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SCO to Novell: We Do Too Own the Unix IP

SCO to Novell: We Do Too Own the Unix IP

Embattled SCO Group CEO Darl McBride, currently the most maligned man in the industry, both publicly and privately, says that despite Novell's contention that SCO doesn't own the Unix patents and copyrights, his legal councilors say SCO does and that it could have sued IBM on the grounds of patent and copyright infringement, but decided to go with a breach of contract charge instead because contracts make a stronger case than IP any day and besides, under contract law, you can get a guy on conduct breaches - like using Unix concepts and methods, a claim that's key to SCO's case.

In a prepared statement issued Wednesday morning shortly after Novell dropped its little bombshell, SCO claimed that it "owns the contract rights to the Unix operating system" and that it has the "contractual right to prevent improper donations of Unix code, methods or concepts into Linux by any Unix vendor." "Copyrights and patents," it said, "are protection against strangers. Contracts are what you use against parties you have relationships with. From a legal standpoint, contracts end up being far stronger than anything you could do with copyrights."

McBride says Novell contacted SCO after SCO letter-writing campaign started a couple of weeks ago - it's SCO's letter to 1,500 CEOs that's really got people's knickers in a twist - the letter that warned the big public companies that they might be legally liable if they used Linux. Novell, he said, was worried. They agreed to meet this past Tuesday in SCO's offices to look at the code SCO claims Linux pinched from SVR5 under NDA. Then the idea of face-to-face meeting turned into a phone call though McBride said he wasn't quite how one is supposed to compare lines of code over the phone and then Novell never called.

Novell issued its letter to McBride publicly the next morning. Supposedly the move was a surprise to SCO.

The letter, written over the signature of Novell chairman and CEO Jack Messman, says that the asset purchase agreement between Novell and the original SCO back in 1995 didn't transfer the SVR5 copyrights and patents to SCO, a claim that anti-SCO observers say makes a hash of the new SCO's royalty pretensions.

Messman's letter says, "Apparently you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected....Finally, we find it telling that SCO failed to assert a claim for copyright or patent infringement against IBM."

McBride said later during a conference call with Wall Street about SCO's earnings that he had approached Novell about the copyrights and patents last year when he signed on to SCO and Novell middle managers agreed the IP belonged to SCO. Any transfer however was nixed by Novell higher-ups. According to McBride, the situation became, "If SCO wants them," meaning the copyrights and patents, "then we," meaning Novell, "must want them too." He said he had consulted the four parties who signed the original transfer agreement and confirmed that the intent was to transfer the copyrights. "We have the absolute right to protect that and push our right in the marketplace. If they want to fight that battle we are very confident of how a judge would view that contract."

Despite the fact that Novell evidently stood SCO up when it could have seen the purported plagiarism - McBride thinks it was because of the terms of the NDA - Messman tells SCO "It is time to substantiate that claim, or recant the sweeping and unsupported allegation made in your letter. Absent such action, it will be apparent to all that SCO's true intent is to sow fear, uncertainty and doubt about Linux in order to extort payments from Linux distributors and users."

SCO of course, much to the Linux community's irritation, has refused to identify any alleged copying.

Messman wants to know "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," he said "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."

Then Messman brings up the NDA. "We wonder," he says, "whether the terms of the nondisclosure agreement will allow Novell and others in the Linux community to replace any offending code." (Which is of course exactly what SCO says it wants to avoid.) "Specifically," he goes on, "how can we maintain the confidentiality of the disclosure if it is to serve as the basis for modifying an open source product such as Linux? And if we cannot use the confidential disclosure to modify Linux, what purpose does it serve?"

Messman closes with the threat that "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. SCO's actions, if carried forward, will lead to the loss of sales and jobs, delayed projects, canceled financing and a balkanized Linux community."

SCO claims it's got the wherewithal to defend itself against any countersuits that may be lodged.

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More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at) or paperboy(at), and by phone at 516 759-7025. Twitter: @MaureenOGara

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