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To read comments to this article, go here
The BSDi Settlement and Methods and Concepts - M&C
Thursday, July 13 2006 @ 08:47 AM EDT

I was just reviewing in another context the BSDi settlement agreement from 1994 [PDF], which Groklaw's dburns located and was able to legally obtain for publication under California's Public Records Law back in November of 2004, and I came across a clause that I'd forgotten. So I'm highlighting it here, so we can put it into the Unix Books methods and concepts project, which turns out to be even more significant than I realized.

I wanted to mention the agreement again because I discern from email and comments that not everyone realizes that the agreement is no longer secret. And then too thousands of you were not with Groklaw in 2004.

We were able to obtain it because the agreement was never filed with any court, and therefore to my understanding is binding only on the parties that signed it.

Here, once again, is the letter received from the Regents of the University of California's Office of the General Counsel revealing that the agreement was never filed with any court:

"This is in further response to your request for legal filings, deposition transcripts, court orders and settlements in the California Superior Court case no. 717864-3.

We have determined that the confidential 1994 settlement agreement between UNIX System Laboratories, Inc. and The Regents which was not filed with the court, may be disclosed to you under the Public Records Act."

As I wrote in November of 2004, I believe that means it's simply a peace treaty between the parties, neither of whom even agreed that the other's claims were true, but simply agreed what each would do and would "encourage" others to do going forward.

Here's the paragraph I noticed regarding methods and concepts, paragraph 3C:

USL agrees that it shall take no action against any person who utilizes any methods and concepts in the Restricted Files which as of this date have become available to the general public by acts not attributable to the University, its employees or students. Nothing in this provision shall limit USL's rights against a third party arising out of a breach of any license agreement with USL or AT&T.

Linus, of course, was never in any license agreement with USL or AT&T. While USL reserved its "rights" to sue licensees, no court has endorsed that it even has such rights, not once the methods and concepts were released to the public. For example, IBM's 1985 agreement with AT&T had a confidentiality clause that specifically said, "If information relating to a SOFTWARE PRODUCT subject to this Agreement at any time becomes available without restriction to the general public by acts not attributable to LICENSEE or its employees, LICENSEE'S obligations under this section shall not apply to such information after such time." Maybe there were others who didn't have that clause that USL thought it could go after, or maybe the lawyers were just trying to make sure they didn't slam the door on themselves.

My point is, this isn't the court speaking. This is a conversation between these two parties, then, a contract, who are declaring to each other what they've agreed they will or won't do. To my knowledge, no court has yet endorsed or upheld this agreement. IBM's Side Letter covered that issue of using methods, ideas, etc., for IBM in any case, and the two 1985 echo letters said they covered all licensees, but even if none of that had happened, all I see USL saying is that it isn't agreeing with the University not to sue licensees, but it is agreeing not to sue third parties over methods and concepts that have been made known to the public up to that point "by acts not attributable to the University, its employees or students".

Now, what USL may have meant at the time was that if it could pin the tail on the donkey and find a licensee had been guilty of violating the license by revealing things it shouldn't prior to 1994, it wasn't going to hold back. But going forward? I think it would be very difficult to get a court to agree that USL (or SCO) can sue a licensee for using "methods and concepts" that everyone else in the world can freely use and is freely using all over the place, even in standards, just because they are or once were licensees of AT&T or USL. Once a secret is no longer a secret, that would seem to be the end of a confidentiality requirement, I would think, in that no confidentiality exists. Reasonableness is a factor in contract interpretation. What kind of contract would require a licensee to pretend something was a secret that no longer was? Hence the Unix Books project.

There are four categories the parties place various files into in the agreement, categories they -- not you and I or IBM or Linus -- agreed to in order to settle their private dispute, "Restricted Files", "UNIX Derived Files", which includes 23 files USL approved for release in BSD4Lite, "Unrestricted Files", and everything in 4.4 BSD(Lite).

"Restricted Files" are files contained in Net2 which "USL contends contain materials from the UNIX System and/or use or disclose methods and concepts in the UNIX System and whose further distribution is restricted pursuant to this Settlement Agreement." To put a finer point on it, these are files that *the University* agreed they wouldn't further distribute. They also agreed to "take reasonable steps" to "encourage" everyone with access to Net2 to switch to 4.4 BSD(Lite).

In addition, the University agreed that USL could "undertake an effort to advise persons of USL's contention that the Restricted Files may contain material that is proprietary to USL." That isn't the same as saying that the material was proprietary to USL, just that USL was making that claim. The University wasn't even agreeing with them, just acknowledging that USL was asserting such a claim. That's a big difference.

USL makes the same assertion about "UNIX Derived Files", that they contain materials USL contends is derived from or based on UNIX, but which the parties agree the University can freely distribute under the terms of the settlement, meaning with a copyright notice and list of "restrictions on use and distribution" as per clause 2e:

"e. Without waiving any of its proprietary rights therein, USL agrees that UNIX Derived Files listed in Exhibit B, or any material therein, may be freely distributed by the University and may be freely reproduced and redistributed by others without payment of any royalties or fees and without execution of any license agreement with USL and/or the University, provided such files or portions thereof include, in text form, a USL Copyright Notice and the same list of restrictions on use and redistribution of the software presently contained in the Net2 version of the file. Attached as Exhibit F is a copy of said notice which has been agreed upon by the parties."

Notice they "may be freely reproduced and redistributed by others" part? I believe SCO tried to tell us they never gave Linux any such right to use, even with a copyright notice, but doesn't this clause seem to pull the rug out from that assertion? Here are some review links on SCO's position and some material on ABI and errno.h.

In turn, USL, in 3(f), agreed to "affix the University Copyright Notice and the University Acknowledgment" on all the files listed in Exhibit C, the "Unrestricted Files," all the rest of the files in Net2, which the University asserted were derived from BSD Releases "which are contained in the UNIX System or are otherwise distributed by USL". USL agreed not to take any action based on the use or distribution "by any person" of the Unrestricted Files. Finally, everything in 4.4 BSD(Lite) "may be publicly distributed to third parties free of any claim by USL of restrictions on its use or further distribution."

Now that SCO has laid claim to "methods and concepts" as basic as system calls and such, it seemed a good time to remind everyone that the settlement agreement is publicly available.


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