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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"
Hi Darl, you fascist, I run Linux on a dozen boxes. Please send me a bill that I will be happy to wipe my ass with and send back to you.
What an arrogant little prick.
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.
- Darl McBride, CEO, SCO Group
Again, end users are not at risk, if anyone is, but rather the distributors of the Linux kernel in question. Secondly, the code was released by SCO under the GPL, negating the claim. Third, by not asking the "infringers" (who would be IBM primarily and companies like Red Hat secondly) to remove the suspect the code and instead attack the customers of the "infringers", SCO has made no attempt to keep their trade secret a secret at all, which renders it's claim to secrecy invalid in legal terms.
SCO has buried itself. I can't believe that anyone is still buying their stock, all they are doing is making McBride richer.
"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."
- Robert Bench, CFO, SCO Group
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.
"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."
- Darl McBride, CEO, SCO Group
It is amazing that this crook has the audacity to suppose that Red Hat is engaged in some kind of a conspiracy, considering the disgusting actions of his company. This is truly laughable.
I would say this is the pot calling the kettle black...but that just doesn't come close...
We have been showing a portion of this code since early June.
Um...no you haven't. Nobody has seen this comparison but Darl McBride and his evil twin brother.
So, they're disappointed that other people are choosing litigation, which is exactly what they did. No surprise to me, though; I'm surprised that SCO is surprised.
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 best that can happen is that they lose quickly. But I bet they'll drag it out as long as they can.
It's not wasting time, I'm educating myself.
SCO's "Disappointed"? Awe poor SCO.
Well SCO, I'm very disappointed in YOU!
Now go to your room and don't come out until you've thought about what you've done.
See the Pictures of the Flood of '08
"How dare you counter our frivolous claims with an honest-to-goodness lawsuit based on real facts!?!?!"
We at the SCO are disappointed you did not roll over and die when we used the word lawyers.
We are awaiting further instruction from out legal team, however this may be delayed as our current course of action provided by our lawyers lists only the phrase "2. ???" for our next step. We are awaiting clarification from them before continuing.
There are some people that if they don't know, you can't tell 'em.
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"?
Saddam Hussein "Disappointed" by U.S. liberation of Iraq....news at 11!
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
What SCO said, and what they really meant
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 just want to scare you into paying us money. Thats easier than actually producing a product that anyone wants.
We have been educating end users on the risks of running an operating system that is an unauthorized derivative of UNIX.
We have been trying to extort money from you.
SCO's claims are true and we look forward to proving them in court.
If we can get you to give us money, then we don't really have to prove anything. Our lawyers told us that.
Recent correspondence from SCO to Red Hat further explains SCO's position
Holy SH*T someone is calling our bluff, what? They have lawyers? Suing WHO? I can't belive it, threatenting to sue is the way to do business, can't we grease your palm with some of our liscence fee to make this go away?
"Science is about ego as much as it is about discovery and truth " - I said it, so sue me.
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
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...
I was thinking earlier today how cool it would be if SuSe were to sue SCO in Germany, Novell (through Ximian) in Mexico, Chinese government in China &c. Screw them as much as possible in as many different legal systems as possible. Where possible get some sort of judgement against the directors as individuals as well as corporately against SCO. Destroy their stock price and make sure they can't travel out side the US (preferably inside as well) without getting arrested for contempt of court or something like that.
Even better! does anyone have photos of McBride playing golf with Bin Laden and Saddam?
Vindicitve? Moi?
Stephen
"Don't write down to your readers, the only people less intelligent than you can't read" - Sign on Newspaper Office Wall
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
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?
long int infinity = 32768;
/
for (i=0,i<=inifinity,++i){
Sue();
GetCountersued();
CountersueCountersuer();
}
Profit!
I leave it to you to work out all the bugs for SCO and upload the source via CVS to the following ftp server: ftp://ftp.scogroup.com/evilbits/code/profitengine
Thanks!
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
Here's a suggestion that I am proposing for Darl McBride, which he is free to use without paying royalties to myself:
I would pay good money for that!Sticking feathers up your butt does not make you a chicken - Tyler Durden
The enemies of freedom were at it again last night. On Kudlow and Kramer on CNBC some analyst hack mentioned Linux's "IP problems" in a Microsoft story. I am afraid that the SCO suit is having its intended affect by negatively influencing public opinion and support by business and analysts. By proxy with SCO, Microsoft is accomplishing what it could not do alone in creating Linux FUD.
By the way the /. crowd has ridiculed Stallman in the past about making contributors sign legal disclosure forms for FSF programs. What do you say now, fools? Had Linus and his open source buddies been half as vigilant about the source of code contibutions, this issue would not exist.
an ill wind that blows no good
"Linux geeks howled a bit, but then wrote off SCO as a bunch of sleazebags and went back to playing live-action roleplaying (LARP) games in their mothers' basements, or whatever it is they do when they're not writing device drivers and complaining about clueless end users."
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
Until April 2005, as I recall. From my own limited experiences with the legal system, (My father involved in a complex dispute over the family farm, and a drawn out divorce) these things move at a speed akin to continental drift. The whole thing will unfold in slow motion, and like an aging wine cannot be hurried. No matter who wins the 2005 hearing, there are bound to be further rounds of settlement talks. (in the unlikely event SCO gains a partial victory) Legal action involving other Linux distributors and SCO will play out over an even longer timeframe, if there is anything left of the carcass, assuming IBM wins.
This will be both a cash drain and an unfortunate distraction for Red Hat, but it has the positive effect of casting a longer shadow over SCO, since they are now fighting a second front. If other Linux distributors follow suit, (or perhaps band together into a class action?) and sue SCO then it will put even greater pressure on them.
My rights don't need management.
-- 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...
... for some message to pop up somewhere, with some guy going
... I dunno. Is this guy more or less priceless than al-Sahaf? ...
"OH GOD! YES! I DID IT! I COPIED V5 SOURCE CODE INTO THE LINUX KERNEL.
I'M SO SORRY! THE PRESSURE! I COULDN'T TAKE IT ANYMORE! AAAARGH! *sob*"
Whereupon we can all go "you know - you're a dick" and buy him a beer. Then everyone cleans up after him.
As to Dee McBride
Dude - *you're* disappointed? Well let me tell you how *we* feel
yes, we have no bananas
Some time ago, a few people claimed to have been shown the code without signing the NDA. They said that the only significant part of the kernel that was an issue was the scheduler, which looked like it had been copied "line by line" from Unix sources (one presumes the copying wasn't in the other direction).
I'd guess the scheduler will undergo a significant rewrite before kernel 2.6 goes gold... ;-)
The other claimed "infringing" areas are things like JFS and NUMA support that IBM initially developed for AIX and then ported to Linux.
I think it very unlikely that these various subsystems will be found to infringe on SCO's IP.
Galileo: "The Earth revolves around the Sun!"
Score: -1 100% Flamebait
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
Dear Mr. "CmdrTaco" Malda and other Slashdot editors:
I appreciated the link in the story to the SCO. It is always best to get the story straight from the horse's mouth. Or, in the case of SCO, the other end of the horse. However, would it be too much trouble to put a "goatse.cx" disclaimer on further links to SCO's website? They are clearly too closely related for my comfort.
On another issue, I understand that there has been conversation regarding changing the SCO icon from it's current Mickey Mouse looking thing to something resembling the goatse.cx picture. I, for one, cast a whole-hearted "no" vote on that potential change. I think that the current Mickey Mouse looking icon accurately reflects the nature of SCO's enterprise and that the proposed alteration might be traumatic for the younger readers of this "family" website.
Thank you for your consideration.
Respectfully,
guacamolefoo
Lots of petrified grits
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
According to a statement by McBride in May (wish I still had the lin), The canopy group owns %85 of the company (which as I understand it, can be turned into public stock, if they wanted to go that route). You're absolutely right. The only real way to buy SCO would be to convince them to sell.
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