Novell Puts the Lie to SCO's Linux Attack

"We knew that SCO's attack on Linux was a lie. But we never dreamed of the big lie behind it.

"This morning, Novell announced some of the terms of the company's 1995 agreement to sell its Unix business to SCO. The shocking news is that Novell

did not sell the Unix intellectual property to SCO. Instead, they sold SCO a license to develop, sell, and sub-license Unix. The title to Unix copyrights and patents remains with Novell. To back up this assertion, Novell refers to public records at the Library of Congress Copyright Office and the U.S. Patent Office.

"In their announcement, Novell refers to recent letters from SCO asking Novell to assign the Unix copyrights to SCO. So, apparently SCO's management team knew that they did not own Unix while pursuing their sham campaign against Linux.

"Along with this revelation, Novell is reiterating its support of the Linux and Open Source developer community, and its status as a partner in that community. Novell rejects SCO's accusations of plagiarism. Novell management says they do not intend to stand in the way of the development of the Linux kernel, its companion GNU system, and other Free Software.

"It would be an understatement to say that this leaves SCO in a bad position. The company has loudly and repeatedly asserted that they were the owner of the Unix intellectual property, all of the way back to AT&T's original development of the system 30 years ago. They've lied to their stockholders, their customers and partners, the 1500 companies that they threatened, the press, and the public. Their untruthful campaign caused the loss of sales and jobs, and damaged Linux companies and developers in a myriad of ways. And now, SCO will be the lawsuit target. SCO's quarterly earnings conference call is this morning, at 9 AM MST (11 AM EST, 8 AM PST). Call 800-406-5356, toll-free, to participate. You might even get to ask a question. It should be fun to watch them try to weasel out of this one.

"Microsoft executives also have egg on their faces. The company self-servingly rushed to buy an SCO license one business day after the threat letter, bringing a senior attorney to the office on a Sunday to tell the press how much Microsoft values intellectual property. Microsoft's management could have taken the time to analyze SCO's claims, if the company had wanted this license for practical and technical reasons. Their decision to buy when they did must have been motivated by a desire to add to SCO's fear campaign. Of course they'll grab any opportunity to spread fear about Linux, but this time Microsoft bought a pig in a poke.

"SCO management, if they insist on standing in the way of a train, could still claim that software they developed in the years since 1995 is being infringed by the Open Source developers. That claim, always a dubious one, will be difficult to take seriously now that their prevarication throughout this campaign has come to light. SCO would be well advised to drop their suit against IBM in exchange for IBM's agreement not to counter-sue. But IBM might not feel that charitable toward SCO.

"In contrast to SCO, Novell's made a friend among the Free Software developers. We're always happy to see people using our software. But a real partnership between an IT vendor and our community is an equal partnership, with the company donating services and new software in exchange for the value it receives. Novell has already placed important software under Open Source licenses. Today, the company has done us a tremendous service, by stomping upon an obnoxious parasite."

This morning, Novell announced some of the terms of the company's 1995 agreement to sell its Unix business to SCO. The shocking news is that Novell did not sell the Unix intellectual property to SCO. Instead, they sold SCO a license to develop, sell, and sub-license Unix. The title to Unix copyrights and patents remains with Novell. To back up this assertion, Novell refers to public records at the Library of Congress Copyright Office and the U.S. Patent Office.

All I have to say is wow. I didn't really believe SCO, because I had not seen SCO offer any proof or provide confirmation of their allegations. But I was under the impression that Novell sold UNIX, not licenced UNIX to SCO. Interesting.

Since novell.com is slashdotted, here's the release:

Novell Challenges SCO Position, Reiterates Support for Linux

PROVO, Utah - May 28, 2003 - Defending its interests in developing services to operate on the Linux platform, Novell today issued a dual challenge to The SCO Group over its recent statements regarding its UNIX ownership and potential intellectual property rights claims over Linux.

First, Novell challenged SCO's assertion that it owns the copyrights and patents to UNIX System V, pointing out that the asset purchase agreement entered into between Novell and SCO in 1995 did not transfer these rights to SCO. Second, Novell sought from SCO facts to back up its assertion that certain UNIX System V code has been copied into Linux. Novell communicated these concerns to SCO via a letter (text below) from Novell® Chairman and CEO Jack Messman in response to SCO making these claims.

"To Novell's knowledge, the 1995 agreement governing SCO's purchase of UNIX from Novell does not convey to SCO the associated copyrights," Messman said in the letter. "We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected."

"SCO claims it has specific evidence supporting its allegations against the Linux community," Messman added. "It is time to substantiate that claim, or recant the sweeping and unsupported allegation made in your letter. Absent such action, it will be apparent to all that SCO's true intent is to sow fear, uncertainty, and doubt about Linux in order to extort payments from Linux distributors and users."

"Novell has answered the call of the open source community," said Bruce Perens, a leading proponent of open source. "We admire what they are doing. Based on recent announcements to support Linux with NetWare services and now this revelation?Novell has just won the hearts and minds of developers and corporations alike."

Text of the letter from Novell to SCO:

Mr. Darl McBride President and CEO The SCO Group

Re: SCO's "Letter to Linux Customers"

Dear Darl:

As you know, Novell recently announced some important Linux initiatives. These include an upcoming NetWare version based on the Linux kernel, as well as collaboration and resource management solutions for Linux.

Put simply, Novell is an ardent supporter of Linux and the open source development community. This support will increase over time.

It was in this context that we recently received your "Letter to Linux Customers." Many Novell business partners and customers apparently received the same letter. Your letter compels a response from Novell.

As we understand the letter, SCO alleges that unnamed entities incorporated SCO's intellectual property into Linux without its authorization. You apparently base this allegation on a belief that these unnamed entities copied some UNIX System V code into Linux. Beyond this limited understanding, we have been unable to glean any further information about your allegation because of your letter's vagueness.

In particular, the letter leaves certain critical questions unanswered. What specific code was copied from UNIX System V? Where can we find this code in Linux? Who copied this code? Why does this alleged copying infringe SCO's intellectual property? By failing to address these important questions, SCO has failed to put us on meaningful notice of any allegedly infringing Linux code, and thus has withheld from us the ability - and removed any corresponding obligation - to address your allegation.

As best we can determine, the vagueness about your allegation is intentional. In response to industry demands that you be more specific, you attempt to justify your vagueness by stating, "That's like saying, 'show us the fingerprints on the gun so you can rub them off.'" (Wall Street Journal, May 19, 2003) Your analogy is weak and inappropriate. Linux has existed for over a decade, and there are plenty of copies in the marketplace with which SCO could attempt to prove its allegation.

We are aware that you recently offered to disclose some of the alleged Linux problems to Novell and others under a nondisclosure agreement. If your offer is sincere, it may be a step in the right direction. But we wonder whether the terms of the nondisclosure agreement will allow Novell and others in the Linux community to replace any offending code. Specifically, how can we maintain the confidentiality of the disclosure if it is to serve as the basis for modifying an open source product such as Linux? And if we cannot use the confidential disclosure to modify Linux, what purpose does it serve?

In your letter, you analogize SCO's campaign against the Linux community to that of the record industry against major corporations whose servers contained downloaded music files. There are crucial differences between the two campaigns. The record industry has provided specific information to back up its allegation, while SCO steadfastly refuses to do so. In its allegation letter, the record industry provides evidence of allegedly infringing activity that is specific to the targeted company. This offers the company real notice of the activity, sufficient information to evaluate the allegation, and an opportunity to stop the activity if it determines the allegation is true. If SCO wants to compare its actions to those of the record industry, it should follow the example set by that industry and present specific evidence of the alleged infringement.

SCO claims it has specific evidence supporting its allegation against the Linux community. It is time to substantiate that claim, or recant the sweeping and unsupported allegation made in your letter. Absent such action, it will be apparent to all that SCO's true intent is to sow fear, uncertainty, and doubt about Linux in order to extort payments from Linux distributors and users.

This true intent becomes clearer when one considers various public statements you and other SCO personnel have made about SCO's intellectual property rights in UNIX. SCO continues to say that it owns the UNIX System V patents, yet it must know that it does not. A simple review of U.S. Patent Office records reveals that Novell owns those patents.

Importantly, and contrary to SCO's assertions, SCO is not the owner of the UNIX copyrights. Not only would a quick check of U.S. Copyright Office records reveal this fact, but a review of the asset transfer agreement between Novell and SCO confirms it. To Novell's knowledge, the 1995 agreement governing SCO's purchase of UNIX from Novell does not convey to SCO the associated copyrights. We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently, you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected. Finally, we find it telling that SCO failed to assert a claim for copyright or patent infringement against IBM.

SCO's actions are disrupting business relations that might otherwise form at a critical time among partners around Linux technologies, and are depriving these partners of important economic opportunities. We hope you understand the potential significant legal liability SCO faces for the possible harm it is causing to countless customers, developers, and other Linux community members. SCO's actions, if carried forward, will lead to the loss of sales and jobs, delayed projects, canceled financing, and a balkanized Linux community.

We, like others, are concerned about the direction of SCO's campaign. For now, we demand that SCO either promptly state its Linux infringement allegations with specificity or recant the accusation made in your letter. Further, we demand that SCO retract its false and unsupported assertions of ownership in UNIX patents and copyrights or provide us with conclusive information regarding SCO's ownership claims. In the future, we hope SCO will adhere to standards of strict accuracy when stating its rights in UNIX.

Sincerely,

Jack L. Messman Chairman, President and CEO

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