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MS Serves Up a Heaping Scoop of SCO FUD in UK Tech Press
Monday, January 23 2006 @ 12:54 PM EST

Do you remember back in August of 2003 when SCO first began the chorus of calls for Linux to offer indemnification for end users? If you recall it that way, like me, you are misremembering. Then was it Laura DiDio? Nope. She wasn't the first either, although she sang the loudest. When I went to check, the very first hint I could find came from Microsoft back in May of 2003, when Steve Ballmer said about Linux, "customers will never really know who stands behind this product."

And do you remember these words of Bill Gates from July of that year:

"Over the next four or five years people will understand more about the intellectual property issues around open source software and Linux and that will address the open ended liability without indemnification for customers. There is going to be some friction around that side of the system."

However did they know, do you suppose? Maybe because they were making it happen? You think?

And so it comes to pass in 2006 that we find Microsoft distributing a flyer in the UK tech press entitled "Indemnification - Weighing the Risk," which uses the SCO case to ask if using open source can leave a company open to legal liability. Three Groklaw readers in the UK tell me that when they received their latest copy of IT Week or, it had the insert from Microsoft. Why only in the UK? Maybe Microsoft knows that in the US people would laugh out loud at such FUD, whereas in the UK it hasn't been as widely covered in the press. The insert's all about indemnification and why Microsoft's indemnification is allegedly better than what you can get for Linux. It does that by misrepresenting in an incomplete chart what indemnity and other legal help you can get for Linux. In fact, I think you could say the insert is an historic stroll through the fields of FUD in which SCO prominently starred. The only trouble is, the history comes to a full stop with a loud screech in March of 2004.

Why, isn't that around the time that SCO's rape-and-pillage ship began to list badly and start taking on water? Why, yes. Yes, it is.

The white paper opens like this:

Indemnification is a word that was rarely uttered in IT circles until the last few years, since when it has cropped up repeatedly, thanks in large part to concerns over intellectual property rights (IPR) and Linux.

Sparked by the dramatic steps taken in 2003 when SCO Group sued software companies and end-users for alleged infringements of Unix IPR it claimed to own concerns have been aired over how IT buyers can be protected against such cases.

The insert encapsulates material from an IT Week and Computing web seminar that debated, "Can IT Decisions Leave Customers Liable?" with Nicholas McGrath, Director of Platform Strategy at Microsoft in the UK, Richard Kemp, a lawyer with Kemp Little, and George Gardiner, a lawyer at Gardiner & Co, "former IT director with positive experience of open-source software".) By the way, the url listed in the white paper for the seminar is not working. Go here if you want to see it, or look for the link on this page. Registration required.

It purports to describe the SCO legal saga, but it gets quite a few facts wrong, aside from being incomplete, not mentioning any SCO negatives. As just one example, it says SCO sued IBM in March of 2003 for misappropriation of trade secrets, unfair competition and contractual claims. It never mentions that it dropped the trade secrets claims completely. Instead it says that in June of 2003, SCO "expanded the size of its claims". They seem to mean they asked for more in damages, but as SCO has been finding out, asking for damages and getting them are two different things. You can throw in any figure you please in a complaint, but then you have to prove your claims, and that appears to be the sticking point for SCO.

The insert says Novell and Red Hat later sued SCO, "on the grounds that it had unfairly represented the status of Linux and caused damage to their respective businesses." That isn't at all accurate. It was SCO who sued Novell for slander of title, after Novell stated it still held the Unix copyrights. Novell later countersued and while the counterclaims are many, including charging SCO with contract breaches -- one being an unjust enrichment claim that SCO pocketed revenues it owed to Novell -- outstanding is the claim that SCO has no valid copyrights in Unix, which would be the basis of SCO's ability to sue anybody for infringement. Novell asserts it still holds the copyrights, a fact you cannot learn from this white paper. Novell also accuses SCO of filing misleading information with the SEC. And it accuses SCO of "scheming" to extract licensing fees from Novell, the Linux community and Unix vendors, and that it asked Novell to go along with the scheme. Novell asks the court for an order attaching SCO's assets pending adjudication of Novell's contract claim, as well as damages, including punative damages, among other relief. None of this is in the white paper. See? That's what you need Groklaw for.

Red Hat asked for a declaratory judgment that it is not violating any SCO copyrights and it has some Lanham Act claims. Of course, if SCO doesn't have any copyrights, that declaratory judgment should be a breeze.

Let me show you a screenshot of another hilariously incomplete chart from the insert, so you can savor the moment when we see Microsoft struggling to cash in on all the FUD from Laura DiDio and others about indemnification. Here's the chart:

Yoo hoo, Microsoft, it's 2006, not 2004. The great plan fizzled. DaimlerChrysler sailed through without a scratch, in case you didn't hear, and AutoZone is as close to over as it can be, resurrectable only after IBM is settled and probably only if IBM loses massively, ha ha. And say, how's SCO's business doing, other than the PIPE fairy transfusions? Did it all work out well for them? Inspire others to want to be just like them? Or did the marketplace decide it was a bunch of hooey that IBM could handle on behalf of the world very nicely, thank you?

Microsoft probably should have left that last bullet point off. Of course, they also don't mention Judge Kimball saying he was amazed that SCO has presented no credible evidence of copyright infringement and the flyer doesn't mention any of the other negative court events since, one after the other.

The flyer quotes various "experts" who have been croaking about indemnification for a long time, including our longtime favorite, Laura DiDio. She says that SCO's litigation is "a dream outcome for Microsoft." Well, she got that part right. Then she says that the minute a corporation gets sued, it loses. In that case, Microsoft must be a losing company, I'd say, because when is it not being sued? Check out Groklaw's Microsoft Litigation page and you'll see what I mean. In contrast, Linux has never before to my knowledge been sued by anyone over IP. Or anything else that I ever heard about. For that matter, have you ever heard of anyone collecting from any of the indemnification offers made two years ago for Linux by HP, Novell or Red Hat? Even applying?

In fact, Linux isn't being sued now. The SCO v. IBM case has pretty much leveled down to a contract case, from all that is publicly available, and it's hard to see any impact it could ever have on Linux, unless SCO comes up with an 11th hour Perry Mason moment. Compare the two records and ask yourself, if what DiDio says true, shouldn't you switch to Linux right away?

Let's see by checking Groklaw's Archives what Ms. Didio's advice was in August of 2003 when SCO sent out its letters to the 1500 after it announced their SCOSource "licensing" program in May:

Several commercial Linux users, including Red Hat and SuSE , have expressed doubt about the need for the licenses - which have yet to be priced officially by SCO. However, Yankee Group senior analyst Laura DiDio is advising customers not to dismiss SCO's licensing offer, despite the arguments of those who think SCO's claims will not be taken seriously in court.

"The customers who received these 1,500 letters from SCO have been told this isn't going anywhere," DiDio told TechNewsWorld. "I don't think anyone should listen to such empty assurances."

Soft Pitch for License

DiDio, who said SCO's copyright registrations illustrate the company's seriousness about its claims and represent a step toward possible litigation, described SCO's actions as "a very wise course."

"They went out of their way to say they are holding Linux customers harmless," she said. "They're not being greedy. Under the law, if they prevailed [in the IBM suit], they could hold the infringers liable."

DiDio criticized IBM's lack of indemnification of customers in the legal case and noted that by stating Linux creator Linus Torvalds had inherited the copyright violation and was therefore not responsible for it, SCO is "trying to ruffle as few feathers as possible."

SCO went out of its way to say they are holding customers harmless and they were not greedy? Is that the way you recall it? Anyway, that was her advice back then: seriously consider taking a SCOsource license. Ah, the advantages of 20-20 hindsight! Not to make fun of anyone, but seriously, how right was she? SCOsource died a horrible death, although I believe it is being kept on life support in hopes of harvesting its organs someday.

And so we come full circle. The only "question" left in my mind is, did Microsoft plan this call for indemnification so it could contrast its offering, or is it just trying to benefit from the SCO litigation after the fact? Perhaps like me you lean to the first, but either way, do you admire Microsoft's FUD? Does it make you want to do business with them?

Deeper, is this FUD really reflective of Microsoft's opinion of Linux? If they sincerely believed that Linux was a legal risk, would they sponsor the following seminar? Judge for yourself:

Ziff Davis Media eSeminars: The Online Seminar Standard Windows and Linux: Perfect Together January 26, 2006 @ 2 p.m. Eastern/ 11 a.m. Pacific Duration: 60 minutes Register & Attend Online If you are unable to attend the live event you may still register and will receive an e-mail when the on-demand version becomes available.

Event Overview:

Savvy IT managers, CIOs and other IT decision makers know that, when it really comes down to it, the Windows-versus-Linux battle being portrayed in the media is mostly hype. The fact is, Windows and Linux OSes can and do coexist peacefully in server rooms and on desktops at organizations worldwide. The benefits are numerous - Linux offers a reliable, extremely cost-effective platform that can run on the most modest of hardware, saving your company money on expensive server and desktop upgrades. Windows continues to be the standard on which most enterprise-class software and applications run, and combining the two means your organization gets the best of both worlds. And recent advances in dual-OS management technology means that a cross-platform implementation is no longer the administrative headache it used to be.

If your organization is already working with a dual-OS environment, you are well aware of the benefits. But how can you increase efficiency, productivity and ease system management? If you are considering a Windows and Linux platform, how do you know if it's the right business decision for you, or which Linux flavor will work best with your business? Join this live, interactive eSeminar sponsored by Microsoft as our panel of experts delve into these and other issues.

"Mostly hype" is correct, and I'm sure the seminar will be an absolute hoot, with hype up to your eyeballs. Even this ad for the seminar tries to portray Linux as something you'd only use for older computers, whereas to really swim with the big boys you need the latest from Microsoft. But the simple fact is, the hype is all coming from Redmond. It's one-way hype, you might say. FOSS developers aren't spewing out FUD about Microsoft.

Microsoft plays dirty, in my opinion and in the opinion of many, and FOSS doesn't. That is the fundamental difference. If Microsoft wishes to learn to play nicely with others, that would be fine, of course. I sincerely wish they would. But otherwise, it really can't have it both ways, where with its right hand it spews out antiLinux FUD and enables vicious lawsuits and with the left it suggests Linux and Microsoft work together. I don't think Microsoft would be saying that if it thought for one minute SCO had a prayer of winning in court. Do you? How dangerous, then, does Microsoft *really* think it is to use Linux?

It does matter about ethics in business. That is the piece the company needs to address about itself, or it's going the way of the dodo bird. They are starting a new ad campaign to alter people's perception that it is a huge US company. Instead, they should probably address the perception that it is a huge, mean US company. Most normal people care about ethics in business. I know some don't, but most want to do business with decent folks. Even people who lie and cheat prefer to do business with straight shooters they can trust. We're hard wired that way. And that, ladies and gentlemen, is the GNU/Linux value add -- ethics. And flexibility and reliability. And no viruses that I ever bumped into.

I surely hope every business that is now 100% Microsoft decides to follow Microsoft's advice and becomes a mixed Microsoft-Linux shop. Then just watch which computers cost you time fixing them and heartache dealing with them. Add up all that time, and figure it into your calculations. Oh, don't forget to factor in the costs of upgrading your Microsoft software and the hardware it needs to be able to function. Those are all important numbers.

But never forget that a company that will do vicious things to its competition will likely do vicious things to you too. It's kind of like the old protective saying women quote if a friend is tempted by a married man: "If he'll cheat with you, he'll cheat on you." Likewise, if Microsoft will use SCO and dish out the kind of FUD it is dishing out about indemnification, what might they do to you if they ever felt like it?

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