May 5, 2008

As the SCO rolls

Author: Steven J. Vaughan-Nichols

Reality, as good writers know, is sometimes stranger than fiction.
SCO's recent performance in the U.S. District Court in Utah is a
perfect example. With years to prepare, SCO executives made some
remarkable statements in their attempt to show that SCO,
not Novell, owns Unix's copyright

While this case is not about SCO's claims that IBM and other
companies placed Unix
IP (intellectual property) into Linux
, Novell's attorneys decided
that they would address this issue as well. One presumes that, since
this may be their one and only chance to attack SCO's Linux claims in
a courtroom -- what with SCO facing
-- they decided to address this FUD once and for all.

Before getting to that, though, Novell
hammered on Christopher Sontag, one time head of SCOSource
, the
division of SCO devoted to selling Unix's IP. Sontag, while dodging
around what code SCO was actually selling -- UnixWare code or the whole
Unix tree leading to UnixWare -- was finally cornered into admitting that
SCO had received $16,680,000 from Microsoft and $9,143,450.63 from Sun
and did not report these deals or income to Novell as it was required
to do under the
terms of the Novell/SCO APA (Asset Purchase Agreement)

On the second day of the hearing, April 30th, Sontag admitted that
he did not "know if there's any code that is unique to UnixWare that
is in Linux." He also admitted that he did not know of any analysis
that showed there was any "legacy SVRX [Unix] software' in
UnixWare." For someone who was in charge of SCO's Unix IP, who arranged
to license it to Sun and Microsoft, and whose company was suing IBM
for using Unix code in Linux, Sontag seemed remarkably ill-informed
about exactly what it was that he was selling.

Sontag was followed on the witness stand by SCO CEO Darl McBride. With
McBride on the stand, as can be seen in the trial's
, things became somewhat surreal. McBride, only minutes
after Sontag said he didn't know if there was Unix or UnixWare code in
Linux, said, "We have evidence System V is in Linux." McBride's most
memorable moment came though when he claimed, after years of never
being able to demonstrate any direct copying of Unix material into
Linux that "Linux is a copy of UNIX, there is no difference [between

In regards to SCO's
May 2003 letter to companies that were using Linux
and "Therefore,
legal liability that may arise from the Linux development process may
also rest with the end user," McBride claimed that "I don't see
anything in here that says you have to take a license from us."

From there, McBride went on to say that simply because SCO had stated in
this letter that "We intend to aggressively protect and enforce our
rights" and added that the company had already sued IBM, that SCO
didn't mean to imply that "we're going to go out and sue everybody
else." At the time, most observers agreed that SCO certainly sounded
like they were threatening to sue Linux end-users.

McBride then managed to entangle himself in how SCO accounted for
the revenue it had received from Microsoft and Sun. The implication,
which McBride vigorously denied, was that SCO had misled the
stock-buying public in SEC documents in 2003 and 2004.

In what may prove to be a problem for Sun in the future, McBride
also said that while SCO
felt Sun had the right to open-source Unix in OpenSolaris
, its
most recent Sun contract was really about Sun "looking for ways to
take their Solaris operating system and make it more compliant with
the Intel chip set, which is what SCO has a deep history of

Greg Jones, Novell's VP of Technology Law, was then sworn in. Jones
testified that SCO's 2003 agreement with Sun "allows Sun, then, to
release Solaris as open source under an open source licensing model,
which they have done in a project called OpenSolaris. So it poses a
direct competitive challenge to Linux and, certainly, to Novell, given
that Linux is an important part of Novell's business. We are a Linux

Jones went on to say that if Novell had been aware of SCO making
this deal with Sun, it would not have allowed it because, "It simply
would not have been in Novell's commercial interests. In the fall of
2002, Novell had acquired Ximian, a Linux desktop company. We were
exploring ways to get into the Linux market so enabling a competitor
to Linux simply would not have been in Novell's interests. In the
manner in which they entered this agreement, when they did it, they
kept all the money. I assume that would have been their proposal but,
fundamentally, it simply would have been contrary to Novell's business
interests to enable something like this."

On the third
day of the case
SCO stuck to its guns, but added little more to
their arguments.

On the case's final day, Novell simply stated that, when all was
said and done, the APA made it clear that Novell, and not SCO, had the
rights to Unix's IP. Therefore, SCO had no right to make these deals,
and certainly no rights whatsoever to keep the funds from such deal.

In Novell's closing arguments, Novell also hit again on the SCO/Sun
deal. Novell pointed out that "There's no question they (SCO) allowed
Sun to open-source Solaris," and that while SCO executives would have
you believe that giving Sun the right to open-source Solaris had no
market value, SCO's engineers believed that open-sourcing Solaris had great value.

So, as the case moves on, SCO still seems unable to make any
headway on its claims that the APA gave it the right to sell Unix's
IP. Novell attorney's also made a point of demonstrating that SCO
still has only naked claims, without any evidence, that there's
any Unix code inside Linux. The Judge is expected to rule on the case
in the near future.

Finally, Sun may yet have to contend with Novell's IP interests in
OpenSolaris. Novell clearly doesn't believe Sun had the rights to
open-source the System V code within OpenSolaris under its CDDL
(Common Development and Distribution License).


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