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SCO Gives Notice To 6,000 Unix Licensees 442

Posted by timothy
from the litigious-devotion dept.
inode_buddha writes "This article describes SCO's recent letters to its UNIX licensees, asking them to certify that they '...are not using Unix code in Linux.' It also notes another set of letters '...outlining additional evidence of copyright infringement to a subset of 1,500 global Linux users that SCO first contacted in May about copyright infringement.' There's also a decent breakdown of the company's balance sheet and some quotes from company officials. I hope to see one of those 'other' letters; could anyone post it? SCO better have asbestos underwear." Ask and receive: idiotnot adds "Here's the article from the Sydney Morning Herald. Here is a PDF Copy of the letter." "Yours truly"?
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SCO Gives Notice To 6,000 Unix Licensees

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  • by Gary Whittles (735467) on Tuesday January 06, 2004 @09:01AM (#7890049) Journal
    By sending out these clearly fraudulent legal notices-- which at best claim copyright over something which is uncopyrightable, and at worst is an attempt by a third party to claim that it is illegal for people to use the materials owned by the BSD regents under the BSD license in the manner in which the BSD regents intended the BSD license to be used-- has SCO opened itself up to legal action?

    SCO has in the past managed to sidestep most allegations of fraud by being horrendously vague. They said that they were owned money but never sent any invoices, sidestepping mail fraud. They tried to present things as if you needed an SCO license to use linux, but if you tried to talk to talk to them, they were actually selling UnixWare licenses and not in the process actually distributing linux to you, sidestepping GPL violations. However, this is entirely non-vague. It seems to me that SCO has stepped over some sort of line here and this is actionable.

    I know that the law does not seem to have many consequences for people who send out bad takedown notices, but surely there must be something preventing company A from finding lists of competitor B's customers and sending them takedown notices for using some portion of competitor B's product that company A does not, in fact, own.

    At the least, can this be added to the lanham act/ restraint of trade/ libel or whatever countersuits that Redhat and IBM have going? What are the options from here, and what will actually happen?
  • by jridley (9305) on Tuesday January 06, 2004 @09:09AM (#7890086)
    From the article:
    SCO also announced its first full year of profitability today, reporting $5.3m in net income for its 2003 financial year

    The company would have reported net income of $14.3m for the year had it not reported a charge of nearly $9m to pay law firms involved in the lawsuit and related efforts to "enforce its intellectual property rights", SCO officials said.

    So, any bets on how long after all the SCO claims are thrown out as frivilous until the shareholders sue the officers for throwing money away on lawyers instead of paying dividends?

    The officers are legally required to maximize shareholder value. Spewing frivilous lawsuits like a leaky hose doesn't qualify.

  • by YanceyAI (192279) * <yanceyai@yahoo.com> on Tuesday January 06, 2004 @09:10AM (#7890100)
    SCO also announced its first full year of profitability today, reporting $5.3m in net income for its 2003 financial year, which ended 31 October, despite legal fees paid out to wage its Unix copyright fight. That fight began when SCO in March filed a $1bn lawsuit against IBM for allegedly breaching its Unix licensing contract.

    Unfortunately, they still turned a profit.

  • by shanen (462549) on Tuesday January 06, 2004 @09:12AM (#7890108) Homepage Journal
    This is really getting loony--but I just realized that time is up. It's already been about a month since SCO was told to produce some REAL goods. It's obviously some sort of diversionary move, but a really crazy one. I'm straining my brain to understand it, but all I can think is that they want to claim this is how they are "protecting" their IP rather than performing normal due diligence. I bet the judge is not going to be amused. Can you say "contempt of court"?

    Remember the NORMAL non-SCO behavior is to say what the disputed IP actually is--but in that case the problem--if there is any real problem--would have been fixed LONG ago. Want to take any bets if there's any code in the 2.6 Linux kernel that has ANY relation at all to anything from SCO?

    In related news, SCO admits they paid $9 million to the lawyers last year--but also claims they managed to clear $5 million net. Which number do you trust more? I say the 5 is just more FUDging.

  • Why would I do that? (Score:5, Interesting)

    by CaptainZapp (182233) * on Tuesday January 06, 2004 @09:12AM (#7890112) Homepage
    asking them to certify that they '...are not using Unix code in Linux.'

    Running my own small business the question arises why I should certify anything to anyone who has no official business of requesting my certification?

    Specifically when it comes to a company who makes the likes of Enron look like a convention of boy scouts?

  • by routerwhore (552333) * on Tuesday January 06, 2004 @09:21AM (#7890159) Homepage
    The fraud questions occurred to me as well. The conclusion I came to was that these enterprises that are paying for the "licenses" are doing so just to be safe, but ptobably with the full idea that soon SCO will be proven wrong and then the tables are turned. They will be dragged into court civilally by everyone of the organizations that paid, if not prosecuted full out for fraud and sent to jail. There is a pot of gold at the end of this rainbow.
  • by eddy (18759) on Tuesday January 06, 2004 @09:29AM (#7890213) Homepage Journal

    Saw this on the Yahoo board [yahoo.com]:

    "From The Wall Street Journal, 1/5/2004, page B1, by Lee Gomes:"

    "As for Linux, when will the courts halt the lies of has-been software maker SCO (with $13 million in funding from Microsoft and Sun -- together at last!) as it tries to make the preposterous claim that it, and not the world, owns the free operating system?"

    Not even the business press is taking them seriously any more.

  • by walterbyrd (182728) on Tuesday January 06, 2004 @09:35AM (#7890248)
    The company would have reported net income LOSS of $9.7m for the year had it not reported one time fud money donations form msft and sunw.

    Without those fud money donations, what will 2004 look like?
  • by Anonymous Coward on Tuesday January 06, 2004 @09:41AM (#7890293)
    Actually, you only need to certify that "we are in compliance with our licence".

    The questions fall into 2 categories:
    - covered by the licence that the licensee signed.
    - not covered by the licence.

    If the question *is* covered by the licence, then you don't need to answer [as your compliance with the licence covers this].
    If the question is *not* covered by the licence, then you have no reason to answer it. [note that SCO does not have the right to amend these licences]

    Hence, it's a waste of paper.
  • by soyle (196995) <soyle@so y l e . org> on Tuesday January 06, 2004 @09:57AM (#7890416) Homepage
    So a judge told SCO to come up with evidence within 30 days from December 5 [groklaw.net].

    Would this evidence be the list of header files as printed in this letter [sco.com], or has SCO chosen not to disclose anything further?

    Is that 30 business days or 30 human days?
  • Any bets (Score:2, Interesting)

    by maroberts (15852) on Tuesday January 06, 2004 @09:57AM (#7890418) Homepage Journal
    On how many of its 6,000 licensed customers are going to remain customers after this letter?

    I'll set my marker for 1000
  • by Ih8sG8s (4112) on Tuesday January 06, 2004 @10:11AM (#7890526)
    I read the PDF of the letter.

    This letter assumes the guilt of all its licencees until proven otherwise. SCO is demanding corporate HR documents (non-disclosure) for each employee who might come in contact with their software stating that they will follow the licence and letter provisions to the T. The letter also seems to suggest that users of SCO software must swear under threat of legal action never to use Linux, and never to develop GPL software. Unbelievable.

    If there was any doubt before, there is none now. This letter can't possibly be seen as anything but insulting, even by historically staunch SCO supporters. I've never seen such arrogance. I feel like I'm reading Hitchhikers' Guide to the Galaxy.

    DIE SCO. I can't wait to read that SCO has finally died, and that its officials and officers are being brought up on criminal charges. What a bunch of fucking crooks.

  • by milo_Gwalthny (203233) on Tuesday January 06, 2004 @10:18AM (#7890565)
    This is actually rather clever. SCO is not claiming that the licensees are using their code in violation of the license, they are asking the licensees to certify that they are not. This puts the licensees in a difficult position: they have absolutely no idea whether or not they are violating the license. They will not want to respond that they are not, because that could come back to haunt them. So, they either have to not respond at all, thus facing the retraction of their license, or (my personal favorite) say they are not violating "to the best of our knowledge." This last might drag them into a legal dispute with SCO.

    SCO is like the insane man on the street: he's almost certainly harmless, but nobody wants to get embroiled with him anyway. Thus the dilemma for licensees. For SCO, they end up with many more legal targets.
  • by Anonymous Coward on Tuesday January 06, 2004 @10:20AM (#7890589)
    Sounds like a dangerous approach to me, thanks to the "not limited to". You admit you are using other "UNIX-based" products, which is part of the whole fishing operation. Stick to the self-termination of the Unixware licenses. If you still have the CDs and shrinkwrap licenses, or the license numbers, send them back to them to emphasize the point. What system is used to replace their product is none of their business. For all they need know, it could be Windows :-)
  • by Billly Gates (198444) on Tuesday January 06, 2004 @10:23AM (#7890622) Journal
    MOD UP!

    Your post is to the point.

    All these developers and companies who use Unix will not be sued if they want to switch to Linux of BSD. If not under the false pretenses that Linux has stolen code, but rather violating a license agreement.

    IF they refuse, SCO can then threaten to sue them claiming they have no respect for their IP.

    So they can never run free software at all. Very crafty and slimy indeed.

    I sense SCO is planning on a backup to keep them afloat if the IBM case fails. They will just sue companies and individuals who are stupid enough to sign such agreements.

    Sorry if your server can not support Unixware, then you must run Windows. Ugh.

  • by eric76 (679787) on Tuesday January 06, 2004 @10:32AM (#7890709)

    It would be funny if they terminated someone's license for running Caldera Linux.

    I wonder if they claim that Caldera Linux infringes.

  • by whuppy (33165) on Tuesday January 06, 2004 @10:38AM (#7890742)
    IMHO, that letter creates a "case or controversy." Now it's time for everyone who received one of them to go to court and file for a declaratory judgment against SCO. This should be fun.
  • by jbolden (176878) on Tuesday January 06, 2004 @10:38AM (#7890744) Homepage
    1) SCO does not own the rights to UNIX (in any sense such rights could exist the open group owns them). This is another one of there false claims. They own the right to use AT&T code in their UNIX product, and they own the right to call Unixware a Unix which is the same rights as IBM, Sun, SGI, etc... have. Be careful about beliving anything they say about their case

    2) They can't terminate the licenses, even if someone answered yes to these questions. The very paragraph they quote gives them the right to ask about the CPUs deploying Unixware not every CPU in the company (bolding mine)

    On request, but not more frequently than annually,
    Licensee shall furnish to SCO a statement, certified by an
    authorized representative of Licensee, listing the location,
    type and serial number of all Designated CPUs
    hereunder and stating that the use by Licensee of Software Products subject to this Agreement has been reviewed and that each
    such Software Product is being used solely on such
    Designated CPUs (or temporarily on back-up CPUs) for
    such Software Products in full compliance with the
    provisions of this Agreement.

  • ok, on to reality... (Score:2, Interesting)

    by i2878 (736937) on Tuesday January 06, 2004 @10:40AM (#7890766)
    So I've got one SCO Openserver box licensed with 2 CPUs. As well, I've got a couple RedHat machines. I'm certainly on some SCO customer list - I was required to register the CPU's. Let's say I get one of these letters, and I hand it over to our company lawyers. I don't believe the request has merit, but that is likely to matter little to anybody other than me in this non-tech company. Even if I say they don't have any right to sue us, that will mean little on the way to the courtroom - or even for management considering the risk. Unless I throw the letter away (tempting) I will likely be expected to respond as directed under the license.
  • by walterbyrd (182728) on Tuesday January 06, 2004 @10:45AM (#7890818)
    Has it been actually verified that these letters were really sent? Since this scam began, scox has told numerous lies of this nature. Here are a few examples of scox's outright lies (from a yahoo poster):

    Lie: We've gone in, we've done a deep dive into Linux, we've compared the source code of Linux with UNIX every which way but Tuesday
    Truth: Experts have shown that SCO used a simple, primitive text search based on a few keywords.

    Lie: SCO's expert witnesses are "MIT Mathematicians".
    Truth: Among various backpedaling statements, Paul Hatch, a SCO spokesman, wrote in a statement to The Tech ,"'To clarify, the individuals reviewing the code had been involved with MIT labs in the past, but are not currently at MIT."

    Lie: SCO received the D&T Fast 500 recognition because of the strong UNIX market, IP enforcement and the Web services strategy
    Truth: SCO made the list because of revenue growth due exclusively to the Tarantula acquisition.

    Lie: The IP protection legal team is on pure contingency
    Truth: The legal team is billing at a 2/3 discounted rate with the possibility of contingent commissions

    Lie: Boies was compensated $1.6M for a contingent event
    Truth: The engagement agreement specifically excludes heritage UNIX OEM license deals; Boies is being compensated 20% of the $8MM Microsoft license deal, which is a follow-on extension of the first deal, a UNIX license deal not eligible as a contingent event.

    Lie: Invoices will be mailed to Linux users by October 15, 2003
    Truth: No invoices were ever mailed.

    Lie: We will show rock solid evidence at SCOForum in Las Vegas
    Truth: SCO was quickly shown to not have any ownership of the SCOForum evidence

    Lie: The Berkeley Packet Filter code in Linux is "obfuscated" SCO code.
    Truth: Jay Schulist, who never had access to SCO code, implemented it from scratch.

    Lie: SCO's 2002 UNIX source release was "non-commercial" and excludes 32-bit code
    Truth: "The text of the letter, sent January 23, 2002, by Bill Broderick, Director of Licensing Services for Caldera [now SCO], in fact makes no mention of "non-commercial use" restrictions, does not include the words "non-commercial use" anywhere and specifically mentions "32-bit 32V Unix" as well as the 16-bit versions."

    Lie: We have been off meeting for the last several months with large corporate Linux end users. The pipeline is very healthy there.
    Truth: The pipeline is empty. All inquiries have been to assess SCO's claims and liability exposure.

    Lie: We have done additional signups for Linux end-user licenses. We have a number of folks that are in the evaluation process, and we definitely have a lot of interest in what's going on there.
    Truth: During the earnings conference, SCO admitted that not a single Linux end-user license has been sold. Follow-on guidance comments warn that no such sales are expected in Q1.

    Lie: Our claims are not trivial.
    Truth: Based on evidence provided to date, SCO's claims are extremely trivial, debunked in a matter of hours

    Lie: claims that SCO has are both broad and deep.
    Truth: SCO's has made a breach of contract claim and a copyright infringement claim; all evidence presented to date has shown each of these claims to be trivial and unfounded

    Lie: These claims touch not, just not IBM, but other vendors as well.
    Truth: Exhaustive code reviews by other SYSV licensees, including HP and SGI, have shown that the only Linux/SysV overlap concerns a small amount of public domain code.

    Lie: (To the Utah Judge on 12/5) SCO will make a copyright claim in two days, but no longer than a week
    Truth: Many weeks later and a copyright claim has not yet been made.

    Lie: During the recent road tour, Blake Stowell indicated that core operations were profitable in Q3.
    Truth: Core operations lost $3.8MM in Q3-03.

    Lie: Sco will audit AIX users.
    Truth: It never happend.

    Lie: Sco will revoke IBM rights to use, support, or distribute AIX.
    Truth: Those rights can not be revoked by scox.
  • Anyone else going .. (Score:2, Interesting)

    by Sarrek (738402) on Tuesday January 06, 2004 @10:49AM (#7890859)
    "What the Heck is SCO Smoking when they write theses things?"

    Also, Didn't the "SCO .. Either Put up or Shut up" Deadline pass yesterday ?
  • by Jaywalk (94910) on Tuesday January 06, 2004 @10:50AM (#7890872) Homepage
    You don't want to respond to their letter at all. The letter begs the question of whether SCO really owns the code, so it's sort of like answering the question, "Do you still beat your wife?" If you answer, you've given their legal team another piece of ammo.

    You've also identified yourself as someone who can be bullied and someone who is not getting good legal advice, just the guy SCO is looking for. If SCO ever actually does sue an end user, they want someone who will pay the fee just to avoid the legal costs. That gives them the appearance of legitimacy and might lead to more people caving in. The last thing they want is for someone to fight back. A savvy lawyer will probably raise the issue of Novell's claims to the same copyright and say something like, "Gee. your honor, shouldn't we find out who really owns the code before we start paying for it?" Once that happens, the jig is up. Everyone else will make the same argument and SCO gets no money until the copyright case with Novell is settled, which could take years.

  • by maroberts (15852) on Tuesday January 06, 2004 @11:05AM (#7891036) Homepage Journal
    Is to terminate the SCO licence and install Linux/ BSD/ your favourite OS on the machines.
  • RICO Lawsuit (Score:4, Interesting)

    by b-baggins (610215) on Tuesday January 06, 2004 @11:25AM (#7891243) Journal
    I'm still trying to find out why none of these companies has filed an extortion suit against SCO.
  • I don't get SCO (Score:2, Interesting)

    by GreatBallsOfFire (241640) on Tuesday January 06, 2004 @11:57AM (#7891622)
    Out of curiosity, how many companies does this really affect? The copyright infringement on code used in the Linux kernel can only be source code, as the copyrighted code could not possibly used in binary form for inclusion in the Linux kernel. So, how many companies have source licenses? IBM, HP, Sun, Motorola, and the US government? Who else? This sems to be directed at a very small number of companies, not 6000.

    I guess what I'm really driving at is that this is an obvious FUD attempt. I'm sure the vast majority of licensees are binary licensees. Also, they specifically mention the ABI, which was a specification published by AT&T, in publicly available books sold by Prentice-Hall, prior to SCO owning the copyright. If I write code to meet this published ABI specification, there will be similarities just because there is only a finite number of ways to implement it for any given platform. The SCO claim is so weak as to almost be non existent.

    As I've said many times before, I would not rush to sign any agreements, especially this one. There are certain statements that would severely limit your rights.

    One final note. How about an interesting mind game. If I manufacture hardware, and distribute SysV and/or Linux with it, and SCO yanks my distribution license, doesn't it hurt SCO? After all, I can still sell Linux boxes, stop paying SCO royalties, sue SCO for pro rated refund of license fees already paid, and switch my SysV code to something else such as OSF/1 or *BSD. With the exception of the pain of the last step, i.e., inability to ship to unix customers for many, many months, I don't suffer a great deal. Isn't SCO shooting themselves in the foot?

    I am not a lawyer, and this is only my opinion. Please seek legal counsel prior to making any decisions related to this topic.
  • by WCMI92 (592436) on Tuesday January 06, 2004 @12:02PM (#7891689) Homepage
    " Who wants to bet many future eula's will include a clause that requires you to certify your complience with the terms upon request..."

    Wanna bet?

    That kind of overt heavy handedness would almost certainly drive more corps to go for GPL/BSD licensed software.

    The BSA's blackmail has already been the best Linux/OpenOffice marketing campaign of all time.

    Notice that you don't hear as much about the BSA threatening to raid schools and municipalities like we did a year or so ago... This is a stupid thing for the BSA to do anyway, as they INVITE legislation to limit extra clauses above what copyright law allows them to put into their EULA...

  • Re:IBM buying SCO, (Score:2, Interesting)

    by An Onerous Coward (222037) on Tuesday January 06, 2004 @01:15PM (#7892549) Homepage
    Not necessarily. It depends entirely on the value of the stock at the time IBM would purchase SCO. At the current valuation, it would certainly be a huge victory for SCO.

    Now, if IBM succeeds in slamming them back down to $0.05 per share, then buys them out and releases Sys V UNIX into the public domain, that would be a pretty strong, "Don't screw with IBM" message.
  • by Tony (765) on Tuesday January 06, 2004 @01:32PM (#7892710) Journal
    That's all well and good; admirable, even. But, SCO doesn't care if they lose Unixware licensees. They aren't making money off Unixware anyway, and it costs money and effort to upkeep, and they have to deal with pesky user problems.

    They just want you to send them money. It's the perfect business: no product, no staff, just a lot of money rolling in due to the past efforts of other, complete strangers (both on the Unix side and the Linux side), and the gullibility of people who believe every official-looking letter they receive.

    SCO is comprised of every kind of sheister who ever followed a get-rich-quick pyramid scheme, put sawdust in the tranny, or used inferior concrete and rebar when building a dam a mile up the river from a town. They don't care about anyone else, nor the consequences of their actions, nor whether they actually deserve the money.

    It's the money that matters, not the users. And if they can get rid of the actual users in the process, all the better.
  • Re:Para 7.10 (Score:4, Interesting)

    by rongage (237813) on Tuesday January 06, 2004 @01:48PM (#7892851)

    The Law of the Land, however, does grant you the right to sell, lease or otherwise transfer or dispose of your own property

    Dude: this is why software in this country is licensed and not sold. The software manufacturers here in the states want to maximize their profits, so they license the software to you *but not sell it*. This allows them to impose all sorts of additional conditions and terms on the use of said software.

    Unfortunately, there are several court cases here in the states that establish this as the way things are - regardless of the "looks like a sale, acts like a sale" bit that occurs when you purchase a retail box at your local store.

I judge a religion as being good or bad based on whether its adherents become better people as a result of practicing it. - Joe Mullally, computer salesman

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