SCO Loses Big in Its Unix Suit v. Novell

Via Groklaw,

Judge Dale Kimball has issued a 102-page ruling [PDF] on the numerous summary judgment motions in SCO v. Novell. Here it is as text. Here is what matters most:

[T]he court concludes that Novell is the owner of the UNIX and UnixWare Copyrights.

Looks like the long nightmare may be (almost) over.

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8 Responses to SCO Loses Big in Its Unix Suit v. Novell

  1. Well, unless you’re one of the open source programmers who took advantage of Caldera’s 2002 BSD-licensing of ancient Unix. If they don’t own the copyright (the reg was fairly vague about the decision, but the drooling linux fanboys at work were convinced that SCO lost the copyright just because Caldera took it over? That would certainly make mergers a much more exciting game) they can’t change the licensing terms, and so all this formerly open source code is *poof* suddenly proprietary again.

    You can just *imagine* my delight at the prospect of having to go into my Linux distribution to replace all of the small fast V7 code with bloated modern rewrites. I hope the appeals court says “no, SCO gets to keep the copyrights” because if SCO has possession of the copyright when they go bankrupt, the change in the terms of the ancient Unix license will stick no matter who picks up the carcass at the liquidation sale.

  2. Ned Ulbricht says:

    Looking at David’s comment here, and the relevant post and comments on his blog, it’s hard to tell exactly what he thinks the basis of the ruling was. In particular, David somehow seems to be confusing the effects of what we call a 17 U.S.C. §204(a) writing with the effects of the “Change of Control” provisions in the 1995 asset purchase agreement (APA). But never mind all that, it doesn’t look like he’s following the case that closely.

    Instead let’s focus on part of what Judge Kimball wrote on pp.27-28 of his recent decision:

    On January 4, 2003, McBride received an email from Michael Anderer, a consultant for SCO retained to examine its intellectual property. Supp. Brakebill Decl. Ex. 12. Anderer stated that the APA “transferred substantially less” of Novell’s intellectual property than Novell owned. Anderer noted that Santa Cruz’s “asset purchase” from Novell “excludes all patents, copyrights, and just about everything else.” Id. Anderer cautioned that “[w]e really need to be clear on what we can license. It may be a lot less than we think.”

    On February 4, 2003, McBride contacted Christopher Stone, Vice Chairman of Novell, and stated that he wanted Novell to “amend” the APA to give SCO “the copyrights to UNIX.” Supp. Brakebill Decl. Ex. 17; id. Ex. 18 (“Stone Dep.” at 108-09). Then, on February 25, 2003, McBride twice called a Novell employee in business development, David Wright, and said, “SCO needs the copyrights.” Wright passed on McBride’s request to Novell’s in-house legal department. Supp. Brakebill Decl. Ex. 13. McBride’s request was memorialized in an email written that day by a Novell in-house attorney, Greg Jones. Id.

    Also early in 2003, McBride and Chris Sontag of SCO contacted Greg Jones regarding the UNIX copyrights. Id. Ex. 8 (“Decl. Greg Jones”) at ¶¶ 13, 14; Decl. Christopher S. Sontag ¶ 6. McBride stated that “the asset purchase agreement excluded copyrights from being transferred” and that it was a “clerical error.” Jones Dep. at 182. On February 20, 2003, Chris Sontag also sent a draft letter to Novell that sought to clarify the parties’ rights under the APA. Decl. Christopher S. Sontag Ex.

    Again in March 2003, McBride called Stone to ask him if Novell would “give him some changes so he could have the copyrights.” Christopher Stone Dep. at 248-49. Ralph Yarro, Chairman of SCO, requested an in-person meeting with Stone. In that meeting, on May 14, 2003, Yarro told Stone that he wanted Novell to amend the APA to give SCO the copyrights. Supp. Brakebill Decl. Ex. 17 at 4; Stone Dep. at 137-8. Stone refused. Id. On May 19, 2003, McBride called Stone and Joe LaSala, Novell’s General Counsel, and again requested that Novell convey the copyrights to SCO. McBride said, “we only need you to amend the contract so that we can have the copyrights.” Stone Dep. 249-250. Stone made notes in June 2003 memorializing both conversations. Supp. Brakebill Decl. Ex. 17. E. SCOsource Initiative

    In approximately this same time frame, in January 2003, SCO launched its SCOsource initiative, which was an effort to obtain license fees from Linux users based on claims to Unix System V intellectual property. McBride commented that “SCO owns much of the core UNIX intellectual property, and has full rights to license this technology and enforce the associated patents and copyrights.”

    Under the SCOsource licensing program, SCO offered intellectual property licenses to Linux end-users. The purported purpose of these licenses is to allow UNIX vendors to use SCO’s UNIX intellectual property and to compensate SCO for the UNIX intellectual property that it claims is found in Linux. In May 2003, SCO sent 1500 end-user corporations a letter threatening suit based on SCO’s assertion that it owned the UNIX copyright and that Linux infringes on its UNIX intellectual property. Decl. Mark James Ex. 42. […]

    SCO generated participation in and revenues from its licensing program. […]

    To emphasize, The SCO Group had reason to know that did not own copyrights in Unix SVRx before they launched their SCOSource initiative. An exclusive right in a copyrighted work requires a §204(a) writing. And The SCO Group didn’t have one.

    Mr. Parsons apparently feels that there wasn’t a lot of upheaval in whatever he considers “the commercial Linux world.” He apparently doesn’t think any sales were lost or anything. There will be evidence presented on that point.

  3. a) I’m a Linux kernel hacker for a large company that sells massively multiuser Linux boxes. Our lawyers fret all the time about GPL infection in our proprietary code, but as for SCO and their ongoing burst of tourette’s syndrome? Nada. (I’d suspect that SCO has encouraged the growth of the Linux market, because the claims of EVIL OPEN SOURCE(tm) from a wine-sodden drunk like SCO are the best possible argument for increasing the number of Linux boxes in your data center. )

    b) And, you know, you ignored the whole point of my comment in your unseemly haste to rattle off the fanboy press release of the week.

    I’m just a little miffed about losing rights to Unix source code. Free access to source code may not be important to the Groklaw fanboys, but I use free software because I like to have free access to the code, not because I can use it to stick it to the man or whatever the fanboys are calling it these days.

  4. nedu says:

    Well, Mr. Parsons, yes, I s’ose I did ignore whatever you were on about. From your blog entry, It’s looks like you really want the code for vi. So why don’t you just ask Bill Joy if that’s ok with him?

    Meanwhile, I’m interested to hear that your large corporation didn’t suffer any damages. I suppose you’re authorized to write on behalf of whatever corporation you work for, aren’t you? Or are you just stating that fact from personal knowledge?

  5. Look at the copyright notices. Bill Joy doesn’t own the copyright to Unix; the copyright is held by a combination of Berkeley (BSD-license) and whoever owns the USG copyright this week (why do you suppose it took so long to release a version of BSD that wasn’t encumbered? It took a while to detangle the copyrights, and some parts [vi in particular] never got untangled.) If someone who doesn’t hold a copyright is authorised to change the copy rights, I’ll just ask my cat “Cat, can you release the source for Unix V7 under a BSD license?” and avoid the middleman.

    I don’t think that this type of relicensing would carry much legal weight.

    And please don’t threaten me. It’s not dignified.

  6. nedu says:

    Mr. Parsons,

    I can sympathize with people who react very badly to threats–real or perceived.

    But I find it hard to understand why you think I might have threatened you. No threat was intended. I merely observed that you’re stating that your “large corporation” has not suffered any damages in this affair.

    Other people have sustained damages. Those damages are probably irrecoverable. But they are very real.

  7. SEO says:

    I agree with you totally David, the important part of the Unix concept is freely having access to the source code. The whole “sticking it to the man” mindset is not what Open Source is truly about.

  8. PHB says:

    The bigger problem here is that if SCO vs IBM does not go ahead we still lack a resolution of the code pollution issue.

    Regardless of whether your code is open or proprietary there is a huge probability that any code base of a million plus lines developed over ten years or more will have at least some code that has dubious origins.

    We simply have to have a statement to the effect that, no you can’t demand $700 per copy on the offchance that there is some of your code in a copy of Linux. We need a safe harbour statute so that an inadvertent copyright infringement does not lead to massive punitive damages.

    Would be nice if the same approach was applied to patents, albeit there is a much harder problem there since it is much easier to rewrite code than to avoid a patent, particularly when the patent is in a standard.

    In some ways it might have been better if SCO had won and brought the whole house of cards down. Not that there was much chance of that with Mr Boies, a three time loser of high profile cases (Florida recount, Napster, Microsoft Anti-trust) header to become a four time loser.

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