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"Now They Own It, Now They Don't" -New OSDL Position Paper on SCO by Eben Moglen
Tuesday, February 10 2004 @ 08:04 AM EST

Eben Moglen has written a third OSDL position paper on the SCO case, focusing on the Novell lawsuit. The paper is entitled: "Now They Own It, Now They Don't: SCO Sues Novell to Stay Afloat". It begins like this:

"The SCO licensing campaign—which has been all bark and no bite since its introduction by way of threatening letters to the Fortune 1500 last summer—lost a wheel last month, and is now headed for the wall."

You have to grant Eben this: 1) He's funny, and 2) You never wonder what he means. Here is the press release OSDL has just put out about it, followed by the paper itself in full.

Groklaw is allowed to reproduce his paper in full, because first, he copyrighted it and then he granted everyone permission to reproduce it verbatim, provided his permission notice, his license you could say, is preserved.

It's legal, because he, the author, has the right to forbid copies under copyright law or to relax the copyright restrictions. It's his property, so he gets to do what he likes with his own property.

Now, I can reproduce it verbatim, but only if I follow his instructions, because it's not my property, even though I tacked on this paragraph ahead of it. His part is still his, and I can't argue that because I tacked on a paragraph of my own, I can release the combination under some terms of my own choosing or that I can revoke his permission to reproduce, because I want my paragraph under total copyright control with no relaxed terms. What he wrote is still his property, not mine. I can release my own paragraph any way I like separately, but if I release his paper with it, it stays under his chosen restrictions.

You can reproduce it too, but only if you also follow his instructions, because it is still his property, even if you got it from me instead of directly from him.

Anything hard about that concept? Unfair? Viral? Unconstitutional?

********************************************************************

Columbia University Law Professor Says Linux Users Will Ignore SCO Legal Threats Until Novell Lawsuit is Resolved

BEAVERTON, Ore., Feb. 10 /PRNewswire/ -- The Open Source Development Labs (OSDL), a global consortium dedicated to accelerating the adoption of Linux, today published a position paper that indicates Linux customers will likely ignore SCO Group's legal threats until a court decision is rendered in the litigation brought by SCO Group against Novell on copyright ownership.

The paper's author, Professor Eben Moglen of Columbia University, is regarded as one of the world's leading experts on copyright law as applied to software. OSDL is disseminating the position paper to address issues of concern to its members and Linux industry customers as a result of SCO Group's ongoing litigation threat to sue end-users.

OSDL believes Professor Moglen's paper will help its members, the Linux development community and Linux end-users better understand legal issues and business risks associated with using Linux.

In his paper, available on the OSDL Web site, Professor Moglen makes two main points:

1. SCO Group admits, by suing Novell, that its claim to exclusive ownership of the Unix copyright is in doubt. Moglen argues that no judge would hold an end-user liable for intentionally infringing SCO Group's rights when SCO Group itself has cast doubt on what it owns. As a result, Linux customers have little incentive to purchase a license from SCO Group and instead will wait for a final decision on who owns the copyrights as between SCO Group and Novell.

2. Even once the litigation is resolved, and regardless of who prevails, customers will still have the right to use the Linux code in question without purchasing a license from either SCO Group or Novell. Moglen points out that both SCO Group and Novell (who recently purchased SuSE Linux, a distributor of Linux) have distributed the Linux code under the GPL. Since the GPL allows licensees to use, modify, copy and distribute the Linux code freely, the results of the litigation will have no affect on those rights, and customers will have no obligation to purchase another license from either SCO Group or Novell to ensure those rights.

"We see Linux deployments continuing around the world and many prudent customers are choosing to ignore SCO's legal threats until the courts rule, particularly given SCO's admitted uncertainty about its own rights," said Stuart Cohen, OSDL CEO. "We believe Professor Moglen's paper gives Linux customers, developers and others added peace of mind about the choices they make about Linux."

To read the entire paper, please visit the OSDL Website at: http://www.osdl.org/docs/osdl_eben_moglen_third_statement.pdf .

Professor Moglen, a legal historian and antitrust expert who has written extensively on the Microsoft antitrust case, is recognized internationally as a leading authority on computers and free expression. He is a 2003 recipient of the Electronic Frontier Foundation's Pioneer Award for Pioneering Freedom on the Electronic Frontier, and has served as the general counsel for the Free Software Foundation since 1993.

As part of its mission to provide peace of mind to Linux users, OSDL in January 2004 announced a defense fund that will defray legal expenses of Linux users involved in litigation with The SCO Group on issues that affect the Linux community and industry. OSDL aims to raise $10 million for this defense fund and is accepting donations from individuals, organizations and companies.

About Open Source Development Labs (OSDL)

OSDL -- home to Linus Torvalds, the creator of Linux -- is dedicated to accelerating the growth and adoption of Linux. Founded in 2000 and supported by a global consortium of Linux customers and IT industry leaders, OSDL is a non-profit organization that provides Linux expertise and computing and test facilities in the United States and Japan available to developers around the world. OSDL members include Alcatel, Cisco, Co-Create, Computer Associates, Dell, Ericsson, Force Computers, Fujitsu, HP, Hitachi, IBM, Intel, Linuxcare, Miracle Linux Corporation, Mitsubishi Electric, MontaVista Software, NEC Corporation, NEC Soft, Network Appliance, Nokia, Novell, NTT COMWARE, NTT DATA INTELLILINK, Red Hat, Sun Microsystems, SUSE LINUX, TimeSys, Toshiba Solutions, Transmeta Corporation, Trolltech, Turbolinux, Ulticom, Unilever , VA Software and Wind River Systems. Visit OSDL on the Web at http://www.osdl.org.

NOTE: OSDL is a trademark of Open Source Development Labs, Inc. Linux is a trademark of Linus Torvalds. Third party marks and brands are the property of their respective holders.

SOURCE Open Source Development Labs Web Site: http://www.osdl.org

***********************************************************

Now They Own It, Now They Don’t: SCO Sues Novell to Stay Afloat

~ Eben Moglen February 5, 2004

The SCO licensing campaign—which has been all bark and no bite since its introduction by way of threatening letters to the Fortune 1500 last summer—lost a wheel last month, and is now headed for the wall.

From the beginning of this irresponsible attack on the freedom of free software, SCO has promulgated public positions about the nature of its supposed rights that conflicted with facts known to the free software community, and relied upon legal positions that were untenable given the real state of facts. SCO supposedly responded to demands to see some evidence of code copied from Sys V Unix into the Linux program, first in a public presentation in August and then in a court filing in January. But both “demonstrations” actually showed that SCO was claiming copyright infringement in material whose copyright it didn’t own. Now, a new party has begun casting serious legal doubt on SCO’s ownership of the rights on which it bases its demands for license fees, to the complete destruction of SCO’s licensing campaign. The new party raising fundamental legal doubt about SCO’s copyrights is SCO itself.

1 You Can’t Sue Over What You Don’t Own

The SCO Group claims to hold copyrights in AT&T’s implementations of Unix as a consequence of a conveyance by Novell to SCO’s predecessor in interest, Caldera. Novell and SCO have disagreed throughout about the meaning and effect of the asset purchase transaction. The most relevant document, the purchase agreement, is a matter of public record, having been attached to IBM’s answer to SCO’s complaint in the lawsuit brought by SCO against IBM. At a minimum, Novell claims—and the document seems on its face to show—that Novell retains an independent right to license the copyright and other legal interests conveyed by the agreement.

Novell’s claim to an independent right to license the Unix technology at issue has been invoked twice since the start of the controversy. Novell renewed licenses to IBM and Silicon Graphics originally granted by AT&T that permitted the production and distribution of the two vendors’ “flavors” of Unix, thus cancelling “revocations” of those licenses supposedly issued by SCO. Those two licenses were side issues: SCO is trying to destroy free software as a competitor, not AIX and Irix. But Novell’s acquisition last quarter of SuSE AG—Europe’s leading commercial distributor of free software, including the Linux kernel—threatens the complete overturning of SCO’s licensing program. If Novell indeed holds residual rights for itself in what SCO claims are its exclusive rights, Novell can distribute Linux through SuSE without any theoretical liability to claims from SCO. And because the Linux program is distributed under GPL, anyone who got code from Novell/SuSE has the right to distribute it to anyone else, under GPL, without limitation.

So on January 20th, SCO sued Novell in Utah state court, on a claim of “slander of title,” seeking a judicial declaration that SCO owns exclusive rights in the copyrights it has threatened to enforce against Linux users. That lawsuit, in which SCO has demanded jury trial, will ultimately require a Utah jury to decide the meaning of the asset purchase agreement and associated documents, in a dispute between SCO and Utah’s largest hightech employer, Novell. If SCO can’t carry its burden of proof in that action, and convince the jury it has asked for that Novell has no rights in Unix, its whole campaign is over, and SCO’s destiny is dissolution.

2 You Can’t Threaten B, C, and D While Litigating With A

Even if one is unsympathetic to SCO, one can’t help but feel sorry for the quandary its lawyers faced in deciding whether to sue Novell. Had they not done so, their client’s ultimate fate would have been sealed. But suing Novell destroys SCO’s licensing campaign for the present just as fully.

Put yourself in the position of a General Counsel whose client has received threatening letters from SCO demanding that the client take a license for the use of the Linux program. As I have argued in past essays on this controversy, there are strong legal reasons for rejecting the demand for a license anyway. But now SCO’s pitch to the GC has become well-nigh impossible: “Pay us money,” SCO is saying, “because sooner or later, after we win a lawsuit against Novell in the Utah courts, we will turn out to own some copyrights on which you might be infringing.” For the GC whose task it is to protect the shareholders’ assets, the answer is simple: “Come back when you’ve won that lawsuit, and we’ll talk.” After all, there’s no downside for the GC’s client in waiting to see what happens in SCO v. Novell. Usually, when the target of a license demand shows a determination to wait out the claimant, the claimant says “If you ignore my demand, you’re engaged in intentional copyright infringement, and that’s a no-no. When I sue you the judge won’t like you, and the Copyright Act says I get double damages.” But SCO itself has put the ownership of the relevant copyrights in doubt by suing over them, and no judge would hold that it is intentional infringement to refrain from taking a license while the plaintiff itself scrambles to show it owns what it is trying to sell.

Many of the large, sophisticated enterprises who are the targets of SCO’s efforts responded to their claims last summer by taking copies of the Linux program, under GPL, from SCO’s own FTP server, where the code remained publicly available. They therefore have an auditable license from SCO to use, copy, modify and redistribute the code about which SCO continues to threaten legal action. For such enterprises, which now can also get a copy of the same program, under the same license, from Novell, any action by SCO to bring a copyright infringement claim would be particularly foolish.

“Judge,” such an enterprise would tell the court in the event of a lawsuit, “SCO and Novell disagree about who wound up with the power to license these copyrights, even if they are somehow infringed. They’re suing one another in the Utah courts over that. But I have here copies of the supposedly infringing work I got from SCO with a license that says I can use, copy, modify and redistribute, as well as copies I got under the same terms from Novell. So no matter who wins that action I have a license that lets me freely use, copy, modify, and redistribute. Judge, can I go home now?” That’s a pretty strong defense. Given that the first party sued would also have the benefit of the $10 million legal defense fund administered by the Open Source Development Lab, the prospects that SCO can convince neutral parties to take licenses under existing circumstances are slim at best.

3 Where the Buck Stops

By bringing the action against Novell, SCO has ’fessed up to yet another fundamental weakness in the tissue of non-truths, half-truths, and exaggerations that constitute its attack on the freedom of free software. It has given the targets of its licensing campaign the clearest possible reason for remaining on the sidelines, and by doing so it has triggered the forces that are going to bring this nuisance to an end.

If SCO’s licensing campaign fails to generate the revenues SCO has been predicting for potential investors—because it turns out that SCO never owned what it claimed to be legally entitled to force others to license— SCO and its principals will have plenty to answer for, and not just to its shareholders, but to the SEC as well. It is not good practice to attempt to force people to buy from you what you may not own. It is even worse practice to mislead investors into thinking that they will benefit from such sales without disclosing that you may not own what you are trying to sell. Now that SCO itself has begun unraveling this aspect of the situation, the end is in sight. The winter of SCO’s discontent is likely to give way to a glorious summer for open source software.


Eben Moglen is professor of law at Columbia University Law School. He has served without fee as General Counsel of the Free Software Foundation since 1993. This paper is based on a presentation given to the Open Source Development Lab’s User Advisory Council in New York City January 22, 2004.

Copyright Eben Moglen, 2004. Verbatim copying of this article is permitted in any medium, provided this notice is preserved.


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