IBM, Industry Respond to New SCO Threats

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It’s no longer just about IBM. SCO has now officially declared war on all business Linux users.

SCO announced that all commercial Linux 2.4 and higher users must buy a UnixWare 7.1.3 license tailored to support run-time, binary use of Linux for all business uses or face the possibility of a law suit. If a company agrees to buy this license, SCO will allow them to continue to use Linux in a run-only, binary format and will not seek damages from the Linux customers against their past copyright violations for their use of Linux.

Specifically, Darl McBride, SCO’s president and CEO, says, ”For several months, SCO has focused primarily on IBM’s alleged Unix contract violations and misappropriation of Unix source code,” but starting ”today, we’re stating that the alleged actions of IBM and others have caused customers to use a tainted product at SCO’s expense. With more than 2.4 million Linux servers running our software, and thousands more running Linux every day, we expect SCO to be compensated for the benefits realized by tens of thousands of customers.”

The copyright claim is an important one. It became clear that while SCO had obtained Unix’s intellectual property (IP) rights from Novell, it had never registered the Unix copyrights. SCO finally officially registered its U.S. copyright to its Unix System V source code to further its Unix intellectual property claims. With this move, David Boies, SCO’s lead attorney, says, SCO can now sue companies that use Linux, which refuse SCO’s offer.

As he explained during the press conference, this means that if you use any Linux based on a 2.4 or higher kernel — SuSE, Red Hat, Mandrake or whatever — in a business, you are violating SCO’s copyright rights and you, as an end-user, are liable for damages.

SCO isn’t blaming Linus Torvalds for this situation. But, McBride said, ”We aren’t saying he created the problem, but now he’s inherited it.” Thus, seemingly opening the door a little wider for the possibility of legal action against Torvalds.

Specifically, McBride claimed hundreds of files had been stolen from Unix and placed in Linux to give version 2.4 and above its advanced enterprise level capabilities such as Symmetric Multi-Processing (SMP) and Non-Uniform Memory Access (NUMA).

Indeed, McBride claims, ”If all the copied code was removed, Linux would have little multiprocessing capability and no enterprise capability.” He went on to say that there had been literal copying of SCO’s code, literal copying of SCO Unix derived code, and nominal copying of code that had been clearly derived from SCO’s copyrighted Unix.

Of course, SCO has not proved yet in any court of law that there has been in fact any copying or copyright violation in Linux. Trink Guarino, Director of IBM Media Relations, says, ”IBM is not aware of any Unix System V Code in Linux. SCO needs to openly show this code before anyone can assess their claim. SCO seems to be asking customers to pay for a license based on allegations, not facts.”

Joseph Eckert, SuSE’s VP of Corporate Communications, couldn’t agree more. ”SCO still needs to prove the copyright infringements at least once. Don’t they?”

Leigh Day, Red Hat spokesperson, says, ”SCO still hasn’t contacted us and while we’ve asked them to show us the offending source code, they haven’t shown us any source code. So, Red Hat continues to maintain that we are not in violation of any IP rights. Red Hat Linux falls completely under the GPL and SCO’s license is simply not necessary for our customers.”

SCO’s CEO, Darl McBride, response to such arguments is that those who have seen the code samples provided by SCO in their Linden, Utah offices, under a strict non-disclosure agreement (NDA) which prevents the viewers from describing exactly what they’ve seen, believe that there are intellectual property problems with Linux and are seeking a way to continue to use Linux while honoring SCO’s IP rights. McBride did not, however, cite any companies which agreed with this claim.

SCO’s answer to these hypothetical corporate customers is to offer them the right to use Linux, as a binary, with the purchase of a UnixWare license. A UnixWare Business Edition license currently runs $1,399, while the UnixWare Enterprise Edition, which includes 4-way SMP support, costs $4,999.

SCO is not ready to announce pricing for the Linux version, but McBride did say that SCO would be trying to make up for revenues lost by UnixWare to Linux and that pricing would be based both on volume purchases and upon the number of Linux servers a company is currently using.

Legally Speaking

Eben Moglen, professor of law at Columbia University and general counsel to the Free Software Foundation (FSF), says there is absolutely no reason for anyone to buy SCO’s license. ”Users don’t need a license to use copyrighted programs anymore than they need to pay a copyright fee before reading Gone with the Wind. If you copy, distribute, or modify copyrighted material, then you can be in copyright violation.”

But, he adds, if a distributor, such as Debian, were to agree to SCO’s license, they would then be in violation of section 7 of the Gnu General Public License (GPL). This section specifies that if legal “conditions are imposed… that contradict the conditions of this License” you cannot distribute GPL protected free software.

Boies claims, however, that the proposed SCO license refers only to Linux binaries and not the source code, which is protected by the GPL. Moglen, while respecting Boies’ ability as a lawyer, finds it hard to see how this could be the case and that, in any case, he doesn’t see why any corporate customer should pay SCO for a UnixWare license to continue to use Linux.

”Even if SCO IP is in the Linux kernel, which has not been proved, an end-user could still not be held responsible for the copyright violation,” Moglen argued.

McBride insists though that IBM, in particular, has made the end-users vulnerable to legal actions based on copyright. Neither he, nor Boies, explained though exactly how this worked.

Curiously, though, SCO is not, at this time, going after Linux distributors — nor did they suggest that they would be adding copyright infringement to their IBM lawsuit. Moglen says, ”SCO is simply trying to scare people about using free software by making irresponsible comments.” He notes that, until recently, SCO itself was distributing the code they now claim violated their own copyrights.

One reason why SCO may be hesitating about going after the Linux distributors, even though they would be the natural target for copyright violations since they’ve actively engaged in copying and distributing Linux source code may be because, SCO is still in the Linux distribution business.

As Paula Hunter, general manager of UnitedLinux, notes, ”UnitedLinux LLC is a private company equally owned by the four partners. These are Conectiva, the SCO Group, SuSE Linux and Turbolinux. And, “SCO is still a member of UnitedLinux.”

Still, Moglen says, ”If SCO really wishes to enforce these claimed copyright rights. I would suggest that they sue a Linux distributor. If the FSF distributed Linux, I would welcome such a lawsuit.” And, speaking for himself and not the FSF, he says, ”I have renewed my offer to assist free software developers who may feel the need for legal assistance” because of SCO’s recent actions.

As for the FSF itself, it will continue to support the cause of free software and the legal rights of developers to create free software.

And as for SCO, McBride says that while the bulk of SCO workers are still in software development, SCO’s revenues will rise with their IP claims and that the company will be announcing revised financial forecasts next month.

Regardless of how the current court case against IBM turn out, or any future copyright based cases, SCO’s IP claims are helping its bottom line and its stock price jumped over 10% to a 52-week high of $13.32 on the news of SCO’s copyright claims and proposed remedy for Linux customers who may, or may not, be violating them.

— From LinuxToday