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SCO's Prentice-Hall Letter - McBride's Trial Testimony
Wednesday, May 07 2008 @ 09:33 AM EDT

A number of media reports have focused on Darl McBride's testimony in last week's SCO v. Novell trial, which morphed into Novell v. SCO when all but Novell's counterclaims were decided on summary judgment back in August. McBride asserted again that Unix is in Linux, blah blah.

But what was more interesting to me was a piece of "evidence" that he tried to introduce into the record via his testimony. It's a letter from 1996, I believe this letter [PDF] to Prentice Hall, the publishers, about who to contact regarding certain Unix works. The timing is after the APA in 1995. This may be the low water mark in the SCO saga's "evidence", so I thought I'd go over a few details about it. For sure, the SCO lawyers, at least, had to know that it doesn't prove what McBride tried to use it to prove, although they did quote from the letter in SCO's Memorandum in Opposition to Novell's Motion for Partial Summary Judgment on its 4th Counterclaim for Relief, and in Support of SCO's Cross Motion for Partial Summary Judgment , a motion Novell won in the August 10 decision. So, the letter didn't help SCO at all then, and it is unlikely to do so now.

First, here is what McBride said about the letter in his testimony on day 2 of the trial:

What Novell did is they told us in 1995, they didn't just tell us, they told all of their customers that they had sold UNIX and their interest in UNIX to SCO. They sent out letters to Prentice Hall, they sent a letter to Prentice Hall and dozens of other companies that said in part, we have sold our interest and our ownership in UNIX and UnixWare to the Santa Cruz Operation. It makes immeasurably more sense for you to be dealing with the owners of UNIX and UnixWare than us. And so here's their numbers. And Novell signed this. SCO signed it; Novell signed it.

Then it lists, in this Prentice Hall letter that goes out in 1996, it lists numerous versions of what Novell said to the customers, to Prentice Hall in this case, was transferred. It was sold. And it lists all of the things that your client went out and filed copyrights on, not in '95. Why didn't they do it in '95? Why didn't they do it in '96? '97? Why didn't they do it in '98 when we had a licensing deal going on with Monterey or IBM. Maybe in 2001 when SCO transferred the company to a new company called Caldera. They could have said something then.

They only did it after we filed suit against IBM in 2003 and IBM paid Novell $50 million to come and work with them. And that copyright ownership letter that Novell sent out to Prentice Hall could not be more clear that SCO is the owner of those products. And ownership in my mind and in the APA says that it includes all rights and ownership.

I never get tired of pointing out the smooth moves SCO tries to make, I find, so here goes. First, if you look at the APA itself, you will find this, in Attachment B, under the header "Agreements* with Most Favored Customer Pricing or Exclusive Marketing Rights for Business Products or Territories":

Publication Agreement dated December 17, 1986 between AT&T Information Systems Inc. and Prentice-Hall, Inc.

The star references this footnote:

*Agreements originally entered into by one of Seller's predecessors in title are so identified.

As you can see, there was a deal struck in 1986 between AT&T Information Systems, Novell's predecessor in title, and Prentice Hall, the publisher. So, the letter McBride refers to happened in that context and it is talking about ownership interest under *that* agreement, the book deal, not the APA. AT&T wanted UNIX out there, where universities could spread its popularity, and publication of books about UNIX was part of that strategy, as you can see in the Declaration of Douglas McIlroy [PDF], one of the hundreds of exhibits IBM offered in support of its numerous summary judgment motions in SCO v. IBM, motions yet to be decided:

16. A complete manual of UNIX supplied detailed descriptions of important system data layouts, particularly those used in the file system. To an experienced programmer, the short, but thorough descriptions of standard system calls (now often called the API, or application programming interface) revealed the underlying architecture of the operating system.

17. Thus, the mechanisms of Unix have always been openly available and widely known. Indeed, had that not been so, academia would probably not have adopted Unix so enthusiastically, and Unix would probably have become just another among countless bit-player operating systems.

18. John Lions began to teach an operating systems course in Sydney from the actual text of Unix, and AT&T barely objected. To protect its interest in the license, AT&T asserted rights over the class notes. Far from suppressing Lions's work, though, the company adopted it for in-house use and, I believe, made it available to licensed customers. Lions was brought temporarily to Bell Labs to advance Unix documentation. AT&T did not object to the rampant circulation of samizdat copies of Lions notes. Some years later AT&T made his book, Lions' Commentary on UNIX 6th Edition, with Source Code (1976), available to the public, including the text of the Sixth Edition Unix, a direct ancestor of System V. The code is still accessible online.

19. One factor that led to AT&T's liberal licensing policy and lenient enforcement was that it was constrained by consent decrees from straying far from its core business as a communications provider. With no potential for significant licensing income, Unix was most profitable in building goodwill among and gaining the respect of the technical community.

20. Subsequent to Lions's book, many books about Unix internals have been written. Among the earliest was M. J. Bach, The Design of the UNIX Operating System (Englewood Cliffs, NJ: Prentice-Hall, 1986), which the Unix development team wrote. The availability of books has further encouraged the study of Unix as a classroom example, and has provided entrée for many others into the mechanisms of Unix.

So, that's how Prentice-Hall gets into the UNIX universe and then eventually into the SCO litigation. This Declaration was offered in support of IBM's Motion for Summary Judgment on SCO's Contract Claims (SCO's First, Second, Third and Fourth Causes of Action , believe it or not back in October of 2006. It's still listed in red on our IBM Timeline page, because it has not yet been decided. First, there was a delay while Novell got to go first, and then another delay due to SCO's bankruptcy. But we'll be getting to it in due time.

The letter, then, is talking about the deal between AT&T and Prentice-Hall, not the APA, as its primary reference. You can see that in the Reference ("Re:") subject line of the letter, which you always find in business letters, so everyone knows what file to put the letter into. What does the letter say?

NOVELL

By Certified Mail, Return Receipt Requested

March 25, 1996

Prentice-Hall, Inc.
[address]

Attention: Mr. Gregory Doench, Executive Editor

RE: December 17, 1986 Publication Agreement, as amended, now in effect between Novell, Inc. ("Novell") and Prentice-Hall, Inc. ("Prentice-Hall")

Dear Mr. Doench:

As you may know, Novell transferred to The Santa Cruz Operation, Inc. ("SCO") its existing ownership interest as listed in Attachment A of this letter ("collectively "Transferred Products").

It makes immeasurably more business sense for SCO, as the owner of the Transferred Products, to handle directly with Prentice-Hall any matters that may become relevant under the subject Agreement. Accordingly, Novell would appreciate Prentice-Hall's formal concurrence under Section 28 of the subject Agreement, to Novell's assignment of its rights and delegation of any remaining obligations under the subject Agreement insofar as such rights and obligations relate to the Transferred Products, to SCO. Novell represents that SCO has undertaken in writing to assume such obligations.

Since Prentice-Hall's interests under the subject Agreement continue to be protected, we assume that Prentice-Hall has no problem with this request. Accordingly, please indicate Prentice-Hall's concurrence by signing and dating a copy of this letter and returning such signed copy to:

Ms. Mei Negishi
Novell, Inc.
[address]

Any applicable payments associated with the Transferred Products under the subject Agreement should be sent with any applicable royalty reports, to the following address:

The Santa Cruz Operation, Inc.
[address]

Please send all other correspondence with respect to the Transferred Products to the following address:

The Santa Cruz Operation, Inc.
[address]

Any payments associated with products other than those listed in Attachment A should be sent to the following address:

Novell, Inc.
[address]

Novell, Inc.
[address]

Very truly yours,

NOVELL, INC.
By: ___[signature]_____

Accepted and Agreed to:

Prentice-Hall, Inc.

____[signature]________
Signature

____[Gregory Doench]______
Printed Name

____[Executive Editor]______
Title __[6/18/96]__
Date


ATTACHMENT A

NOVELL SOFTWARE PRODUCTS

All Releases of UNIX System V and prior Releases of the UNIX System

All UnixWare Releases up to and including UnixWare Release 2 (encompassing updates and upgrades to these releases as well)

Open Network Computing+

386 Implementation of UNIX System V Release 4
Multi-National Language Supplement
3B2 Implementation of UNIX System V Release 4
Multi-National Language Supplement
Application Source Verifier Release 2.0
Artus
C Compilation System for Motorola 68000
C Optimized Compilation System for UNIX System V
386/486
C++ Documents
C++ Language System Release 2.0
C++ Language System Release 2.1
C++ Language System Release 3.0 and 3.0.1
C++ Language System Release 3.0.2
C++ Language System Release 3.0.3
C++ Object Interface Library Release 1.1
C++ Standard Components Release 2.0
C++ Standard Components Release 2.0.1
C++ Standard Components Release 3.0
C++ Standard Libraries Release 2.0
C++ Standard Libraries Release 3.0
C++ Standard Library Extension Release 1.0
C++ Translator
CFRONT Release 1.2
Chinese System Messages Implementation of UNIX
System V Release 4 System Messages
Distributed Manager/Framework & Host Manager
Release 1.0
Distributed Manager/Framework & Host Manger
Technology Licensing Program 1
Distributed Manager/Framework & Host Manager U. I.
Early Access
Distributed Manager/Print Manager Release 1.0


Distributed Manager/Print Manager Technology
Licensing Program 1
Distributed Manager/Print Manager U.I Early
Access
DM/SM-TLP1
Documentation Reproduction Provision - UNIX System
V Handbook
Documentation Reproduction Provision - UNIX System
V Programming Books
Documentation Reproduction Provision - UNIX System
V Reference Books
Documentation Reproduction Provision - UNIX System
V User's and Administrator Books
European Supplement Release 3.2
European System Messages Release 3.2
French Application Environment 1.0/3B2
French System Messages Implementation of UNIX
System V. Release 4 System Messages
French System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
German Application Environment
German System Messages Implementation of UNIX
System V Release 4 System Messages
German System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
Hindi System Messages Implementation of UNIX
System V Release 4 System Messages
Intel386 Microprocessor Implementation of VERITAS
File System (VxFS) Release 1.0
Intel386 Microprocessor Implementation of VERITAS
Visual Administrator Release 1.01
Intel386 Microprocessor Implementation of VERITAS
Volume Manager (VxVM) Release 1.01
Intel386 Microprocessor Implementation of VERITAS
Volume Manager (VxVM) Release 1.1
Intel386 Microprocessor Implementation of VERITAS
Volume Manager (VxVM) Release 1.1.1
Italian System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
Italian System Messages Implementation of UNIX
System V Release 4 System Messages
Japanese Application Environment I/O Release 1.0
Japanese Application Environment Release 2.0
Japanese Application Environment Release 2.0
Japanese Application Environment Release 2.1
Japanese Environment for SVR4.2
Japanese Extension Implementation of UNIX System V
Release 4.2
Japanese I/O Release 1.0
Japanese System Messages Implementation of UNIX
System V Release 4 System Messages


Japanese System Messages Implementain of UNIX
System V Release 4.1 Enhanced Security System
Messages
Japanese System Messages Release 3.2
Korean System Messages Implementation of UNIX
System V Release 4 System Messages
Optimizing C Compiler for Intel, Release 3.0
Spanish System Messages Implementation of UNIX
System V Release 4 System Messages
Spanish System Messages Implementation of UNIX
System V Release 4.1 Enhanced Security System
Messages
System V Release 2.0 Machine Readable
Documentation
System V Release 3.0 Documenation Reproduction
Provision
System V Release 3.1 Documenation Reproduction
Provision
System V Release 3.2 Documenation Reproduction
Provision
System V Verification Suite Release 2
System V Verification Suite Release 3
System V Verification Suite Release 4
UNIX System V French System Messages Release 3.2
UNIX System V German System Messages Release 3.2
UNIX System V Release 1.0 for 3B2 Multi-National
Language Supplement
UNIX System V Release 1.0 for Intel 386 Multi-
National Language Supplement
UNIX System V Release 3.2 386 Documenation
Reproduction Provision
UNIX System V Release 3.2 for Intel 386 Multi-
National Language Supplement
UNIX System V Release 3.2 Multi-National Language
Supplement
UNIX System V Release 4 European Language
Supplement
UNIX System V Release 4 STREAMS-Based Korean
Input/Output Subsystem
UNIX System V Release 4.0 386 Documentation
Reproduction Provision
UNIX System V Release 4.0 3B2 Documentation
Reproduction Provision
UNIX System V Release 4.0 i860 Documentation
Reproduction Provision
UNIX System V Release 4.2 European Language
Supplement, Version 1
UNIX System V Release 4.2 MP Japanese Extension
UNIX Time Sharing Operating System Phototypesetter
and C Compiler Edition #7
USL Standard C Development Environment for the 860
Implementation of UNIX System V Release 4.0


Veritas File System (VxFS) Release 1.3 for UNIX
System V Release 4.2
XWIN Graphical Windowing System Release 3.0
XWIN Graphical Windowing System Release 4.0
XWIN Graphical Windowing System Release 4.0i

Of course, McBride tried to spin this as "evidence" that Novell sold everything, lock, stock and barrel, to Santa Cruz under the APA. But please go to the APA Schedules page, and look for items on the above list. What? No "Japanese System Messages Release 3.2"? No "Documentation Reproduction Provision - UNIX System V Handbook"? Why might that be? Because this is a list of items referenced in the AT&T/Prentice-Hall agreement, not the APA.

[Update: You can find them listed on Amendment 1, dated December of 1995, with the following change which helps SCO not at all:

The following is added to the list of SVR4 Licenses: -- Auxiliary Products --

Emphasis added. And then you find the list of the auxiliary products which presumably SCO owes Novell for, since they are SVRX products, according to the amendment to Article VI, the first two paragraphs of which read like this:

4.16 SVRX Licenses.

(a) Following the Closing, Buyer shall administer the collection of all royalties, fees and other amounts due under all SVRX Licenses (as listed in detail under item VI of Schedule 1.1(a) hereof and referred to herein as "SVRX Royalties"). Within 45 days of the end of each fiscal quarter of Buyer, Buyer shall deliver to Seller or Seller's assignee 100% of any SVRX Royalties collected in the immediately preceding quarter. Buyer shall diligently seek to collect all such royalties, funds and other amounts when due (and shall investigate and perform appropriate auditing and enforcement under such licenses at Buyer's cost including auditing two (2) SVRX licensees identified by Seller during each quarter in which SVRX Royalties are collected). In consideration of such activities described in the preceding sentence, Seller shall pay to Buyer within 5 days of receipt of SVRX Royalties from Buyer as set forth in the preceding sentence, an administrative fee equal to 5% of such SVRX Royalties.

(b) Buyer shall not, and shall not have the authority to, amend, modify or waive any right under or assign any SVRX License without the prior written consent of Seller. In addition, at Seller's sole discretion and direction, Buyer shall amend, supplement, modify or waive any rights under, or shall assign any rights to, any SVRX License to the extent so directed in any manner or respect by Seller. In the event that Buyer shall fail to take any such action concerning the SVRX Licenses as required herein, Seller shall be authorized, and hereby is granted, the rights to take any action on Buyer's own behalf. Buyer shall not, and shall have no right to, enter into future licenses or amendments of the SVRX Licenses, except as may be incidentally involved through its rights to sell and license the Assets or the Merged Product (as such term is defined in the proposed Operating Agreement, attached hereto as Exhibit 5.1(c)) or future versions thereof of the Merged Product.

End update.]

Plus, you likely know that Veritas owns Veritas products, not SCO, yet Veritas products are listed in this letter. If you note, on the APA's schedules, Veritas appears under the header of Products (or Components) on which Vendor Royalty is Due". So when the letter says to send payments to Santa Cruz, it's for the products in Attachment A, which is not a list from the APA. It is talking about who gets paid for books about the stuff on Attachment A, in reference to the AT&T/Prentice-Hall book deal.

So that's for starters. Nothing like taking things out of context. But even if it were about the APA, which it isn't, the letter doesn't say what it would say if everything was sold in the sense that McBride would like the court to believe. Instead, it would say, "We sold everything. Don't write to us any more. Santa Cruz owns it all now." It doesn't say that. Instead it says it makes more "business sense" for SCO to keep track of everything, and Novell asked them to take on the responsibility to keep track of book stuff, and SCO agreed to "assume such responsibilities." There would be no issue about that if SCO owned it all, lock, stock and barrel. Novell would have no standing to ask them to take over this job. And SCO wouldn't have to agree. It'd be automatic. Obviously, Novell retained some interest, which is why Prentice-Hall needed assurances from SCO that it would do what it needed to do under their agreement, their being AT&T/Novell. So the book royalties were to be sent to SCO as the owner "under the subject Agreement". And that's the book agreement, not the APA. What Novell sold was its business of selling UNIX and UNIX products.

So the letter is totally irrelevant to the trial subjects, and that is why if you read the closing statements of both SCO and Novell, closing statements being where the lawyers sum up the important points and evidence from the trial, neither side mentioned the letter. In fact, SCO's Stuart Singer didn't use anything McBride said. You know why? One must assume it's because it was not only useless, it was incredibly helpful to Novell, as I'll be writing about soon, which is why Novell's attorney quotes McBride copiously.

Anyway, I wanted to highlight this letter, so you'd know what they were talking about. SCO actually has it on its website. To me, it sums up SCO's "proof". Over and over SCO flashed something quickly before our eyes that seemed like it might "prove" SCO's case, but when you looked more closely, it evaporates.

Update: You can get a very clear picture of what Prentice Hall and SCO might be doing together if you look at this Caldera press release from 1997:

CALDERA AND PRENTICE HALL COLLABORATE ON LINUX BEST-OF-BREED INTERNET BUNDLE FOR EDUCATION

Number One Commercial Linux, Educational Publishing and Educational Distribution Companies Combine Efforts

PROVO, UT—Dec. 2, 1997—Caldera today announced that it has teamed-up with Prentice Hall, the leading publisher of college course materials, and NACSCORP, the leader in educational promotion and distribution, to deliver a new product containing OpenLinux Base and the Prentice Hall Web Server Handbook.

This collaboration targets the education market and augments Caldera's long term commercial Linux strategy to meet and fulfill educational needs. Through this collaboration Caldera will provide standard technical support and Prentice Hall will support product sell-through.

Same time frame. Same publisher. Caldera. They should know better, I therefore assume.

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