SCO-Linux Controversies

   

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The SCO Group (SCO) is involved in a dispute with various Linux vendors and users. SCO has initiated a series of lawsuits that will probably define the future of both Linux and UNIX. The company alleges that SCO's intellectual property has been incorporated into Linux without permission. Members of the Linux community have expressed skepticism regarding SCO's claims and some of the parties named in the lawsuits have launched counter-suits.

Background

In the beginning of 2003, The SCO Group claimed that there had been "misappropriation of its UNIX System V code into Linux". However, the company refused to identify the specific segments of code, claiming that it was a secret which they would only reveal to the court.

They later announced that they were suing IBM for $5 billion, claiming that IBM transferred SCO trade secrets into Linux.

Some industry experts believe that any relevant copyrights would be the property of Novell. And even those copyrights had been shown to be weak and unenforceable by the USL v. BSDi case a few years before. SCO has not claimed any patent infringement. The trademark, UNIX, had been transferred to the Open Group. That left trade secrets, which would be an issue strictly between SCO and IBM and not affect anyone else, especially Linux users.

There then ensued over many months a bewildering storm of claims, counter claims, threats, and litigation that involves many of the major names in the computer industry, including IBM, Hewlett-Packard, Microsoft, Novell, Silicon Graphics, Sun Microsystems and Red Hat.

As of mid 2004, five major lawsuits have been filed, which are


Details of each of these suits are below. Intertwined with these court cases has been a number of public statements and assertions made by SCO implying or directly claiming copyright infringement by a number of other parties, including not only Linux developers but also commercial Linux users.

UNIX SVRx

SCO's original claims were based on a package of rights in UNIX System V Release 4. These are the basis of SCO's claim to be the "owner of UNIX". These rights are derived as successor in interest through four separate sales of assets between four companies. The UNIX IP rights originated with UNIX Systems Laboratories, a division of AT&T. In 1993, USL sold all of the UNIX rights and assets to Novell, including all copyrights, trademarks, and active licensing contracts. A portion of those rights and assets, plus additonal assets derived from Novell's development work, was then sold to a company called Santa Cruz Operation in 1995. Santa Cruz Operation developed and sold a PC based UNIX product until 2000, when it then resold its UNIX assets to Caldera, which then changed its name to The SCO Group.

Through this chain of sales, SCO stands as successor in interest to some bundle of rights. Just what those rights are is being hotly contested by all parties. SCO's two most important claims are to the core copyrights to all of the UNIX code developed by USL, referred to as SVRx, and to the standing in the licensing contracts originating with AT&T, inherited through the same chain of sales. The primary document SCO presents as evidence of these claims is the "Asset Purchase Agreement", (in the original (http://www.groklaw.net/pdf/SCONovellAssetAg.pdf) or transcribed (http://www.groklaw.net/article.php?story=2003111023050367&query=asset+purchase+agreement)), that defines the sale between Novell and Santa Cruz Operation. Any rights that SCO has that derived from Novell, and USL before it, must be defined at the time of that sale. This would include any copyrights to the UNIX code base and contractual rights to the licensing base. SCO claims that these documents demonstrate that they own all of the UNIX copyrights and that they have unrestricted standing in the licensing agreements. The other parties disagree.

UNIX Copyrights Ownership

Novell has challenged this interpretation of the purchase agreement. In response to a letter SCO sent to 1500 companies on May 12, 2003, [1] (http://www.novell.com/licensing/indemnity/pdf/5_12_03_sco-n.pdf), Novell exchanged a series of letters (http://www.novell.com/licensing/indemnity/legal.html) with SCO beginning in May, 2003, claiming that the copyrights for the core UNIX System V were not included in the asset purchase agreement and were retained by Novell. In October of 2003, Novell registered those copyrights with the US Copyright Office.

In response to these challenges from Novell, SCO filed a "Slander of Title" suit against Novell in a Utah state court, SCO v. Novell January 20, 2004. The complaint said that Novell was interfering with their business activities by clouding the ownership of the UNIX copyrights. The case was immediately remanded to Federal Court because the validity of copyright transfer is covered by federal copyright law. The case was dismissed on June 9, 2004 on a pleading technicality. However, the judge did express doubt that the Asset Purchase Agreement transferred the relevant copyrights.

"Although the case will obviously require contract interpretation, at this stage of the litigation, the agreements raise substantial doubt as to whether the APA as amended by Amendment No. 2 qualifies as a Section 204(a) writing.", [2] (http://www.groklaw.net/pdf/Novell-29.pdf).

SCO filed an amended complaint and the case awaits further court action. As of August, 2004, there has been no further resolution of the question of which copyrights the APA did or did not transfer.

There also is an issue with the status of the copyrights as they originated with USL. The UNIX code base has always been a compilation of elements with different copyright histories. Many original files were released without copyright notices prior to changes in the copyright laws in 1976 that made copyright automatic. These materials may be in the public domain and not subject to copyright claims. Other elements have been affected by the USL v. BSDi case, and are covered by the BSD License, allowing unconditional reuse.

License Administration Standing

The Novell to Santa Cruz Operations Asset Purchase Agreement also conveyed some number of rights and obligations related to the administration of some 6000 standing licensing agreements between various UNIX customers and users and the previous owners, both Novell and AT&T through its subsidiary,USL, known as the "UNIX Licensees". These licensees include many universities, end user corporations and a small number of computer hardware companies. The computer makers used the license to develop versions of UNIX specific to their products. SCO's standing with the licenses has become an issue in three aspects of the SCO-Linux Wars so far. The first was the cancellation of IBM's license, the second was SCO's demand for certification that led to the SCO v. DaimlerChrysler complaint, and the third is the derivitave works claim that is basic to the SCO v. IBM case.

In May, 2003, SCO announced its intent to cancel IBM's SVRx license to its version of UNIX, called AIX because of IBM's response to the lawsuit. This action was based on SCO's claim of unrestricted standing in the Systems V licensing contracts inherited from USL. Novell again challenged that interpretation and voided SCO's actions under the terms of the same Asset Purchase Agreement, section 4.16(b), [3] (http://www.groklaw.net/pdf/SCONovellAssetAg.pdf). IBM ignored the license cancellation because of Novell's action. SCO then amended its SCO v. IBM complaint to include copyright infringement based on IBM's continued sale and use of AIX. (Contrary to popular understanding, SCO has not claimed in the SCO v. IBM case that IBM has infringed the SVRx copyrights. SCO is claiming that the derivative works developed by IBM are also subject to the same restrictions as the original SVRx code.) The issue has arisen in a motion made by IBM for a Preliminary Summary Judgment, deciding that IBM has not violated copyright to any SRVx material in its Linux activities.

In December, 2003, SCO sent a letter to all of the UNIX licensees demanding certification of a number of items, some related to the use of Linux, that were not provided for in the License agreement language. DaimlerChrysler failed to respond within the 30 day time frame demanded in the letter. SCO then filed the SCO v. DaimlerChrysler suit in March, 2004. All claims related to the certification demands were summarily dismissed by the court.

The third issue based on the UNIX Licensees agreement is related to SCO's claims of control of derivative works. This is a major and complex question and is discussed in a separate section below.

Control of Derivative Works

Many UNIX licensees have added new features and services to the core UNIX SVRx system and those new features contain computer code that was not in the original SVRx code base. In most cases, the copyright for software code is owned by the person or company that develops it, unless rights have been explicitly assigned to another party. SCO, however, is claiming that the language of the original licensing agreements defines such new code as a derivative work. They further claim that they have the right to control and restrict how that new code is used and distributed.

These claims are the basis of SCO v. IBM. A large part of SCO's initial complaint, [4] (http://sco.tuxrocks.com/Docs/IBM/complaint3.06.03.html), was that IBM violated the original licensing agreement by not maintaining confidentiality with the new code, developed and copyrighted by IBM, and releasing it to the Linux project.

IBM claims that the license agreement and subsequent clarifications in contract language noted in the $Echo newsletter of April 1985, [5] (http://www.groklaw.net/article.php?story=20040211153230800), and present in subsequent licenses defines derivative works as the developer's property free of any claims. This leaves IBM free to do as it wishes with its new code. In August, 2004, IBM filed a motion for a Partial Summary Judgement as part of the SCO v. IBM case. This motion states that the contract language and depositions from those involved with the original license agreements make clear as a matter of law that IBM has the right to do as it wishes with software not part of the original SRVx code. This issue remains unresolved at this time and is still before the court.

SCO IP in Linux

The claim most commonly heard in SCO's public statements is that Linux infringes SCO's intellectual property. This claim is fundamental to the SCOsource program, where SCO offers licenses to use that intellectual property to Linux users. Exactly what parts of Linux are involved in this infringement remains undefined. There are only four kinds of intellectual property; copyrights, patents, trademarks and trade secrets. Patents and trademarks have not been issues in any claim raised by SCO against Linux to date. SCO's initial complaint in the SCO v. IBM case claimed IBM had violated trade secrets. But trade secrets violations by IBM could not create any liability by Linux distributors or end users. The trade secret violation claims, however, were dropped when SCO filed its amended complaint, [6] (http://sco.tuxrocks.com/Docs/IBM/Doc-25.html), in June of 2003.

This leaves copyrights. SCO's initial statements claimed line for line literal copying of code from UNIX code files to Linux kernel files, but they refused to identify which code was in violation. Over the time of these events, SCO has offered a number of specific examples that it claims as evidence of infringement in public statements, correspondence and in various court filings.

The examples of infringing Linux code have fallen into two groups. The first group are segments of files or whole files claimed to originate in the UNIX SRVx code base. The second group are files and materials contributed by IBM that originated at IBM developments associated with AIX and Dynix, IBM's two UNIX products.

Each group has a different set of issues. In order for a violation of copyright to exist, several basic conditions must be met. First, the claimant must be able to show that they own the copyrights for the material in question. Secondly, all or a part of the source material must be present in the infringing material. There must be enough similarity to evidence direct copying of material.

SVRx Code in Linux

The issue of ownership of the SVRx code base was discussed above. Beside the unresolved issue of the transfer from Novell to Santa Cruz Operation, there is also the significant portions of SVRx code base that are covered by BSD copyrights and public domain.

SCO's first public disclosure of claimed infringing code was at SCOForum in August, 2003. Two examples were shown. The first, known as the Berkeley Packet Filter, was distributed under the BSD License and is freely usable by anyone. The second example was related to some memory allocation functions and was also released under the BSD License. It also was no longer in the Linux code base, [7] (http://perens.com/Articles/SCO/SCOSlideShow.html).

SCO has also presented a claim that code segments related to Application Program Interfaces has been copied from UNIX. It has been shown that this code and the underlying standards they describe are both in the public domain and also are related to rights that USL sold to The Open Group, [8] (http://www.zdnet.com.au/insight/software/0,39023769,39116509,00.htm). A later claim was also made to code segments related to ELF file format standards. This material was developed by the Tool Interface Standard (TIS) Committee and placed in the public domain, [9] (http://www.groklaw.net/article.php?story=20040722135616439).

To date, SCO has voiced claims of someone violating UNIX SVRx copyrights by putting code into Linux only in the press and public forums. They have not brought this claim directly in any of the cases they have filed. The IBM case is about derivative works, not SVRx code (see below). The Novell case is about copyright ownership. DaimlerChrysler was about contractual compliance statements. In Autozone, SCO claims that Autozone copied certain libraries (outside the Linux kernel) from a Unix system to a newer Linux-based system to facilitate moving an internal application to the Linux platform faster. Autozone denies the claim. The claim has nothing to do with the Linux kernel or the actions of any distributors.

The copyright issue has been directly addressed in two cases. The first is by IBM in their counter claim in the SCO v. IBM case. The issue is central to a pending motion by IBM for a Preliminary Summary Judgment, stating that IBM has violated no copyrights in the SVRx licensed product in its Linux related activities. It has also been addressed by Red Hat in the Red Hat v. SCO case. Red Hat has claimed that SCO's public statements about infringement in Linux are unproven and untrue, damaging to their business, and violations of the Lanham Act and Red Hat asks for an injunction to stop claims of violations without proof. They also ask for a judgment that they violated no SCO copyrights in their activities. A hearing on the IBM motion is scheduled in September, 2004. The Red Hat case is on hold.

IBM code in Linux

SCO has pointed to a number of instances of code contributed to Linux by IBM as examples of infringement of their IP rights. These examples include code related to Symmetric Multiprocessing (SMP), Journaled File System (JFS), Read-Copy Update (RCU) and Non-Uniform Memory Architecture (NUMA). This code is unquestionably in the Linux kernel, and was contributed by IBM through the normal kernel submission process. These code groups were developed and copyrighted by IBM. They added features to the AIX and Dynix versions of UNIX. SCO claims that they have 'control rights' to this code that is the equivalent of copyright. They base this claim on language in the original license agreement that requires non-disclosure of the code under license. They further claim that this applies to any code developed by UNIX Licensees and used in association with the code under license. This claim is discussed above at Control of Derivative Works.

The validity of these claims is directly addressed by a motion for Partial Summary Judgement filed by IBM in August 2004 in the SCO v. IBM case. The motion ask for a judgement that the Asset Purchase Agreement does not give SCO any rights over IBM developed material.

SCO and The GPL

Before changing their name to the SCO Group, the company was known as Caldera. They were one of the major distributors of Linux from the companies inception in 1994 to 2003. Some legal observers have suggested that because they themselves distributed the infringing code under the GPL that this act would license any proprietary code in Linux, [10] (http://www.internetnews.com/dev-news/article.php/2207791). They, in turn, have stated that they didn't know their own code was in Linux, so releasing it under the GPL doesn't count. They also claim that the GPL itself is invalid and non-binding.

The GPL has become an issue in the SCO v. IBM case. In its eighth counterclaim, IBM charges that SCO has violated IBM's copyrights by distributing SCO's own version of Linux. In August, 2004, IBM filed a motion for Partial Summary Judgement on this specific question. Since IBM released the relevant code only under the terms of the GPL, that is the only way the code can be copied and distributed. IBM states that SCO has voided the GPL by publicly denouncing its validity and by claiming that the GPL violates the U.S. Constitution, together with copyright, antitrust and export control laws. SCO has also voided the GPL by collecting and attempting to collect licensing fees while distributing IBM's copyrighted material that is part of Linux. This explicitly terminates all rights granted by the GPL. Many observers believe that this means that SCO has released and distributed IBM's code without permission, a clear copyright violation.

Status of Current Lawsuits

SCO v. IBM

On March 7, 2003, The SCO Group filed suit against IBM. Initially this lawsuit was about breach of contract and trade secrets. Later on SCO dropped the trade secrets claim, so the main focus is breach of contract. SCO also added a copyright claim related to IBM's continued use of AIX, but not related to Linux. IBM filed a counter claim, including charges of both patent violations and violation of copyright law.

Current state: Discovery is underway. A motion by IBM for a summary judgement regarding violation of USVx copyrights in Linux has been heard by the court and a decision is pending. Two further motions have been added by IBM for summary judgement on the derivative works claim in SCO's complaint and on IBM's claim of SCO's violation of IBM's copyrights and the GPL.

Red Hat v. SCO

Red Hat filed suit against The SCO Group on August 4, 2003. Red Hat sued SCO for false advertising, deceptive trade practice and asked for a declaratory judgement of noninfringement of any of SCO's copyrights.

Current state: The case has been stayed pending the resolution of the IBM case. Red Hat is actively trying to reopen this case. The motion for lifting the stay is fully briefed.

SCO v. Novell

After The SCO Group initiated their Linux campaign, they made several statements that they were the owners of UNIX. Novell claimed these statements were false, and that they actually still owned UNIX. After Novell registered the copyrights to some key UNIX products, SCO filed suit against Novell, claiming slander of title.

Current state: The court ruled that Federal court is the correct forum for this lawsuit and dismissed it without prejudice, on the basis of inadequate pleading on special damages. SCO has filed a corrected version of their original complaint. Novell has also filed a motion to dismiss the second claim with prejudice

SCO v. AutoZone

AutoZone, a corporate user of Linux and former user of SCO OpenServer, was sued by The SCO Group on March 3, 2004. SCO claims AutoZone violated SCO's copyrights by using Linux.

Current state: This lawsuit has been stayed pending the resolution of the IBM, Red Hat and Novell cases. However, both sides were granted limited discovery related to a possible preliminary injunction.

SCO v. DaimlerChrysler

In December 2003, The SCO Group sent letters to a number of UNIX licensees demanding that they certify certain issues regarding their usage of Linux. DaimlerChrysler, a former UNIX user and current Linux user, did not respond to this letter. On March 3, 2004 SCO filed suit against DaimlerChrysler for violating their UNIX license agreement by failing to respond to the certification request.

Current state: Almost every claim SCO made has been ruled against in summary judgement (not dismissed, see the hearing transcript, page 15 (http://www.groklaw.net/pdf/DCHearing-2.pdf)). Only the issue of whether or not DaimlerChrysler should have responded within 30 days is still before the courts.

Other issues and conflicts

SCO and SGI

During SCOforum in August 2003, The SCO Group presented two examples of what they claimed was the illegal copying of copyrighted code from UNIX to Linux. One of the examples (Berkely packet filter) apparently was not related to original UNIX code at all. The other example did, however, seem to originate from the UNIX code and was apparently contributed by a UNIX vendor Silicon Graphics. In fact, this code contained comments identical to comments in UNIX code thus seeming to prove the copyright infringement in the Linux kernel. However, a more detailed analysis had revealed that

  • the code (and the comments) originated from an even older version of UNIX which at some point was published by Caldera (the same Caldera which had later became SCO) thus making any claim of copyright infringement very shaky
  • the code was only used in the IA-64 specific part of Linux kernel and thus the vast majority of Linux users would not have used it
  • the code was removed from the Linux kernel about 2 months before the SCOforum as being redundant
  • the contested segment was small (80 lines of code) and fairly trivial

SCO and Baystar Capital

In October 2003, BayStar Capital and Royal Bank of Canada invested $US50 million in The SCO Group to support the legal cost of SCO's Linux campaign. Later it was revealed that Baystar was referred to SCO by Microsoft, a competitor of Linux. Baystar was, however, not satisfied with the way SCO was handling their Linux campaign and threatened to pull back. On August 27, 2004 SCO and Baystar closed their dispute. [11] (http://www.theregister.co.uk/2004/08/27/sco_completes_baystar_settlement/)

SCOsource

After their initial claim of copyright infringement in the Linux kernel, The SCO Group started their SCOsource initiative which sells licenses to Linux users. Corporate users of Linux can buy a license at $699 (USD) per processor running Linux. SCO says that participants of the SCOsource initiative are not liable for any claims that SCO makes against Linux users.

See also

External links



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