decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books
Your contributions keep Groklaw going.
To donate to Groklaw 2.0:

Groklaw Gear

Click here to send an email to the editor of this weblog.


Contact PJ

Click here to email PJ. You won't find me on Facebook Donate Paypal


User Functions

Username:

Password:

Don't have an account yet? Sign up as a New User

No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
Comparative Chart of the EV1 Contracts
Tuesday, October 17 2006 @ 09:26 PM EDT

Groklaw volunteer Nivuahc has done a comparative chart for us of the two EV1 contracts we find in Robert Marsh's Declaration [PDF, text]. I think it will not only help you to follow his story, but it also can show you what lawyers do for a living. Compare the language that was added (in red) and the language dropped (in blue) and imagine that you are EV1's lawyer trying to make sure you never hear from those SCO folks again as long as you live. Then do an analysis of each change from SCO's standpoint. You'll be able to pretty accurately guess who wanted the language changes in each case, I think. Some are just because of the nature of EV1's server business, and because EV1 didn't want a per seat license deal.

Thanks to the gang, and particularly bprice and belzecue for helping us figure out a width issue with the table.

Draft - For review and discussion purposes - SCO Legal will provide executable documents. COPY

THE SCO GROUP, INC.
INTELLECTUAL PROPERTY LICENSE

This Intellectual Property License Agreement ("Agreement") is made and entered into on the date last executed below by and between The SCO Group, Inc., a corporation of the State of Delaware, for itself and its Subsidiaries (collectively referred to herein as "SCO"), with its place of business at [redacted], Lindon, Utah 84042, U.S.A., and Everyones Internet EV1, a corporation of the State of Texas, (referred to herein as "Licensee"), with its place of business at [address redacted] Texas 77098.

WHEREAS, SCO owns all right, title and interest in and to certain SCO intellectual property (as hereinafter defined); and

WHEREAS, Licensee is in the business of providing hosting services through its hosting centers; and

WHEREAS, SCO wishes to grant and Licensee wishes to obtain certain limited rights and licenses to use SCO IP, which rights Licensee wishes to accept, all in accordance with the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual promises made herein it is agreed as follows:

THE SCO GROUP. INC.
INTELLECTUAL PROPERTY LICENSE

This Intellectual Property License Agreement ("Agreement") is made and entered into on the date last executed below by and between The SCO Group, Inc., a corporation of the State of Delaware, for itself and its Subsidiaries (collectively referred to herein as "SCO"), with its place of business at [redacted], Lindon, Utah 84042, U.S.A., and Everyones Internet EV1, a corporation of the State of Texas, (referred to herein as "Licensee"), with its place of business at [address redacted] Texas 77098.

WHEREAS, SCO owns all right, title and interest in and to certain SCO intellectual property (as hereinafter defined); and

WHEREAS, Licensee is in the business of providing hosting services through its hosting centers; and

WHEREAS, SCO wishes to grant and Licensee wishes to obtain certain limited rights and licenses to use SCO IP, which rights Licensee wishes to accept, all in accordance with the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual promises made herein it is agreed as follows:

1.0 DEFINITIONS

1.1 "Code" shall mean computer programming instructions.

1.2 "CPU " means a single physical computer processor.

1.3 "Customer" means those entities who purchase hosting services from Licensee's through Licensee's hosting center.

1.4 "Desktop System" means a single user computer workstation controlled by a single instance of the Operating System. It may provide personal productivity applications, web browsers and other client interfaces (e.g., mail, calendering, instant messaging, etc). It may not host services for clients on other systems.

1.5 "General Purpose Computer System" means a commercially available system which is intended to be reprogrammable by the end user and is either (i) intended for primary use as a general purpose business computer, a personal computer, or a scientific/technical workstation; or (ii) part of a network configuration whose primary purpose is for executing general application programs supporting general business, personal, or scientific/technical activities.

1.6 "Method" means the human or machine methodology for, or approach to, design, structure, modification, upgrade, de-bugging, tuning, improvement or adaptation of Code.

1.7 "Object Code" means the Code that results when Source Code is processed by a software compiler and is directly executable by a computer.

1.8 "Operating System" means software operating system Code (or Code that substantially performs the functions of an operating system) that is a distribution, rebranding, modification or derivative work of the Linux operating system.

1.9 "Point of Sale/Embedded System" means a computer system, controlled by a single instance of the Operating System, that can not be used as a General Purpose Computer System and, as such, is (1) restricted in normal use to the execution of a predefined set of special purpose applications, and (2) does not allow an end user, directly or indirectly, to (i) add or run general purpose application software; (ii) add or administer users; or (iii) provide system administration functions other than diagnostics and maintenance.

1.10 "SCO IP" means the SCO intellectual property included in its UNIX-based Code in Object Code format licensed by SCO under SCO's standard commercial license.

1.11 "Software" means the Operating System in Object Code format.

1.12 "Source Code" means the human-readable form of the Code and related system documentation, including all comments and any procedural language.

1.13 "System" means a computer system, containing the licensed CPUs, controlled by a single instance of the Operating System.

1.14 "UNIX-based Code" means any Code or Method that: (i) in its literal or non-literal expression, structure, format use, functionality or adaptation (ii) is based on, developed in, derived from or is similar to (iii) any Code contained in or Method devised or developed in (iv) UNIX System V or UnixWare, or (v) any modification or derivative work based on or licensed under UNIX System V or UnixWare.

1.15 "Update" means the updates or revisions in Object Code format of the Software that You may receive. Update shall not include any alteration, modification or derivative work of the Operating System prepared by You.

1.0 DEFINITIONS

1.1 "Code" shall mean computer programming instructions.

1.2 "Customer" means those persons and entities who now or hereafter purchase, lease, license, subscribe to, or otherwise obtain ISP Business and Hosting Business services, or both, from Licensees.

1.3 "Method" means the human or machine methodology for, or approach to, design, structure, modification, upgrade, de-bugging, tuning, improvement or adaptation of Code.

1.4 "Network System" means the computers and computer network systems and equipment utilized by Licensee to provide ISP Business and Hosting Business services (including, without limitation, all servers owned, lessed, licensed, or utilized and controlled by Licensee to operate, conduct, and maintain the Businesses), or both, to its Customers and the computers and computer network systems and equipment utilized by Licensee in connection with its internal business operations.

1.5 "Object Code" means the Code that results when Source Code is processed by a software compiler and is directly executable by a computer.

1.6 "Operating System" means software operating system Code (or Code that substantially performs the functions of an operating system) that is a distribution, rebranding, modification or derivative work of the Linux operating system.

1.7 "SCO IP" means the SCO intellectual property alleged by SCO to be included, embodied, or otherwise utilized in the Operating System.

1.8 "Software" means the Operating System in Object Code format.

1.9 "Source Code" means the human-readable form of the Code and related system documentation, including all comments and any procedural language.

1.10 "UNIX-based Code" means any Code or Method that: (i) in its literal or non-literal expression, structure, format, use, functionality or adaptation (ii) is based on, developed in, derived from or is similar to (iii) any Code contained in or Method devised or developed in (iv) UNIX System V or UnixWare, or (v) any modification or derivative work based on or licensed under UNIX System V or UnixWare.

1.11 "Update" means the updates or revisions in Object Code format of the Software that You may receive. To the extent that the SCO IP includes patents, "Update" shall include all extensions, divisionals, continuations, continuations-in-part, examinations and reissue patents of such patents, as well as patent applications thereof. TO the extent that the SCO IP includes copyrights "Update" shall include any and all renewals and extensions thereof..

2.0 GRANT OF RIGHTS

2.1 SCO hereby grants Licensee and Licensee hereby accepts from SCO the following limited, non-exclusive, non-transferable right and license to use SCO IP, for its internal business purposes and its Customers who purchase system and application hosting services from Licensee, concurrent with run-time use of the Operating System, in Object Code format only on Systems owned by and under the control of Licensee, for which Licensee has paid the applicable licensing fee to SCO. Anything herein to the contrary notwithstanding, Licensee shall have the right to make copies of the SCO IP so long as such copies are used in connection with the properly licensed SCO IP hereunder solely for back-up and recovery purposes.

2.2 Except as otherwise expressly provided in Section 2.1 above, no right to copy, modify, distribute, transfer or alter any part of the Operating System or the Software is granted under this Agreement.

2.3 No right to create derivative works or modifications of UNIX-based Code, or any other software owned or licensed by SCO is granted under this Agreement.

2.4 This Agreement does not grant the right to receive any distribution of software from SCO or any third party.

2.5 This Agreement does not extend to contractors or joint venture partners of Licensee. No third party shall acquire any additional rights under this Agreement by acquisition of the assets or stock of Licensee or the merger with or acquisition of a third party. Specifically but without limitation, an acquiring company shall not and is not intended to receive for itself any benefit of the SCO waiver of claims and covenant that is extended to Licensee under the Covenant and Waiver of Certain Claims provisions of this Agreement. Conversely, Licensee shall not acquire any additional rights under this Agreement by acquisition of the assets or stock of a third party. In any stock or asset acquisition of a third party, the release of claims and covenant shall not extend to or benefit Licensee with respect to any infringing use of Software or the Operating System by any third party acquired by Licensee after the date of this Agreement. Anything herein to the contrary notwithstanding, Licensee may request additional licenses hereunder to cover any acquired third party and such request shall not be unreasonably denied by SCO.

2.6 No right may be implied beyond those expressly granted hereunder. Any ambiguity in this Grant of Rights or Agreement will be resolved against the grant of any additional right not specifically and expressly granted hereunder.

2.0 GRANT OF RIGHTS

2.1 SCO hereby grants Licensee and Licensee hereby accepts from SCO the following limited, non-exclusive, worldwide and perpetual, subject to Section 6, right and license to use SCO IP solely in Object Code format, for or in connection with: (a) Licensee's internal business purposes; (b) the Network Systems owned, lessed, licensed, or utilized and controlled by Licensee to operate, conduct, and maintain the Businesses; and (c) providing ISP Business and Hosting Business services, or both, to the Customers through Licensee's hosting center(s) identified in Exhibit A of this Agreement. Subject to the provisions included in Sectin 2.5 below, such changes and or additions to Licensee's hosting centers whall not require additional SCO IP license fees. Anything herein to the contrary notwithstanding, Licensee shall have the right to make a reasonable number of copies of the SCO IP so long as such copies are used in connection with the properly licensed SCO IP hereunder solely for archival, back-up and recovery purposes.

2.2 Except as otherwise expressly provided in Section 2.1 above, no right to copy, modify, distribute, transfer or alter any part of the Operating System or the Software is granted under this Agreement.

2.3 No right to create derivative works or modifications of UNIX-based Code, or any other software owned or licensed by SCO is granted under this Agreement.

2.4 This Agreement does not grant the right to receive any distribution of software from SCO.

2.5 This Agreement does not extend to contractors or joint venture partners of Licensee. No third party shall acquire any additional rights under this Agreement by acquisition of the assets or stock of Licensee or the merger with or acquisition of a third party. Specifically but without limitation, an acquiring company shall not and is not intended to receive for itself any benefit of the SCO waiver of claims and covenant that is extended to Licensee under the Covenant and Waiver of Certain Claims provisions of this Agreement. Conversely, Licensee shall not acquire any additional rights under this Agreement by acquisition of the assets or stock of a third party. In any stock or asset acquisition of a third party, the release of claims and covenant shall not extend to or benefit Licensee with respect to any infringing use of SCO IP by any third party. Anything herein to the contrary notwithstanding, Licensee may request additional licenses hereunder to cover any acquired third party and such request shall not be unreasonably denied by SCO.

Notwithstanding anything contained herein to the contrary, should Licensee decide to sell its interest in either, or both, of the Businesses, SCO grants Licensee a one-time right to assign this license, with the exception of Section 9.2 which is hereby excluded from any such assignment, to a third party (hereinafter referred to as a "Purchaser") who purchases either or both Businesses. In such case Purchaser shall, provided such Purchaser agrees, in writing to SCO, to be bound by the terms and conditions of this Agreement, have the limited rights granted to Licensee pursuant to this Agreement, with the exception of Section 9.2, solely for the Network Systems covered by this Agreement at the time of transfer to the extent, and only to the extent, the limited rights transferred relate to those assets of the Business purchased. The limited assignment right granted in this Section shall further extend to a Purchaser of the Hosting Business, for said Purchaser's organic growth of the Hosting Business only through the addition of Customers and the resulting additional Network Systems required to service such additional Customers directly related to the Hosting Business so acquired from Licensee. The extension of the limited assignment right to such growth specifically excludes additions or growth by Purchaser through joint ventures, mergers, acquisitions of the assets or stock of a third party, and shall not apply to any other assets, businesses, including the ISP Business or uses owned or controlled by such Purchaser or any other prior or concurrent uses of the SCO IP by Purchaser either before or after the transaction with Licensee. Furthermore, and notwithstanding anything contained herein to the contrary, in the event Licensee spins-off either the ISP Business or Hosting Business into a new entity under majority ownership control of Licensee, then provided such spin-off entity agrees, in writing to SCO, to be bound by the terms and conditions of this Agreement, such spin-off entity shall be entitled to the benefits of the waiver, releases, and indemnities contained herein to the extent, and only to the extent, as such rights, uses, waivers, releases and indemnities rrelate to those assets, businesses, and uses covered by this Agreement and shall not extend to any other assets, businesses or uses owned or controlled by such spin-off entity or any other prior or concurrent uses of the SCO IP by such spin-off entity.

Licensee shall keep full, clear and accurate records with respect to all servers owned, lessed, licensed, or utilized and controlled by Licensee to operate, conduct, and maintain the Businesses. Such records shall contain all information necessary to determine compliance with this Section 2.5.

2.6 No right may be implied beyond those expressly granted hereunder. Any ambiguity in this Grant of Rights or Agreement will be resolved against the grant of any additional right not specifically and expressly granted hereunder.

3.0 SCO COVENANT AND WAIVER OF CERTAIN CLAIMS

Provided Licensee does not exceed the Grant of Rights under this Agreement from and after the date hereof, SCO will not consider such use of the SCO IP licensed by Licensee under this Agreement to be in violation of SCO's intellectual property ownership rights and SCO shall not bring any legal action alleging infringement of the SCO IP by Licensee or Licensee's Customers.

3.0 SCO COVENANT AND WAIVER OF CERTAIN CLAIMS

Upon full payment of the one-time licensing fee described in Exhibit A of this Agreement, SCO will not consider such use of the SCO IP or future use of the SCO IP and Updates licensed by Licensee under the rights granted under this Agreement (provided Licensee does not exceed the Grant of Rights under the Agreement) to be in violation of SCO's intellectual property ownership rights and SCO shall not bring any legal action alleging infringement of the SCO IP by Licensee or Licensee's Customers for usage of SCO IP solely in connection with Licensee's Businesses. In that regard, upon full payment of the license fee described in Exhibit A of this Agreement, Licensee and its Customers shall be forever released and discharged from any and all claims, liabilities, suits, demands, or obligations arising from any authorized use of the SCO IP in connection with: (a) Licensee's internal business purposes; (b) the Network Systems owned, lessed, licensed, or utilized and controlled by Licensee to operate, conduct, and maintain the Businesses; and (c) providing ISP Business and Hosting Business services by Licensee to its Customers through the date of the final payment of the one-time licensing fee. Nothing contained herein shall be deemed, interpreted or construed as an admission of liability on the part of Licensee for any unauthorized use of the SCO IP prior to the date hereof.

4.0 ORDERS, PRICE AND PAYMENT

4.1 Licensee will pay the applicable licensing fee included in Exhibit A of this Agreement to SCO.

4.2 Licensee's order for licenses under this Agreement is included in Exhibit A of this Agreement. SCO shall invoice Licensee, at the time of execution of this Agreement, pursuant to the information provided for in Exhibit A.

4.3 License Fees are exclusive of all applicable taxes. Licensee agrees to pay all taxes associated with right-to-use licenses ordered under this Agreement, including but not limited to sales, use, excise, added value and similar taxes and all customs, duties or governmental impositions, but excluding taxes on SCO's net income.

4.4 All fees, costs and charges shall be due and payable thirty (30) days from date of receipt of invoice. SCO may charge Licensee interest at the rate of 1 1/2 percent per month, or such maximum rate as may be permitted by law, whichever shall be less, with respect to any sum that is not paid when due.

4.5 Licensee shall make all payments in United States Dollars -- or as agreed to in writing by the parties.

4.0 ORDERS, PRICE AND PAYMENT

4.1 Licensee will pay the applicable licensing fee included in Exhibit A of this Agreement to SCO.

4.2 Licensee's order for licenses under this Agreement is included in Exhibit A of this Agreement. SCO shall invoice Licensee, at the time of execution of this Agreement, pursuant to the information provided for in Exhibit A.

4.3 License Fees are exclusive of all applicable taxes. Licensee agrees to pay all taxes associated with right-to-use licenses ordered under this Agreement, including but not limited to sales, use, excise, added value and similar taxes and all customs, duties or governmental impositions, but excluding taxes on SCO's net income.

4.4 All fees, costs and charges shall be due and payable thirty (30) days from date of receipt of invoice. SCO may charge Licensee interest at the rate of 1 1/2 percent per month, or such maximum rate as may be permitted by law, whichever shall be less, with respect to any sum that is not paid when due.

4.5 Licensee shall make all payments in United States Dollars -- or as agreed to in writing by the parties.

5.0 RECORD KEEPING AND AUDIT

5.1 Licensee shall keep full, clear and accurate records with respect to licenses granted hereunder for the Systems owned or operated by Licensee. Such records shall contain all information necessary to determine all fees due hereunder and shall be maintained for a period of five (5) years.

5.2 Licensee hereby grants SCO the right to cause an audit to be made with respect to the fees due hereunder. If any discrepancies are found with respect to Licensee's payment of fees due hereunder then a prompt adjustment shall be made by the proper party to compensate for any errors or omissions disclosed by such audit. Any such audit shall be conducted no more frequently than once per calendar year, during regular business hours at Licensee's offices and in such a manner as not to interfere with Licensee's normal business activities. In the event that an audit discloses an underpayment by Licensee to SCO of the lesser of five percent (5%) or the equivalent of Five Thousand United States Dollars ($5,000), then Licensee shall pay for the cost of the audit, within thirty (30) days of demand therefore.

5.3 In the event that SCO makes any claim against Licensee for payment with respect to such audit, upon written request, SCO agrees to promptly make available to Licensee, its records and reports and those prepared for SCO by third parties pertaining to the audit.

[Removed]

6.0 TERM OF AGREEMENT; OBLIGATIONS UPON TERMINATION

This Agreement shall remain in effect until terminated as set forth herein. Licensee may terminate this Agreement without any right to refund or reimbursement by notifying SCO of such termination. SCO may terminate this Agreement, upon thirty (30) days notice and without judicial or administrative resolution, if Licensee or any of Licensee's employees, consultants or Customers breach any material term or condition hereof and such breach is not cured within such thirty (30) day period.

Upon the termination of this Agreement for any reason, all rights granted to Licensee hereunder will cease.

5.0 TERM OF AGREEMENT; OBLIGATIONS UPON TERMINATION

This Agreement shall remain in effect until terminated as set forth herein. Licensee may terminate this Agreement without any right to refund or reimbursement by notifying SCO of such termination. SCO may terminate this Agreement, upon thirty (30) days notice and without judicial or administrative resolution, if Licensee or any of Licensee's employees, consultants or Customers breach any material term or condition hereof and such breach is not cured within such thirty (30) day period.

Upon the termination of this Agreement for any reason, all rights granted to Licensee hereunder will cease; PROVIDED, however, that Licensee's rights of indemnity for Licensee claims arising during the term hereof shall survive the termination of this Agreement.

7.0 PROPRIETARY NATURE OF SCO PRODUCTS AND OWNERSHIP

SCO represents and warrants that UNIX-based Code and related materials, and all copyrights, trade secret and other intellectual and proprietary rights therein, are and remain the valuable property of SCO and its suppliers.

6.0 PROPRIETARY NATURE OF SCO PRODUCTS AND OWNERSHIP

SCO represents and warrants that it has full right and title to grant the rights hereunder to the SCO IP and related materials, and all copyrights, trade secret and other intellectual and proprietary rights therein, are and remain the valuable property of SCO and its suppliers. SCO makes no representations or guarantees concerning the outcome of any pending or potential litigation, as outlined above, regarding SCO's claims of violations of its IP or contractual rights in the Operating System. Licensee acknowledges that SCO's claims regarding its IP as it relates to the Operating System are being litigated in one or more cases, with possibly more litigation to follow, and that SCO has not guaranteed that it will ultimately prevail in any of this litigation. Licensee, to avoid any such litigation and to effectuate a productive and prompt resolution of any and all issues relating to the use of SCO's IP, desires to obtain this license.

8.0 LIMITATION OF WARRANTY

SCO MAKES NO WARRANTIES OF ANY KIND EXPRESS OR IMPLIED WITH RESPECT TO ANY RIGHTS OTHER THAN TO THE SCO IP DEFINED BY THIS AGREEMENT.

SCO WARRANTS THAT IT IS ENPOWERED TO GRANT THE RIGHTS AND LICENSES GRANTED HEREIN.

EXCEPT AS SET EXPLICITLY FORTH IN THE PRECEDING SENTENCE, ALL WARRANTIES, TERMS, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH RESPECT TO THE RIGHTS, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN STATEMENTS BY ANY PARTY OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY OF NON INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED. SOME STATES OR COUNTRIES DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY.. THIS WARRANTY GIVES SPECIFIC LEGAL RIGHTS AND LICENSEE MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM STATE TO STATE OR COUNTRY TO COUNTRY.

7.0 LIMITATION OF WARRANTY

SCO MAKES NO WARRANTIES OF ANY KIND EXPRESS OR IMPLIED WITH RESPECT TO ANY RIGHTS OTHER THAN TO THE SCO IP DEFINED BY THIS AGREEMENT.

SCO WARRANTS THAT IT IS ENPOWERED TO GRANT THE RIGHTS AND LICENSES GRANTED HEREIN.

EXCEPT AS SET EXPLICITLY FORTH IN THE PRECEDING SENTENCE, ALL WARRANTIES, TERMS, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH RESPECT TO THE RIGHTS, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN STATEMENTS BY ANY PARTY OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY OF NON INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED. SOME STATES OR COUNTRIES DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY.. THIS WARRANTY GIVES SPECIFIC LEGAL RIGHTS AND LICENSEE MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM STATE TO STATE OR COUNTRY TO COUNTRY.

9.0 LIMITION OF LIABILITY

UNDER NO CIRCUMSTANCES WILL SCO OR ITS REPRESENTATIVES BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE, OR INCIDENTAL DAMAGES, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON LICENSEE'S CLAIMS OR THOSE OF ITS CUSTOMERS (INCLUDING BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL, PROFITS, USE OF MONEY OR USE OF THE SCO PRODUCTS, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR RAPAIRMENT OF OTHER ASSETS, TRADEMARK, PATENT OR COPYRIGHT INFRINGEMENT), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE, EXCEPT ONLY IN THE CASE OF PERSONAL INJURY WHERE AND TO THE EXTENT THAT APPLICABLE LAW REQUIRES SUCH LIABILITY IN NO EVENT WILL-THE AGGREGATE LIABILITY WHICH SCO MAY INCUR IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR OTHERWISE EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY LICENSEE TO SCO FOR THE LICENSE OF THE SCO PRODUCT THAT DIRECTLY CAUSED THE DAMAGE.

SOME JURISDICTIONS DO NOT ALLOW THE LIMITATION OF EXCLUSION OF LIABILITY FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES SO THE ABOVE LIMITATION MAY NOT APPLY IN CERTAIN CIRCUMSTANCES..

8.0 LIMITATION OF LIABILITY

UNDER NO CIRCUMSTANCES WILL SCO OR ITS REPRESENTATIVES BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE, OR INCIDENTAL DAMAGES, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON LICENSEE'S CLAIMS OR THOSE OF ITS CUSTOMERS (INCLUDING BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL, PROFITS, USE OF MONEY OR USE OF THE SCO PRODUCTS, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR RAPAIRMENT OF OTHER ASSETS, TRADEMARK, PATENT OR COPYRIGHT INFRINGEMENT), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE, EXCEPT ONLY IN THE CASE OF PERSONAL INJURY WHERE AND TO THE EXTENT THAT APPLICABLE LAW REQUIRES SUCH LIABILITY IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH SCO MAY INCUR IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR OTHERWISE EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY LICENSEE TO SCO FOR THE LICENSE OF THE SCO PRODUCT THAT DIRECTLY CAUSED THE DAMAGE.

SOME JURISDICTIONS DO NOT ALLOW THE LIMITATION OF EXCLUSION OF LIABILITY FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES SO THE ABOVE LIMITATION MAY NOT APPLY IN CERTAIN CIRCUMSTANCES.

10. LICENSEE INDEMNIFICATION

Licensee will defend, indemnify and hold harmless SCO, its parents and subsidiaries, against any third party claim against it for loss, damage, liability or expense (including but not limited to attorneys' fees) arising out of any unauthorized representations, warranties, or willful acts or omissions of Licensee in connection with its activities under this Agreement.

9. INDEMNIFICATION

9.1 Licensee will defend, indemnify and hold harmless SCO, its parents and subsidiaries, against any third party claim against it for loss, damage, liability or expense (including but not limited to attorneys' fees) arising out of any unauthorized representations, warranties, or willful acts or omissions of Licensee in connection with its activities under this Agreement.

9.2 SCO shall indemnify and hold Licensee harmless from and against and defend any claim, suit or proceeding, and pay any settlement amounts or damages awarded by a court of final jurisdiction, for claims filed by a third party against Licensee claiming damages caused by a breach of SCO's representations and warranties set forth in this Agreement and claims that the SCO IP infringes any copyright, patent, trade mark or other intellectual property right, provided Licensee promptly notifies SCO in writing of any such claim, suit or proceeding, and permits SCO to control the settlement or defense thereof. Licensee has the option to be represented by Counsel at its own expense.

If, pursuant to any such claim, a court of competent jurisdiction removes or restricts Licensee's right to continue to exercise it rights granted hereunder to the SCO IP, SCO shall, at its sole option (i) procure for Licensee the right to continue to exercise it rights granted hereunder to the SCO IP; (ii) modify the SCO IP, provided the functionality thereof is not substantially affected, so as to make it non-infringing; or (iii) refund the Net License Fees paid SCO discounted over a three (3) year period, subject to a pro rata adjustment for prior usage of the SCO IP. In addition, SCO shall have the right to exercise any of options (i) through (iii) at any time following receipt of a claim of infringement of copypright or other proprietary right.

SCO shall have no obligation under this section with respect to any claim of infringement of a proprietary right based upon any modification of the SCO IP by Licensee or any other entity or the combination, operation or use of SCO IP with materials not supplied by SCO provided that it is such modification, combination, operation or use which caused the claimed infringement.

THE ABOVE STATES THE ENTIRE LIABILITY OF SCO WITH RESPECT TO INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS OR ANY OTHER FORM OF INTELLECTUAL PROPERTY RIGHT BY ANY PRODUCT SUPPLIED BY SCO.

11.0 MISCELLANEOUS

11.1 Neither party shall be liable for any delay or failure in its performance hereunder due to any cause beyond its control provided, however, that this provision shall not be construed to relieve Licensee of its obligation to make any payments pursuant to this Agreement.

11.2 Licensee may not assign, sublicense, rent lend, lease, pledge or otherwise transfer or encumber this Agreement or the rights granted under this Agreement the SCO IP, any of the individual licenses granted under it or Licensee's rights or obligations hereunder Any purported assignment shall be null and void. Change of control is deemed an assignment and not effective without SCO's express written consent.

11.3 All notices and requests in connection with this Agreement may be sent or delivered to the addresses above by hand, by certified mail return receipt requested, by fax, or by courier.

11.4 Support and maintenance are not available under this Agreement.

11.5 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Utah and the United States of America, specifically excluding the United Nations Convention on Contracts for the International Sale of Goods, and without giving effect to conflict of laws. Any litigation or arbitration between the Parties shall be conducted exclusively in the State of Utah. Licensee expressly consents to the jurisdiction of such courts. Process may be served by U.S. mail, postage prepaid, certified or registered, return receipt requested, by express courier such as DHL or Federal Express, or by such other method as is authorized by law. Nothing in this Section will prevent SCO from seeking injunctive relief against Licensee or filing legal actions for payment of outstanding and past due debts in the courts.

11.6 If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or unpaired thereby. The Parties will seek in good faith to agree on replacing an invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that, in effect, will, from an economic viewpoint most nearly and fairly approach the effect of the invalid, illegal, or unenforceable provision.

11.7 Each Party acknowledges that the parties to this Agreement are independent contractors and that it will not, except in accordance with this Agreement, represent itself as an agent or legal representative of the other. This Agreement does not create a joint venture or fiduciary relationship of any kind between the Parties.

11.8 Company represents and warrants that all consents of governmental officials necessary for this Agreement to become effective have been obtained, or will be obtained, before Company places any orders under this Agreement. Company will comply, at its own expense, with all statutes, regulations, rules, ordinances, and orders of any governmental body, department or agency that apply to or result from Company's obligations under this Agreement.

11.9 No High Risk Activities: The SCO IP is NOT fault-tolerant and are not designed, manufactured or intended for use or resale as on-line control equipment in hazardous environments requiring fail-safe performance, such as in the operation of nuclear facilities, aircraft navigation or communication systems, air traffic control, direct life support machines, or weapons systems, in which the failure of the Product could lead to death, personal injury, or severe physical or environmental damage ("High Risk Activities"). SCO specifically disclaims any express or implied warranty of fitness for High Risk Activities.

11.10 This Agreement (including all Exhibits) sets forth the entire understanding and supersedes and merges all prior and contemporaneous agreements between the parties relating to the subject matter contained herein. Neither Party shall be bound by any provision, amendment or modification other than as expressly stated in or contemplated by this Agreement or as subsequently shall be set forth in writing and executed by a duly authorized representative of the Party to be bound thereby.

10.0 MISCELLANEOUS

10.1 Neither party shall be liable for any delay or failure in its performance hereunder due to any cause beyond its control provided, however, that this provision shall not be construed to relieve Licensee of its obligation to make any payments pursuant to this Agreement.

10.2 Except as otherwise provided for Section 2.5, Licensee may not assign, sublicense, rent, lend, lease, pledge or otherwise transfer or encumber this Agreement or the rights granted under this Agreement, the SCO IP or Licensee's rights or obligations hereunder without SCO prior written consent which shall not be unreasonably withheld. Any purported assignment shall be null and void. Change of control is deemed an assignment and not effective without SCO's express written consent.

10.3 All notices and requests in connection with this Agreement may be sent or delivered to the addresses above by hand, by certified mail return receipt requested, by fax, or by courier.

10.4 Support and maintenance are not available under this Agreement.

10.5 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Utah and the United States of America, specifically excluding the United Nations Convention on Contracts for the International Sale of Goods, and without giving effect to conflict of laws. Any litigation or arbitration between the Parties shall be conducted exclusively in the State of Utah. Licensee expressly consents to the jurisdiction of such courts. Process may be served by U.S. mail, postage prepaid, certified or registered, return receipt requested, by express courier such as DHL or Federal Express, or by such other method as is authorized by law. Nothing in this Section will prevent SCO from seeking injunctive relief against Licensee or filing legal actions for payment of outstanding and past due debts in the courts.

10.6 If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or unpaired thereby. The Parties will seek in good faith to agree on replacing an invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that, in effect, will, from an economic viewpoint most nearly and fairly approach the effect of the invalid, illegal, or unenforceable provision.

10.7 Each Party acknowledges that the parties to this Agreement are independent contractors and that it will not, except in accordance with this Agreement, represent itself as an agent or legal representative of the other. This Agreement does not create a joint venture or fiduciary relationship of any kind between the Parties.

10.8 SCO and Licensee represent and warrant that all consents of governmental officials necessary for this Agreement to become effective have been obtained, or will be obtained, before the parties execute this Agreement. Each party will comply, at its own expense, with all statutes, regulations, rules, ordinances, and orders of any governmental body, department or agency that apply to or result from such party's obligations under this Agreement.

10.9 No High Risk Activities: The SCO IP is NOT fault-tolerant and are not designed, manufactured or intended for use or resale as on-line control equipment in hazardous environments requiring fail-safe performance, such as in the operation of nuclear facilities, aircraft navigation or communication systems, air traffic control, direct life support machines, or weapons systems, in which the failure of the Product could lead to death, personal injury, or severe physical or environmental damage ("High Risk Activities"). SCO specifically disclaims any express or implied warranty of fitness for High Risk Activities.

10.10 This Agreement (including all Exhibits) sets forth the entire understanding and supersedes and merges all prior and contemporaneous agreements between the parties relating to the subject matter contained herein. Neither Party shall be bound by any provision, amendment or modification other than as expressly stated in or contemplated by this Agreement or as subsequently shall be set forth in writing and executed by a duly authorized representative of the Party to be bound thereby.

10.11 This Agreement may be executed in any number of counterparts and via facsimile, each of which shall be deemed an original instrument, but all of which together shall constitute only one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the last date properly executed by both parties. All signed copies of this Agreement shall be deemed originals.

THE SCO GROUP, INC LICENSEE
By:
............................ By:
............................
Name:
............................ Name:
............................
Title:
............................ Title:
............................
Date:
............................ Date:
............................

® Linux is a registered trademark of Linus Torvalds in the US and other countries.
® UNIX and UnixWare are a registered trademarks of The Open Group in the US and other countries.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the last date properly executed by both parties. All signed copies of this Agreement shall be deemed originals.

THE SCO GROUP, INC EVERYONES INTERNET, LTD.
By its Sole General Partner, E. I. MANAGEMENT, LLC
By:
............................ By:
..[signature]....
Name:
............................ Name:
Robert Marsh
Title:
............................ Title:
President
Date:
............................ Date:
3/1/04

® Linux is a registered trademark of Linus Torvalds in the US and other countries.
® UNIX and UnixWare are a registered trademark of The Open Group in the US and other countries.

Draft - For review and discussion purposes - SCO Legal will provide executable documents.

EXHIBIT A

LICENSE FEES AND ADDITIONAL TERMS AND CONDITIONS

LICENSE FEES:

The following License Fees are not subject to any additional discounts and may not be used for purposes of aggregating to any other SCO discounts.

Subject to Section 2 of this Agreement SCO grants licensee a limited, non-exclusive, non-transferable right and license to use SCO IP, for its own internal business purposes, concurrent with run-time use of the Operating System, in Object Code format only, on all Systems owned and operated by Licensee. Licensee agrees to pay SCO the following License Fees:

Total Site License Fee US$2,000,000 (total fee payable including advertising)
Less: Licensee Promotional Allowance US$ 600,000 (less promotional allocation)
SCO Discount/Contribution Allowance US$ 600,000 (less applied discount)

Net License Fee

US$800,000

(payable to SCO per below)

Net License Fee will be paid pursuant to the following schedule:

Upon Execution - US$ 100,000
March 31, 2004 - US$ 100,000
April 30, 2004 - US$ 100,000
May 31, 2004 - US$ 100,000
June 30, 2004 - US$ 100,000
July 31, 2004 - US$ 100,000
August 31, 2004 - US$ 100,000
September 30, 2004 - US$ 100,000

Promotional Allowance:

In consideration of Licensee's commitment ($600,000 Promotional Allowance) to participate in mutually agreed upon advertising campaign related to this Agreement, specifically excluding any pricing related information, SCO is granting Licensee a reduction in Licensee Fees payable. Should Licensee fail to comply with this commitment, the Net License Fee shall be adjusted accordingly. SCO and Licensee will mutually agree upon the costs to be applied by Licensee toward satisfaction of its Promotional Allowance.

Both Parties will work together to complete a joint press release by the parties to be issued upon execution of this Agreement. Licensee further agrees to favorably discuss the benefits of this Agreement in mutually agreed to interviews including provide the an executive quote/endorsement that SCO can use in press releases, allow SCO to write up a success story for its web site and press usage and Licensee agrees to talk with the press about SCO's Intellectual Property License.

Licensee agrees to commence advertising campaign for national/international publications within the first thirty (30) days of this Agreement SCO and Licensee reserve the right to approve final advertising copy prior to distribution. Other advertising initiatives may include, but not to be limited to advertising and press release opportunities, joint participation at events, or other venues, etc.

SCO and Licensee will jointly agree on press releases and other publicity related to this Agreement. SCO will be free to reference Licensee as a licensee of the SCO Intellectual Property License subject to Licensee's prior approval of the content. Such approval by Licensee shall not be unreasonably delayed or withheld. Approval shall be deemed granted if SCO does not receive an objection from Licensee within five (5) business days of such request. This includes but is not limited to references with industry and financial analysts.

Each Party will be free to reference the other as the licensor/licensee of the SCO Intellectual Property License subject to the other party's prior approval of the content. Such approval shall not be unreasonably delayed or withheld. Approval shall be deemed granted if the requesting party does not receive an objection within five (5) business days of such request. This includes but is not limited to references with industry and financial analysts.

EXHIBIT A

LICENSE FEES AND ADDITIONAL TERMS AND CONDITIONS

SCO's standard unit quantity discount applicable to SCO's US Price List for one thousand (1,000) licenses is fifty percent (50%) for standard corporate licensees and is applied to the cumulative unit purchases made by a licensee under a Corporate Agreement.

In consideration for the estimated number of SCO IP Licenses to be granted and the unique nature of the internet access services and webhosting services business, including but not limited to the ongoing changes to computer systems configurations, and Licensee's cooperation and commitments agreed to below, including the fact that Licensee is the first such company to seek such a license from SCO, SCO is agreeing to the following License Fees.

LICENSE FEES:

The following one-time License Fee is not subject to any additional discounts and may not be used for purposes of aggregating to any other SCO discounts.

In consideration for the rights, licenses waivers and releases contained in the Agreement, Licensee agrees to pay SCO the following one-time License Fees:

Total Site License Fee US$1,400,000 (total fee payable including advertising)
Less: Licensee Promotional Allowance US$ 600,000 (less promotional allocation)

Net License Fee

US$800,000

(payable to SCO per below)

Net License Fee will be paid pursuant to the following schedule:

Upon Execution - US$ 100,000
March 31, 2004 - US$ 100,000
April 30, 2004 - US$ 100,000
May 31, 2004 - US$ 100,000
June 30, 2004 - US$ 100,000
July 31, 2004 - US$ 100,000
August 31, 2004 - US$ 100,000
September 30, 2004 - US$ 100,000

Promotional Allowance:

In consideration of Licensee's commitment ($600,000 Promotional Allowance) to participate in mutually agreed upon advertising campaign related to this Agreement, specifically excluding any pricing related information, SCO is granting Licensee a reduction in Licensee Fees payable. Should Licensee fail to comply with this commitment, the Net License Fee shall be adjusted accordingly. SCO and Licensee will mutually agree upon the costs to be applied by Licensee toward satisfaction of its Promotional Allowance.

Both Parties will work together to complete a joint press release by the parties to be issued upon execution of this Agreement. Licensee further agrees to favorably discuss the benefits of this Agreement in mutually agreed to interviews including providing an executive quote/endorsement that SCO can use in press releases, allow SCO to write up a success story for its web site and press usage and, Licensee agrees to talk with the press about SCO's Intellectual Property License.

Licensee agrees to commence an advertising campaign for national/international publications within the first thirty (30) days of this Agreement. SCO and Licensee reserve the right to approve final advertising copy prior to distribution. Other advertising initiatives may include, but not to be limited to advertising and press release opportunities, joint participation at events, or other venues, etc.

SCO and Licensee will jointly agree on press releases and other publicity related to this Agreement. SCO will be free to reference Licensee as a licensee of the SCO Intellectual Property License subject to Licensee's prior approval of the content. This includes but is not limited to references with industry and financial analysts.

Each Party will be free to reference the other as the licensor/licensee of the SCO Intellectual Property License subject to the other party's prior approval of the content. This includes but is not limited to references with industry and financial analysts.


It is expressly agreed that wherever the prior approval or consent of any party hereto is required under the terms hereof that the party from whom such consent or approval is required (the "Receiving Party") agrees not to unreasonably condition, withhold or delay such consent or approval. Furthermore, the Receiving Party shall have five (5) days from written requrest for same by the requesting party (the "Requesting Party") to consent to or disapprove of such request, press release, advertising, or any other item requiring concsent or approval hereunder (an "Advertisement") and, if the Receiving Party disapproves of such Advertisement it shall provide the Requesting party with written notice thereof within such five (5) day period along with the particular reasons for such disapproval and written editorial comments or suggestions to the Advertisement which if incorporated therein by the Requesting Party the Receiving Party would then be deemed to have approved or consented to such Advertisement as modified.

Any notice, request, approval, consent or other communication required or contemplated by this Agreement must be in writing, and may, unless otherwise in this Agreement expressly provided, be given or be served by depositing the same in the United States Postal Service, post-paid and certified and addressed to the party to be notified, with return receipt requested, or by delivering the same in person to such party (or, in case of a corporate party, to an officer of such party), or by prepaid telegram or express overnight mail service, when appropriate, addressed to the party to be notified, or by facsimile to the facsimile numbers below with confirmation of receipt. Notice deposited in the mail in the manner hereinabove described shall be effective from and after three (3) days (exclusive of Saturdays, Sundays and postal holidays) after such deposit. Notice given in any other manner shall be effective only if and when delivered to the party to be notified or at such party's address for purposes of notice as set forth herein. For purposes of notice the addresses of the parties shall, until changed as herein provided, be as follows:

NOTICE AND APPROVALS:

For SCO: Chris Sontag
[address, fax]

For EV1: Robert Marsh
[address, fax]

LICENSEE'S HOSTING SITES:

Licensee is required to notify SCO in writing related to any changes or additions to its hosting sites prior to any such change or addition.

....[address]....

....[address]....



  


Comparative Chart of the EV1 Contracts | 191 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Off-Topic Goes here
Authored by: The Mad Hatter r on Tuesday, October 17 2006 @ 09:51 PM EDT

Don't forget to use clickable links.


---
Wayne

http://urbanterrorist.blogspot.com/

[ Reply to This | # ]

Corrections Here
Authored by: Trollsfire on Tuesday, October 17 2006 @ 09:53 PM EDT

Please put any corrections you see here so that they may be fixed. Please verify anything against the relative PDF's if it is material in the tables.

--Trollsfire

[ Reply to This | # ]

will jointly agree on press releases and other publicity
Authored by: LegalIdiot on Tuesday, October 17 2006 @ 10:12 PM EDT
That alone says enough to know what this contract was all about. Never mind the
other $600K, just do us some publicity for us so we can scam the rest of the
world into our little money pit.

[ Reply to This | # ]

Get The Facts
Authored by: Anonymous on Tuesday, October 17 2006 @ 10:15 PM EDT
I remember reading somewhere that EV1 was suppose to be a case study in the
Microsoft, "Get the Facts" campaign. Can anyone else confirm that and
if so, how does it relate to EV1 buying an SCOsource license and EV1's plans to
replace their Linux servers with Windows servers?

[ Reply to This | # ]

in Object Code format only,
Authored by: LegalIdiot on Tuesday, October 17 2006 @ 10:18 PM EDT
I guess that means EV1 can not fix any bugs they find since 'source code' is not
included in the license. Oh, you want those security vulnerabilities fixed? That
will cost you... $cha-ching$

[ Reply to This | # ]

The key difference
Authored by: elcorton on Tuesday, October 17 2006 @ 10:20 PM EDT

Where the draft version has this,

1.10 "SCO IP" means the SCO intellectual property included in its UNIX-based Code in Object Code format licensed by SCO under SCO's standard commercial license.

the executable version has this:

1.7 "SCO IP" means the SCO intellectual property alleged by SCO to be included, embodied, or otherwise utilized in the Operating System.

The draft version arguably would protect EV1, if SCO actually did own any copyrights that were infringed in Linux. The executable version, on the other hand, gives EV1 no rights whatsoever. What at the time was "alleged by SCO to be included, embodied, or otherwise utilized" in Linux? Only a bunch of header files, which are unprotectable as a matter of law. EV1 didn't need a license from SCO or anyone else to copy those. If SCO later established that it held copyrights to protectable elements of UNIX, and that those elements were copied without authorization in Linux, it could still sue EV1 for infringement, because that infringement wasn't alleged when the agreement was signed.

If that interpretation of the agreement seems far-fetched, look at SCO's interpretation of just about every other agreement it's ever been a party to.

Since the EV1 "license" doesn't involve the exchange of valuable consideration, it's void. EV1 is entitled to its money back.

[ Reply to This | # ]

  • Difference? - Authored by: Anonymous on Wednesday, October 18 2006 @ 12:08 AM EDT
  • The key difference - Authored by: ore on Wednesday, October 18 2006 @ 07:21 AM EDT
Still doesn't quite add up...
Authored by: Anonymous on Tuesday, October 17 2006 @ 10:26 PM EDT
As I said in the first thread, I don't know that I'm willing to believe
everything Mr. Marsch says.

Some of the recipients of similar letters were telling SCO to drop dead; that
was the same 2003. There certainly was plenty of public information
contradicting SCO representations to EV1. If EV1 were interested in finding out
the real story - and you should be in a situation like this, simply to
understand what your negotiating position is - all they had to do was to stall
for a few months and see what happens. Stalling over some stupid little point in
the contract isn't that difficult, and they certainly know how to do that. EV1
is a large business, not a lemonade stand.

So.. I'm wondering. EV1 enjoys a very good relationship with MS. That
relationship stared approximately the same time the SCO farce stared. They were
mentioned in some bogus MS performance study, etc. Was the MS guy who engineered
that relationship - we are, after all talking about the largest webspace
provider in the States - by any chance the same Mr. Richard Emerson who talked
Mr. Goldfarb into financing SCO? Or one of his people?

Would explain a lot of things...

[ Reply to This | # ]

PROVIDED, however
Authored by: LegalIdiot on Tuesday, October 17 2006 @ 10:31 PM EDT
PROVIDED, however, that Licensee's rights of indemnity for Licensee claims arising during the term hereof shall survive the termination of this Agreement.

Does this say what I think it says? We (SCO) won't sue you for the time you held the license, but after termination you are on your own? Who else would sue you for for SCO's IP infringment? Ok, lets reword that, you drop the contract and we're coming after you...

[ Reply to This | # ]

Smoking gun for CC10
Authored by: Aim Here on Tuesday, October 17 2006 @ 10:42 PM EDT
"1.6 "Operating System" means software operating system Code (or
Code that substantially performs the functions of an operating system) that is a
distribution, rebranding, modification or derivative work of the Linux operating
system."

"2.2 Except as otherwise expressly provided in Section 2.1 above, no right
to copy, modify, distribute, transfer or alter any part of the Operating System
or the Software is granted under this Agreement."

Ouch. SCO's PSJ, (and probably their answer to IBM's PSJ), for IBM's copyright
counterclaim makes the bogo-claim that they were only licensing UNIX, not Linux,
with these contracts, and that they licensed Linux itself in accordance with the
GPL. How exactly can they square that with the two paragraphs in the agreement
above?

Looks to me that IBM only needs to show that SCO distributed Linux after signing
this contract, (which SCO admits) to win this claim, providing Kimball doesn't
buy SCO's bizarre theory that you can impose restrictions on an instance of GPL
code you didn't distribute, (despite the wording of the GPL itself).

Of course, I could be utterly wrong...

[ Reply to This | # ]

Comparative Chart of the EV1 Contracts
Authored by: pmichaud on Tuesday, October 17 2006 @ 11:03 PM EDT
From the "Copy" version of the agreement:
1.7 "SCO IP" means the SCO intellectual property alleged by SCO to be included, embodied, or otherwise utilized in the Operating System.

This seems very odd to me... is it possible for SCO to grant a license for things that it alleges to be in the Operating System?

What happens if one or more of SCO's "allegations" are false? Does the plain reading of this agreement then mean that SCO is granting a license to something that it doesn't own or that doesn't exist?

Pm

[ Reply to This | # ]

From a brief read.
Authored by: Brian S. on Tuesday, October 17 2006 @ 11:16 PM EDT

Mr. Marsh's lawyer rewrote that contract.

Effectively EV1 servers paid SCOG $800,000 to go away.

2.1 SCO hereby grants Licensee and Licensee hereby accepts from SCO the following limited, non-exclusive, worldwide and perpetual, subject to Section 6, right and license to use SCO IP

It left him free to expand the EV1 operations without any increase for what appeared to be a perpetual licence.

Notwithstanding anything contained herein to the contrary, should Licensee decide to sell its interest in either, or both, of the Businesses, SCO grants Licensee a one-time right to assing this license, with the exception of Section 9.2 which is hereby excluded from any such assignment, to a third party (hereinafter referred to as a "Purchaser") who purchases either or both Businesses. In such case Purchaser shall, provided such Purchaser agrees, in writing to SCO, to be bound by the terms and conditions of this Agreement, have the limited rights granted to Licensee pursuant to this Agreement, with the exception of Section 9.2, solely for the Network Systems covered by this Agreement at the time of transfer........

He must have had some idea he would be selling in the future because he adds quite a long section which effectively allows him to offer the license to the purchaser of the business.

SCOGs original contract did not fit his business(definitions of POS etc?).

New: 1.2 "Customer" means those persons and entities who now or hereafter purchase, lease, license, subscribe to, or otherwise obtain ISP Business and Hosting Business services, or both, from Licensees.

1.4 "Network System" means the computers and computer network systems and equipment utilized by Licensee to provide ISP Business and Hosting Business services (including, without limitation, all servers owned, lessed, licensed, or utilized and controlled by Licensee to operate, conduct, and maintain the Businesses), or both, to its Customers and the computers and computer network systems and equipment utilized by Licensee in connection with its internal business operations. IMHO the deal that Mr. Marsh obtained was better for EV1 than living under the cloud of SCOG even under the protection of Red Hat.

He was away and free for $800,000 in monthly installments. End of problem.

What's more I note:

1.7 "SCO IP" means the SCO intellectual property alleged by SCO to be included, embodied, or otherwise utilized in the Operating System. the word alleged and the rest of the bold were added.

:)

Just a glance.

I congratulate Mr. Marsh.

Brian S.

[ Reply to This | # ]

Marsh was replaced on July 5, 2006
Authored by: stats_for_all on Tuesday, October 17 2006 @ 11:36 PM EDT
Marsh was replaced by Douglas Erwin in July 2006. The CFO and General Counsel were also changed

[ Reply to This | # ]

Paragraph two of Exhibit A
Authored by: Upholder on Wednesday, October 18 2006 @ 12:14 AM EDT
In consideration for the estimated number of SCO IP Licenses to be granted and the unique nature of the internet access services and webhosting services business, including but not limited to the ongoing changes to computer systems configurations, and Licensee's cooperation and commitments agreed to below, including the fact that Licensee is the first such company to seek such a license from SCO, SCO is agreeing to the following License Fees.

That doesn't jive with the declaration that Marsh filed where he says he was under the belief that many companies had signed up for SCOsource licenses -- unless he didn't read the revised document before signing it.

[ Reply to This | # ]

LIMITATION OF WARRANTY - Section 7 (was 8)
Authored by: Totosplatz on Wednesday, October 18 2006 @ 02:47 AM EDT

A question for the lawyers - the limitation of warranty section seems to me to imply that tSCOg does warrant that they have the IP rights that they claim:

SCO WARRANTS THAT IT IS ENPOWERED TO GRANT THE RIGHTS AND LICENSES GRANTED HEREIN.

If that statement proves false, can EV1 get its money back?

Thanks. Greetings from Back in the USA.

---
All the best to one and all.

[ Reply to This | # ]

I have a theory.
Authored by: Brian S. on Wednesday, October 18 2006 @ 03:33 AM EDT

There is more to this, but Robert Marsh doesn't know what it is.

Maybe one or both of SCOG and M$ do.



Robert Marsh and 2 partners(one his brother? - CFO and the CTO) started Everyones Internet in 1998 as an ISP ( I guess thats where Head Surfer comes from).

But Robert bumped into Linux on Cobalt Cubes.

In fact he found he could host web sites on them.

In Summer 2000 he had 1500 Cobalt Cubes delivered on a lorry and they were the real start of the hosting business.

I acn't find it now but I've seen some pictures of their data centre in 2003. It consisted of thousands of servers(PC's?) on about 3 shelf levels of Industrial Racking. I will say the cabling and installation looked tidy if somewhat homemade??(is that the word).

It's become obvious that Mr Marsh could do a deal and he was turning EV1 servers into something more significant.

In 2003 they ran out of space and had to obtain a second data centre. EV1 also wanted to offer "any" web server platform.

Robert Marsh did a deal with Microsoft for the first 2000 servers. The price was really cheap because he agreed to do some M$ promotion.




January - March 2004 from the point of view of Robert Marsh -He got a nasty letter from SCOG. If they carried out their threats it would put him out of business. But he had a surprise when he spoke to them. They could understand his position and seemed very willing to negotiate and adjust the contract to suit. Up his street - a bit of wheelin and dealin.

He would not agree anywhere in their contract to admit that they had IP in Linux, it must be referred to as their "alleged" IP and he talked them down to $800,000 for a perpetual licence paid for in stages which didn't impede his expansion and possible sales plans.

It was all done and dusted by the end of February. His lawyer had rewritten the contract to suit and he would get some promotion. He had to agree to a promotion for SCOG but he made sure that they knew he would not allow that promotion to say that he believed SCOG had IP in Linux. It was only "alleged".

He was angry when within a week ot two they had broken their word but he still had his contract and EV1 have yet to complete paying foor it.



Those same events through late 2003 and early 2004 have a very different reality from the point of view of M$ and SCOG.

One or both wanted a Linux customer taking up a SCOG Linux/Unix IP licence of any description as long as the financial and licensing details weren't public. They achieved their aim.



EV1 servers continue to host an ever increasing number of Linux Web Sites. They also do Windows and have 3 different customer control panels. BSD. Novell Suse. Whatever takes you fancy.


Brian S.

[ Reply to This | # ]

Para 7 Dropped - why?
Authored by: wHo on Wednesday, October 18 2006 @ 06:45 AM EDT
From my pespective the "loss" of para 7 seems significant.
I wonder (admittedly I have not yet read all of Groklaw on this) whether IBM has
disposed as to the detail that led to dropping this para from the initial
agreement proposed: particularly who intially put it up.

---
IAAL but not in the USA - My comments here are not legal advice and maybe only
worth what you paid me for them.

[ Reply to This | # ]

Doesn't this language mean they are licensing UNIX ? Would this help Novell as well?
Authored by: HockeyPuck on Wednesday, October 18 2006 @ 08:37 AM EDT
Contract language:

1.10 "UNIX-based Code" means any Code or Method that: (i) in its
literal or non-literal expression, structure, format, use, functionality or
adaptation (ii) is based on, developed in, derived from or is similar to (iii)
any Code contained in or Method devised or developed in (iv) UNIX System V or
UnixWare, or (v) any modification or derivative work based on or licensed under
UNIX System V or UnixWare.

All the magic words are there, UNIX, System V, UnixWare. To me this plainly
states this contract is licensing UNIX. That said, shouldn't this contract play
a part in the Novell vs. SCO regarding Microsoft, Sun agreements? I would
imagine those contracts are similar, which is probably why Novell is taking the
course they are taking.

I may have it wrong because I don't have a lot of time reading each and
everything on Groklaw. But I thought SCO was claiming the contracts to Sun and
Microsoft are SCOsource licenses, not "UNIX" licenses. Although, I
can't imagine how SCO can wiggle its way out of saying the Sun contract is not
for UNIX since that is a big part of what Sun does. Microsoft maybe has some
wiggle room, but not Sun. In any case, where are the UNIX contracts between
these parties if the SCOsource license is not one?

Also I'm surprised the wording for that paragraph doesn't actually go like:

1.10 "UNIX-based Code" means any Code or Method ever created that: (i)
in its literal or non-literal expression, structure, format, use, functionality
or adaptation (ii) is based on, developed in, derived from or is even remotely
similar to (iii) any Code contained in or Method devised, anything looking even
remotely similar or developed in (iv) UNIX System V or UnixWare, or (v) any
modification or derivative work based on, remotely similar to all source code
ever created in the world or licensed under UNIX System V or UnixWare.

[ Reply to This | # ]

Legal Loophole?
Authored by: GLJason on Wednesday, October 18 2006 @ 09:37 AM EDT
How is it that SCO can license Linux? Cut through all the wavering and lying and that is what they were trying to do. That's what they represented to their 'customers' and that's what they wrote in all those letters. They said Linux contained their 'IP' and that people had to buy a 'SCO IP' license to use Linux (or they would get sued).

They are attempting to get around the GPL by not distributing Linux themselves, but what is really the difference? Is it a weakness of the GPL that is section 0 they say that running the program isn't restricted? Does that allow SCO to wash their hands of it since others are the ones that are doing the copying and distributing?

I feel bad for EV1 because they were pressured into doing this, but it shows a lack of their understanding of the GPL. The GPL says 'running' the program is not restricted, but what about copying it to new servers and making backups? If they do so under SCO's license, why wouldn't that terminate their GPL license?

I just cannot understand how they can get by licensing whatever IP they claim is in Linux without actually telling anyone what they are licensing... And they say they are charging "market price", but they were charging $699 per processor per server I think. I couldn't find a price for AIX or Solaris, but a Solaris computer was just $300 more with the OS than it was without. And SCO isn't even providing you with an OS, they were just allowing you to run an OS that you had already bought from someone else.

This explains why they didn't want to sue Red Hat, and why they wanted the Red Hat case stayed. SCO knew they couldn't distribute Linux themselves and charge the licensing fee, they needed others to do the distribution. If they put Linux distributors out of business, then no one would be running Linux (or at least updating it and distributing the updates) and they wouldn't have anyone to sell their 'SCO IP License For Linux' to.

[ Reply to This | # ]

OT: Why it doesn't matter that you are not a lawyer
Authored by: Anonymous on Wednesday, October 18 2006 @ 10:22 AM EDT
Quoted from http://ju staskjudy.blogspot.com/2005/09/disorder-in-courts.html

ATTORNEY: Doctor, how many of your autopsies have you performed on dead people?

WITNESS: All my autopsies are performed on dead people.

ATTORNEY: ALL your responses MUST be oral, OK? What school did you go to?

WITNESS: Oral.

ATTORNEY: Do you recall the time that you examined the body?

WITNESS: The autopsy started around 8:30 p.m.

ATTORNEY: And Mr. Denton was dead at the time?

WITNESS: No, he was sitting on the table wondering why I was doing an autopsy on him!

ATTORNEY: Are you qualified to give a urine sample?

WITNESS: Huh?

ATTORNEY: Doctor, before you performed the autopsy, did you check for a pulse?

WITNESS: No.

ATTORNEY: Did you check for blood pressure?

WITNESS: No.

ATTORNEY Did you check for breathing?

WITNESS: No.

ATTORNEY: So, then it is possible that the patient was alive when you began the autopsy?

WITNESS: No.

ATTORNEY: How can you be so sure, Doctor?

WITNESS: Because his brain was sitting on my desk in a jar.

ATTORNEY: But could the patient have still been alive, nevertheless?

WITNESS: Yes, it is possible that he could have been alive and (is currently) practicing law (in this court). (In Utah?)

[ Reply to This | # ]

Was it cheap compared to defending an action brought by SCO?
Authored by: Crocodile_Dundee on Wednesday, October 18 2006 @ 01:01 PM EDT
I have no idea, but how would this $800,000 compare with the likely costs that
Autozone would have paid to defend themselves?

At some point you need to decide whether you'll take a stand (and perhaps a
bigger hit -- even if you win) or take a financially pragmatic view.

The fact that pragmatism can result in unfavourable precident (perhaps not in a
legal sence, but persuasive none the less) is another issue.

Of course, taking the time to "get the facts" is generally an
important consideration in either case :-)

---
---
That's not a law suit. *THIS* is a law suit!

[ Reply to This | # ]

Penalties for lying to the court
Authored by: Anonymous on Wednesday, October 18 2006 @ 01:24 PM EDT
I live in the UK and I'm not familiar with the US system but.....in UK there can
be severe penalties for intentionally lying to the court.
Is this different in the US ? This submission from SCO seems to be full of
half-truths and condradictory statements - at best missleading and at worst
intentionally lying about the true situation. Is this permissable in the US ?
Seems rather strange to me....seems like SCO can tell the court anything it
likes regardless of whether its true or not.

[ Reply to This | # ]

Free SCO Linux?
Authored by: Anonymous on Wednesday, October 18 2006 @ 01:26 PM EDT
What happens when EV1 finds out that SCO was giving away free copies of Linux
before durring and after they signed the agreement.

I suppose nothing, but it sure looks like entrapment to me.

Bill

[ Reply to This | # ]

Lets all be clear about one thing; Mr. Marsh is a suave businessman.
Authored by: Anonymous on Wednesday, October 18 2006 @ 01:52 PM EDT
While this seems to be a "poor me, I was a sucker" declaration; I beg
to differ. This was and is a business decision. Think for a second about the
main "selling points" of the contract. Protection (which he could
easily sue over later, assuming SCO was still standing) and advertising. Sure he
had to pay $800,000 to SCO, but he was supposed to get almost as much in
advertising dollars for this (same for Microsoft). So what was actually losing?
I'm sure he thought he could recoup these monies with increased business because
of increased advertising. And Microsoft threw in some software to boot in
exchange for more promotion. He simply decided to ride the coat tails of SCO and
Microsoft. SCO for all the press they were getting and Microsoft because, well;
they’re Microsoft. P.T. Barnum said, “I don’t care what they say about me. Just
make sure they spell my name right!” I think Mr. Marsh was thinking along the
same lines.

There is no doubt in my mind he was in this for the business and knew very well
the repercussions (thus the language "alleged"). Perhaps there was
some miscalculation to the fall back. But he also knows that we have short term
memory. So if he could recoup even a third, he would be fine. I even doubt that
his business would falter, even if he had to pay full price. But he knows no
company would force that in a volume deal. Businesses give out discounts far
more often than they charge full price. Volume pricing is a given.

Bottom line, IBM wanted to get a hold of him to prop their case. But like a
suave business man, this gave him a platform to tell the world he was duped into
this (poor ignorant me). SCO cannot touch him, despite this normally would be
breach of the contract because he was deposed to legally discuss the contract.
This is a win-win situation for both Mr. Marsh and IBM. IBM chose this target
for many reasons; the main being EV1 was SCO's golden child and it implies even
more treachery on SCO’s part.

What I don’t understand is why SCO did not try (to my knowledge) to seal this.
With the confidential language in the contract, I would have expected them to
fight this going public. I believe the contract language is bad enough for SCO;
let alone the testimony.

[ Reply to This | # ]

Comparative Chart of the EV1 Contracts
Authored by: Anonymous on Wednesday, October 18 2006 @ 02:24 PM EDT
I think some ar confused here and assume that the markups/edits to the contract
are the work of Marsh's lawyers alone.

As an experienced lawyer who handles such negotiations on a regular basis, I can
assure you that you should start with the assumption that (a) a negotiation has
taken place and (b) both sides have requested and extracted gives-and-takes in
the edited language.

That being said, the changes in revised section 6.0 (6.0 PROPRIETARY NATURE OF
SCO PRODUCTS AND OWNERSHIP) appear to me to be Boies-Schiller requested edits,
not EVI edits.

The net effect of the changes is to transform the original draft language, which
warranted and represented (as we know, falsely) that SCO owns the IP that is
being licensed via this contract, into language that says, in effect:

"We THINK we own the IP, but the fact is that we're litigating it and so it
is uncertain, but in any event EVI desires to mtigate the risk that we might be
right and purchase a settlement/insurance policy against any future claims that
we MGHT be able to bring if we prevail against IBM".

So Boies Schiller used EVI's desire to negotiate changes in order to back down
from a "licensing" posture, which exposed SCO to claims of fraud, and
move back to a negotiated settlement posture, which is much more legally
defensible from SCO's position.

Of course, the last thing that SCO wanted was for the EVI contract to become
public, as the changes undermine SCO's purported position that it is licencing
it's code, rather than the truth, which is that it is shaking down 3rd parties
who are litigation-shy.

[ Reply to This | # ]

An Easy Out?
Authored by: Anonymous on Wednesday, October 18 2006 @ 03:46 PM EDT
I'm curious. When Mr. Marsh/EV1 had gotten the finally contract and license to
sign would that not have been a good time to tell SCO we are going to "look
it over" and consult decent representation. It seems to me, given the
wording of the license and contract, that it would have been a simple matter to
have any legal proceedings postponed until after some of the matters in the then
ongoing cases were settled.

[ Reply to This | # ]

- Section 9.2 - Hey Novell!
Authored by: zenofjazz on Wednesday, October 18 2006 @ 04:07 PM EDT
Here's an interesting bit of the agreement...

9.2 SCO shall indemnify and hold Licensee harmless from and against and defend any claim, suit or proceeding, and pay any settlement amounts or damages awarded by a court of final jurisdiction, for claims filed by a third party against Licensee claiming damages caused by a breach of SCO's representations and warranties set forth in this Agreement and claims that the SCO IP infringes any copyright, patent, trade mark or other intellectual property right, provided Licensee promptly notifies SCO in writing of any such claim, suit or proceeding, and permits SCO to control the settlement or defense thereof. Licensee has the option to be represented by Counsel at its own expense.

Is this what it looks like?
So, if Novell were to SUE EV1 over this agreement, SCO would have to pay out, or cover the cost of the suit, or otherwise come-a-running with lawyers (or bankers) in tow?
Hey, Novell, wanna have some fun with SCO?


---
--
Fed up with Sony DRM? Show the world.
http://www.cafepress.com/sonynodrm

50% of profits will be donated to GrokLaw

[ Reply to This | # ]

Red Hat defense fund
Authored by: Anonymous on Wednesday, October 18 2006 @ 10:07 PM EDT
I asked this in another thread. Checking the timelines, there seems to be some
misconception that EV1 could have counted on Red Hat for monetary support. Red
Hat didn't announce its legal fund until the beginning of August. That's over
four months after this agreement. So EV1 would have no reason to think Red Hat
would cover their legal costs. Does anyone know if EV1 contacted Red Hat?
Maybe they actually did try to get Red Hat to cover the costs and couldn't get a
commitment. Am I just confused about the timeline?

[ Reply to This | # ]

Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )