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The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

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SCO Goes Into The Oil Business, Or Vice Versa
Tuesday, August 12 2003 @ 06:01 AM EDT

SCO is inviting us to SCOForum 2003 in -- where else? -- Las Vegas.

All right. Not us. Probably not me, anyway.

But can you think of a more appropriate spot for them in these United States than sin city? Unless...

... no, I don't think Fantasy Island is a real place. You couldn't have a conference there.

The SCOForum for this year has a James Bond theme, with the page showing a man with a gun. "Live and Let Die" they call it. Those SCO rascals are such cut-ups.


read more (1492 words) 13 comments  View Printable Version
Most Recent Post: 08/13 08:38AM by Anonymous

Old SCO Also Donated Code to Linux
Monday, August 11 2003 @ 04:14 AM EDT

Well, knock me over with a feather. It turns out that old SCO, The Santa Cruz Operation, also donated code to Linux. There is an article dated June 12, 2000, that tells us all about their Linux distribution and their plans, which included scaling it to the enterprise, as marketroids like to call it:
While SCO may be rolling out its Linux distribution long after Red Hat and Caldera hit the market with theirs, SCO is no open source Johnny-come-lately. The company offers support services to Caldera and TurboLinux customers. In addition, the company's Tarantella middleware supports Linux, as will Monterey, the Intel-based version of Unix that SCO is building with IBM.

SCO is expected to announce 32- and 64-bit versions of Linux for Intel-based servers, which will be available in the fourth quarter of this year. In early 2001, SCO plans to deliver a 32-bit Internet Infrastructure Edition that will come bundled with a Web server and other IP applications. The company is also working on a 64-bit edition for service providers, including ISPs and application service providers, which will feature special billing and management tools.

The company is also expected to explore the following areas:

  • Building the Linux clustering capacity to be in line with SCO's NonStop Clusters technology, which scales to 12 or more boxes with advanced reliability for data and applications. Current Linux clustering technology is generally limited to two or four nodes.
  • Beefing up Linux's symmetric multiprocessing capabilities. Currently the number of CPUs per Linux server is usually limited to eight; UnixWare can run on servers with up to 32 CPUs.
  • Managing multiple Linux servers as well as applications from a single console as if they were a single system.
  • Improving security and the ability of Linux to handle applications such as e-mail, including instant messaging.
  • Adding online support services and documentation.
Wait a sec. Isn't that what paragraph 85 of SCO's original complaint was talking about, and didn't they say that without IBM entering the picture, Linux could never have scaled?

read more (1241 words) 75 comments  View Printable Version
Most Recent Post: 08/12 08:48AM by Anonymous

If We Send You an Invoice, Then Will You Pay Us?
Monday, August 11 2003 @ 02:58 AM EDT

Now SCO says it will send out invoices to the 1500 companies that got the earlier warning from them, and maybe you too, in the next weeks or months. What? You mean you aren't in a hurry to stand before a judge? Expected response from one and all: yawn. Here's the article:
SCO Group Inc is preparing to invoice customers running or developing with Linux, while broadening its copyright net to include manufacturers of embedded systems. . . .

Invoices will be dispatched in the "next weeks or months" a company spokesperson confirmed.

Those being billed will include 1,500 end-users who were earlier this year informed by SCO in writing they should seek legal advice as running Linux violated the company's copyright. Customers running Linux who were not on SCO's original mailing list will also be targeted."

Chris Sontag says you end user pirates better not wait for the legal case to be over, or you'll have to "face the consequences":
"SCO has the right to defend its copyright all the way down to the end user," said Sontag. "If necessary we will start picking end users to enforce our rights." Sontag warned that SCO had no qualms about enforcing its claimed rights anywhere in the world - including the UK.
And if that doesn't work, then they'll huff and they'll puff and they'll blow your house down.

With FUD galore.


read more (249 words) 25 comments  View Printable Version
Most Recent Post: 08/18 09:30PM by Anonymous

Compaq Worked With China's Red Flag Linux in 2000 -- The Goal? To Scale to 64-bit
Sunday, August 10 2003 @ 08:49 PM EDT

A couple of days ago, I had occasion to go to lunch with some old chums from grade school through high school. One of them, as it happens, married a theoretical mathematician who ended up in investment banking, a VC guy. I took the occasion to pick his brain a bit.

We talked about GNU/Linux being able to survive long-term. He was thinking from a US perspective, so his initial reaction was that MS would surely kill it off, because "they have to". Nobody, he told me, can win against Microsoft, because they have too much money.

Well, that was not pleasant to hear, but I always take seriously all opinions, whether I like them or not, considering carefully as to whether they might be correct.


read more (709 words) 14 comments  View Printable Version
Most Recent Post: 09/08 05:57AM by Anonymous

Sun: The Toxic Boyfriend
Saturday, August 09 2003 @ 10:42 PM EDT

Sun Microsystem's Executive VP Jonathan Schwartz demonstrated Mad Hatter at Linux World. At the same time, he joined SCO and MS in attacking the GPL. His method was subtler -- or more devious, depending on your mood -- but you can catch his drift. It seems he thinks open-source coders shouldn't care so much about what license they use and just think about writing "better and cheaper" software.

True BusinessThink that completely misses all points not exclusively about the bottom line.

Coders, at least GPL coders, don't volunteer their time and what the law likes to describe as "the sweat of their brow" so that the world can have cheaper software. It is cheaper and it is better, and naturally companies like that. But that wasn't and isn't the primary goal of free software. Open source kind of liked the sound of business' line for a while, or at least pretended to, so business would like them back, but free software never fell for it. The primary goal was and is freedom for users and programmers. Businesses that think they can use or coopt GNU/Linux without adopting the values will never make money from their efforts, minus the goodwill of the programmers.


read more (1426 words) 43 comments  View Printable Version
Most Recent Post: 08/13 09:17AM by Anonymous

The Novell Letters
Friday, August 08 2003 @ 11:50 PM EDT

The IBM Amended Answer with Counterclaims is available on Pacer now. LWN has it up as text, for those of you who prefer text. Thanks for the tip, D. Note there could be OCR errors here and there, according to the page. And the Red Hat complaint is now available as text too.

The section I want to highlight is about two exhibits, Exhibit K and L, which are referenced in the document but not provided by Pacer or LWN, because they are paper documents filed with the court, not in the digital records.

I have the two letters now, which were faxed to me, both of them from Jack Messmen, CEO of Novell, to Darl McBride of SCO. What they say is that SCO has no contractual right to terminate IBM's AIX license, because, as earlier reported, it was a three-way contract, and one under which Novell retained the right to compel SCO to do pretty much whatever Novell wanted done respecting IBM's license rights. According to these letters, Novell told SCO not to terminate IBM's rights, and when SCO didn't comply, on June 12, Novell intervened and overruled SCO, which Novell says it had retained the right to do when it sold some, but not all, of its UNIX ownership rights. In other words, while SCO got some rights to UNIX, Novell retained veto power.

According to IBM's papers, the history goes like this: IBM bought its rights to use UNIX in the mid 1980s from AT&T Technologies, Inc. under an agreement called the AT&T Agreements, the plural being used because there were numerous amendments and further agreements by letter modifying the original agreement.

In 1993, Novell bought AT&T Technologies, Inc.'s rights under the AT&T Agreements. In 1995, Novell assigned certain (but not all) of these rights to The Santa Cruz Operation, Inc., which is now known as Tarantella, Inc., "which is not affiliated with SCO."

Next, IBM got additional rights by means of Amendment X, which was signed by IBM, Novell and Santa Cruz, the original SCO, as IBM calls them, on October 17, 1996. It was under this Amendment X that IBM spent some $10+ million to acquire the 'irrevocable, fully paid-up, perpetual right to exercise all of its rights' under the AT&T Agreements.

OK, still with me? One of the rights Novell says it retained was the right to compel SCO to waive or revoke any of SCO's rights under the contract. This little detail is the nail that everything else can hang on. Cognizant of these rights, Novell sent two, actually three, letters to Darl McBride, and two of them are the exhibits K and L.

In the first letter, Exhibit K, dated June 9, 2003, Novell's Jack Messman wrote: "IBM paid $10,125,000 for the rights under Amendment No. X. Novell believes, therefore, that SCO has no right to terminate IBM's SVRX Licenses, and that it is inappropriate, at best, for SCO to be threatening to do so."

The letter refers to Section 4.16(b) of the Asset Purchase Agreement, under which Novell said it retained the right, at their "sole discretion and direction" to require SCO to "amend, supplement, modify or waive any rights under, or. . . assign any rights to, any SVRX License to the extent so directed in any manner or respect..." The letter reminds McBride that the agreement also provides that Novell retained the right at "its sole discretion and direction" to require SCO "to amend, supplement, modify or waive any rights under, or . . . assign any rights to, any SVRX License to the extent so directed in any manner or respect" by Novell, and should SCO fail to comply, Novell retained "the rights to take any action" on SCO's behalf. Then it directs SCO to waive any right it might claim to terminate IBM's AIX licenses or to revoke any rights by June 12, 2003.

Comes June 12, and SCO has not complied, so Mr. Messman sends Darl a second letter, now Exhibit L, in which he tells SCO, in essence, that Novell noticed SCO had not taken the required actions, so Novell was exercising its right to act on SCO's behalf:

"Accordingly, pursuant to Section 4.16(b) of the Asset Purchase Agreement, Novell, on behalf of The SCO Group, hereby waives any purported right SCO may claim to terminate IBM's SVRX Licenses enumerated in Amendement X or to revoke any rights thereunder, including any purported rights to terminate asserted in SCO's letter of March 6, 2003 to IBM."

This is not just a pukey detail. Or, you could say that contract law is all pukey details, but when you find the right little detail, you win the day. You know, when lawyers find something like this, it's sooooo satisfying. I'll bet they had a party. It's worthy of a glass of champage, no doubt about it. It means that when SCO told the world that it had revoked IBM's AIX license rights, it knew that Novell was contesting their right to do it, and under the contracts referenced by Novell, they had overruled SCO's desire to terminate those rights.

IBM then used this in their legal document to accuse SCO of false and misleading statements, upon which it built many of its counterclaims. First, IBM makes reference to the various documents on which it is relying, telling the history of the contracts and amendments to the contract, followed by the section of the complaint that refers to the exhibits (thank you, LWN, for providing text, so that I don't have to type my fingers to the bone one more night):

"BACKGROUND

"A. UNIX, IBM and AIX

"8. Beginning in the mid-1980s, IBM acquired broad rights to use UNIX software pursuant to a series of agreements with AT&T Technologies, Inc. These agreements, referred to as the 'AT&T Agreements', include the Software Agreement (Agreement Number SOFT-00015) dated February 1, 1985, the Sublicensing Agreement (Agreement Number SUB-00015A) dated February 1, 1985, the Substitution Agreement (Agreement Number XPER-00015B) dated February 1, 1985. the letter agreement dated February 1, 1985, and the Software Agreement Supplement 170, as amended by a letter agreement dated on or about January 25, 1989. Copies of these agreements are attached hereto as Exhibits A through F, respectively.

"9. In connection with the proper exercise of these and other rights previously obtained by IBM with respect to UNIX, IBM began development of its own verion of a UNIX operating system, called AIX. Over the last two decades, IBM has expended tremendous resources on developing AIX, creating millions of lines of original code, incorporating it into its product lines and licensing the technology to thousands of customers worldwide. IBM continues to do so today.

"10. In 1993, Novell, Inc. ('Novell') acquired AT&T Technologies, Inc.'s rights under fhe AT&T Agreements. In 1995, Novell assigned certain (but not all) of these rights to The Santa Cruz Operation, Inc. ("Original SCO"), a California corporation now known as Tarantella, Inc., which is not affiliated with SCO.

"11. Thereafter, IBM obtained additional rights with respect to UNIX software. Pursuant to an agreement known as Amendment X, entered into by IBM, Novell and Original SCO on October 17, 1996, for example, IBM acquired the "irrevocable, fully paid-up, perpetual right to exercise all of its rights" under the AT&T Agreements. A copy of this amendment is attached hereto as Exhibit G. . . .

"H. Novell's Exercise of Rights

"32. On June 9, 2003, in response to SCO's actions, and pursuant to its obligations under Amendment X, Novell stated its belief that SCO has no right to terminate IBM's UNIX License which is perpetual and irrevocable, and Novell exercised its retained rights to UNIX to put a stop to SCO's misconduct. Under Section 4.16(b) of the Asset Purchase Agreement between Novell and Original SCO dated September 19, 1995 ('APA'), attached hereto as Exhibit J, Novell directed SCO to 'waive any purported right SCO may claim to terminate IBM's [UNIX] licenses enumerated in Amendment X or to revoke any rights thereunder, including any purported rights to terminate asserted in SCO's letter of March 6, 2003 to IBM'. A copy of Novell's June 9, 2003 letter is attached hereto as Exhibit K.

"33. When SCO failed to take the actions directed by Novell, on June 12, 2003, Novell exercised its rights under Section 4.16(b) of the APA to waive and revoke, in SCO's stead, any purported right SCO claimed to terminate IBM's licenses. A copy of Novell's June 12, 2003 letter is attached hereto as Exhibit L."


So, now it will be up to a judge to rule on this point, but where SCO sees wiggle room in all this is hard to fathom. IBM must see it Novell's way too, because they accuse SCO of false and misleading statements to the world about having "terminated" IBM's rights, despite having these letters. Making false and misleading statements about a company can get you sued. If the judge sees the contract the way Novell sees it, it gives substance to the tort counterclaims. Did I say substance? It's a touchdown. What also needs to be said here is that Novell really stood up to the plate and put its money where its mouth is. Champagne, anyone?

You know what I can't figure? How come none of the mainstream reporters are talking about this? Maybe they are and I missed it, but to me this is the headline news for the entire SCO-IBM contest regarding AIX. By the way, SVRX just means AIX, or more precisely System V UNIX and all revisions.

PS Sorry about the typo in the headline yesterday. I had to go out of town and struggled to get the story up at all. I knew everyone was chomping at the bit to see it. If I fix the typo now, your comments will likely get erased, so I'm leaving it the way it is until it gets archived. So, thank you for letting me know about it, those of you who did. I appreciate it and am letting you know why it isn't yet fixed. It will be.

61 comments  View Printable Version
Most Recent Post: 11/04 07:11PM by Anonymous

SCO, Meet the GPL -- IBM's Legal Cavalry Charges
Thursday, August 07 2003 @ 07:08 PM EDT

I've seen the papers. I can't post them, but they'll be available in due course, either tomorrow or more likely the day after at the Utah courts, via Pacer. Here's an advance peek:

There are ten, count them, ten counterclaims. The main theme is this: that SCO has been misleading the world by falsely stating that IBM's license has been terminated. It was never terminated, they say, in part because it is irrevocable and also because it was a 3-way contract, and Novell, the third party, stepped in and blocked the attempt at termination. And SCO, the papers charge, is in violation of the GPL and has had its rights to distribute GPL code terminated.


read more (1294 words) 101 comments  View Printable Version
Most Recent Post: 08/24 05:15PM by Anonymous

Update: Novell was 3rd Party to SCO-IBM AIX Contract - Novell Disputes SCO's Right to Terminate
Thursday, August 07 2003 @ 01:58 PM EDT

I just spoke with Trink Guarino at IBM, who informed me that the SCO/IBM contract regarding AIX, which SCO claims they terminated, was a three-party contract, the third party being Novell, and that Novell sent a letter to SCO disputing their right to terminate IBM's AIX license. No wonder IBM hasn't been acting worried. Funny SCO didn't tell us about this, huh? This is huge. More soon. Very soon.

While we wait, ECommerceTimes has this:
IBM claims SCO's case has no merit or supporting facts. The company is countersuing SCO for several issues: violation of the Linux General Public License (GPL); improper claims to revoke IBM's Unix license; and infringement of IBM patents relating to SCO's UnixWare, Open Server, SCO Manager and Reliant clustering software products.

Big Blue is seeking compensatory and punitive damages and an injunction requiring SCO to refrain from "misrepresenting its rights" and to cease further infringement of IBM's patents, according to the claim.

Germany: "We Must Resist" -- Looks Like More Legal Action

Here is an article that seems to be saying that there is a court order against SCO in Germany. I have run it through a computer translator, but to all you Golem.de folk: "Bitte, auf English!" Anyone?

Provisional order against SCO

Of Bremen Linux specialist univention proceeds against SCO

That of Bremen Linux specialist univention obtained regional court before that of Bremen against the SCO Group GmbH a provisional order. The order forbids maintaining it SCO, "that Linux operating systems illegitimately acquired mental property of SCO Unix contains and/or that final user, which uses Linux, for whom associated patent right violations can be made liable". During offence an order cash of up to 250.000 euro threatens.

Univention had warned the SCO Group before already because of competition-adverse behavior, SCO let however the set period for the delivery of an omission assertion elapse. "we saw ourselves therefore forced to let the order now set", describe Peter H. Ganten, Geschaeftsfuehrer of univention, its procedure. "the unproven statement of SCO, Linux hurts patent rights of the enterprise at Unix, disconcerts the public and harms the image of Linux. On the other hand we had to resist."

The full story, in German, available by clicking on the link.

57 comments  View Printable Version
Most Recent Post: 08/08 10:38PM by Anonymous

"Death to Linux"? No, an IBM Countersuit Instead
Thursday, August 07 2003 @ 10:55 AM EDT

Stephen Shankland is reporting that IBM has filed a countersuit today. No details yet, but I'm working on it. Wait, someone just posted this in the comments section. The article says IBM says SCO is violating their patents and it stands on the GPL.

read more (2393 words) 32 comments  View Printable Version
Most Recent Post: 08/08 11:47AM by Anonymous

The License, Should You Choose to Accept It
Wednesday, August 06 2003 @ 11:25 PM EDT



LWN has it posted.They say SCO sent it to them upon request.

The part that is surprising is the warranty. Or should I say the lack of much of one. What happened to all that trash talk about Linux not indemnifying its customers? This warranty, as far as I can see, and assuming that it's authentic, has a warranty for SCO's code only, and only up to a point. There doesn't seem to be any warranty for any GNU/Linux code or any warranty regarding infringement of any third party IP either.


read more (3262 words) 37 comments  View Printable Version
Most Recent Post: 08/07 06:16PM by Anonymous

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