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Transcript, Part 2, of Teleconference
Wednesday, August 06 2003 @ 09:33 PM EDT

Here is the rest of the transcript I promised. If anyone sees any errors, please let me know. It's as accurate as I can make it, with parts marked where I didn't catch exactly what was said. Wherever I wasn't sure, I didn't guess, so as to be fair. I also left out some word whiskers. I'll put this together with the first part as I find the time, and put it in the archives. So, without further ado:

"McBride: In furtherance of this agenda, SCO is rolling out this week its new licensing plan for Linux. The run-time license permits the use of SCO's intellectual property in binary form only as concerning a Linux distribution. By purchasing a SCO intellectual property license, customers avoid infringement of SCO's intellectual property rights in Linux 2.4 and Linux 2.5 kernels. Because the SCO license authorizes run-time use only, customers also comply with the General Public License under which Linux is distributed.

"OK. Those are my opening statements. Let's go ahead and open up the phone lines for any questions that you might have.

"(Directions given by unidentified female on how to indicate you wish to ask a question.)

"UF: And we'll go first to Lee Gomes with Wall St. Journal.

"Gomes: Hello?

"McB: Hi, Lee.

"Gomes: Hi, Darl. How are you?

"McB: Great.

"Gomes: Can you explain to me why you don't release the examples of infringement that you keep talking about, so everyone can see this?

"McB: Actually, we have been releasing them. We've gone through. . .

"Gomes: (interrupting) Is there a web site or something?

"McB: What we've been doing is we've been going through these sessions and giving them, the people (cross talk as Gomes asks a question, but inaudible)... there's two types of infringements here. As it relates to the derivative works code, actually we can be very open about that. It's not something that's under protective provision that we have in our contract. So we've been very clear that the NUMA, the RCU contributions that have come from IBM into open source and into Linux, into the Linux kernel, are direct violations of our...

"Gomes: (interrupting) Do you have actual specific examples in there?

"McB: Absolutely. That's one of the things that we've been showing, is absolute...

"Gomes: (interrupting) By showing, who do you, do you mean making this publicly available to anyone?

"McB: Sure. Absolutely. The only pieces that have been restricted are the pieces that we have basically control restrictions on (inaudible) in our contract. We can't just open this up. The minute we open it up, we have in fact opened it up to the public, and we can't restrict it in the future from a proprietary standpoint. So under that scenario, we have shown this to over one hundred people so far, under NDA, and the clear conclusion of people, coming back, is, yeah, they getting to see the direct, line-by-line verbatim copies of the code.

"Gomes: Could you make available a list of the people that you've shown it to?

"McB: I'd have to go back with my PR team. Some of the companies that we've shown that to don't necessarily want to have it revealed. For example, I . . .

"Gomes: (interrupting) (inaudible cross talk) Are you saying that you've thoroughly made it available to some Linux and open source activists or something along those lines?

"McB: Absolutely. We've found out they've have written about it, in fact. We can make available what he said publicly.

"Gomes: Who was that?

"McB: I don't remember his name. Chris, you ...?

"Sontag: I don't have his name in front of me either, but we can provide that to you. By the way, I just want to remind everyone that we're limiting everyone to one question. Thank you.

"McB: Lee, the other question, in response to that question there, so, yeah, we have gone through and we have shown this code, and whether it's in the verbatim side, and that is confidentially protected, or on the other side, which is open. We've done that. And this last week, I met with a Linux developer who came in and admitted going in to the discussion, that he was skeptical. He was, you know, he'd been watching this case for four months, and after we went through the code (inaudible) he said,"OK. You've convinced me. Now what do you want me to do?" So, it's really clear from everybody that we've met with, virtually every, almost 100% (inaudible, but maybe hit) rate of the people who've looked at this, say yeah, there is a problem. (inaudible, but I think he said, "Beth?")

"UF: Thank you. Now we'll hear from David Becker with CNN.

"Becker: Hi, could you tell me the terms of this new Linux license pricing and how one would go about acquiring that?

"McB: Sure. Chris, you want to give some detail on the announcement we made today on the licensing side?

"Sontag: Sure. (clears throat) The pricing initially for a single CPU commercial use of Linux 2.4 or above is $699 for an introductory price that will be good until October 15, after which it will climb to a higher price. We've decided to provide an introductory pricing to allow people to more readily purchase that intellectual property license from SCO to continue on with their business unaffected. The means by which they can obtain that license is to contact their SCO representative and they will place them in contact with appropriate people in my organization to set up appointments to facilitate the purchase of those licenses. (pause) Next question?

"UF: Thank you. We'll go now to Larry Greenmeier with Information Week.

"Greenmeier: Hey guys. I have a question about an email that had been sent out. One of the things it refers to is a possibility of a global resolution of SCO's intellectual property claims? What else can you tell us about this? You know, what went into resolving this prior to the suit? What type of global resolution were you referring to?

"McB: We've had discussions over the last several months. I can't get into the details, based on confidentiality provisions. We have had discussions, you know, at a point in time we thought these discussions were going somewhere. You know, in terms of where we are right now, clearly it's at a point of time where we're going to take matters in our own hands and move forward. So, you know, I guess the way to categorize it, we have had some discussions but from where we stand right now, it's time to start marching onward again with our legal claims that we have.

"UF: Thank you. Our next question will come from Michael Singer with Jupiter Media.

"Singer: Yes, hi. So, to clarify, are you also taking legal action, like a countersuit against Red Hat at this point? Or are you just considering it and kind of assessing your situation?

"McB: Right. Good question. We do have a number of options in terms of how we move forward on this, you know in terms of how we move forward, what we do next, do we, you know, we have questions as to whether Red Hat's complaint even states a claim upon which relief may be granted, but, due to the fact of the way that it was filed.

"We may file a motion to dismiss. We also have counterclaims against Red Hat that we could file, according to the rules established by the federal courts. It's probably a fair estimate that the Delaware case that was filed yesterday would go to trial some time in 2005, which is about the same time as the IBM case. The IBM case, for your information, does have a court date now, and that is, in April, I believe it's April 11 of 2005. And this one's probably tracking behind that one by a few months, so again, we got the suit yesterday. David and his team are looking at the various options that we have. We're not here today to say which path we are going down, but I am letting you know that based on the way the suit was filed, there are a number of options that we have, and we're looking at all of those options currently.

"Sontag: Next question?

"UF: Thank you. We'll hear rom Maureen O'Gara with Client Server News.

"O'Gara: Thank you. Hi, guys. Are you going to try to back bill some of these people? I mean, when does this license pick up as far as time goes? I'd like to know what the real price (inaudible) of a uni-processor system is, if it's not $699, and that's only introductory, and I'd like to get some sort of an idea what the pricing for the rest of these other sorts of systems are, multiple CPUs, the CPU addons, the desktop systems, and the embedded systems. Can you help us out here?

"McB: Sure. Chris, I know we have more detail behind where we are on the pricing for the embedded systems and what not. Do you want to jump in with that?

"Sontag: Sure. I'm happy to answer that. Maureen, the price after October 15th for a uni-processor system will be $1399. Uh, detailed pricing of additional CPUs will be available on our web site. I think it'd be a rather boring list to read off to you right now, but tracking along that same level of pricing for additional CPUs.

"UF: Thank you. We'll go now to Reed Stevenson with Reuters.

"Stevenson: Just a couple of technical details. Is this a one-time license or are you going to charge yearly or something like this, and also, due to the timing of your announcement, which is right at the start of Linux World in San Francisco, I mean, is there something you're trying to say to the Linux (inaudible, but I think community)?

"McB: On the price, it is a one-time license as its structured there, now Reed. With respect to the Linux World conference, we basically got served with this suit yesterday and we're responding to the Red Hat suit, so, I'm not sure what their timing was from Red Hat's standpoint, I talked to Matthew Szulik, their CEO, on Thursday, had a really amicable discussion with him, we... in fact, thought we were on track to sit down and I volunteered to them that we would show them the code, that we've volunteered to show to anybody that has come in to this point. And actually, right after the call, on Thursday, I called my team and said,"Hey, I think we may be getting some positive traction here. So that this is interesting." So that was Thursday. And then on Monday morning, we get served with a lawsuit. So I'm not sure what their timing was as related to Linux World (inaudible). First of all, we're responding to where they are. Our pricing announcement, we announced a couple of weeks ago that we were going to go down this path, we were going to take a few weeks to do some checking, and going through and validating with various customers. We've gone through that. We've got things bolted down now, and in fact, have now launched the pricing of that.

"UF: Thank you. From Wired Magazine, we'll hear from Gary Rivlin.

"Rivlin: Aren't you worried that even if you're right here, you lose, because you could very well alienate every Linux programmer on the planet, which is a large and influential group?

"McB: Well, I think the way we look at this is, if we're right here, and we have every reason to believe that we are, based on the evidence that we have, we think it's the other way around. We think that there needs to be a recognition here that intellectual property rights do matter. The legal system, copyright laws do matter, and in fact that should be the recognition going forwared, that we need to step back and take a look at this business model we have on the open-source side, which in fact doesn't have any inherent protections.

"It's been interesting, as I've talked to a lot of Linux developers, at the same time that they like the model of having things freely available, virtually every one of them talks about their need to in fact have their own business interests protected, in fact thy have needs to put bread on the table, and then everybody focused on, that I've talked to, "How do I make money on top of this Linux model that's out there?" And that's why I believe that one of the things that might create going forward, I believe this is going to be the impetus for in fact adjusting the open source model in a way that people have a better ability to make profits off of their hard work, their proprietary work, that they've put in to their coding efforts.

"Sontag: Next question?

"UF: Thank you. We'll go next to Chris Gaither with Boston Globe.

"Gaither: Yes, I was wondering if you have an estimate of how many, roughly, end users this might apply for, and also if you plan on suing end users who don't sign up for the SCO intellectual property license?

"McB: Right. The absolute number, it's hard to get your arms around, by virtue of the way Linux has been distributed, it's redistributable, freely copyable, etc. We have got our arms around a number that roughly 2 1/2 million servers, installed servers, are out there, since the 2.4 kernel shipped, and so, you know, the, obviously, the number is, we think, is in the thousands. We don't know how many, whether it's tens or hundreds of thousands of customers. The server shipments that are out there, they're in the millions. And with respect to where do we go with this next, yes, we do have an ability to go down to the end user with lawsuits, if we have to.

"If you look at what's happened here, there's an article that just hit the wire here, I was reading just before we went online, how IBM has come out and said that they in fact are not indemnifying their end users. So the game here, there's a shell game going on around legal Linux liability, and the rock that it's showing up under is the end-use customer. Now, the question then is, when it moves from IBM to Red Hat to an end-use customer, and in fact both companies have in fact shifted the liability, they admit they've shifted the liability to the end-use customer, and have basically taunted us to go sue them to get relief for our damages that we have, you know, at a certain point, you're left with that card to play with, so that's what we're staring at.

"I think that as we move forward here, the big part of putting the licensing program in place was to in fact avoid these lawsuits. I was encouraged when I talked to Matthew last week maybe we were moving down a path where there'd be some resolution with a Red Hat where we could start to work out these differences. Obviously, that all changed, as of yesterday, so yes, we're absolutely, 100 per cent, going to fight for our intellectual property rights we've paid hudnreds of millions of dollars to either purchase or develop over the years, and you know, our desire is that we can work through this in a licensing fashion, but if we don't get there with licensing, then we will have to move to enforcement actions.

"Sontag: OK, the last question.

"UF: Thank you. And that will come from Herbert Jackson at Renaissance Ventures.

"Jackson: Hi, guys, you've been busy.

"McB: (laughs) Yes, it's been a busy few months.

"Jackson: (laughs) Can you comment on any discussions with other software vendors that might produce a (inaudible) legal version of Linux going forward?

"McB: We have a variety of discussions going on and I'm not at libertyto go into detail of all the various discussions that are out there. I can say there are companies we're dealing with that have seen the code, have seen the problem, they're stepping up There are others that are taking the approach to really come after us, and to try and take our legal rights that we have and just squash these rights.

"So we are encouraged that we have some agreements we've signed already, we have other agreements that are in the works that we're encouraged about how they're working through the process, and so we will see how those go.

"I think the summary of the whole thing in terms of where we stand right now is, you know, the reality here, IBM and Red Hat have painted a Linux liability target on the backs of their customers, and due to IBM and Red Hat's actions, we have no choice but to fight the battle at the end-user level. It wasn't the place we wanted to fight the battle, but that's where we've ended up, and they've pushed us in that direction. Yesterday was another push in that direction.

"It was very interesting that I think one of the biggest announcements yesterday was an announcement that in fact was not made. At the same time that Red Hat stepped up and talked about a legal liability indemnification fund, they targeted that fund for someone who's not even under attack right now. We've never said once that we're considering that we're going after Linux developers per se. We have talked about in fact the end-use customer is where the Linux legal liability is being held. The fact that Red Hat set up an indemnification fund and didn't even mention the customer was, I thought, a pretty loud statement. So there seems to be an elephant on the table here in the SCO-Linux debate, and it's all around indemnification. And the fact that Red Hat ignored this issue in its press statement yesterday, to me speaks volumes. And what they didn't say is becoming by now very loud and very clear, and that is, the legal liability for Linux truly rests with the end user."

21 comments  View Printable Version
Most Recent Post: 08/09 12:33AM by Anonymous

An Open Letter to Darl McBride
Tuesday, August 05 2003 @ 08:15 PM EDT

What you said in your statement today, as I heard it, is this: no one has the right to come up with a business plan that might put yours out of business.

I feel your frustration, but that's like saying if I come up with a better mousetrap, I can't sell it, if it will put prior mousetrap manufacturers out of business. Don't you believe in free markets? Don't people get to choose a better mousetrap, if someone invents one? The GPL is a better mousetrap for software than what you are offering, which is why your software business isn't thriving.

Now, before you have a stroke thinking you are getting a letter from a nasty IP pirate, I want you to know that I never, ever knowingly violate anyone's legal rights. I don't download music unless I have paid for it. No kidding. If you really have infringing code that you are willing to show, I'll definitely not use it. If I have to jump down to 2.2 or up to 2.6, or wait for a clean version of the kernel, or switch to the HURD or BSD, or stop using computers entirely, whatever it takes, I'm happy to do so, if necessary. I really mean it.

I know for sure no one in the GNU/Linux community wants your code. You yourself in your statement acknowledged that Red Hat wants to see the infringing code so it can take it out. The only party refusing to let that happen is you. Do you want it to stay in, if it exists, just so you can make money from licenses? that legal? I'm not a lawyer, so maybe I've misunderstood, and you can explain it to me.

As I understand it, a copyright must be public, so if you're really finding verbatim code, there really is no reason not to show it. I believe, in fact, the burden is on you, not us, to do so. A trade secret is something else, but there are no secrets about copyrighted material, and besides, according to you, your trade secrets have been outed already by IBM, so no contract that you could possibly have could require secrecy for copyrighted code, unless I have missed something huge. Perhaps you can explain that part of your message more clearly than you did today, unless clarification isn't your intent.

You are the only entity here who can know what infringes your proprietary code, because proprietary means we can't look at it, so you have to identify it yourself. Your unwillingness to mitigate any problem you may have leads us to believe you may not have a legitimate problem or that you may have an illegitimate goal, like maybe destroying GNU/Linux. Say, is that legal? To try to destroy someone else's business? You can ask David about that.

Really, no one wants your code. That's the problem with your business model.

But when you say that the GPL, and releasing code under the GPL, is the same as stealing IP in the internet era, someone needs to explain some things to you.

First, the author gets to choose what licensing terms he or she wishes to release code under, if any. That's his IP right, as you would think of it. The GPL doesn't result in communal property. Each author retains his or her own copyright in the code or can turn it over to another entity, such as the FSF, depending on the author's choice. That, by definition, means it isn't communal property. Somebody owns it and has copyright rights in it. Just like you say you do in UNIX code. It's their copyrighted property, which they require you to respect, just as you would like others to respect your rights.

On top of the copyright, GPL coders choose to give users and other programmers more rights than copyright law itself allows. That's also their legal right. It's no different than Microsoft slapping a EULA on its copyrighted work, except it is different in that their EULA takes away rights, where the GPL gives rights. If the GPL isn't "legal", then neither is Microsoft's EULA. It's the same concept.

Now, I'm a writer, so that means this letter is copyrighted. So is everything else I write. No one can take it and print it anywhere without my permission under copyright law, except for fair use, which I believe in and I'm sure you do too, since it's part of the law.

I choose, however, to use the Creative Commons license for my site, because I want people to use whatever I put up here in accord with broader rights than copyright allows. Reporters "steal" my research results all the time and use it as if they did it themselves, and that is fine with me. I want them to do that. They can't steal anything when I freely give it to them to do whatever they want. I want the widest possible distribution of my work so people will see through your, well, excuse me, but what I would call your FUD.

Are you saying that I can't distribute that way, because other web sites charge for access to their content? If not, what is the difference? The GPL is a choice some programmers make, in some cases because they believe in free software, free as in speech, and others because it leads to tremendous benefits in the end result, the software. It's a legal choice, whatever the motivation. Can't you see the difference between that legal choice and piracy, as you call it?

GPL'd code is meant to be used and improved, unless you use it only privately, in which case you don't have to share anything, even any improvements you feel like making to the code. It's yours and yours alone unless you distribute. Companies that aren't software companies can use GPL code as much as they like safely and they will never have to share any private code they add to it, so long as they never distribute the code. That's my understanding of how the GPL works.

And as for Red Hat's SEC risk disclosures, I have a tip for you. No one, including you, has access to unpublished patent applications and copyright registrations. It's a problem common to all, that one minute before you do your search, someone will file an application that will eventually come to light, once the data is updated, and make your later application void. Take a look on the Copyright Office or the USPTO's web site. They explain that to you.

Nice try.

As to the GPL, I think somebody needs to explain it to you a bit better. You have set it up, you think, so end users can't be in compliance with both your license and the GPL at the same time, so no further distribution can occur, as you said. But there is another option. We can remove your code, if you ever show it, or start from scratch, or switch to the HURD kernel, or BSD, or whatever it takes to diligently avoid your code. Then we'll just keep on coding without you and distributing away. That's if you hadn't already released this code already under the GPL, which I think you did, in which case you can't now take it back and write another license for the same code.

We can also decide to try to defeat your claims in a court of law, and that seems to be the legal choice so far everyone is choosing to follow. How is using the courts to establish rights equivalent to piracy? That's what courts are for: to determine if folks like you have any claimed rights or not. Until that happens, you'll have to admit it's a stretch to compare yourself to the glorious RIAA. At least they have demonstrated some copyrights under the current law. So far, you have not. Inviting flies into your spiderweb to look at code you have hand picked and, from analyst reports, edited, just doesn't qualify as proof of rights. It isn't even showing the code.

I hope you figure the GPL part out real soon, so you don't sink in the quicksand I believe you are standing on. Actually, that's hypocritical. I hope you do sink, in a business sense, grasping your unwanted code close to your proprietary heart.

52 comments  View Printable Version
Most Recent Post: 08/09 11:09AM by Anonymous

Part One of Transcript of Today's Teleconference
Tuesday, August 05 2003 @ 06:11 PM EDT

Here's the first part of Darl McBride's statement that he read first. I'll put the rest up as I get it done. I'll be providing a finished version eventually, but you'll get the idea and at least you won't have to wait to get the main thrust of the day. The rest is just like this part, menacing and lacking in comprehension of the GPL.

Here's the McBride statement:

"Thanks to all of you for joining us today.Yesterday, Red Hat filed a legal action against the SCO Group in Delaware federal court and announced the formation of the Open Source Development Fund. The purpose of this call today is to comment on those actions and discuss SCO's new licensing plan going forward.

"Red Hat's lawsuit confirms what we've been saying all along: Linux developers are either unwilling or unable to screen code in the Linux kernel to remove infringing code before customers buy and use it.

"Let me be clear. Red Hat is selling Linux that contains verbatim and obfuscated code from UNIX System V. Red Hat is also selling Linux that contains derivative works from UNIX that have been contributed to Linux in violation of UNIX licensing agreements. Some of these companies, like IBM and Sequent, have now had their license agreements terminated for acting in violation of the terms and agreements.

"We've had a chance to preliminarily review the lawsuit and Red Hat's press statement from yesterday, and there's several responses to [inaudible].

"First, RH claims that we have not shown examples of infringing code in Linux. This statement is simply not true. We have shown examples of infringing code in Linux to many distinct people, including some Linux advocates. We set up a viewing center in Lindon, Utah. We have gone to companies around the world to show infringing code.

"In fact, this same offer was made to RH, but they chose instead to sue us. RH is apparently trying to pretend that no problem exists.

"The code that the court will review in this case contains verbatim code from UNIX and misappropriated derivative works from UNIX. That has to be clear to the people that have reviewed the example code that we have shown. [inaudible]

"Second point: RH claims SCO is at fault for its loss of recent Linux business. We believe that SCO is not at fault for RH's recent loss of business. Rather, we suggest that RH has adopted a faulty business model. In its [inaudible] disclosure filed with the SEC on July 7th, 2003, just a few weeks ago, RH included very revealing risk factor disclosures that speak to this business model. The risk disclosure states that RH relies on software developed by independent parties over whom it exercises no control. The disclosure statement continues to state that RH lacks access to unpublished software patent applications and copyright registrations. These are RH's words about its own business. RH's disclosure also warns that if infringing code is in Linux, it may need to stop product shipments.

"In fact, this warning is consistent with the requirements of Section 7 of the General Public License, under which Linux is shipped to end users. The GPL states in Section 7 as follows:

"'If, as a consequence of a court judgment or allegation of patent infringement or for any other reason (not limited to patent issues), conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all. For example, if a patent license would not permit royalty-free redistribution of the Program by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution of the Program.'

"So, this is the main problem of RH's business model. It distributes under the GPL. It has no control to prevent infringing code from going in to Linux. But if infringing code is found, RH is required under the GPL to stop shipments of Linux. That business model seems unsustainable in the long run.

"We believe it is the real cause of RH's business problems, not SCO. These issues would have surfaced eventually, with or without SCO."

"Third point: RH has pledged one million dollars for a Linux Development Fund. This pledge misses the mark. SCO has never considered suing Linux developers as individuals, only companies that employ them, like IBM, who are taking improper advantage of their UNIX licenses with SCO.

"Furthermore, RH's pledge will not do anything for end users, since there is still no indemnification for Linux end users. If RH or other Linux [inaudiable, maybe players] decides at some point in the future to [inaudible, maybe redraw] the defense fund to protect those who need protecting, we'd suggest they need to increase the size of the fund dramatically. With over 2 1/2 million servers running infringing Linux 2.4, the price of indemnification is measured in the billions of dollars, an exposure which monumentally dwarfs the current pledge of one million dollars."

Fourth point: Red Hat thinks SCO should publicly show them every line of infringing code. Why is this? So RH can acknowledge SCO's legitimate claims and acknowledge the key role that UNIX intellectual property is playing in the growth of Linux? Not likely.

"Red Hat thinks we should show them every line of infringing code so they can make changes and go forward, in complete ... with complete disregard for our business rights. Some [inaudible] developers are so comfortable with misappropriating UNIX code and derivative works that they seem to feel an entitlement to keep doing it. [inaudible, something about SCO spending a lot of money to develop and purchase their valuable IP] That makes no sense.

"At issue here is more than just SCO and Red Hat. What is at issue is whether intellectual property rights will have any value in the age of the internet, where intellectual property rights can be simply taken without regard to rightful ownership. Some people think they have the right to do that. Linux companies seem to encourage that, and even make business models around selling an unwarranted software code developed under a 'Don't Ask, Don't Tell' policy.

"Our society is engaged in an important debate to decide whether IP will remain proprietary or whether it will all become communal property according to Richard Stallman's vision for all software distributed under the General Public License, such as Linux.

"There are so many current intellectual property [inaudible, maybe violations or infractions], responsible corporations cannot disregard this as someone else's problem. SCO, one small company, intends to defend its intellectual property rights vigorously against Red Hat and all others.

"This is the only clear path for long-term profitability growth for any company in this internet era."

This was followed by his statement announcing the license plan. About 9 questions and answers followed, which is the part I haven't got transcribed yet. At the end, he made the statement I put up earlier and which I repeat here, so as to complete (eventually, gasp) the whole transcript:

"What they [Red Hat] didn't say is becoming by now very loud and very clear, and that is, the legal liability for Linux truly rests with the end user.

"As we move down the path of resolving our issues, we recognize that we're in a broader world of intellectual property issues right now. If you look at what's happened in the music business over the last few months, the music fights on for a number of years, and there's been billions of dollars the artists and the companies there have lost, and when they finally took the fight down to where the infringements are going on, the copyright infringement going on at the end users end of the music business, one press report I read said there is a 30% slowdown of downloading of illegal music on the internet after these customer lawsuits started.

"If we have to go down that path, then, again, we've been pushed there, we will go down there, that's why Boies' team is engaged, and David is ready to go, if that's what we have to do."

29 comments  View Printable Version
Most Recent Post: 08/07 02:03AM by Anonymous

Meanwhile, SuSE Linux on IBM Hardware OK'd for Mission Critical Computers
Tuesday, August 05 2003 @ 04:19 PM EDT

The LA Times is reporting that GNU/Linux software is now certified, by the Common Criteria Group, for use on "mission critical" computers, including those used by US spy agencies and the military.

"It opens up new horizons and new venues that we'd been precluded from. Everyone has had this view of Linux as interesting but done by hackers on a part-time basis, a bathtub of a code," an IBM spokesman is quoted as saying. SCO didn't get the memo, I guess, speaking of new horizons.

I'm reporting this from a NewScan feed. Registration required at LA Times.

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Most Recent Post: 08/05 08:54PM by Anonymous

Forget Red Hat, SCO Now Wants to Sue
Tuesday, August 05 2003 @ 03:22 PM EDT

Forget Red Hat, SCO Now Wants to Sue You

SCO's response to Red Hat's lawsuit is that now they are being "pushed" to sue the end users. They'd sure hate to have to do it, but IBM and Red Hat are making them. Seems SCO's rights are being "squashed". Here's McBride's wording:
What they [Red Hat] didn't say is becoming by now very loud and very clear, and that is, the legal liability for Linux truly rests with the end user.

As we move down the path of resolving our issues, we recognize that we're in a broader world of intellectual property issues right now. If you look at what's happened in the music business over the last few months, the music fights on for a number of years, and there's been billions of dollars the artists and the companies there have lost, and when they finally took the fight down to where the infringements are going on, the copyright infringement going on at the end users end of the music business, one press report I read said there is a 30% slowdown of downloading of illegal music on the internet after these customer lawsuits started.

If we have to go down that path, then, again, we've been pushed there, we will go down there, that's why Boies' team is engaged, and David is ready to go, if that's what we have to do.

Of course, he'd so rather y'all didn't push him to do this by getting a license instead. I'll have more as I type up my notes. Remember, he's talking 2.4 and 2.5 kernels. They have a FAQ page now. And a description page, which looks like it was written very, very fast, with the kinds of grammar and punctuation mistakes you normally only see in email. In it, they say they are only going after commercial users, but what I heard at the teleconference indicates a shift, so this is in the shifting sands department. Talk to your own lawyer for advice, if you think you need some.

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Most Recent Post: 08/05 05:49PM by Anonymous

SCO Wants Us to Buy Their Binary-Only License for $699
Tuesday, August 05 2003 @ 01:51 PM EDT

Um. No. Speaking just for myself, I'd give up computers altogether before I'd hand over one slim dime to SCO. I think I'd prefer to join the DoD and spend $640 dollars for a toilet seat first. Next, I was planning on buying the Brooklyn Bridge. Hey, we all have our priorities.

Here [update: you'll have to get it now from] are their thoughts and terms:
The run-time license permits the use of SCO's intellectual property, in binary form only, as contained in Linux distributions. By purchasing a SCO Intellectual Property License, customers avoid infringement of SCO's intellectual property rights in Linux 2.4 and Linux 2.5 kernels. Because the SCO license authorizes run-time use only, customers also comply with the General Public License, under which Linux is distributed. . . .

SCO will be offering an introductory license price of $699 for a single CPU system through October 15th, 2003. Pricing for multiple CPU systems, single CPU add-ons, desktop systems and embedded systems will also be available.

Nope. Guess again. Back to GPL Summer School for you. Take your time. We'll wait.

This is, no doubt, what the teleconference will be about. Until they open up the floor for questions. Then it'll be about Red Hat, I'm thinking.

That $699 is a special introductory offer, by the way, so you probably need to snap them up quick.

Unless you think you might do better with their Going-Out-of-Business sale.

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Most Recent Post: 08/06 03:33AM by Anonymous

SCO Teleconference at 2 PM Today
Tuesday, August 05 2003 @ 12:18 PM EDT

Yup. More. At 2 PM EDT, they say we can call in to hear them tell us how saddened they are to find themselves sued. Nah. They want to tell you about their licensing problem, oh, I mean program. Here's the scoop:

Number : Toll Free within North America: 1-800-238-9007
International: 719-457-2622
Password to enter call: 274040

When: Tuesday, Aug. 5, 2003
2:00 p.m. EDT, 11:00 a.m. PDT

Who: Press and industry analysts interested in UNIX and Linux intellectual property issues

Replay: An audio replay will be available for interested media and analysts. To gain a copy, e-mail the SCO PR team at or the Schwartz Communications team at

It seems this time you must be screened if you want an audio replay later. No more Mr. Nice Guy.

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Most Recent Post: 08/05 06:51PM by Anonymous

Helping Red Hat
Tuesday, August 05 2003 @ 03:43 AM EDT

One of the things that might help Red Hat would be a collection of articles indicating that SCO was going to sue Red Hat at some point in the not too distant future. So, here are some articles that I think might be helpful. Perhaps you can find more.

Here is one from Datamonitor, July 24, 2003:

"SCO is aiming its licensing scheme at end-users rather than Linux distributors. 'Our first and primary concern comes from commercial users who are benefiting from this,' said CEO Darl McBride. 'This is very targeted towards the people that are using Linux, which is end users.'

"What SCO appears to have forgotten with this statement is that some of the biggest Linux users are the Linux vendors and supporters themselves, however."

Here is another from Open for Business, dated March 7, 2003:

"Rumors escaping the Lindon, Utah-based company as early as mid-January had suggested the company may be gearing up to sue one or more of its competing Linux distributors, such as Red Hat , in the near future. The speculation intensified when SCOsource , the intellectual property-licensing wing of the company, was announced during LinuxWorld in late January. In part, that announcement acknowledge the retaining of star attorney David Boies by SCOsource for "research and protection of SCO's patents," providing many observers of an ominous feeling about what SCO was up to."

And here's another, from Linux World, dated May 14, 2003:

"Question : Are you planning any legal action against SuSE or Red Hat?
"Sontag : We have no action planned at this time. Our focus is on the IBM lawsuit. This does not mean, however, that we will not initiate other actions to protect our intellectual property at a future point. . . .

"Question : What about SuSE and Red Hat customers and other Linux users? Could they face litigation or be impacted in any way?
"Sontag : Certainly, as the evidence mounts, there could be concerns and issues for end customers. When you're talking about copyrighted materials or trade secrets being inappropriately obtained and released, even the recipients of that information have to have concerns."

And finally, here's one from, dated January 23, 2003:

"Anybody that does not have intellectual property issues related to SCO can sleep well at night, but for anyone violating our IP we are going to be more aggressive enforcing our rights than we have in the past," Chris Sontag, SCO senior vice president for operating systems, told . . . Published reports elsewhere have hyped the matter, claiming that companies that might be affected by any potential legal action could include various other Linux companies, Apple Computer, Microsoft, BSD versions of Unix and others using the various operating systems."

If you see any more like that, feel free to add to the collection.

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Most Recent Post: 08/06 01:59PM by Anonymous

Correction On Red Hat Injunctive Relief
Tuesday, August 05 2003 @ 12:35 AM EDT

I had time to read Red Hat's complaint more carefully, and there was an error in what I earlier wrote. The media, in two places that I saw, reported that Red Hat was asking for a preliminary injunction, and that's what I wrote about too, because I didn't at the time have the actual complaint, only media reports. I have corrected what I wrote earlier, but I'm highlighting it here so you won't think you were dreaming.

What I am reading in the actual complaint is that they are asking for a permanent injunction, stopping SCO from saying bad things about Linux, in effect, and several orders, under the Declaratory Judgment Act, declaring that SCO's trade secrets have not been stolen by Red Hat or its customers, and that any such trade secrets claimed to be misappropriated are unenforceable, that Red Hat and their customers aren't guilty of copyright infringement, and that any copyrights are unenforceable, and that the Linux kernel and operating system are public and therefore can't be a trade secret.

Here's the actual wording:
WHEREFORE, Red Hat respectfully requests:

A. A permanent injunction restraining SCO and its officers, directors, partners, agents, servants, employees and attorneys, and those persons in active concert or participation with SCO from representing by any means whatsoever, directly or indirectly, or doing any other acts or things calculated or likely to cause confusion, mistake or to deceive purchasers, business partners and/or investors into believing that Red Hat's LINUX products and/or the LINUX products used by Red Hat's customers and partners violates any of SCO's intellectual property or trade secret rights;

B. Under Count I, a Declaratory Judgment pursuant to 28 U.S.C. Sections 2201 et seq. that Red Hat's and its customers' actions in providing, creating, maintaining, debugging, developing, copying, selling, transferring, installing, operating, or otherwise using any of Red Hat's LINUX products and services do not violate any SCO rights under Section 106 of the Copyright Act, 17 U.S.C. Sections 101 et seq., and a Declaratory Judgment that any SCO copyright claimed to be infringed by Red Hat or its customers in conjunction with any of Red Hat's products is unenforceable;

C. Under Count II, a Declaratory Judgment pursuant to 28 U.S.C. Sections 2201 et seq. that Red Hat's and its customers' actions in providing, creating, maintaining, debugging, developing, copying, selling, transferring, installing, operating, or otherwise using any of Red Hat's LINUX products and services do not constitute a misappropriation of any SCO trade secret, a Declaratory Judgment that the LINUX kernel and operating system are public and therefore cannot constitute a trade secret; and a Declaratory Judgment that any SCO trade secret claimed to be misappropriated by Red Hat or its customers in conjunction with any of Red Hat's products is unenforceable; . . .
It then goes on to ask for actual damages, in an amount to be determined at trial, trebled, plus attorneys' fees.

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Most Recent Post: 08/05 03:03PM by Anonymous

More, More, More - How Do You Like It?
Monday, August 04 2003 @ 09:04 PM EDT

First, here is SCO's press release in response. They just can't quit with the threats. Dear Darl's letter to Red Hat says the lawsuit surprised him and warns:
Be advised that our response will likely include counterclaims for copyright infringement and conspiracy.
That's not much of a threat, since Red Hat has already asked the court to rule on the copyright issue. Remember the nasty guy at Forbes who wrote the article, "What SCO Wants SCO Gets?" It's the one SCO plastered up on its web site. Well, he's beside himself being scornful about Red Hat seeking a declaratory judgment. He sneeringly compares it to asking a judge to say you aren't a bank robber before you've been charged with a crime. But he's soooo off-base.

There are advantages to asking for a declaratory judgment, if you anticipate that you are going to get sued. If you file first, you have the advantage of picking the place where the case will be tried. Think: not Utah.

Red Hat's complaint makes frequent reference to the July 21 teleconference, so if you haven't heard it yet, it is here, as an mp3. The link to it is on this page. It may still be available via SCO, but it gives me the creeps to visit their web site, so if you feel the same, now you have an alternative. [ Update: Groklaw has a transcript of the teleconference.]

I have read the complaint. They tell the court all about SCO's stock leaping into the stratosphere and everything else you, or Groklaw, has thought of. They use Gartner Group pronouncements against SCO. I enjoyed that part. Speaking of analysts, even some of them now say SCO's license plan will fail. Here's what the Butler folks said today:

SCO ... appears to have forgotten about the real power of Linux: the "community" of developers, both employed and otherwise, who are passionate about the GNU Public Licence software, said the analyst group.

Even if SCO's claims are proven to be true that the 2.4 kernel and later does contain Unix code, the kernel will be rewritten.

If the people that are in the community can produce a security patch for Linux six to 10 times faster than an equivalent from Microsoft for Windows, then a new kernel will not be long in coming and SCO can wave goodbye to its expected royalties.

Amen, brother. Maybe triple damages instead of royalties. Am I dreaming? Or did I die and go to heaven? heh heh. I know, I know.

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Most Recent Post: 08/06 07:46PM by Anonymous

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