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IP attorney: Why SCO has no case
SearchOpenSource.com ^ | 2005/01/09 | Jan Stafford

Posted on 01/10/2006 8:34:45 AM PST by TechJunkYard

IT directors shouldn't worry about SCO Group's latest sallies in its legal war on Linux vendors IBM Corp. and Novell Inc., says attorney Thomas Carey. It's just more posturing, or as Shakespeare said, a tale "full of sound and fury, signifying nothing."

In this interview, Carey explains why SCO has no case, predicts the open source legal fields of battle for 2006 and discusses SCO's claims against Novell. Carey chairs the Business Practice Group of Bromberg & Sunstein LLP, an intellectual property law practice in Boston, Mass. Carey's IT background includes a stint as a programmer for the city of New York.

What's the linchpin of SCO's anti-Linux legal battle?

Thomas Carey: The key to the case is that IBM specifically negotiated with SCO a clause that permitted it to use the same programmers who saw the Unix code to make competing products. This was documented as part of a transaction in which SCO was paid lots of money. SCO conveniently left that clause out of its explanation of the facts. But in the long run, it will not be able to hide from that concession.

The result is, absent literal copying of meaningful amounts of Unix into Linux, SCO has no case. None. Nada. Zilch.

Is there any significance to the timing of SCO's renewed activity in its anti-Linux lawsuits?

Carey: [It's] quite possible the renewed activity results from the recent completion of a PIPE [Private Investment in Public Equity] offering by SCO, giving it the funds to proceed more vigorously than before.

Has SCO actually shown that its UnixWare System V code exists in SuSE Linux or another distribution?

Carey: SCO has not shown that its code exists in Linux. SCO now seems to be grounding its case on 'unauthorized disclosures', which is a very different kettle of fish than copied code.

What are the implications of SCO's suit against Novell for Novell/SuSE customers?

Carey: The implications are generally the same as they are for Red Hat customers, except that Novell has some superior legal standing because of their presence in the chain of title to Unix.

But this really misses the main point, which is that SCO's lawsuit is a lost cause. The implications for Linux users are rather like the implications for passengers on an ocean liner of a seagull diving into the water nearby. A physicist might be able to measure the perturbation, but the passenger feels nothing.

SCO went after, with lawsuits, Linux customers before. Do you foresee this happening again?

Carey:This might happen again. Hitler fought World War II until the Allies had nearly overrun his bunker. As long as investors are willing to provide the cash, SCO will sue because that is their business model. They will likely go after smaller companies as a means of controlling the cost of litigation.

Last summer, it came out that an outside consultant, Bob Swartz, conducted an audit for SCO that showed that no SCO code was used in Linux. Why do you think that CEO Darl McBride still proceeded with lawsuits against IBM and Novell?

Carey: The facts concerning this analysis are not very clear. The consultant apparently did find some overlapping code, but came to the conclusion that it was not significant. You can understand how opinions on this might differ. In addition, the audit may have been inadequate to determine whether or not there were derivative works contained in Linux.

I think that the strategy behind SCO's legal actions was to generate recurring licensing revenue from thousands of Linux users who would pay up on the theory that the license fee would be cheap insurance against a lawsuit. The strategy failed.

When will SCO's suits come to a conclusion? Why are they taking so long?

Carey: A trial date has been set for February, 2007. There may be more delays. The factual investigation associated with the development of so many lines of code is very time-consuming.

What does the Novell case mean to other Linux vendors and to corporations using Linux?

Carey: It means much less than the IBM case. Novell presents an interesting, but far-fetched, reason why SCO might have little right to pursue the claims it is pursuing. The IBM case is likely to determine that the claims themselves are baseless; not because IBM didn't contribute ideas found in Unix to Linux. That is a factual question about which I am agnostic. The claims are baseless because IBM had a clear right to copy the ideas embedded in Linux under its agreements with SCO. I strongly suspect that IBM did no more that that, and thus SCO is out in the cold.

What are your predictions for legal activity in the open source arena in 2006?

Carey: The skirmishing will revolve around version 3.0 of the GPL, and the extent to which it attempts to GPL code that is dynamically linked to it; or to otherwise clarify the mysterious "lesser GPL". Also the Massachusetts drive for open source file formats will be interesting.


TOPICS: Miscellaneous; Technical
KEYWORDS: computers; linux; microsoft; nix; sco; unix
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More grist for the mill.

Don't just take his word for it... the contracts are all here. However, these three are pertinent:


1 posted on 01/10/2006 8:34:47 AM PST by TechJunkYard
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To: TechJunkYard

Carey's comments also discussed at:
http://www.groklaw.net/article.php?story=20060109231849961


2 posted on 01/10/2006 8:37:13 AM PST by Boundless
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To: ShadowAce; N3WBI3
Tech / OSS Ping requests...
3 posted on 01/10/2006 8:37:15 AM PST by TechJunkYard (MS users: how much abuse are you gonna take?)
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To: rdb3; chance33_98; Calvinist_Dark_Lord; Bush2000; PenguinWry; GodGunsandGuts; CyberCowboy777; ...

4 posted on 01/10/2006 8:49:38 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: TechJunkYard
Is there any significance to the timing of SCO's renewed activity in its anti-Linux lawsuits?

Carey: [It's] quite possible the renewed activity results from the recent completion of a PIPE [Private Investment in Public Equity] offering by SCO, giving it the funds to proceed more vigorously than before.

Is there anyone out there stupid enough to invest in SCO thinking it is likely to make money? The only reason I could see putting money into SCO is to damage Linux. And I can think of only one company has a significant reason to want Linux damaged. I'm not saying who, but their initials are M$.

5 posted on 01/10/2006 8:50:56 AM PST by KarlInOhio (What is the most obscene gesture to a Democrat? An Iraqi voter showing him a stained finger.)
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To: TechJunkYard
The skirmishing will revolve around version 3.0 of the GPL, and the extent to which it attempts to GPL code that is dynamically linked to it;...

This caughy my attention. Since I have heard nothing in regards to 3.0, is this true? Are they really going to try to GPL dynamically linked code? I can't see a legal footing for that.

6 posted on 01/10/2006 8:55:53 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: TechJunkYard
The key to the case is that IBM specifically negotiated with SCO a clause that permitted it to use the same programmers who saw the Unix code to make competing products

I know this may be done for clean writing, but it falls into SCO's hands and therefore annoys me. IBM did not negotiate a contract with SCO. Its contracts were with AT&T and the Santa Cruz Operation (now called Tarantella), not SCO.

SCO even changed its name from Caldera to SCO in order to give it an air of legitimacy for the law suits. They are not enforcing their own contracts, only interpreting contracts made long before by others, against the interpretations of those who actually negotiated the contracts.

7 posted on 01/10/2006 9:31:50 AM PST by antiRepublicrat
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To: ShadowAce
Are they really going to try to GPL dynamically linked code? I can't see a legal footing for that.

Neither can I. Can Stallman be trying for a push to expand the GPL by legal technicalities? We all know he hates the very concept of non-GPL software.

8 posted on 01/10/2006 9:34:23 AM PST by antiRepublicrat
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To: ShadowAce

I just spent some time reading on the GPL3. It doesn't look that bad. It will mainly tighten up some loopholes that let people abuse the license, treat software running a web server as distribution, and address software patents. It'll be a fully public and transparent group effort with the motto "First, do no harm."

That still doesn't mean it won't be Stallman-psycho, but I'll just wait and see.


9 posted on 01/10/2006 9:46:18 AM PST by antiRepublicrat
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To: ShadowAce
Since I have heard nothing in regards to 3.0, is this true? Are they really going to try to GPL dynamically linked code?

I have to research that. It could be that the "draft" test has such a loophole that people are concerned about.

10 posted on 01/10/2006 9:47:31 AM PST by TechJunkYard (MS users: how much abuse are you gonna take?)
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To: antiRepublicrat
I've observed many times that SCOG wasn't a party to the original contracts, so how could they "know" what the intent of the original signers were?
11 posted on 01/10/2006 9:49:57 AM PST by TechJunkYard (MS users: how much abuse are you gonna take?)
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To: antiRepublicrat
That still doesn't mean it won't be Stallman-psycho,...

Any idea where our favorite future felon may be hiding?

12 posted on 01/10/2006 9:52:00 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: ShadowAce
Any idea where our favorite future felon may be hiding?

I don't know, but I'm glad there's no ex post facto. I've had too much fun in the past playing with the trolls, which I'm sure annoyed them.

13 posted on 01/10/2006 9:56:24 AM PST by antiRepublicrat
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To: TechJunkYard
so how could they "know" what the intent of the original signers were?

Especially when IBM dug up statements from practically everyone involved on both sides to show SCO's interpretation was wrong. Maybe this is just a big comedy of errors thought up by some brilliant film producer.

14 posted on 01/10/2006 9:58:40 AM PST by antiRepublicrat
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To: ShadowAce

She's all windows, all the time, so she's probably busy as hell patching. If we're thinking of the same person.


15 posted on 01/10/2006 10:19:27 AM PST by Salo (He hath touched me with his noodly appendage. Ramen.)
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To: TechJunkYard

SCO is going to go bankrupt if they keep up this nonesense with the lawsuits... oh wait they did that on their own with their worthless product.


16 posted on 01/10/2006 10:20:00 AM PST by Element187
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To: Salo

"She"? I didn't picture that...


17 posted on 01/10/2006 10:20:45 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: KarlInOhio
Is there anyone out there stupid enough to invest in SCO thinking it is likely to make money?

Not anymore. At the time of the original PIPE deal, there was enough speculation in the "tech" press that there was at least some merit to SCO's position, that investors who didn't do the research may have thought there was a BIG payoff just down the road.

Now that there has been a big change of attitude even among SCO's old supporters, investment money has been hard to come by. Almost everybody has heard of the case by now and almost all of them think it's a scam.

The only reason I could see putting money into SCO is to damage Linux. And I can think of only one company has a significant reason to want Linux damaged. I'm not saying who, but their initials are M$.

Another reason might be an insider PR campaign to show "support" for SCO. The latest shot-in-the-arm included a lot of money from Darcy Mott, a board member, supposedly to support a stock buyback, but I've heard speculation that someone flush with cash and close to SCO (Ralph Yarrow perhaps?) is trying to get rid of some of it. IMO, Micr'soft isn't likely to be the source of this cash because (1) MS saw what happened the first time the PIPE was attempted, and (2) it didn't work -- Linux growth actually accelerated.

18 posted on 01/10/2006 1:25:15 PM PST by TechJunkYard (MS users: how much abuse are you gonna take?)
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To: Element187
SCO is going to go bankrupt if they keep up this nonesense with the lawsuits... oh wait they did that on their own with their worthless product.

Novell can do it singlehandedly if they ask for 95% of the SUN and MS license money to be escrowed, and the request is granted.

But it looks to me like the lawyers are setting up to do it for them. SCO's last payment to their legal team was last month; after February the lawyers will be working for free. IBM is about ready to go to SJ or trial, while Novell is headed for discovery;

Now let me ask you if it might be interesting for the lawyers to get these two cases so wrapped up in dependencies on each other, both in front of the same judge, such that no one can determine which case should be tried first? And then SCO goes belly-up and heads to bankruptcy court? And nothing gets resolved?

Dark clouds hang over Novell's copyright issues, IBM's home-grown code rights and the very heritage of Linux. Party in Redmond!

19 posted on 01/10/2006 1:50:50 PM PST by TechJunkYard (MS users: how much abuse are you gonna take?)
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To: TechJunkYard
And nothing gets resolved?

I'm becoming more convinced that this is the strategy.

20 posted on 01/10/2006 1:53:54 PM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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