SCO's suit not all that simple

    U.S. Magistrate Brooke Wells met for nearly 30 minutes in chambers Friday with attorneys for Utah's SCO Group and IBM, hoping to keep their open-court debate simple and to the point.
    But when arguments ended shortly before noon, nearly 90 minutes later, Wells acknowledged she would need time to unravel competing motions related to SCO's claims that its proprietary Unix operating system was illegally incorporated into the Linux OS.
    Noting the "complicated" nature of the issues, Wells told her tiny, standing-room-only courtroom that she would forgo the usual quick oral ruling in such cases in favor of issuing written rulings "within a week."

    SCO seeks up to $50 billion in damages from IBM in a federal suit alleging Big Blue violated its Unix contract with the Lindon-based software company. SCO, which recently added patent violations to its list of allegations, contends IBM illegally dropped Unix code into Linux via contributions from IBM's own AIX and Dynix products.
    The suit, along with SCO's subsequent global campaign to license corporate Linux users under the perceived threat of potential litigation, has enraged the pro-Linux "open source" community, a loosely knit network of programmers and free software developers.
    Several DoS (denial of service) attacks over the past year, including one borne by the MyDoom.A virus that knocked out SCO's Web site last weekend, have had the company pointing the finger at open-source extremists. Open-sourcers, meantime, have blamed spammers or even SCO itself for the DoS attacks.
    On Dec. 12, Wells ordered SCO to provide specific lines of code to prove its claims. IBM was dissatisfied with the response and sought additional data; on Jan. 23, the judge extended SCO's time to comply with the order until Friday's hearing.
    SCO's latest responses also fell short, IBM attorney David Marriott argued on Friday, asking Wells to once more order the Utah company to provide "full, complete and detailed" evidence to back its allegations.
    "SCO has not complied, your honor," Marriott declared. "They have not provided all the documents requested. . . . We want to know the location of the 17 lines of code [SCO has thus far provided to IBM]. We want to know, exactly, what it is in Linux they believe they have rights to."
    Mark Heise, representing SCO, insisted the company has "exhaustively detailed the improper contributions IBM made to Linux." But to provide the "line by line" evidence IBM is now demanding, he said, would require Big Blue to released AIX and Dynix code -- as SCO has requested in its own discovery motion.
    Wells interrupted: "The requirement of the court is that you provide those source codes; this is about your response to the order."
    Heise insisted, however, that without IBM's compliance, "it is literally impossible" for SCO to itself provide direct proof of the Unix-to-AIX/Dynix-to-Linux continuum it argues exists.
    "We're at an impasse and we can't be at an impasse and have this case remain at a standstill," Wells responded. "You've made your point -- I'm just not certain I agree."
    IBM's Marriott, arguing against SCO's own request for complete AIX/Dynix programming details, said it was an unreasonable burden on his clients to demand "millions and millions of lines of source code" to determine whether the 17 lines SCO has cited are indeed in Linux.
    "Contributions to Linux are public," Marriott said. "All they have to do is get on the Internet."

Heise countered that "not everything they have put into Linux is public," and that pointing SCO to the Internet did not amount to "complete disclosure" it seeks from IBM.
bmims@sltrib.com

I hate to be the one to break this to you guys but ... this case is being tried in a courtroom, not in public.

That is an interesting comeback. Back in Note 54 you said, "Show us the sources. Let the public decide who's lying here." When reminded that the judge has stayed further discovery until SCO provides its evidence, you have blown that off and continued to insist that IBM should "make public" this or that... after all, what have they to hide?

So we are left with the conclusion that when it suits you to have the case tried by the public, you advocate in favor of that. But the moment it becomes inconvenient, you "hate to break it to us" that the case is being tried in court, not in public. Let us stipulate that your responses here are disingenuous; you are shifting positions in accordance with the instinctive bodily movements of a weasel.

Curiously, SCO does the same thing. Last Thursday, Darl McBride gave a speech at Harvard in which he said, "We then said 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. In fact, that is going to be the subject of a hearing that comes up this Friday in the Utah courtroom.". Then, the very next day, during the hearing, SCO's attorney tells the judge, "I guess maybe a way to explain it, is in the technologies that they have contributed, let's say in rungs 15 and 16, that is not from us. That is not our Unix System V code. That is AIX or Dynix. We don't have that source code to be able to identify the lines." He's telling the judge this to explain why SCO has not complied with the court's order that it identify with particularity which lines of System V code it alleges are in linux. He hasn't supplied a million lines. He hasn't supplied any. And he's telling the judge that he can't really do that.

What kind of a weasel company has their CEO go out and make false statements in public that hype their chances at litigation (and hence their stock price), when he knows damn well that his lawyer is going to go in there the very next day and say the opposite?

You see what the problem is here? It's just one damned liar after another. Oh yeah, they have "millions of lines." Except when they have to actually show them to the judge. Then they haven't got squat.

What they claim to have is Magical Knowledge that IBM has committed a terrible wrong. They can't prove it, they can't even say what the terrible wrong is with any specificity. When the judge rules, as happened on December 5, that that line of argument will not fly, and they should go off and find some evidence of this stuff they supposedly "know," they come back with more arm-waving and try to re-argue their points from the December 5 hearing, which the judge has already ruled on.

It gets better, though. SCO Attorney Heise has just stated in court that there is no System V code in linux. Now they want to base their whole thing on the "derivative works" nonsense. OK, that is their choice. But what does this say about the "enormous revenue stream" they are going to garner from selling licenses to linux users? If they admit there is no System V code in linux, they have no case against any linux user. They do not dispute that the IBM contributions are ©IBM Corp. So while they might sue IBM for breaking some 'confidentiality' requirement, they can't sue any user, because the users did not do anything wrong, and they are not infringing any SCO copyrights. Basically, they just knocked the pins out from under their own revenue projections. Now they have to beat Novell on the issue of whether they even own any copyrights, and on the issue of whether Novell has the contractual right to tell SCO to STFU, and then they have to win a decision on their bizarre theory of derivative works, and another decision that the AT&T amendments to Section 2.01 don't mean what they plainly say. What are we talking about here, 2007 before they could even hope to see a dime? And meanwhile, there is no linux license revenue.

This thing is all over but the securities fraud indictments. And possibly, depending on whether anybody snitches, the $40 billion class action trade libel suit against Microsoft for funding this barrage of lying FUD.

Bush2000 wrote:
I hate to be the one to break this to you guys but ... this case is being tried in a courtroom, not in public.

OK, I understand that. In SCO's Amended Complaint of June 16 (Link to google.com cached copy because original site is not working) I found the following excerpts:

4 ... As a result of IBM’s wholesale disregard of its contractual and legal obligations to SCO, Linux 2.4.x and the development Linux kernel, 2.5.x, are filled with UNIX source code, derivative works and methods. As such, Linux 2.4.x and Linux 2.5.x are unauthorized derivatives of UNIX System V.
5. As set forth in more detail below, IBM has breached its obligations to SCO, induced and encouraged others to breach their obligations to SCO, interfered with SCO’s business, and engaged in unfair competition with SCO, including by:
     a) misusing UNIX software licensed by SCO to IBM and Sequent;
     b) inducing, encouraging, and enabling others to misuse and misappropriate SCO’s proprietary software; and
    c) incorporating (and inducing, encouraging, and enabling others to incorporate) SCO’s proprietary software into Linux open source software offerings.

The SCO Groups Proposed Second Amended Complaint (PDF Format) makes the same claims in Paragraph 4 and Paragraph 6.

cc2k wrote:
IBM's contributions have already been disclosed.

Bush2000 replied:
Provide a reference.

For starts, at IBM's web site at http://oss.software.ibm.com. Further evidence is availabe widely on the web, including this list of Linux source code with IBM copyrights and this list of Linux source code files containing IBM email addresses (or web site references)

cc2k wrote:
The SCO Group has a right to enforce the terms of all of their contracts with IBM. However, if one section of one contract is superceded by a later supplemental agreement, or a later clarification from The SCO Group or any of it's predecessors, then only the latest terms are enforceable.

Bush2000 replied:
Would it be asking too much to ask for a reference?

OK, On February 1, 1985, IBM and AT&T entered into several agreements. The primary agreement, which is referenced by and modified by some of the subsequent agreements is the Software Agreement (February 1, 1985) (link to PDF Format). There's also a Sublicensing Agreement (February 1, 1985). Equally important is the Letter Agreement (February 1, 1985).

Now, The SCO Group claims their rights to "derivative works" from paragraph 2.01 of the Software Agreement.

2.01 AT&T grants to LICENSEE a personal, nontransferable and nonexclusive right to use in the United States each SOFTWARE PRODUCT identified in the one or more Supplements hereto, solely for LICENSEE'S own internal business purposes and solely on or in conjunction with DESIGNATED CPUs for such SOFTWARE PRODUCT. Such right to use includes the right to modify such SOFTWARE PRODUCT and to prepare derivative works based on such SOFTWARE PRODUCT, provided the resulting materials are treated hereunder as part of the original SOFTWARE PRODUCT.

If that was all there was to the agreement, The SCO Group might have a case. Of course, their case would depend on the vagueness within this agreement of the term "derivative works." That term has specific meanings within the context of copyrights, and it is generally held to mean a work that contains some part of the original. For example, AIX would be a derivative work of UNIX because AIX is UNIX plus some IBM provided enhancements and modifications. Under that limited definition of "derivative work," Linux would only be a derivative work of UNIX if it actually contained code from UNIX.

The SCO Group favors a more liberal and more far reaching definition of "derivative works." They are pressing this case under the theory that once IBM created AIX as a "derivative work" of UNIX, The SCO Group then had all rights under the AT&T license agreement to all of the code in AIX, not just the code that came from AT&T. Under this far reaching interpretation (favored by The SCO Group), this would give AT&T (and it's successors) some rights to enhancements and modifications added to UNIX by the licensee (IBM in this case). However, that interpretation has never been tested in a court, and courts generally have held that the term "derivative work" only refers to works that contain some part of the original.

Even worse for The SCO Group, if you read the Letter Agreement, The SCO Group's case is much, much weaker. Paragraph two of the letter agreement says:

2. Regarding Section 2.01, we [AT&T] agree that modifications and derivative works prepared by or for you [IBM] are owned by you [IBM]. However, ownership of any portion or portions of SOFTWARE PRODUCTS [UNIX System V] included in any such modification or derivative work remains with us[AT&T].

The parts in square brackets were added by me to clarify exactly what the pronouns and terms refer to.

This letter agreement is part of the contract between IBM and AT&T, and it clearly states that code developed by or for IBM and added to UNIX to create derivative works is owned by IBM. No encumbrances are placed on this kind of code by the Letter Agreement, and a court would generally interpret this to mean that all rights of ownership are retained by IBM to any additions or modifications that don't contain AT&T code. These license agreements don't apply to code that IBM develops and adds to UNIX (If IBM owns the enhancement code outright, they clearly aren't licensing it from AT&T). These license agreements only apply to products that actually contain code provided by AT&T under the license agreement.

There's more problems for SCO than just the written agreements that pretty convincingly refute SCO's claim of interest in IBM's code. Even if you accept The SCO Group position that section 2.01 of the Software Agreement somehow encumbers IBM's additions to UNIX in creating the derivative product AIX, The SCO Groups would still have to prove that the Software Agreement represents a valid contract and that IBM has a duty to honor that contract or to provide some remedy if they don't honor the contract. Since a valid contract requires some form of consideration and a mutuality of obligations, that portion of the Software Agreement might not meet the legal definition of a valid contract. Clearly, there is consideration and mutuality of obligations where IBM agrees to pay AT&T for the right to use and distribute AT&T's SOFTWARE PRODUCTS and derivative works containing parts of AT&T's SOFTWARE PRODUCTS. But what consideration does AT&T give IBM for encumbering their ownership of IBM's own additions and ehancements? Without consideration, this isn't a valid contract. Clearly, The SCO Group sees value in IBM using the enhancements that IBM owns in other areas. That's the basis for the Billions of dollars in damages that they seek. Without some consideration for giving up these rights, IBM could argue that the alleged contract is invalid.

Another question you might answer (I'm not holding my breath, you have yet to answer any question I've asked you), if these AT&T agreements make JFS subject to the terms of the AT&T UNIX license agreements, why isn't every copy of OS/2 that contains JFS also an unauthorized derivative work of UNIX. Once IBM put the code into AIX, didn't they give up their rights to use it in OS/2? Shouldn't The SCO Group ask for another Billion or two in royalties on all copies (possibly both copies would be a better description) of OS/2 which were unauthorized derivatives of UNIX that IBM sold?

So we are left with the conclusion that when it suits you to have the case tried by the public, you advocate in favor of that. But the moment it becomes inconvenient, you "hate to break it to us" that the case is being tried in court, not in public.

Nah. What suits you is taking my statements out of context.

Let us stipulate that your responses here are disingenuous; you are shifting positions in accordance with the instinctive bodily movements of a weasel.

Speaking of weasels, Nick, when are you going to provide me with proof that nobody from Santa Cruz Operation joined SCO after the purchase?

What kind of a weasel company has their CEO go out and make false statements in public that hype their chances at litigation (and hence their stock price), when he knows damn well that his lawyer is going to go in there the very next day and say the opposite?

McBride's statement about IBM's contributions was not false. As for whether that would be presented in court, any attorney will tell that a plaintiff should never act as his own spokesman. Darl McBride ain't an attorney. His attorney should tell him to STFU.

It gets better, though. SCO Attorney Heise has just stated in court that there is no System V code in linux. Now they want to base their whole thing on the "derivative works" nonsense. OK, that is their choice. But what does this say about the "enormous revenue stream" they are going to garner from selling licenses to linux users? If they admit there is no System V code in linux, they have no case against any linux user.

Actually, yes, they do. IBM contributed the code. If IBM won't indemnify them, SCO can sue them.

when are you going to provide me with proof that nobody from Santa Cruz Operation joined SCO after the purchase?

Have you bothered to think through the implications of Doug Michels entering into talks with Caldera to sell them the crown jewels that he had been bragging about for years, just on the eve of the cancellation? Although the deal did not close for a year, SCO and Caldera publicly announced their intention to do this deal on August 2, 2000. The public announcement of the cancellation of Project Monterey was then three weeks away, although there were already rumors circulating for weeks before that.

Smarter people would have said, "Forget it, Doug. You tried to snooker us. You tried to sell us a 30-year-old bag of crap right before everyone found out the bad news."

Did Caldera do that? Nooooooo. They spent the next nine months futzing with lawyers and regulatory agencies to make the deal go through. I'm sure when they had the signing ceremony, the Caldera boys grabbed the champagne and jumped up and down, shouting "We bought it! We bought it!" And Doug Michels said, "Thank you P.T. Barnum! There really is one born every minute."

The year 2000 sucked for SCO. They were "restructuring" and laying people off months before any of this happened. IBM had nothing to do with that; Monterey wasn't even shipping. SCO's bread-and-butter business was tanking. In fact it's obvious now (because of the way Michels restructured SCO to position the "server software business" as a separate entity, all packaged up with a bow around it) that he decided to jettison the thing some time in the first quarter of 2000. So he can't be bitter; he was getting hammered on that side of the house, Monterey or no Monterey. He decided to bail before IBM did.

People aren't stupid. Whatever SCO employees might have been left after the various rounds of layoffs would see immediately, when the Caldera deal was announced, that they had been positioned for exit months before, when they were made a separate division. IBM didn't do that to them. Doug Michels did it. Had he not sold the division to somebody, he would have laid them all off. As a division they were losing money. A lot of money. They were lucky that anybody even wanted it.

That's your formulation, not mine. I never said "no one" was transferred. The context was your claim that there was some significant quantity of ill will towards IBM over the fate of Project Monterey, and that this ill will entered Caldera in the form of institutional memory among the transferred employees. If you are now going to claim that it only took one employee of unspecified position to cause this effect, I think I'll ignore you.

You haven't debunked the assertion (mine and Torvalds, ironically) at all. You've argued that (a) SCO knew what it was getting into and (b) that anybody who cared stayed with the Santa Cruz Operation.

To which I now reply that (a) SCO/Caldera most certainly does bear some bad feelings toward IBM over Monterey (regardless of your assertions to the contrary), and (b) there's no evidence that everyone from Santa Cruz Operation bailed after the Caldera purchase.

http://www.crn.com/sections/BreakingNews/dailyarchives.asp?ArticleID=41480

CRN

McBride: IBM walked away from Project Monterey, and they told us if we didn't like it, sue us. That took two years out of our life. IBM took chunks out of Monterey, and gave it away. You can find it in Red Hat and SuSE Linux. When IBM pulled out of Monterey, they did it concurrently with moving over to Linux. The heat has been turning up on this for some time.

It's interesting to probe why you're so upset about this. It's like sticking electrodes in a rat's brain. You're not telling us the whole story about your relationship with IBM, Nick. Your unrelenting defense of Big Blue leads me to believe that you are (or were) some kind of marketing droid for those cretins.

Let's set a target date, say June 2005. If neither event occurs, you admit publicly that you were full of crap.

What were these two statements? I preume they are:

I would argue that it is not possible for anyone to have been "full of crap" for having made the second statement. It is explicitly a "possibility" which depends on a snitch coming forward. Real companies are not as screwy as SCO. Real companies would not file a lawsuit claiming that they "knew" that Microsoft did it, and they would like the court to give them a fishing license to go poke around in Microsoft's emails and financial records so they can prove it. Not everyone in the world is as crooked as SCO, so I will never get to badger you about why Microsoft doesn't just clear the air by publishing all its internal correspondence and accounting records for the last two years... after all, what do they have to hide, right? But I'm not a Munchkin, so I will spare you the disingenuous crap arguments that you have been using on me.

As for the securities fraud indictments... if you don't think that can happen, you have not read the transcript of the next-to-last SCO conference call with securities analysts. These guys -- Darl McBride and David Boies -- are flat-out lying about the payment arrangements with Boies' law firm, in a way that purposefully misleads analysts as to the impact on future earnings that legal fees will represent. It is blatant. And it's on tape. And it is totally contradicted by SCO's subsequent SEC filings, which show that both men knew when they made the statements that they were lying.

Now it's possible that the SEC will blow it off. Such things happen. But if any ambitious young prosecutor wants an easy feather in his cap, the case is slam-dunk. They both say X, the reporters smell a rat and keep poking at it, and they both say X again several times. Then the company files an 8-K that shows they the contracts were entered into prior to the conference call, and they are nothing like what was said on the call. The impact on earnings is substantial. It is a clear case of securities fraud.

McBride: IBM walked away from Project Monterey, and they told us if we didn't like it, sue us.

Please... spare us quotes from Darl McBride. That guy is a sociopathic liar. Here he is saying "IBM walked away from Project Monterey, and they told us that if we didn't like it, sue us."

Darl McBride is CEO of a company that was never a party to Project Monterey. They didn't even buy the division until 9 months after the project had been cancelled. There is no "us" that IBM told anything to. He's trying to sell the same crap that you were trying to sell.... that his company and the one that participated in Project Monterey are the same company. That's a lie. It's trivially easy to establish these dates, and I've already done it twice in this thread.

Do you really think you're fooling anyone by posting this nonsense over and over? All you're doing is making a fool of yourself.

So is McBride.

IBM took chunks out of Monterey, and gave it away. You can find it in Red Hat and SuSE Linux.

That's what he says. Ask him what "chunks" he's talking about, and once again it turns out to be "chunks" that IBM owned to begin with. This is his SMP, JFS, NUMA crap. Those were not SCO contributions to Monterey. Those were IBM contributions. One of the things that Darl McBride is apparently going to have to have smashed into his face is that he does not own other people's stuff just because he says he does. Frigging sociopath is what he is.

What's worse, Caldera had employees working on porting this stuff to linux. He seems to want to forget that, too.

And he also wants to forget that Caldera subsequently distributed all this stuff themselves under the GPL, with their name on it. The guy is nuts. He owns everything, he's not responsible for his own actions, and if he had his fingers crossed when he released all this code under the GPL on the Caldera web site, he gets to claim now that he didn't mean it. The man is insane. If Microsoft wasn't having Waggoner Edstrom flogging his stories, he would have been dismissed as a nutcase months ago.

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SCO's suit not all that simple

By Bob Mims The Salt Lake Tribune

By Bob Mims
The Salt Lake Tribune