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My understanding is that the copyright action is, legally speaking, merely a 'derivative" cause of action based on the same alleged facts that make up the breach of contract (meaning the breach of the Confidentiality clause) action.

In other words, if SCO can't prove the latter, they can't prove the former. If they can prove that IBM was not permitted to release the IBM-created UNIX-derivative AIX code due to the reach (as SCO alleges) of the Confidentiality clause, then such release would be a breach of copyright as well as a breach of confidentiality.

So it makes no sense for IBM to make it's fight on the amended complaint -- the ballgame is on the larger issue as to whether SCO can even show any re-use of the UNIX code, and on the interpretation of the Confidentiality clause, especially in view of the recently-emerged 1985 newsletter from ATT that undercuts SCO's legal theory of the Confidentiality clause.

Novell Inc.

SCO Group's demands on fees may spark action; SOFTWARE: Regulatory authorities keep eye on possible breach of Fair Trading Act

02/16/2004, 14:25 [New Zealand Herald]

The SCO Group, locked in a bitter war against Linux and embroiled in a US$5 billion ($7 billion) lawsuit against IBM, may be heading into trouble with the regulatory authorities in New Zealand and Australia.

Asserting it holds the rights to the Unix operating system, SCO's Australia/New Zealand subsidiary is demanding licence fees of A$285 ($320) per desktop and A$999 per server from all Linux users. SCO says that Linux contains code copied from Unix, but to date its claims remain unproven.

Asked if SCO ANZ's demands for licence fees could be a breach of the Fair Trading Act, Commerce Commission's spokeswoman Jackie Maitland says its preliminary view is that ``no one should pay an invoice unless they are clear on the obligation to pay''. Furthermore, Maitland says that ``it is not clear that SCO are entitled to charge end- users who have downloaded a product on the condition they understood the product was free''.

A person or a company falsely claiming to have ownership of a product or service or the rights to payment could breach the Fair Trading Act, said Maitland.

The commission is at this stage not clear what if any representations have been made in NZ, but says it is aware that the ACCC in Australia and FTC in the US ``are dealing with [SCO's licensing demands]''.

Intellectual property lawyer Craig Horrocks says the commission's comment about representations made in New Zealand is hard to understand, because SCO's Intellectual Property Licence for NZ was widely reported in media here.

Horrocks also asks whether New Zealand has adequate consumer protection in the technology arena if the commission simply defers to overseas agencies instead of taking action itself.

Before its crusade against Linux, Caldera, which later renamed itself The SCO Group, offered its own version of the free operating system called OpenLinux. It was well- received, especially as a desktop operating system alternative, and eventually ended up as the foundation of the United Linux consortium which featured large Linux distributions SuSE, Conectiva and TurboLinux.

Renamed ``SCO Linux 4.0'' and costing between US$600 and US$2200 the last version of SCO's Linux distribution was not a commercial hit, and is no longer for sale. However, Linux itself has always been covered by the GNU General Public Licence, which states any software offered under its terms is freely distributable, copyable and modifiable. This apparent paradox has not prevented SCO from claiming licence fees.

[(c) 2004 The New Zealand Herald ]

> "The amount is starting to become breathtaking,"

But before anyone decides to invest in SCOX, they'd
better head over to www.groklaw.net and do their
due diligence on the merit of SCO's case.

Don't presume from "IBM didn't oppose" that IBM failed
to respond. They did, and they indicated no objection
to SCO's amending. This is most likely because they
want this settled forever, and they want SCO to take
their best shot.

If the matter ever actually goes to trial, the final
case won't even resemble SCO's initial case, and SCO
will still lose. This was never about the merits of
their claim. Whether it was a failed attempt to get
IBM to buy out SCO, or is an ongoing stock scam, or
something else, is left as an exercise for the
informed investor.

This has all become so complicated that hardly anything reported in the press is true. The reporters are either too sloppy, or too ignorant, to understaand what is going on.

A judge has accepted the SCO Group's changes to a lawsuit

That is an error of fact. What the judge ruled on was SCO's "Plea for leave to file an amended complaint." At this point, the only thing that has happened is that the judge has ruled that yes, SCO has permission to file an amended complaint. That is not at all the same thing as the judge "accepting the changes."

Because IBM didn't oppose SCO's motion to amend its claims--a motion that was "subject to IBM's right to move against the amended pleadings"--Magistrate Judge Brooke Wells accepted SCO's new legal attack

The author does not understand what that first part means, and has therfore told us something that is not true in the second part.

This is lawyers dancing on the head of a pin. What IBM did not oppose was giving SCO leave to file an amended complaint. They explicitly reserved the right to "move against the amended pleadings" themselves, when they arrive.

Between where we are now, and the judge actually "accept[ing] the SCO Group's changes," there are at least 4 steps. SCO has to actually file the amended complaint. Then IBM gets some period of time in which to "move againt the amended pleading." SCO gets to answer that, and sometime after that there will be a hearing, followed by a decision as to whether to accept the amended complaint.

To read this article, you'd think all that is done. But it hasn't even begun yet.

How might IBM move against a claim of copyright infringement? They will almost certainly demonstrate to the court that two separate companies have registered the same copyrights, and that those are the ones at issue in SCO's amended complaint. There is therefore a dispute concerning the ownership of these copyrights, a dispute that SCO should be required to settle before they bring charges of copyright infringement against anyone. Why waste the court's and IBM's time trying a case that may be moot? This is a reasonable request on IBM's part, and it has a very good chance of being granted. SCO will have to go off and resolve its contract dispute with Novell over who owns the copyrights. IBM is not even a party to that dispute, so it's not something that can reasonably be addressed as part of this lawsuit.

Meanwhile, SCO has done something useless and stupid in the form of suing Novell for "slander ot title." Well, they can't really do that either, because that also gets back to whether SCO even has title. Somewhere out of that dreck there has to come a new lawsuit, a contract dispute, over how all those contract terms and amendments between the old SCO and Novell are to be interpreted. SCO says it means this, Novell says it means that, both companies have registrations on file with the Copyright Office, so until some court rules one way or the other, no one can be sure who really owns the copyrights.

So it may well turn out that the judge in SCO v IBM will decide not accept SCO's amended complaint, on the grounds that SCO cannot demonstrate that they even own the copyrights they are accusing IBM of infringing.

he said in a filing Wednesday

We are left to wonder who the "he" is that sentence. It is not Magistrate Brooke C. Wells.The reporter didn't even check. That's how sloppy the reporting is.