SCO vs. Linux – mixed reactions to Novell Unix copyright verdict
Detlef Borchers
The question of what happens next, following the decision that Novell has exclusive copyright to Unix and UnixWare, is currently occupying the minds of many in the IT industry. This review of this seemingly endless story may help to clarify the situation.
The verdict handed down (August 2007) by Judge Kimball in the SCO case has aroused much comment, some of it rather muddled in its arguments. In a 100 page judgement, Kimball explains why he concluded that Novell has not relinquished copyright to Unix and UnixWare to SCO. The German Frankfurter Allgemeine Zeitung writes that the judgement represents a victory for Linux in the copyright dispute, "The judgement removes the sword of Damocles hanging over the Linux community." It opines that the software industry can now breath a sigh of relief and offer Linux without let or hindrance. Businesses and government agencies in turn need no longer fear prosecution if they use Linux. The American Forbes goes one step further and predicts a Linux boom. The specialist press is also confused, with Information Week claiming that Novell can now block all SCO Group's law suits and that there is a risk that Novell will itself bring actions for copyright infringement against Linux. This is directly repudiated by Novell elsewhere.
In the driving rain, hackers at the Chaos Computer Camp took part in a procession around the camp, complete with drumming and obscure chants, to exorcise SCO from the world of software.
As news of the judgement that SCO did not own the copyright to Unix spread, hackers at the Chaos Computer Club summer camp organised a Hax0rcism. Accompanied by drumming and invocations, the procession circled the hangar at the former airbase hosting the event, before finally destroying a hard drive containing "evidence", the last remains of the primal evil known as SCO.
From hackers to financial analysts, the question of what happens next is occupying the minds of many in the IT industry – not all of them as well-informed as Pamela Jones, the good fairy behind Groklaw, a website which follows such cases. She has told Infoworld that Microsoft will be the next SCO Group; the company has been loudly rattling its patent sabres, claiming earlier this year that Linux violated mote than 235 Microsoft patents. Whether Microsoft goes beyond mere sabre rattling and whether SCO manages anything more than a last gasp is also a question of how you evaluate the course of court proceedings so far.
To briefly recapitulate the most important twists and turns of this seemingly endless story; it begins in early 2003, with the small SCO Group, vendor of the Unix operating systems OpenServer and UnixWare, opening a campaign against Linux distributors, describing Linux as a cheap copy of its own programs. Both are based on Unix System V, the licensing rights to which belong to SCO Group. The group had previously acquired the licenses from Novell. In March 2003 the threats were followed by the first actions – SCO launched a lawsuit against IBM. SCO accused IBM of illegally copying code from AIX, a System V variant licensed by SCO, into Linux. There was talk of damages in the range of $1 to $5 billion. SCO followed this up by intensifying its campaign against Linux. The open source operating system was deemed by SCO to be un-American and to mock the pursuit of profit. Various US journalists, who were required to sign non-disclosure agreements, were shown evidence of allegedly stolen code. In August and September 2003, IBM reacted and counter-sued the SCO Group, claiming that it had infringed IBM copyright and patents and had failed to observe the conditions of the GPL.
SCO Group then presented an initiative, SCOSource, aimed at worried businesses using Linux. It enabled them to buy an "antidote" – an "indulgence", one might even call it – in the form of an SCO license for the SCO code allegedly included in Linux. Investors were impressed by the move as being pretty much a license to print money. On the back of a vague recommendation from Microsoft, in October 2003 a group of investors led by investment fund Baystar Capital invested about $50 million in the SCO Group to allow the software distributor to restructure itself into an effective machine for pursuing legal actions against companies using Linux.
However, the restructuring had barely got off the ground when, in December 2003, the foundation on which all the prospective legal actions was based was convulsed by the intervention of Novell, which claimed that it had never sold the copyright for Unix to SCO. SCO reacted immediately and in January 2004 brought an action against Novell for slander of title. The company also launched its first suit against companies alleged to have installed stolen code, with car parts dealer AutoZone and car maker DaimlerChrysler the accused parties. This action was all the more astonishing as both companies were former customers of the SCO Group's predecessor.
Disappointed that SCO had sued just two companies and that only one company had bought an antidote license, investors in Baystar Capital prepared to cut their losses, finally severing ties with SCO in August 2004. Since then it has been the turn of the lawyers in the numerous lawsuits – including the suspended suits with Linux distributor Red Hat and AutoZone – to strut their stuff. SCO succeeded in putting the lid on runaway legal costs, but as early as December 2004 was forced to recognise that suing Linux installations was not the right route to big bucks.
In retrospect, the involvement of Novell in the dispute between SCO Group and IBM has proved doubly significant. The copyright verdict which has now been handed down not only means that SCO's slander of title suit against Novell is off the table, it also puts the boot into the action against IBM. The question of copyright has become significant in this case because SCO Group has still not been able to produce any really strong evidence that code has been taken from AIX; that thousands of lines of code have been turned into pilfered methods and concepts. In addition, Novell and Microsoft have since struck a deal which pulls the rug out from under SCO's strategy completely. Even if SCO were to win its lawsuit against IBM, it would still be unable to sell code licenses to Linux users. Adding insult to injury, according to the judge's decision, SCO Group now owes Novell millions in licensing fees which it has received from Microsoft and Sun Microsystems.
Against the backdrop of the various lawsuits and counter-suits it is worth noting that one goal of SCO's opponents is still far from being achieved. It remains the case that no court has declared that Linux represents a set of programs or distributions which are subject entirely to the GPL and are free from third party IP rights. As long as such no such verdict has been delivered, speculation will remain that some company, somewhere, may go further than mere sabre rattling and may make copyright, patent or plagiarism claims and demand licensing fees or other damages.
One blogger at Information Week, sees one consequence of the judgement as being that Novell could sell the copyright to another company such as Microsoft or could become an attractive target for a private equity takeover. The new copyright owner could then spin off a further company to harass the Linux community with lawsuits in the manner of SCO – a point of view which Novell repudiates in the Infoworld article mentioned above, "We're not interested in suing people over Linux. We're not even in the Unix business anymore." Nevertheless, the Infoworld article does go on to speculate on the new opportunities open to Novell, noting that there is nothing to stop Novell from suing existing Unix vendors. In doing so the author is hinting that Novell could sue IBM (AIX), Hewlett-Packard (HP-UX) or other Unix distributors. How these may have infringed Unix IP rights is left to the imagination. Perhaps the search for the "evidence" exorcised by the hackers is about to start over... (Detlef Borchers)
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