August 11, 2004

Legal bungling sank SCO Group's investigation against DaimlerChrysler

Author: Chris Preimesberger

NewsForge has found that The SCO Group, which purports to have ownership of all Unix System V code, was also fishing for usage of its proprietary code in Linux systems when it filed a lawsuit March 3 against multinational automaker DaimlerChrysler -- even though the actual complaint said otherwise. On paper, the lawsuit alleged only that DaimlerChrysler had not recertified with SCO Group the use of its old Unix code, as required by the original license contract between Chrysler Motors Corp. (now DaimlerChrysler) and AT&T Information Systems (which owned the Unix code at that time).

In fact, DaimlerChrysler proved that it had complied with the original license by certifying its use of Unix System V code with SCO Group on April 6, 2004, 11 weeks before Michigan Judge Rae Lee Chabot's dismissal of most of the case on July 21. DaimlerChrysler IT manager Norman Powell did this by attesting that no SCO-owned code had been used in DaimlerChrysler's shop for more than seven years, thus there were no CPUs to be accounted for. (With thanks to Pamela Jones at Groklaw, see DaimlerChrysler's Motion for Summary Dismissal, dated April 15, 2004.)

DaimlerChrysler: Full compliance led to a de facto agreement

"DaimlerChrysler has provided SCO with a certification that complies with the express requirements of Section 2.05 (of the original contract with AT&T Information systems)," the company said on Page 24 of its 54-page Motion for Summary Dismissal. "Specifically, the DaimlerChrysler letter provides SCO with the required information about Designated CPUs (explaining that none are in use); certifies that an authorized person reviewed DaimlerChrysler's use; and states that no software product licensed under the subject agreement is being used or has been used in more than seven years, and as a result, there is full compliance with the provisions of the subject agreement," DaimlerChrysler said.

SCO Group then accepted DaimlerChrysler's certification response, company spokesman Blake Stowell told NewsForge. Thus, a de facto agreement between the two companies was reached, although it was not noted in any court record. "We were satisfied that DaimlerChrysler did finally certify their compliance with the existing software agreement," Stowell said.

Then why didn't SCO Group drop the suit, after its customer (DaimlerChrysler) offered its explanation of compliance on April 6?

"One of the reasons our lawyers decided to pursue the case is that I think they wanted to investigate further whether DaimlerChrysler had any possible misuse of our code within Linux in their systems," Stowell said on Monday.

Why the lawyers' plan backfired in court

However, the SCO lawyers' plan backfired when Judge Chabot stuck to the letter of the complaint, which dealt strictly with certification of Unix System V code usage, and threw out all but one point. The fact that the case was all but dismissed by the court made it appear to be a ringing victory for DaimlerChrysler. Furthermore, "DaimlerChrysler was not obligated to tell us anything about their use of Linux," Stowell said.

In fact, DaimlerChrysler believes that it wasn't required to do anything about the lawsuit. "We're not under license to SCO," DaimlerChrysler spokeswoman Mary Gauthier told NewsForge Tuesday. "Our license was with AT&T, and we never received notice that the license had been transferred to SCO or anybody else."

Nonetheless, DaimlerChrysler was accommodating enough to have one of its IT managers do some research and certify the company's use -- or, as it turns out, its non-use -- of the old SCO code. No DaimlerChrysler employee had used SCO Unix code in any kind of development for seven years, according to DC IT manager Powell.

Was DaimlerChrysler surprised to learn that SCO had ulterior motives for wanting to keep the case alive in court?

"It's not for us to be surprised as to what SCO's motives were," Gauthier said. "Although there were some unusual things said by the SCO CEO at his press conference on the day they filed the suit against us (March 3, 2004) that we didn't quite understand."

What Gauthier was referring to was SCO Group CEO Darl McBride's comments that shed some light on why DaimlerChrysler and AutoZone -- which was served with a lawsuit the same day -- were selected from hundreds of SCO licensees as litigation targets.

"One thing to think about here is that these are not just two users that we randomly picked," McBride said on March 3. "They're basically at the head of two different classes of end users that we feel are violating our agreements or our copyrights. And that's the two groups -- one is source code licensees; and then the other group is Linux end users that we feel are violating our copyrights."

More litigation to come?

McBride recently told a SCO conference that his company will pull back on starting new lawsuits, saying that his company wants to "have our claims heard before a court." However, will SCO Group continue its investigation into whether DaimlerChrysler is somehow using proprietary Unix code in its Linux systems?

"I don't know," Stowell said. "I can't answer that. It's up to our lawyers."

"We have a lot of systems, and a lot of Linux in those systems," Gauthier said. "But the SCO lawsuit was about Unix, not Linux."

For the DaimlerChrysler case, SCO Group retained the Southfield, Mich., firm of Seyburn, Kahn, Ginn, Bess and Serlin. The New York City-based firm, Boies, Schiller & Flexner, handles SCO's overall legal strategy and was the conduit between SCO and the Michigan firm.

Attorney Mark Heise, based in Boies' Miami, Fla., office, did not return multiple calls for comment from NewsForge on Tuesday. Nor did Steven Froot, based in Boies' New York City office. Heise and Froot are among the lead lawyers working with SCO on all its litigation. The admins for both lawyers told NewsForge that they were in their offices Tuesday.

Asked why the law firm decided to continue pursuing the case despite the fact that SCO itself had said it was satisfied with DaimlerChrysler's compliance document of April 6, attorney Barry M. Rosenbaum of Seyburn, Kahn told NewsForge Tuesday that "we believe there is more to the case," but that he couldn't go into detail about it.

"Obviously, we disagree with any assertion that we had no case. That's all I can say at this point," he said.

DaimlerChrysler's Gauthier said: "As far as we're concerned, we have a trial date set for January (2005). Until we hear something different, we're preparing for it."

Stowell said he does not believe SCO Group will pursue the final point in the Michigan case that is still open: Why DaimlerChrysler didn't respond to the certification request in a reasonable amount of time after it was mailed last Dec. 18.

An earlier report said that SCO Group sent the original certification request to an address no longer used by DaimlerChrysler, and that the letter didn't get delivered in a timely fashion to the correct company executive. "That doesn't make sense," Stowell said. "You mean they couldn't have had it forwarded internally to the right person? The fact is, DaimlerChrysler responded to us only after we filed the lawsuit."

In fact, DC responded to SCO on April 6 -- about a month after the lawsuit was filed -- explained its legal point of view, and offered certification information. This information is all included in the motion filed on April 15. That meant DaimlerChrysler took about three and a half months to respond to SCO's first letter on Dec. 18, 2003 requesting an accounting of its Unix System V code.


  • Legal
Click Here!