SCO Gives Notice To 6,000 Unix Licensees

inode_buddha writes "This article describes SCO's recent letters to its UNIX licensees, asking them to certify that they '...are not using Unix code in Linux.' It also notes another set of letters '...outlining additional evidence of copyright infringement to a subset of 1,500 global Linux users that SCO first contacted in May about copyright infringement.' There's also a decent breakdown of the company's balance sheet and some quotes from company officials. I hope to see one of those 'other' letters; could anyone post it? SCO better have asbestos underwear." Ask and receive: idiotnot adds "Here's the article from the Sydney Morning Herald. Here is a PDF Copy of the letter." "Yours truly"?

Comments

The important question

[Gary Whittles]

By sending out these clearly fraudulent legal notices-- which at best claim copyright over something which is uncopyrightable, and at worst is an attempt by a third party to claim that it is illegal for people to use the materials owned by the BSD regents under the BSD license in the manner in which the BSD regents intended the BSD license to be used-- has SCO opened itself up to legal action?

SCO has in the past managed to sidestep most allegations of fraud by being horrendously vague. They said that they were owned money but never sent any invoices, sidestepping mail fraud. They tried to present things as if you needed an SCO license to use linux, but if you tried to talk to talk to them, they were actually selling UnixWare licenses and not in the process actually distributing linux to you, sidestepping GPL violations. However, this is entirely non-vague. It seems to me that SCO has stepped over some sort of line here and this is actionable.

I know that the law does not seem to have many consequences for people who send out bad takedown notices, but surely there must be something preventing company A from finding lists of competitor B's customers and sending them takedown notices for using some portion of competitor B's product that company A does not, in fact, own.

At the least, can this be added to the lanham act/ restraint of trade/ libel or whatever countersuits that Redhat and IBM have going? What are the options from here, and what will actually happen?

Re:The important question

[milo_Gwalthny]

This is actually rather clever. SCO is not claiming that the licensees are using their code in violation of the license, they are asking the licensees to certify that they are not. This puts the licensees in a difficult position: they have absolutely no idea whether or not they are violating the license. They will not want to respond that they are not, because that could come back to haunt them. So, they either have to not respond at all, thus facing the retraction of their license, or (my personal favorite) say they are not violating "to the best of our knowledge." This last might drag them into a legal dispute with SCO.

SCO is like the insane man on the street: he's almost certainly harmless, but nobody wants to get embroiled with him anyway. Thus the dilemma for licensees. For SCO, they end up with many more legal targets.

Re:The important question

[jbolden]

1) SCO does not own the rights to UNIX (in any sense such rights could exist the open group owns them). This is another one of there false claims. They own the right to use AT&T code in their UNIX product, and they own the right to call Unixware a Unix which is the same rights as IBM, Sun, SGI, etc... have. Be careful about beliving anything they say about their case

2) They can't terminate the licenses, even if someone answered yes to these questions. The very paragraph they quote gives them the right to ask about the CPUs deploying Unixware not every CPU in the company (bolding mine)

On request, but not more frequently than annually,
Licensee shall furnish to SCO a statement, certified by an
authorized representative of Licensee, listing the location,
type and serial number of all Designated CPUs
hereunder and stating that the use by Licensee of Software Products subject to this Agreement has been reviewed and that each
such Software Product is being used solely on such
Designated CPUs (or temporarily on back-up CPUs) for
such Software Products in full compliance with the
provisions of this Agreement.

SCO shareholders lawsuit?

[jridley]

From the article:
SCO also announced its first full year of profitability today, reporting $5.3m in net income for its 2003 financial year

The company would have reported net income of $14.3m for the year had it not reported a charge of nearly $9m to pay law firms involved in the lawsuit and related efforts to "enforce its intellectual property rights", SCO officials said.

So, any bets on how long after all the SCO claims are thrown out as frivilous until the shareholders sue the officers for throwing money away on lawyers instead of paying dividends?

The officers are legally required to maximize shareholder value. Spewing frivilous lawsuits like a leaky hose doesn't qualify.

SCO has noticed the rope stopped moving

[shanen]

This is really getting loony--but I just realized that time is up. It's already been about a month since SCO was told to produce some REAL goods. It's obviously some sort of diversionary move, but a really crazy one. I'm straining my brain to understand it, but all I can think is that they want to claim this is how they are "protecting" their IP rather than performing normal due diligence. I bet the judge is not going to be amused. Can you say "contempt of court"?

Remember the NORMAL non-SCO behavior is to say what the disputed IP actually is--but in that case the problem--if there is any real problem--would have been fixed LONG ago. Want to take any bets if there's any code in the 2.6 Linux kernel that has ANY relation at all to anything from SCO?

In related news, SCO admits they paid $9 million to the lawyers last year--but also claims they managed to clear $5 million net. Which number do you trust more? I say the 5 is just more FUDging.

Why would I do that?

[CaptainZapp]

asking them to certify that they '...are not using Unix code in Linux.'

Running my own small business the question arises why I should certify anything to anyone who has no official business of requesting my certification?

Specifically when it comes to a company who makes the likes of Enron look like a convention of boy scouts?

SCO called liars in Wall Street Journal

[eddy]

Saw this on the Yahoo board:

"From The Wall Street Journal, 1/5/2004, page B1, by Lee Gomes:"

"As for Linux, when will the courts halt the lies of has-been software maker SCO (with $13 million in funding from Microsoft and Sun -- together at last!) as it tries to make the preposterous claim that it, and not the world, owns the free operating system?"

Not even the business press is taking them seriously any more.

SCO is totally bonkers

[Ih8sG8s]

I read the PDF of the letter.

This letter assumes the guilt of all its licencees until proven otherwise. SCO is demanding corporate HR documents (non-disclosure) for each employee who might come in contact with their software stating that they will follow the licence and letter provisions to the T. The letter also seems to suggest that users of SCO software must swear under threat of legal action never to use Linux, and never to develop GPL software. Unbelievable.

If there was any doubt before, there is none now. This letter can't possibly be seen as anything but insulting, even by historically staunch SCO supporters. I've never seen such arrogance. I feel like I'm reading Hitchhikers' Guide to the Galaxy.

DIE SCO. I can't wait to read that SCO has finally died, and that its officials and officers are being brought up on criminal charges. What a bunch of fucking crooks.

Re:SCO is totally bonkers

[Billly Gates]

MOD UP!

Your post is to the point.

All these developers and companies who use Unix will not be sued if they want to switch to Linux of BSD. If not under the false pretenses that Linux has stolen code, but rather violating a license agreement.

IF they refuse, SCO can then threaten to sue them claiming they have no respect for their IP.

So they can never run free software at all. Very crafty and slimy indeed.

I sense SCO is planning on a backup to keep them afloat if the IBM case fails. They will just sue companies and individuals who are stupid enough to sign such agreements.

Sorry if your server can not support Unixware, then you must run Windows. Ugh.

Were letters actually sent?

[walterbyrd]

Has it been actually verified that these letters were really sent? Since this scam began, scox has told numerous lies of this nature. Here are a few examples of scox's outright lies (from a yahoo poster):

Lie: We've gone in, we've done a deep dive into Linux, we've compared the source code of Linux with UNIX every which way but Tuesday
Truth: Experts have shown that SCO used a simple, primitive text search based on a few keywords.

Lie: SCO's expert witnesses are "MIT Mathematicians".
Truth: Among various backpedaling statements, Paul Hatch, a SCO spokesman, wrote in a statement to The Tech ,"'To clarify, the individuals reviewing the code had been involved with MIT labs in the past, but are not currently at MIT."

Lie: SCO received the D&T Fast 500 recognition because of the strong UNIX market, IP enforcement and the Web services strategy
Truth: SCO made the list because of revenue growth due exclusively to the Tarantula acquisition.

Lie: The IP protection legal team is on pure contingency
Truth: The legal team is billing at a 2/3 discounted rate with the possibility of contingent commissions

Lie: Boies was compensated $1.6M for a contingent event
Truth: The engagement agreement specifically excludes heritage UNIX OEM license deals; Boies is being compensated 20% of the $8MM Microsoft license deal, which is a follow-on extension of the first deal, a UNIX license deal not eligible as a contingent event.

Lie: Invoices will be mailed to Linux users by October 15, 2003
Truth: No invoices were ever mailed.

Lie: We will show rock solid evidence at SCOForum in Las Vegas
Truth: SCO was quickly shown to not have any ownership of the SCOForum evidence

Lie: The Berkeley Packet Filter code in Linux is "obfuscated" SCO code.
Truth: Jay Schulist, who never had access to SCO code, implemented it from scratch.

Lie: SCO's 2002 UNIX source release was "non-commercial" and excludes 32-bit code
Truth: "The text of the letter, sent January 23, 2002, by Bill Broderick, Director of Licensing Services for Caldera [now SCO], in fact makes no mention of "non-commercial use" restrictions, does not include the words "non-commercial use" anywhere and specifically mentions "32-bit 32V Unix" as well as the 16-bit versions."

Lie: We have been off meeting for the last several months with large corporate Linux end users. The pipeline is very healthy there.
Truth: The pipeline is empty. All inquiries have been to assess SCO's claims and liability exposure.

Lie: We have done additional signups for Linux end-user licenses. We have a number of folks that are in the evaluation process, and we definitely have a lot of interest in what's going on there.
Truth: During the earnings conference, SCO admitted that not a single Linux end-user license has been sold. Follow-on guidance comments warn that no such sales are expected in Q1.

Lie: Our claims are not trivial.
Truth: Based on evidence provided to date, SCO's claims are extremely trivial, debunked in a matter of hours

Lie: claims that SCO has are both broad and deep.
Truth: SCO's has made a breach of contract claim and a copyright infringement claim; all evidence presented to date has shown each of these claims to be trivial and unfounded

Lie: These claims touch not, just not IBM, but other vendors as well.
Truth: Exhaustive code reviews by other SYSV licensees, including HP and SGI, have shown that the only Linux/SysV overlap concerns a small amount of public domain code.

Lie: (To the Utah Judge on 12/5) SCO will make a copyright claim in two days, but no longer than a week
Truth: Many weeks later and a copyright claim has not yet been made.

Lie: During the recent road tour, Blake Stowell indicated that core operations were profitable in Q3.
Truth: Core operations lost $3.8MM in Q3-03.

Lie: Sco will audit AIX users.
Truth: It never happend.

Lie: Sco will revoke IBM rights to use, support, or distribute AIX.
Truth: Those rights can not be revoked by scox.

RICO Lawsuit

[b-baggins]

I'm still trying to find out why none of these companies has filed an extortion suit against SCO.

Re:Para 7.10

[rongage]

The Law of the Land, however, does grant you the right to sell, lease or otherwise transfer or dispose of your own property

Dude: this is why software in this country is licensed and not sold. The software manufacturers here in the states want to maximize their profits, so they license the software to you *but not sell it*. This allows them to impose all sorts of additional conditions and terms on the use of said software.

Unfortunately, there are several court cases here in the states that establish this as the way things are - regardless of the "looks like a sale, acts like a sale" bit that occurs when you purchase a retail box at your local store.