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Did SCO Actually Buy What it Thought?

Posted by CmdrTaco on from the well-that-makes-things-different dept.

Int27h quotes The Age saying "Just before Christmas last year, Novell announced publicly that SCO had known for some time that it did not receive all rights and ownership to UNIX technologies, despite public statements to the contrary. Novell has made public correspondence between lawyers representing both Novell and SCO." Lots of links and commentary on what continues to be one of the strangest stories in the history of Linux.

23 of 470 comments (clear)

  1. No one is taking SCO seriously anymore by wawannem · · Score: 4, Interesting

    I mean, other than the dolts that may actually be paying the licensing fees. But, I don't see any steep declines in RedHat, Suse, or Mandrake sales. People don't believe these guys and it will be a matter of time no before the press quits attending Darl and Co.'s press/phone conferences

    1. Re:No one is taking SCO seriously anymore by happyfrogcow · · Score: 5, Interesting

      I have a question about cleanliness of the kernel (no RMS shower jokes please;). SCO has stated that all versions after some version are tainted. i'll just say version X is the last clean kernel according to SCO since i don't know what the version number is. Recently SCO has been claiming the ABI is one of the infringing elements, correct?. So how is the ABI different in the clean version X and the "tainted" versions?

    2. Re:No one is taking SCO seriously anymore by ignipotentis · · Score: 3, Interesting

      But yet, their stock is still not taking a nose dive...

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    3. Re:No one is taking SCO seriously anymore by foandd · · Score: 5, Interesting
      While I agree that this is nowhere near the slam-dunk that the linked article makes out, there is a possibly important point here that people seem to be missing. If the amendment states that copyright is transferred only insofar as SCO needs it to fulfill the original contract (which basically allows them exclusively to sell that version of Unix), it still leaves SCO with a few problems:
      • The original agreement could be fulfilled by only granting copyright on the binaries (as a derivative work), not the source. SCO would need copyright on the source to sell it outright, but not to license it or create derivative works, which it appears possible is all the original agreement allows them to do.
      • They don't need exclusive copyright to do any of the things which the original agreements give them the rights to; shared copyright is enough (and contrary to what most people seem to think, nothing in copyright law requires it to be exclusive). While it may be possible (if doubtful) for them to claim that they need full rights in order to be able to license Unix, it would be hard to interpret things in a manner which shows that they would need exclusive rights. Even if SCO won this part of the argument, Novell would have an argument that the amendment's granting of rights to SCO does not remove them from Novell.
      • The original agreement grants SCO exclusive rights to license Unix; it does not guarantee they will do so profitably. Many arguments in favor of SCO's amendment two interpretation come down to "they won't make money if it's interpreted otherwise." Whether or not SCO manages to make money from it is immaterial. All that matters is whether or not they can license it, and even if you take Novell's interpretation as gospel, they can still do that.
      As you note, there's a lot of wiggle room here, but in terms of their assault on Linux I'd say most of it is not on SCO's side of the argument.
    4. Re:No one is taking SCO seriously anymore by GSloop · · Score: 4, Interesting

      You forgot point #4:

      That Novell, who seems to have retained the rights to the code hasn't (or doesn't in the future) grant rights to the code included in Linux. (You'd think the owner of SUSE might want to grant those rights too huh?)

      SCO's position is laughable. Even if they get rights, are they eclusive rights, that prevent Novell from transferring or licensing them to the Linux community themselves. This seems to be a crux argument, and it certainly doesn't look good for SCO.

      Cheers,
      Greg

  2. Groklaw by donnz · · Score: 5, Interesting

    And of course Groklaw has had the full analysis for a while now, including the fact that SCOs filings missed mentioning this dispute, even going so far as to deny there was any ongoing dispute with third parties over Copyright...some pants combusting rather brightly over in Salt Lake City.

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  3. Fraud? by anachattak · · Score: 5, Interesting

    So if they knew, or should have known, that their rights were not as expansive as they represented, and they knowingly misrepresented the scale of those rights to the persons they offered licenses, and those persons bought those licenses based on those misrepresentations.....sounds like a big fat old prima facie fraud case to me.

    1. Re:Fraud? by Anonymous Coward · · Score: 5, Interesting

      Just buy one share of SCO, find a bunch of other small shareholders and start a class-action for misrepresentation of risks in their filings/public statements.

      Or, buy 100 shares, sell 1 each to 99 Slashdotters... ;-)

    2. Re:Fraud? by anachattak · · Score: 3, Interesting

      But if you bought a license based on their "representations", you can bypass the whole shareholder lawsuit issue and go directly after the personal assets of McBride and Boies. They might try to hide behind the "corporate shield", but fraud can pierce the corporate veil. On top of which, their actions were clearly outside the scope of just describing the features of their product (i.e. interpreting federal copyright law and the benefits imputed into their license products). Even if SCO went under in bankruptcy, to fully escape both McBride and Boies would have to declare bankruptcy as well.

  4. Interesting market reaction by strictnein · · Score: 5, Interesting

    SCO Group (NASDAQ SC:SCOX)
    17.05 -0.95 / -5.28%

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    1. Re:Interesting market reaction by happyfrogcow · · Score: 5, Interesting

      as well with IBM, NOVL, SGI, and RHAT. all which have been embroiled in this nonsense. all 4 are up, SGI up nearly 100% in the last few weeks. NOVL steadily rising since aquiring SuSE.

  5. for SCO by mr_tommy · · Score: 5, Interesting

    SCO has gone to far now to simply back off, or admit they were wrong. They have invested their whole business in this, and have no option but to go forward and proceed with litigation. If they back of now they loose face and the business will probably crash. If they loose in court, they have the same situation, except they lost alot of money on lawyers instead.

    HOWEVER, if they win in the quirky US legal system, who knows. They might make alot of money, and keep on putting out super duper products :S

  6. Another nail in the coffin by The+One+KEA · · Score: 4, Interesting

    Novell's sudden assertion of their ownership of UNIX copyrights seemed to derail the SCO case in its early stages; it's nice to see that their explanation of this provides yet another nail in SCO's coffin. Way to go, Novell.

    Let's just hope that they remain Linux-friendly.

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  7. No, Thanks to IBM by holzp · · Score: 5, Interesting

    I don't think they thought they would be buying the World of Pain they are walking into...

  8. Let's not be too smug by Uma+Thurman · · Score: 3, Interesting

    It's also certain that Novell doesn't quite understand what they sold to SCO either. Perhaps Novell would like to take a shot at selling SCO the same thing twice!

    --
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    1. Re:Let's not be too smug by furry_marmot · · Score: 4, Interesting

      I agree. In fact, a question has been on my mind for a while which I haven't seen addressed on Slashdot yet.

      So, let's say SCO is right and Novell wrote a contract that says (simplified for the sake of argument), "SCO now owns everything having to do with Unix ever." Did Novell ever have the right to grant such to SCO?

      Given the amount of code put into the public domain, and given the number of products descended in one way or another from System V, is it even legally feasible for a company to claim it has gained all rights to something one, two, three generations back from my current product, and therefore owns rights to my product?

      I'm afraid this hasn't made any sense to me from the beginning.

  9. Isn't tomorrow... by Valdrax · · Score: 4, Interesting

    Isn't tomorrow "put up or shut up" day for SCO?

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  10. New light on the subject by erroneus · · Score: 3, Interesting

    Woah!

    If what is being said here is true, then that must mean that the people at SCO are not liars, they're just embarassingly stupid!!

    You know? This is beginning to make a little more sense... but can the SCO people be put in jail for being ridiculously stupid and making people suffer needlessly from it?

  11. Re:The whole thing just highlights... by YoJ · · Score: 3, Interesting

    It illustrates how vulnerable linux companies are to legal wrangling; this is different than linux itself being vulnerable.

  12. IAA Confused L by stewball · · Score: 5, Interesting

    I spent a few years drafting exactly these kinds of agreements, and having read the SCO/Novell Asset Purchase Agreement, including the dreaded Amendment Number 2, I have to confess, I don't know what SCO's lawyers were thinking.

    When you buy technology, you buy 2 classes of assets: (1) the tangible (which includes stored electrons) real-world implementations of the stuff, like copies of the software, units of hardware, copies of manuals, and so on; and (2) the intellectual property rights, including copyright and patent, embodied in the tangible stuff.

    The way I'm reading the contract (which could be wrong -- I took a pretty quick pass through it) Novell sold SCO the "stuff" without any of the rights associated with the stuff. In other words, because the stuff was software, Novell sold them pretty much nothing.

    When I've done these deals in the past, the purchaser either gets the associated IP rights as part of the deal, or a REALLY broad license to them. From the looks of things, SCO didn't even have the right to make copies of the stuff it bought. That's completely incoherent from a transactional point of view.

    That argues for 2 things: (1) SCO's lawyers really pooched it in this deal, which is certainly possible -- I've seen some really dumb language come out of high-end firms, and/or (2) SCO is right, and the agreement couldn't possibly mean what Novell thinks it means, because that makes no sense. SCO might not be able to get that enforced without a court action to do what's called "reformation" of the contract, where the court goes in and rewrites the contract to make it coherent. This is a really rare remedy, BTW, for obvious reasons.

    Please, someone who's read this document more closely, feel free to correct me.
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  13. explain something to me by jonathanduty · · Score: 5, Interesting
    I have to admit, we are beginning to see several new discoveries that put evidence to the claim that SCO is full of crap. But I have to wonder, back in late 2001 and early 2002, when SCO and their legal team were deciding if they wanted to start this campain, how could they not see these discoveries coming into the spotlight?

    They knew this data existed (hello, the linux kernel and all of the CVS logs are open source, they can be read by anyone)

    They have the same copies of the contracts as everyone else (Novel, Sun, ect)

    They had to know that a judge was going to make them produce evidence and this "We can't show the conflicting code" thing wouldn't fly with a judge.

    I worked for a dot-com that provided a service to Corporate Law Firms and I know that they go through a lot of trouble to do their homework. Some of these things would have not slipped their radar.

    So is all if this (including us tearing up SCO's claims) just part of their plan? Are we missing the real target of McBride and SCO? I find it hard to belive that SCO and their legal team are, or have ever gone "Oh Shit" since this all started. More like they are saying "This is going exactly to plan".

    Someone please shed some light

  14. Blatent Ploy |OT| by obsolescence · · Score: 5, Interesting
    A not for profit's reaction to the debacle:

    Open Letter to SCO

    Dear Sirs:

    It has come to my attention that you claim certain intellectual properties involved in the UNIX operating system and that you intend to prosecute those who violate those claims.

    To be more specific you claim that Gnu/Linux is a derivative of your Unix IP and as such is your IP. After extensive research on my own part and reviewing the considered opinions of those in the field of IP litigation I have concluded to my own satisfaction that your position consists of bullpuckey.

    As such I feel I should bring my company to your attention. My name is James Burgett and I am the executive director of a not for profit organization called Computer and Technology Resource Center (CATRC). We recycle unwanted equipment and give it to underprivileged people throughout the world.

    What I feel should come to your attentions is this: We install Gnu/Linux on over 1200 machines a year and we fully intend to continue. We send said computers to schools, not for profits and underprivileged people throughout the world. We have been doing so for over 3 years and I can safely say that all of them could be classed as "servers". On the basis of your pricing (assuming that our inevitable litigation extends past your discount deadline), my organization owes you at least $ 5,036,400 (5+ million).

    We also advocate the further distribution of your alleged IP by other agencies and governments at home and abroad and could quite possibly be held liable for a lot more. (I'm sure you can come up with a price for this.) We have also assembled many multi processor systems (By the way, what is your price for multiprocessor systems?)

    So based on an assessment of our operations and your claims. I have concluded the following:

    Your ownership of the IP is dubious at best (Novell copyrights, Unix system labs vs. UC Berkeley, distribution of all contested IP by you under the GPL while Caldera,.... etc.)

    Your ability to enforce your claims is laughable at best (you would have to deal with Novell's copyrights before you can sue anybody, then demonstrate that you did not release said IP as your Linux distribution and last that you have the right to those copyrights at all as they seem to violate some of IBM's patents. This combined with the fact that your lead attorney seems to be under investigation in Florida that may lead to his disbarment leads me to the conclusion that you are not a credible threat.

    Your only redeeming feature is your histrionic and ill-conceived rants, which admittedly have an enviable ability to generate press.

    As you represent no threat and can only bring us press, I humbly request that you use us in your act of corporate self-destruction.

    If you choose not to sue us I should inform you that I have been consulting with my attorneys about options for initiating lawsuits against you based on some of the fallacious claims made by you about operations such as ours that use Gnu/Linux. You have made direct accusations about Gnu/Linux and its users that could only be construed as accusations of theft.

    As I am not a thief and find your accusations harmful from both a personal and corporate standpoint I demand that you immediately cease and desist from your unsubstantiated statements or face litigation.

    In conclusion let me thank you for this wonderful opportunity to promote our message on your dime and fully expect to be giving away what you claim is your IP long after your company is dead and gone.

    Yours sincerely:

    James Burgett

    Executive Director

    Computer and Technology Resource Center

    Primary website: www.accrc.org

    email james@accrc.org

  15. Amendment 1 limits SCO's rights to SVRx by whoever57 · · Score: 4, Interesting
    If you go to this page and read the paragraph headed: "10. In Section 4.16, paragraph (b), the last sentence (\"Buyer shall not ... Merged Product\") is amended to read as follows:", you will see that the amendment eliminated almost all right to sell new SVRx licenses. SCO only bought rights to sell the rights to use on additional CPUs to existing licensees.

    Given this limited right, why would SCO need ownership of the SVRx copyrights in order to exercise their rights under the agreement.

    Hence SCO did not get the SVRx copyrights. What SCO bought was really the UnixWare business. Not UNIX!

    --
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