into linux. But if they haven't waived it, they have violated the GPL for years by distributing linux (regardless of whether they did so knowingly, though for three months they can't even make this defense). Thus any copyright owner of code in the linux kernel (ie any contributor) should be able to sue SCO for willful and unwillful copyright infringment.

Imagine the soilation of SCO's underwear if Red Hat filed copyright infringement in the US, Alan Cox filed copyright infringement in the UK, Linus Torvalds filed copyright infringement in Finland, SuSE filed copyright infringement in Germany, and so forth. I would think the firm that IBM has retained would probably be very interested in taking such cases on a contingency basis for the very purpose of making this litigation as painful as possible for SCO.

show me the money, McBitch!

[twitter]

McBride gives some tips as to where IBM may have used their code.

Hints, horeshoes and hand granades are all useless in court. What wonders and marvels does he have that have yet to be expressed in any SCO product besides Caldera Linux? It's not there.

Why is it that they don't point to it explicitly? Surely it's not to protect publically publishes source code, nor can they care much about actual damages if they don't send specific cease and dissist orders. Anything they point to can be rewritten without trouble. The only reason is that it's not there.

It's not here, it's not there it's not anywhere. The whole case is some kind of weird sham for the M$ PR department.

Still want that $100 one time fee, McBitch? Yeah, that's what I thought. Why don't you go buy me a happy meal and we'll call it even.

On the Contrary

[Gerry Gleason]

Novell appears to be very interested in the community good will generated by being a good corporate citizen of the open/free source world. I'm surprised it took them so long to comment (the lawyers probably had to mull everything over for a while first).

If the truth is as it now appears that SCO really has very little IP interest in the original Unix core, and Novell actually owns what IP remains, then of course they can release any possible legal liabilities for Linux as it is and even release versions of their Sys V property under a free license. Novell would be very wise to do something like this because there isn't much commercial value remaining in this IP. I claim that the commercial value would actually increase after they released all the old stuff under GPL or compatible license. Anyone wanting to create a commercial derivative product still has to come back to the original owners for a commercial license, and the GPL branch will bring experimentation and resources to both.

I was on the call. Here's my take

[Larthallor]

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.

Constantly shifting FUD

[siskbc]

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.

Really? 'Cause that's not what you said before, you bunch of assholes. Last month, it was patents, copyrights, AND trade secrets. Then they got outted about the patents, and the fact they don't own any (Novell and Tarantella do I believe). Then it was copyrights and trade secrets, according to Darl. Now, they drop the copyright argument, after Novell decides to shame them, and evidently are down to trade secret.

Of course, if he's punting the copyright argument, that puts linux out of damage, or should.

Naturally, they're still lying, since they don't know how to do anything else. My favorite line from their press release today:

"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."

Really? They do? That little bitty circle-R there seems to imply a copyright. I wonder if the Open Group will bitchslap them the way Novell just did, since they own that trademark. Anyone can call any product Unix if Open Group says so, and SCO ain't got a thing to do with it. The only way to make the above sentence true is to substitute UNIX with OpenUnix. Now, the only thing they can hang on to is if IBM put some project Monterrey into linux. That's it, and good luck SCO.

I mean, I understand lying and all to get some cash through FUD, but they're losing their skill at it, because their latest is just bunk through and through.

Re:Conference Call - Don't do it

[willtsmith]

Wouldn't it be VERY HARD to determine WHAT damages would be?

IBM may have violated the license by inserting proprietary code into an open source project. But SCO, knowingly (and still apparently legally in all scenarios (since they were authorized to sub-license)) and willingly published the code under GPL.

Any damages would be constrained between the time IBM released the "stolen code" and the time when SCO blessed the code by knowingly releasing it under GPL.

Even beyond that, the fact that SCO DID publish it knowingly and willingly under GPL could be interpreted as implicit or even explicit permission for the code to be there in the first place thus indemnifying IBM from fault and damages.

It looks like SCO MUST now reveal WHAT code is affected just to stay relevant. They must differentiate their stuff from both Linux AND the source they received (under license) from Novell.

And in related news . . .

[harley_frog]

SCO proves that black is white and get hit by a bus at the next zebra crossing.

Re:And....

[PhipleTroenix]

SCO Statement on Novell's Recent Actions
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.

SCO is a registered trademark of The SCO Group.
UNIX is a registered trademark of The Open Group.
Linux is a registered trademark of Linus Torvalds.

The claims don't match the "code"

[TheConfusedOne]

Give the Sco vs IBM position paper a read (http://www.opensource.org/sco-vs-ibm.html) it's quite informative. One of the main contentions is that the functionality in Linux far exceeds any matching functionality in SCO's code. That being the case you would wonder how they were able to borrow code from SCO?

(The best explanation so far [I believe from here on SlashDot]: IBM coders used cut and paste instead.)

UNIX trademark and Unix code

[MythosTraecer]

The Open Group was assigned the trademark rights to the UNIX(TM) name for purposes of standards compliance (you can't call your OS UNIX(TM) without them). What we've found out today, however, is Novell, not SCO, owns the UNIX System V code and its assocated copyrights and patents.

Sue Linus?

[PurpleFloyd]

Just saw on CBS Marketwatch that SCO's CEO, Darl McBride, is threatening to sue Linus for patent infringement unless more companies license SCO products. To put it bluntly, what in the sweet merciful FUCK is going on?

I doubt there would be grounds to sue Linus even if there was clear-cut evidence of patent infringement in the Linux kernel. Linus didn't put the supposedly offending code in there, but he's still liable? SCO seems to be really grasping at straws here; they know that the bluff has been called. I just hope they don't manage to do any more FUD-based harm to Linux before they die a merciful death.

I'm not a lawyer, so nobody use this as legal advice. If you want legal advice, go pay a lawyer.

Re:Sue Linus?

[PurpleFloyd]

Worse yet, SCO's own CEO, who estimates that intellectual property accounts for about 1/3 of his sales, doesn't understand the difference between a patent and a trade secret. A patent is afforded legal protection for a limited time in exchange for disclosing all the information necessary to reproduce the patented object, be it an algorithm, gene, or device, to the public. Also, it's the responsibility of your competitors to check the Patent Office and make sure they don't violate your patent. If they do violate your patent, then you can sue and recover damages even if you didn't notify them about the patent violation beforehand. It's their responsibility to check out patents.

On the other hand, trade secrets don't have any legal protection, but you don't have to disclose anything to the public. The only way to protect a trade secret is through contracts, made with everyone that the secret code comes into contact with. If you make these contracts, then you can sue for damages if the secret is leaked (assuming you were smart enough to put that provisio in your contract).

SCO seems to want to have it both ways; they want the legal protection of a patent, and the ability to sue people associated with Linux for patent violations, but they also want to not disclose anything about their technology. In essence, they seem to want to sue Linus for something he had no control over, and no way to know that he was doing anything wrong (if there was any wrong committed; it could be that, as a poster on the LKML noted, the similarities are like having "her bosom heaved in anticipation" in two different cheesy romances; the similarity is coincidental and rather likely, given that the two OSes implement similar concepts).

Note that although they can't have patent protection on their software, SCO may still be able to sue IBM for contract violations. If IBM did indeed leak SCO's code into Linux or elsewhere, they could be liable for damages (although almost certainly not $1 billion; no sane judge or jury would award that much to a company who hasn't sold that much software over the past few years, even when it was dealing in Linux itself and thus getting the benefit of IBM's supposed evil machinations)

As an aside, does anyone else find it perversely enjoyable to refresh the Yahoo ticker constantly and realize that for every cent SCOX loses, the bastards who started this whole thing are probably out tens of thousands of dollars?

Stock is tanking...

[zoid.com]

It took the 2:00 bounce and is now heading south indicating that investors see no future for SCO.

SCOX 2:35pm 7.12 -1.59 -18.25% N/A N/A 7.12 7.29

Novell Press Release Text:

[Black Copter Control]

I finally got thru to their site.. I'm really happy to see that somebody is threatening to sue SCO over their lies innuendo and prevarication. If/when they do sue SCO, hopefully they'll make it a class action lawsuit.

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

Re:Conference Call - Don't do it

[webster]

However, directly from their quarterly earnings page...

This looks like something the SEC should be looking into. Making false claims in a lawsuit is one thing - lawyers are expected to be liars in court. Making false declarations on financial statements is something else.

SCO's "Contact US"

[bigbadunix]

I think the evil bastards at SCO should change their number (linked from the contact us section on their pitiful excuse of a website) from
1-888-GO-LINUX to 1-888-NO-LINUX.

But, that's just me, and I'm dumb.