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SCO Reacts to Novell's Indemnification
Tuesday, January 13 2004 @ 12:52 PM EST

After nagging and whining for almost a year about the need for Linux vendors to offer indemnification, Darl McBride offers this reaction to Novell's announcement that it is now offering indemnification for enterprise SuSE:
"We believe Novell's indemnification announcement is significant for a couple of reasons. By announcing the program they are acknowledging the problems with Linux. Through the restrictions and the limitations on the program, they are showing their unwillingness to bet very much on their position."
There needs to be an award for whatever this quality is. It's uniquely Darl, no doubt about it. The fact that it's so unattractive should not blind us to its worthiness as something so outstandingly beyond the usual it should be recognized with an award as an example of... what is it, exactly? Gall seems too small a word.

First he claimed lack of indemnification indicated that no one dared to offer it, proving there were "problems" in Linux. Now offering it proves there are "problems" in Linux and the limitations, which are of course standard in any indemnification, prove no one dares to offer much. Just breathtaking. Speaking of indemnification, does SCO offer indemnification for its products? I'd like to see what they offer up on their web site. Wait, there is more.

On their site, taking their cue presumably from Novell's release earlier of its correspondence with SCO on Novell's web site, now SCO has put up the various agreements they had with Novell, which Groklaw already has made available on our Legal Docs page as well as in the chronological SCO Archives. They also direct folks to a Novell press release, which they claim supports their Amendment 2 giving them IP rights. The SCO statement quotes part of one sentence from the Novell press release:

In June 2003, Novell publicly confirmed with a press release, available on Novell's Web site at http://www.novell.com/ news/press/archive/2003/06/pr03036.html, that amendment 2 to the asset purchase agreement "appears to support SCO's claim that ownership of certain copyrights for UNIX did transfer to SCO in 1996."
Here's the rest of what that press release says, the part SCO left out:
To Novell's knowledge, this amendment is not present in Novell's files. The amendment appears to support SCO's claim that ownership of certain copyrights for UNIX did transfer to SCO in 1996. The amendment does not address ownership of patents, however, which clearly remain with Novell.

Novell reiterates its request to SCO to address the fundamental issue Novell raised in its May 28 letter: SCO's still unsubstantiated claims against the Linux community.

That just is not the same thing at all. I am amazed SCO would use this as "proof" that they got the copyrights. Nevertheless, McBride's statement reiterates that SCO owns copyrights, etc. and Darl adds that they still plan to come after "infringers" down to the end user level:
"Based on the asset purchase agreement, amendments, press releases and other publicly available documents, SCO has rights to all UNIX and UnixWare source code, legal claims, contractual rights, including copyrights, necessary to protect its intellectual property," said Darl McBride, president and CEO, The SCO Group, Inc. "Indemnification programs or legal defense funds won't change the fact that SCO's intellectual property is being found in Linux. SCO is willing to enforce our copyright claims down to the end user level and in the coming days and weeks, we will make this evident in our actions."
Isn't that endearing? If Dark Darl ever wonders at 2 AM why the whole world appears to be now uniting against him, methinks he should read his statements in today's SCO press release.

SCO has also put out a press release, a rather odd one, regarding OSDL.

Update: And here's SCO's press release:

SCO Reiterates Ownership of Unix Intellectual Property and Prepares to Press Copyright Claims

LINDON, Utah, Jan 13, 2004 -- The SCO Group, Inc. (Nasdaq: SCOX) today reiterated its ownership of UNIX intellectual property, source code, claims and copyrights and has made all of the documents surrounding the companies ownership of UNIX and UnixWare available for public viewing at www.sco.com/novell . The Web site includes access to the asset purchase agreement, the amendments to the asset purchase agreement, and the joint press release that was issued at the time SCO purchased the UNIX assets from Novell in 1995. The press release confirms that SCO purchased the UNIX "IP" along with the UNIX business and source code, among other things.

The asset purchase agreement, signed by Novell and SCO executives in September 1995, as amended, states that all of the following transferred to SCO:

-- All UNIX rights and ownership
-- All claims against any parties relating to any right, property or asset included in the UNIX business
-- All UNIX source code
-- All UNIX contracts, copyrights, and licenses
The asset purchase agreement provided Novell with a UNIX license, but with the conditions that Novell use the licensed technology only for internal purposes, or for resale in bundled or integrated products sold by Novell which do not directly compete with the core UNIX products of SCO. SCO believes that a Novell Linux offering is clearly competitive with SCO's core UNIX products.

Amendment 2 to the asset purchase agreement, also available from SCO's Web site, reiterates that the copyrights and trademarks required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies transferred to SCO. It also states that Novell may not prevent SCO from exercising its rights with respect to UNIX System V source code.

In June 2003, Novell publicly confirmed with a press release, available on Novell's Web site at http://www.novell.com/news/press/archive/2003/06/pr03036.html, that amendment 2 to the asset purchase agreement "appears to support SCO's claim that ownership of certain copyrights for UNIX did transfer to SCO in 1996."

"Based on the asset purchase agreement, amendments, press releases and other publicly available documents, SCO has rights to all UNIX and UnixWare source code, legal claims, contractual rights, including copyrights, necessary to protect its intellectual property," said Darl McBride, president and CEO, The SCO Group, Inc. "Indemnification programs or legal defense funds won't change the fact that SCO's intellectual property is being found in Linux. SCO is willing to enforce our copyright claims down to the end user level and in the coming days and weeks, we will make this evident in our actions."

On the topic of Novell's recently announced indemnification program, McBride stated, "We believe Novell's indemnification announcement is significant for a couple of reasons. By announcing the program they are acknowledging the problems with Linux. Through the restrictions and the limitations on the program, they are showing their unwillingness to bet very much on their position."

About The SCO Group

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

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


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