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IBM Countersues SCO, And More!
mr.crutch writes "Few details are available, but CNet is reporting that IBM has filed counterclaims against SCO. CNet also has an interview with Red Hat CEO Matthew Szulik..." Jizzbug writes "Thanks to the folks of K5, we can all obtain our rights to use the Linux kernel from SCO, and without paying up to SCO's extortion. If kernel.org kernels aren't safe, sco.com kernels certainly ought to be." LWN has a copy of SCO's Linux License for your perusal. Bruce Perens is speaking of the dangers of patent portfolios to open source software, notable because IBM's counterclaims include patent infringement. And finally, a company is selling SCO Check, a tool to de-SCOify your Linux system, if SCO ever presents any evidence whatsoever of infringing code in Linux. Update: 08/08 00:16 GMT by T : SCO's public response to IBM's counterclaim is short and to the point. Among other things, it says "If IBM were serious about addressing the real problems with Linux, it would offer full customer indemnification and move away from the GPL license." Given the other links in this story, perhaps SCO should go first on that count.
"SCO said it revoked IBM's license to ship AIX in June. In its countersuit, Big Blue reasserted its position that its AIX license is irrevocable and perpetual, but then added a new twist involving Novell, the company that owned Unix copyrights until selling them to SCO's predecessor in 1995.
;)
IBM's suit revealed that Novell on June 12 effectively forbade SCO from terminating IBM's AIX license. SCO said it revoked the AIX license on June 16. Novell maintained the right to issue such instructions to SCO under the terms of the Unix sale, the suit said. "
Does anyone know anything more about this?
I know tht Novell apparently DID sell the copyrights, but this is a news Item...
Bruce Perens might want to help clarifiy this for us
-Colin
Colin Davis
In a way, I'm glad it's IBM fighting the first big GPL court battle, rather than any of the advocacy organizations, which while strongly motivated and highly expert, are also woefully underfunded and would almost certainly lose in a drawn-out war of attrition.
For once, a corporate behemoth on our side...
When SCO dies, who will snatch up the assets it has (including if any valid IP)?
Who has more cash floating around than most?
M$... and that could get messy quickly.
sPh
Hope SCO managers cashed in ALL of their stock
Unfortunately for them, right now is the time between the close of last quarter and the official annoucement of results. The SEC generally frowns on insider sales during this time period. Gotta love Red Hat's timing.
Considering the fact that Redhat recently filed a lawsuit, it looks like the "Linux Allies" are mobilized and are opening multiple fronts. What is interesting here is IBM's fighting for GPL, which means a team of highly paid attorneys will argue the viability of GPL. If this makes it to court, then GPL will have its test.
On another point, perhaps IBM holds the patent "process of suing other companies for patent violations as a means of revenue." If so, SCO is definitely in violation.
What those who want activist courts fear is rule by the people.
IBM also claims SCO Group has violated the general public license, or the GNU GPL, under which Linux is distributed.
Will this be the first time that the GPL has actually been used as part of a court preceeding? As far as I am aware all companies, who did not orginally comply, have felt that their public image was more important than a challenge of the GPL, and respected the contract of the GPL, even if it did take the FSF or public pressure.
Jumpstart the tartan drive.
Well, actually, they can't.
IBM can't use the patents against the Linux kernel anymore than SCO can -- as IBM points out in its own brief, distribution of the source under the GPL prohibits you from certain legal tactics... like licensing. You are implicitly licensing any IP (copyrights, trade secrets, patents) that you may own that are applicable to the source you distribute. Don't like it? Don't distribute. Also don't use GPL code in a distributed product, since doing so requires distribution of the source.
Of course, one day a patch could come along that IBM doesn't like and it would cease to provide newer kernels including that patch in order to preserve its rights... but that's a battle that would have to be fought when that time comes. Most likely IBM would inform the relevant people of their rights and their intentions, and the code wouldn't be integrated into the kernel. I'm not saying that this is a good thing, or that software patents are a good thing, just pointing out how it would work.
So the big question; who shorted the stock? What was the price point and when do you plan to cash in? C'mon, fess up. We're all rooting for you to make a killing from SCO's flameout as we get the pleasure of watching Darl's FUD machine go crashing into the sea.
===== Murphy's Law is recursive. =====
IBM's finally opened the patent portfolio. Boies must have known this was coming; he worked on the IBM anti-trust case for years. I wonder if he already has plans for dealing with this.
Part of the claim demands that SCO stop shipping all of the software infringing on IBM's patents, which is essentially all of SCO's software. I think SCO may have decided that they are not really in the software business anymore but intends to just pursue licensing, contract, and IP infringement claims for years.
If that's the case, then they won't be upset even if they lose the right to distribute their software due to the patent claims.
OTOH, SCO is screwed. I'm waiting for a pacer account to show up in the mail so I can read the counter-claim online. If anyone already has a pacer account, can they download the file and post it someplace where we can all see it?
...I always took it for granted that SCO obtained permission from IBM to use RCU, NUMA, ... in their OS. (I am assuming that those are the patents that IBM is accusing SCO of violating.)
You could assume that, or your could RTFA:
The patents cover a data compression technique, a method of navigating among program menus using options arranged in a graphical tree, a method for verifying that an electronic message was received and a method for monitoring computing systems linked in a cluster.
The infringing SCO software, IBM said, is its UnixWare and OpenServer operating systems, its SCO Manager remote administration tool and its Reliant HA package for letting one computer in a cluster take over if another fails.
BTW- Don't you just love how general all of those sound? I'd love to see patent numbers, but it sounds like almost any OS might infringe on one or two of those.
the no
http://lamlaw.com/
dragoncortez and I live here in Salt Lake and were thinking of going down to Lindon with a big poster or something to... you know... sike them out a little bit. We're thinking a big sign that reads "Ha Ha." or "YHBT" or something. Suggestions? Anyone else want to come along? Nothing illegal or innapropriate or anything- just something to let them know that we here in Utah aren't very pleased with SCO and support the opposition.
Does anyone remember the Bill Gates thing on cross-license, well IBM is dumping huge amounts of money into Linux, they see the potential, it's in their interest to never use these patents against Linux, just as it's in their interest to never use them against MicroSoft, as it's in MicroSoft's interest to not use them against Linux as IBM is sitting there with it's portfolio ready to shred MicroSoft if it came down to it, so effectively Linux is using cross licesened patents, and being protected from others by IBM. This is business, this is how patents are used, we should be glad IBM is up on IP law and knows how to use it, and that Linux is so valuable to IBM.
Actually, IBM litigated until the United States Government ran out of money, which should really give SCO pause!
This is true, according to the book "Big Blue: IBM's use and abuse of power".
Baxter finally dropped the suit (Regan adnimistration) due to "lack of merit". Lack of merit? Then why did they spend 10+ years litigating this?
The price of freedom is eternal litigation.
IBM has always agressively defended their IP and they have a shitload of it. a lot more of it is in hardware R&D though. I think IBM puts out more pattents in a week than SCO has in it's entire portfolio. it's like fighting a guy with a knife when he has a tank. there's nothing inherantly wrong with what IBM is doing, they invest a lot in IP so they should be able to defend what they develop. they definately do let a lot of people slide who violate IBM IP rights, it's not like they're going to sue everyone, it's not worth it to them. and besides SCO started the pissing contest, now IBM is just going to finish it.
I never said I was smart, I just said I was smarter than you
I wonder if Boies is just sitting on his ass and that's all he's supposed to do.
I'd be willing to bet that this whole charade by SCO is just a shell game to pump and dump stock, and earn a bit of scratch from MS and SUN, while plowing the company under. Hiring Boies was a PR move. They never really intend to use him. I'll bet SCO doesn't expect to got trial. That's OK for Boies, he won't get a cut of $3 billion (like that would've happened, anyway) but I'm sure he's getting paid and doesn't have to do a damn thing except let his name be associated with the suit. SCO gets PR pump from his name, Boies gets a little cash (and the appreciation of Canopy, MS and SUN) for doing nothing. Win-win.
I've course, I'm just speculatin' on a hypothesis.
Of EXTREME interest is the "IBM is seeking ... an injunction requiring SCO to refrain from misrepresenting its rights, and to cease further infringement of IBM's patents." part. An injunction would shut down SCO's sales of any of the identified infringing software.
I'm serious about this. After IBM & Red Hat finish these pathetic twits off in court, their stock will be probably no more than 10 cents per share. The open source community needs to buy them (hell, everybody throw in a dollar) and then throw open their "intellectual property" completely free to the world. While we're at it, let's publicly abandon the Unix trademark (which is likely unenforcable, anyway).
Their market cap before this was $25M. I suspect it'll be 1/10 that after this is done. It's not much money spread among all of us.
Michael
Do you have ESP?
When I was working for bombay stock exchange, they had a system called "badla". (paying (money) or buying (stock) later ). The bombay stock exchange had a settelment period of 5 days from Mon-Fri. i.e. what you owned or gained in terms of money or stocks was determined on Friday even and you had to settle by saturday morning.
Now if you had bought stocks in the week and didn't have the money to cover it by saturday, You would use the "badla" trading system which ran on saturdays. Similarly if you had short -selled in the week and had no stock to deliver by saturday, you could use the badla system.
Using the badla system was a way to avoid selling your bought stock if you didn't have the money or avoid buying the short-selled stock , if you didn't have the stock to deliver by saturday.
The badla system was a process where a person who had say bought stocks could find a money lender to lend him money to cover his purchases. Of course he would have to pay interest to the lender and a commission to the estock exchange. Similarly if you had short selled, the exchange would find some one who was willing to lend you the stocks.In this case you would still pay interest to the stock lender based on the price of the stock and a commission to stock exchange.
And like normal stock exchange dealings, there was trading involved. i.e. the lenders would compete against each other for a competetive rate at which to lend money or stock.
This was an immensely beneficial system to the stock exchange as they would get commission from every one. The long-buyer, the short-seller and the money /stock lender. But was a major source of rampant corruption. Often the badla rates were indicative of how the stock would perform over the comming weeks, and clever brokers had found lot of loopholes in the system.
Before the badla system was closed down in mid 2000-2001, the average trade on Bombay stock exchange on a normal week day was somewhere in ther region of 3,000 - 5,0000 Crore Indian Ruppes i.e. 60-100 Million USD. After the system was closed the daily trading dropped by as much as 10 times i.e 6-10 Million USD in the initial days.
Now I believe the bombay stock exchange has a rolling settelment something like the nasdaq or nyse.
for the last time people, I am "frodo from middle eaRTH", not "middle eaST".
7. If, as a consequence of a court judgment or allegation of patent infringement or for any other reason (not limited to patent issues), conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all. For example, if a patent license would not permit royalty-free redistribution of the Program by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution of the Program.
So, yeah, IBM could kill Linux if it wanted to brush off some patent and take RedHat or someone to court. They way I read this (IANAL, duh), if IBM got a court order saying that Linux infringes some of its patents, people would have to stop distributing programs that cannot be used royalty-free, right?
Seems unlikely they they would do that.
According to forbes:
IBM last year took in more than $1 billion in Linux-related revenue. In its 2002 annual report IBM claims it has 7,500 employees involved in developing, selling or supporting Linux, and that more than 15% of the mainframe capacity it shipped last year was for Linux workloads.
IBM is pulling in some major cash from its Linux business (after having made an equally major investment, it seems). What motivation would they have to piss in their own cornflakes?
There is much cruelty in the universe, John.
Yeah, we seem to have the tour map.
I'd be willing to bet that this whole charade by SCO is just a shell game to pump and dump stock
a shell game? You can say that again!
Back in '95 I used to be both a contractor for IBM and a member of TeamOS2. At the 95 Atlanta COMDEX (Which I attended on my own dime to do OS/2 advocacy and provide installation support to the team,) one of their marketing guys demoed the latest neat stuff for the operating system. At the presentation, he mentioned that IBM's vision was to provide the same OS across the board. It was to be OS/2 on the laptop (PDA? Notebook? hah!) OS/2 on the desktop and OS/2 on the big blue iron. This would result in a significant decrease in training costs because the employees would always know the platform no matter how big the iron was that they were running on.
8 years later their vision has been realized. Sure the OS has changed, but a single corporation-wide OS deployment is now possible. The radical learning curve necessary to use their big stuff has been smoothed out. The search for that last 90 year old guy who knows how to administer MVS has been eliminated. A much deeper talent pool (of people who know UNIX) can now be tapped.
At the moment it looks like the IBM/Open Source Community relationship is pretty stable. Of course we should be wary -- a corporation can turn on you in a heartbeat if it'll make them a buck. Right now this relationship is making IBM a buck, so I don't see that happening in the immediate future.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
I just finished my SCO timeline complete with SEC fillings. Got to go back and update it again. Oh well, here it is. Please email me if you can add to it.
June 27 2002
McBride becomes CEO of Caldera.
Stock price around $0.60
March 7 2003
SCO sues IBM
Stock price up from $2.21 to $3.10 but falls back to mid $2.00 range
March 18
SCO stocks hits low of $2.07
Jeff Hunsaker (VP Worldwide Marketing) gets 100,000 options
Reginald Broughton (Senior VP International Sales) gets 50,000 options
Michael Olsen (VP Finance) gets 50,000 options
Robert Bench (CFO) gets 100,000 options
Darl McBride (CEO) gets 200,000 options
Can anyone fill me in on what happened between 3/14 and 3/17 that caused the
price to drop from $2.64? And how did the executives know that $2.07 was the
lowest it would go?
April 8
Robert Bench sells 4100 shares at $2.90 each for $11,890.
April 23
SCO issues warning to Red Hat and SuSE
Stock is up to $3.10
May 2
IBM responses to lawsuit, denies claims
SCO claims they have proof
May 14
SCO stops selling Linux, sends out letter to 1500 large corporations
suggesting that they stop using Linux.
Stock has been steadily rising, now at $3.55
May 15
SCO offers to show proof under strict NDA to journalists only
Stock shoots up to $4.55
May 16
SCO changes name to SCO Group Inc.
Board of Directors gets 10,000 options each at $4.75
May 19
SCO announces that Microsoft has given it cash, and that M$ is
not the first company to pay it off. Rumours are that the other
company is Sun. Total revenue from both licences: $8.25M.
Stock price starts to really take off.
May 28
Novell issues press release challenging SCO
SCO states that they may end up suing Linus
Stock plummets from $8.71 to $6.60
June 3
Opinder Bawa (VP Global Services) pancis and sells 15,000 shares at a paltry
$6.00 each, making $90,000.
June 5
O. Bawa exercises 7916 in options at $1.20 each and sells them for
$6.60 each, netting himself just over $42,000. He really should
have waited a day.
June 6
SCO announces discovery of ammendment to Novell contract
Share price shoots up to $8.52
Giddy with glee, Jeff Hunsaker (VP Worldwide Marketing) sells
5000 shares for $44,500.
June 8 SCO announces that they have shown 80 lines of code to some
doofus. This is a Sunday.
June 9 The day after this announcement, shares are up to $9.38.
Robert Bench (CFO) celebrates by selling 7000 shares, making
over $64,400.
June 11 SCO gives IBM until Friday the 13th to settle.
Shares drop to $8.65. Believing that the end is near, Michael
Olsen (VP Finance) sells 6000 shares, earning $51,720.
June 13
IBM's deadline passes and SCO is still alive. The stock price shoots up
to $11.21. Darl buys 7003 shares for one tenth of a penny each. In an
interview, Chris Sontag (Snr VP OS) says that SCO may own BSD
as well.
June 16 SCO announces that they are revoking IBM's AIX license. IBM
announces that they don't care. Shares dip.
June 17 SCO decides that they actually want three billion from IBM and
elaborate on what technology they think IBM stole from them.
June 18 Sun launches ad campaign trying to get Linux and AIX customers
to use Solaris instead. SCO criticizing Linus in a court document.
June 20
Reginald Broughton, needing some weekend money, sells 5000 shares when the
stock price goes over $11, making almost $55,500. The price closes at $10.77.
June 23 SCO says that they won't sue their own Linux customers.
June 25 With the stock
IBM e-Business on Demand General Manager Irving Wladawsky-Berger seemed surprised to hear of Perens' comments. "The question has never come up with Linux," Wladawsky-Berger says. IBM's history of working with open communities like the World Wide Web Consortium should reassure developers, he adds, but he encourages Perens to contact IBM to discuss the issue.
In other words -- again -- Perens started shooting off his mouth about possible bad intentions from IBM before even discussing it with IBM. That's just plain bad form, since it means Wladawksy-Berger was caught off-guard by an unexpected question from a reporter. That's not a good way to treat people whose cooperation you desire.
I hope that someday, the Open Source/Free Software community will have spokespeople who comport themselves professionally instead of brilliant but socially-impaired people with a tendency to ill-considered public tantrums. You can get away with that as a developer, at least sometimes, but when you get into the PR business, basic manners are a fundamental requirement of the job.
If Perens had talked to IBM at length and gotten nowhere, it would have been acceptable to say, "We talked to IBM at length and got nowhere." Just calling the press and saying, "IBM hasn't spontaneously stepped up to the plate and I'm starting to have paranoid fantasies," doesn't cut it.
Proud member of the Weirdo-American community.
SCO is still distributing Linux kernels under the GPL (check their ftp site), that doesn't seem to stopped them from making their licence claims anyway. Explicitly forbidden in the GPL, but who cares about proper licencing anyway? ;)
Kjella
Live today, because you never know what tomorrow brings
I think the term we are all forgetting is: Defensive Patents. Designed NOT to enforce on a regular basis, but instead to say "sue us, and we will bitch slap you back". Lots of companies use defensive patents (especially IBM) in case they tread ever so slightly on someone else's patent. A type of insurance policy.
Tequila: It's not just for breakfast anymore!
This surely looks like SCO has bitten off more than they can handle. At the moment they've got three big lawsuits going: their own initiative against IBM, Redhat and now IBMs countersuit. Not to mention that in some countries they have been forced to shut up alltogether or pay huge fines (i'm really wondering if they can be forced to take a definitive stand about their Linux license in Germany). It'll be interesting to see if they can afford to pay all the lawyers. That brings up the question who else can increase the heat by bringing up some litigation against them. If they're entangled in enough lawsuits now that'll bring them down quite effectiveley: They have to pay all those lawyers, every time another lawsuit against them is announced their shares fall (so they'll have a hard time to pay all those lawyers), and they'll have to weigh any statement with respect to all those lawsuits (but i wouldn't expect them to).
Note that SCO did that to themselves: they are shooting their mouth off every which way and opened themselves up to dozens of ways of litigation. I'd say: hand it to them now, draw them into court for any case which has a good chance of winning (if they win the cases it'll only help them publicitywise, and for SCO publicity is boosting shares which equals money).
It'd be nice if the FSF could join the fray for copyright infringement (do they still distribute Linux? since their Linux License invalidates the GPL they'd be violating the copyrights of any kernel-developer out there).
"By the way if anyone here is in advertising or marketing... kill yourself." -- Bill Hicks
From the news.com.com article:
...and our cash kinda ran out, too!
"What I'm getting a sense of now is there is an effort to counterpunch," said Gartner analyst George Weiss, who has warned clients to take SCO seriously. "What I thought the (Linux) community should be doing is shift the initiative away from SCO and throw them off balance into a defensive posture. Until Red Hat started its counterclaim, all the initiative was with SCO."
This has really suprised me. I mean, I'm not shocked at corporate opportunism of course - especially analysts and people who think of themselves as visionaries, being opportunistic is practically their job description.
But the thing is: I always took for granted that Gartner is just an MS marketing branch, and now they turn around and say that they always thought the Linux community should really take countermeasures, and stuff like that! Wow...
To the paranoid conspiracist mind this can only mean that MS must have realized that there is not much substance behind SCO's claims and that their activities in the fraudulent extortion department didn't go over well at all in the industry.
Probably something like this happened:
SCO: Hey, guess what, we can prove that Linux is just a pirated copy of SCO Unix!
Microsoft: Wow, cool, that would make Linux illegal and discredit the whole open source community?
SCO: Yeah, you bet. Only, if someone could give us credibility.
Microsoft: NP, we'll announce that we honor your Unix rights and pay for your initial lawyer fees with some Unix license, OK? Additionally we will buy some studies and news articles that lend credibility to your claims.
SCO: Thanks, we feel much better now, that really helped. Initiating FUD and extortion campaign now.
Microsoft: What? Uhm, your going to prove your thing in court soon, will you? You know, revealing the evil that is Open Source for what it really is?
SCO: Yah, sure.
Microsoft: SCO? You're making us all look bad.
SCO: We know, but "the software business is binary", remember? Gotta do what keeps us alive!
Microsoft: There is no proof, is there?
SCO: We're still kinda working on that, sir.
Microsoft: OK, that's it, we're bailing out. Steve, call Gartner and tell them they can switch modes from "MS fantasy sales pitch" to default "echo the public opinion" mode. Farewell, SCO.