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Early Reaction to Novell's Copyright Claims and Linus' Statement
Tuesday, December 23 2003 @ 06:09 PM EST

Well, who'd a thunk it? It seems Laura DiDidio is wrong about something.

A new survey shows that companies they surveyed don't care two hoots about indemnification for Linux or about yesterday's SCO threats either. Linux deployment is not slowing.

What is interesting in the InternetNews story is that, after quoting Ms. DiDidio's earlier words on how vital indemnification would be to enterprise users, it reports that of the companies just surveyed, half say they checked with their attorneys and the attorneys said that the GPL offers all the protection needed.

Now you know I'm not just whistling Dixie here on Groklaw. The GPL really is powerful. It's just that the SCO gang doesn't understand the GPL and so all their strategies and analyses suffer from a fatal flaw.

Here are the facts about the latest survey:

Evan Bauer, a principal research fellow with Robert Frances Group ( ), said a just-completed survey the IT consulting firm conducted with 15 companies about Linux deployments suggests that cost-savings and the General Public License, or GPL, are trumping any concerns about SCO Group's claim of copyright infringement within parts of Linux.

"None [of the companies surveyed] have concluded they're liable in any way," he said. . . . About half of the companies in the survey, which is expected to be released in January, checked with their legal departments about any potential exposure to the issue. For example, if a court ruled in favor of SCO in finding that some parts of the Linux kernel were copyrighted, would companies running Linux have to pay SCO license fees?

"Many feel they are absolutely protected by the GPL [General Public License]," Bauer said, referring to the open source software license (also called GNU GPL) that details how the open source operating system software and its source code can be freely copied, distributed and modified.

Of course the GPL turns out to be only one protection available against copyright lawsuits. Reactions to Novell's copyright registration are starting to come in and they confirm what I thought. The fact that both SCO and Novell are claiming ownership of the code means that neither has clear ownership until a judge sorts it out. One attorney writes: "I agree with you that if SCO filed an infringement claim based on their claimed ownership of System V, then Novell could intervene in the litigation to argue that SCO doesn't have such rights in System V. Here's how another attorney, in an InfoWorld piece by IDG News Service's Robert McMillan, explains it:

The fact that both Novell and SCO have now registered as owners of the Unix copyright does not necessarily say anything about the validity of either company's claims, said David Byer, a partner with the patent and intellectual property group at Boston's Testa, Hurwitz & Thibeault, LLP, who is not involved in the dispute. Unlike the U.S. Patent and Trademark Office, the U.S. Copyright Office does not examine the validity of copyright claims. he said. "When you fill out a copyright registration, you're essentially declaring under penalty of perjury that you are the owner," he said. "If you tell them that you wrote it, they believe you."
Penalty of perjury, you say? That tells us that Novell didn't register without seriously considering whether they felt they could back up their claims. Stephen Shankland has more attorney reaction in Shankland's extremely thorough coverage of the significance of the Novell monkey wrench, as he calls it:
But Novell, which bought Unix from AT&T before selling a SCO Group predecessor at least some of the intellectual property in 1995, is disputing SCO's claims of Unix copyright ownership. Spokesman Bruce Lowry said Monday the U.S. Copyright Office has given Novell copyright registrations for 11 versions of System V Unix.

The copyright registrations by Novell, which is in the process of acquiring No. 2 Linux seller SuSE Linux, are "a pretty clear indicator there will be a litigation between Novell and SCO," said David B. Moyer, an attorney with Wineberg, Simmonds & Narita.

Novell's moves could throw a wrench into SCO's effort to sell Unix licenses to Linux users, a plan under which it's asking $699 to use Linux on a single-processor server, Radcliffe said. "Now basically these guys have got to go to court and prove they own the copyright. That takes a lot of the pressure off the Linux users," Radcliffe said.
And that's just Novell. What about Linus? He's claimed some of the files already as being his own work product. Paula Rooney with CRN saw Groklaw's articles and contacted Linus:
In an e-mail exchange with CRN, Torvalds, a fellow with the Open Source Development Labs, snubbed SCO's latest series of allegations as hollow and said the so-called violations relate to a group of simple header files, not significant IP.

"As you can see, it's basically something like five files, it's just that several of them are replicated for every single architecture out there," Torvalds wrote, pointing to the files listed on the letter. "And the thing is, those files don't even contain any code. They contain things like the error number lists--and, yes, we made the error numbers match with traditional Unix on purpose, since, for example, Linux/alpha wanted to be binary-compatible with OSF/1. Ask any programmer what this is, and he'll tell you it's just a C header file that gives symbolic names to static error numbers." . . .

According to the Groklaw Web site, which chronicles the legal aspects of SCO IP cases, Novell has registered for the copyrights on Unix System V 2, 3.0, 3.1, 3.2, 3.2/386, 4.0, 4.1, 4.1ES, 4.1ES/386, 4.2, and 4.2MP with the U.S. Copyright Office during the past four months. . . .

However, SCO's McBride said he is not intimidated by the legal backlash from key Linux vendors and that the company is serious about filing a copyright infringement case against a Linux customer no later than mid-February.

He claims SCO will crush Novell's copyright claims as fraudulent. He also claimed that SCO's rights to Unix under the DMCA will prevail over the GPL.

EWeek says McBride is now claiming SCO will "legally pursue all companies that contribute to or use Linux." That's a lot of companies. He has his work cut out for him there, particularly with deployments booming. The InternetWeek article says Federated Department Stores -- you know, Bloomingdales and Macy's and such -- say they intend to increase their Linux deployment:
Christopher Dudley, an operating vice president for Federated Department Stores (which was not a part of the survey), echoed the sentiment, but also clarified the role that Linux is playing in the retail company's networks.

"Despite the SCO/IBM legal issues we are continuing to look into further deployments of Linux into some of our core business areas including and," he said, referring to Web sites of the respective department stores that Federated also owns.

With annual sales of more than $15.4 billion, Federated currently operates more than 450 stores in 34 states, Guam and Puerto Rico. Within that structure Federated currently runs a small number of Linux-based servers. And Dudley also pointed out that the company also runs a large number of proprietary, Unix-based servers from Sun, HP, and IBM.

"The dispute hasn't really yet become a factor in our Linux deployment strategy. As with most companies today, we continue to aggressively pursue cost-saving areas. Linux fits in this space. That, coupled with our direction to make the lower-level operating system components of the infrastructure a commodity currently makes Linux a powerful tool in support of our business," he said.

The eWeek article clarifies why SCO sent letters to their own licensees:
By the end of January, McBride said, companies using Linux have three choices: 1) Cease and desist any use of Linux; 2) obtain a license from SCO to use Linux at $699 per CPU (the licensing fee to go up to $1,399 at some time in the future); or 3) continue to use Linux, and lose all rights to the company's Unix license and face SCO in court.
He forgot a fourth option, and the one I'd pick if I received such a letter: 4) Cease and desist any use of UNIX from SCO. So now legal users of UNIX are not allowed to use Linux? Steven J. Vaughan-Nichol's reacts to this startling news with a fairy tale about "The Little SCO That Cried Wolf":
SCO has shouted so long that when businesses and analysts alike hear them, they say, "Oh, that SCO... They're just crying wolf, and we'll pay no more attention to them from here on."

Excuse my fractured fairy tale, but I think that's exactly what is happening to SCO. Many people assumed that the DoS attack had been faked. It wasn't. So now, SCO can be completely in the right and still not taken seriously.

Personally, I don't think SCO has a leg to stand on in its copyright cases, but I do know one thing: By constantly playing up its threats, SCO has become a company that has cried wolf too often. The latest threat was that anyone who uses Unix legally can't use Linux.

Even people I know who used to take SCO seriously, have gotten weary of SCO's ever expanding claims. They want real proof. If SCO has another intellectual property customer besides Microsoft and Sun, they want to know who it is. In short, they want SCO to stop crying wolf and show some fur, some teeth, something more than an eternal cry of the grievances and victimization.

If not, well, companies that cry wolf too often eventually run into real wolves--perhaps Novell's counterclaims on SCO's Unix copyrights?--and that's the end of them.

McBride was directly asked about Groklaw's article reporting that Novell had filed for copyrights on System V:
Finally, McBride responded to a report that Novell Inc. was still pursuing its own copyright claims on Unix. "Novell is desperate," McBride said. "SCO has produced documents that say we own the Unix copyrights. Let me be real clear: SCO acquired all rights for Unix and UnixWare, includes copyrights. We see this as a fraudulent notice." McBride added that SCO sees Novell as being "all hat, no cattle".
Speaking of desperate, here's a look at SCO's next quarter financial prospects:
UNIX products and services are expected to represent the majority of consolidated first quarter revenue. Revenue from SCOsource licenses is expected to be minimal in the first quarter as the company finalizes license agreements with vendors and continues to implement its intellectual property license initiative, officials said.
More details on who got the letters and how they are likely feeling about them is in PCPro[reg. req'd]:
In letters sent to the some 6,000 Unix licencees, SCO is demanding that such companies provide written evidence that the software has been used strictly under the terms of the licence. Aside from showing they have not allowed Uix code to be contributed to Linux, SCO is also seeking evidence that these companies told each employee and contractor their obligations concerning the licensed code, and didn't let anyone else use the code, either - especially anyone else in terrorist harbouring nations such as Syria, Iran, North Korea or Cuba. All this, and more, by the end of January.

These UNIX licensees include 41 companies of the Fortune 100, and as such, large corporates will find this no easy task. If they fail, SCO reserves the right to withdraw the Unix licence and demand that the companies stop using the software.

I think I've figured out why SCO is doing this. Maybe they just don't want any customers, so they can concentrate full throttle on their core business: litigation. If that's the plan, they appear on the right path to achieving their goal. Of course, admitting to the press that you are trying to force companies to stop using Linux might leave one open to tort claims, but who's counting?

Maybe Judge Sue Robinson in Delaware, one hopes?

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