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About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Discovery
Sunday, July 31 2005 @ 03:00 AM EDT

Back in May of 2003, SCO announced that Microsoft had paid them millions, and we were told this is what they paid for:
According to a statement from Microsoft, the company will license SCO's Unix patents and the source code.
Remember that detail? Patents. Plural. At the time, everyone, including me, took them at their word that such patents existed and had been licensed, even if only as cover.

But now that Ninja Novell has put its SCO cards on the table, including at least an implied fraud card, no pussyfooting around, in its Answer and Counterclaims [PDF], it's clear there will be discovery in SCO v. Novell regarding the Microsoft license, and they will be looking more closely at the deal struck. We're all looking more closely. Novell has asked to see the license, and it's very likely they will get to see it. Discovery is very broad, as you may have noticed in the SCO v. IBM case. Anything the least bit relevant is usually ordered turned over. So, if they do depositions of SCO and/or Microsoft employees, here's a question I'd like Novell to ask:

What patents, exactly, did Microsoft license?

I've tried to find SCO patents, and all I can find is this Caldera Systems, Inc. patent dated March of 2003. It has nothing to do with the Linux kernel, by the way, and is describing, I think, a kind of network administration and software update mechanism, kind of like up2date. Patents are deliberately written so no one knows what they do, so I'm guessing, and patent law isn't my field, but if I'm in the ball park, surely Microsoft didn't need to license that, did they? Even if they did, considering the date of application, February of 2000, and the listed owner, why wouldn't they have contested the patent instead? What due diligence did they do regarding SCO's claims?

Anyway, Microsoft told us patents, not *a* patent, according to the media report. So, which patents would those be? I can't find them. Can you? If this is the one and only, and they mispoke, and they did license it, exactly how has Microsoft used this vital, patented material since 2003? It has to be vital, right, to pay millions to use it? Did SCO threaten to sue Microsoft if it didn't pay up, and Microsoft rolled over?

Any use of the patent that dates from after Microsoft reads this Groklaw article doesn't count, by the way. No cheating, Microsoft. Cheating would be very, very naughty. Your nanny would have to put you in the Naughty Corner until you apologize.

Joke. Joke. They can't cheat. Either SCO had patents, plural, to license back then, or they didn't. It's not fixable now, if they said it. And lots of cynical eyeballs are watching now, unlike in 2003, when we were all naive and a bit dumbfounded by SCO.

SCO's Chris Sontag, as you'll see, said the deal was "a standard, straight-up Unix licensing agreement, like many we've done in the past", which would seem to support Novell's claim for its cut. Regarding any Unix patents that SCO might claim they got from Santa Cruz, right after Caldera purchased whatever it is they purchased from Santa Cruz, in August of 2000 Ransom Love was asked if Caldera had gotten any patents, and he said he didn't know, but "That wasn't our intent". And now Novell CEO Jack Messman tells us that Novell retained all the patents, which would explain why I couldn't find them for SCO. And, indeed, if you look at this Caldera 10Q from the third quarter of 2001, look what they say they got from Tarantella, formerly Santa Cruz:

Intangible assets acquired:
Distribution/reseller channel
Existing technology (consisting primarily of UnixWare and OpenServer)
Acquired in-process research and development
Trade name and trademarks
Distribution agreement
No patents. No copyrights. Trade name and trademarks *are* listed, however, so they didn't just forget to list the IP assets, did they? If Novell retained the patents, as it says, and never sold them to Santa Cruz, obviously Santa Cruz couldn't pass patents it didn't get from Novell to Caldera.

So what patents did SCO have to license? SCO hasn't sued anyone over patents, not IBM, not anyone. Here's their complaint in SCO v. IBM, so you can check it for yourself. Why not?

Of course, if you haven't got patents, you can't litigate over them, can you? But you can't license them either.

So why did Microsoft say it was licensing patents? Just carelessness? I find it hard to believe that any corporation would pay millions without knowing precisely what they were getting in return. Did SCO tell them, as they did the media, that they had patents, and Microsoft failed to do due diligence? Perhaps I have missed some patents, and it will be revealed in discovery. Or if you find some, let me know and I'll update the story. If not, and they in fact had no patents to license, or just one, why did Microsoft and SCO say that Microsoft was licensing patents? They can't say they didn't know SCO said it. SCO put out a press release, and the press asked Microsoft to comment on it and they did.

To remind of you of what happened, I've collected some materials on this subject from that time period.

To start us off, here is the SCO press release about the Microsoft license. Notice the headline says patents, but the text says a patent:

SCO Announces UNIX Licensing Deal With Microsoft

SCO Licenses UNIX Patents and Source Code to Microsoft

LINDON, Utah, May 19, 2003 -- The SCO® Group (SCO) (Nasdaq: SCOX), the owner of the UNIX® operating system, today announced it has licensed its UNIX technology including a patent and source code licenses to Microsoft® Corporation. The licensing deal ensures Microsoft's intellectual property compliance across all Microsoft solutions and will better enable Microsoft to ensure compatibility with UNIX and UNIX services.

"There are many companies in the IT industry who acknowledge and respect the intellectual property of software," said Chris Sontag, senior vice president and general manager for SCO's intellectual property division. "With this announcement, Microsoft is clearly showing the importance of maintaining compatibility with UNIX and Microsoft's software solutions through their software licensing. This important step will better help their customers implement UNIX and Windows® solutions."

Microsoft joins thousands of IT companies, educational institutions and customers that have licensed the UNIX source code for the benefit of their organizations. UNIX is one of the most widely used operating systems in the industry for implementing highly scalable computing solutions for high-end computing.

About The SCO Group

The SCO Group (Nasdaq: SCOX) helps millions of customers in more than 82 countries to grow their businesses with UNIX business solutions. Headquartered in Lindon, Utah, SCO has a worldwide network of more than 11,000 resellers and 4,000 developers. SCO Global Services provides reliable localized support and services to all partners and customers. For more information on SCO products and services visit .

SCO, TeamSCO and the associated SCO logo are trademarks or registered trademarks of Caldera International, Inc. in the U.S. and other countries. UNIX is a registered trademark of The Open Group in the United States and other countries. Microsoft is a registered trademark of Microsoft Corporation. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

Naturally, Microsoft was contacted by the press for clarification:
  • SCO on Monday said that Microsoft has licensed from it the source code and patents associated with the Unix operating system. . . .

    A Microsoft representative said that the deal was simply in response to SCO's request. "Microsoft respects legitimate licences, and Microsoft took that licence (from SCO). That's it," the representative said.,39020472,2134917,00.htm

  • The software giant will license SCO's Unix patents and source code, which SCO said would ensure Microsoft's intellectual property compliance across all Microsoft solutions and will better enable it to ensure compatibility with Unix and Unix services. . . .

    Chris Sontag, senior vice president and general manager for SCO's intellectual property division, said in a statement: "There are many companies in the IT industry which acknowledge and respect the intellectual property of software.

    "With this announcement, Microsoft is clearly showing the importance of maintaining compatibility with Unix and Microsoft's software solutions through its software licensing." Brad Smith, general counsel and senior vice president at Microsoft, added: "The announcement of this licence is representative of Microsoft's ongoing commitment to respecting intellectual property. "This helps ensure intellectual property compliance across Microsoft solutions and supports our efforts around existing products like Services for Unix."

  • Through the deal, SCO has licensed Unix technology, including source code and patents, to Microsoft, said Chris Sontag, senior vice president and general manager of the company's SCOsource, a division in charge of managing and protecting SCO's Unix intellectual property. . . .

    Windows Services for Unix, now in Version 3.0, consists of different components that bridge the gap between Windows- and Unix-based systems running in the same network, according to information on Microsoft's Web site. The product's services include file sharing, remote access and administration, password synchronization, common directory management, a common set of utilities and a shell, according to Microsoft's Web site.

    Microsoft didn't immediately return calls seeking comment on the deal. But in an e-mail statement, Brad Smith, the company's general counsel and senior vice president, said the agreement "is representative of Microsoft's ongoing commitment to respecting intellectual property [IP] and the IT community's healthy exchange of IP through licensing. This helps to ensure IP compliance across Microsoft solutions and supports our efforts around existing products like Services for UNIX that further UNIX interoperability."

    The deal isn't a reward from Microsoft for SCO's recent legal challenges to the Linux operating system, Sontag said. Microsoft has been very vocal about the threat that Linux poses to its business.

    "That is simply not the case," he said. "This is a standard, straight-up Unix licensing agreement, like many we've done in the past" with other companies, he said. . . .

    Asked to comment on the news of the licensing deal at a news conference today, Oracle Chairman and CEO Larry Ellison seemed to have no compunction about drawing a link between the agreement and SCO's litigation. "Bill [Gates] is innovating. Microsoft has always had incredible innovation. You've had advanced bundling, and what you see now is extreme litigation. They have a lot of experience with extreme litigation, actually," he said.

    Microsoft once licensed Unix source code from AT&T Corp., Unix's creator, but that license ran out after Microsoft abandoned the Unix-related project that had prompted the licensing, Sontag said.

    A SCO spokesman said that the licensing deal will allow Microsoft to continue a program, announced earlier this year, of providing deeper Unix services.,4814,81352,00.html

As you see, they all reported patents, plural. Of course, there was speculation at the time as to why Microsoft would take a license. SCO made a public statement, through its irrepressibly loquacious CEO Darl McBride, that it hired David Boies to investigate who was violating its "IP", and VP Chris Sontag chipped in with some grandiose hints that their claims might include Microsoft, as well as BSD and MacOS:

  • At that time he also confirmed to eWEEK that the company had hired high-profile attorney David Boies and his legal firm to investigate whether Windows, Mac OS X, Linux and versions of BSD infringed on the Unix intellectual property it owned. As SCO was concerned about a number of other issues relating to its IP, it had approached Boies to deal with the matter. . . .

    But the unlicensed use of its Unix shared libraries was just the "tip of the iceberg as there are so much IP we're dealing with here, ranging from copyright, trade secrets, patents, source code and licensing issues.

    "Because this range of IP-related issues is so broad-based and there is such a wide-range of players involved, we're just making sure we move forward very sure-footedly. We don't want to start running before we can walk. We're trying to take things in the right order," McBride said.,1895,904685,00.asp

  • Microsoft would say nothing further on the matter, and certainly did not want to answer questions concerning whether or not Microsoft did this licensing deal to protect it from being sued by SCO for violating Unix patents and intellectual property rights that SCO acquired from Novell in 1995. But it is clear that any licensing deal between SCO and Microsoft would have to protect Microsoft from future litigation or Microsoft would not have bothered. Whether or not it was on the short-list of potential targets for being sued by SCO is also unknown. One potential point of legal exposure might be products created by Softway Systems, a company Microsoft acquired in September 1999. Softway developed a Unix runtime environment for Windows called Interix, which is now sold by Microsoft as Windows Services for Unix. With the licensing agreement, the theoretical question about whether or not the Softway products--or indeed any other Microsoft programs--were violating SCO patents or IP rights is moot. Still, more than a few eyebrows in the industry raised upon hearing that Microsoft had done this.

    The financial terms of the licensing deal were not disclosed, but as we went to press SCO's market capitalization has risen by about 50 percent since Friday's close to $58 million. There's no question that the lawsuits are making SCO's shareholders happy, even if it is making Linux and Unix vendors and shops jumpy. By inking a deal with SCO, Microsoft can breathe easy and let Linux and Unix shops stay jumpy, too. Microsoft would love anything that makes Linux look less desirable, and staying out of the Unix IP lawsuit and giving SCO some money to keep up its own lawsuits certainly helps in that regard.

    SCO's market cap has almost doubled since it established the SCOsource intellectual property licensing unit and launched a $1 billion lawsuit against IBM in early March contending, among other things, that IBM has stolen SCO's intellectual property and put it into Linux or abetted those who did do this. IBM denies these allegations, of course, and says further that SCO cannot revoke its license to Unix, which SCO has threatened to do on June 13, because the license it has to Unix is perpetual and irrevocable.

    In a separate announcement, SCO and Microsoft announced that SCO and business partner Center 7, which is based in SCO's hometown of Lindon, Utah, have created an authentication product for Microsoft's Active Directory for Windows that runs on top of Unix. SCO Authentication for Microsoft Active Directory costs $999 on a RISC/Unix box with 25 active users, with additional licenses costing $20 per user. Customers with more than 1,000 users can buy a site license at a discount.

As a result of such claims, the media dutifully reported that SCO had patents, and here is just one example:
Unix was invented more than 30 years ago by AT&T, which later sold the technology to Novell. SCO acquired the patents and source code in 1995. Caldera Systems, a distributor of Linux software, bought most of SCO's operations over two years ago and recently changed its name to SCO.
Novell contests that history of a patents sale, of course, and we'd have to point out that "SCO" in that paragraph is referring to Santa Cruz Operation, now called Tarantella, not The SCO Group of today, which used to call itself Caldera.

Here is the contract in the Santa Cruz-Caldera deal, the Caldera Systems, Inc./Caldera Holding, Inc./Santa Cruz Operation, Inc. Agreement and Plan of Reorganization dated August 1, 2000, a version with the three amendments attached, one in September of 2000, and one in December of 2000, and one February of 2001, and a Caldera International 5/16/2001 SEC filing, a 13D, General statement of acquisition of beneficial ownership, with exhibits attached, including stockholder agreement, secured promissory note, form of security agreement, and escrow agreement. You can find Caldera/SCO's quarterly and annual reports filed with the SEC on Groklaw's SCO Financials page.2 At the time Microsoft agreed to take a SCO license for whatever it was purportedly for, analysts were skeptical and viewed it as a cover:

"There's obviously an agenda on Microsoft's part. They want SCO to win this case because if they do, it will cause a considerable amount of chaos in the market," said George Weiss, a vice president at Gartner. "They've transitioned away from attacking Linux head-on, and they're doing it back door, indirectly, [employing] a much subtler strategy of trying to align themselves with SCO in the interest of [intellectual property]."

Channel partners expressed mixed sentiments about SCO's licensing deal with Microsoft. One Linux solution provider said SCO's licensing agreement with Microsoft simply serves political interests of both vendors to slow down Linux's success in the marketplace.

"I think Microsoft is paying a small amount of money to create a mountain of perception that the SCO claims regarding Linux have weight," said Anthony Awtrey, vice president at I.D.E.A.L. Technology, a solution provider in Orlando, Fla. "I would view this the same as the U.S. funding the enemies of our enemies. Large potential gain for very little risked."

One Microsoft solution provider agreed that the licensing deal is likely motivated by Microsoft's interest to hurt Linux, but nevertheless said its stance with SCO to protect intellectual property will likely add weight to SCO's legal case against IBM.

"This will make IBM's case much thinner," said the solution provider. "Microsoft will play they're the good guys doing the right thing, but we know that's never true."

Perhaps the analysts were right, and Microsoft just wanted to give SCO money and didn't even check to see if there actually were any patents. No wonder Novell wants to see that license. And when it does get to see it in discovery, I hope they let us in on the solution to the mystery of SCO's phantom patents.

1 If you go through the quarterlies, you'll find that from 2002 onward, the following sentence appears: "On May 7, 2001, we formed a new holding company, Caldera International ('Caldera'), to acquire substantially all of the assets and operations of the server and professional services groups of Tarantella Inc., formerly known as The Santa Cruz Operation, Inc., pursuant to an Agreement and Plan of Reorganization, dated August 1, 2000 and as subsequently amended (the 'Tarantella Acquisition')." "Substantially all" isn't legally the same thing as "all". And in fact, in one 2001 quarterly, they said "all" instead of "substantially all" in describing the same deal: This change in wording, from all to substantially all, may just reflect the vagueness that Ransom Love revealed when he was asked what they'd bought. Or it could reflect that they had been doing an analysis of what they actually had in 2002, and found out it wasn't all. Tilting toward vagueness is the 3rd quarterly of 2001, which says they got only "significant assets": "In May 2001, the Company acquired significant assets and operations from Tarantella, Inc."


About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Discovery | 157 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here...
Authored by: martimus on Sunday, July 31 2005 @ 03:15 AM EDT
Please post here, if needed, so PJ can fix it.

[ Reply to This | # ]

About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Di
Authored by: xtifr on Sunday, July 31 2005 @ 03:16 AM EDT

Which patents? All patents. It's kind of like all those "non-public" contributions to Linux that SCO wants to see so badly. Or all those CPUs DC was oh-so late on reporting about. Or all the verifiable copyright violations in Linux that SCO has shown so far. To put it in mathematical terms, "all" is only non-null when you're selecting from a non-empty set.

Yes, I believe that MS licensed all of the SCO Group's UNIX patents. Oh, and by the way, I'm about to start an auction on eBay of all the original Rembrandts that I own. Every single one. Bid now while the price is still low! :)

Do not meddle in the affairs of Wizards, for it makes them soggy and hard to light.

[ Reply to This | # ]

Just for the sake of claiming to have more
Authored by: Anonymous on Sunday, July 31 2005 @ 03:18 AM EDT
Microft might just have used the term 'patents' for the sake of claiming to get
more from the SCO deal.They might as well have called it 'Intellectual Property
Understanding' or whatever.

Perhaps the deal meant future patents SCO might get.

[ Reply to This | # ]

Off Topic posts and links here...
Authored by: martimus on Sunday, July 31 2005 @ 03:20 AM EDT

Post stuff here that's not on the main topic, and if you have any links, use the format listed in the Post Mode: notes.


[ Reply to This | # ]

About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Discovery
Authored by: pallmall on Sunday, July 31 2005 @ 04:11 AM EDT
Ninja Novell ... I like that.

The Ninja has put SCO in an awkward spot about their licensing to MS and Sun. Novell claims that 95% of the license fees paid to SCO belongs to them. Now SCO will have to respond and give some attempt to explain, for the record, why Novell is not entitled to the $25 million. What explanations will they give? That the licenses they sold were not for anything covered by the APA? That would raise questions regarding their earlier SEC filings. And if SCO takes a position that the contractual provisions regarding Novell's compensation are not valid, then the whole contract is invalid -- but SCO is claiming that their contract with Novell gives them the right to sell such licenses to *customers* like MS and Sun.

So what is it, SCO-boys? Did you sell the licenses to MS and Sun without telling them that the licenses really weren't what you sold them as? Did you sell them and now claim that the agreement authorizing you to sell them is invalid? Or, how about this one: Did MS and Sun buy these licenses knowing that they were not valid and knowing that the fees would be used for litigation and not for fulfilling contractual obligations with Novell?

In light of PJ's observation of the mystery patents, the last question is extremely legitimate and can no longer be dismissed as a far out conspiracy theory. If a company pays millions of dollars for a patent that they do not use, or does not exist, then the company is grossly incompetent or they are paying for something other than what they say they are. And I've never heard the term incompetent used to describe MS.

Bravo, PJ. You're a true Ninjette.

[ Reply to This | # ]

Note 1.
Authored by: Ian Al on Sunday, July 31 2005 @ 04:16 AM EDT
I found Note 1. very interesting. If the terms of the spinoff contractual
documents from OldSCO (called NewCo, later to merge with Caldera International
IIRC) said 'all' the Unix assets, I would have thought that was sufficient
writing to transfer any copyrights that OldSCO had purchased from Novell to

Any wording that suggested any part of the UNIX assets did not transfer would
mean that every copyright that did transfer would have to be named in writing
with specificity.

This might mean that NewSCO don't even have the copyright to the manuals. I hope
they have a licence for all that stuff from Sun!

Ian Al

[ Reply to This | # ]

Here is why
Authored by: Anonymous on Sunday, July 31 2005 @ 04:39 AM EDT

This fits in nicely with M$ game plan. M$ wanted to use the well-written and secure GPL'ed code which is of course, available free of costs from web. Only way you could get around the obligaitons imposed by GPL was to claim Linux=Unix.

Include Linux in one of your products, and when copyright holder of the GPL'ed material accosts you, claim all linux is Unix and is licensed from SCO, therefore M$ is not obliged to conform with the GPL.

[ Reply to This | # ]

About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Discovery
Authored by: Anonymous on Sunday, July 31 2005 @ 06:03 AM EDT
I am quoting from the SCO press release:
"system, today announced it has licensed its UNIX technology including a
patent and source code licenses to"

It doesn't say patentS there, just "a patent".

That deals with the plurality question.
Yes I know it said patentS elsewhere but that was the key headline summary.

Just the usual pedantic view of a tech journal sub-editor......

[ Reply to This | # ]

Authored by: RedBarchetta on Sunday, July 31 2005 @ 06:09 AM EDT
...there exists a video of Darl McBride being interviewed by one of these
daytime financial new channels. It might have been Chris Matthews on CNBC, but
I'm not sure. I believe it occurred sometime in the Spring of 2003, shortly
after the SCOvsIBM lawsuit was filed.

Anyhow, in that interview Darl was in full stock-pump mode, and I recall him
stating stating that theirs (SCO) was a "patent" suit against IBM, or
that IBM violated their patents. He stated the word "patent" in some
form... seemingly for effect, as I recall.

I believe the FOSS community made some stink back then regarding the veracity of
his statements.

If someone's able to find the link to the news channel web site in question, or
perhaps a "wayback" link to a media file, I believe it could
potentially be helpful to IBM, don't you? (tee hee!)

If I find it, I'll post a link...

Collaborative efforts synergise.

[ Reply to This | # ]

Poor Timing
Authored by: Anonymous on Sunday, July 31 2005 @ 06:22 AM EDT
The timing of all this is very unfortunate, tonight I fly off to Kenya for two
weeks and the chances of getting an Internet connection in the middle of the
African bush is somewhat remote.

If I were to slip Novell a brown envelope stuffed with cash do you think they
would put this on ice until I get back? Two weeks without Groklaw. Arrghh!!!!

Ed Almos
Budapest, Hungary

[ Reply to This | # ]

He who must not be named - Patent
Authored by: Anonymous on Sunday, July 31 2005 @ 06:40 AM EDT
Perhaps one of the patents is the one (just one?) that someone transferred to
Canopy (around 2003?).

[ Reply to This | # ]

PJ, yet again ...
Authored by: dmarker on Sunday, July 31 2005 @ 07:24 AM EDT

you pull rabbits out of the hat.

I had begun to worry that the June/July barrage of hostile posts may have
diminished our effectiveness but this past week you have shown yet again that
(in the words of a once popular reggae style hit tune) "ain't no one gonna
slow - me - down"

You and your work are a 'treasure'. Maybe one day you may even nail the big
corp behind tSCOg.


Doug M

[ Reply to This | # ]

Michael Davidson Didn't Think SCO Had Unix Patents Either
Authored by: Jeff on Sunday, July 31 2005 @ 10:25 AM EDT

From Michael Davidson's email to Reg Broughton:

"Note that the scope of the project was limited to looking for evidence of copyright infringement (we didn't consider patents because SCO didn't own the rights to any patents, and more general IP issues were just too vague - besides SCO was *sure* that it was going to find evidence of copyright violations which are comparatively straightforward to prove once you have found them)"

This would indicate to me that there were people in SCO who knew that SCO didn't have Unix patents.

[ Reply to This | # ]

So where does ms stand now?
Authored by: Anonymous on Sunday, July 31 2005 @ 10:41 AM EDT
Ok we know they dont like linux, we know they've paid Tscog for alleged
patents/patent licenses.
If ms knew that Tscog didnt own any patents, and they should see proof of such
patents before they pay for said licenses, are they not also guilty of helping
with any alleged fraud or other wrongdoing by Tscog?
Is it possible they can get caught up in any future investigation of Tscog at

[ Reply to This | # ]

    5 possible answers to what those patents were
    Authored by: Anonymous on Sunday, July 31 2005 @ 10:55 AM EDT

    From reading the above article and the Novell motion from friday 29. July 2005, I see at least 5 possible meanings of what those patents are:

    1. Simply a blanket license to any and all patents SCOX may ever end up owning, controlling or otherwise be able to license to MS, including any they might get by winning any of their lawsuits.
    2. Just a license for that update patent, MS recently (June 2005) released a much delayed rework of their own update system, and would definitely like to avoid being suid if that patent should ever fall into the hands of someone like Darl (oops, it already did, lets hurry up!)
    3. A (source code included) license for oldSCO UNIX, complete with sublicensing of all the stuff oldSCO used to sublicense from AT&T/USL/Novell. Novells motion says that at least some licenses for oldSCO UNIX wouldn't imply a 95% cut to Novell, only whatever oldSCO used to pay before the APA. And unlike Sun, MS didn't seem to have an existing SVRX license triggering the "anti-conversion" clause in the APA.
    4. A similar licence, but for the UNIXware product oldSCO got from Novell in the APA. Almost the same situation but with some twists.
    5. An SVRX license as Novell suspects. The APA allows oldSCO / SCOX to sell those, but require them to do various stuff with Novell to fulfill their contract with Novell (including the 95% payment). How was MS to know that SCOX would forget to do the paperwork at their end, especially the part to be done after the deal?

    It could also be a combined sale including more than one of the above things, perhaps with a clause claiming that most of the millions was for using the update patent in Windows, and only a small amount for the part(s) where Novell gets 95%

    Just speculating of cause...

    [ Reply to This | # ]

    About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Discovery
    Authored by: Bill The Cat on Sunday, July 31 2005 @ 11:01 AM EDT
    Did SCO ever mention income from the sale of patents in their SEC filings? If
    they did claim they sold patent licenses and they didn't have anything to
    license, wouldn't that make their official statements to the SEC a bit of a
    problem now?

    Bill Catz

    [ Reply to This | # ]

    Did Microsoft submarine itself?
    Authored by: jsoulejr on Sunday, July 31 2005 @ 11:56 AM EDT
    Does Microsoft owe money to Novell for use of Novell

    [ Reply to This | # ]

    The smoking gun?
    Authored by: DaveJakeman on Sunday, July 31 2005 @ 11:59 AM EDT

    The Novell filing was momentous and I see from the number of comments on it, I'm not alone in that view. But having read it, something is still troubling me. Something I'm still not clear on: a couple of facts that I've failed to properly connect.

    In the PDF, it says:

    G. SCO's Requests to Novell To Assist in a Licensing Scheme and To Transfer the UNIX Copyrights

    38. In late 2002, SCO repeatedly contacted Novell in connection with SCO's soon-to-be-announced SCOsource campaign. SCO requested copies of certain documentation concerning rights to UNIX, including the agreement between Novell and Santa Cruz. SCO also expressed its interest in a campaign to assert UNIX infringement claims against users of Linux. SCO asked Novell to assist SCO in a Linux licensing program, under which SCO contemplated extracting a license fee from Linux end users to use the UNIX intellectual property purportedly contained in Linux. Novell refused to participate.

    Then, the timeline looks like this:

    January 22nd, 2003: SCO announced its SCOsource program.

    March 7th, 2003: SCO's press release improprly claiming ownership of UNIX; IBM lawsuit filed by SCO.

    Aril 30th, 2003: SCO shows its first profitable quarter as a result of the Sun/Microsoft deal.

    In the above article, SCO states "a patent" and Microsoft states "patents". I am assuming this is not a transcription error. If the purpose of the deal was not in fact the patent(s) and source code, then SCO/Microsoft might have easily slipped up in their reports of what actually occurred, as that would have been a cover story.

    So, is the Sun/Microsoft deal the smoking gun we have been looking for? If so, what was Sun's role in this? Were Sun and Microsoft coaxed in the same way as Novell?

    "SCO also expressed its interest in a campaign to assert UNIX infringement claims against users of Linux. SCO asked Novell to assist SCO in a Linux licensing program, under which SCO contemplated extracting a license fee from Linux end users to use the UNIX intellectual property purportedly contained in Linux."

    Could you envisage Microsoft turning down an offer like that?

    Should one hear an accusation, first look to see how it might be levelled at the accuser.

    [ Reply to This | # ]

      Material(s) SCO licenced to MS
      Authored by: Anonymous on Sunday, July 31 2005 @ 01:10 PM EDT
      I support the idea that MS funnelled money to SCO though some arrangement. It
      serves their purpose, they bought a service.

      There existes another even scarier version of this conspiracy theory.

      What if SCO sold (unrestricted) rights to Linux to MS?

      SCO opens a billion dollar lawsuit against Big Blue alleging that thousands of
      lines of Unix is in linux. Alleges and alleges that Big Blue... Right about
      the time it inks it's deal with MS, SCO further alleges that the GPL is illegal,
      iligitimate, bastard, comunist etc. etc. It takes ownership of the linux code
      as it's not properly licensed, copywrited and has huge amounts of UNIX code
      copied fraudently by one of it's clients. A client that is undergoing a _slow_
      judicial process; as a small, agile and competitive company, SCO takes it within
      it's rights to license unrestricted rights (or something) to MS.

      MS knows it must wait until the end of litigation before it does anything with
      it's newly aquired license (a lottery ticket). There are three possible

      1. SCO wins (a remote possibility) and MS has legal rights to the code it
      aquired. Legal arms to further pursue it's agenda in some way.

      2. SCO settles with IBM (a plausible arrangement). The details of the
      settlement are secret and SCO insists upon one or two points which validates
      it's agreement with MS. MS has further legal arms to pursue it's agenda in some

      3. SCO loses. The license they bought from SCO becomes garbage but only they
      know it.

      The problem now is that Novel got involved. This involvement was not something
      MS or SCO considered when they inked the deal. Around that time, MS settled or
      was in the process of settling a deal with Novel. That agreement may have
      stipulations regarding further actions against MS in regards to Operating
      Systems. Novel was considering opening another law suite against MS
      (WordPerfect suite) or already just opened it. Perhaps the thought was that
      attacking a company like SCO who was over it's head with law suites against IBM,
      AZ and RedHat was not a _financially_ viable option. However now that it

      MS accepted the deal because if it could go to court against an institution
      (like the state of oregon) and somehow prove that linux contained code that
      somehow pertained to MS and win. Linux would never again pose a challenge to
      the Empire of Mr Gates.

      SCO accepted the deal because Unix is on the decline, if they could aquire
      rights to license something they got for free they can once again rule the
      henhouse of the linux/unix markets.

      They just needed to figure out how to get what they want.

      [ Reply to This | # ]

      About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Di
      Authored by: Anonymous on Sunday, July 31 2005 @ 01:43 PM EDT
      SCO has been selling licenses for copyrights that it does not appear to own, so
      why wouldn't SCO also license out patents that it does not own?

      [ Reply to This | # ]

      Vista/Longhorn may rely on unlicensed patents?
      Authored by: Anonymous on Sunday, July 31 2005 @ 04:14 PM EDT
      One conclusion you might draw from this is that Vista/Longhorn may be based on
      unlicensed patents that the vendor knows about. Clearly MSFT had to license
      these OS-related patents for something worth many millions; and it's becoming
      clear they foolishly paid someone who didn't have the rights to them anyway.

      Just to be safe from a patent point of view I'm recommending our company avoid
      Vista/Longhorn until Microsoft has some trusted third party audit their code for
      IP infringements with at least the same diligence that SCO looked into Linux.
      They apparently didn't need these licenses before, so I assume Win2K and XP are
      clean -- but if Vista's infringing on improperly licensed patents I sure want to
      steer clear of it so my infrastructure isn't yanked out from under me when
      whomever the rightful owner is stops MSFT from distributing Longhorn.

      (yes, this is a parody of MSFT's anti-linux fud -- but even without the
      exaggerated tone above, it sure does seem true that from a patent point of view
      Linux is a far safer platform to base a company than Vista would be)

      [ Reply to This | # ]

      Longwait version 2.0
      Authored by: Tufty on Sunday, July 31 2005 @ 10:01 PM EDT
      I would have liked to have seen the faces of the Vista marketing team on Friday,
      as they read the Novell reply. Now, if TSCOG did not have the copyrights and IP
      but instead it is owned by Novell then did TSCOG try and sell Novell's IP to

      Now if any of that is incorporated into Longhorn then there appears to be a
      little issue there. Would this mean a deep dive, by Novell, into the Longhorn
      source code? Would this mean delays for Longhorn? A discovery order for the code
      and all versions?

      Now that may have some impact on launch plans. A cease and desist untill the
      code is shown to be clean? Any other snakes in the grass shown up during



      There has to be a rabbit down this rabbit hole somewhere!
      Now I want it's hide.

      [ Reply to This | # ]

      Somewhat OT but GL does a good thing
      Authored by: inode_buddha on Sunday, July 31 2005 @ 11:32 PM EDT
      Somewhat OT but GL does a good thing with the news picks. Based upon the Corante
      article regarding "copyfight" I have decided to throw my hat into
      Corante's ring also.

      Copyright info in bio

      "When we speak of free software,
      we are referring to freedom, not price"
      -- Richard M. Stallman

      [ Reply to This | # ]

      About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Di
      Authored by: Anonymous on Monday, August 01 2005 @ 01:29 AM EDT
      could the patents be 'future' patents?? I say this because MS is trying to
      patent everything it can regardless of the source and it might think it can
      patent something in UNIX.

      [ Reply to This | # ]

      Darls bonus
      Authored by: Anonymous on Monday, August 01 2005 @ 01:30 AM EDT
      I'm just wondering if Darls bonus was for quarterly profits, And he knew that
      the money from M.S. and Sun where not really Scox funds but that of novels.
      Would he not be collecting those bonuses under false pretences. Would that be
      comitting fraud by accepting the bonus.

      [ Reply to This | # ]

      Yes, there is MS Linux.
      Authored by: Anonymous on Monday, August 01 2005 @ 02:15 AM EDT

      This is off topic but there actually is MS Linux.
      Apple had a working x86 version of its OS X long
      before they announced the switch.
      MS is doing the same to Linux. When time comes
      they will be able to release their own Linux
      distro which will look exactly like Windows.

      [ Reply to This | # ]

      Finding The Patents...
      Authored by: sproggit on Monday, August 01 2005 @ 03:53 AM EDT
      I've no detailed knowledge of these things, but perhaps there are ways we can track down any use of SCO "patents" by Microsoft. I am sure that when one company licences the software of another, then the company utilising that licensed code makes reference to those licences in it's warranty and copyright statements.

      You know... "Copyright (C) 2001 Microsoft Corporate. Some portions Copyright (C) 2000, SCO inc."

      Or similar.

      So we should be able to see, fairly easily, if Microsoft has actually used any SCO IP in WindowsXP, or Windows Server2003 or other released product. Given the timing and the slow release rate from Microsoft [ ;o) ] it's entirely possible that licensed code hasn't seen the light of day yet. But then... why would Microsoft pay SCO $50Million for code and IP they have no intention of using, unless.... No, surely not!

      I'm also particularly interested by the line of thought that says Novell's contract with SCO entitles them to 95% of any Unix based licensing revenues... Given that Microsoft and SCO have publicly stated that the payment was for software IP for Microsoft Windows Services for Unix, one could reasonably deduce that there would be a good chance that SCO have provided Microsoft with code containing Novell IP. Now wouldn't that be an odd coincidence.

      Discovery for any such subsequent court case would of course have to include all currently support Microsoft products, plus those in the pipeline, such as Longwait [sic]. Of course, since Microsoft is such as valiant defender of IP rights, they'd have no problem turning over their entire OS codebase for external inspection, would they? And given the nature of the complaint, I wonder if Novell could legitimately then search the source looking for LinuxCode? Now that would be interesting! Such discovery would also force SCO to detail exactly what source code and/or IP had been handed over to Microsoft.

      Way back, when Novell threw it's hat into the ring in the defense of IBM and Sequent and to challenge SCO's IP ownership claims, I was both delighted and stunned. I'm happy to report my view hasn't changed.

      Although we're all watching the ebb and flow of this case with rapt interest, I also think it's important that we don't lose sight of the big picture and IP and patents in software in general. The simple truth of the matter is that a few foolish decisions by the US Patent & Trademark Office are causing a serious amount of harm for a field of endeavour that we all care deeply about and which is ingrained in our daily lives.

      It's time the US lead the world and admitted this error and then put it right.

      [ Reply to This | # ]

      So what if they did?
      Authored by: Anonymous on Monday, August 01 2005 @ 05:25 AM EDT
      OK, suppose it transpires that MS paid SCO for, on the face of it, nothing.
      Reasonable people may suspect that SCO was being paid by MS to go after Linux.
      But a lot of people suspected that at the time.

      So how does the absence of SCO patents change this? Sure its one more piece of
      evidence that MS can behave in unscrupulous ways, but everybody knows that
      anyway. Is this some kind of legal smoking gun that we can actually use to hang
      MS in court? Does it mean that if SCO goes under then IBM and Novell can pursue
      MS on the grounds that SCO were merely their agents in a barratry scheme?
      Somehow it sounds unlikely.


      [ Reply to This | # ]

      Authored by: Anonymous on Monday, August 01 2005 @ 02:57 PM EDT

      If you must look at it, use an anonymizer like Java Anonymity Proxy or Tor.

      I am not a lawyer, this is not legal advice, and my opinions reflect my own, not
      necessarily those of my employer.

      "There's no need for red-hot pokers. Hell is -- other people!"
      -Jean Paul Sartre

      [ Reply to This | # ]

      About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Discovery
      Authored by: Anonymous on Tuesday, August 02 2005 @ 04:52 PM EDT
      Has SCO passed the threshhold where the RICO law comes into play?

      [ Reply to This | # ]

      About Those "Patents" MS Licensed from SCO in 2003: What I'd Like Novell to Ask SCO or MS in Di
      Authored by: Anonymous on Wednesday, August 03 2005 @ 03:02 PM EDT
      Well SCO and LINSPIRE (then lindows) also entered into a agreement. I wonder
      what the details of that were? Why is Linspire not asked what they know?

      [ Reply to This | # ]

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