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The Party of the First Part...
Saturday, May 31 2003 @ 04:18 AM EDT

SCO now says that all their actions, including the warning letters, are based on contract rights, not copyright. You can listen yourself to a replay of Friday's conference call by calling 888-203-1112 or 719-457-0820, conference code #164628. The machine will ask for your name but that appears to be a leftover from the original and it goes forward without any input there. That, of course, isn't what they said before, but listening to the call clarifies what they are planning currently.

They say that the SCO-Novell agreement back in 1995 is in a prior SEC filing and that it says they own all the UNIX source code and all rights to enforce licenses. They have around 30,000 licenses with virtually all hardware manufacturers and sublicenses with most of the Fortune 5000 software firms. The licenses impose a "standard of care" which applies not only to the companies but to all employees. They say that their rights extend to derivative code as well. They say there is "derivative works code" in the kernel. So, in their eyes, any System V licensee or sublicensee is vulnerable. They are, Darl said, "holding aces" (meaning their broad rights flowing from the contracts) and they are playing them.

Next week, they will respond to their "customers" clamoring to see the code in question. They won't show it all, because of the lawsuit, but they will shows "hundreds" of lines of code. They also clarified that they are talking about the 2.4 kernel and forward. They haven't "yet" looked at older versions of the kernel, but that means it is possible that just going back to 2.2 would be a quick fix. Sontag described pre-2.4 as "extremely old", but that's not so old.

What this call means to me is that this is likely to drag on for some time. I can't have any other opinion without looking at the contract terms, which no doubt IBM has already done. However, Computer World says that SCO's McBride says he's fine with IBM buying them. "If there's a way of resolving this that is positive, then we can get back out to business and everybody is good to go, then I'm fine with that," McBride said today in an interview with Computerworld. "If that's one of the outcomes of this, then so be it." Somehow I can't help but feel that someone really holding aces would want to not sell, but rather hold on to those "broad" contract rights and milk them forever, or at least for as long as the contract term lasts. Which raises the question: how long do these licenses last? Are they all perpetual, as IBM says theirs is?

The SCO Group in Germany, also on Friday, was served with a temporary restraining order by the German court, ordering them to stop claiming Linux is an illegal derivative of UNIX or pay fines. However, this was an ex parte proceeding, so SCO hasn't had its say yet. SCO says they will comply until the matter is settled, but says they will "vigorously oppose it" and they expect to have a hearing in the next two weeks.

Computer World is reporting that: "Analysts are balking at The SCO Group Inc.'s offer to view its proof that there is illegal Unix code in Linux, with one calling the move a publicity stunt. Meanwhile, Linux creator Linus Torvalds today said that he has no plans to look at the code and that the battle between SCO, IBM and Novell Inc. is on par with a rancorous episode of the Jerry Springer Show." reports that "Microsoft Chief Executive Steve Ballmer this week cashed in on nearly 2 million shares of the software giant's stock, bringing the total number he sold this month to about 51 million. The stock sold Wednesday for between $24 and $25 per share, according to a regulatory filing with the U.S. Securities and Exchange Commission. Ballmer raised about $49 million from the transaction. Last week's sale raised about $1.2 billion."

And Bruce Perens' interpretation of SCO's 10-k filing was incorrect. SCO is not paying Novell royalties for System V, according to a Novell spokesman, according to EWeek: "But Novell spokesman Bruce Lowry told eWEEK on Thursday that the statements made by SCO in its 10-K filing were accurate. The SVRx component of Novell's deal with SCO related to the existing Unix licensees Novell had acquired when it bought the Unix licenses from AT&T. When Novell entered into its agreement with the Santa Cruz Operation, it specifically retained these customers and the revenue that flowed from them. 'They got an administrative role for certain types of existing contracts we held, which were explicitly identified in our agreement with SCO,' he said."

According to O'Reilly, Caldera(SCO) released some of the older UNIX Codes (they say including V7 and 32V) under an open source license.

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