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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."
"I am also disappointed that you have chosen litigation rather than good faith discussions with SCO about the problems inherent in Linux."
I don't seem to remember SCO giving IBM much of a chance for "good faith discussions"
I'm glad that Redhat finally brought their suit. This will assure linux users that they are not being left out to be attacked by SCO. Even if their claims are unfounded, you must agree that they seem to have a quite large legal team (if that isn't all that they have), and could really cause some damage if they started to attack companies. The companies may have to settle to just avoid a suit. Also, this'll nicely divide the SCO legal team into two suits.
"Men lie."
"Yeah, about sleeping with other women, but never about bioluminescent plankton."
-Dan Brown
Conspiracy? Wow, that's a really strong word to throw into the FUD campaign. It will certainly have people looking at Linux with even more doubt. Hopefully, the judicial system will work in this case and force SCO to actually prove their side of the issue.
I would say this is the pot calling the kettle black...but that just doesn't come close...
Red Hat's decision to file legal action does not seem conducive to the long-term survivability of SCO.
No, I don't want a free iPod
Whatever. If SCO proves their claims, then it won't be long before the Linux community re-writes those parts that IBM contributed and makes the Linux kernel "UNIX-free."
You'll pardon me if I'm not frightened.
Finding God in a Dog
SCO still has not formally charged someone with copyright violation... Their only (related) suit on record is a "contract breach" with IBM. That makes great grounds for libel and fraud, considering they continue to distribute Linux code over FTP months after proclaiming this a crime against themselves!
It was my understanding that the Microsoft EULA is the "use" license for Word--Linux customers have made no such agreement with SCO.
In addition, Stowell admits that IBM holds the copyrights to the code in question (emphasis mine):
Someone please ask SCO this:
Since IBM has the copyrights to the code in question, what recourse can SCO possibly have against end-users?
If the contracts forbid these "derivative works" from being contributed to open source, what recourse do you have against end-users now that they have been? You don't own the copyrights for such code, and end users are not party to your contract with IBM.
Or do you realize that you have no claim against end-users, and as such are inventing a new kind of intellectual property called "control rights"?
In other words, they still refuse to take action in defending their trade secrets and rectifying the problem. No moral judge is going to cut them any slack with this kind of behaviour.
A moral judge isn't necessarily a warranted assumption. All SCO needs is a somewhat viable legal theory to hang their case on. That isn't to say a "amoral" judge wouldn't find SCO's legal theories wanting but morality needn't enter into it.
The image that SCO is trying to put forward is that of course there isn't any problem that they're going after IBM (and threatening Linux end-users) because that group is in the wrong, but they're wounded that Red Hat is opportunistically and cynically using the court system to punish them for only trying to set things right.
It's not going to work, mind you, because this is the kind of crap long-term 'stable' investors will cut through, and the ones that are betting on SCO as a kind of crapshoot have probably already committed themselves, but if you're going to bluff (as I'm still suspecting is their activity) why go halfway?
Try not. Do or do not, there is no try.
-- Dr. Spock, stardate 2822-3.
Umm, SCO is literally a -tenth- the size (market cap wise, they're even -smaller- when you compare revenue) of RedHat.
SCO squish RH? Maybe the other way around...
Reporters might want to consider this list of questions for the conference call today:
Note: Brazenly ripped off from a post on the SCOX Yahoo discussion board:
1. When you said there are thousands of files of "your" (ie SCO's) Intellectual Property in Linux, were you referring to IBM's copyrighted and patented code?
2. Isn't that a very liberal and deceptive use of the word "your"?
3. Were you intentionally trying to mislead investors, Linux users, and the general public by referring to it as "your" IP before your case with IBM even goes to trial?
4. Are you concerned that your deceptive use of the words "your" and "our(s)" will lead to class action lawsuits by investors?
5. Don't the clauses in ammendment X saying that IBM owns all work produced by IBM and that those works are not subject to the other restrictions in Ammendment X mean that IBM can donate its patented, copyrighted code to Linux?
6. If you and other SCO execs feel you have such a strong case, why have there been no executives cashing in options and holding them?
7. Assuming for the moment that IBM has violated your trade secrets, accourding to established IP law, wouldn't that simply mean that IBM was liable to you for damages, but that the 'secrets' are now out of the bag and there is no legal way to encumber Linux because of that?
8. Given the filing date on your copyright, isn't SCO enjoined from seeking statutory damages or fees and limited only to the much harder to prove actual damages in any copyright legal action against Linux?
9. How does SCO, a Unix company, expect to make use of Vultus, a web services company whose product works only in Internet Explorer for deployment on IIS servers as a slower than Java replacement for Java?
10. Sontag has publicly stated that JFS, RCU, and NUMA are copyrighted by IBM but that SCO has "control rights" over that code. Is that type of contract legal? Has the validity of such a contract ever been tested in court?
Compliments of martin_lvnv -
11. When was the last time you checked on the number of resellers and developers? Don't you think it might be time to update those figures?
"I'm not saying that Red Hat made the wrong decision - they were injured and are suing - but I think the more Linux players SCO can get involved with litigation, the happier they will be - if they can drag out the proceedings. Imagine the boost to the "Linux has IP problems" line if all the major Linux players are tied up in litigation over IP issues."
The more players that sue SCO, the more resources SCO has to devote to their litigation (lawyers are whores, but they ain't cheap), the LESS time left on their life support clock...
Linux is a multibillion dollar industry now. There are players who make money (Redhat), some make LOTS of money (IBM, HP), and others who have a dog in the fight (Linus, RMS).
SCO's market cap is tiny compared even to Redhat's... They are outnumbered, and the more suits get targeted at THEM, most preferably in a LOT of different locales (state courts where the case won't take years to get to trial), the faster this is brought to an END.
A lion can be brought down by a pack of hyenas. It's all the more easy when SCO isn't a lion, but a jackass... And tigers are pursuing them...
SCO already has taken money from MS and Sun. For MS and Sun to pump more into them would speak BLATANTLY of conspiracy. In MS's case, it could be a violation of their anti trust settmelent...
Corporatism != Free Market
A few things that stood out for me:
.
SCO has not been trying to spread fear, uncertainty and doubt to end users.
I love the way this is phrased. It sounds like it's the first they've heard of the term FUD. They're literally adressing every word of the acronym.
We have been educating end users on the risks of running an operating system that is an unauthorized derivative of UNIX.
The risk is that SCO will sue you, of course.
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.
"Yep, the claims are true. Really true. See how true they are. And we'll show this truth at a later date. If we need to."
And no warranty and indemnification . .
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.
"So, we'll provide a ton of examples, then control how you can discuss them. Trust us. You have to sign the agreement of course before we provide them"
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.
This makes me wonder what kind of NDA would be required to see the code anyway. It sounds like "we can show you this stuff if it never gets involved in a lawsuit, but we can sue the bejesus out of you anytime."
To my surprise, I just discovered that your company filed legal action against The SCO Group earlier today.
A Linux company suing SCO. Will surprises never cease.
Be advised that our response will likely include counterclaims for copyright infringement and conspiracy.
"We're going to try and turn this lawsuit into a new revenue stream for us."
I must say that your decision to file legal action does not seem conducive to the long-term survivability of Linux.
Pure threat. Red Hat isn't the only Linux out there. This sounds like A) A general threat and B) more of a "bring it on" attitude towards Linux in general - posturing.
I don't think much has changed. This is the usual mix of threat and PR work.
My two cents.
"The Sage treasures Unity and measures all things by it" - Lao Tzu
But Redhat is trying to win an Injunction, which doesn't cost much and doesn't take long.
If Redhat loses in its attempt, THEN you are talking about a longer lawsuit and then you are also more likely to see, as IIRC Bruce Perens was recently quoted as stating, the cases betwixt SCO, IBM and Redhat settling.
This prediction of settlement I thought was one of this week's weirdest twists, and it hasn't been much commented upon. Are the issues so murky that Bruce thinks obtaining an injunction v. SCO is unlikely, and so like in the majority of cases which result in long, drawn-out court battles, all sides would then be more likely to settle and end the bleeding?
This portion of the correspondence (where Red Hat explains it's intentions) is the cusp of the thing:
"Claims of infringement could require us to seek to obtain licenses from third parties in order to continue offering our products, to reengineer our products, or to discontinue the sale of our products in the event reengineering could not be accomplished on a timely basis."
So Red Hat requested to know what parts are infringement. The purpose is to either pay a fee to use, rewrite the stuff to eliminate infringement, or stop selling the stuff if they can't get it fixed quickly. They gave SCO 30 days to provide them with the kernel code, then decided to sue them since they were dragging their heels. This is smart. Red Hat depends on Linux (duh). They want to get this resolved. By stating clearly that they will simply rewrite the code in question, SCO balked and delayed. Red Hat's managers seem to have a good grip on how a business is run, and SCO just realized that once Red Hat makes a compliant kernel, the rest of the community will follow, and SCO will have no suit. This is the real reason they are hiding the code till trial. They won't have a case if it comes out sooner.
"Curiosity killed the cat, but for a while I was a suspect."- Steven Wright