“To the outsider, and even to me for some time, the various lawsuits involving the SCO Group follow a relatively simple story line. I’m not a lawyer, but after many interviews with the involved parties and lawyers, the case boils down to divergent interpretations of the subject matter.” Read the editorial at ZDNet.
What did SCO buy–Unix or the Brooklyn Bridge?
About The Author
Eugenia Loli
Ex-programmer, ex-editor in chief at OSNews.com, now a visual artist/filmmaker.
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What SCOX bought from SCO is very clearly specified in the Asset Purchase Agreement(APA) between the two. The original APA excluded both patents and copyrights from the sale by Novell to SCO. There was a modification to the APA which reaffirmed the exclusion of patents but included copyrights “needed to enforce the Unix licences” by SCO.
What copyrights are needed to enforce the licences are not specified and it is clear that that is open to interpretation. But the copyrights were never transferred to SCO and now Novell has registered them in its own name.
The other thing that could have been open to interpretation is the definition of derivative works in this dspute. But the recent disclosure about ATT’s clarification regarding what constituted derivative works according to ATT, clearly undermines SCOX’s contention that code developed independently by ATT’s Unix licencees are covered under the definition of derivative works.
In short, there is not much left to interpretation by anyone. Documentation is available clarifiying what various parties meant by their contracts and what was bought and sold.
The author of the article is so amazed by the limited scope of the sale between Novell and SCO that he believes that it flies in the face of logic. It probably does. But it is what it is , in black and white, and enforceable in courts.
“What SCOX bought from SCO is very clearly specified in the Asset Purchase Agreement(APA) between the two.”
should read
What SCOX bought from SCO is very clearly specified in the Asset Purchase Agreement(APA) between Novell and SCO.
That was probably the least biased and best article written about the subject. I think the BSD case will have the most impact on the outcome of this case. If Unix IPR is specifically not enforceable due to the BSD case then nothing else matters. On the other hand if Unix IPR is enforceable, the details of the specific agreements between SCO and Novell will force the outcome.
You can read all this with more informed comments than mine at groklaw, of course, but what Caldera/SCOX bought from SCO was at least an unlimited and perpetual license to the UNIX codebase, a 5% slice of license fees from most other UNIX licensees in return for collecting them for Novell, and a huge network of customers, dealers and contacts into which they could sell their own products.
They have, at various times, listed exactly these things as being the things they wanted (especially the increased customer/reseller base), and in the end they paid *less* money than some other people were paying for *just* a perpetual UNIX license a few years before the deal.
So it doesn’t really fly in the face of logic at all – they got a good deal for various assets which they then failed to make good use of, making them appear worthless now.
“So it doesn’t really fly in the face of logic at all – they got a good deal for various assets”
SCOX believe they have the same ownership rights that ATT originally had. That is clearly not true. But they have created an impression that they do. Apparently the author of the article finds it difficult to accept that SCOX does not have the same rights that ATT had before they sold Unix.
That is why it seems to him that the claim that SCOX does not own everything related to Unix is tantamount to claiming that SCOX bought the Brooklyn brdge.
Ummm didn’t they keep the receipt?
Also isn’t there a 14 day (years) refund policy if they are not happy with their purchase? 
SCOX believe they have the same ownership rights that ATT originally had. That is clearly not true. But they have created an impression that they do. Apparently the author of the article finds it difficult to accept that SCOX does not have the same rights that ATT had before they sold Unix.
I don’t get that impression at all. The author says that there is a disagreement between Novell and SCO as to what was bought and sold. The author at one time even proclaims that while SCO purchased UNIX for 100 million it cost Novell nearly 800 million. That doesn’t seem like Novell sold everything to SCO that SCO thinks they did. We won’t know until a judge decides.
The news has said that SCO also will be hunting end users. Say SCO wins the first round. Then maybe end users are next. Say they win that too. But end users acted in good faith when they got their copy of Linux – whether free or purchased – and will then want to sue someone. The store, the download mirror, Redhat? Or could it go SCO as with Eolas e.g. sorry, Linux has become too big and society will have to nullify your rights.
Under a veneer of supposed even-handedness, Berlind has accepted many of SCO’s claims without any supporting evidence, while ignoring critical issues which damn SCO’s claims beyond redemption. Here’s a few off the top of my head:
1) Derivative works. Copyright law is quite clear that a work is derivative only if it contains elements of the original work. Sequent’s code for RCU and IBM’s code for JFS were written by them, and contains no AT&T code. SCO claims that it is derivative due to the license terms, even if it isn’t due to copyright law. This is in direct conflict with AT&T’s public statements about the license. The license terms cannot be extended retroactively. SCO, if they actually own those licenses, can surrender rights that they own, but they can’t take away rights that the licensees agreed to.
2) Ownership. AT&T sold USL to Novell. That part is clear. What happened later is not so clear. Novell sold a sublicense to the original SCO, with old SCO’s products to be free and clear of license fees to Novell. Novell also paid old SCO a 5% fee to collect license fees from third parties, which supports the idea that Novell retained ownership of the UNIX copyrights. This is also supported by the lack of any written copyright transfer, as required by law. The APA also contains a clause which reverts all rights to Novell if the ownership or control of SCO changes. When Caldera bought old SCO, and renamed itself The SCO Group (TSG), that may be viewed as ending the APA. TSG and Novell are likely to end up in court arguing over the terms of the contract, but so far TSG has been avoiding resolving these issues. I think that Novell has a stronger case, and TSG’s stalling suggests that they think so, too.
3) BSD and ancient UNIX. UNIX was originally NOT copyrighted, but distributed under a contract which imposed trade secret terms. Note that those terms only apply to parties to the contract. AT&T had been sloppy about retaining control of the code, so it is likely that the trade secret terms are unenforceable. When USL sued BSDI, copyright notices were added. The judge in the case was of the opinion that copyright would not hold up, as the notices were not added within the time period required by copyright law of that era. It also became obvious that AT&T had copied far more BSD code than BSD has copied AT&T code.
This means that the original UNIX source may well be public domain. At any rate, Caldera released the ancient UNIX code under a very open license. BSD and ancient UNIX code may be used by anyone, with the appropriate copyright notices attached. The only code not under an open license is that which is unique to System V, which is owned by Novell (or TSG, if you believe them). Every reporter seems to be oblivious to the fact that there is a great deal of code in System V which comes from earlier versions. Ownership or control of System V does not imply ownership or control of all of the code found in System V; much of that code comes from BSD or ancient UNIX.
What SCO purchased was the right to sell their own UNIX without paying fees to Novell, and to collect a 5% management fee for handling the license fees of everyone else. Other UNIX licensees, such as HP, IBM, SGI, and Sun, had enhanced and improved their versions of UNIX to the benefit of their sales. SCO failed to keep up, and acted as if they had a monopoly on UNIX and did not need to improve it. What they purchased had the potential to be worth a great deal, but only if they worked for it. Instead, they ran it into the ground. SCO knew that the value of their purchase had evaporated, which is why they sold it to Caldera, who was flush with Linux IPO cash. Caldera, now TSG, has managed to eliminate what little value remained. There is no way that any sensible person would sign a contract with TSG after the way that they have treated their partners.
Just because many situations are muddy, and usually the truth is “somewhere in between”, doesn’t mean EVERYTHING is like that. The author of the article seems to think there is some truth to SCO’s claims for no other reason than the faulty notion of the truth ALWAYS being somewhere in between. Too much holywood brain candy on his part I’d say.
I like summary HC gave in his post.
I just want to add that USL might be releavant to AIX license, but does for SCO nothing regarding UNIX IP even if it was found in Linux.
SCO has distributed Linux under GPL. They either accepted GPL terms and could have no legal claims to Linux. Or as they claim GPL is invalid, then SCO gave away Linux source along with IP without any license. In that case Linux is freeware and its sources are public domain. Whatever IP could be found in Linux is also public domain.
“Why on Earth would any company pay more than $100 million for a technology –as the SCO Group’s ancestry did for Unix–if it knew the technology could be opened to the kind of cloning that could irrevocably jeopardize the potential return on that $100 million investment? The SCO Group might as well have bought the Brooklyn Bridge and tried to charge tolls.”
They (Caldera) bought SCO for their (corporate, specialized, long time locked-in) customer base and “distribution channels” as the expression goes. I think Ransom Love wasn’t lying when he said that UNIX IP wasn’t their focus back then. They wanted to transform Unixware into OpenLinux or even UnitedLinux. Their goal was to beat RedHat and become the corporate i386 Linux king IMHO.
It even appears as if old Caldera interpreted this IP as “ancient UNIX” which was released with a sort-of BSDL stamp, while SCO talks about sys V. It’s my understanding that most of ancient unix was PD and BSD anyway and then Caldera wanted to clear it up once and for all. I don’t think anything was “planted” then or in the Linux kernel in that time as some people do.
Interesting parallel is that Caldera got big by forking RedHat and adding some commercial stuff (OpenDesktop or something it was?) and later unix (read: unixware) compatibility. At least then they added something. Today’s SCO basically is attempting a landgrab and a huge one.
It’s also interesting how they argue that through buying (allegedly!) the same package that Novell bought from AT&T (Novell disagrees on this) this gave them sort of a corporate GPL to all your base. *That* is why they’re playing out the GPL card again and again (and how they’ll try to dismiss the argument that they use GPL on their Linux products and use lots of GPL stuff with Unixware): they want the “viral” parts of both “license models” as they’re going to argue, to been viewed as equally restrictive and thereby fair. Mark my words.
Derivative works. Copyright law is quite clear that a work is derivative only if it contains elements of the original work. Sequent’s code for RCU and IBM’s code for JFS were written by them, and contains no AT&T code. SCO claims that it is derivative due to the license terms, even if it isn’t due to copyright law. This is in direct conflict with AT&T’s public statements about the license. The license terms cannot be extended retroactively. SCO, if they actually own those licenses, can surrender rights that they own, but they can’t take away rights that the licensees agreed to.
I think the real issue of derivative works is that since code was develped and used in UNIX and then Linux, it was not a clean room reimplementation. The code was once a part of UNIX so there was not a complete seperation of code. The lines were blurred.
SCO has distributed Linux under GPL. They either accepted GPL terms and could have no legal claims to Linux. Or as they claim GPL is invalid, then SCO gave away Linux source along with IP without any license. In that case Linux is freeware and its sources are public domain. Whatever IP could be found in Linux is also public domain.
It should be pointed out that, as the article says, only the copyright holder can attatch the GPL license in order to be valid. What remains to be seen is if the judge believes by releasing Linux under the GPL themselves, they assigned their copyright to the GPL.
I am a Linux supporter but when it all comes down to it, most of this stuff is up to a judge’s interpretation. I do not beleive Linus or IBM did anything wrong personally but what matters is what the judge believes. This article does a very good job of pointing out the specific points that have been raised by both parties. One thing that was missing and definitley should have been included was Linus’ rebuttal of the SCO letter about the errno.h files.
Abraxas, I think that SCO has succeeded in confusing you. Sequent and IBM didn’t need to do a clean room reimplmentation, because what they each created didn’t exist in AT&T UNIX at all. Each added something new.
Sequent’s Dynix was the first multiprocessor UNIX that I remember. I had an account on an early Sequent system sometime in the mid-80’s, back when they used 68k processors. Sequent invented and patented RCU, and did much of the pioneering work on NUMA. None of that was in the UNIX that they started with. It is original work, as shown by the patent. They could have kept the code to themselves.
Instead, Sequent made the RCU code available for UNIX and Linux. Sequent allowed SCO to use it, just as they allowed Linux to use it. In return for that freely given gift of permission to use Sequent’s code, TSG is claiming that the gift means that Sequent doesn’t own it any more, TSG owns it. It doesn’t make sense. Sequent didn’t sign over the copyrights or patents to SCO, they gave permission for others to use what Sequent owns.
The wrangling over discovery in the court case makes this perfectly clear. TSG can’t show SCO code that was given to Linux because no SCO code was given away. Sequent gave away Sequent code. TSG has the SCO code, and the Linux source is published. It would be trivial for them to find any SCO code if it existed in Linux. They can’t find any, so they want to dig through Sequent’s code and claim that they own it. It’s absurd. The AT&T license makes it clear that code written by Sequent which does not contain AT&T code belongs to Sequent, not to AT&T, Novell, SCO, or Caldera/TSG.
Similarly, IBM wrote JFS. There was no journaling filesystem in AT&T UNIX. The original AT&T filesystem was very simple, and vulnerable to corruption if not shut down cleanly. JFS is a robust replacement. Not an improved version of the AT&T code, but an independent replacement. Once again, TSG is claiming ownership of someone else’s code which is not derived from AT&T code.
No one stole code from SCO. AT&T misappropriated BSD code, and settled out of court. TSG is attempting to steal code written by Sequent and IBM.
The point missed by Berlind and others is that the UNIX code owned by TSG isn’t worth anything, because no one wants it. The value in UNIX is not in the System V code, but rather in the extensions written by people other than AT&T, Novell, SCO, or TSG.
UNIX was useful when AT&T was prohibited by an anti-trust consent decree from selling computers. It was a neutral OS available to all, not owned by a competitor, much as DOS was in the early days of PCs. Unlike DOS, the source was available, and each company could improve upon UNIX, and most did – with the notable exception of SCO. Technically owned by AT&T, it was in practice open. The value was in the openness.
When AT&T was broken up into the Baby Bells, the consent decree no longer applied. AT&T got into the computer business, and attempted to commercialize UNIX. That destroyed the value, for UNIX was no longer controlled by a neutral party. AT&T was now a competitor. When AT&T and Sun teamed up, that’s when IBM, DEC, Apollo, and HP started the Open Software Foundation to make an independent UNIX. The UNIX wars started, and almost killed UNIX. BSD had been supported by everyone, System V was the beginning of the end. When Berkeley was the defacto controller of UNIX, their light hand on the controls added value. When AT&T took control back, their heavy hand removed value. TSG still hasn’t learned the lesson.
“SCO has distributed Linux under GPL. They either accepted GPL terms and could have no legal claims to Linux. Or as they claim GPL is invalid, then SCO gave away Linux source along with IP without any license. In that case Linux is freeware and its sources are public domain. Whatever IP could be found in Linux is also public domain.”
Not public domain. Copyright is retained by the authors which would make sco guilty of massive copyright infringement.
I think the real issue of derivative works is that since code was develped and used in UNIX and then Linux, it was not a clean room reimplementation.
———
It doesn’t have to be a clean-room reimplementation. That’s only of concern when we are talking about code that does the same thing. Eg. Compaq’s BIOS had to be a clean-room implementation of IBM’s BIOS because they did the same thing, so Compaq has to have a way to prove they didn’t just copy IBM’s code. In this case, the existing code and the new code did totally different things. IBM and Sequent don’t need a clean-room reimplementation, because the existing UNIX code didn’t do remotely the same thing. Code is not contagious. Say I wrote a fragment of code, BSD-licensed it, and put it into a GPL program. That would cause the whole work, including the code I wrote, to be GPL’ed. However, if I took that code back out, I could still use it under the terms of the BSD license.
It should be pointed out that, as the article says, only the copyright holder can attatch the GPL license in order to be valid.
———
SCO is the copyright holder. They distributed the code under the GPL. By all means, that’s valid. Its not like they did it on accident — they still have the Linux code, under the GPL, on their servers!
What remains to be seen is if the judge believes by releasing Linux under the GPL themselves, they assigned their copyright to the GPL.
———-
You don’t “assign” your copyright to the GPL. You license your code under the GPL. And I don’t get your logic. You admit that SCO “releas[ed] Linux under the GPL themselves.” That means they put it under the GPL! It’d be one thing if they didn’t know their code was in there, but they do, and they are still distributing it!
What SCOX bought from SCO is very clearly specified in the Asset Purchase Agreement(APA) between Novell and SCO.
You neglected to mention the Amendment which both SCO and Novell signed, which very clearly granted the copyrights to SCO.
It doesn’t have to be a clean-room reimplementation.
In this case, yes, it does. IBM signed a contract with AT&T agreeing that, once it added technology to AIX, that technology would be considered part of AIX (the SOFTWARE PRODUCT, according to the contract) and couldn’t be redistributed for any reason other than “internal business purposes” and without the consent of AT&T. Once IBM added code to AIX, unless they created a clean room version of their own code, they were in violation of the contract.
That means they put it under the GPL! It’d be one thing if they didn’t know their code was in there, but they do, and they are still distributing it!
SCO is contending that they didn’t realize that some of their code was illegally present in Linux. Furthermore, they are saying that they can’t be forced to relinquish their copyright on that basis.
None of the regular zealotry of ” SCO is wrong just because ” I wish we could have more articles like this.
Being even handed about something does not mean you are being fair or correct. It just means that you are giving the same weight to two opposing arguments no matter how pathetic one may be.
“You neglected to mention the Amendment which both SCO and Novell signed, which very clearly granted the copyrights to SCO.”
I did not neglect to mention that the amended APA included copyrights. I clearly mentioned in my post that the amended APA transferred the copyrights to SCO but only to the extent necessary to enforce the licence sold to SCO, without specifying what those copyrights were. To me that does not appear to be clear at all. That is why Novell has written to SCOX that the amended APA raises as many questions as it answers.
You made several mistakes.
1) IBM has a side letter to their license that states the samething the 1985 “$ echo” news letter does: Direved works belong to you, all AT&T code in the modified file belongs to us and we retain rights to it. (ie: JFS is IBM’s code and belongs to IBM and if their is any AT&T code in a JFS file then that code still belongs to AT&T can must be protected. The JFS files modifed to work with Linux contain no AT&T code).
2) The Amendment said that some copyrights may be transfered. Copyright law states that to transfer a copyright, the granter must specify exactly what copyrights are being transfered in writting. Since no written transfer specifying which copyrights were transfered, then no copyrights were transfered.
3) The sales agreement between Novell and SCO (Santa Cruz Operations) is the only sales document produced. The SCO Group can’t find the SCO to SCO Group sales document (they told the court and IBM that they can’t find it). This is like saying “I have a contract of sale between you and the previous owner of you house; therefor, I own your house because you sold it to me but I can seem to find the contract between you and me”.
The Asset Purchase Agreement indicates that copyrights needed for the sublicense that they purchased would be transfered.
That 95% of the license fees go to Novell and 5% to SCO shows that Novell owns the copyrights, and SCO purchased the right to act as the distributor for Novell’s property. As a distributor, SCO needed copyrights for collateral materials such as sales literature and technical documents.
SCO bought the right to sell UNIX. They didn’t buy UNIX.
The 5% that SCO gets is clearly a commission for selling licenses to Novell’s property.
We really need a version of Godwin’s law for OSNews discussions. Whosoever mentions zealotous trolls that aren’t actually present at the discussion automatically loses. It should shut down the fallacious arguments real well.
Hear, hear! A very good idea!
How hapless is this argument “Anyone who pays $100 million can’t be wrong”. That the very act of shelling out large sums of money in and of itself demonstrates the rightness of your claims. If SCO plans to argue this truly goofey notion before a court -it’s over.
many thanks – your article was an interesting read and i think you are absolutely right.
The article us to believe that it is strange for SCO to buy something and not get full ownership rights but thats the normal state of affairs for commercial software. Then he wants us to accept that Unix license holders are forever in the thral of the UNIX IPR OWNER. Its like someone who writes software for windows not being allowed to release software on another platfrom just because they know how windows works and that they should do their utmost to keep microsoft’s IPR valuable.
<sarcasm>
I bought a software sales business. Several shops. I also bought their stocks of MS Windows, MS Office etc.
Remind me tomorrow to sue microsoft for violating my copyrights to Windows and Office.
</sarcasm>
Another point people sometimes forget is that JFS was written for OS/2, NOT AIX. After getting it to work on OS/2, IBM then ported it to AIX and then to Linux. This completely obliterates any control claims TSG might wish to assert on JFS. It also demonstrates the level of greed in TSG – that they are trying to steal code written for a completely different OS simply because a port was made to an OS that was a derivative of their OS.
Even saying AIX is a derivative of SysV is speculative at this point. IBM has stated that virtually all AIX has been rewritten to eliminate SysV code. By law, a derivative must have a substantial amount of the original code still in it. I doubt AIX has enough SysV code to legally qualify as derivative.
>>Why on Earth would any company pay more than $100 million for a technology –as the SCO Group’s ancestry did for Unix–if it knew the technology could be opened to the kind of cloning that could irrevocably jeopardize the potential return on that $100 million investment?<<
Scox didn’t pay $100 million for rights to unix code. The payment was mostly in the form of stock shares. Even at that, it didn’t add up to $100 million. Scox bought rights to UnixWare, and a hugely increased distribution base.
This article is just more scox propaganda. I don’t know why osnews would bother addressing this.
While Berlind’s article is a rational discussion of what he *thinks* are the issues, they are in fact not the same issues that SCO has raised in its lawsuit against IBM. The grounds of SCO’s lawsuit have changed somewhat as the case has progressed to the discovery stage, where the parties are arguing over what documents (paper or electronic format, including code), etc., each should have to produce.
Each party’s court filings to this point are available on the Web, at Groklaw and other sites. What these documents show is that SCO’s suit against IBM as it stands now is based on two legal theories:
1. Technologies such as read-copy-update (RCU) and JFS are derivative works of Unix code to which SCO has legal rights, and IBM’s contribution of such works to Linux violated those legal rights.
There are two sub-issues concerning theory #1: (a) Technologies such as RCU and JFS must be found to be derivative works of Unix, and (b) SCO’s contract with Novell must give it the legal rights to such derivative works.
One important thing to note about theory #1 is that it does *not* involve what everyone seems to be discussing regarding this case, i.e., “cloning.” SCO isn’t even claiming to the court that one can recognize original Unix code in Linux files. (This may seem amazing concerning all the public discussion, including some by SCO corporate executives, but see SCO’s attorneys’ statements in the most recent court filings and hearing transcripts. This is why SCO contends it needs IBM to produce all its AIX and Dynix source code – because, SCO says, what IBM contributed to Linux so little resembles any original Unix code that without the AIX and Dynix ‘roadmaps’ there is no way to trace it.)
2. IBM entered into agreements with SCO regarding something called ‘Project Monterey’ where, SCO contends, IBM agreed to provide SCO all the wonderful new technologies it was in the process of developing, like RCU and JFS. But IBM decided Linux was the way to go rather than SCO Unix, so it contributed these technologies to Linux, thus, SCO says, violating the Project Monterey agreements.
The important thing to note about #2 is that for this theory to work, no copyright violation is necessary. All that is necessary is that IBM agreed to give SCO such technologies as RCU and JFS, then reneged on those agreements.
Therefore, as the court case stands now, SCO is *not contending that Linux was cloned from its copyrighted Unix code*. Rather, it contends that technologies developed by IBM up to 20 years after IBM received its Unix license should be considered derivative works to which SCO’s contract with Novell gives it the legal rights; or, alternatively, that IBM entered into contractual agreements to give those technologies to SCO and reneged on the agreements by contributing them to Linux instead.
I am not expressing any opinion whatever on the merits of SCO’s case or IBM’s defense. I just thought it was high time the actual issues before the court were explained, rather than continuing an argument that SCO isn’t making to the court, i.e., that copyrighted Unix code was literally copied into Linux.
SCO is contending that they didn’t realize that some of their code was illegally present in Linux. Furthermore, they are saying that they can’t be forced to relinquish their copyright on that basis.
That’s good. Does it also mean that since Redhat didn’t know it was distributing SCO code, they’re not wrong either?