We have received permission from Dan Farber to provide a transcript of a July 22, 2003 interview with Darl McBride, CEO and President of the SCO Group, by Dan Farber and Charlie Cooper of news.com. We have tried to be accurate, as always, and any mistakes are ours, not those of Mr. Farber, Mr. Cooper, Mr. McBride, or News.com. If you see any errors, do tell us, so we can perfect the transcript.
Our sincere thanks for allowing us to make this transcript available. You can find the video at this page [originally it was here] and then scrolling down. Thanks too, to the transcription group for working so hard to make this available.
By far the most interesting statement is McBride's characterization of Novell's copyright position, in light of later evidence that came to light, the Novell correspondence.
Because of what we now know, it's also telling to read the description of the vast copyright claims they began by asserting and comparing those claims to the very narrow and limited claims of today. I see that from day one SCO was talking not so much about Linux accepting stolen copyrighted code but about code SCO lays claim to under their derivative code legal theory, but presented in such a way as to make people think they were talking about Linus being asleep at the wheel. Oh, and their header file claims, which have been debunked thoroughly.
The understanding back then was that they were saying that there were flaws in the Linux code process. We all spent considerable time and effort to prove that there was no line-for-line stolen code in Linux, and that must have made them laugh, but in the end it has only strengthened the perception that the Linux open source system worked quite well indeed, with the result that there is no improper code, in the stolen code sense, and that the only way to attack it was to invent a new legal theory that no one else has ever gone by and then accusing Linux, or more precisely IBM, of violating this novel theory of what belongs to SCO.
The final interesting point from this interview is McBride's obvious misunderstanding of how the GPL works. When he makes the assertion that "Because we were distributing Linux does not mean we had donated code to Linux", he reveals he does not accurately grasp that their distribution triggered the GPL, no escape, no excuses.
Dan Farber (DF):
Darl, Thanks for being here.
Hey, thank you guys. It's good to be here on your show today.
You know it's been about 4 months since you launched your
lawsuit against IBM. What precisely is the status of the lawsuit and
what are those thousand-dollar-an-hour lawyers doing at this point?
Yeah, good question. The lawsuit was launched back in March. It was
after a period of several months where we had found intellectual property
violations and contract problems. We launched the lawsuit on March 7.
We had a hundred-day notice in place at the time we put the lawsuit in
place that if we did not have these contract issues resolved then we
would in fact be canceling or revoking the AIX license. On June 13, we
in fact did revoke the AIX license agreement as per our contract rights.
With respect to the broader lawsuit that was filed on March 7, it is now
moving into discovery and we're going to the next phases. So basically
the legal teams on both sides are digging up information and, you know,
we're going from there.
Well, There seems to be some alleged code that's offending that is
purportedly the property of SCO through all the rights they've gained
in acquiring those versions of Unix. What precisely is the code that
you're talking about? We've seen some stories where it's 80 lines here
it's just the comments. I mean how can you have a lawsuit like this
and not be more forthcoming about what the offending code is?
Right, so when we started off this problem with IBM, it was very clear
that IBM had donated things improperly into the open source community.
That was the basis for our lawsuit against IBM, among other things,
but that was the primary driver.
And during the period of time shortly after filing the lawsuit until
recently when they came back and responded, we had a 60 day period
there where we turned 3 different teams of code programmers loose
on the codebases of AIX, Unix and Linux. And they came back with -
independently - we had the three teams - one was a set of high-end
mathematicians, rocket scientist, modeling type guys. Another team was
based on standard programmer types. A third team were really spiffy on
agent technology and how all of this technology was built in the first
place. So the three teams came back independently and validated that
there wasn't just a little bit of code showing up inside of Linux from
our Unix intellectual property base. There was actually a mountain
of code showing up in there. Now if you look at the types of code,
we really see them in three different buckets.
But, Where does all this code come from before. I mean Unix goes
back to 1960. We're talking about code that could be as old as 40-some
So what's the prior art that you're going after at this point?
Good questions. So in 1996 our company paid, or in 1995 I guess
it was, we paid more than 150 million dollars for the rights to Unix
from Novell. So you could ask the same questions, what rights did we
buy then? There very clearly are rights that are well beyond anything
that's been out there in the public domain. You know, just because there
have been versions or different iterations of Unix out there doesn't
mean the proprietary or commercialized Unix has been in that bucket.
So, what we have is the main code base of Unix. We have the source
tree here of System V if you will, that SCO owns, and then what you
have are multiple branches off from that tree that go into many of the
OEM vendors that have been selling Unix over the years. Unix last year
was a 21 billion dollar marketplace. All of those versions of Unix tied
back to SCO's branch. So what happens here is SCO owns the main source
trunk and they have derivative rights control on the branches that are
out there. So when you have an AIX or an HP-UX or Fujitsu or wherever
the various version is coming from, they have the rights to go sell
and promote their branches and the derivative works they do on those
branches, but they don't have the right to donate that or give it away.
They have to keep all of those works in confidence.
Charlie Cooper (CC):
And how ... Darl let me ask you this, how then did you folks determine
that this is worth one billion dollars plus in damages?
Yeah, there are a few different ways you get there. But let's go
back to the basis of our claims which is there is a huge amount of code
inside of the Linux kernel today that is improperly there that has come
from system vendors that we have contracts with.
That... what that does is it creates copyright violations inside of there,
some of it coming straight from our source tree. So yes, there are direct
Well, Novell would say you don't actually own those copyrights fully.
Yeah well, the Novell thing. They came out and made a claim that held
up for maybe four days and then we put that to bed. If you go back and
talk to Novell I guarantee what they'll say, which is they don't have a
claim on those copyrights anymore.
Well, that's not exactly what they're saying at this point. But I
think it's pretty clear that one of the issues here is saying that the
open source community is purposely putting code into their open source
Linux that is code that is not their own. Is that something that you're
actually saying in your complaint, and will you end up suing the various
What we're saying right now is that we're seeing a lot of code.
Let's go to the basis here. Linux 2.2 kernel goes up through the end of
the millennium. 2.4 comes out early millennium. Since 2.4 has gone out,
there have been a couple of million servers shipped. And if you look,
if you do a comparative analysis, the code in 2.2 kernel is very simple,
doesn't allow for a lot of scalability, not high reliability in terms of
where this stuff runs. When you go to 2.4 and beyond, you're seeing
Linux run inside of enterprises. Data-grade, carrier-grade Linux and
the SMP - the symmetric multi processing, the ability to scale up to
many processors in terms of a Linux box - is way beyond where it was in
2.2. One thing I will make clear here, Dan, is we're drawing a line on
2.2 and 2.4. The massive amounts of code we're seeing show up in Linux
today that relates to our IP really came along the lines of 2.4 kernel.
Let me just get a clarification here. Does that mean that you plan to
levy a licensing fee on all commercial Linux users of 2.4?
We think that there are a lot of ways that we get justice. Our main
thing right now - it's just a little bit like what's going on in the
music industry, the film industry. It's very clear in the film industry
when the video comes out two weeks ahead of the release date of the
that there's been an infringement. It's very clear with the online music
sharing there are problems. They're working through their issues in
different ways. We very clearly have problems here. How we work through
and get justice to that? We're open to as far as how that works out.
Does it happen at an end-user level? Does it happen at an OEM level?
Does it happen at a Linux distributors level? We're looking at all of
those options right now.
Darl, does it bother you at all that the company is now considered a
pariah by the open source community?
Well, there's no doubt we're not winning the Miss Congeniality
contest of the software industry now. But I think if you step back and
look at it, in terms of if we really are right with what we're saying,
and we're 100% convinced we are and the world is coming around to that.
The few dozen people that have come in, taken the time to take a look at
our code, take a look at our claims have unanimously walked out of our
Lindon, UT offices with the same conclusion that, "Yeah, you guys do have
some pretty powerful claims here." They then turn to, "What's next?
What are you going to do next?"
So I believe that as our claims are now being validated and as we start
to gain wins in this area, I believe that it will turn, it will come back
round and people say "Well, OK, there were problems." In the end of the
day though, what I would say is, we're not trying to kill Linux. I mean
we're not attacking Red Hat right now which if we did, by definition,
could end up shutting down Linux tomorrow.
But what do you think the impact is on a CIO who reads that they
may very well be vulnerable to litigation if they go ahead and deploy
open source software?
I think the impact is, this situation potentially can get wrapped
up a lot sooner than having this big cloud over the industry for what
could take a couple years to go litigate with IBM.
You mentioned that you have a lot of evidence as to your intellectual
property that's being violated, but I so far haven't seen any of it.
I do have a quote from someone who said allegedly that they did see it,
an Aberdeen analyst, Bill Claybrook. He said he looked at the code, he
saw some lines that looked similar, but it was not conclusive in any way.
Well, another report that I saw that Bill wrote basically said from
what I saw there seem to be claims that seem to be very legitimate and
if everything I saw was correct I think then the industry has a problem.
So I think depending on which press report and how they want to twist
his words, you come up with different conclusions. But very clearly
the two or three I've seen and the report that he in fact wrote on it
was very strongly weighing in on our side.
It sounds like there's a lot of confusion over precisely, you know,
is it a contract dispute, is it an IP dispute? Is there evidence,
clear evidence that you've been able to present, which I haven't seen,
that says that IBM in particular or the Linux community had violated any
copyright or patent that SCO might have? When is that evidence going
to be produced?
Well, so these were the issues that were coming up in the May
time frame. Right after we sent out our letters to the CIO's, we had
a lot of demand coming in saying, "We'd really like to see the code."
We opened up our offices in Lindon, UT for code-viewing sessions. As I
said, we've had dozens of folks that made the trek out to Lindon and
we haven't had anybody yet that's walked away not a believer. So to the
extent that you wanted to come and see it, you're more than welcome to.
Anybody else that wants to come in. What we are doing to open it up
more to the world, to more of an open session: We have our annual event
that's coming up in Las Vegas on August 18, and we will in fact be doing
a full show-and-tell session at that point in time.
Let me ask you to comment on something that Linus Torvalds said.
He said none of the SCO accusations have anything to do with IP rights.
It's all about contracts between SCO and IBM and that it's blathering
by SCO and it's a kind of holier-than-thou stuff.
The part with Linus that I would agree with him on is that it started
out as a contracts case about IBM - and Linus and I have shared emails
along the way and I guess we've chosen to agree to disagree. The point
that we fully disagree on at this point is whether it is an intellectual
property problem or not. Although it started off as a contracts problem,
as we've gone in and done our full analysis of the code base, it is
very clear that we have a copyright problem with the code that's in
Now one thing that is late-breaking and fresh news for you and all
the listeners out there is that last week, middle of the week, we did
receive our registered copyrights back on the Unix code base. And the
copyright registrations are interesting because they do in fact give
you the ability to go seek injunctive and damages relief from end users.
Well, clarify something for me. SCO has been a distributor
under the GPL which provides for free distribution of the code.
So how can SCO claim rightly that its IP has been violated
if Linux customers are using the code that was distributed?
Right, so what happens here is there's a difference between a
distribution of a code base and a donation of code. Because we were
distributing Linux does not mean that we had donated code to Linux.
In fact the GPL is very specific that it protects users or code developers
who have had their code improperly donated into Linux. That is in fact
the part that shuts down the GPL. If you have tainted code that's in there
you have to in fact stop shipping, if we came out and put a claim against
one of the Linux distributors. That's why we haven't done that at
this point. If you look at the code that is out there. So we just found
out about this a couple of months ago and when we did, immediately we
came out and we suspended our shipment of Linux until this gets resolved.
So we're really protected on two fronts. The GPL actually protects
us on this front and then if you look at copyright law, copyright law is
as explicit in terms of saying a copyright owner cannot accidentally give
their rights away. You have to actually sign your rights away and we
have never done that.
If SCO prevails, what's the impact then on the future of Linux?
Well, I think the thing that is clear here is that we have code that
is massively showing up inside of Linux 2.4 today. There's a couple
million servers out there in the marketplace, and if you go back to early
2000, maybe 2001, and go forward, you have a lot of versions of Linux
that are running that are tainted.
So I think the implications are pretty simple. We either get square
with users that are using our code improperly and true up on that front, or, well, in any case we do that. But then I think in terms of the go
forward is the real question.
The real question is, does the Linux community want to roll the
I mean I actually agree with the points that Linus is making around
"show us the code, we'll go back and fix this." The problem is we are
talking about hundreds of thousands of code that have come from 25-year
veterans of putting symmetrical multi-processing together.
When you take that code out, you know, to the extent that you can redo
it with your own workings and have it there ready to go tomorrow, great.
Most likely what happens is this rolls back to a pre-2000 state on the
On the other hand if we want to leave the code in there and keep going
and there's a way for SCO to get compensated for the damaged goods that
are out there, then we're fine with that too.
Did the symmetrical multi-processing actually come from SCO or its
licenses, or did it come from IBM or some other organization?
When you look at the types of code that are in Linux today that are
violating, there's really three types. There's line-by-line code that
came right out of our System V source tree. There's derivative works
code that came from vendors that we have license protections against
them donating. And then there is basically non-literal implementations
where they've munged code or obfuscated it to make it look like it's not.
The biggest concerning areas are the direct line-by-line and these
derivative works code. The derivative works is the main area that IBM
has been in violation of.
Isn't it difficult to prove derivative works in the sense that Unix
System V is derivative. There's things that predated it. There's BSD,
I mean, is the Mac OS still going to be in your gun sights as well?
No, this is a little bit different than that. We're not aiming
at BSD. We're not aiming at pre-2000 Linux. We're not trying to go
after University code. We're basically saying in the late 2000's or
pre-2000, you had two codebases that had the NUMA technology - non uniform
memory architecture - that allows high end scalability inside of them.
It was Unixware and it was Dynix that Sequent held. OK, so IBM buys
Sequent while we're doing Project Monterey. Within the last 18 months,
two years, they have in fact donated the Sequent NUMA code, the Sequent
RCU code into Linux. OK, so part of it is code that we had as part
of our Unixware product. Other parts such as RCU were things that were
clearly derivatives. I mean if you look at the RCU code it could not be
more clear that it's a derivative because in the copyright statements
where IBM donated it into open source -- you can go out and look on
sourceforge yourself -- it lists out that in fact RCU is a derivative
work of Dynix, and Dynix is in fact a derivative work of System V.
OK, one quick question.
You said in the past that you intend to sue other hardware vendors.
What's the status of that?
Well, I think what I've said in the past is I don't want to have
any more lawsuits. If people press me on it and say if they don't come
clean, does that mean you won't sue them? No. I mean, if we have to use
the legal resources we have available to us, we will do that, but our
preference would be to work things out with whether it's at vendor,
user, or at a distributor level, or at an end-user level.
I'll take that as a yes.
I have one final question, Darl.
Speaking about IBM, you were quoted as saying, "Those guys know what
it's going to come out in discovery and you hear a lot of rumors on the
street that they're going to buy us out. Well, I bet that's exactly what
they want to do. The last thing they want to do is hear the testimony
that's going to come out." Is your strategy really to get acquired by
IBM, to basically save your company from extinction?
No, our strategy is not that. Our strategy is to take this business
that we have and get it back on track and moving again. It was rolling
along very nicely at the end of the millennium. IBM approached us and
"Hey, let's do this thing called Project Monterey. Let's go to market
together, file this thing with the Justice Department. Let's create 54%
of the market share going into the new millennium." It was all set up
and then after the project was all done from a technology standpoint,
IBM backed off and didn't go to market with us.
And at the same time they did that, they jumped in bed with Red Hat and
went off and started distributing Red Hat.
Now, just because they did that doesn't mean -- I mean at one level, yeah,
we can be upset and we can whine and moan about it -- but that doesn't
create technically a legal violation. What creates the violations are
when they actually go out and take our code, contribute that into open
source that in fact does boost Red Hat. It does boost the other distros.
And at the same time our revenue comes down from 230 million down to
60 million. At the same time, the Linux marketplace is just booming.
So didn't it really, didn't you really just miss the Linux market?
Just kind of timing, that Unix being displaced by Linux in a lot of
these scenarios? And that's a lot of the enterprise, not kind of in the
smaller businesses where necessarily SCO has been doing a lot of
business in the past.
I think you have to look at it real clearly. What is Linux? It is a
Unix-like operating system on Intel. For 20 years, SCO had the value
proposition of Unix on Intel. We all remember in the valley what it
was like in the 90's, early 90's moving on. It was a boom time for
the SCO group, the Santa Cruz Operation. It had the kind of brand Red
Hat has today. When you go into the new millennium, what is the Red Hat
value proposition? It is Unix on Intel.
So you're saying if Linux hadn't come up, SCO Unix would have
conquered the world?
A lot of the people that I talk to today talk about the proposition
of Linux has more to do with cheap hardware than it does the operating
system. I think absolutely SCO was positioned to be in the driver's
seat for this burgeoning market of Unix on Intel.
Well, the operating system wouldn't be in the enterprise if it were
just because of cheap hardware.
I'm sorry, say that again?
The operating system Linux wouldn't get into enterprises if it were
just because of cheap hardware. It's got to be a robust operating system.
Understood. And the point is if you look where Unixware was in the
90's, it was way ahead of Linux by any stretch of the imagination. If you
look at Unixware today, it still runs on more boxes from an SMP standpoint
or from a NUMA standpoint than Linux does, but Linux is closing the
gap fast. And from a certification standpoint, obviously Linux is ahead,
because all the hardware vendors have jumped ship with us and gone over
and now are supporting Linux. The value proposition is Unix for free,
which is obviously a good deal if you can pull it off. But if you're
going to do Unix for free, you've got to make sure it's also IP-free.
Well, we'll have to leave it at that Darl. I want to thank you
for joining us today. Darl McBride, who is CEO and president of
I'd also like to thank my colleague, who is Charlie Cooper from News.com.
I'm Dan Farber. This is Face to Face.