SCO
Moves To License Its IP
It’s
been another busy week for the industry that has developed around
tracking SCO’s activities on the trail of mining its intellectual
property assets (IP).
A
Word From SCO
SCO
started things off by reporting its delayed financial results.
Basically, they’ve made a profit, for the first time, for
the year and would have made one for the quarter, except for their
high legal expenses. They
estimate that legal expenses in the future will run $1-2 million
more per quarter than the $3-5 million they’re running now, but
that includes new efforts to do more to get IP licensing efforts
under way.
SCO
ended up the year with $64.4M in cash on the balance sheet (most of
it from the $50 million investment infusion and licenses to Sun and
Microsoft). They
reported that 58% of
their 4th quarter revenue came from UNIX licenses and
royalties, and 42% from SCOSource IP licenses.
At
the same time, SCO announced two new letter campaigns (does this
count as a new form of direct mail marketing, one wonders?).
(1)
SCO is going to Linux users to remind them that they need to
sign up for SCO IP licenses to avoid illegal infringing on
copyrighted SCO assets. This
time, they are adding threats of DCMA violations to the copyright
infringements. That’s
important because such violations, if proven, would carry heavy
penalties.
(2)
In a new tactic, SCO has decided to send notices to all of
its UNIX source license customers (both vendors and users, which
include a number of universities and non-profits), that they cannot
use their SCO UNIX source code to in any way support their use (or
anyone’s use) of Linux. Therefore,
they are asking these customers to certify that none of the UNIX
code has been used improperly and that none of the employees or
contractors who have had access to it under the control of the SCO
licensee have done anything improper nor will they do anything
improper in the future.
SCO
is asking that the licensee certify his behavior and prove it by
showing such documents as manuals, memos, or employee contracts how
they conveyed such policies to employees and contractors.
Think
of it!
•
Can you imagine knowing what some student who worked on a
university research computer 5 or 10 years ago did with the
knowledge he thereby gained? Wasn’t
he supposed to go out and use it in the world?
•
Don’t you think that at least some of those students took a
few manuals with them?
•
Would you, the current holder of the job of supervising the
UNIX source code license, like to sign a certification about what
happened over the last ten years?
I
wonder what the courts will eventually have to say about “normal
business practices,” and “timely filing.”
Novell
Files For Copyrights
In
the meantime, life goes on. And
gets more complicated by the minute.
It seems that Novell has spent the last few months filing for
the copyrights it felt it should have had on its UNIX IP and which
SCO filed for earlier this year. This means both of them have filed for (that just means
filling out pieces of paper) copyrights on the same IP.
The
real questions will be:
•
Who will the courts recognize as the rightful holder of the
copyright(s)? This
hinges on whether the copyrights were actually transferred, based on
the contract documents from Novell to SCO (not this SCO, this other
one), at the sale of UNIX.
•
If the copyrights are in dispute (and it looks like that
might be the case), how can anyone be expected to assume the
outcome? That is,
wouldn’t it be logical for the courts to rule that no one has to
pay SCO a license fee based on its ownership of copyrights until its
legal rights to those copyrights is established?
As
you might imagine, SCO feels that this latest round of copyright
filing is (according to Darl McBride, whom I spoke with yesterday),
simply a tactic being executed by Novell on behalf of its partner,
IBM. They seem to think
it doesn’t mean much. But
I bet there will be at least one company in court pretty soon if SCO
pursues legal tactics against users who don’t take out licenses,
arguing that it’s unreasonable to let SCO pursue these licenses
until the copyright issue is resolved.
CA
Might Have Some IP Too
And
just because why should anyone
be left out of the fun, it recently occurred to CA that when they
bought Platinum three years ago, they were buying Locus, and that
IBM pays CA royalties for work done by Locus for the SMP technology
in AIX. So I guess that
technology can’t be all SCO’s if it came from somewhere else?
My
theory is we’re going to still be sorting this out in 2025 at this
rate.
And
Linus Owns Some, Too
But
it gets even more complicated.
Linus Torvalds stepped into the conversation after SCO
published the 65 ABIs which it claimed were clear proof of
infringement (you can view them by going to www.sco.com
and opening the Letter on the ABIs on the front page) and pointed
out where they came from and that it is naming conventions in
standards like C which determine how these are created, not copying.
He
also poignantly admits that some of the original code (which he
shows) was written by him (and embarrasses him now), when he was
young and less skilled and before he had ever actually seen UNIX
source code.
In
Summary
This
seems to need a summary, so I’m giving it one.
SCO
continues to believe that its IP has been illegally used
(1)
By IBM in violation of its contract with SCO; and
(2)
By Linux users who are infringing on SCO’s IP because there
is (they claim) UNIX code and methods in Linux
The
Open Source community continues to offer counter-proof.
Some of it is on the level of hype and hysteria.
Some of it as proof of its point of view.
The Internet turns out to be a good way to collect
information but a tough way to filter it.
SCO
is doing something that is damaging to the Open Source community and
they don’t seem to care – even though they benefited by
belonging to that community. But
their assertions must be countered by solid arguments not by
demonizing them.
This
is what I think is going to happen (an opinion: that’s what
analysts do):
(1)
Many of the SCO IP claims of infringement are going to vanish
for a variety of reasons – being based on code in the public
domain, code under GPL, code released to the GPL by SCO itself, or
code that can be proven to belong to someone other than SCO.
(2)
Some small amount of code may remain in dispute.
It will then be up to the court to determine an appropriate
outcome. That would
probably be removing it from Open Source libraries and programs. If it’s a very small percentage of the total code, I doubt
that financial damages will be appropriate.
(3)
SCO’s contract dispute with IBM will be determined, as all
contract disputes are, by contract law.
There seems to be a lot of disagreement as to the terms of
this contract and the semantics of some terms.
I guess we’re going to hear a lot of arguing about
definitions. I
wouldn’t hold my breath waiting to hear that SCO is getting paid
any enormous sum of money because
-
IBM created the Linux market (it didn’t) or
-
IBM tried to ruin the UNIX market (it doesn’t have an
interest in that either – just ask the IBMers who carry AIX
quotas).
(4) Darl has come up with another idea which might actually work.
He’s thought of offering annual licenses to the UNIX IP to
Linux users, instead of a one-time fully paid up license (which is
what the $699 now/$1399 later deal was).
This would mean that for I’d guess a few hundred dollars a
year per server, Linux users would be legal.
I’d guess that some users might decide this was worthwhile
– it’s a lot cheaper (kind of like an insurance policy) and if
Darl loses the suit you can just stop paying.
It
has another, hidden benefit for SCO.
One of the big questions for SCO was if they DID get the
Linux users to pay for licenses, what would happen once they paid
up? Wouldn’t he then
be depending on the Linux market (which he had damaged) doing well
enough to generate more Linux licenses every year?
This way, there is a continuing income stream. Wall Street loves continuing income streams.
Of
course, it leaves unanswered the big questions:
What happens if SCO just outright looses?
I’d point out that they still own UNIX and it isn’t going
away just yet. And if they surprise everybody and win? I can’t imagine that, but I guess all bets are off.
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