Contrary to Novell's allegations, Santa Cruz "did not add any Novell copyright notices to," or "remove any copyright notices" from, the source code it acquired from Novell. (10666¶¶6-7.) In fact, it was Novell that changed the notices to add the Santa Cruz notice. (Id.) In addition, the date range of the Novell notices from 1984-95 could not pertain to UnixWare source code, because Novell did not acquire the UNIX and UnixWare source code from AT&T until 1993. (10666¶8.) Instead, since Netware code was "contained in UnixWare," the notices pertained to Netware, which Novell had owned since "the mid-1980s." (00317;10666¶8.)

SCO has more than once told journalists that they read Groklaw and use it as a reference, including the attorney who signed SCO's filing, so I can't figure out how they could write this. Have they really forgotten that Novell and USL set up Univel as a joint venture in 1991 and that the first version of UnixWare Novell produced appeared in 1992? Have they forgotten our 2004 article? I'll show you some Novell and Santa Cruz copyright notices to refresh everyone's memory from that article, but here's a 1995 Novell press release showing Novell still very much involved in Unix and UnixWare, after the APA, in working with Santa Cruz on UNIX products.

To get some context, here's an October 3, 1993 New York Times article, New Crusader in Software's Holy War. Thank you, Google. It includes a timeline that supports the dates mentioned, but it also tells us that Novell had just announced that it would give away the UNIX trademark, likely to X/Open, that year. Ah! The sweet smell of truth.

In order to understand fully what SCO said, though, first we need to review quickly what Novell wrote in its appellate brief that SCO is responding to. Novell said this about the copyrights in Unixware:

A. Santa Cruz's APA Implementation

The APA was forward-looking. The goal was for Santa Cruz to develop and sell a "Merged Product" based on Novell's UnixWare that would provide a platform for Novell's NetWare. (06102(¶8);00288(Art.4.18);01425-26;01438.) After the APA closed, Santa Cruz devoted substantial resources "to upgrade UnixWare for high-performance computing on Intel processors." (05819(¶49);15541-42.)

Santa Cruz changed the copyright notices on UnixWare products to state:

Copyright 1996 The Santa Cruz Operation, Inc. All rights reserved.

Copyright 1984-1995 Novell, Inc. All rights reserved.

(10310.) SCO continues to use that form of copyright notice, even on recent products. (07408.) These notices reflect that (1) Novell owns the copyrights for code developed 1984-1995, having bought those rights from AT&T and withheld them from the sale to Santa Cruz; and (2) Santa Cruz owns the copyrights on code added from 1996. See 2 Nimmer on Copyright §7.12[C][1](noting "practice of many publishers to include earlier copyright notices as well as a notice for the newly published derivative or collective work").

1983: A.T.& T. introduces a new generation of Unix, called System V, and changes licensing terms that removes Bill Gates's Unix pricing advantage. Hewlett-Packard introduces its Unix version, HP-UX.

1984: X/Open, a consortium is founded by a group of European computer companies to counter I.B.M.'s dominance.

1987: X/Open endorses a set of Unix standards known as Posix. A.T.& T. faces backlash over Unix licensing terms.

1988: A.T.& T. buys 20 percent of Sun Microsystems. I.B.M. enters Unix market with AIX software.RIGHT?? A broad industry coalition forms the Open Software Foundation in opposition to the A.T.& T.-Sun alliance and to promote an "open" approach to Unix that is not dependent on any one company's version. To counter the Open Software Foundation, A.T.& T. forms the Unix International consortium, and the Unix war is on.

1989: A.T.& T. and Sun introduce version of System V Unix that incorporates Berkeley and Xenix features.

1990: Products from Novell and other companies begin to appear that let Novell Netware PC networks interact with Unix systems. A.T.& T. spins off Unix development into a separate subsidiary, Unix System Laboratories. Open Software Foundation introduces its Unix standard, OSF/1, but only Digital Equipment fully embraces it.

1992: Novell and A.T.& T.'s Unix System Labs form joint venture, Univel. Novell introduces its own version of Unix, called Unixware. Novell agrees to buy Unix System Labs.

1993: June -- Novell completes acquisition of Unix Sy[s]tem Labs. Sept. -- Novell indicates intention to give Unix brand name and underlying software code to the X/Open consortium. (Source: Open Systems Today)

In April 1991, the Company invested $15.0 million in UNIX System Laboratories, Inc. (USL), a subsidiary of AT&T that develops and licenses the UNIX operating system and other standards-based software to customers worldwide. In December 1991, the Company announced the formation of Univel, a joint venture with USL, formed to accelerate the expanded use of the UNIX operating system in the personal computer and network computing marketplace. Novell and USL contributed cash and technology rights to Univel. Then in June 1993, the Company acquired the remaining portion of USL by issuing approximately 11.1 million shares of Novell common stock valued at $321.8 million in exchange for all of the outstanding stock of USL not previously owned by Novell and assumed additional liabilities of $9.4 million. The transaction was accounted for as a purchase and, on this basis, resulted in a one-time write-off of $268.7 million for purchased research and development in the third quarter of fiscal 1993....

UNIX SYSTEMS GROUP. USG provides a full suite of UNIX operating system and UNIX connectivity products. Key products include:

Operating System Products. Novell's UnixWare operating system provides a powerful application server and client for today's distributed computing environments. The current product offerings are the UnixWare Application Server 1.1 and the UnixWare Personal Edition 1.1. UnixWare uses the network services available from NetWare and the cross-platform development tools available from AppWare to make applications available throughout the entire enterprise. UnixWare is easy to use, enabling users to be productive right away. Its fully graphical user interface gives users access to all the enterprise-wide information and services available in the corporate computing environment with simple point-and-click mouse functions. UnixWare also supports a variety of international languages.

Optional products for the Application Server systems include: UnixWare Server Merge for Windows, which provides UnixWare users with multiuser DOS access and limited multiuser MS Windows access; UnixWare Online Data Manager 1.1, a UNIX System V, industry-standard, robust file system designed to maximize system and data availability and improve I/O performance; and OracleWare System-UnixWare Edition, a powerful applications data server platform which integrates the UnixWare Application Server 1.1 operating system with Oracle 7 cooperative database server on a single CD-ROM disk.

Optional add-on products for UnixWare Personal Edition include UnixWare NFS, which enables resource-sharing with other UNIX systems; UnixWare C2 Auditing, which records security-related events to help detect attempts to breach security; and UnixWare Encryption Utilities, which provide support for DES encryption and decryption.

Novell also supplies the UNIX operating system source code to other UNIX system vendors. The latest version, UNIX System V Release 4.2 (SVR4.2), unifies several earlier versions and offers greatly enhanced ease of use and ease of administration features....

In April 1991, the Company purchased a minority equity position in UNIX System Laboratories, Inc. (USL), a subsidiary of AT&T that develops and licenses the UNIX operating system and other standards-based software to vendors worldwide. This cash investment of $15.0 million was accounted for using the cost method. Later, in December 1991, the Company announced the formation of Univel, a 55% owned joint venture with USL, formed to accelerate the expanded use of the UNIX operating system in the personal computer and network computing marketplace. Novell and USL contributed cash and technology rights to Univel. In June 1993, the Company acquired the remaining unowned portion of USL by issuing approximately 11.1 million shares of Novell common stock valued at $321.8 million in exchange for all of the outstanding stock of USL not previously owned by Novell and assumed additional liabilities of $9.4 million. The transaction was accounted for as a purchase and, on this basis, a one-time write-off of $268.7 million for purchased research and development was incurred.

Univel has been included in the consolidated financial statements of Novell since December 1991 by virtue of Novell's 55% ownership interest. That ownership interest is now 100% since the June 14, 1993 acquisition of USL, whereby both USL and Univel are now included in the consolidated financial statements of Novell.

In early 1993, AT&T sold its UNIX System Laboratories to Novell which was looking for a heavyweight operating system to link to its NetWare product range. At the same time, the company recognized that vesting control of the definition (specification) and trademark with a vendor-neutral organization would further facilitate the value of UNIX as a foundation of open systems. So the constituent parts of the UNIX System, previously owned by a single entity are now quite separate.

What about 1996 onward? Let's take another look at Groklaw's 2004 article once again, and you may wish to have all the relevant documents handy, so here is where you can find all of them:

• SCO-Novell Asset Purchase Agreement, 1995
• Amendment No. 1
• Amendment No. 2
• Technology License Agreement
• Schedules
• Asset Purchase Agreement With Amendments 1 & 2 Merged

And with that, once again, Notice this Notice?:

*******************************

Notice this Notice?
~by Dr Stupid

Executive Summary

The clearest and least biased indication of the nature of the 1995 agreement between Novell and The Santa Cruz Operation (hereafter "oldSCO") comes from the contemporaneous statements and, more crucially, actions of both parties.

oldSCO's handling of the UnixWare source code in the years following the deal seem to me most consistent with those of a company that had obtained the right to freely derive from and sell products based on the code, but inconsistent with those of a company that had been granted, or believed they owned, the copyrights on that code.

There is also some evidence that indicates to me that the notices of copyright ownership became gradually obfuscated over time, either by accident or design.

A 1996 Clarification of What SCO Purchased from Novell

Here is a 1996 UNIXWARE/OPENSERVER WATCH, which described itself like this:

In 1995, Novell and oldSCO announced a deal whereby oldSCO would take over the Unixware business from Novell. Novell may have got rid of the UnixWare business, but in 1995 it hardly looked as if Novell was washing its hands of UNIX per se:

Here is what is supposed to be in a copyright notice, according to the US Copyright Office's Copyright Basics page:

"Form of Notice for Visually Perceptible Copies

"The notice for visually perceptible copies should contain all the following three elements:

1. The symbol © (the letter C in a circle), or the word "Copyright," or the abbreviation "Copr."; and

2. The year of first publication of the work....

3. The name of the *owner of copyright* in the work, or an abbreviation by which the name can be recognized, or a generally known alternative designation of the owner." [emphasis added]

So, the names mentioned should be the copyright owners, not a history of past authors. Novell wasn't writing UNIX in 1984, AT&T was. But because Novell bought the copyright from AT&T/USL, they got to say "(c) 1984 Novell."

It follows logically that if oldSCO bought the copyrights from Novell, the notice should read "(c) 1984-1997 The Santa Cruz Operation" and not mention Novell at all.

What does this mean?

• Several months after the deal that newSCO now claims gave them the copyrights, oldSCO was happily selling a product that showed Novell as owning copyrights.
• Novell was still contributing code to the product even after oldSCO supposedly "took it over".
• In 1998, years after the APA and years after Amendment 2, oldSCO was still leaving (c) Novell notices untouched in its updates to the UnixWare system - including updates to the manuals of which newSCO explicitly claimed the copyright in its complaint against AutoZone.

As mentioned, the 2.1.3 update does not add SCO copyrights to system files: in fact it contains several updated man pages and some headers that still say (c) Novell. However, it does alter some system header files.

If one compares the errno.h file from UW2.1.1 and UW2.1.3 with a "diff" program, one can see that none of the code has changed. The only real change is that the copyright notice has been removed. That's right - (c) Novell is not replaced with (c) SCO, but instead the copyright header is simply stripped.

The same is done to various other system header files in the 2.1.3 update. The reader is invited to draw his or her own conclusions.

The step from 2 to 7

In 1998 oldSCO released UnixWare 7 - the merger of OpenServer 5 and UnixWare 2 (The "merged product" referred to in the APA.) The following makes use of information obtained from a legitimate UnixWare 7.1.1 system and its associated media kit.

Looking at the actual files on a UnixWare 7 system, we find that the errno.h file contains a simple (c) 1998 The Santa Cruz Operation notice. Of course this copyright notice is not complete since errno.h was not wholly authored in 1998, but the more significant point is the overall history of this file while it was in oldSCO's hands:

• UnixWare 2.1.1 - (c) Novell
• UnixWare 2.1.2 - (c) Novell
• UnixWare 2.1.3 - No copyright notice
• UnixWare 7 - (c) oldSCO

CD1 - the installation CD - boots to a miniature UnixWare system to conduct the install. The data for the installation is held in several folders on the CDROM, each of which is like a partly unpacked "pkg" format archive. I say partially, because although the individual files are present in a series of directory structures topped with "/root.#" (where # is a number) rather than held in a cpio-style archive, most are compressed and must be unpacked with the traditional UNIX "uncompress" before reading.

From the Horse's Mouth

There is a package called "BASE", which as you might guess from the name contains (inter alia) the UW kernel:

A Cast of Thousands

Now, the install program places a "copyrights.list" file on the hard disk, which reads (in part):

Along with the operating system binaries, the installation also includes system header files. Here is a particularly interesting one:
/usr/include/machlock.h - it appears to deal with atomic locks, a low-level system operation.

newSCO has dismissed the original APA's explicit exclusion of copyrights as a "scrivener's error" - that is to say, that it was everyone's intention in 1995 that oldSCO receive the copyrights and the agreement was merely incorrectly drafted. However, on its face the UnixWare 2.1.1 update shows me that in 1996
(a) Novell was more involved in UnixWare at the time than newSCO has subsequently represented;
(b) oldSCO was not acting like a company that had bought the copyrights;
(c) Novell was not acting like a company that had sold them.

This is not the only evidence, moreover. In particular, if the exclusion of copyrights was really just a typo, then one would have expected it to be corrected in Amendment 1. Instead,
Amendment 1 actually adds the language

The trademark patch

Firstly, the original APA gave as excluded assets:

The Real Point of the Amendment?

Secondly, there is more to Amendment 2 than this oft-discussed clause. The bulk of the amendment creates arrangements for royalty buyouts of System V: arrangements whereby both oldSCO's and Novell's permission is required. Why might this have come to the fore? Presumably because in the two previous years there had been two royalty buyouts associated with System V:

Based on the above publicly available evidence, which -- being contemporaneous -- is the least likely to be coloured by today's agendas of the parties involved, in my opinion, the deal between oldSCO and Novell was most likely as follows:

• Novell sold the physical assets, reseller channel and information related to the UnixWare business to oldSCO and was given oldSCO stock in return. This was part of an overall strategy whereby Novell, HP and oldSCO would co-operate on driving forward the Unix platform.
• oldSCO were given every right they needed to conduct the business -- the trademarks, and the right to develop and license the UnixWare code as they saw fit.
• Novell retained ownership of the copyrights and patents, both so as to retain a revenue stream from royalties and for its internal needs.
• Because Novell retained such broad rights to UNIX, oldSCO needed assurances that Novell would not undermine their business. Thus, Novell was contractually bound not to create new System V licensees, not to try to "sell" System V in general, and so forth.
• In return, Novell needed assurances that oldSCO would not undermine the System V royalty stream by allowing licensees to buyout their System V licenses, or by harassing the licensees. Thus, Novell retained far-reaching powers of waiver with respect to the old licenses, and it was agreed that royalty buyouts needed both parties' approval.
• oldSCO negotiated a royalty buyout in respect of its existing System V licenses, so that it could create the merged product (UnixWare 7) and sell it without paying any royalties to Novell.

An enterprising Groklaw reader, Sean Lynch, used his research skills to contact Michael Dortch, mentioned in the article, who has some remembrances to add to the picture. He has given us permission to publish the email, which confirms that the article is "essentially accurate and correct" and that to the best of his knowledge, "SCO only purchased from Novell UNIX System licensing rights and the UnixWare business":

Thanks for your e-mail. I must say at the outset that I was initially surprised to see a quote from "UnixWare/OpenServer Watch" in a current e-mail. It seems that some artifacts never die online.

In any event, yes, I am the Michael Dortch who was the editor of that newsletter at the time the piece containing the quote referred to in the Groklaw article was published. I created that newsletter while at UnixWare Technology Group (UTG), a trade association of UnixWare (and, later, as I recall, OpenServer) resellers and other supporters. I was "chief evangelist" for UTG, recruited by its founding president and CEO, Lawrence Lytel, in 1994. (I am now a principal business analyst at Robert Frances Group (RFG), providers of advice and counsel to IT executives and their teams and colleagues. In this role, my colleagues and I have also been following closely and striving to untangle the details of the "Novell-SCO spat," as the Groklaw article so charmingly describes it.)

Yes, UTG and I were contacted by Grant Bird, then Director of Branding at X/Open, predecessor to today's Open Group. As it says in the issue of "UnixWare/OpenServer Watch" from which the Groklaw article extracted my quote, X/Open produced and "owned" the then-"official" guide to proper use of terms such as "UNIX System," and I had misused some of those terms in a previous issue of the newsletter. It was my discussions via e-mail and telephone with Grant that led to the apology and commitment from which the Groklaw article quote was extracted.

As I recall, my discussions with Grant focused solely on proper use of terms, not ownership of the intellectual property described by those terms. However, I do have some thoughts and recollections on that subject as well.

UTG was formed to help Novell promote UnixWare, and was initially populated largely by Novell UnixWare partners such as Unisys. As I recall, Novell was the primary initial financial supporter of UTG, apparently intending to encourage collaborative marketing among UnixWare partners as well as interoperability among their various respective UnixWare and UNIX System offerings.

HP was also prominently involved; representatives from HP and what you refer to as "oldSCO" made a joint presentation to a UTG member meeting held on March 27, 1996 in Japan, for example. At that event, oldSCO said it had hired more than 200 former employees of Novell and "USL," which was the old AT&T UNIX System Laboratories from which, as I recall, Novell bought the rights to UNIX System V. In any event, oldSCO said the "Next Generation OS" being developed would be based on "SCO's and HP's 3 products: UnixWare, OpenServer, and HP-UX." (FYI, I parted company with UTG in July 1996, and the organization itself was dissolved shortly thereafter. As I recall, there was fairly substantial doubt that HP was really more interested in collaborating on a "Next Generation OS" than in promoting HP-UX as that solution. There was also doubt among UTG's former members that SCO could really lead a charge toward such an OS without full support from HP and/or Novell.)

In any event, based on my recollection of events at the times mentioned in the articles to which you referred in your earlier e-mail, I believe the Groklaw article's interpretation of both my quote and the events at the time is essentially accurate and correct. To the best of my knowledge, as it says in my quote, SCO only purchased from Novell UNIX System licensing rights and the UnixWare business. Also, Novell did in fact continue to work on and champion UnixWare for some time after that purchase SCO was made final.

The vast majority of RFG clients are IT executives at large enterprises. Many of these use or are seriously considering using Linux and other technologies potentially affected by the labyrinthine legal machinations of "newSCO." As RFG said in a March 2004 analysis, "Is SCO At the Tipping Point?," "SCO's case continues to disintegrate, and proving its claims against IBM will be extremely difficult. Until and unless SCO is able to do so, RFG does not see value in paying SCO protection money just to use Linux. ...IT executives should not fall prey to SCO's scare tactics, and should instead continue to focus on the ultimate values and risks involved in each platform decision made as part of an application deployment."

I hope this is helpful, and appreciate your contacting me. Please feel free to quote from the above text in whole or in part, as long as any such quotes are made verbatim and include appropriate attribution. Also, feel free to contact me again with any other questions or comments you may have on this still-fascinating topic.

Cheers,

Michael Dortch
Principal Business Analyst
IT Infrastructure Management Practice Leader
Editorial Director
Robert Frances Group
"Business Advisors to IT Executives"

¹ From the New York Times article, about the trademark:

IT was less than four months ago that Novell Inc. acquired Unix System Laboratories from A.T.& T. in a stock swap valued at about $320 million. Within the next few weeks, Novell intends to give the Unix trademark away. Bizarre? Not in the context of Unix, the software system with a troubled past.... Still, Novell, which acquired the Unix trademark when it bought Unix System Laboratories, hopes to overcome the industry fragmentation. Novell means to give away the Unix brand name and responsibility for maintaining the Unix specifications to an independent organization, most likely the X/Open Company, a London-based consortium of 14 hardware and software companies that was founded in 1984 to promote standardized approaches to Unix. What Novell is offering is the ability for any company to call a product Unix if it meets the basic specifications maintained by X/Open. The hope is that "Unix" could become a stamp of credibility, just as the "Intel Inside" stamp is now being used in the personal computer business. Among the Unix specifications is a common set of application programming interfaces -- the links between Unix and individual application programs -- meaning a program written for one version of Unix should more easily be able to run on others.

But Novell, which also intends to continue marketing its own flavor of Unix, called Unixware, has not had an easy time selling its vision of unity to the industry. "Discussions of the plan are problematic at best," said Mike Azzara, editor of Open Systems Today, a trade publication. "Novell is also now at the vortex of some intensely competitive market share battles involving many of the same companies that it hopes to cooperate with on the trademark issue."

NOVELL had planned to announce its Unix giveaway at an industry trade show late last month, but it ran into difficulty getting other major Unix vendors to agree on the details. The company scuttled the announcement at the last minute. Other vendors, such as the International Business Machines Corporation, the Hewlett-Packard Company, Sun Microsystems Inc. and the Santa Cruz Operation, said they were concerned that Novell was attempting to make its Unixware the de facto standard.