Tom Carey, partner with intellectual property firm Bromberg & Sunstein, explains the side letter to the AT&T-IBM license agreement, now Exhibit C to SCO's complaint:
"IBM negotiated with AT&T [the original holder of the Unix copyrights and patents] a very detailed side letter to their license agreement," Carey told internetnews.com. "That side letter is Exhibit C to the SCO complaint. That side letter negates many of the key license terms that SCO relies upon in its complaint. For example, the basic license agreement says that IBM is authorized to create derivative works, but those derivative works will become the property of AT&T. The side letter says exactly the opposite, that those derivatives will become the property of IBM." [Emphasis added]
He added, "The format of this is unusual. It appears that AT&T insisted that IBM sign their standard form agreement and that any changes be set forth in a separate document. The side letter clearly takes precedence."
In addition, Carey said, the side letter spells out the conditions under which IBM could keep ownership of derivative works. Carey explained that the letter permits IBM to have its employees use ideas they learned from seeing the Unix code and incorporate those ideas into other products, under certain conditions: the programmers could not refer to Unix code or manuals while doing their coding.
"That provision allowed, I believe, IBM to essentially reverse engineer Unix, provided that it did so in a kind of a 'clean room' method, and incorporate those reverse engineered modules into its products," Carey said. "It seems hard to imagine that if IBM followed those procedures that someone who bought a product from IBM or acquired software indirectly from IBM could be found guilty of infringing SCO's copyrights in the Unix operating system."
Another attorney, Mark Radcliffe, co-chair of the Licensing Division at Gray Cary, points out something interesting about derivative works:
Meanwhile, Radcliffe also pointed out that the term 'derivative works' has a very precise meaning in copyright law. He also gives his opinion that if anybody licenses from them and then they lose, they will have sold something not needed in the first place:
"[SCO] talks about these things as derivative works," he said. "We need to be careful to separate out derivative works in a copyright statute and the way they may have been used in the agreement."
Specifically, Radcliffe said that according to copyright law, a derivative work is "a work where if you excised any of the copyrights in that work, you would infringe another work."
In other words, a specific instance of code would have to contain actual Unix code to constitute a derivative work under copyright law, Radcliffe said.
Meanwhile, Carey noted that SCO President and CEO Darl McBride seemed to have misspoken when he said last week that Linux is unique in that it is an operating system which is offered without any warranty of copyright non-infringement (which implied that users were taking a big risk by signing onto Linux).
Carey said he took a look at the Unix license between AT&T and IBM -- the very agreement that forms the basis of SCO's complaint. "It contains a nearly identical disclaimer of any warranty of non-infringement," he said.
While conceding that he has not seen the current license that SCO offers, he said, "It would be interesting to see if it also contained a disclaimer to any warranty. If they're following the AT&T model that they are the successor to, it would contain just such a disclaimer."
". . .then I think that SCO will have committed the business equivalent of extortion, assuming they lose their case against IBM. And they will have some exposure for having collected substantial licensing fees and having given nothing in return." [emphasis added]
Sun Sings a Nasty Swan Song
For those of you still thinking Sun is friendly to Linux or merely conflicted, Sun's Jonathan Schwartz, executive VP of software, is quoted as saying Linux is irrelevant. Warning: It's a bit like picking up a rock. First on Linus:
"Looking at the first view that says Intel is the future, how many operating systems run on Intel? There are only three. There's the one that Microsoft delivers. There's the one that Red Hat delivers -- because Linux right now is Red Hat. Red Hat has way more control than Linus does. If Red Hat tweaks their distribution just a little bit, does anyone care about what Linus says? ISVs qualify to Red Hat , not to Linus. So Red Hat is number two. And number three is Solaris."On SCO:
"The one thing they didn't realize they wanted was the capacity of their vendors to indemnify them against the risks that went into the products that they were using. And just as there are a bunch of mothers of 14-year-olds getting subpoenas because their kids are sharing music on the Internet, there will be a bunch of CIOs to testify with respect to the intellectual property that they are using. . . . [emphasis added]
"Open source to me is an irrelevance in the sense that customers don't want products based on whether they are open source or not. They buy them based on whether they are better quality, are faster, are innovative and help solve problems. . . .
"But there are two problems. One is that IBM appears to have committed a landmark mistake in the [alleged] leakage of its IP license from SCO into the mainstream distribution of Linux. My bet is that as a result, there's going to be a bunch of end users, who, just like the mothers of 14-year-olds who trade files, will be getting letters telling them that they have an obligation to compensate for the liberties they took with that IP."
I take that as inside scoop until proven wrong. He goes on to sing the indemnification ditty. But you get the idea. So I guess the White House is getting that subpoena after all. The DOD too. And the army. And you and me.
And then the lovely and tireless Ms. DiDio says maybe Sun or someone will buy SCO and carry the baton onward and upward. Say, that's a great idea. Good thing she's usually wrong. She tips us off that Microsoft is behind this:
"There's a lot going on behind the scenes," Yankee Group senior analyst Laura DiDio told TechNewsWorld. "Not necessarily coming out to say they support SCO or coming to their defense, but I think there are a lot of behind-the-scenes machinations. . . . They stepped right up and certainly they are supporting them tacitly," DiDio said. This is why she is a senior analyst. Such depth. Such cognitive clarity. Such a big mouth. I'm thinking she got a call after SCO heard what she said, and SCO, of course, denied it.
SCO's 3rd quarter financial conference call is August 14 at 9 AM MDT. You may also join the call in listen-only mode via Web cast. The URL is here.
Linux 101 for Business Types
Ian Murdoch breaks it down into little pieces and says Linux is a process that's alive, not a product you can box and stamp and be done with it. He says that not only our enemies but Linux distributors need to think about what it really is that people love about GNU/Linux, and it isn't that it works better, as Sunfolk imagine:
Let's step back a bit and look at why people are flocking to Linux. It's an open platform that is not owned or controlled by any single company. It comes with unmatched customization, optimization and integration possibilities. It is the ideal "invisible engine" for driving the next generation of applications and services. And it gives its users greater control over the evolution of the underlying platform, putting the user firmly in control of product release timelines and rollout schedules. In short, with Linux, the balance of power has finally shifted back from company to user.
That really is the problem, when you break it all down. Business doesn't get it, and trying to suit them can kill what makes GNU/Linux desirable in the first place.
"Around the edges" incompatibilities introduced by the company lead, once again, to a lock-in and reliance on that company for services and support. The seller, rather than the customer, once again controls the evolution of the platform and dictates the timeline on which the customer must release or implement new products and services. And the one-size-fits-all, Linux-as-product approach complicates or eliminates the ability to customize, optimize and integrate. Sure, the product can be modified--but only at the cost of losing service and support.
The Linux distribution industry needs to start looking at Linux in a new and different way--as a platform to be shared rather than as a product to be owned. Linux distributors need business models that better match the fundamental differences that Linux brings to the market in technology, culture and process. They need business models that preserve the magic that has made Linux what it is today.
It couldn't happen to a nicer bunch of guys: Sun and its twisted vi$ions, and SCO like a crazed bull in a china shop. And, according to Ms. DiDio, who probably knows a thing or two about it, in the shadows, like a drooling hyena, there lurks Microsoft. Hyenas don't care who does the actual killing, you know, as long as they get to eat. What a team. And GNU/Linux like an elegant deer. Well, no. More like a zebra, actually. You can't tell zebras what to do. That's why you can't train them for circuses or petting zoos. They are independent-minded, and they don't care what you want.