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SCO "Disappointed" by Red Hat Lawsuit
schmidt349 writes "SCO has issued a preliminary response to Red Hat's lawsuit, in which President and CEO Darl McBride advises that SCO will prepare a "legal response" to Red Hat's requests for injunctive relief. In addition, he promises that the countersuit that SCO will file may include "counterclaims for copyright infringement and conspiracy." His final statement-- that Red Hat's "decision to file legal action does not seem conducive to the long-term survivability of Linux--" is chilling in light of the business strategy that SCO has adopted in its sales of UnixWare licenses to actual and potential users of the Linux kernel."
Want to hear more details on the conspiracy and long term viability of Linux? Check out their conference call today:
Where: Toll Free within North America: 1-800-238-9007
International: 719-457-2622
Password to enter call: 274040
When: Tuesday, Aug. 5, 2003
2:00 p.m. EDT, 11:00 a.m. PDT
slatted to lose 35% today after 8% losss yesterday..
burn sco group shares!
Don't Tread on OpenSource
Toll Free within North America: 1-800-238-9007
International: 719-457-2622
Password to enter call: 274040
More info at: http://biz.yahoo.com/prnews/030805/latu080_1.html
Secondly, the code was released by SCO under the GPL, negating the claim.
This argument gets thrown around a lot but it can only be correct of SCO knowingly injected the code in question into Linux. However, that's not the argument. Even before SCO started selling distributions, the alleged code existed in the codebase. If this is true, than that code is not legitimately GPL'd.
For example: I write some commercial code. You get the code under a license for internal modification. Later I decided to create a distribution for a cool project on Sourceforge. However, you took some of the code I licensed to you and contributed it to that project without my knowledge. Because you don't have ownership of that code, you do not have the right to GPL it. I distribute that project with no knowledge that my commercial code exists within it. This does not mean that I explicitly GPL'd my commercial code. Therefore, no one with the right to GPL said code GPL'd the code.
Keep in mind that I'm not arguing that SCO's claims are valid, I'm simply pointing out the fallacy in this commonly used argument.
There is no longer anything that can be done with computers that is nontrivial and clearly legal. -- Paul Phillips
SCO has consistently stated that our UNIX System V source code and derivative UNIX code have been misappropriated into Linux 2.4 and 2.5 kernels. We have been showing a portion of this code since early June. SCO has not been trying to spread fear, uncertainty and doubt to end users. We have been educating end users on the risks of running an operating system that is an unauthorized derivative of UNIX. Linux includes source code that is a verbatim copy of UNIX and carries with it no warranty or indemnification. SCO's claims are true and we look forward to proving them in court.
... [and Red Hat's] lack of access to unpublished software patent applications, copyright registrations which fail to adequately disclose source code, and numerous issued software patents that are of dubious validity ... Claims of infringement could require us to seek to obtain
Recent correspondence from SCO to Red Hat further explains SCO's position.
The first letter is from Bob Bench, CFO of The SCO Group, Inc., to Mark Webbink, Sr. Vice President and General Counsel of Red Hat, Inc., that SCO intended to send to Red Hat. After a conversation between Matthew Szulik and Darl McBride, Red Hat determined that SCO did not need to send this letter.
The second letter is one that was sent to Matthew Szulik today from Darl McBride after Red Hat's lawsuit was filed.
July 31, 2003
Mark Webbink, Esq.
Sr. Vice President and General Counsel
RED HAT, INC.
1801 Varsity Drive
Raleigh, NC 27606
VIA FACSIMILE: (919) 754-3700
Dear Mr. Webbink:
This letter is in response to yours of July 18, 2003 to Darl McBride President and CEO of The SCO Group, Inc. ("SCO").
Before responding to your request, it is important to place your letter in context. Your letter follows on the heels of Red Hat's S-3 filing of July 7, 2003, in which your company revised its risk disclosure statement.[1] In addition, SCO is currently engaged in litigation with International Business Machines Corporation ("IBM") regarding its role in the development of the Linux operating system. At the time of your letter, we had expected the possibility of a global resolution of SCO's intellectual property claims against all Linux-related companies that would have likely included Red Hat. This effort has apparently stalled, through no fault of SCO.
Based on the posture of our litigation and your revised risk disclosures, it is unclear to us the purpose of your July 18, 2003 letter. If you desire to enter good faith discussions to address SCO's intellectual property claims against Linux, either on behalf of a wider consortium of Linux companies or solely on behalf of Red Hat, we are willing to meet with you for that purpose. In any such meeting, we will provide example after example of infringement of our intellectual property found in Linux. Of course, any such demonstration must be pursuant to an acceptable confidentiality agreement and must be intended to further good faith discussions about resolving the differences between us.
If you seek information for the purpose of informal discovery intended to benefit IBM in the pending litigation, or for the purpose of devising
your own litigation plans against SCO related to Linux, we must respectfully decline your request. Therefore, please clarify in writing the purpose for your request. Thank you.
Sincerely,
Robert Bench
Chief Financial Officer
The SCO Group, Inc.
[1] Red Hat states in the revised disclosure that it is "vulnerable to claims that [its] products infringe third-party intellectual property rights particularly because [its] products are comprised of distinct software components many of which are developed by independent parties." The revised risk disclosure continues: "[M]uch of the code in [Red Hat's] products is developed by independent parties over whom we exercise no supervision or control
SCO will now get to counter sue
Sure one can counter sue. However, you have to counter sure over something specific. Exactly what do you think SCO will counter sue over? They have no contract with Red Hat other than the GPL'd code for which they have yet to show any proof publicly and for which no court has shown they even own in the first place. SCO will bark and grumble but there's nothing they can sue Red Hat for that would not involve disclosing the GPLed code and I doubt SCO would risk their new Linux FUD and licensing business over what is essentially a gag order.
Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws-Plato
*grin* They have.
From Forbes: That's pretty much -exactly- what the suit is saying, in a nutshell.
-- Robert Bench, Chief Financial Officer, The SCO Group, Inc.
Take notice, all you that still believe that this is just a simple contract dispute between SCO and IBM. SCO's CFO is clearly stating that they have IP claims against the Linux kernel!
There should be no doubt of their intents after this...
Actually the company that gets the most from the anti-linux FUD is Sun. THey also popped SCO a major chunk (and probably recommended Boise to them)
-- SJS smooge at smoogespace dot com
Take a real hard look at http://biz.yahoo.com/prnews/030804/lam110_1.html
...
Of course, we will prepare our legal response as required by your
complaint. Be advised that our response will likely include
counterclaims for copyright infringement and conspiracy.
There appear to be some inconsistencies in the August 4 letter:
At the start he says
Attached is the letter I discussed with you during our July 31, 2003 telephone conversation. Instead of actually sending the letter, I thought it was best to telephone you and speak in person to see if we could resolve the issues between our companies short of litigation
Later he says
To my surprise, I just discovered that your company filed legal action against The SCO Group earlier today. You, of course, mentioned nothing of this during our telephone conversation. I am disappointed that you were not more forthcoming about your intentions.
Comments:
- If he had a telephone conversation (July 31) to discuss avoiding litigation, why was he surprised that litigation followed.
- How could he have had a telephone conversation to discuss avoiding litigation, if Red Hat had mentioned nothing of the possibility?
Next ook at that paragraph again
Attached is the letter I discussed with you during our July 31, 2003 telephone conversation. Instead of actually sending the letter,
Comments:
- How could they have discussed that letter, if he hadn't sent it?
Read this:
I just discovered that your company filed legal action against The SCO Group earlier today.
Comments: - He "just discovered", therefore presumably hasn't read and prepared a response. Yet he's already decided what his counterclaims would include!
Going back to July 31st letter
Based on the posture of our litigation and your revised risk disclosures, it is unclear to us the purpose of your July 18, 2003 letter. If you desire to enter good faith discussions to address SCO's intellectual property claims against Linux, either on behalf of a wider consortium of Linux companies or solely on behalf of Red Hat, we are willing to meet with you for that purpose. In any such meeting, we will provide example after example of infringement of our intellectual property found in Linux. Of course, any such demonstration must be pursuant to an acceptable confidentiality agreement and must be intended to further good faith discussions about resolving the differences between us.
If you seek information for the purpose of informal discovery intended to benefit IBM in the pending litigation, or for the purpose of devising your own litigation plans against SCO related to Linux, we must respectfully decline your request. Therefore, please clarify in writing the purpose for your request. Thank you. Even though it wasn't sent (by SCO's own admission)
Comments:
- Doesn't it sound like SCO required Red Hat to basically accept SCO's claims: "discussions to address SCO's intellectual property claims against Linux, either on behalf of a wider consortium of Linux companies or solely on behalf of Red Hat, we are willing to meet with you for that purpose."
Next:
Of course, any such demonstration must be pursuant to an acceptable confidentiality agreement and must be intended to further good faith discussions about resolving the differences between us.
If you seek information for the purpose of informal discovery intended to benefit IBM in the pending litigation, or for the purpose of devising your own litigation plans against SCO related to Linux, we must respectfully decline your request."
Comments:
Doesn't it also sound like SCO required Red Hat to waive any claim against SCO before disclosing their "evidence".
If you look carefully at stock market data on SCOX, you'll eventually find an interesting stat on "Short Interest" which Nasdaq defines as...
SCOX short interest in April was ~40k shares, May was ~30k shares, June was ~280k shares, July was ~390k shares. About mid-May was when SCOX stock price jumped from ~$4 to ~$10.
Based on this, i'd opinion that many brokers don't believe the SCO FUD either. Many are positioning themselves for a hefty profit when SCOX claims are proven in court (which i believe to be inevetable) to be null & void.
Personally, I very nearly exited a BAD stock position, thus taking a significant $ hit on my portfolio, in order to short SCOX at $15 near the end of July. I may regret not doing so for a long time.
As to makeing McBride richer, according to the SEC, he hasn't cashed out on any of his stock yet. 5 of his employees, however, (2 Sr Vice Presidents, 2 Vice Presidents, and their CFO) have cashed out a total of ~75k shares for a grand total of ~$884k. Combined, the 5 of them have at LEAST 395k more shares which can be sold
Those are the facts as near as I can gather with my meager resources.
"Glory is fleeting, but obscurity is forever." - Napoleon Bonaparte
That's a big part of the plan. They also get to try to wrangle out a statement from SCO that says "Only IBM need fear this lawsuit, and not any other linux users or companies" and this problem is relegated down to a business dispute and linux can continue worry-free.
In any event, all this is completely irrelevant to SCO's current claims of infringement within the Linux kernel.
I just visited the German SCO Server (online again, *sig*). Their Newsletter 01/2003 brags about SCO-Linux being ready for enterprise level applications. They state that SCO Linux (distributed under GPL AFAIK) includes code of the "Open Source Community" and the "UnitedLinux LLC, which included and integrated the functionalities critical for professional enterprise deployment" (bad translation by me ;-)).
... back to see if they still have something about this whole mess on their German server. That would cost them a lot of money now.
Then they go on talking about what great stuff there is in this release (see page 2 of the newsletter):
* Kernel 2.4.19, KDE 3 etc
* Improvements in the memory manager for scalability and performance
etc.
I don't believe they did not know what they were distributing if they advertise with this stuff.
OK
ftp://ftp.sco.com/pub/scolinux/server/4.0/updates/ SRPMS/
Scroll down to the k's... there are updates specifically for SMP kernels.
Sometimes I wish this would just get to litigation now, because I believe things like this will screw SCO. But then again, IBM has the money to destroy SCO in negotiations... either way works for me.
Why doesn't RedHat just buy them?
People keep asking this question, so it seems like it deserves a "OK, once and for all, this is why" answer.
Your question is based on the (common) misconception that all of a company's shares (or even a majority of them) are necessarily publicly traded. A company, when it "goes public," may make 95% of all its shares available to the public, or it may make only 5% of those shares public.
If the case is the latter, you could go to the NYSE or NASDAQ and buy every share there that someone is selling, and you would still only own 5% of the company. Ownership percentage = the percentage of votes you can cast on shareholder questions like kicking out the board of directors, etc.
I don't have figures, but I believe that SCO is more than 51% privately held. So buying all the publicly traded shares of SCO still isn't going to let you dictate the course of the company, it would just give you a bunch of (hopefully soon worthless) shares. The only way to gain control of the company would be to buy out the private owners ... who, I'm guessing, will make that price VERY steep if they think they have any chance at winning.
"95% of all Slashdot
Go snap one up for only $699. Oh, and that is run-time binary license only, not source.
.
Pricing and Availability
SCO will be offering an introductory license price of $699 for a single CPU system through October 15th, 2003. Pricing for multiple CPU systems, single CPU add-ons, desktop systems and embedded systems will also be available. Linux users who are interested in additional information or purchasing an IP License for Linux should contact their local SCO sales representative or call SCO at 1-800-726-8649 or visit our web site at http://www.sco.com/scosource
Stock up 4% as of 1:13pm ET:
/PRNewswire-FirstCall via COMTEX/ -- The SCO Group, Inc. (SCOX, Trade), the owner and licensor of the core UNIX(R) operating system source code, today announced the availability of the SCO Intellectual Property License for Linux(R). The run-time license permits the use of SCO's intellectual property, in binary form only, as contained in Linux distributions. By purchasing a SCO Intellectual Property License, customers avoid infringement of SCO's intellectual property rights in Linux 2.4 and Linux 2.5 kernels. Because the SCO license authorizes run-time use only, customers also comply with the General Public License, under which Linux is distributed.
O GO )
.
.
/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/19990421/SCOLO GO
SCO Announces Intellectual Property License for Linux
August 05, 2003 12:43:00 (ET)
LINDON, Utah, Aug 5, 2003
(Logo: http://www.newscom.com/cgi-bin/prnh/19990421/SCOL
SCO announced in July that it had registered the copyrights to its software releases of UNIX System V and UnixWare(R) with the U.S. Copyright office and that it would offer licenses to cure the SCO IP infringement issues for Linux operating systems. Beginning this week, SCO will start meeting with commercial Linux customers to present the details of this right to use SCO intellectual property binary licensing program.
"We have identified numerous files of unlicensed UNIX System V code and UNIX System V derivative code in the Linux 2.4 and 2.5 kernels," said Chris Sontag, senior vice president and general manager of SCOsource, the intellectual property licensing division of SCO. "We believe it is necessary for Linux customers to properly license SCO's IP if they are running Linux 2.4 kernel and later versions for commercial purposes. The license insures that customers can continue their use of binary deployments of Linux without violating SCO's intellectual property rights."
Pricing and Availability
SCO will be offering an introductory license price of $699 for a single CPU system through October 15th, 2003. Pricing for multiple CPU systems, single CPU add-ons, desktop systems and embedded systems will also be available. Linux users who are interested in additional information or purchasing an IP License for Linux should contact their local SCO sales representative or call SCO at 1-800-726-8649 or visit our web site at http://www.sco.com/scosource
About The SCO Group
The SCO Group (SCOX, Trade) helps millions of customers in more than 82 countries to grow their businesses with UNIX business solutions. Headquartered in Lindon, Utah, SCO has a worldwide network of more than 11,000 resellers and 4,000 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 and UnixWare are registered trademarks of The Open Group in the United States and other countries. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners.
SOURCE The SCO Group
Blake Stowell of The SCO Group, +1-801-932-5703,
bstowell@sco.com ; or Dave Close, Avi Dines, or Brian Willinsky, all of
Schwartz Communications, +1-781-684-0770, sco@schwartz-pr.com , for The SCO
Group
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, +1-888-776-6555 or +1-212-782-2840
http://www.sco.com/scosource
"You have liberated me from thought."
From my own limited experiences with the legal system, ... these things move at a speed akin to continental drift.
IANAL, but I believe that "Injunctive relief" suits move faster than normal lawsuits, because their purpose is to stop an ongoing illegal activity (as opposed to apportion blame and determine compensation for a past activity).
I just saw this press release from SCO. Pricing starts at $699 per CPU until October 15th, 2003!
Unbelievable!
infested with jello like fishes no melotron wishes
SCO's issue seems to be with code that IBM completely and honestly believe they own, wrote and have the rights to. IBM would probably have signed such a disclosure form.
The FSF's disclosure/assignment policy protects them against individuals whose employers might sue. Not corporations giving source code.
SCO has just announced pricing for its Linux licensing scheme.
SCO will be offering an introductory license price of $699 for a single CPU system through October 15th, 2003.
and
Because the SCO license authorizes run-time use only, customers also comply with the General Public License, under which Linux is distributed.
Another question I'd like to see asked is for a clearer explanation of that last sentence. I just can't think of any way that could make any sense.
Let 'im know how you feel:
:)
Blake Stowell of The SCO Group, +1-801-932-5703,
bstowell@sco.com
Be nice, now!
/.: why the hell am I here?
That's not necessary any more: Some German groups (e.g. LinuxTag e.V.) have already forced SCO to back down from their claims, and SCO removed them from their website. There's nothing more to be done in Germany right now.
do some research before you throw insults around.
wikipedia
Reclaim Democracy
The supreme court decision
I was just having this conversation with someone here. A better way to do it would be to contribute to the legal defense fund. This clearly sends the message that you want them to fight this and support that. So that is what I'm going to do.
Cypherpunks: Civil Liberty Through Complex Mathematics. Those who live by the sword die by the arrow.
According to the same site (yahoo finance) Red Hat (market cap $1.14B) has about $80.0 M in cash. Breaking the bank to buy an unprofitable dog of a company seems like a bad proposition to me. You could buy a lot of lawyers with that money.
Don't drop the soap, Tommy!
The Linux community does not believe in IP laws, but that does not make them code thiefs. They belive in a licience that does not allow any one person or organization to own any code they write.
Speak for yourself, please. Just because I use and work on code licensed under GPL doesn't mean that I don't respect the intellectual property licensing predilections of others.
The whole point of the Free Software/Open Source movement, to my way of thinking, is to create a corpus of intellectual property that is and remains extremely free. As you say, it is not about ripping off other people's copyrights.
- jon
Ganymede, a GPL'ed metadirectory for UNIX
*sigh*
Here's how it really happened:
1 Samuel 17:49 - "Then David thrust his hand into his bag and took a stone and slung it, so that he struck the Philistine in his forehead, and he went falling upon the earth"
1 Samuel 17:51 - "And Devid continued running and got to stand over the Philistine. Then he took his sword and pulled it out of it's sheath and definately put him to death when he cut off his head with it."
Ergo: The original poster was correct. David indeed used Goliath's own sword to kill him. The stone in the forehead merely knocked Goliath out, possibly even putting him a coma, but the Bible does not say for sure. David using his enemy's own weapon against him perhaps had a major psycological effect on the Philistine at that time, but again, we cannot say that with absolute certainty. All we know is that the enemy army fled after David cut off Goliath's head.
Any questions?
Impossible. 4.4 BSD/Lite 2 has those, and is completely free of SCO code.