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Novell Claims Ownership of UNIX System V 1179

Posted by michael
from the batter-up dept.
Novell has put out a press release this morning unequivocally claiming that they, and not SCO, own the patents and copyrights to UNIX System V. If true, this would torpedo SCO's claims over the last few months about intellectual property infringement in the Linux kernel, GNU/Linux distributions, etc. News.com has a story from last night, prior to this press release. SCO is releasing quarterly financial results today, including their notes about how much they've made from their licensing claims. You can join their conference call (mirror) if you like, and Bruce Perens weighs in below with a strongly-worded statement about SCO and Novell. Update: 05/28 14:22 GMT by M : SCO issued a response.

Bruce Perens writes:

"We knew that SCO's attack on Linux was a lie. But we never dreamed of the big lie behind it.

"This morning, Novell announced some of the terms of the company's 1995 agreement to sell its Unix business to SCO. The shocking news is that Novell did not sell the Unix intellectual property to SCO. Instead, they sold SCO a license to develop, sell, and sub-license Unix. The title to Unix copyrights and patents remains with Novell. To back up this assertion, Novell refers to public records at the Library of Congress Copyright Office and the U.S. Patent Office.

"In their announcement, Novell refers to recent letters from SCO asking Novell to assign the Unix copyrights to SCO. So, apparently SCO's management team knew that they did not own Unix while pursuing their sham campaign against Linux.

"Along with this revelation, Novell is reiterating its support of the Linux and Open Source developer community, and its status as a partner in that community. Novell rejects SCO's accusations of plagiarism. Novell management says they do not intend to stand in the way of the development of the Linux kernel, its companion GNU system, and other Free Software.

"It would be an understatement to say that this leaves SCO in a bad position. The company has loudly and repeatedly asserted that they were the owner of the Unix intellectual property, all of the way back to AT&T's original development of the system 30 years ago. They've lied to their stockholders, their customers and partners, the 1500 companies that they threatened, the press, and the public. Their untruthful campaign caused the loss of sales and jobs, and damaged Linux companies and developers in a myriad of ways. And now, SCO will be the lawsuit target. SCO's quarterly earnings conference call is this morning, at 9 AM MST (11 AM EST, 8 AM PST). Call 800-406-5356, toll-free, to participate. You might even get to ask a question. It should be fun to watch them try to weasel out of this one.

"Microsoft executives also have egg on their faces. The company self-servingly rushed to buy an SCO license one business day after the threat letter, bringing a senior attorney to the office on a Sunday to tell the press how much Microsoft values intellectual property. Microsoft's management could have taken the time to analyze SCO's claims, if the company had wanted this license for practical and technical reasons. Their decision to buy when they did must have been motivated by a desire to add to SCO's fear campaign. Of course they'll grab any opportunity to spread fear about Linux, but this time Microsoft bought a pig in a poke.

"SCO management, if they insist on standing in the way of a train, could still claim that software they developed in the years since 1995 is being infringed by the Open Source developers. That claim, always a dubious one, will be difficult to take seriously now that their prevarication throughout this campaign has come to light. SCO would be well advised to drop their suit against IBM in exchange for IBM's agreement not to counter-sue. But IBM might not feel that charitable toward SCO.

"In contrast to SCO, Novell's made a friend among the Free Software developers. We're always happy to see people using our software. But a real partnership between an IT vendor and our community is an equal partnership, with the company donating services and new software in exchange for the value it receives. Novell has already placed important software under Open Source licenses. Today, the company has done us a tremendous service, by stomping upon an obnoxious parasite."

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Novell Claims Ownership of UNIX System V

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  • by stu_coates (156061) * on Wednesday May 28, 2003 @10:11AM (#6056516)

    Oh my god, you /.'ed the conference call.... You bastards! ;-)

    • by Dub Kat (183404) on Wednesday May 28, 2003 @10:22AM (#6056651) Homepage
      It's useless to call in and try to ask questions about this. I'm sure it'll be brought up by the financial analysts dialed in, and the SCO people will weasel out with something like "This just came to our attention today. We will be looking at the validity of the claims but are confident blah blah blah..."

      You won't today be hearing a full-out apology to the OSS community, if ever at all. They might just quietly drop the whole thing while they figure out the next best lawsuit.

      Colocated Linux Servers - From $60/mo [aktiom.net]
      • by Bruce Perens (3872) * <bruce@perens.com> on Wednesday May 28, 2003 @10:25AM (#6056684) Homepage Journal
        They only take a few questions, and they probably do filter them for press and analysts (so say who you write for). Shankland was one of the few to get through last time. But it will be fun to listen.

        Bruce

        • New Number and Code! (Score:5, Informative)

          by augustz (18082) on Wednesday May 28, 2003 @10:48AM (#6056934) Homepage
          I called in and was given a new phone number.

          800-946-0719

          they then ask for a code after a bit of a wait and will not connect without it.

          Code is 728441

          Enjoy the call!
        • by b0r1s (170449) on Wednesday May 28, 2003 @10:53AM (#6056980) Homepage
          Wait a minute ....

          The SCO claim is that:

          " In the last 18 months, we found that IBM had donated some very high-end enterprise-computing technologies into open-source. Some of it looked like it was our intellectual property and subject to our licensing agreements with IBM. Their actions were in direct violation of our agreements with them that they would not share this information, let alone donate it into open-source. We have examples of code being lifted verbatim.
          And IBM took the same team that had been working on a Unix code project with us and moved them over to work on Linux code. If you look at the code we believe has been copied in, it's not just a line or two, it's an entire section -- and in some cases, an entire program.
          "

          They don't actually say they own the code (in this excerpt), but rather, that they have licensed it to IBM. As I'm sure you know, there are often agreements made that allow corporations to sublicense works; although Novell owns the code itself, if they granted SCO the right to license it (as they apparently have), and SCO licensed it to IBM (as they apparently have), IBM is still responsible for using it legally.

          • by LarsG (31008) on Wednesday May 28, 2003 @11:51AM (#6057652) Journal
            They don't actually say they own the code (in this excerpt), but rather, that they have licensed it to IBM. As I'm sure you know, there are often agreements made that allow corporations to sublicense works; although Novell owns the code itself, if they granted SCO the right to license it (as they apparently have), and SCO licensed it to IBM (as they apparently have), IBM is still responsible for using it legally.

            Good point. But this would also make it a pure license/contract issue between SCO and IBM - SCO does evidently not hold copyright or patent rights to the code, so they can't go after SuSE or any other GNU/Linux distributor, vendor or user.

            If IBM broke the license, SCO can get damages. But unless I'm missing something it seems like they can not go after any other party for using or distributing said code. That makes the threat letter a bit puzzling, to say the least.
          • by Quixadhal (45024) on Wednesday May 28, 2003 @12:03PM (#6057803) Homepage Journal
            However, directly from their quarterly earnings page...

            "
            About The SCO Group

            The SCO Group, Inc. (Nasdaq: SCOX), the owner of the UNIX operating system, helps millions of customers in more than 82 countries to grow their businesses. Headquartered in Lindon, Utah, SCO has a worldwide network of more than 11,000 resellers and 8,000 developers. SCO Global Services provides reliable, localized support and services to all partners and customers. For more information on SCO products and services, visit http://www.sco.com .

            SCO and the associated SCO logo are trademarks or registered trademarks of The SCO Group, Inc. in the U.S. and other countries. UNIX is a registered trademark of The Open Group. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners."

            I'll assume that "The Open Group" is something which Novell belongs to, so the trademark claim is probably OK. But they clearly claim ownership of UNIX in that opening paragraph.

            For years now, I've wondered just why anyone would choose to stick with SCO Unix when so many other versions existed, most of which are cheaper and/or more stable. When I heard that they were releasing their own Linux distro, I figured they had finally seen the end of the tunnel, and were migrating their apps to move into the application market... Of course, I didn't realize they were so bad off that trying to sue the next quarter's revenue was all they had left!

            SCO should be given the same respect that they so clearly show the rest of the community. I hope IBM's 400-pound gorilla legal-team squashes them into jelly.

          • by Anonymous Coward on Wednesday May 28, 2003 @12:22PM (#6058006)
            This is from SCO's original complaint off of the SCO website. It seems that they do think they own the code as they state in line item 18. If they don't actually own it they are being purposefully deceptive.

            17. All commercial UNIX "flavors" in use today are based on the UNIX System V Technology ("System V Technology").

            18. SCO is the present owner of all software code and licensing rights to System V Technology.
          • by EvilBudMan (588716) on Wednesday May 28, 2003 @12:32PM (#6058106) Journal
            SCO is now claiming that Novell is wrong. Check ou this article from Forbes.

            http://www.forbes.com/technology/newswire/2003/0 5/ 28/rtr984048.html
            • by slipstick (579587) on Wednesday May 28, 2003 @01:15PM (#6058543)
              Note the difference in language. SCO is being extremely weasly here. Novell is talking Patent and Copyright rights, SCO is talking "contract" rights. Presumably they have the right to subcontract their rights to IBM and others. However, this isn't what SCO has been complaining about mostly.

              Their problems with IBM may be a contract dispute but they've been actively claiming IP rights to all kinds of things to discourage Linux use. This may have something to do with the Monterey project and IBM pulling out of that. If so SCO may have a case if IBM used some of that work in Linux but this has nothing to do with System V work previous to that project. As such Linux wouldn't be in any bind except with respect to work provided by IBM with regards to the Monterey project. If SCO is claiming IBM violated rights with respect to Unix System V work, the IP rights of which are held by Novell, than SCO is going to get crushed like a bug.
              • by bwt (68845) on Wednesday May 28, 2003 @02:44PM (#6059506) Homepage
                Novell is talking Patent and Copyright rights, SCO is talking "contract" rights.

                SCO's reply states: "Copyrights and patents are protection against strangers. Contracts are what you use against parties you have relationships with."

                This gives them no possible cause of action against anyone in the Linux community other than organizations that willingly entered into a contract with SCO. Moreover, it means that their entire case here can only be against IBM, for trade secret infringement of code that SCO itself published, which is not going to work. Yet SCO, by trying to claim trade secret protection on elements of the version of linux that they were shipping still violates the GPL clause 6 "You may not impose any further restrictions on the recipients' exercise of the rights granted herein."

                Would some kernel contributor wake up and sue SCO for copyright infringement, please.
          • Give the Sco vs IBM position paper a read (http://www.opensource.org/sco-vs-ibm.html) it's quite informative. One of the main contentions is that the functionality in Linux far exceeds any matching functionality in SCO's code. That being the case you would wonder how they were able to borrow code from SCO?

            (The best explanation so far [I believe from here on SlashDot]: IBM coders used cut and paste instead.)
        • by DG (989) on Wednesday May 28, 2003 @11:59AM (#6057755) Homepage Journal
          I'm on now - and it has started.

          8.3 million in revenue from SCO Source licencing.

          6000 licences.

          They intend to increase these licences as they "agressively protect our intellectual property rights"

          1/3rd of their projected earnings is from licencing, the rest is from OS products.

          Lots of rah-rah "our best quarter ever" "we have eliminated all long-term debt"

          The core business is still selling SCO UNIX

          (which as an aside, means that you really cannot afford a wave of consumer hostility, can you?)

          Looking to provide "subscription-based" services.

          They have cash in the bank.

          Their prime focus is defending themselves against Linux.

          A nod towards the Novell thing - "SCO owns the UNIX contract rights" not the UNIX trademarks or IP.

          A list of customers is presented... British Army just bought an asset/lifecycle management system for helicopters based on SCO UNIX

          "SCO Source" is their new shakedown unit. 2 big licencees - one is secret, the other is Microsoft. Microsoft bought a licence for "Microsoft services for UNIX" putting UNIX source into Windows (?)

          IBM is NOT the secret licencee.

          They claim 3 code teams found violations where their code was in Linux, independantly.

          No mention of what code, where.

          Ahhhh... something makes sense now. Their Linux sales were tanking hard - they were making more money off SCO UNIX. So they're out to go toe-to-toe with Linux (a big part of which is anti-Linux FUD)

          Q&A now starting:

          First question mentions Novell release and asks for explicit listing with the code violations. They claim IBM has them (?)

          Claim Novell blew them off; that there was a meeting yesterday that Novell skipped.

          They refuse to publish the violations publically.

          Next question is about how long the SCO Source revenue stream is likely to be. So far, they claim two contracts. No way to quantify how many contracts are in the pipeline.

          What is happening Jun 14th re IBM/AIX? They will revoke the AIX licence. Details will follow.

          Next question is from a capital company, asking about aquisitions. They want to get into web services, interact with Java and .net.

          They claim 2.2 million SCO servers - original business plan was to migrate those to Linux, and they lost money doing that. So now they want to keep those people on SCOX (at $1500 a server)

          Nothing about why those people should stay on SCO when they have Linux readily availible....

          Mr Wall Street thinks SCO is going to gain some short-term cash.

          They think that their stock price spike reflects market confidence in SCO vs Linux

          Another venture capitalist.... wants to know if licence deals will drive SCOX product sales.

          They used SCO Source to raise capital instead of going to veture capital.

          Next question asks for an estimate on legal costs. So far they are below their legal budget, but they are in for the long haul and are ready for countersuits.

          Next caller wants to know why SCO was asking for transfer of UNIX copyrights from Novell and why they were denied. SCO doesn't seem to know what they own. They claim they own the UNIX copyrights, based on a contract review of the Novell contracts. They feel they can go toe-to-toe with Novell and win that fight too.

          Next question wants to know if SCO has abandoned Linux sales. They claim lots of people are putting Linux implementation on hold, and that Linux "leadership" is dismissive to SCO IP rights. SCO is probably done with Linux. Caldara upgrade path is SCO UNIX.

          That's it.

          DG
    • Re:Conference Call (Score:5, Informative)

      by AEton (654737) on Wednesday May 28, 2003 @10:55AM (#6057009)
      Instead of /.'ing the phone lines, try the live Web stream -- it can probably withstand a few more hits:
      http://biz.yahoo.com/cc/0/30510.html [yahoo.com]
    • Staying Power (Score:5, Informative)

      by Anonymous Coward on Wednesday May 28, 2003 @12:09PM (#6057876)
      Are you guys listening to the conference call? The speaker was codemning Linux for having "millions of lines of code"...

      I got in just before the Q/A session. I took rough notes. I'm not skilled in the art of dictation, so you should assume the following is a fictional drama loosely based on reality, which happens to be extremely dificult to read. The part about Novell doing a no show at a scheduled meeting yesterday is interesting... Apologies to non-native-English speakers-- I'm too busy to clean this up.

      Questions denoted "Q:", answers denoted "A:".

      By the way, SCO is pronounced as one syllable, "sko", with a long "o". Hence SCO X is pronounced "sko-ex" and SCOsource "sko-source". ick...

      Q: About the IBM suit: when will you put out info regarding allegations?

      A: there are two parts:
      1) in discussing with IBM, they've been made aware, we continue to work path with IBM...
      2: novell announcment, response from 1500 letters has been significant, lots of companies asking what is going on, "am i running compromised?, is it illegal , who do i talk to?" we have people get their own legal opinions, second, we have invited people that have licenses with us, who are concerned, to come in, under nda, to be glad to go thru things we found. in novell case, they called last week about letter, we said we can sit down with them. set to meet Novell yesterday at 11AM and Novell didn't show up, then they sent out a letter saying SCO won't meet with them, and issues the press release.

      Q: the info wrt allegations will not be made public?

      A: correct

      Q: comment on visibility of SCO source revenue stream. How long expect it to be a contribution to revenue. others?

      A: started last quarter, had 8.2 million in revenue. SCOsource 1/3 of this. signed 2 contracts so far...

      Q: any way to quantify?

      A; range is very broad. for the coming quarter roughly 1/3 of revenue from SCOsource...

      Q: will you be able to disclose other contracted party in future?

      A: ... [short answer: no]

      Q: what happens on June 14th with IBM? About their AIX license?

      A: we will revoke their AIX license if no resolution. exact details, not ruling out, can't say definitively,

      Q: do ou anticipate coming to a resolution before 6/14?

      A; that question is for the other folks...

      Q: Nice quarter guys... can you share [question doesn't sound interestng to Linux folk, but is about busines stategy]

      A: [Answer is very long-winded-- speaker is happy to answer this one]

      Q: [question from same person about business particulars]

      A: ...

      Q: [ditto]

      A: ....

      Q: [question about SCO X and SCOsource contract values in relation to new products]

      A: [... he incidentaly mentions SCO is debt-free and has cash]

      Q: [how much money set aside in defending IP claims?]

      A: we have a lot of "staying power" [ :) ] to pursue claims and defend claims. amount we spent [on legal fees] is less than amouut we budgeted.

      Q: is legal structure based on contingency [A: yes] and does it include countersuits? [A: yes]

      Q: Novell said this morning SCO asked Novell to transfer UNIX IP...

      A: We haven't mentioned "copyright" or "patents". Everything we listed is about the contracs [with IBM]... that is our focus. There was confusing language with Novell/SCO agreement... this doesn't make any sense... how do you transfer IP without the copyright?... like selling a book w/o the words... some Novell people said this makes no sense... they concluded "if SCO wants this Novell wants it too"... legal people read contract in entirety... it's clear we [SCO] own the copyrights... ... a four party group, 2 SCO, 2 Novell, concluded the contract says SCO has absolute rights to push this in marketplace... [emphasized it's not about copyrights, etc...]

      Q: Suspension o
  • by mschoolbus (627182) <travisriley@@@gmail...com> on Wednesday May 28, 2003 @10:11AM (#6056525)
    Will the real Unix owner, please stand up, please stand up...
    • by gerf (532474) <edtgerf@gmail.com> on Wednesday May 28, 2003 @10:19AM (#6056620) Journal

      Will the real Unix owner, please stand up, please stand up...

      or, "Who owns the code code to the Unix source? SCO does.

      who me?

      yes you.

      Couldn't be

      Then who?

      Novell owns the code to the Unix source

      who me?

      Yes you.

      continue...

      Ah, shit, why don't we just call it all open source and be happy.

      • by Anonymous Coward on Wednesday May 28, 2003 @11:04AM (#6057100)
        May I have your attention please?
        May I have your attention please?
        Will the real UNIX Owner please stand up?
        I repeat, will the real UNIX Owner please stand up?
        We're gonna have a problem here..

        Y'all act like you never seen linux source code before
        Jaws all on the floor like Bruce, like Linus just burst in the door
        and started whoopin that SCO's ass worse than before
        they were first with the source, throwin it over IBM (Ahh!)
        It's the return of the... "Ah, wait, no way, you're kidding,
        he didn't just say what I think he did, did he?"
        And Novell Man said... nothing you idiots!
        Novell Man's dead, he's locked in my basement! (Ha-ha!)
        Kernel lovin men love Novell too
        SCO UNIX, I'm sick of it
        Look at them, walkin around suing users' you-know-what
        Flippin the you-know-who, "Yeah, but he's so cute though!"
        Yeah, SCO probably got a couple of screws up in the head loose
        But no worse, than what's goin on in their corporate boardrooms
        Sometimes, I wanna get on Slashdot and just let loose, but can't
        but it's cool for Cowboy Neal to spread his lie caboose
        "My source is on your lips, my source is on your lips"
        And if I'm lucky, you might just give it a little kiss
        And that's the message that we deliver to little kids
        And expect them not to know what an OS's source code is
        Of course they gonna know what linux sourse is
        By the time they hit fourth grade
        They got the Discovery Channel don't they?
        "We ain't nothing but hackers.." Well, some of us are slackers
        who cut other people open like smashed crackers But if we can hack a dead OS and take our source
        then there's no reason that a man and his penguin can't recourse
        But if you feel like I feel, I got the antidote
        Men here wave anti-SCO flags, sing the chorus and it goes

        I'm UNIX Owner, yes I'm the real Owner
        All you other UNIX Owners are just lying loaners
        So won't the real UNIX Owner please stand up,
        please stand up, please stand up?
    • by kenthorvath (225950) on Wednesday May 28, 2003 @11:08AM (#6057147)
      Repeat after me Linux Is Not UniX. Damn Linus couldn't have named it any more perfectly if he had thought of lame recursive acronyms...
  • Finally (Score:5, Interesting)

    by IpsissimusMarr (672940) * on Wednesday May 28, 2003 @10:12AM (#6056537) Journal
    For now, we demand that SCO either promptly state its Linux infringement allegations with specificity or recant the accusation made in your letter. Further, we demand that SCO retract its false and unsupported assertions of ownership in UNIX patents and copyrights or provide us with conclusive information regarding SCO's ownership claims.

    Finally, SCO being put in its place. I just wonder why this took so long for Novell to bring up.
    • Re:Finally (Score:5, Interesting)

      by xanadu-xtroot.com (450073) <xanadu.inorbit@com> on Wednesday May 28, 2003 @10:18AM (#6056614) Homepage Journal
      I just wonder why this took so long for Novell to bring up.

      My feeling on that is rather simple, actually. They had to make for 100% damn sure that they were right in what they were gonna say to the public. They've probably dumped millions into lawyers over the past few weeks / months to make for SURE that SCO is / was wrong. THAT is probably what took so long.

      Or maybe it's just they're not doing all that well since M$ took over the Network arena.

      Oh... right, I forgot... M$ has been giving money to SCO...

      Hmmm...
      • Re:Finally (Score:5, Insightful)

        by arivanov (12034) on Wednesday May 28, 2003 @10:50AM (#6056951) Homepage
        It was brought up on the day of the earnings call you silly.That is the only reason for the delay ;-)

        It is called "Open fire with the main armament from point blank range".

        • +1 to the parent. It's like in the song "battle of New Orleans"
          The seargent said we could catch 'em by surprise

          If we didn't open fire till we looked 'em in the eyes.
          I'm guessing that Novell was PISSED about SCO making excessive claims about owning UNIX(TM). It probably did take them a couple of days to verify that SCO was pumping more feces out of their mouth than the NY sewage service then it was a case of deciding when to release the info.

          This morning would be the best time to do so because SCO is already comitted to a press conference that they cannot cancel or delay.
          lock, stock and two smoking barrels.

          Oh, man I sooo want to source a class-action libel suit against SCO.

          • I finally got thru to their site.. I'm really happy to see that somebody is threatening to sue SCO over their lies innuendo and prevarication. If/when they do sue SCO, hopefully they'll make it a class action lawsuit.

            PROVO, Utah -- May 28, 2003 -- Defending its interests in developing services to operate on the Linux platform, Novell today issued a dual challenge to The SCO Group over its recent statements regarding its UNIX ownership and potential intellectual property rights claims over Linux.

            First, Novell challenged SCO's assertion that it owns the copyrights and patents to UNIX System V, pointing out that the asset purchase agreement entered into between Novell and SCO in 1995 did not transfer these rights to SCO. Second, Novell sought from SCO facts to back up its assertion that certain UNIX System V code has been copied into Linux. Novell communicated these concerns to SCO via a letter (text below) from Novell® Chairman and CEO Jack Messman in response to SCO making these claims.

            "To Novell's knowledge, the 1995 agreement governing SCO's purchase of UNIX from Novell does not convey to SCO the associated copyrights," Messman said in the letter. "We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected."

            "SCO claims it has specific evidence supporting its allegations against the Linux community," Messman added. "It is time to substantiate that claim, or recant the sweeping and unsupported allegation made in your letter. Absent such action, it will be apparent to all that SCO's true intent is to sow fear, uncertainty, and doubt about Linux in order to extort payments from Linux distributors and users."

            "Novell has answered the call of the open source community," said Bruce Perens, a leading proponent of open source. "We admire what they are doing. Based on recent announcements to support Linux with NetWare services and now this revelation...Novell has just won the hearts and minds of developers and corporations alike."

            Text of the letter from Novell to SCO:

            Mr. Darl McBride
            President and CEO
            The SCO Group

            Re: SCO's "Letter to Linux Customers"

            Dear Darl:

            As you know, Novell recently announced some important Linux initiatives. These include an upcoming NetWare version based on the Linux kernel, as well as collaboration and resource management solutions for Linux.

            Put simply, Novell is an ardent supporter of Linux and the open source development community. This support will increase over time.

            It was in this context that we recently received your "Letter to Linux Customers." Many Novell business partners and customers apparently received the same letter. Your letter compels a response from Novell.

            As we understand the letter, SCO alleges that unnamed entities incorporated SCO's intellectual property into Linux without its authorization. You apparently base this allegation on a belief that these unnamed entities copied some UNIX System V code into Linux. Beyond this limited understanding, we have been unable to glean any further information about your allegation because of your letter's vagueness.

            In particular, the letter leaves certain critical questions unanswered. What specific code was copied from UNIX System V? Where can we find this code in Linux? Who copied this code? Why does this alleged copying infringe SCO's intellectual property? By failing to address these important questions, SCO has failed to put us on meaningful notice of any allegedly infringing Linux code, and thus has withheld from us the ability - and removed any corresponding obligation - to address your allegation.

            As best we can determine, the vagueness about your allegation is intentional. In

    • Re:Finally (Score:5, Interesting)

      by RobotRunAmok (595286) * on Wednesday May 28, 2003 @10:24AM (#6056670)
      Finally, SCO being put in its place. I just wonder why this took so long for Novell to bring up.

      Because SCO's earnings call is THIS morning.

      This isn't just a smackdown, this -- today's release, the Perens-for-the-Prosecution piece on Page One of SlashDot, along with the divulging of the Conference Call Phone Number (nice one, that!) -- is a highly-coordinated strike meant to drop a tactical nuke down their shorts. This is calculated to not just damage SCO but make their Corporate Headquarters a Dead Zone for the next Three Thousad Years.

      Nice Work, everyone! Proud to be a small part of it, even if only as a witness.
    • Re:Finally (Score:5, Interesting)

      by pbranes (565105) on Wednesday May 28, 2003 @10:43AM (#6056873)
      This is very interesting. In SCO's response to Novell, they acknowledge that they do not own Unix, and they are only suing IBM for breach of contract:

      SCO's lawsuit against IBM does not involve patents or copyrights.

      However, in the press release about the stock holder's conference call, they state this:

      The SCO Group (NASDAQ: SCOX), the owner of the UNIX operating system...

      Sounds like SCO is doing a little backpedaling in the Yahoo article. :-)

  • by mj01nir (153067) * on Wednesday May 28, 2003 @10:14AM (#6056551)
    Here is Novell's informative press release [novell.com] on the matter. A juicy excerpt:

    "SCO continues to say that it owns the UNIX System V patents, yet it must know that it does not. A simple review of U.S. Patent Office records reveals that Novell owns those patents.

    "Importantly, and contrary to SCO's assertions, SCO is not the owner of the UNIX copyrights. Not only would a quick check of U.S. Copyright Office records reveal this fact, but a review of the asset transfer agreement between Novell and SCO confirms it."

    Of course, this doesn't address the "source code theft" issues, but hopefully this will shut SCO up about the UNIX IP issues.
    • Full text of release (Score:5, Informative)

      by Anonymous Coward on Wednesday May 28, 2003 @10:24AM (#6056675)
      Some stupid-ass language selector JSP is stalled (who uses JSP to put up a press release?!) so here's the text:

      Novell Challenges SCO Position, Reiterates Support for Linux

      PROVO, Utah -- May 28, 2003 -- Defending its interests in developing services to operate on the Linux platform, Novell today issued a dual challenge to The SCO Group over its recent statements regarding its UNIX ownership and potential intellectual property rights claims over Linux.

      First, Novell challenged SCO's assertion that it owns the copyrights and patents to UNIX System V, pointing out that the asset purchase agreement entered into between Novell and SCO in 1995 did not transfer these rights to SCO. Second, Novell sought from SCO facts to back up its assertion that certain UNIX System V code has been copied into Linux. Novell communicated these concerns to SCO via a letter (text below) from Novell® Chairman and CEO Jack Messman in response to SCO making these claims.

      "To Novell's knowledge, the 1995 agreement governing SCO's purchase of UNIX from Novell does not convey to SCO the associated copyrights," Messman said in the letter. "We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected."

      "SCO claims it has specific evidence supporting its allegations against the Linux community," Messman added. "It is time to substantiate that claim, or recant the sweeping and unsupported allegation made in your letter. Absent such action, it will be apparent to all that SCO's true intent is to sow fear, uncertainty, and doubt about Linux in order to extort payments from Linux distributors and users."

      "Novell has answered the call of the open source community," said Bruce Perens, a leading proponent of open source. "We admire what they are doing. Based on recent announcements to support Linux with NetWare services and now this revelation...Novell has just won the hearts and minds of developers and corporations alike."

      Text of the letter from Novell to SCO:

      Mr. Darl McBride
      President and CEO
      The SCO Group

      Re: SCO's "Letter to Linux Customers"

      Dear Darl:

      As you know, Novell recently announced some important Linux initiatives. These include an upcoming NetWare version based on the Linux kernel, as well as collaboration and resource management solutions for Linux.

      Put simply, Novell is an ardent supporter of Linux and the open source development community. This support will increase over time.

      It was in this context that we recently received your "Letter to Linux Customers." Many Novell business partners and customers apparently received the same letter. Your letter compels a response from Novell.

      As we understand the letter, SCO alleges that unnamed entities incorporated SCO's intellectual property into Linux without its authorization. You apparently base this allegation on a belief that these unnamed entities copied some UNIX System V code into Linux. Beyond this limited understanding, we have been unable to glean any further information about your allegation because of your letter's vagueness.

      In particular, the letter leaves certain critical questions unanswered. What specific code was copied from UNIX System V? Where can we find this code in Linux? Who copied this code? Why does this alleged copying infringe SCO's intellectual property? By failing to address these important questions, SCO has failed to put us on meaningful notice of any allegedly infringing Linux code, and thus has withheld from us the ability - and removed any corresponding obligation - to address your allegation.

      As best we can determine, the vagueness about your allegation is intentional. In response to industry demands that you be more specific, you attempt to justify your vagueness by stating, "That's like saying, 'show us the
  • by crivens (112213) on Wednesday May 28, 2003 @10:14AM (#6056554)
    That's hilarious! Especially the part saying "you repeatedly asked us to transfer ownership over the past three months" (words are my own). If this is true, then it shows what SCO has been doing is extremely, extremely immoral. They knew they had no basis for suing IBM and for demanding that companies license SCO, but they did it anway to try to make some money. All I want to know is, who's idea was it - Microsoft's? ;)
    • by bogie (31020) on Wednesday May 28, 2003 @11:03AM (#6057091) Journal
      "All I want to know is, who's idea was it - Microsoft's? ;)"

      I know your joking, but once a company lies to the court, fakes videos in court, and has dead people sending letters to the Attorney General of Utah, can you trust them not to do anything that's illegal?

      Microsoft has proven without a doubt they are one of the most immoral, corrupt, and untrustworthy companies in the world. After their trackrecord of lies and illegal acts it really couldn't be a surprise to anyone that Microsoft was behind this whole thing.
  • AT&T (Score:4, Funny)

    by budcub (92165) on Wednesday May 28, 2003 @10:14AM (#6056563) Homepage
    How long before AT&T makes a statement of being the "real" owner of Unix?
  • by The Slashdolt (518657) on Wednesday May 28, 2003 @10:15AM (#6056565) Homepage
    Business Week has interviewed the CEO of SCO Darl McBride here [businessweek.com]. McBride gives some tips as to where IBM may have used their code. Specifically:

    " In the last 18 months, we found that IBM had donated some very high-end enterprise-computing technologies into open-source. Some of it looked like it was our intellectual property and subject to our licensing agreements with IBM. Their actions were in direct violation of our agreements with them that they would not share this information, let alone donate it into open-source. We have examples of code being lifted verbatim.
    And IBM took the same team that had been working on a Unix code project with us and moved them over to work on Linux code. If you look at the code we believe has been copied in, it's not just a line or two, it's an entire section -- and in some cases, an entire program. "

    • by twitter (104583) on Wednesday May 28, 2003 @12:35PM (#6058134) Homepage Journal
      McBride gives some tips as to where IBM may have used their code.

      Hints, horeshoes and hand granades are all useless in court. What wonders and marvels does he have that have yet to be expressed in any SCO product besides Caldera Linux? It's not there.

      Why is it that they don't point to it explicitly? Surely it's not to protect publically publishes source code, nor can they care much about actual damages if they don't send specific cease and dissist orders. Anything they point to can be rewritten without trouble. The only reason is that it's not there.

      It's not here, it's not there it's not anywhere. The whole case is some kind of weird sham for the M$ PR department.

      Still want that $100 one time fee, McBitch? Yeah, that's what I thought. Why don't you go buy me a happy meal and we'll call it even.

  • TV (Score:5, Funny)

    by DreadSpoon (653424) on Wednesday May 28, 2003 @10:15AM (#6056567) Journal
    This could make an excellent soap opera. All we need now is a love triangle in this SCO/Novell/Linux/UNIX/IBM mess!
  • by Lumpy (12016) on Wednesday May 28, 2003 @10:15AM (#6056575) Homepage
    All I can say is.... this is getting really funny. it's like everyone is coming out of the woodwork with whatever sticks they have to beat the SCO beast into submission.

    what's next in this saga?
    • by TheRaven64 (641858) on Wednesday May 28, 2003 @11:45AM (#6057583) Journal
      what's next in this saga?

      Novell discovers that they don't actually own the IP anymore. They sold it to MS a while back when they were short of cash.

      Next week we'll find out who MS sold it to.

      The week after, we'll find the relevant patents on eBay, and an intense bidding war going on between MS and IBM.

  • W00t!!! (Score:5, Funny)

    by da' WINS pimp (213867) * <dart27 AT gmail DOT com> on Wednesday May 28, 2003 @10:16AM (#6056578) Journal
    This makes me proud to be a Novell admin! After all the years of abuse from *nix and even Windo$e admins I can stand proud behind a company that does the right thing. ;)

    Proud Novell Admin, pimpin' to keep Bill in business.
  • Unix (Score:5, Funny)

    by gmuslera (3436) on Wednesday May 28, 2003 @10:16AM (#6056582) Homepage Journal
    Multiuser, multitasking, and now, multiowner!

    At this point, I'm not sure if I want it to be owned by everybody or by nobody, but at least being "owned" by two is better than by (a bad) one.

  • by Cally (10873) on Wednesday May 28, 2003 @10:17AM (#6056590) Homepage
    ROFLM~F~AO!

    Like everyone else I got all got all pissed off with Caldera/SCO for their petty, vindictive & malicious behaviour. But now look at 'em... the management team will never work again in corporate America, the company will be bust quicker than you can say "busted flush", and the shareholders (if there's any justice) will be left with nothing. How hilarious! :))

  • SCO replies (Score:5, Informative)

    by prostoalex (308614) on Wednesday May 28, 2003 @10:17AM (#6056597) Homepage Journal
    That was quick [yahoo.com]:

    The following statement is being issued by SCO (Nasdaq: SCOX - News):
    SCO owns the contract rights to the UNIX® operating system. SCO has the contractual right to prevent improper donations of UNIX code, methods or concepts into Linux by any UNIX vendor.

    Copyrights and patents are protection against strangers. Contracts are what you use against parties you have relationships with. From a legal standpoint, contracts end up being far stronger than anything you could do with copyrights.

    SCO's lawsuit against IBM does not involve patents or copyrights. SCO's complaint specifically alleges breach of contract, and SCO intends to protect and enforce all of the contracts that the company has with more than 6,000 licensees.

    We formed SCOsource in January 2003 to enforce our UNIX rights and we intend to aggressively continue in this successful path of operation.

    • Re:SCO replies (Score:5, Insightful)

      by Drakon (414580) on Wednesday May 28, 2003 @10:21AM (#6056636) Journal
      While this may be true, any and all complaints against the distributors and users of linux is completely and utterly shot down. They also can't even ask for the offending code to be removed, since they don't own the patents or copyrights to it.
      • Re:SCO replies (Score:5, Interesting)

        by SquareOfS (578820) on Wednesday May 28, 2003 @10:39AM (#6056820)
        In other words, Novell (assuming they do in fact retain copyright) can make this go away for Linux simply by, at whatever point SCO reveals what source was theoretically copied into Linux, slapping a copyright notice on the appropriate files and granting GPL on the code involved.

        Unless, of course, what SCO means by having the "contract rights" to Unix involves having the exclusive right to license the source (but if so, why didn't they say so?). And, how exactly would posessing the exclusive right to license be different from copyright itself?
      • Re:SCO replies (Score:5, Interesting)

        by Quila (201335) on Wednesday May 28, 2003 @10:50AM (#6056956)
        From SCO's response, it appears they think that although they didn't buy the copyright, they did contract the exclusive distribution rights to the code. This appears to be like how Pixar contracted the exclusive distribution rights to its movies to Disney. Nobody can distribute all or parts of Toy Story except for Disney under the contract.

        This wouldn't make it a copyright violation, but a contract violation that could have a serious ripple effect. We can't know until Novell or SCO releases the relevant terms of the contract.
    • Re:SCO replies (Score:5, Insightful)

      by wrero (314883) * on Wednesday May 28, 2003 @10:39AM (#6056826)
      Contracts are what you use against parties you have relationships with.

      Funny, I thought "Contracts" were a method for doing business in good faith with people, not just something to be used for frivolous lawsuits....
  • Number Changed (Score:5, Informative)

    by mobileskimo (461008) on Wednesday May 28, 2003 @10:17AM (#6056599) Journal
    800-946-0719 for the Conference Call
  • by flyingace (162593) on Wednesday May 28, 2003 @10:19AM (#6056626) Journal
    So what did MS buy from SCO ?

    And most importantly, how much did they buy it for ?
    • by Seanasy (21730) on Wednesday May 28, 2003 @11:08AM (#6057153)
      So what did MS buy from SCO ?

      1500 threatening letters to companies using Linux. That amounts to a whole lot of Fear, Uncertainty and Doubt. SCO's claims don't have to be true to do the kind of damage the MicroSoft wants done to Linux. After all, didn't MS warn companies that they might get sued for using Linux? Convenient.

    • by Drakon (414580) on Wednesday May 28, 2003 @11:22AM (#6057337) Journal
      A license to the UNIX source code, which (see above) Novell granted SCO an exclusive license to sell.
      Apparently they have some product in the pipeline which would be easier to create with the unix source... probably interoperability or that text-mode windows server we were hearing about
  • by phr2 (545169) on Wednesday May 28, 2003 @10:27AM (#6056703)
    IpsissimusMarr already asked that question but I figured it needs a new thread heading. That this didn't come out earlier, even as leaks, is suspicious. Xanadu-xtroot's explanation (they were waiting til their lawyers got the letter phrased absolutely right, that the assertions were correct, etc) reaches for plausibility but isn't entirely convincing.

    How the heck did SCO buy "Unix" without buying the copyrights? Why have they been in discussion (dispute?) between SCO and Novell for the past several months? Novell's letter has qualifiers like "to our knowledge" when it says SCO doesn't own the copyrights. It sounds like the Novell-SCO agreement has been flawed all along and nobody knows what the real situation is.

    I think there are yet more layers to this madness waiting to be unpeeled.

  • by Bootsy Collins (549938) on Wednesday May 28, 2003 @10:28AM (#6056713)

    Heh, I submitted this seemingly seconds before it was posted by Michael.

    The press release link at Novell in the story appears to have been replaced with a blank page, at least for now. This story [theinquirer.net] at the Inquirer includes a copy of the letter that Novell's CEO sent to SCO's CEO Darl McBride. Good stuff.

  • Stock (Score:4, Informative)

    by Waab (620192) * on Wednesday May 28, 2003 @10:28AM (#6056715) Homepage

    Down 4% since the market opened this morning, half of that in the last 20 minutes.

    NASDAQ: SCOX [nasdaq.com]

  • Computing History (Score:4, Insightful)

    by Organic_Info (208739) on Wednesday May 28, 2003 @10:29AM (#6056719)
    This will be one of those saga's that become a part of computing history.

    The plot twists and turns are making this into a very intersting story.
  • by Gizzmonic (412910) on Wednesday May 28, 2003 @10:29AM (#6056725) Homepage Journal
    You know, where the bad guy (SCO) comes out and talks trash about the good guy (IBM). Then when the good guy comes out to attack him, he gets jumped by another bad guy (Microsoft). And then just as they're about to pummel the hell out of IBM, Novell comes out of the crowd brandishing a folding chair...

    Next week they'll be a tag match to determine the UNIX championship...in the cage!
    • hehe.... (Score:5, Funny)

      by notque (636838) on Wednesday May 28, 2003 @10:36AM (#6056790) Homepage Journal
      Then Novell and IBM are walking to the ring, accompanied by Bruce Pearns.

      IBM and SCO start out, with IBM teasing a test of strength, SCO begins, but gets scared and immediately tags in Microsoft.

      Microsoft and IBM go at it, with Microsoft gaining the upperhand. IBM is almost down and out, when a diving tag in to Novell.

      HOT TAG!

      Novell clears house, and the crowd is going wild, SCO gets back up, and they start double teaming both until

      CHAIRSHOT!

      Bruce Pearns jumps out from the side, and knocks Novell out!

      JIM ROSS: "OH MUH GOD! THEY'VE BEEN DOUBLE CROSSED!"
  • by Anonymous Coward on Wednesday May 28, 2003 @10:31AM (#6056737)
    Based on SCO's response, claiming that no patent or copyright issues are involved, then Linux and Linux users are safe from any action by SCO EVEN IF SCO WINS AGAINST IBM. I certainly hope SCO doesn't win, but even if they do, since the entirety of their claims are contract based, and NOT copyright or patent based, the Linux code base can't be touched.
  • eniac (Score:5, Interesting)

    by dollargonzo (519030) on Wednesday May 28, 2003 @10:33AM (#6056756) Homepage
    This whole thing has really started to remind me of the eniac patent suit. As soon as some technology starts to take off (long after it has actually been created), some larger adversary comes out and tries to threaten the validity of the original claims.

    The exact same thing happened when Sperry (the company that bough Eckert and Mauchly's company, which made UNIVAC) was sued for rights to the ENIAC patent (that Mauchly and Eckert at the time held). No one had contested that Eckert and Mauchly had designed the first electronic computer, but instead had hooked onto details in the patent file. Ironically, IBM was in a very similar position as it is with the SCO/Linux problem. IBM has cooperated with open source to a great degree, just as it had licensed Eckert and Mauchly's products and was seen as a supported of the "dark side" by SCO, just as they were seen by those trying to strip E & M of their patents.

    History really has a funny way of repeating itself
  • Founder confusion? (Score:4, Interesting)

    by linuxislandsucks (461335) on Wednesday May 28, 2003 @10:38AM (#6056810) Homepage Journal
    Is not the Founder of Novell also the founder of SCO Group?

    You would think he would have warned the SCO Group board about their own stupidity, no?
  • by geirt (55254) on Wednesday May 28, 2003 @10:39AM (#6056823)
    It looks like SCO might have stolen code from Linux, according to this post on the linux kernel mailing list [iu.edu]
  • by mzs (595629) on Wednesday May 28, 2003 @10:41AM (#6056849)
    SCO just reported net income of $4.5 million on revenue of $21.4 million for the second quarter. $8.3 million of that revenue came from its UNIX licensing program, SCOsource, CNET [com.com]. It appears that all of that licensing revenue came from Microsoft and the other licensee that has not been disclosed. If you disregard the income from licensing, SCO would have had another net loss on their hands. In fact they would have pulled in $2.4 million less in net income this quarter than the same quarter last year.

    Their stock price is down today, so maybe The Street finally sees that the reality of the situation is that their operating systems division is failing. It is ironic that SCO made a profit selling licences to something that Novell now claims it 'owns' but I really cannot make sense of this mess any more. So maybe I just misundersand how SCO can sell licenses to something that Novell opwns the copyrights to.

  • by gwappo (612511) on Wednesday May 28, 2003 @10:42AM (#6056855)
    If SCO owns the contracts but not the code, I find the following statement on their website [caldera.com] a tad strange:

    SCO is the owner of the UNIX Operating System Intellectual Property that dates all the way back 1969, when the UNIX System was created at Bell Laboratories. Through a series of mergers and acquisitions, SCO has acquired ownership of the patents, copyrights and core technology associated with the UNIX System

    I.e. they're fucked.

    Many kudo's to Bruce Perens for his obvious behind the scenes lobbying and to Novell for trying to pamper the community (hope they succeed, they're a cute, insignificant little friendly, furry, huggable company and deserve a profitable niche in todays market).

  • Stock Performance (Score:5, Interesting)

    by Dunkirk (238653) <david@@@davidkrider...com> on Wednesday May 28, 2003 @10:43AM (#6056865) Homepage
    Did anyone notice this?! I wasn't paying attention.

    SCO 's Stock Performance [cnet.com]

    I think it's high time that the SEC got involved here.
  • by Asprin (545477) <gsarnold@3.14yahoo.com minus pi> on Wednesday May 28, 2003 @11:07AM (#6057135) Homepage Journal
    SCO: "Oh, no, we were NEVER suing for patent infringment - it was ALWAYS a contract dispute over the LICENSING of the code." So, Novell, how'd you like to make about a kajillion new fans? License the code to IBM for a buck. SCO is irrelevant, problem solved. P.S. Didn't I hear somewhere that NW7 is going to be a services based connectivity, authentication and management layer running on Linux? Samba? LDAP? NIS? ACLs? THAT would be cool.
  • by XaXXon (202882) <xaxxon&gmail,com> on Wednesday May 28, 2003 @11:30AM (#6057413) Homepage
    They just said that there were 244 people on the conference call vs 17 people last quarter (or was it two quarters ago? -- either way there's a lot more).

    They are talking about the MS SCO licensing deal. Not much info.

    They're talking about the IBM lawsuit.. just that they sued them, didn't specify the amount. Said that in June they'd revoke the AIX UNIX license.

    Talking about the Linux letter.. that they sent to everyong. Said they found code violations -- not saying what code. Said 3 teams came back with "significant code problems". Said they were legally advised to send letters to enterprise users of Linux to advise misappropriation of code.

    Regarding Linux: "Millions of lines of code without knowing where they came from" -- almost a quote. Very close. Grrr.. pissing me off.

    Q&A session coming soon... :) This ought to be fun. I'll kharma whore with another post on that as it comes...
    • by dr.newton (648217) on Wednesday May 28, 2003 @11:53AM (#6057684) Homepage
      It seemed at first that he was being pretty careful with his wording, with stuff like: "SCO owns the contract rights to the UNIX platform." But then...: "As the owners of the UNIX operating system..." They just said in their press release this morning that they never said they owned it, just the "contract rights" to it. It seems to me that this guy doesn't really understand the situation, that he was told by his lawyers "You can make money here" and he just believed them. He doesn't understand the difference between "derived from UNIX" and "works like UNIX". He even implicated that Sun might be a licensee of their source code, which, IIUC is false, Sun bought out their UNIX license before SCO got hold of even the limited rights to it they have.
  • by E1ven (50485) * <e1ven@nospaM.e1ven.com> on Wednesday May 28, 2003 @11:30AM (#6057418) Homepage
    From his Speech, on the Conferance Call-

    "Last year we had 7 callers for our earnings, this year we have over.. 240 callers on the line"

    Behold the Power of Slashdot.

    Slashdotting a Telephone.

    -Colin
  • SCO Letters (Score:5, Interesting)

    by the eric conspiracy (20178) on Wednesday May 28, 2003 @11:32AM (#6057445)
    While IANAL, I hold 12 patents and have been involved in a variety of legal wrangles involving patents.

    It would be very interesting to see the letters that SCO sent out. If they weren't worded very carefully, and they include assertions of IP rights that SCO in fact doesn't own they could definitely trigger a rash of lawsuits.

    When I was working in this field we were VERY careful when we went trolling for license fees. Something like:

    Dear Sirs:

    It has come to our attention that you may want to consider licensing the following patents (list numbers here).

    Signed
    XYX Patent Attorney.

    No claims of infringement etc. Just a word to the wise. The recipient would then decide what sort of position they were in and respond with something like:

    Dear XYX:

    We are interested in #47, and would like to offer a license to our #53 in exchange.

    (In other words, yeah, we might be doing #47, but we think you are doing #53)

    -or-

    We are not interested. (Prove it).

    -or-

    We invented that long before you patented it and here is a copy of our documentation of the fact.

    And so on.

  • by LibertineR (591918) on Wednesday May 28, 2003 @11:36AM (#6057487)
    Suppose Microsoft did have a hand in this?

    Now, SCO is about to get their asses sued off by some very angry competitors, and what if they decide to squeal that the whole thing was Microsoft's idea in the first place?

    Oh brother, this could get NASTY.

    Even if Microsoft was just suckered in by the potential to do damage to Linux, SCO can make it very embarassing to Microsoft. This could be a lot more fun to watch than previous lawsuits.

  • by XaXXon (202882) <xaxxon&gmail,com> on Wednesday May 28, 2003 @11:59AM (#6057751) Homepage
    Waiting on the Q&A session...

    First question(sounds like a /.'er) -- when are the violations going to be made public?
    Only under NDA because of ongoing litigation.

    What about the Novell announcement this morning?
    Novell called last week re: the letter. Time set up yesterday morning at 11am. They didn't show up for the meeting. Later sent the letter -- saying SCO should publish the offenses.

    "Is my linux illegal?"
    SCO says people should talk to their own lawyers.

    Come June 13 if no resolution with IBM -- revoke AIX license.
    Details are not being disclosed. Not saying they can't sell AIX -- no real answer.

    Blah blah blah about uninteresting stuff.. web services strategy and stuff.. stuff about acquisitions. Blah blah..

    They just said they used to be moving people from UNIX to Linux, but when they did that, they lost a lot of money, and they basically said the customer got the same thing in terms of services. So now they're switching them back for a lot more money. Wow. That's ballsy.

    Haha. sorry. Little stuff I find funny.

    They say they're sort of looking at buying companies in the 4-5 million dollar (up to maybe 10 million dollars) range. Apparently their stock is doing pretty well.

    How much will it cost to go after infringers? Is that being budgeted for?
    structure with legal council for staying power -- pursuing and defending claims. First quarter of activitiies -- came in below budgeted amount. Set up for the long haul. Feel good about the legal structure.

    Is that legal structure related to contingency?
    Yes
    Does that include counter suits?
    Strucutred so that depending on how those come int hat they may be included in it.

    I have no idea what that means.

    Novell said SCO execs had asked for UNIX copyrights. It was denied. Why was this denied?
    Stuff with IBM isn't related to copyright or patent. Focused on contracts. "By an order of magnitude" more powerful than copyright or patent. Language in contract between novell and SCo was confusing -- as they looked at it and said "this doesn't make sense".. SCO thinks it's confusing -- they call 'em up cuz SCO knows 'em. "If SCO wants it, then we want it too." As SCO brings in attorneys, they do a review on it and read the contract in its entireity -- SCO says they own copyrights -- that they can enforce that and the patents. Talked to all parties in agreement -- two people in NOVELL, two in SCO -- CEOs and legals of each side. Says intent was everything was transferred to SCO. Maybe some little things that are common.. Feel confident that they have the copyright and patent rights.

    Suspension of linux sales -- given small amoutn of money from linux sales -- do you forsee SCO returning to selling Linux?
    We would only return to Linux once the issues were resolved with Linux and "the community". SCO seems to be getting further away from that path (of selling linux). Claims are very strong and valid and customers are saying "time out here" begfore we do this big linux implementation, we nee to understand what's goign on. Linux leadership -- we like a lot of stuff about open source.. blah blha -- our intellectual property was being abused. Having more problems with that. Fruther from going back to Linux than closer.

    What woudl you recommend for previous caldera users looking for an upgrade path? What recomendations?
    Linux is "UNIX on Intel" UnixWare, and openserver. UnixWare can go anywhere linux can go. Lost ground while chasing the linux dream?

    • by Bootsy Collins (549938) on Wednesday May 28, 2003 @12:08PM (#6057864)

      I also listened in on the conference call; wanted to ask a question but didn't get a chance.

      The parent poster already said this, but given the size of the post and the fact that it was being written during the call (and thus somewhat stream-of-consciousness in style), I wanted to emphasize one thing: SCO's CEO McBride stated during the call that they're confident that they do own the copyrights (which would mean Novell's claim of ownership in the press release must therefore be false, if SCO were correct).

  • by atheos (192468) on Wednesday May 28, 2003 @12:03PM (#6057797) Homepage
    http://netscape.com.com/2102-1104-992345.html

    SCO exec sells stock after price surge
    By Stephen Shankland
    CNET News.com
    March 13, 2003, 5:05 AM PT
    URL: http://zdnet.com.com/2100-1104-992394.html

    SCO Group Chief Financial Officer Robert Bench sold 7,000 of his 245,000 SCO shares Monday, two business days after the Unix software company's stock price surged on news of a billion-dollar lawsuit against IBM, according to a filing with the Securities and Exchange Commission.

    SCO's stock closed at $2.21 on Thursday, a few hours before the lawsuit alleging that IBM misappropriated SCO trade secrets was announced. On Friday, the stock surged 40 percent to close at $3.10, and Bench filed to sell shares Monday at $3.06. SCO's stock since then has slipped down to close at $2.40 on Tuesday. SCO formerly was named Caldera International but changed its name to reflect the fact that most of its revenue came from Unix products acquired in 2001
  • by brandido (612020) on Wednesday May 28, 2003 @12:07PM (#6057845) Homepage Journal
    The text of SCO's response sounds like a junior high student wrote it:
    Copyrights and patents are protection against strangers. Contracts are what you use against parties you have relationships with. From a legal standpoint, contracts end up being far stronger than anything you could do with copyrights.
    Normally, press releases try to sound businesslike and professional - the use of "you" in this announcement makes it sound like an entreaty to the reader to "please take our side, please believe us!" For me, it ended up making the press release sound rushed, unprofessional, and like they are starting to loose their cool.
  • by lunenburg (37393) on Wednesday May 28, 2003 @12:12PM (#6057902) Homepage
    I dialed into the conference call, secure in the knowledge that I may have cost SCO $0.50 for using their 800-number. Highlights (Lowlights?)

    • They got $8.8M in revenue this quarter from their SCOsource licensing program. All the revenue came from two agreements - one with Microsoft, another with an unnamed company.

    • Aside from the extortion racket, their other big plan for future revenue is "SCO/X" - a "web services" platform running on SCO. They somehow see a huge demand for ASP stuff (they mention salesforce.com as an example) running on their third-rate platform.
      They mentioned potential $3B in revenue from SCO/X, based apparently on everyone who owns a SCO server buying an equiavelent number of SCO/X boxes at $1500

    • There is "confusing" language in the Unix agreement between Novell and SCO. Novell is taking a hard line on ownership of Unix, but all four people who signed the transfer agreement (two for SCO, two for Novell) say that the intent was to transfer all rights to SCO.

    • If IBM doesn't pay up by June 13th, SCO will terminate their AIX license.

    • The financial impact from terminating the SCO/Caldera Linux business was "minimal" - no shit.

    • They won't be making the disputed bits public, but they welcome affected people to check it out at SCO's office under an NDA.

    • They have a legal team working on a contingency basis with respects to the extortion - minimal cost to SCO if they lose.

    • The chance of SCO getting back into Linux is small. (Awwwww)
  • by Larthallor (623891) on Wednesday May 28, 2003 @12:51PM (#6058292)
    First off, I was able to get in using the original number from Bruce. I had to give my full name, phone number, and company. For company, I said that I was a private citizen and had no problems getting in.

    I came in a bit late, but I don't think I missed much, as the SCOSource bit wasn't discussed until later. Also, I got in on all of the questions. I was disappointed that Bruce Perens didn't get to ask a question.

    From what they said in the beginning and from the answers to the questions (most of which were fairly typcial financial questions from financial analysts, btw) here is what I got out of it. Be advised that this is just one person's interpretation of what SCO is saying and that IANAL.

    1. The suit against IBM doesn't depend upon IP ownership via copyright or patents, per se. It is a suit based on breach of contract between SCO and IBM. The original contract (license) between IBM and the then-owner of the rights included a stipulation against sharing this code or IP. Needless to say that any alleged releasing of this code under the GPL would qualify. SCO has the right to sue, because it purchased the license rights from Novell.

    2. The language of the rights transfer from Novell to SCO seems to have been considered rather unclear by SCO about whether the actual IP ownership (copyright and patents) of UNIX(tm) had been transferred. After much research by SCO and it's counsel, they believe that they do, in fact, now own the copyrights and pertinent patents to UNIX(tm). Included in the research was discussions with lower-level contacts within Novell and with the principals of the earlier deal, many of whom no longer appear to be in power at Novell.

    3. While it's true that the suit against IBM doesn't derive any legitiamcy from IP ownership (see 1), due to SCO's belief that it owns the IP of UNIX(tm) SCO believes that future lawsuits may be brought against anyone infringing on what SCO believes to be their IP, with or without a license agreement based on copyright or patent laws.

    4. SCO now feels confident that a court proceeding to settle any dispute between SCO and Novell would be resolved in their favor.

    My personal conclusions:

    A. While Novell's stance certainly helps against SCO's activities (at least it buoys morale and adds a corporate voice against SCO), it is not the end of the IP issue. It seems that SCO is prepared to legally assert it's claims to the IP ownership, despite this morning's announcement by Novell.

    B. Novell's announcement will marginally help against the FUD created by SCO's actions. However, I believe that only the most ardent and brave Linux supporters in corporate management will feel better enough to proceed if they were at all concerned. The rest will put off any decision to switch because there is still too much uncertainty and risk to their own stature and careers.

    C. The FUD about Linux will continue until the alleged violations are made public enough to allow either a solid refutation or code replacement.

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