Posted on 02/07/2004 7:10:20 AM PST by Salo
SCO abandons trade secret attack on IBM
By Andrew Orlowski in San Francisco
Posted: 07/02/2004 at 03:14 GMT
The SCO Group abandoned a major rationale of its case against IBM by dropping its trade secret claims. These were the basis, last June, for SCO revoking IBM's UNIX license. IBM didn't blink, and has simply carried on selling its AIX Unix without blinking. But today SCO dropped the trade secrets and claimed breach of copyright instead.
But such claims need proof, and it proved to be another hearing in which the SCO Group vs. IBM without the Utah company showing any infringing code. SCO also admitted to not producing documents that IBM had requested.
In fact, IBM used Darl McBride's braggadocio performance at Harvard this week against him.
Darl McBride had stated that there "is roughly a million lines of code that tie into contributions that IBM has made and that's subject to litigation that is going on. We have basically supplied that."
"No you haven't" IBM replied, "and if you had we'd be seeing them today," in so many words. "SCO has identified no more than around 3,700 lines of code in 17 AIX or Dynix files that IBM is alleged improperly to have to have contributed to Linux." IBM describes this as a "significant disparity." As indeed it is.
"SCO abandons any claim that IBM misappropriated its trade secrets, concedes that SCO has no evidence that IBM improperly disclosed System V code, and acknowledges that SCO's contract case is grounded solely on the proposition that IBM improperly disclosed portions of BM's own AIX or Dynix products, which SCO claims to be derivatives of Unix System V," according to IBM's compliance report on the Court's order from Dec 12.
"SCO refuses to disclose from what lines of UNIX System V code these alleged contributions are supposed to derive, which it must to allege the contributions were improper … and a number of the allegedly improper contributions are not disclosed with adequate particularity (eg SCO claims IBM improperly disclosed "SMP" but does not specify the files or lines of code allegedly 'dumped' into Linux, or the files and lines of Linux in which they are supposedly found. SCO also fails properly to identify and describe all of the materials in Linux to which it claims to have rights and whether, when, to whom, and under what circumstances and terms it ever distributed those materials."
The Judge will rule in around a week.
I was originally hired by the company I work for as an SCO Xenix specialist... Funny thing is that over the years, I haven't done much *IX since then (other than just playing around a bit), and have become a Novell specialist... Now Novell owns SuSe Linux!
Mark
You can try, but a lot of people have already thought of that.
As a result, there is essentially no stock available to be shorted (it's limited by the publicly traded shares that holders are willing to "lend"). But, the number of shorted shares was still almost three times the average daily volume:
http://www.viwes.com/invest/shorts/query.cgi?q=scox
Note that the last entry is dated September, 2003. Apparently, NASDAQ stopped providing the info for free, so this particular website is no longer updating it.
There's some evidence that the significant short interest is actually pushing up the price -- it's called a "short squeeze":
(This was during the discussion of SCO's demand for the source code to AIX, so they could determine if IBM was in compliance with the SysV license)
SCO fell right into the trap, answering: "HP and Sun do not contribute to Linux". IBM's attorney immediately produced a print-out from HP's website detailing their contributions to Linux.
Ooops.
I've tried to sort out the discussion elsewhere, and the consensus seems to be that this new "breach of copyright" claim is based almost solely on IBM's continuance in marketing AIX after SCO "terminated" IBM's SysV license.
But, as this article points out: the basis for terminating the license was for disclosure of trade secrets. And now they have dropped that claim. And on top of that, Novell has told SCO they have no right to terminate IBM's license, at least under Novell's interpretation of the agreement between the predecessor of SCO and Novell.
So, it appears that the ownership of SysV Unix is going to have to be established. I don't know if that will be done in the suit against IBM, or if the dispute with Novell must be settled first (that suit was filed last month).
And, if I understand their latest variation correctly, SCO is now apparently claiming that if AIX or Dynix have any SysV-licensed code in it, the entire OS becomes a derivative work. Effectively, SCO is claiming "all your code are belong to us", and that anything in AIX that was subsequently contributed to Linux (even if it was completely developed by IBM and doesn't originate from SysV Unix) is a violation.
These cartoons are from http://www.userfriendly.org/
Why don't we wait until the judge issues her upcoming order in about a week before we make pronouncements about the outcome? We wouldn't want to be embarrassed when SCO changes their claims yet again, would we?
One thing that I thought was interesting: IBM did not make a motion for summary judgement against SCO, even after IBM demonstrated that SCO was substantially non-compliant with the judge's previous order. So, IBM apparently wants to finish this, once and for all.
It is not strictly true that SCO has substituted a copyright infringement charge. What it has done is file a "Request for leave" to make such a substitution. The judge does not have to grant this. A judge could rule that such a claim is more properly the subject of a new and different lawsuit, which SCO is free to file. However, its previous lawsuit is dismissed since SCO has disavowed its own claims in that suit, and has admitted that it has no evidence to support its claims in that suit. Then, when SCO comes to court with its new copyright-based lawsuit, IBM can reasonably move to set the lawsuit aside until the issue of whether SCO even owns the copyrights is settled. There is a secondary issue related to SCO's new claims, and that concerns whether SCO had the right to terminate IBM's UNIX license. Novell claims that under the Asset Purchase Agreement, it retained the right to overrule SCO on such matters, and in fact did so. SCO claims that IBM's infringement is "willful" (thus deserving of higher damages) but no court will buy that because IBM could not reasonably know in advance whether Novell or SCO would prevail in their own lawsuit over who owns the copyrights, and whether Novell can overrule SCO's actions regarding UNIX licenses. It could well happen here that SCO is left with no case at all against IBM, pending resolution of SCO v Novell. In the meantime, IBM's countersuit against SCO involving patent infringement, trade libel, etc., moves forward. |
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It would not be unreasonable for the judge to dismiss the original SCO claim in its entirety, given that SCO has itself abandoned that claim.