Follow Up: Novell challenges SCO in Linux fight

Novell Inc. has announced that it—not SCO Group—owns the Unix copyrights and patents that form the basis of SCO’s $1 billion lawsuit against IBM. SCO claims Big Blue unlawfully allowed proprietary Unix computer code to be copied into the open-source operating system Linux. The controversy is important to ed tech because the outcome could affect the future of Linux, which has been growing in popularity for servers in schools, colleges, and government agencies.

The stakes in this increasingly baroque dispute could rise still higher. Linux has traditionally been viewed as an operating system strictly for servers. Now, however, Linux has begun migrating to personal computers as well, a setting where Microsoft long has held sway virtually unchallenged.

When Hewlett-Packard introduced a Linux-powered laptop in Thailand not long ago, for instance, demand was so great, according to the daily newspaper Bangkok Post, that the Thai ministry of technology began talks to bring in other manufacturers if HP failed to keep up with orders. Serious Linux competition for Windows on personal computers could pose a major headache for Microsoft.

Some open-source advocates claim the lawsuit by SCO is intended to slow or stop the momentum of Linux. Others maintain the suit is an effort by SCO to make itself desirable as an acquisition target for IBM, Microsoft, or another giant technology company. SCO contends it is merely protecting its proprietary rights to Unix computer code and seeking fair compensation from those who use it.

Shortly after filing the IBM suit, SCO sent letters to 1,500 Linux customers claiming that Linux contains “unauthorized derivatives” of Unix and warning that Linux users might be subject to legal liability unless they pay fees to SCO. (See “SCO throws legal scare at Linux users,”

Microsoft quickly agreed to license SCO’s Unix code. Critics claimed the move was designed to provide funding for SCO’s Linux fight and lend credibility to SCO’s infringement claims.

But Microsoft general counsel Brad Smith is quoted by CNET News as saying that acquiring the license from SCO “is representative of Microsoft’s ongoing commitment to respecting intellectual property and the IT community’s healthy exchange of IP through licensing. This helps to ensure IP compliance across Microsoft solutions and supports our efforts around existing products, like services for Unix that further Unix interoperability.”

Unix was initially developed more than 30 years ago by AT&T. Then AT&T sold Unix to Novell. Novell, in turn, sold the operating system to SCO in 1995, but—according to Novell boss Jack L. Messman—never conveyed to SCO ownership of the Unix copyrights.

In a letter to SCO President and CEO Darl McBride, Messman spelled out the Novell position in no uncertain terms: “SCO is not the owner of the Unix copyrights. Not only would a quick check of U.S. Copyright Office records reveal this fact, but a review of the asset transfer agreement between Novell and SCO confirms it. To Novell’s knowledge, the 1995 agreement governing SCO’s purchase of Unix from Novell does not convey to SCO the associated copyrights.”

McBride replied that Novell’s assertion derives from what he called a “contradiction” in the 1995 contract with SCO: One part of the contract “said Novell had some rights to copyrights and patents,” according to McBride, but much more of the contract describes in detail copyrights and patents that will be transferred to SCO.

McBride said his company has checked with attorneys and top executives who were involved in the 1995 transaction. All agreed that the contract’s intent was to give SCO “the entire rights to the Unix business,” including copyrights and patents, McBride contended.

Messman’s letter to McBride went on to warn that SCO itself could be subject to liability: “SCO’s actions are disrupting business relations that might otherwise form at a critical time among partners around Linux technologies, and are depriving these partners of important economic opportunities. We hope you understand the potential significant legal liability SCO faces for the possible harm it is causing to countless customers, developers, and other Linux community members.”

Novell’s boss also directed key questions to SCO: “What specific code was copied from Unix System V? Where can we find this code in Linux? Who copied this code? Why does this alleged copying infringe SCO’s intellectual property? By failing to address these important questions, SCO has failed to put us on meaningful notice of any allegedly infringing Linux code, and thus has withheld from us the ability—and removed any corresponding obligation—to address your allegation.”

In recent days, SCO has offered to show examples of the allegedly pilfered code, but only if those scheduled to view it consent to signing a non-disclosure agreement. Signing such an agreement would negate the value of seeing the code, Novell and others have responded.

Will all this sound and fury hurt the Linux movement in education and elsewhere? Novell clearly thinks so, but a spokesman for SuSE, one of the firms circulating Linux, said they’ve not heard of a single prospective user who has altered course because of the controversy.

Leading market research firms are split on the likely impact of the controversy on Linux. The firms also are divided on what Linux users and prospective users should do now.

In May, analyst firm Gartner Inc. told customers they should minimize their use of Linux on important systems because of SCO Group’s warnings about legal liability.

But Forrester Research, another prestigious firm, had this advice for clients: “Enterprises should not stop their Linux rollouts. Why not? (1) The cost-benefit of migrating high-priced Unix on RISC servers to low-cost Linux on Intel servers is highly positive, (2) the risk that tiny SCO can muster the resources to effectively litigate against even one or two of the 1,500 companies it has threatened is low, and (3) IBM will further dilute that risk by intervening to eliminate the threat of legal action.”

See these related links:

Novell Inc.

SCO Group

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