As the SCO rolls

By: 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 bankruptcy -- 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 transcript, 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 them]."

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 doing."

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 distributor."

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).