"This is terrific news and we're happy to have SGI as part of the open source family," said Ransom Love, president and CEO of Caldera Systems, Inc. "There's a great need in Linux for business to have that enterprise-class file technology and storage capability. Daily, we have enterprise customers asking for these solutions - particularly where graphics are concerned. With SGI's contribution and expertise in journaling, throughput and data integrity, we can meet the file sharing/storage needs of those customers with the best technology available. That SGI would make this contribution to the open source community says a lot about their vision and business acumen."-- Ransom Love, 1999-05-20

"Our goal is to protect, extend and acquire intellectual property," said Anderer, who's Silicon Stemcell's president and chief executive officer.

[...] "The technologies that they're working on are things that will touch ... just about everybody in the country sometime in the next two years," Anderer said.

"We are very optimistic about our ability to go out and license these technologies in several different ways."-- Michael Anderer, 1999-09-03

"We basically can go into a group and say, `OK, what is it that you're missing?'" and provide that, Anderer said.

[...] Anderer said Silicon Stemcell is involved with about 15 companies and the number is growing daily. Its firms have two patents issued, have filed about another five and are preparing to file yet another 10, he said.

"The portfolio of intellectual property we've built up as a group is extremely impressive," he said.-- Michael Anderer, 1999-09-03

"more than half of what Project Monterey features that should have been there are not. Monterey is D-E-A-D! Only some parts of Monterey will be folded to the next version of AIX OS."-- Hetz Ben-Hamo, 2000-08-20

Ransom Love, Caldera Systems' CEO, said IBM's announcement that Monterey was completed "could not have been an official statement. We have partnership agreements with IBM and it would not be appropriate for IBM to declare the project done." That stated, Love agreed that many of Monterey's goals had been completed. He also said that the Linuxication of Monterey AIX 5L was a good thing for both AIX and Linux users.-- Ransom Love, 2000-08-20

An IBM spokesperson said today that "not all the code of Project Monterey will be included in the first release of AIX 5L,"-- IBM PR, 2000-08-20

SCO officials said that the the environment [LKP] amounts to around 40,000 lines of code, plus around 2m drawn from the real Linux kernel tree.-- SCO PR, 2000-08-22

Although our notes from yesterday's session include the words of "subset" and "Linux kernel" - and so do notes of our colleagues - we're assured that this was a ZDNetification of the truth. It's all very odd - as we were even given detailed figures - but the word is now to disregard these completely.

Kienhoefer says that instead of taking a slice of the Linux kernel source, SCO has implemented a clean room set of interfaces. There's no Linux code there, so there's no obligation to publish anything GPL. That said, SCO will probably make source code available around October. The full LKP is scheduled for release by the end of the year.-- SCO PR, 2000-08-23

"SCO worker bees have been screaming about these horrors for most of the two years this 'partnership' has been in place. We're mystified as to how this relationship got this far out of control. From what I can tell, we exchanged several person-decades for the privilege of being an AIX VAR."-- SCO SOURCE, 2000-09-12

"The companies that we have controlled are those we have been most successful with, the companies where we are passive, or we don't spend the time there, they just haven't been successful."

[...] The Canopy Group holds "bankers' summits? for its portfolio companies. "It's part of the whole model that I've tried to create here at Canopy," said Yarro. "We do whatever we can for the benefit of the whole or the given companies. So, on Canopy's dime, we host as many banks, strategic partners, and VCs as we can. This gives funding sources exposure to what we internally at Canopy determine is the cream of the crop: the top 10 to 20 companies we believe deserve an opportunity to get in front of these different banks."

Canopy looks to exit its companies at any stage, or at least bring in other money. "We welcome outside investors into our portfolio companies," said Yarro. "That's the purpose for funding them. You fund something with the hope of being diluted."-- Ralph Yarro, 2001-04-01

"What is wrong about this distribution, is basically the millions of lines of code that we never have seen. We don't know if there are any patent infringements [in this code] with somebody we don't know. We don't want to take the risk of being sued for a patent infringement. That is why we don't do distributions, and that's why we have distributors. Because distributors are not so much exposed as we are. So that's the basic deal as I understand it."-- Karl-Heinz Strassemeyer, 2002-03-02

"When we put source code into the Open Source community, the code we are putting in there, we have clearly patent clearence for in the sense we know what we put out in the Open Source community so we don't claim own patents on [it] anyway. Our patents clearance process makes sure we are not infringing the patents of anybody else. We are doing it with our proprietary code, so we are fine."-- Karl-Heinz Strassemeyer, 2002-03-02

Fortunately, BayStar's first investor, a convertible arb shop, "gave us $75 m. We made a lot of money for it and here we are."

Goldfarb had done his apprenticeship under the principal of Shoreline Pacific. "He taught me the business, but he believed we needed to go upmarket in the deals we were doing, and he thought the structure of the deals would protect him. I disagreed. We parted company," says Goldfarb.

[...] "When things implode, you're screwed," he says. "We have invested in companies in several sectors in which we should have seen the train on the track. Where the liquidity in the stock (which is key to the hedging mechanism) dried up. We had a credit instrument, but we did a bad job of our credit analysis." He adds, "We have never lost all our money on a deal, but we have lost more than would have liked to. Where we failed [you know wha'ts coming...] is not in the structure of the deal, but in believing that the structure would protect us when in fact the funcamental credit analysis was faulty."

[...] "I make a decision that the company is not going to go bankrupt in the timeframe in which I have the instrument. And I have the deal structured so that if the company fals apart at the very least there is enough capital for me to get my cash or stock."

[...] "Unlike most hedge funds, we hedge with a directly correlative hedge," says Goldfarb.-- Lawrence Goldfarb, 2002-05-01

"It is not our policy to comment on supporters; I'm sure you can understand. From this you should not infer that information you have is correct or not correct; we just don't comment," Fossedal wrote in an e-mail.-- Gregory Fossedal, 2002-06-05

"We support a diverse array of public policy organizations with which we share a common interest or public policy agenda such as the de Tocqueville Institution," the spokesman wrote in an e-mail.-- Microsoft PR, 2002-06-05

"These folks really need to be more straight-forward about this," security researcher Richard Smith said. "Not commenting makes it appear as if they have something to hide."

[...] "I would really like to see rigorous testing with hard statistics and not mere speculation on an issue as serious as this," Smith said.-- Richard Smith, 2002-06-05

"If people had understood how patents would be granted when most of today's ideas were invented and had taken out patents, the industry would be at a complete standstill today."-- Bill Gates, 2002-08-15

"The solution is patenting as much as we can. A future startup with no patents of its own will be forced to pay whatever price the giants choose to impose. That price might be high. Established companies have an interest in excluding future competitors."-- Bill Gates, 2002-08-15

The first four weeks on the job I've spent a lot of time looking for value points, leverage points, if you will, in terms of "what do we do with this company." I just sent out a letter to shareholders a couple of days ago--I won't bore you with all the details--but there are a couple of interesting things in there that I found out about Caldera that I didn't know before. One, the intellectual properties that we hold--we own SVRx, UnixWare, SCO Unix--in terms of the Unix timeline, the thread that runs through the middle of these is really SVRx. All of the subsequent Unix licensing that happened broke off from that. We own all that intellectual property and have relationships with a lot of vendors. If people want to come and see the original HP-UX source code, they come to us. We get several dozen requests a month just to come in and see AIX or HP-UX code base. And C++ programming languages, we own those, have licensed them out multiple times, obviously. We have a lot of royalties coming to us from C++. It was interesting to see the depth of Caldera's intellectual capital.-- Darl McBride, 2002-08-15

When we start talking about a product that has a price tag on it like UnitedLinux, we suddenly have a model to go to market with. It's not that these guys [resellers] don't like Linux per se, it's just "How do I make money on it?" Beyond the typical service story, they need to have a box that they can get some margin on, and that's what we'll be looking at.-- Darl McBride, 2002-08-15

"When you look inside our customer accounts, very rarely is it just a Linux environment," says Darl McBride, president and CEO of The SCO Group. "Caldera was always known as a Linux company; The SCO Group came from the Unix camp. The pendulum swung too far on the Linux side. We're just trying to get a happy medium that is more beneficial to our users."-- Darl McBride, 2002-08-27

According to Opinder Bawa, new Senior VP of Technology, "we own the source to UNIX; it's that simple. If we own the source, we are entitled to collect the agreed license fees."-- Opinder Bawa, 2002-08-28

"In theory", stated McBride, "there should be some value to that property--somewhere between a million and a billion [dollars], right? I just wanted to know what real, tangible intellectual property value the company held."-- Darl McBride, 2002-08-28

According to McBride, "obviously Linux owes its heritage to UNIX, but not its code. We would not, nor will not, make such a claim."-- Darl McBride, 2002-08-28

I heard about Linux and Mosaic at the same time. The thing that captured me more at the time was the browser, to be honest, because I'd never seen one before. What impressed me about Linux was Open Source.-- Darl McBride, 2002-08-28

Our UnitedLinux development team? They're really fired up. Our member partners, even our SCO re-sellers are becoming enthusiastic. They're saying, "When you're ready, let me know. We can make some money with that." I have a hard time selling something without a price tag. It's back to the bottled water analogy. It's not free water. It's bottled water. $14 a gallon. Buy now. Buy often.-- Darl McBride, 2002-08-28

If Linux companies are going to be successful in providing solutions that compete against MS [Microsoft], then we have to agree upon a certain set of standards. That's why Caldera/SCO has been so vocal and supportive of LSB from its early beginnings. That's why we made sure that our partners made LSB certification a top priority in the upcoming release of UnitedLinux--due out in the October/November time frame.-- Darl McBride, 2002-09-20

We are more committed to Linux than ever before. I understand the perception that we're going back to the 1980s, but when we looked under the stones for hidden assets, we found that the Caldera name had very limited reach and only into the US. But we sell to 86 countries with multiple brands and SCO reaches into all of them. We have to ask ourselves, are we trying to cater for the guys at Slashdot [a popular Web site among Linux enthusiasts] or the larger business audience?-- Darl McBride, 2002-10-15

I am not being cynical, but the GPL is too overreaching. This is not just my opinion. I have visited dozens of free software websites and developer disfavor about the GPL is steadily increasing. It is just a matter of time before the tenuousness of this license ends up in a court. I think money will also force this issue into court, because inevitably, someone's confusion about the license will lead to the loss of a ton of money. When big cash is on the table, a court case is around the corner.-- Ken Brown, 2002-10-31

"IBM is not developing its own version of the Linux OS. Rather than that it distributes Red Hat's version and clears itself from any liability in case the customer changes the code. I advise organizations to review the licensing agreement of Red Hat distributed by IBM, and ask the company for legal protection if it turns out that the OS infringes patents."-- Arie Scope, 2002-11-11

"If you think about a horse race, we're really getting out of the starting gate right now," said Darl McBride, chief executive of the SCO Group. "We're maybe not the first horse on the track, but we think before the race is done, we'll be at the front."-- Darl McBride, 2002-11-19

Our UNIX IP is a significant asset and for several months we have been holding internal discussions, exploring a wide range of possible strategies concerning this asset. We've reached no final decisions on any course of action.

SCO is a Linux vendor and a leading member of United Linux. Contrary to the claims in the Client Server News article, SCO has no desire to take legal action against fellow Linux vendors. As a normal part of business, SCO has had discussions with several legal experts in the field of intellectual property law, and these discussions included David Boies. Contrary to the claims in the Client Server News story, SCO has not engaged Mr. Boies to take legal action against our fellow Linux vendors.-- SCO PR, 2003-01-13

David Boies secretary was adamant in her assertion that neither Boies nor any other attorney at Boies, Schiller, and Flexner was currently performing duties as "IP advisor" for SCO, as the Client Server News article states.-- Boies, Schiller & Flexner STAFF, 2003-01-13

Stowell also denied that SCO would target other Linux distributions, basically suggesting that it would be suicide for SCO to do such a thing. "Microsoft would love to see that happen," he said. Instead Stowell suggested that SCO would take out after other unidentified operating systems that drive something from Unix and hinted that that might mean Microsoft itself since Boies was involved.-- Blake Stowell, 2003-01-13

"SCO is a trusted UnitedLinux partner," spokesman Joe Eckert said. "We have faith in what they're doing."-- Joe Eckert, 2003-01-14

"There's a little bit of ignorance on the part of some customers," a source familiar with the plan said. But at the same time, the source added, "there are customers using the libraries that know they're not supposed to be using it."-- SCO SOURCE, 2003-01-14

What we have here is SCO exploring whether there's any money to be made from operating system companies that are using its Unix intellectual property licenses without permission. The net effect on existing Linux customers should be zero. At most, a few operating system companies using the libraries without permission might eventually have to pay SCO back-dated licensing fees.-- Steven J. Vaughan-Nichols, 2003-01-16

"SCO is the developer and owner of SCO UnixWare and SCO OpenServer, both based on UNIX System V technology," said Darl McBride, president and CEO, The SCO Group. "SCO owns much of the core UNIX intellectual property, and has full rights to license this technology and enforce the associated patents and copyrights. SCO is frequently approached by software and hardware vendors and customers who want to gain access to key pieces of UNIX technology. SCOsource will expand our licensing activities, offering partners and customers new ways to take advantage of these technologies."-- Darl McBride, 2003-01-22

"We do have concerns about our intellectual property in general," McBride said in an interview. "To us, it's not an issue of: Is Linux violating (SCO intellectual property)? It's an issue of: Is anybody violating it?"-- Darl McBride, 2003-01-22

"We've been looking at this for months. Every time we turn over a stone, there's something there," McBride said. "If you pull down (Mac) OS X you'll see a lot of copyright postings that point back to Unix Systems Laboratories, which is what we hold."

... "Instead of going after people, we're giving people a chance to license," McBride said. Customers with numerous servers will receive discounts, he added.-- Darl McBride, 2003-01-22

As such, the company approached Boies to deal with the matter as "we wanted to find a guy who was used to dealing with complicated legal issues," McBride said.-- Darl McBride, 2003-01-22

McBride also confirmed that the company has hired high-profile attorney David Boies and his legal firm to investigate whether Windows, Mac OS X, Linux and versions of BSD infringed on the Unix intellectual property it owned.

While claiming that it is hard to estimate how many people are technically in breach of its licensing terms, McBride said it's "very widespread and would generate a revenue stream in the millions of dollars. We know who they are."

But he stressed that this is a "friendly move" by the company....-- Darl McBride, 2003-01-22

"There are a number of gating factors against SCO filing lawsuits against companies and individuals," Quandt said. "Even if they pursue some level of legal action, they will be placing themselves in contention with their potential customers since SCO also has a Linux strategy. Organizations who have a vested interest in working with Linux companies will resist a shotgun approach to switching to another Linux distribution provider like SCO."-- Stacey Quandt, 2003-01-22

"The most substantial intellectual property in UNIX comes from SCO," said Chris Sontag, Senior Vice President for Operating Systems and SCOsource, The SCO Group. "While Linux is an Open Source product, it shares philosophy, architecture and APIs with UNIX. Starting today, SCO's libraries will be available to third-party application developers, OS vendors, hardware providers, services vendors, and end-users. SCO will help customers legitimately combine Linux and UNIX technology to run thousands of UNIX applications. SCOsource plans to create other new licensing programs to make our rich inventory of UNIX System technology available to the market."-- Chris Sontag, 2003-01-22

Michael Tiemann, CTO of Red Hat, told eWEEK in an interview that he was fairly certain that if it involved proprietary Unix technology, Red Hat had no concern. "But every time people get engaged in unproductive arguments, it slows things down.

"What the IT industry needs today is a direction forward and as long as we're fighting these border skirmishes about this library and that thing there, is it Lindows, is it Windows, that's a distraction," he said.-- Michael Tiemann, 2003-01-22

"Steve's view is really on a multidecade time frame," said Nick Bowen, vice president of Unix and Intel server software development at IBM. "Over time, Linux and Intel and Windows will catch up to where we were yesterday (with AIX). When they catch up, we'll be two steps down the road."-- Nick Bowen, 2003-01-29

"The notion of a lead in Unix is eroding faster than we expected. Linux has grown up incredibly fast already. I don't see any sign of a deceleration,"-- James Governor, 2003-01-29

"They've [IBM] denied it [Linux] would replace AIX in the past," said Illuminata analyst Gordon Haff. "Perhaps their thinking is beginning to shift. They've been quite clear that they see Linux as picking up AIX technologies maybe a year, two years later, but they've certainly been quite circumspect about saying Linux would ever replace AIX."-- Gordon Haff, 2003-01-29

"It's very clear that Unix still has some significant functional advantages over Linux in high-end systems,"-- Tony Iams, 2003-01-29

"Microsoft sees IBM spending money on Linux, making Linux more robust, getting in the way of their aspirations. I think it makes them very unhappy," Mills said.-- Steven Mills, 2003-01-29

Asked whether IBM's eventual goal is to replace AIX with Linux, Mills responded, "It's fairly obvious we're fine with that idea...It's the logical successor."

A replacement "won't happen overnight," Mills said, but years of experience designing operating systems at IBM and other companies means developers know just where Linux needs to go. "The road map is clear. It's an eight-lane highway."-- Steven Mills, 2003-01-29

No, none of the code in the Linux ABI modules contains SCO IP. This code is under the GPL and it re-implements publicly documented interfaces. We do not have an issue with the Linux ABI modules. The IP that we are licensing is all in the shared libraries - these libraries are needed by many OpenServer applications *in addition* to the Linux ABI.-- Blake Stowell, 2003-02-05

"As anything becomes more popular in an industry, it's going to open itself up to and become more of a potential target to holders of intellectual property," McDermott, Will & Emery's Ferguson said. "The Linux situation is a prime example of that."-- Brian Ferguson, 2003-02-11

"Bringing a person like Mr. Boies on board is certainly an indication that they plan to take this very seriously,"-- Brian Ferguson, 2003-02-11

"I think they want to generate more revenue through IP licensing. But it would be insanity for SCO to try and say: 'We hold IP on every Unix-like operating system which has ever shipped and is in use right now,'"-- Nat Friedman, 2003-02-11

"Eventually there's going to be some court cases interpreting the GPL itself," Kelly said. "But to date, there have been no decisions at all interpreting it or what it's supposed to mean ... or interpreting these ambiguities. And that's causing a good bit of uncertainty."-- Brian Kelly, 2003-02-11

"It's hard to see that happening in any big fashion. But it's certainly a risk with any open source project, because you don't know where all the contributions are coming from and it's possible that any individual contributor could have misappropriated that code or contribution from somewhere else," Kelly said.-- Brian Kelly, 2003-02-11

"We have a clear chain of custody for that (GNU) software so we're quite immune to those kinds of claims. The Linux kernel, because of the way it was developed, and because its developers didn't feel that what the (FSF) did was the right approach, have left themselves open to that kind of attack" from opportunistic bounty hunters, he said. However, he feels confident that the Linux kernel copyrights are all in order.-- Bradley Kuhn, 2003-02-11

"You can be certain that IBM and some of the larger companies will fight tooth and nail if they are approached on this, and they certainly have the legal army to do that. A company the size of IBM will come out with all cannons blazing," McDermott, Will & Emery's Lupo said.-- Ray Lupo, 2003-02-11

"There's a lot of big money and big guns who are going to find it in their selfish corporate interest to line up with the open source hackers," Raymond said. "I predict that if SCO attempts to levy patents or seek restraining orders against any of the Linux distributions, there will be a mob with pitchforks and torches at its door."-- Eric S. Raymond, 2003-02-11

"This is just the beginning; there's going to be a lot more of this,"

[...] "What surprises me is that I thought the first assault would come from Microsoft. I didn't expect it would be some of our guys who would go over to the dark side," Raymond said, referring to the fact that SCO also sells Linux software.-- Eric S. Raymond, 2003-02-11

"I wish we could just say we know everything, but we're dealing with such a large problem with many areas and complexities that we can't say 'this is it' and be done -- I wish we could," he said. "I can empathize with the concerns of [the Linux community], but we don't know all the answers to what may or may not be of issue," as SCO assess its intellectual property.

[...] "We want to see Linux succeed and grow," he said. "But we also have a significant amount of intellectual property in Unix, and in a number of cases we've seen so far, there's been some inappropriate use of our Unix technology."-- Chris Sontag, 2003-02-11

"If the Linux community is really going to continue to grow, we can't keep ignoring this problem of intellectual property violations. We need to address it head on,"-- Chris Sontag, 2003-02-11

"Many have commented that the GPL is very ambiguous and not very specific, leaving many things up in the air that could be potentially interpreted in many different ways, and I would agree with those characterizations," Sontag said.

This vagueness, he said, "can be problematic in cases when companies want to make contributions of certain things and maintain their intellectual property on other things and hold some things in reserve. The GPL in some cases can be problematic as to how you go about sorting that out."-- Chris Sontag, 2003-02-11

"In retaining Silverman Heller Associates," said Darl McBride, president and chief executive officer, "we look forward to expanding our dialogue with the investment community. Silverman Heller will assist us in finding new investors who share our enthusiasm for SCO's future and whose support will be instrumental in our efforts to maximize shareholder value."-- Darl McBride, 2003-02-21

"We have very positive programs for working through these issues as they arise. Some 95 percent of the companies we are in discussions with are co-operating well, but there are a handful of cases where the discussions are not as amicable," he said, declining to be more specific about which companies were being uncooperative.-- Darl McBride, 2003-02-26

But the unlicensed use of its Unix shared libraries was just the "tip of the iceberg as there are so much IP we're dealing with here, ranging from copyright, trade secrets, patents, source code and licensing issues.

"Because this range of IP-related issues is so broad-based and there is such a wide-range of players involved, we're just making sure we move forward very sure-footedly. We don't want to start running before we can walk. We're trying to take things in the right order," McBride said.-- Darl McBride, 2003-02-26

McBride said SCO expected revenue for the second quarter, ending April 30, 2003, to be in the range of $23 million to $25 million. That forecast was based on anticipated revenue from its current operating platforms of $13 million to $15 million, and from $10 million in revenue from its SCOsource licensing initiative.-- Darl McBride, 2003-02-26

[McBride] did confirm that the Lindon, Utah-based firm is expecting to make at least $10 million in revenue in the current financial quarter from its SCOsource licensing initiative.-- Darl McBride, 2003-02-26

C++ is one of the properties that SCO owns today and we frequently are approached by customers who wish to license C++ from us and we do charge for that. Those arrangements are done on a case-by-case basis with each customer and are not disclosed publicly. C++ licensing is currently part of SCO's SCOsource licensing program.-- Blake Stowell, 2003-03-04

Lets go back to the gas service station comparison. If you were the service station owner, and you knew that people were taking your gasoline on purpose, would you turn a blind eye to it and say, "these people might be curious and irate with me if I tell them that I need to start charging them for the gasoline that they are stealing." Property is property, and if there is the potential that SCO's intellectual property is being used without permission, then we need to investigate that. We're not saying yet that it is, but we have to research areas where that might be happening. Anyone who runs a business can certainly understand that.-- Blake Stowell, 2003-03-04

SCO has contributed to the Open Source community in the past, and I'm sure that SCO will contribute to the Open Source community in the future. SCO isn't going to give away intellectual property that the company could be monetizing for the benefit of its shareholders.-- Blake Stowell, 2003-03-04

SCO owns the core UNIX code that was originally developed by AT&T. Everyone knows (and Linus has publicly stated) that Linux is a derivative of that UNIX source code. Whether or not parts of SCO's UNIX intellectual property resides in any parts of Linux is still being investigated. To comment further on that would be pre-mature until we come to a conclusion on any findings.-- Blake Stowell, 2003-03-04

So far all that we have announced is that we are licensing our UNIX libraries for use with Linux. The Linux community should actually see that as a very positive thing because now customers have access to nearly 4,000 UNIX applications that they didn't have before. So when you think about it from that standpoint, SCO is actually helping to grow the application base for Linux overnight by 4,000 applications. SCO is making Linux more useful.-- Blake Stowell, 2003-03-04

"This happens every couple of years," said Bradley Kuhn, president of the Free Software Foundation. "What we have here is a company desperately looking for a business model around free software that people are using and loving, and looking to their patent portfolio for revenue."-- Bradley Kuhn, 2003-03-06

"As part of a series of licensing agreements, Sun acquired rights to make and ship derivative products based on the intellectual property in Unix. This forms the foundation for the Solaris operating system that ships today.

"Sun's complete line of Solaris and Linux products -- including Solaris for the SPARC and x86 platforms, Trusted Solaris, the highly secure operating system, and Sun Linux - are all covered by Sun's portfolio of Unix licensing agreements. As such, Solaris and Sun Linux represent safe choices for those companies that develop and deploy services based on Unix systems," he said.-- John Loiacono, 2003-03-06

"SCO is in the enviable position of owning the UNIX operating system," said Darl McBride, president and CEO, SCO, in an interview with eWeek Thursday. "It is clear from our stand point that we have an extremely compelling case against IBM. SCO has more than 30,000 contracts with UNIX licensees and upholding these contracts is as important today as the day they were signed."

[...] "IBM has been happily giving part of the AIX code away to the Linux community, but the problem is that they don't own the AIX code," he said. "And so it's a huge problem for us. We have been talking to IBM in this regard since early December and have reached an impasse. This was thus the only way forward for us."

The Unix contracts held by SCO were "extremely powerful and one of the remedies under the contract is that we have the ability to revoke their AIX license," he said. "We have to give them 100 days notice before we do that. If they don't cure the problems we have then we will revoke their license. We sent them a letter today informing them of that, so the 100-day clock has started."-- Darl McBride, 2003-03-06

"We did a channel survey recently to see where our solution partners were, what platforms they were running on, and what applications they were running. I don't remember any questions like these even being part of that survey. This latest survey wasn't commissioned by us, I can tell you that," he said.-- Darl McBride, 2003-03-06

"We have very strict confidentiality agreements with IBM about what they can and can't do" with Unix developed using SCO intellectual property, said Darl McBride, president and chief executive of SCO. Further proof of IBM's intellectual property violations will come out in trial, he said.

He also said that a specific type of intellectual property cited in the suit, the so-called "shared libraries" used in the operation of Unix, was "one of seven or eight" different types of IP which SCO is investigating for IP violations by Linux developers. He declined to comment on whether SCO would pursue additional lawsuits against IBM or other Linux companies.-- Darl McBride, 2003-03-06

The president of an exclusively Linux/Open Source shop told eWeek last week that he had recently participated in a 20 minute phone survey that began with a statement to the effect that a company named SCO was pursuing legal remedy to protect its intellectual property.

The researcher had begun with a statement to the effect that a company named SCO was pursuing legal remedy to protect its intellectual property. "I had my suspicions, but as soon as they asked my familiarity with, respect for and opinion of, Red Hat and IBM, I knew what was going on. They also asked me about Sony and Ford - I believe several automotive components run on Linux," he said.

The next set of questions, the researcher said, had to do with his understanding of intellectual property laws. They were followed by questions regarding several aspects of intellectual property rights - from music to software and copyrighted printed materials. The questions then moved on to how his opinion of a company would be affected if certain statements were used.

"And all of them had to do with the way to spin public perception of a company that is suing a lot of other popular companies for using a product that helps them make money, but for which they refuse to pay the company that produced the original product," he said.

"They spun it about 15 different ways, using different verbiage and angles," he said. "They even went as far as asking me if I'd think more highly of the litigious company if they donated a portion of the funds generated from lawsuits to some charity."-- Undisclosed SOURCE, 2003-03-06

"What they have to prove is there was some code from AIX ... that actually made its way into Linux," Claybrook said. "That may not be hard to prove."-- Bill Claybrook, 2003-03-07

"It's a fairly end-of-life move for the stockholders and managers of that company," said Jonathan Eunice, an Illuminata analyst. "Really what beat SCO is not any problem with what IBM did; it's what the market decided. This is a way of salvaging value out of the SCO franchise they can't get by winning in the marketplace."-- Jonathan Eunice, 2003-03-07

"Companies that switch from competing in the marketplace to trying to enforce their basic patents and intellectual is a style of conducting business that isn't very conducive to getting a lot of business partners," Eunice said.-- Jonathan Eunice, 2003-03-07

"If there's any impact on Linux, it'll be principally through fear, uncertainty and doubt," he said. "The principal winners in that would not be SCO, but Microsoft and potentially Sun."-- Jonathan Eunice, 2003-03-07

Eunice said IBM was unhappy with the performance of Unix kept only the interfaces higher-level software used to communicate with it.

"The AIX kernel...was not principally based on the Unix source code. It was based on their (IBM's) own development," Eunice said.-- Jonathan Eunice, 2003-03-07

"The complaint is full of bare allegations and no facts to support it," he said. "SCO never approached IBM ... in advance of filing it" to discuss the matter.-- Mike Fay, 2003-03-07

Brian Ferguson, an intellectual property attorney at McDermott Will & Emery LLP in Chicago, said the SCO suit against IBM is "an attempt to show the industry that they mean business."

"It looks to me like a strategy not necessarily to save their own business, but to use the intellectual property purely as a manner of generating revenue," Ferguson said. "It's one thing to have an executive of IBM make a comment. It's another thing to take that comment and make it into a claim."

[...] "I'm sure SCO is going to paint this as the tiny little David vs. the Goliath who stole their secrets out from under them," Ferguson said. "That's the risk that IBM takes, and that could make them negotiate [a settlement], even if they think they have the better case."-- Brian Ferguson, 2003-03-07

"It's possible, if you're not filtering carefully, yes, there could be something in that that infringes on someone else's intellectual property rights," Kelly said.-- Brian Kelly, 2003-03-07

"But when they take our proprietary code and, without our permission, put that into the open-source community, that is where we do have a major-league problem," McBride said.-- Darl McBride, 2003-03-07

"IBM has taken our valuable trade secrets and given them away to Linux,"-- Darl McBride, 2003-03-07

"The details of this case will be played out by the attorneys in a legal setting, so I'm not at liberty to go into the evidences we have at this point in time," he said.-- Darl McBride, 2003-03-07

"This case is about IBM not stepping up to what we feel are contract violations, which we've alleged in our complaint," he said.-- Darl McBride, 2003-03-07

"This case is not about the Linux community or us going after them. This is not about the open-source community or about UnitedLinux, of whom we are members and partners. A small part of our business is Linux-based," McBride said. "This case is and is only about IBM and the contractual violations that we are alleging IBM has made and that we are going to enforce."-- Darl McBride, 2003-03-07

"This is about moving our core operating system technologies forward. SCOsource is important to us as it will protect the intellectual property in the next iteration of our operating systems, which is key to our future, as is migrating the 4,000-plus applications written on SCO Unix and helping them migrate to the next-generation operating system," he said.-- Darl McBride, 2003-03-07

"When you take our intellectual property and move it into open source, then we have a big problem,"-- Darl McBride, 2003-03-07

"Yesterday I had a request from a $28 billion company, an IBM customer, who sent us a request asking to see the AIX source code and the derivative work that came out of that. It is crystal clear to us here that certain parts of IBM are regularly reinforcing that we do have pretty strong ownership of the AIX code base," he said.-- Darl McBride, 2003-03-07

Darl McBride, SCO's CEO since June, said in an interview this morning that the lawsuit was inspired by public comments made recently by IBM executives who have allegedly said they're moving features from IBM's AIX Unix into Linux to benefit enterprise customers as part of IBM's Linux strategy. The problem with that, McBride said, is IBM doesn't own AIX, but licenses it through SCO.

"It goes to the heart of confidentiality agreements in AIX contracts," he said. "IBM has been publicly saying that they're OK putting AIX into open source, that it's not a problem for them," he said. "When you take our valuable intellectual property and say you're going to move it into open source, then we have a major problem."

[...] "This case is about IBM making commitments to us and honoring them."-- Darl McBride, 2003-03-07

"What SCO is doing raises a bunch of questions," Mills said. "Instead of building customer value, they're chasing people saying, 'License technology from us.' To me it's an odd strategy."-- Steven Mills, 2003-03-07

"If I were an AIX customer, I might see a small downside risk, but Linux customers certainly shouldn't worry," he said.-- Eric S. Raymond, 2003-03-07

"SCO's motivation is desperation, because it doesn't have a business left,"-- Eric S. Raymond, 2003-03-07

"The history is that much of the commercial value SCO is alleging IBM destroyed was actually created by open-source hackers back in the 1970s and 1980s,"-- Eric S. Raymond, 2003-03-07

"They are full members of UnitedLinux. We expect them to stick to the rules. They signed up as an open source (company). They buy into the GPL philosophy,"-- Richard Seibt, 2003-03-07

"They have the right to make money off their intellectual property. The problem is, they should have done this six years before," Seibt said. And SCO Chief Executive Darl McBride, by raising questions about Linux, would "hurt himself more than anybody else," Seibt said.-- Richard Seibt, 2003-03-07

"Our focus right now is on IBM," he said Friday morning before the conference call. "We have a very strong case and we're very confidently moving forward. We're fully committed to taking this all the way."-- Chris Sontag, 2003-03-07

"Those that purchase our Linux product have nothing to fear. They have our full license to our Unix intellectual property when they're purchasing our Linux products,"-- Chris Sontag, 2003-03-07

"When they (IBM) started utilizing the same engineers that worked on the Unix System V source code and the ultimate derivative of it in the form of AIX, they have effectively been applying our methods and concepts, even if there isn't a single explicit line of code" that shows up in Linux.

Asked if there was no possibility such features could have been independently developed, Sontag responded, "On such short order, it seems highly improbable."-- Chris Sontag, 2003-03-07

"Red Hat and its business partners work diligently to respect the valid intellectual property rights of others. We believe that the open-source community has provided and will continue to provide quality software that is well-suited for wide deployment throughout the enterprise," he said.-- Mark Webbink, 2003-03-07

I don't think IBM would have started using Linux if it was true. I think IBM got serious about Linux because it noticed that it _was_ "adequate for enterprise use" from a technical perspective, but lacked a lot of things IBM could bring to the table (marketing, of course, but even more than just marketing, just the presence of IBM made Linux be taken much more seriously).

So I think IBM's involvement has been very important, but while IBM has fine engineers, the most important part by _far_ has been the "mindshare" part of it.

But what does "adequate for enterprise use" really mean? The marketing and mindshare certainly _matter_ a lot for pretty much all enterprise customers. So in _that_ sense maybe SCO is right, even though I don't think that is really what SCO _meant_.-- Linus Torvalds, 2003-03-10

I'm not all that excited about commenting a lot on lawsuits, since quite frankly I want to have as little as humanly possible to do with such things. At the same time I obviously do find the SCO one a bit interesting, since it's the first lawsuit ever I know of that actually involves Linux, even if Linux itself seems pretty peripheral.

Just as well, that "peripheral" thing ;)-- Linus Torvalds, 2003-03-10

Q: [Impact of the lawsuit?]

None, really. The people I work with couldn't care less.-- Linus Torvalds, 2003-03-10

Yeah, I don't personally think they have any IP rights on Linux, and I agree, it looks more like a suit over the contract rather than over Linux itself.

I don't think they are going to win it (very very weak arguments, since at least from a technical perspective I don't think the IBM involvement has been that significant, and SCO was losing out _long_ before IBM started pushing Linux). However, my personal (maybe overly cynical) suspicion is that even _they_ don't think they'll win the suit, and it may be nothing more than a way to force IBM back into license discussions over UNIX itself.

So I think that 100-day license revocation thing may actually be the most important part of the whole suit, and that the rest might be just the excuse. If I was SCO and looking at IBM, I'd have long since noticed that IBM has been talking about Linux taking over more and more of their current AIX usage, to potentially eventually replace it altogether.

So SCO sees IBM largely going away as a licensee in a few years - and while I certainly don't have any knowledge of how much that means for SCO, I would not be surprised if IBM licenses are quite a noticeable part of SCOs receivables.

And what would you do? You want to get IBM back to the discussion table over licensing _before_ IBM starts to consider the UNIX licenses for AIX to be no longer worth it. I think IBM has announced they'll drop AIX eventually, but I do _not_ think that IBM is willing to drop it within three months. They tend to pride themselves on supporting their existing customers.-- Linus Torvalds, 2003-03-10

"I'm hoping that this doesn't set back the whole evolution of open-source development and Linux too much," Claybrook said. "The more [the lawsuit] is dragged out, the more uncertain the future of Linux becomes."-- Bill Claybrook, 2003-03-12

"So far, I don't think it would have an impact on Red Hat," said Katherine Egbert, analyst with CE Unterberg Towbin. "I don't know how you would enforce patents on something like open-source."-- Katherine Egbert, 2003-03-12

"It's kind of irrelevant who wins the lawsuit," said Victor Raisys, analyst with Soundview Technology Group in San Francisco. "You can't take back the fact that someone has tried to claim intellectual property on Linux. The genie is out of the bottle."-- Victor Raisys, 2003-03-12

"Linux customers and vendors will be forced to consider their legal liability due to intellectual property issues," he wrote.-- Victor Raisys, 2003-03-12

Heise claims to have them [substantive claims] - and isn't proposing to go on discovery fishing expedition - but doesn't want IBM to know what they are. At the time, and this was a week ago, he said he had spent more time talking to us than to IBM, that there had been no contact. He figures IBM's strategy will be to go for a dismissal on the grounds that what he's charged IBM with so far are is not a cause of action and are conclusions, not facts. He seems relatively unperturbed at the prospect. He also gave Sun a hall pass on IP tampering, calling it "clean as a whistle," because it paid all that money once upon a time for Unix. As for everybody else, well, he hadn't gotten around to reading their agreements yet.-- Mark Heise, 2003-03-21

SCO looked at being acquired and at raising finances for three or four months last year, "but we turned that aside in December or January as we got cash-flow positive," Chief Financial Officer Bob Bench said in an interview. Now the company is looking more at acquisitions of smaller companies, he said.

"We have some growth internally, but we'd like to grow faster doing acquisition of technologies and smaller companies," Bench said.-- Robert Bench, 2003-03-31

"Since the parties are incorporated in different states, both parties are entitled to have their dispute heard in a federal rather than a state court," said John Ferrell, an intellectual property attorney with Carr & Ferrell in Palo Alto, Calif.-- John Ferrell, 2003-03-31

"Since the parties are incorporated in different states, both parties are entitled to have their dispute heard in a federal rather than a state court," said John Ferrell, an intellectual property attorney with Carr & Ferrell in Palo Alto, California.-- John Ferrell, 2003-04-01

At the end of the day, our most prized asset is our ownership of the Unix OS. And that's what IBM said they'd obliterate. It's a punch in the nose. You can either take flight, or fight for what's right. But this is about misappropriation of trade secrets and contractual violations. We have 30,000 licensees of the Unix OS. We've always been very open with the source code to any institution that wanted it, whether it's a university, government or a corporation. If they turn it to commercial use, there are royalties. In our contract, it states that licensees must use their best efforts to protect our source code.-- Darl McBride, 2003-04-24

By June 13, if there is no response from IBM, we will revoke their AIX contract so they won't have source code to use it. The judge will then make up his or her mind.-- Darl McBride, 2003-04-24

Everyone just says we're a company going out of business, and throwing a Hail Mary pass, but once we get to court, those who say that will look as strange as the Iraqi information minister on TV saying the infidels are defeated and did not get into Baghdad.-- Darl McBride, 2003-04-24

From what I hear, IBM will blacken the Utah sky with lawyers.-- Darl McBride, 2003-04-24

I can't answer that right now for legal reasons. It will be discussed in court. But we're not talking about insignificant amounts of code. It's substantial System V code showing up in Linux.-- Darl McBride, 2003-04-24

IBM walked away from Project Monterey, and they told us if we didn't like it, sue us. That took two years out of our life. IBM took chunks out of Monterey, and gave it away. You can find it in Red Hat and SuSE Linux. When IBM pulled out of Monterey, they did it concurrently with moving over to Linux. The heat has been turning up on this for some time.-- Darl McBride, 2003-04-24

The open-source guys were cool with it. IBM wanted to keep IP issues under the rug. They said not to talk about IP. And they talked about source code libraries. They told us if we didn't retract it, IBM would stop doing business with us. IBM threatened us and told us if we didn't back off, life would be ugly.-- Darl McBride, 2003-04-24

We approached Red Hat [about licensing source code libraries] and they thought [our claim] was interesting. They said they'd talk about it, but then called back and said we'll pass [on licensing the source code from SCO]. [Red Hat Chairman and CEO Matthew] Szulik said copyright issues scare him. But Red Hat has had a free ride. In its IPO filings, one of the warnings to investors stated clearly that Red Hat may be violating IP and one day they may have to step up and pay royalties. Why not? Every time I ship a copy of my operating system, I pay royalties to Novell and Veritas. There will be a day of reckoning for Red Hat and SuSE when this is done. But we're focused on the IBM situation.-- Darl McBride, 2003-04-24

We're either right or we're not. If we're wrong, we deserve people throwing rocks at us. But what if SCO is right? When we go through the legal proceedings, people will see. Is there collateral damage? Yes. We had our eyes wide open when we started this. We're not blind as to what is going on around us. But we're in it for the long haul.-- Darl McBride, 2003-04-24

Who's making money off Linux? Red Hat barely had its head above water and it's right back down again. If you look closely, a lot of the Linux distributors have gone out of business on this model. You have to ask, who is making money? And it's IBM. IBM is making money on boxes and IBM Global Services. If you're this company, don't you have an interest in the operating system being commoditized because there's more money in hardware and services? Linus Torvalds regulates the trademark and determines what goes in and out of the kernel. So who is the policing agency that checks the code and makes sure there aren't IP violations? Linux doesn't have IP roots. If it's true that IBM has violated, let's get some roots in the ground on this.-- Darl McBride, 2003-04-24

Yes, we're getting a good amount of support from the OEMs and even others in the Linux community. We have a good relationship with Sun [Microsystems]. Of all the companies, they are very clear in terms of licensing. They paid more than $100 million [in royalties]. They're not interested in destroying Unix.

IBM was unique in their push back. They know this is a problem, but they played a card. They underestimated our resolve. This is not about eking out some [marketing development funds] or getting more money for the quarter. This is our most prized possession. We're the source of AIX, HP UX, Solaris, Linux, Mac OSX. It all comes from us. The only one that hasn't been rationalized [from a licensing perspective] is Linux. If people signed a source code license with us, they have to think hard about how they protected it or didn't protect it.-- Darl McBride, 2003-04-24

Some have perpetual licenses, others do not. They are perpetual as long as they honor the terms of their contract. When they break their contract, they are no longer perpetual. Some companies have been very honorable in their strict adherence to the terms of our contract. Others, as our complaint against IBM alleges, have not.-- Chris Sontag, 2003-04-28

We are finding SCO-owned code in their [Red Hat and SuSE] distributions.-- Chris Sontag, 2003-04-28

We are using objective third parties to do comparisons of our UNIX System V source code and Red Hat as an example. We are coming across many instances where our proprietary software has simply been copied and pasted or changed in order to hide the origin of our System V code in Red Hat. This is the kind of thing that we will need to address with many Linux distribution companies at some point.-- Chris Sontag, 2003-04-28

We're not talking about the Linux kernel that Linus and others have helped develop. We're talking about what's on the periphery of the Linux kernel.-- Chris Sontag, 2003-04-28

What he meant was that if SCO prevails in their lawsuit with IBM, companies like Red Hat and SuSE may need to revisit their distributions and remove any UNIX system code from their distributions and compensate SCO in some way for the software code that they benefited from by using our UNIX code.-- Chris Sontag, 2003-04-28

"Given that we have extensive legal resources put forth into making sure we respect the valid intellectual property rights of companies, we are not concerned with the statements that have been made" that Unix code appears in Linux, said Red Hat spokeswoman Leigh Day. "We do take intellectual property very seriously."-- Leigh Day, 2003-05-01

"so far there have been no significant problems with cleanliness of code," Eunice said. "This is the first major case where there's been a claim of fraud or improper use of code getting into open-source."-- Jonathan Eunice, 2003-05-01

SCO's claims "could definitely sensitize the open-source community in general," said Illuminata analyst Jonathan Eunice, "but before it creates any kind of vastly disruptive effect, (SCO is) going to have to not only make a claim, they're going to have to prove a claim."-- Jonathan Eunice, 2003-05-01

"To the extent that there is copyrighted code in the Linux operating system borrowed from Unix, I think these companies have a problem,"-- John Ferrell, 2003-05-01

"For Linux to move forward in a wide-scale fashion, I believe the intellectual property issues have got to be resolved," he said.

"There is not an intellectual property policeman sitting in at the check-in counter saying this is OK, this is not OK. It is a free-for-all," McBride said. "At the end of the day, there's not a basis for making sure code is clean when it goes in there."-- Darl McBride, 2003-05-01

"There's a point in time that has to be resolved with those guys [SuSE and Red Hat] too," McBride said, "but that's not currently what our legal approach is about."-- Darl McBride, 2003-05-01

"This is not about 10 lines of code, it's about 20 years of extremely valuable intellectual property we're trying to protect...Am I supposed to lie down and not say anything about it?" McBride said. "There's a certain point here where you stand up for what's right and let the chips fall where they will."-- Darl McBride, 2003-05-01

"We feel very good about the evidence that is going to show up in court. We will be happy to show the evidence we have at the appropriate time in a court setting," McBride said. "The Linux community would have me publish it now, (so they can have it) laundered by the time we can get to a court hearing. That's not the way we're going to go."-- Darl McBride, 2003-05-01

"We're finding...cases where there is line-by-line code in the Linux kernel that is matching up to our UnixWare code," McBride said in an interview. In addition, he said, "We're finding code that looks likes it's been obfuscated to make it look like it wasn't UnixWare code--but it was."-- Darl McBride, 2003-05-01

"He's saying this stuff exists, but he's not willing to reveal it. Well, maybe we'll hear about this in court, but frankly, maybe we won't, because they'll try to seal it all," Perens said. "It sounds like he's trying to FUD Linux in general."

And taking the offensive, Perens added, "Copying works both ways. I want to see some proof they haven't copied Linux source code into SCO Unix."-- Bruce Perens, 2003-05-01

"They should show us what code they have problems with. We'll take a look at it or we'll just replace it. Keeping us in the dark is just silly,"-- Bruce Perens, 2003-05-01

"This shows one of the weaknesses of the open-source movement," said Mark Radcliffe, a copyright attorney with Gray Cary. "You're all dependent on trust. Unfortunately, a number of people involved in the process do not have a great degree of respect for intellectual property. It's fine if it's personal, but if you decide to implement that by saying 'I don't give a damn about this intellectual property,' everything that touches it is now screwed."-- Mark Radcliffe, 2003-05-01

"We have a joint development agreement with them, which includes appropriate cross-licensing arrangements," said SuSE spokesman Joe Eckert on Friday. "Our lawyers feel that covers us from any actions that SCO may take."-- Joe Eckert, 2003-05-04

Asked if SCO planned legal action against Red Hat and SuSE, SCO Chief Executive Darl McBride told CNET News.com, "There's a point in time that has to be resolved with those guys, too." However, he said such action isn't currently part of SCO's legal proceedings....-- Darl McBride, 2003-05-04

SCO lawyer Mark Heise of Boies, Schiller & Flexner LLP says IBM's defense is so thin and "boilerplate" that he's "still waiting for them to file it." He calls the preamble a "press release."

[...] Heise says that IBM could have asked the court for more detail, but chose not to, contending that the substance-less nature of IBM's reply was less a matter of IBM's unwillingness to show its hand than it was a matter of having nothing in it.

[...] "I'm ready to throw my 25-30 pages of details on the table," Heise claimed. He has previously said the SCO suit lacked facts on purpose to play cat and mouse with IBM.-- Mark Heise, 2003-05-05

"We're not happy about this. We don't think they have a case but would rather see it resolved. SCO released the code under GPL and has relinquished all rights to it."-- Mark de Visser, 2003-05-15

"SCO has been unable so far to unveil the exact parts of the incriminated code, and it doesn't seem they will do publicly, which could mean that they don't feel very confident about their claims," he said. "(There is) nothing concrete yet."-- Gael Duval, 2003-05-15

"I'm not a lawyer but what I've said I stand by. How can they sue us for a product we have jointly developed?"-- Joe Eckert, 2003-05-15

"SCO's actions are...indeed curious. We are not aware, nor has SCO made any specific attempt to make us aware, of any unauthorized code in any SuSE Linux product," Eckert said in a statement. "As a matter of policy, we have diligent processes for ensuring that appropriate licensing arrangements (open source or otherwise) are in place for all code used in our products."-- Joe Eckert, 2003-05-15

"One the one hand, you want to laugh and say this is an interesting sideshow," Haff said. "But if directives were to start coming down from CEOs of, 'Get that Linux stuff out of my shop,' it's going to be very disruptive for a lot of IT shops, very disruptive for a lot of vendors and very expensive."-- Gordon Haff, 2003-05-15

"SCO has lobbed its dirty bomb into the user community, saying, 'You'd better clean this up in a big hurry or there's going to be a lot of damage,'" said Illuminata analyst Gordon Haff. "I guess suing IBM wasn't enough to get them acquired, so this is the next stage."-- Gordon Haff, 2003-05-15

"The only rational explanation for this is it's a plea for money, essentially, from IBM and others that can't afford to let Linux be derailed," he said. "SCO is not the least afraid of being the bad guys here."-- Gordon Haff, 2003-05-15

"Microsoft will declare victory and say 'we told you so'. Companies were starting to see Linux show up as a mainstream choice and this would put a chill on that. It won't stop [installations] but it will lengthen the decision cycle."-- Dan Kusnetzky, 2003-05-15

"SCO's actions may prove unpopular with those who wish to advance or otherwise benefit from Linux as a free software system for use in enterprise applications," wrote SCO CEO McBride. "However, our property and contract rights are important and valuable; not only to us, but to every individual and every company whose livelihood depends on the continued viability of intellectual and intangible property rights in a digital age."-- Darl McBride, 2003-05-15

"It's history that can't be erased. They've foregone any royalty because they promised that their distributions would be without a royalty. So there's no royalty upside," he told us.-- Bruce Perens, 2003-05-15

"We've seen no indication from enterprise customers that these statements from SCO have been a deterrent from viewing Red Hat as a trusted provider of Linux solutions,"-- Red Hat PR, 2003-05-15

"It's [copying] way wider than we expected. We thought our main focus would be with IBM. It still is our predominant effort,"-- Chris Sontag, 2003-05-15

"Legal liability may rest with the end users. It is not carried by the distributor or by anyone else involved in selling that Linux distribution into these commercial accounts. It resides with the end users, which is unheard of. They need to know they have exposure in this issue," Sontag said.-- Chris Sontag, 2003-05-15

"SCO is taking this important step because there are intellectual property issues with Linux.

"When SCO's own UNIX software code is being illegally copied into Linux, we believe we have an obligation to educate commercial users of the potential liability that could rest with them for using such software to run their business. We feel so strongly about this issue that we are suspending sales and distribution of SCO Linux until these issues are resolved."-- Chris Sontag, 2003-05-15

"We certainly have suspended our activities with UnitedLinux," SCO's Sontag said. SuSE's argument that its UnitedLinux contract protects it from SCO legal action is baseless, he added.

"That simply is not the case at all," Sontag said. "Public statements to that effect (are) the farthest thing from the truth."-- Chris Sontag, 2003-05-15

"We think it is appropriate that we warn commercial companies that there are intellectual property issues with Linux," Chris Sontag, head of the effort to derive more revenue from SCO's intellectual property, said in an interview. "We sent it to the Fortune 500 and effectively the global 2000. It ended up being about 1,500 top international companies."-- Chris Sontag, 2003-05-15

"We've identified a large number of contributions from various sources which are very disconcerting to us, and additional areas of code with no attribution to any contributor or maintainer at all," Sontag said. "This is in the kernel, and also in extended areas of Linux."

Sontag said IBM employees were among those who copied code. In reading Big Blue's Web site describing Linux contributions, one can "find a lot of areas they mention code contributions they have made from AIX into Linux," Sontag said. AIX is IBM's version of Unix.-- Chris Sontag, 2003-05-15

Sontag specifically claimed that there is "significant copyrighted and trade secret code within Linux".

When asked for examples of infringement, Sontag said, "It's all over the place" but did not characterize any one subsystem as containing more infringing code than others. Infringement is present not only in distributions and vendor kernels, but in the official kernel available from kernel.org. Code has been "munged around solely for the purpose of hiding the authorship or origin of the code", he said.

"I can't at this point lay out all the evidence", Sontag said [....]

[...] "We specifically excluded the BSD-derived code", Sontag said. "There is post-BSD UnixWare source code origined [sic] with SCO, and that is of issue."-- Chris Sontag, 2003-05-15

"They're not well loved," Weiss said. "I guess SCO is really attempting to create a fairly large disruption of Linux, and will attempt to take the Linux community with them in the defense of their intellectual property, regardless of how poorly it goes off in the Linux community."-- George Weiss, 2003-05-15

"This whole thing strikes me as utter insanity but there's really no way of knowing what's going on here until SCO shows exactly what bits of the kernel code is at issue," said Linux developer Ken Camern. "Until then, weird rumors will continue to fly, which is no surprise.

"What does surprise me is the deeply nasty nature of the comments from SCO directed towards the Linux development community."-- Ken Camern, 2003-05-16

"A misappropriation case is not particularly expensive," Ferrell said. "To the extent that they begin to raise copyright infringement issues and patents are ultimately brought in -- which they could well be -- this could be an incredibly difficult litigation for SCO."-- John Ferrell, 2003-05-16

"It's an axiom of law in business that it's not a great idea to sue your customers or your potential customers," Ferrell told internetnews.com. "In the event that they intend to sue customers, they may drive away potential customers of both their Linux business as well as their Unix business. I think they're going to be very careful before they sue customers. It's also easier to sue a few distributors or publishers or developers."-- John Ferrell, 2003-05-16

"They filed for misappropriation of trade secrets to get them in Utah state court rather than federal court," John Ferrell, founding partner and chairman of the intellectual property practice at Palo Alto-based law firm Carr & Ferrell LLP, told internetnews.com. "SCO being in Utah would have had hometown advantage over a large IT corporation."

He added, "so far, everything that has been filed has been state court claims relating to the misappropriation of Unix software secrets by IBM. The misappropriation comes down to the allegation that IBM, having rightful possession of Unix secrets, breached its duty of secrecy with SCO by conveying and transmitting those secrets to third parties. Those third parties were the members of the Linux community that were working on drivers and various other enhancements to the Linux operating system."-- John Ferrell, 2003-05-16

"They've [Rambus] announced that their litigation fees were in the order of about $2 million per month for intellectual property litigation," he said. "This is a big undertaking."-- John Ferrell, 2003-05-16

At that point in time when the teams came back and said, 'Yes, there are violations, and it's not an insignificant amount of code we are talking about,' we, after much dissecting of the problem and kicking it around, came to that we conclusion that we needed to send out an alert or notice to let people know that these problems existed. That notice came in two forms. One was a press release that went out [on May 14,] while the second was a letter that went out to customers.-- Darl McBride, 2003-05-16

I don't think you are going to have any challenges worldwide with the argument that SCO owns the majority of the Unix operating system intellectual property. The arguments will come in that we don't all of it. And that is a challenge in this case, versus the online music business, I would agree with that.-- Darl McBride, 2003-05-16

I think there are multiple paths for how this can get ultimately resolved and rationalized. We're not really stating that this is the path. We think it's a very complicated situation that we are dealing with. You have vendors that don't want to own a Linux OS because of intellectual property issues involved; that's been a well stated fact for a long period of time now. You have vendors that distribute the code and issue a license agreement that says 'we do not warrant the intellectual property validity of this product.' You have developers that are contributing code that are on the honor system and there's not a policeman to check in the code at the Linux kernel level to ensure that there are not violations. So, there are a lot of moving parts to this problem, and we're not pretending to have all of the answers right now. But, one thing that's interesting, T.C., is if you look at the online music business and the path that that's gone through over the past few years, it started off where Linux is now where millions of people around the world were excited about online music, Napster, because it was music for free. You now have millions around the world that love Linux because it's Unix for free. Free models have a way of not sustaining for a long period of time. And I believe that's the case here as well. But if you look at how the evolution continued on the music side, you have the [Apple] iTunes product line that came out two weeks ago and in the first week you have over 1 million songs that are downloaded for a buck a song. I believe that at some point, you are going to see a more rationale business model attached to Linux than something that is called 'free software.' -- Darl McBride, 2003-05-16

I understand why people are upset. And I understand why people are asking, 'Those SCO guys, what are they doing now?' But I would turn the question around to them and ask the question: 'What would you do if you were in our shoes?' What would you do if you had turned three independent programming teams loose on the question of 'Is our UnixWare inside of Linux?' and all three of those groups came back independently and said yes.-- Darl McBride, 2003-05-16

I've been saying we didn't go into this trying to win Miss Congeniality, and we're not in first place in that right now, that's for sure.-- Darl McBride, 2003-05-16

Q: Is there anyway to get a real Linux version from your perspective without violating SCO IP?

Based on the understandings we have right now, we don't see how.-- Darl McBride, 2003-05-16

Q: What are the Red Hats of this world, the other distribution companies, doing?

It's a good question. We have had over the last six months, various discussions with distributors about intellectual property issues and how to resolve them. We've worked with these guys on the front end. We've thrown out different models. We've looked for ways of working together and we've been politely told that they are not interested in working out those kind of deals.

... They were polite, though. [laughs] They let us know in a very kind way.-- Darl McBride, 2003-05-16

Q: What's to prevent IBM from scooping up all your shares on the open market and doing business with you that way?

McBride: Well, they'd have to scoop up all the shares from one shareholder, first, that basically owns about 50 percent. It's not as simple as it would be with many public companies that have 95 percent of their stock in the public float, or 80 percent. The point is we have one shareholder 85% whom they'd basically have to convince to make that happen.-- Darl McBride, 2003-05-16

So, at the same time we filed the lawsuit against IBM for the misappropriation of trade secrets and other things, we sent a letter to IBM informing them of a material breach of their AIX contract with us. And, based on the contract stipulation, we can terminate their AIX contract based on material breach of it. We would send out a notice, a 100-day notice letter, and at the end of the 100 days, we would have the right to terminate that contract. So we are about 28 days to go on the countdown of the AIX contract.-- Darl McBride, 2003-05-16

The Linux community on these message boards will get very vocal, many times without even understanding what the underlying issues are. So it's a little bit like being Shaquille O'Neil and driving home from the game that night and listening to the call in show. It can drive you crazy if you listen to every fan that calls in or non-fan. And these chat boards can drive you crazy if you try and follow the logic, or lack thereof that goes on on some of these boards. So I believe what we have to stay focused on is what is the right thing and stay focused on what is the right thing at an industry level and what is the right thing at a customer and industry partner level, and, in the end, try to apply some leadership to the equation to problem to help resolve things.-- Darl McBride, 2003-05-16

We're not trying to go fight people with this right now; we're trying to let them know about the problem. We didn't send out a fight letter. If you look at the letter it's really more of a notification letter. The responses that have come back have been more of an educational nature,i.e., 'help me understand what it is.' So we're trying to help accommodate that and help given understanding to where the problems are.-- Darl McBride, 2003-05-16

Well, the phones have been ringing off the hook. People are trying to understand what is going on, and we understand the concern that have, which is the same concern we had when we found out there problems. The typical response is 'what do you want me to do?' And our answer to that is the same thing that we did, 'go get opinion of counsel.' The second thing we are offering up is for people to come to our offices in Lindon, Utah, and go under non-disclosure and take a look at the evidence that we are talking about. We'll be glad to accommodate that.-- Darl McBride, 2003-05-16

Well, we didn't go into this trying to get headlines. We went into this trying to protect and defend our crown jewels. We own the Unix operating system, which is one of two main operating systems in the world. There's Windows and Unix. Microsoft owns the Windows operating system and SCO owns the rights to the Unix operating system. It's an extremely valuable property that has not been as polished up and played out in the market place as it could have been over the last couple of years. And that's the path that we are going down. We are very proud of our heritage on Unix. We believe it has an incredible life ahead of it, and by focusing more fully on that Unix core OS and then our extended SCOx web services strategy that wraps around it, we think we have an incredibly bright future. The quarter that just passed, our second quarter ended April 30, we just gave guidance on [on May 14.] Our revenue, sequentially from Q1 to Q2 has gone from $13.5 million to $21 million. We have hit our first operating income quarterly [target] in the history of the company. We just didn't eek out an operating income number; we blew it away. We are going to announce around $4 million of operating income for the second quarter. These numbers going up are a function of the renewed emphasis that we put on Unix last fall. As you remember down in Las Vegas last fall, it was an unpopular thing to do at the time to come out and say we are the Unix guys. But you can see after a few quarters of focusing on that core asset, financially we are doing better as a company.-- Darl McBride, 2003-05-16

[IBM] came back with the response a couple of weeks ago that basically filled several pages [with] denials. Our attorneys are calling this the whip-lash injury response, which is full of denials and doesn't really say anything. So, we don't have much to gauge based on what they came back with. In that particular case, the next interesting benchmark or time frame to look at is June 13th, which is the time that the AIX license comes due. We had to give them notice on the termination of AIX of 100 days, and that deadline will be due on June 13.-- Darl McBride, 2003-05-16

"There is absolute difficulty with this line of argument which ought to make everybody in the world aware that the letters that SCO has put out can be safely put in the wastebasket," Moglen told internetnews.com, noting that SCO distributed its own version of Linux with a kernel that allegedly contains Unix-derived code.

"From the moment that SCO distributed that code under the GNU General Public License, they would have given everybody in the world the right to copy, modify and distribute that code freely," he said. "From the moment SCO distributed the Linux kernel under GPL, they licensed the use. Always. That's what our license says."-- Eben Moglen, 2003-05-16

"SCO's handful of patents aren't significant. Nobody's ever won a trade-secret case like this one."

[...] "The open-source community has been careful about other people's code for years," Perens said.-- Bruce Perens, 2003-05-16

"SCO's actions are again indeed curious," SuSE said in its statement, released on Thursday. "We have asked SCO for clarification of their public statements, SCO has declined," SuSE's statement read.

"We are not aware, nor has SCO made any attempt to make us aware, of any specific unauthorized code in any SuSE Linux product. As a matter of policy, we have diligent processes for ensuring that appropriate licensing arrangements (open source or otherwise) are in place for all code used in our products."-- SuSE PR, 2003-05-16

"I'm intimately familiar with the history of the 'intellectual property' SCO is talking about," said open-source advocate Eric Raymond. "I was there for a lot of the history, as far back as 1982. The fundamental claims in SCO's complaint are a colossal, brazen pack of lies."

"What's mystifying is that they are stupid lies, easily falsified by facts in the public record and SCO's own behavior?. I hope IBM calls me as a witness, so I can eviscerate these clowns."-- Eric S. Raymond, 2003-05-16

"When SCO shipped what it now claims as its property under GPL, it voluntarily ceded the right to recover for these alleged misappropriations," Raymond said. Read the license and see for yourself."

[...] "Your typical businessperson is much more likely to be impressed by IBM's support of Linux than by SCO's claims," Raymond said.-- Eric S. Raymond, 2003-05-16

I can't answer for IBM. There is strong contractual language that allows us on breach - as we have alleged in the lawsuit - the right to revoke the AIX license.-- Chris Sontag, 2003-05-16

I have reviewed the agreements we have with SuSE. I would not characterise them in any form whatsoever as providing SuSE with any rights to our Unix intellectual property. They are dead wrong on that issue.-- Chris Sontag, 2003-05-16

Q: What you are saying then is: if there is Unix code put into Linux by IBM, and SuSE is using Linux, they would therefore be liable by default?

Yes.

Q: Would that also be true of Red Hat?

The same issue in terms of inappropriate intellectual property in Linux being distributed by any commercial distribution would provide them with the same issue. So Red Hat, SuSE or any other commercial distribution would have equal liability.-- Chris Sontag, 2003-05-16

They really did not make much of a response. So we are moving forward now and we expect to speedily get into the discovery process and be able to start coming forward in a court setting with the evidence related to the evidence in our lawsuit.-- Chris Sontag, 2003-05-16

We announced with our first-quarter earnings that our financial situation had dramatically improved. I will leave it at that, but we expect very shortly to be announcing our second quarter and it is my understanding that it should be very favourable.-- Chris Sontag, 2003-05-16

"That's akin to saying, "Show me the fingerprints so I can clean them off." The Linux community would love for us to point out the lines of code. We're willing to show that under non-disclosure to select individuals, but the first time we show that publicly will not be in the open," SCO spokesman Blake Stowell told internetnews.com.-- Blake Stowell, 2003-05-16

"SCO's lawsuit can be construed as an attempt to raise shareholder value through claims of intellectual-property infringement or to pressure IBM into an acquisition," Weiss said in an April research note.

He added, "If IBM is found to be in violation according to the complaint, its options will be to settle on a compromise in damages or to buy out SCO. It is unlikely IBM will acquire SCO and add to an already complex portfolio with SCO's aging OSs, especially with Linux as IBM's mainstream direction. However, IBM is committed to protect its users and maintain Unix license rights."-- George Weiss, 2003-05-16

"I guess suing IBM wasn't enough to get them acquired, so (the letters are) the next stage,"-- Gordon Haff, 2003-05-18

Late Sunday, Microsoft general counsel Brad Smith said 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." The pact was first reported by the Wall Street Journal.-- Brad Smith, 2003-05-18

"We have not seen any specific code referenced that we are supposed to be in violation of. We are certain we are not in violation of any intellectual property, and so this is a non-issue until we can see some of that," Day said. -- Leigh Day, 2003-05-19

"We feel pretty comfortable with the [UnitedLinux] agreement we have with SCO," said Joe Eckert, a spokesman for SuSE Linux AG, in New York. "We have yet to hear from SCO about exactly what these issues might be."-- Joe Eckert, 2003-05-19

"All Bill (Gates) says is, 'Give me the opportunity to innovate,' and once again Bill is innovating," Ellison said during a press conference announcing an alliance between Oracle and Sun to promote Sun's Intel-based servers. "You've seen advanced bundling and now you are seeing extreme litigation...They know a lot about extreme litigation."-- Larry Ellison, 2003-05-19

"You can design the code out, and that certainly gets rid of an injunction as a viable remedy, because there will be nothing left to enjoin," Ferrell said. "However, there still is the issue of past damages that SCO would have the opportunity to seek redress for."-- John Ferrell, 2003-05-19

"(The license) allows Microsoft to leverage the fear, uncertainty and doubt that is moving around Linux," said Gordon Haff, an analyst at Illuminata. "This is a defensive move on the part of Microsoft, which isn't to say that the sales and marketing people won't take advantage of it."-- Gordon Haff, 2003-05-19

"We paid a big, big bag of money a decade ago to get IP (intellectual property) rights to do what we wanted to do with Solaris," he said at a press conference announcing a new line of Intel-based servers on Monday. "We've got a free and clear SCO license. Your audit committee won't get a letter if you are using Solaris."-- Scott McNealy, 2003-05-19

"We think open source is wonderful and good, but we also believe in copyright and the rule of law," McNealy said.-- Scott McNealy, 2003-05-19

"The announcement really serves two purposes," RedMonk analyst Stephen O'Grady said. "First, it temporarily allows Microsoft to steal the moral higher ground from its Linux competitors; and second, it's a big fork in the eye to IBM."-- Stephen O'Grady, 2003-05-19

"This benefits Microsoft more than anything else. Microsoft does a little Unix work, but not much," Perens said. ? "This is more of a symbolic act intended to intimidate other companies" into complying with SCO's royalty demands, Perens said. "From my point of view, it weakens (SCO's) case, because it seems that there has been collaboration with Microsoft (over Linux intellectual-property claims) from the start."-- Bruce Perens, 2003-05-19

"Based on SCO's recent announcement, it appears that HP was one of 1,500 other companies to receive a letter regarding Linux, the company said in a statement. "HP is unaware of any intellectual property infringement within Linux. The complaint is focused on alleged inappropriate behavior by IBM, it is not about infringement by Linux itself of SCO's IP rights."-- HP PR, 2003-05-19

"Microsoft has been warning people about IP issues for a long time," Gartner analyst David Smith said. "In many ways they're looking back and able to say 'I told you so.'"-- David Smith, 2003-05-19

"There are many companies in the IT industry who acknowledge and respect the intellectual property of software. With this announcement, Microsoft is clearly showing the importance of maintaining compatibility with Unix and Microsoft's software solutions through their software licensing. This important step will better help their customers implement Unix and Windows solutions," he said.-- Chris Sontag, 2003-05-19

"We are sensitive of the fact we need to make some of this information available to make our case," he said last week.-- Chris Sontag, 2003-05-19

the company had identified "significant source code copying issues within Linux, some of which we believe comes from IBM but many others of which come from third parties. All of these are very troubling to us," Sontag said.-- Chris Sontag, 2003-05-19

"With the commercial adoption of solutions based on open source technologies by enterprises, governments, schools and software innovators, legal challenges were expected from entities who face economic consequence by Red Hat's progress in delivering competing alternative solutions," Szulik's letter stated. "Since 1983, lawsuits have become all too commonplace in the software industry. Innovators who challenged proprietary economic models have faced threats to free enterprise throughout the history of commerce."-- Matthew Szulik, 2003-05-19

"The contract IBM has for Unix is perpetual and irrevocable,"-- Adam Jollans, 2003-05-22

"Ever since the day that SCO made their claims public through their court filing against IBM, we have been asking SCO to tell us precisely what FSF copyrighted code they believe contains their trade secrets (or for that matter, infringes on their copyrights or patents). SCO has refused to answer us or give us any details. As far as we know, there are no such claims.

"Indeed, FSF holds documents from SCO regarding some of this code. SCO has disclaimed copyright on changes that were submitted and assigned by their employees to key GNU operating system components. Why would SCO itself allow their employees to assign copyright to FSF, and perhaps release SCO's supposed 'valuable proprietary trade secrets' in this way?-- Bradley Kuhn, 2003-05-22

"For nearly two decades, the FSF has carefully and arduously collected copyright assignments on each contribution to the GPL'ed programs on which we hold copyright. We carry out due diligence to ask contributors if they have any reason to believe that trade secrets, patents, or other copyright claims cover their work before they submit it to us. We then collect a copyright assignment from the contributor (and a copyright disclaimer from their employer when necessary) to ensure that we hold proper title to the software on which we place our copyright notice and license freely under GPL or LGPL.

"Individuals and companies using FSF copyrighted programs know as much as one can know that the software has been examined carefully, that its authors certify that the work is their own, and that the authors have no knowledge of other claims conflicting with its licensing under GPL or LGPL."-- Bradley Kuhn, 2003-05-22

"SCO was not merely a distributor of the kernel named Linux; they were the distributor off the entire GNU/Linux system, which includes Linux as well as the core components of the GNU operating system, such as glibc, GCC, GDB, etc.

"Most of the core GNU components are all copyrighted by the Free Software Foundation and distributed under our auspices under GPL. SCO's right to redistribute them, and Linux too, is the GNU GPL and only the GNU GPL."-- Bradley Kuhn, 2003-05-22

I believe the way the open-source community works right now has some fundamental flaws that have got to be addressed. We need to address how this open-source intellectual property is developed, routed, and sold. Thousands of software developers send code to contribute to open-source projects -- but there isn't a protective device for the customer using the software to ensure they're not in violation of the law by using stolen code.

Basically it's a "buyer beware" situation. The one holding the hot potato is the end-use customer. If the process can't provide more guarantees for customers, I don't think it will pass the long-term test at the customer level. You need some comfort level other than "We can warrant none of this, we don't know where it came from. And because you got it for free, you shouldn't complain about it."-- Darl McBride, 2003-05-23

In the last 18 months, we found that IBM had donated some very high-end enterprise-computing technologies into open-source. Some of it looked like it was our intellectual property and subject to our licensing agreements with IBM. Their actions were in direct violation of our agreements with them that they would not share this information, let alone donate it into open-source. We have examples of code being lifted verbatim.

And IBM took the same team that had been working on a Unix code project with us and moved them over to work on Linux code. If you look at the code we believe has been copied in, it's not just a line or two, it's an entire section -- and in some cases, an entire program.-- Darl McBride, 2003-05-23

Our feeling is that if our intellectual-property rights have been violated, then all parties need to recognize that and work out some form of compensation or action. The majority of other vendors are stepping up in a positive fashion.

We want to protect our rights, but our goal is not to litigate with anybody. In IBM's case, they came back and said, "If you go down this path, we are going to disengage. We are not going to do any more business with you, and we are going to encourage others not to do any more business with you." That was in fact what happened. The impact was immediate and swift. No doubt, we lost some business and some revenue.-- Darl McBride, 2003-05-23

The tipping point for us was at Linux World this year, when an IBM executive stood up in front of a large crowd and essentially said, "We're moving our AIX expertise into Linux, and we're going to destroy the value of Unix."

Those comments alone would have been a direct violation of our AIX contract with IBM, under which they license our Unix intellectual property. That's what caused us to start digging [to] find out what was going on. And the deeper we dug, the more we found. When we tried to resolve things with them, we reached an impasse. This lawsuit is the final extension of the negotiating process.-- Darl McBride, 2003-05-23

They [Microsoft] agree with our approach to intellectual property. They've taken a patent license on our technology to build better integration between Unix and Windows. I believe that sends a statement to others with respect to what it means to honor intellectual property.-- Darl McBride, 2003-05-23

We would be happy to sit down and get a resolution on this so we can all live together peacefully. But when we file a legal claim and then someone does a denial-of-service attack on our Web site to try to shut us down, it creates concerns for us as to how can you work with this community.-- Darl McBride, 2003-05-23

"The idea of getting a SCO license had been under consideration prior to the IBM lawsuit. Then the suit came along. The lawsuit was seen as indirect supporting our position on the value of IP. Since other software vendors who depend on software licenses haven't been exactly falling all over themselves to support our position, seeing something that supported it was welcome. The idea of going ahead with the license was initially motivated by wanting to make a statement reinforcing everything we've been saying about IP. But if we didn't have any actual use for the license, it absolutely would not have happened. The fact that the license would make it easier to enhance future versions of Services for Unix was a deciding factor. The license was not seen as a way to underwrite SCO's legal fees."-- Microsoft SOURCE, 2003-05-23

"SCO approached us a couple of months ago, and they had a valid IP claim, and, as we do quite regularly, we agreed to a broad IP license with SCO and as such have stepped out of the fray," said Alex Mercer, a Microsoft spokeswoman, in Redmond, Wash.-- Alex Mercer, 2003-05-26

"There is absolutely no correlation between the IBM suit and our IP license with SCO," she said.-- Alex Mercer, 2003-05-26

"There are many companies in the IT industry who acknowledge and respect the intellectual property of software," said Sontag. "Microsoft is showing the importance of maintaining compatibility with Unix and Microsoft's software solutions."-- Blake Stowell, 2003-05-26

"That's not true," Bird said. "What they own is some source code and technology" for UnixWare. "That's not the same thing as owning Unix.

"If you're an uneducated observer of this, it would be very easy to say that SCO owns Unix, which is not the case," Bird said.-- Graham Bird, 2003-05-28

"You don't want proprietary software to kill Linux or vice versa. I want to make sure the playing field doesn't get tipped,"-- David Boies, 2003-05-28

"It's a food fight" among several parties, he said. "As an industry analyst, I'm sitting back and watching. This is a set of intriguing developments that stands to only help one company, and it's none of the companies that are participating now."-- Dan Kusnetzky, 2003-05-28

"We want SCO to know this isn't a pain-free move," says Bruce Lowry, a spokesman for Novell. "They've been playing this up so much in the media and we're tired of it,"-- Bruce Lowry, 2003-05-28

"That's like saying, 'show us the fingerprints on the gun so you can rub them off.'"-- Darl McBride, 2003-05-28

"We talked to those guys, but there was never one comment at any time that, 'Hey, we want to buy copyrights from you,' " McBride said. "It was very clear in our minds that we already purchased that."-- Darl McBride, 2003-05-28

McBride added that unless more companies start licensing SCO's property, he may also sue Linus Torvalds, who is credited with inventing the Linux operating system, for patent infringement.-- Darl McBride, 2003-05-28

"Novell has answered the call of the open-source community," Perens said. "We admire what they are doing. Based on recent announcements to support Linux with NetWare services and now this revelation ... Novell has just won the hearts and minds of developers and corporations alike."-- Bruce Perens, 2003-05-28

SCO did not get Unix "lock, stock and barrel. We retain the patent and copyrights to Unix, which is spelled out in our agreement with SCO. A review of both the U.S. Patent Office's records and our review of the asset transfer agreement convinces us that we retain the rights to the patents and copyright to Unix. So we are asking SCO to prove otherwise, which they have not yet done,"-- Bruce Lowry, 2003-05-29

"I have seen the contract, and it contains specific asset exclusions."

"This is a very important development as I think we will see very soon who is right and who is wrong. They are talking about a public contract document between the two parties,"-- Richard Seibt, 2003-05-29

Q: You're claiming that Linux has been polluted with Unix code that you own, but you have not produced any evidence of that. Will you?

We will actually be providing some of the evidence next month to various industry analysts, respected press people and other industry leaders so that they don't have to take our word for it or wait until we show some of that evidence in court. We will actually be showing the code, and the basis for why we have made the allegations that we have. We are very confident about our case. Because we are dealing with confidential source code that we have never released without confidentiality agreements, we will have to put in place nondisclosures [agreements] simply to protect the source. But people will be able to give their opinion as to what they think.-- Chris Sontag, 2003-05-29

"Even if you potentially had a problem [with concerns about Unix code in Linux back then], what are you going to do?" McBride asked. "Sue Linus Torvalds? And get what?"-- Darl McBride, 2003-05-30

"I'm not trying to screw up the Linux business," he said. "I'm trying to take care of the shareholders, employees and people who have been having their rights trampled on."-- Darl McBride, 2003-05-30

"If there's a way of resolving this that is positive, then we can get back out to business and everybody is good to go, then I'm fine with that," McBride said today in an interview with Computerworld. "If that's one of the outcomes of this, then so be it."-- Darl McBride, 2003-05-30

"It's sort of like somebody stealing your car, and you hunt them down and you find them, and they say you can have your car back, but there's no penalty for that," McBride said. "If there's no penalty for stealing property, then where are we?"-- Darl McBride, 2003-05-30

"Novell timed their announcement to coincide with our earnings release...to try and screw that up,"-- Darl McBride, 2003-05-30

"The copyright issues are not important to our current enforcement actions and anything happening in the marketplace," he said.

"To the extent we want to deal with copyright issues down the road, we have our attorneys working on that," McBride said. "As far as claims Novell is making...we'll be settling those in court."-- Darl McBride, 2003-05-30

"The month of June is show-and-tell time," McBride said. "Everybody's been clamoring for the code...and we're going to show hundreds of lines of code."-- Darl McBride, 2003-05-30

"We strongly disagree with Novell ... and see it as a desperate attempt to curry favor with the Linux community," McBride said of Messman's letter. "If the System V code is showing up inside the [Linux] kernel, then that is going to change the playing field."-- Darl McBride, 2003-05-30

SCO saw its revenue go from $200 million in 1999 to $60 million this year "due primarily to the onslaught of Linux in the marketplace," he said. "The notion that we're going to sit back and let the Linux steamroller go over us at our expense, at the shareholders' expense, makes zero sense to me."-- Darl McBride, 2003-05-30

"Copyrights and patents 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."-- SCO PR, 2003-06-02

"I have not heard about anyone rethinking an order based on this," says Larry Augustin, the chairman of VA Software. "I haven't seen anyone express a fear. The only thing I have seen is people say we need to be careful about where source code comes from -- and that statement was true in the past and it's just as true now."-- Larry Augustin, 2003-06-03

"We've not seen a single hesitation from customers--just look at Munich".... SuSE's customers "simply do not believe that SCO, even if it has a case, will impact them--Linux is simply an inevitability."-- Joe Eckert, 2003-06-03

"I don't think anyone knows how it's going to play out, and I believe in the end it may start to be troublesome in sales. But I have not heard of any sales where it has been a problem so far. And I can easily see that where the customer may get antsy and say, 'I don't want to get sued if I buy this thing,' what would happen in this case is it might only delay a sale. In the end I think IBM starts indemnifying its customers. It starts to say, 'Listen, this is bullshit but we understand your concerns about this and if anything happens, we'll take the hit for you.'"-- Jonathan Eunice, 2003-06-03

"I'm no lawyer, but I suspect there is a little bit of aggressive flippancy in that response," says Jonathan Eunice, an analyst at Illuminata, a technology research firm in New Hampshire. Eunice has been closely following the SCO case, and he says that IBM's response "does signal a feeling that they think this is not a serious lawsuit. If IBM thought, 'We may have a material problem here -- golly, they may have a point!' I think IBM would take it more obviously seriously."-- Jonathan Eunice, 2003-06-03

"Let's say that IBM never touched Linux. So Linux would probably be less successful because IBM's stamp of approval was key in getting corporate approval for it -- but IBM doesn't deserve much credit for the quality of the Linux kernel as its stands today. Both HP and IBM have contributed to the 2.6 version, the forthcoming version, so you could make a claim about a future version of Linux if you like. But for the current version -- Linux got good fast long before IBM had a broad systematic commitment to it."-- Jonathan Eunice, 2003-06-03

"SCO must not be allowed to damage its competitors by unsubstantiated claims, to intimidate their customers and to inflict lasting damage on the reputation of GNU/Linux as an open platform," LinuxTag's Michael Kleinhenz said in the statement.-- Michael Kleinhenz, 2003-06-03

"I frankly don't think that people are going to make that big of a deal of it -- as soon as the actual evidence of what SCO claims to have been copied is out there, then those sections of Linux are going to be replaced with unambiguous original code effectively immediately."

... "And that's the apparent reason why SCO is sitting on the code," Marti says. "The kernel developers, if they find out what it is, they'll say, 'We'll re-implement it.'"-- Don Marti, 2003-06-03

"Our agreement with SCO is independent of any other industry action and solely designed for the benefit of our customers and our products,"-- Microsoft PR, 2003-06-03

"I didn't get the impression that they were going to settle this case," Raymond says. "And I told Dan, 'We want you to crush these guys. You go after them foot, horse and marines. And we will cheer.'"-- Eric S. Raymond, 2003-06-03

"Is it appropriate for someone to take your work that you do for Salon and put it in another publication without attribution and with someone else's name on it? The obvious answer is no. What if someone takes your research and the effort you put into your work and then munges it around -- changes the paragraphs and the words around so it doesn't look like it's the same work, although it's effectively your work? Is that appropriate? Still the answer is no."-- Chris Sontag, 2003-06-03

"What we're talking about is showing Unix System V code, and we have strict confidentiality with that and it has to be maintained," he says. "But we do realize and understand that people want to see that we have proof, and we are going to be making that proof available as soon as we can. We'll probably make it available to some people" -- for instance, financial analysts or reporters -- "under NDA so they can make their own evaluations."-- Chris Sontag, 2003-06-03

"The Canopy Group said SCO has got to hire somebody in-house to manage the IBM litigation," Tibbitts said. "My background is litigation. With the firestorm that has started, they need someone who can manage and oversee the litigation."-- Ryan Tibbitts, 2003-06-03

"We didn't want to run afoul of the court," Tibbitts said. "I haven't seen the length and breadth of the temporary restraining order to see what it is we're precluded from doing. In an abundance of caution we just took down the whole German Web site."-- Ryan Tibbitts, 2003-06-03

"Although Gartner has reservations on the merits of (SCO's claims), don't take them lightly," Gartner analyst George Weiss advised in a May note. "Minimize Linux in complex, mission-critical systems until the merits of SCO's claims or any resulting judgments become clear."-- George Weiss, 2003-06-03

"It doesn't make sense. How would you transfer the product but not have the copyright attached? That would be like transferring a book but only getting the cover," McBride said.-- Darl McBride, 2003-06-04

"The letter went to 1,500 large companies around the world, the majority of which all have (Unix) System V licenses with us...We do have sublicense rights," McBride said. "They sign up for the fact that they will not misappropriate the code."-- Darl McBride, 2003-06-04

"If they did enough due diligence to figure out there were concepts there, how the heck did they miss that there was actual code copying?"-- Mark Radcliffe, 2003-06-04

"If they had the rights to enforce the copyrights, how come that didn't show up in the IBM suit?" Radcliffe asked. "It's very weird they would bring a lawsuit on trade secret (misappropriation) and unfair competition and not put in copyrights and patents. Those are the strongest rights. Particularly with IBM, you don't go out and say, 'I'm not going to take the elephant-hunting rifle with me, I'm just going to take my .22-caliber.'"-- Mark Radcliffe, 2003-06-04

"This situation illustrates the superiority of the Free Software licensing model: If a software manufacturer withdraws from the development of GPL software, its contributions that were published under the the GPL up to that time remain available to users," said J?rgen Siepmann, attorney and founding member of LinuxTag.-- Jurgen Siepmann, 2003-06-04

"It's pretty clear that patents and copyrights were excluded and not included in the business as it's described (in the contract), so we don't believe SCO would have copyright and patent enforcement rights," Hal Thayer, vice president of communications for Novell, said Wednesday.-- Hal Thayer, 2003-06-04

"My impression is that [SCO's claim] is credible," says Laura DiDio, a Yankee Group analyst who was shown the evidence by SCO Group earlier this week. "It appears to be the same" code.-- Laura DiDio, 2003-06-05

"The fact that these appear to be transposed from Unix System V into Linux I find to be very damaging."-- Laura DiDio, 2003-06-05

"Then I'd talk to IBM and say, 'How are you going to help me out?'"-- Laura DiDio, 2003-06-05

"They do have the copyrights," said John Ferrell, an intellectual property attorney with Carr and Ferrell, after reviewing the contract amendment.-- John Ferrell, 2003-06-05

"IBM believes our license is irrevocable and perpetual," a spokeswoman says. "And we have the right to continue shipping AIX according to the terms of the contract."-- IBM PR, 2003-06-05

"Our interpretation of this is that we have the copyrights for Unix and UnixWare technologies," said SCO spokesman Blake Stowell.-- Blake Stowell, 2003-06-05

"If everything SCO showed me today is true, then the Linux community should be very concerned,"-- Bill Claybrook, 2003-06-06

"If IBM wants to cure this problem, they could start by buying all the appropriate licenses and then paying SCO a billion dollars," Claybrook said. "But SCO now says that a billion may not be enough to cover their damages."-- Bill Claybrook, 2003-06-06

"It's very unlikely that code and comments could be identical by pure chance,"-- Bill Claybrook, 2003-06-06

"SCO's words were that Linux distributors and others who are using Linux are 'distributing stolen goods,' "-- Bill Claybrook, 2003-06-06

"One could argue that developers could write exact or very similar code, but the developers' comments in the code are basically your DNA, or fingerprints, for a particular piece of source code,"-- Laura DiDio, 2003-06-06

"SCO is not trying to destroy Linux," said DiDio of the Yankee Group. "That's silly. This is about paying royalties."-- Laura DiDio, 2003-06-06

"Can SCO prove that this code came from SCO to Linux, and not from Linux to SCO?" asked Jon "Maddog" Hall, executive director of Linux International (Nashua, N.H.), a Linux advocacy organization. "Or did the code that's in SCO Unix come from a third source? Show me the facts,"-- Jon Hall, 2003-06-06

"We strongly disagree with Novell's position and view it as a desperate measure to curry favor with the Linux community," McBride said.-- Darl McBride, 2003-06-06

"This amendment simply confirms SCO's long-stated position that it owns all copyrights associated with the Unix and UnixWare businesses.

"SCO is the owner of the Unix operating system, as well as all of the Unix contracts, claims and copyrights necessary to conduct that business.

"Because others have called into question SCO's ownership of the Unix and UnixWare copyrights, we are satisfied that we have now proven without a doubt that SCO owns those copyrights."-- Chris Sontag, 2003-06-06

"I'm a little dubious about this agreement they just sort of found in a drawer somewhere," said Perens, a Berkeley, Calif., Linux developer in his own right. "But even if they end up owning the copyrights, there's still a whole lot of questions whether any Unix code has improperly shown up in Linux."-- Bruce Perens, 2003-06-07

"If we do find out some pieces of Unix code ended up in Linux, then we will take it out and go on with our lives," Perens said. "I don't think it would have any real impact on the open-source movement."-- Bruce Perens, 2003-06-07

"Prior to today, SCO had asserted it had copyright ownership. Now this document shows and confirms what we have been saying all along," said company spokesman Blake Stowell. "A week ago [skeptics] were all saying, 'We got them now,' and now they are all walking away with their tails between their legs."-- Blake Stowell, 2003-06-07

"SCO is the owner of the Unix operating system, as well as all of the Unix contracts, claims and copyrights necessary to conduct that business," Sontag said. "Others have called into question SCO's ownership [of Unix], but we are satisfied that we have now proven without a doubt that SCO owns those copyrights."-- Blake Stowell, 2003-06-07

"Both companies [IBM and Red Hat] have shifted liability to the customer and then taunted us to sue them. So that's all they have left us to play with," said McBride.-- Darl McBride, 2003-06-08

"We have the ability to go to users with lawsuits and we will if we have to,"-- Darl McBride, 2003-06-08

"I'm going to indemnify my customers' products. We have a big OEM business. We have to have to start with the fundamentals of indemnifying OEMs because they indemnify their customers," Schwartz said.-- Jonathan Schwartz, 2003-06-08

"IBM has left themselves exposed," he warned. He also criticized Linux running on the mainframe. "You can put Linux on a mainframe but it's still a mainframe. Customers are throwing away Linux on the mainframe. They're going back to where it runs best, Linux on Intel."-- Jonathan Schwartz, 2003-06-08

"Linux on Intel kicked us in the butt. We weren't paying attention to Linux on Intel - we are now," Schwartz said. "Judge us by our actions not by the ridiculous press releases from our opposition."-- Jonathan Schwartz, 2003-06-08

Laura, by the way, who's known McBride and SCOsource licensing chief Chris Sontag for 15 years - since their days at Novell under the tutelage of then Novell CEO Ray Noorda - says they're neither "capricious" nor "showboats."-- Laura DiDio, 2003-06-09

[...] she says what she saw was "licensed SVR5 code transposed into Linux by a number of vendors" - whom she identified only as "IBM" and the "usual suspects." She said the transpositions included the "developers' comments."

She said that what she saw - as a "layperson, not a lawyer" - "backed up SCO's claims," adding her appreciation that "the trademark and patent people are going to have a field day with this."

She said she saw "several different examples" of the alleged plagiarism.-- Laura DiDio, 2003-06-09

Messman's letter, he said, turned those requests [for Amendment No. 2 of Asset Purchase Agreement] into SCO "repeatedly" asking "Novell to transfer the copyrights to SCO, requests that Novell has rejected."

"We knew this amendment existed," Sontag said. "We just didn't know where it was."-- Chris Sontag, 2003-06-09

"There has never been a time where Unix as an operating system has been licensed in an open-source way," he said. "It's always been protected."-- Blake Stowell, 2003-06-09

"The lawsuit itself doesn't bother me that much - clearly litigation is a fact of life in U.S. business," Torvalds wrote in an e-mail interview last week. "I'm a bit disappointed over the way that SCO has waged the lawsuit, i.e., the fact that they spread a lot of rumors without showing what they are actually talking about."-- Linus Torvalds, 2003-06-09

"It is not true that SCO has refused to show the code to Torvalds. SCO has already shown the code to several reporters and analysts and continues to do so. SCO continues to be willing to show the code to Linus as well," according to a statement released by McBride and SCO Senior Vice President Chris Sontag.-- Darl McBride, 2003-06-10

"SCO has exchanged a series of e-mails with Linus Torvalds starting last December and continuing until early this month. SCO is perfectly willing to show the code to Linus. Linus says he will not sign an NDA. SCO cannot show the Unix code without the NDA, so it appears that they are at an impasse. SCO's offer stands--Linus can see the code under the NDA."-- Darl McBride, 2003-06-10

SCO was able to uncover the alleged violations by hiring three teams of experts, including a group from the Massachusetts Institute of Technology math department, to analyze the Linux and Unix source code for similarities. "All three found several instances where our Unix source code had been found in Linux," said an SCO spokesman.-- SCO PR, 2003-06-10

"Something I strongly suspect is going to come up in the court case is, how do we know what the direction of transmission was?" said open source advocate Eric Raymond.

"The burden of proof is on [SCO] to demonstrate that the transmission went from System V to IBM to Linux, rather than from System V to SCO's own kernel developers to Linux," he said.-- Eric S. Raymond, 2003-06-10

"The one specific example that I'm showing right now is [Unix] code, line by line copied into Linux," said Sontag.-- Chris Sontag, 2003-06-10

"During that project we often came across sections of code that looked very similar, in fact we wondered why even variable names were identical. It looked very much like both codes had the same origin, but that was good as the implementation of 95 percent of all Linux system calls on the Unix kernel turned out to be literally 'one-liners'," the source said.

Only a handful of system calls-socketcall, ipc and clone-were fairly difficult to implement as they involved the obvious differentiators between Linux and Unix: networking, inter-process communication and kernel threads, the source said.

"These system call implementations had to be quite compatible with the behavior of the real Linux kernel, otherwise Linux applications would not work on SCO Unix. It is quite obvious to argue that in order to get these right, Linux kernel code had to be studied and possibly copied into the SCO Unix kernel to implement the Linux Kernel Personality.

"How else would you get the Java Hotspot VM or the X-window server (Linux binaries) to work on SCO Unix?" the source questioned.-- SCO SOURCE, 2003-06-10

"That is a false notion. SCO also never used any of the Linux kernel code in the LKP and thus has not violated the GPL. We have also never contributed Unix source code to the Linux kernel," he said.-- Blake Stowell, 2003-06-10

"I don't see what the IBM angle is, though. The kernel clearly does contain code from IBM too (much more than 80 lines), most notably the IBM journalling filesystem JFS," Torvalds wrote in an e-mail to CRN. "I personally consider any claimed shared source unlikely to be of truly SVR4 origin and much more likely to have other sources, but before we can see the code we can't really make any firm statements to that effect.

"The code will have to come out eventually. I can wait. I don't have to like it, of course," Torvalds added.-- Linus Torvalds, 2003-06-10

"I've not seen the code, and clearly I can't sign an NDA for it," said Torvalds. "I did ask [SCO CEO] Darl McBride to show it to me but didn't expect them to make it available. They didn't."-- Linus Torvalds, 2003-06-10

"It's clearly a fact that [Unix] contains a lot of BSD code, and Linux has some too, so there are bound to be ... lines of code in common," wrote Linux creator Linus Torvalds in an e-mail interview.-- Linus Torvalds, 2003-06-10

"While we may not agree with all of the strategies and decisions made by SCO, I still believe that they have acted professionally and seriously under an extremely stressful climate," Weiss said. "The case represents a clash of two cultures, philosophies and business models on software development and distribution. I think both will have to coexist, especially as Linux is increasingly wedded into commercial environments.

"Open source brings many tremendous advantages to the user community and IT organizations," Weiss continued. "But in like manner, there are many vendors participating in that very OSS [open-source software] community who believe quite strongly in their own creative product and do not wish to open their designs to scrutiny nor feel compelled to lead or be directed by a community on how their product should evolve. This is a classic case study for the OSS community to create protection and audit mechanisms that respect the processes of both models."-- George Weiss, 2003-06-10

However, some open-source advocates have argued that the General Public License (GPL) may make SCO's suit a moot point, and other analysts believe the company may not benefit from the suit even if it is found to have a viable complaint.

Overall, this snowballing situation is turning into "a high-tech game of Risk, with different combinations of players moving to form political alliances," Yankee Group senior analyst Laura DiDio told the E-Commerce Times.-- Laura DiDio, 2003-06-11

The Yankee Group's DiDio explained that people traditionally have viewed Linux and open source as a sort of utopia, in which source code is free and organizations can customize it to their hearts' content without fear of infringing on old-fashioned bugaboos like copyrights.

"Obviously, this situation has been sobering to a lot of people," she said.

DiDio added that customers of IBM absolutely must review terms of their individual licensing contracts. She said now is the time for end users to perform due diligence and ensure compliance with such agreements, so they do not make a mistake that could cost them in the future. -- Laura DiDio, 2003-06-11

"If neither party knew what it was getting under the contract, it may be possible for SCO to avoid the terms of the contract,"-- John Ferrell, 2003-06-11

"This particular issue is really important to the GPL, and (its resolution) is just inevitable," Ferrell said. "At some point we're going to need to have a judge sit down and sort it all out."-- John Ferrell, 2003-06-11

"In a way, Microsoft is legitimizing SCO's claim," Gardner said. "They're sort of saying that more licensing should take place for Unix. That Microsoft should do this now is also pretty interesting timing."-- Dana Gardner, 2003-06-11

"The timing is interesting," he told the E-Commerce Times. "Why now? Linux has been available and growing for a number of years. The similarities between Linux and Unix in terms of their technical features and functions are well known and go back a number of years. So, why SCO would do this now, and go after the big kid on the block, is strange."-- Dana Gardner, 2003-06-11

"Until a few weeks ago, SCO itself distributed the Linux kernel...as a member of the UnitedLinux alliance. Thus, even if SCO owns parts of the Linux kernel, it has made them into Free Software by distributing them under the GPL."-- LinuxTag PR, 2003-06-11

"I think that's a tough argument to make. The fact that distributing software with proprietary code in it turns it into open source--I think a court would have difficulty swallowing that one," he said. "This may be a test of the open-source license."-- Mark Radcliffe, 2003-06-11

"They delivered the product. Just because of that, they have made that code GPL,"-- Richard Seibt, 2003-06-11

"The GPL requires the intentional act of the legal copyright holder to affirmatively and knowingly donate the source code to the GPL," Sontag said. "You can't inadvertently GPL your code."-- Chris Sontag, 2003-06-11

"The GPL issue is something we've just recently been looking at," SCO spokesperson Blake Stowell told the E-Commerce Times. "It's been said that maybe we've contributed Unix source code to Linux, because SCO was formerly a distributor of Linux."-- Blake Stowell, 2003-06-11

"Open source (programs) will be used more and more in the future, but they've got to have a clean bill of health," Weiss said.-- George Weiss, 2003-06-11

"The cloud that hangs over the Linux community has to be lifted," he said. "I don't think this back-and-forth innuendo and accusation can continue without forcing a pall over the community.

"It's going to cost SCO a tremendous price in terms of goodwill," Weiss added. "I don't even know if it's worth the minimal profits they could see from the suit, if you consider how important it is to have the faith of the community."

He noted that any new products SCO might release in the future could be affected, since purchase of such items generally requires good feelings about the company that makes them. "As long as this cloud hangs over SCO," he said, "it will dampen any enthusiasm to do business with them, regardless of the outcome of the suit."-- George Weiss, 2003-06-11

"What we have is a clash between two different philosophies," said Gartner analyst George Weiss, referring to the proprietary software on the one hand and the free software and open-source software movements on the other. "I happen to believe there's room for both."-- George Weiss, 2003-06-11

"I have no idea" if there's a problem with the code, Claybrook added.

"From what I've seen, I think people should be taking the SCO accusations seriously, but I don't know if they have any proof," he said.-- Bill Claybrook, 2003-06-12

One thing that "bothered" him, he said, is that he asked SCO officials if they had any "direct evidence" that IBM copied any System V code into Linux and was first told there was no such evidence. Hours later, he said, SCO officials called him back and told him that they had "misspoken" and that they did have such evidence.

"That's kind of strange," Claybrook said.-- Bill Claybrook, 2003-06-12

It nonetheless would "behoove" Red Hat and companies that sell Linux-based products to sign SCO Group's nondisclosure agreement and "do the comparison," Collins says. "Red Hat, for example, doesn't want to be charged with willful copyright infringement. Now that SCO Group has put them on notice, it would be prudent for [Red Hat] to have their IP lawyers and programmers take a look at this."-- Michael Collins, 2003-06-12

"The courts are going to ultimately have to prove this, but based on what I'm seeing ... I think there is a basis that SCO has a credible case," DiDio said. "This is not a nuisance case."-- Laura DiDio, 2003-06-12

"If we don't have a resolution by midnight on Friday the 13th, the AIX world will be a different place,"-- Darl McBride, 2003-06-12

"If you get your driver's license revoked, that doesn't mean you can't drive, but you're skating on thin ice. The morning of June 14, you'll have all of these companies driving without a license,"-- Darl McBride, 2003-06-12

It would be within SCO Group's rights to order every copy of AIX "destroyed," says Darl McBride, SCO Group's president and CEO. McBride acknowledges the situation isn't likely to come to that. In fact, he says, he'll leave different scenarios open to IBM. The most likely outcome, he says, is license payments.-- Darl McBride, 2003-06-12

"They need to correct their actions as outlined in our complaint. If those terms aren't met, then we will announce what our actions are on Monday," Stowell said. "We would intend to revoke the AIX license."-- Blake Stowell, 2003-06-12

I've known for about a week now-known, not assumed, not puzzled it out, known-that SCO had mixed Linux code into Unix. I know it because a source I trusted who was in a position to know had told me that had been the case.

I haven't written it up as news though because the person who's told me this doesn't want their name used and I haven't been able to get anyone else who was at SCO in those days to confirm or deny the story.-- Steven J. Vaughan-Nichols, 2003-06-12

"If the theory they've set out in their complaint can be backed up by proof, I think they have a pretty good shot to making a good showing," he said. But, he cautioned, "A good question is: 'Can they back up the allegations of their claim with proof?'"-- Gray Cary, 2003-06-13

Again, this varies according to which piece of code you're reviewing. Clearly with so many different versions extant, that span decades, there are millions of lines of code. The Yankee Group as well as the other analyst firms and members of the press, were only shown small portions of a few pieces of code. In my case, I saw Unix System V, version 4.1. Incidentally, this particular code is from the early 1980s, and hence predates Linus Torvalds' first Linux code.-- Laura DiDio, 2003-06-13

Anything is possible. The real issue is how likely is it that such a situation occurred and does proof exist that this actually happened? At this stage, no one can answer that question definitively. That's what the trial is all about. Certainly, there are examples of code that could have been developed by BSD and then incorporated by AT&T. But SCO claims it has identified code that it has positively identified as originating from AT&T.

SCO hired three separate teams of code experts, including a group from the Massachusetts Institute of Technology. According to SCO, these groups all found code in Linux that purportedly originated in the Unix System V kernel and not BSD.

It now remains to be seen whether IBM and its teams of legal experts can refute the findings of SCO's experts in court. Expect reams of documentation and lots of minutiae!!!! I'm glad I'm not the judge on this case. As an aside, I give SCO credit for getting the best legal and technical advice. Their attorney David Boies is top notch and spent 31 years working for IBM's attorneys and you don't find a group with more technical prowess than MIT (though the great minds at Stanford University in California would beg to differ!).

Seriously though, the fact that legal and technical experts of this calibre are willing to take SCO on says something. In an age of "experts for hire" it's still questionable whether people of this calibre would lend their names to a case that lacked merit.

Incidentally, when you trace the history of code development you will find that Utah-based Caldera was a Linux distributor and they did not mingle the development teams. The Linux development was over in Nuremberg, Germany. And the two Unix development teams were in New Jersey and Santa Cruz, California. Presumably these three teams were not mingling virtually or literally... But again, anything is possible....-- Laura DiDio, 2003-06-13

No one has greater respect for their inherent limitations than I do!!!-- Laura DiDio, 2003-06-13

SCO claims it was just one example. But (it) says there are "hundreds of thousands of derivative lines of code," to back up its claims. The industry will find out for certain once this case gets to court. I wouldn't expect lawyers for either side to divulge all of their evidence in advance. IBM and SCO are just now beginning the "discovery phase" of the suit. So I anticipate that more revelations will be forthcoming over the next couple of months.-- Laura DiDio, 2003-06-13

That is not the case. Check the GPL and look at Section 0. It reads that the legal copyright holder of the source code has to explicitly put an assignment and copyright transfer notice into the beginning of the GPL. There is no concept of accidentally giving away the code to the GPL. There are five or six million lines of code in the kernel.

That said, SCO, as required by distributing a version of Linux, did distribute free source code. SCO must honour the commitment to the product it shipped. But this does not alter the fact that SCO has not done a wholesale GPL giveaway of the code. SCO further claims that many System V licensees are inappropriately taking derivative work and putting it into Linux. That same derivative works clause is in the GPL which says once you contribute it to the GPL you can't make modifications and changes, it must remain in the GPL's license.-- Laura DiDio, 2003-06-13

"Do we have potential issues with Red Hat, SuSE and other commercial Linux distributors--yes, we might," Sontag said, adding that chances for negotiating with such companies appear to be slim.

"Red Hat has been saying all along, 'We don't believe in licensing IP (intellectual property),'" he said.-- Chris Sontag, 2003-06-13

"Hopefully by July, we'll have some solutions we can offer," he said.-- Chris Sontag, 2003-06-13

"Our biggest issues are with the derivative code," he said. "It would be almost impossible to separate it out."-- Chris Sontag, 2003-06-13

Sontag said SCO has found numerous other violations since filing the IBM suit. "We keep finding more stuff every day," he said. "There's (allegedly infringing) code in all the Linux distributions."

"If it were a few lines of code, I'd give it to you," he said.-- Chris Sontag, 2003-06-13

"We would also have the right to make all the AIX licenses (that IBM's) customers have invalid, but at this point in time, we have chosen not to exercise that option," Stowell said. "We view the customers as innocent bystanders in this, but that doesn't mean we won't invoke that right at some time."-- Blake Stowell, 2003-06-13

"It is an indicator that the industry at large is seeing credibility in SCO's claims," she said. "They are thinking this is not just your basic nuisance suit or a grandstanding effort by the little guy against the big computer company."

DiDio said SCO had little choice, economically, but to defend its Unix rights: SCO's Unix royalties have slumped 75 percent to about $60 million, compared with $250 million in 1999-2000, she said.

"If they win, they win big," she said. "If they had done nothing, they would probably be out of business."-- Laura DiDio, 2003-06-14

"They have until midnight [Friday]. After that time, if they have not taken the necessary steps to correct their actions, we will have to consider moving ahead [with the lawsuit]," he said.-- Blake Stowell, 2003-06-14

"It's caused a great deal of angst within the open-source community, but there has been no slowdown whatsoever in the progress Linux is making," said Matthew Szulik, chief executive of Red Hat, the largest distributor of Linux.-- Matthew Szulik, 2003-06-14

He [Bill Claybrook] is not sure who wrote it [an 80-line section of code he was shown by SCO], where it comes from, what kernels are involved or when it got into either code base. All he was told - in answer to a question he asked - was that it was done by a "large independent hardware vendor" that is neither IBM nor Sun.

He says that having seen this evidence, he has "not come to any conclusion about copying." Such a matter is for a court to decide, he said.

Claybrook is under the impression that so-called "derivative works" are more important to SCO than any purported acts of IBM, which SCO is suing for a billion dollars, that resulted in directly copying Unix code into Linux. He's a bit confused over whether SCO has evidence of direct copying or not. SCOsource senior VP Chris Sontag at one point denied it did, a statement that was later corrected.

[...] Claybrook also quotes SCO as saying that Red Hat and SuSE are "distributing stolen goods,"-- Bill Claybrook, 2003-06-16

"There isn't going to be any practical impact now," Harris said. "Unless they seek a preliminary injunction, there's no (court) order impacting IBM or IBM's customers."-- Daniel Harris, 2003-06-16

"The Software and Sublicensing Agreements and related agreements that SCO has with IBM includes clear provisions that deal with the protection of source code, derivative works and methods," said Mark J. Heise, Boies Schiller, & Flexner, LLP. "Through contributing AIX source code to Linux and using UNIX methods to accelerate and improve Linux as a free operating system, with the resulting destruction of UNIX, IBM has clearly demonstrated its misuse of UNIX source code and has violated the terms of its contract with SCO. SCO has the right to terminate IBM's right to use and distribute AIX. Today AIX is an unauthorized derivative of the UNIX System V operating system source code and its users are, as of this date, using AIX without a valid basis to do so."-- Mark Heise, 2003-06-16

I was shown a little of the copied code. Admittedly, I can't tell you what I saw, but I did form the opinion that it was not in the kernel proper. In all probability, the code is more important to Silicon Graphics' Altix servers than to average x86 Linux users.-- Trevor Marshall, 2003-06-16

In the Microsoft case, they saw an opportunity. We originally approached them and said we're on a new licensing path; we have this intellectual property that we've started approaching vendors about. IBM is one we approached; Microsoft was another. We had about four big vendors in the last quarter that we talked with. With two of them, we signed deals. The other we're still talking with, and IBM we reached an impasse.

As far as what Microsoft gets out of the deal, they get the source code rights in order to be better able to integrate their services for Unix products, which gives them a much stronger, tighter integration between Unix and windows.-- Darl McBride, 2003-06-16

"The point about open source that I believe is really cool is this notion that you have thousands of eyes around the world looking at a similar problem, and obviously when you have more people focused on something, you can solve things better," he said. "To the extent you take that model and solve problems better and create ultimately a better computing environment that solves a lot of application problems and makes life better for everybody, that's the part of open source I believe is really cool.

"I think this business of not having intellectual-property protection or in fact even having a system set up to be able to police intellectual-property violations coming into Linux, that's the part that's really going to the jury right now. I believe that we've got to get that part resolved...so the baby doesn't get thrown out with the bathwater."-- Darl McBride, 2003-06-16

I believe were doing them a huge favor. Think about an IT shop that's in the middle of putting in a system that runs an entire enterprise. You've got 5,800 stores, for example, and you're just getting ready to put it in, and you hear about this issue now, versus us deciding to wait and you hear about it six months or a year from now, in the middle of a trial or whatever.

Now, that company, instead of being on the front end of a rollout, is on the back end. That's when I'd really be ticked off. "You're telling me, SCO, that you found out about this last spring and you didn't say anything about it until now? Thanks a lot."-- Darl McBride, 2003-06-16

I've been surprised by the level. I haven't been surprised that there has been animosity. As we started down this path, even IBM said, 'You can't go down this path of enforcing your rights, because the Linux community is going to have a field day with you guys.' The way they had described it to me is, 'You can't sue us because we don't do distributions. You can't sue developers for the Linux community, because these guys don't have a lot of money and they're going to hate you. Customers aren't going to want to see lawsuits.'

It wasn't a question of whether we had intellectual-property violations; it was 'What are you going to do about it?' My take on it is we have been wronged. We're stepping up and trying to get some justice in the situation. Is there heat coming at us? Absolutely. It's hot in the kitchen, but that's not a reason to not do what you feel is the right thing.-- Darl McBride, 2003-06-16

In May, we sent out a notice letting people know there are problems. This month, to the extent people want to see this, we're showing people the problems.

There's a big concern that if you just drag this out in a typical litigation path, where it takes years and years to settle anything, and in the meantime you have all this uncertainty clouding over the market, it's not a positive. So we've been responding to things in a proactive way. We've been bringing out bits of our evidence...so people can get an understanding of the problems that exist.

As we get to the end of this month, as we get more user feedback...in the July time frame, we expect to come out and make some statements about how this whole situation can be resolved and how we can move forward. In terms of where we sit right now, we're not prepared to make any directional statements about how the licensing of this is going to fall out.-- Darl McBride, 2003-06-16

Those letters had to do with the fact we had just uncovered these issues, and with the legal requirements...we felt we had to go out and let the world know we had come across these problems.

We can sit there and talk to IBM all day long, but if in fact users are running systems that have basically pirated software inside of there, or stolen software inside of their systems, they have liability. We're not saying that they created that liability; we think there are a number of parties along the way that generated that. But we feel like we have an absolute requirement to let them know what was going on as we went down this path.-- Darl McBride, 2003-06-16

To the extent we were filing copyright claims against IBM, sure, it would have been useful. In fact, we had some discussions with Novell as early as last year around cleaning up the language that related to the copyrights. They chose not to clarify them.

And when we filed against IBM, we chose to not even talk about copyrights. That's why it's interesting the copyright thing showed up...It was strange behavior for somebody we've had a partnership with for a long time and for a company I used to work at for eight years of my life.-- Darl McBride, 2003-06-16

We saw some initial problems last fall, and we tried to address those with vendors in the December time frame. We didn't really get a lot of traction with just having friendly discussions. So we came out in the first part of this year and basically said, 'We are going to enforce our intellectual-property rights.' And even though we weren't directly going after IBM at that point, they had a violent reaction to (that).

So at that point in time, we tried to work through the issues with IBM. We came to an impasse, and that's what led to our filing our lawsuit against IBM on March 7. Concurrent with filing our lawsuit against IBM, we put them on notice that we were going to be revoking our AIX (IBM's Unix distribution) license. Under the contract, we have to give them 100 days notice. That notice was due on Friday, June 13, and if we hadn't had the issues resolved then, we would revoke their AIX license.-- Darl McBride, 2003-06-16

We're not trying to sell the company; we're trying to enforce our rights. We believe that in the marketplace we operate in--just take our UnixWare operating system that competes straight up against Red Hat--if you look at the marketplace over the last two years, there've been 2 million servers shipped into the market. Our UnixWare price tag of $1,500 would have generated $3.5 billion in revenue for us.

The fact that Linux shows up in town and everybody gets excited about it because they get the same sort of value we had with UnixWare but they don't have to pay anything--I get why customers like that. It's the same reason everybody loved Napster--you get CDs for free.

But from our perspective, if you're going to show up and sell against us with a free operating system, then you better have your house in order with respect to these intellectual-property issues.-- Darl McBride, 2003-06-16

What we've found here over the last couple of days is that Novell and IBM have been working together on some things relating to this case. So our suspicion is that some kind of deal they have going on with IBM is what motivated it.

Were we surprised? Yes. It's like you're sitting there fighting a battle; you have this David-and-Goliath battle going on. And then from the side, you get hit by this other force, this other army's attacking you. At first, you're surprised by it. But then you realize there appears to be some linkage to the Goliath, so then I guess it's not so surprising.

Even though we didn't have any copyright claims in our case with IBM, this shot came in. We stopped our battle with IBM for basically four days; we stamped out the Novell attack and put that one behind us. Now we're back on what our original focus was, which is resolving the issues we have with IBM.-- Darl McBride, 2003-06-16

When we first started talking about how we were trying to protect our intellectual-property assets around Unix...IBM basically became very upset we were going to go down the path of even talking about intellectual-property rights in relation to Linux. And they basically threatened that if we didn't pull back from our statements that we were going down that path, they would quit doing business with us at all.

To me, it was a strange posture to be taking for a company that collects a billion and a half dollars a year on their own intellectual-property portfolio. And so that caused us to go digging on what was behind the initial set of problems we found...And as we dug deeper, we found that we did have significant violations going on with respect to their version of Unix they had licensed from us.

At one of their conventions this year, an IBM executive stood in front of an audience and said that IBM was going to destroy the value of Unix and move it all over to Linux. They were going to take the know-how, the people, the methods they developed over the years around AIX--which is our licensed version of Unix--and they were going to transport all that in a wholesale fashion over to Linux. Those statements alone caused us alarm. When we dug deeper, we found they, in fact, had been doing that and they were going to do more.-- Darl McBride, 2003-06-16

When we take a top-tier view of the amount of code showing up inside of Linux today that is either directly related to our Unix System 5 that we directly own or is related to one of our flavors of Unix that we have derivative works rights over--we don't necessarily own those flavors, but we have control rights over how that information gets disseminated--the amount is substantial. We're not talking about just lines of code; we're talking about entire programs. We're talking about hundred of thousands of lines of code.

Where people get a little confused is when they think of SCO Unix as just the Unix that runs the cash register at McDonalds. We think of this as a tree. We have the tree trunk, with Unix System 5 running right down the middle of the trunk. That is our core ownership position on Unix.

Off the tree trunk, you have a number of branches, and these are the various flavors of Unix. HP-UX, IBM's AIX, Sun Solaris, Fujitsu, NEC--there are a number of flavors out there. SCO has a couple of flavors, too, called OpenServer and UnixWare. But don't confuse the branches with the trunk. The System 5 source code, that is really the area that gives us incredible rights, because it includes the control rights on the derivative works that branch off from that trunk.-- Darl McBride, 2003-06-16

"IBM continues to maintain that its license is irrevocable and perpetual, but the contract we have with them makes clear that if all the terms and conditions of the contract are not met, then it is revocable," said McBride. "We believe they have not held up to those terms and conditions, particularly those around intellectual property and confidentiality, and so we have the right to revoke their license."-- Darl McBride, 2003-06-16

"IBM has chosen to continue the actions that violate our source code and distribution agreements," said Darl McBride, President and CEO of The SCO Group. "Over the last several months, SCO has taken all of the steps outlined in the UNIX licensing agreements to protect its rights. Today SCO is requesting that the court enforce its rights with a permanent injunction. IBM no longer has the authority to sell or distribute AIX and customers no longer have the right to use AIX software."-- Darl McBride, 2003-06-16

"Unless something significant happens, you can expect us to go into an audit process," McBride told eWEEK. "We are currently in discussions with audit firms to get people lined up there. As of Friday, June 13, we will be done trying to talk to IBM, and we will be talking directly to its customers and going in and auditing them."-- Darl McBride, 2003-06-16

SCO's McBride said the company has looked at its code closely in this regard, and "we have no GPL violations, as there is absolutely no Linux kernel code in our Unix products."-- Darl McBride, 2003-06-16

The Linux community loves to jump on that bandwagon [of Microsoft using issue as a weapon against Linux]. There's no truth to it. We did a straight-up licensing deal around the intellectual property we had as well as the source code to allow them to tie in their Unix-related products. The world seems to be divided into two camps--those that respect intellectual property and those that don't. Those that do, to the extent they're associated with SCO, anybody who steps forward and does something with us in a positive way seems to get attacked these days.

It's not just Microsoft. We've had an industry analyst who has been attacked because they said, 'Hey, I've seen the code, and SCO's right.' We've had denial-of-service attacks on our Web site. We had a reporter who had their site hit by a denial-of-service attack because they wrote a positive story about us. Any time it seems we have somebody on our side of the table, somebody wants to start shooting at them.-- Darl McBride, 2003-06-16

We were certainly willing to try to work through issues...I think there's a lot of ways you can resolve things short of full-out litigation. Licensing programs come to mind; different marketplace partnerships come to mind. There are a number of things we could have done together.-- Darl McBride, 2003-06-16

We're talking about line-by-line code copying. That includes not just the function but the exact, word-for-word lines of code. And the developer comments are exactly, 100 percent the same. The developer comments really get to the DNA of the code. It's one thing to have something look the same, but when the developer comments are exactly the same, that tells you everything you need to know that this is in fact lifted, that it has been copied and pasted from Unix into Linux.-- Darl McBride, 2003-06-16

When we filed against IBM, they were supposed to respond in 30 days, and they filed an extension for another 60 days. So we had about 60 days where we were waiting for IBM to respond. So we turned a group of programmers loose--we had three teams from different disciplines busting down the code base, the different code bases of System 5, AIX and Linux. And it was in that process of going through the deep dive of what exactly is in all of these code bases that we came up with these more substantial problems.-- Darl McBride, 2003-06-16

"But what about BSD?" I asked. Sontag responded that there "could be issues with the [BSD] settlement agreement," adding that Berkeley may not have lived up to all of its commitments under the settlement.

"So you want royalties from FreeBSD as well?" I asked. Sontag responded that "there may or may not be issues. We believe that UNIX System V provided the basic building blocks for all subsequent computer operating systems, and that they all tend to be derived from UNIX System V (and therefore are claimed as SCO's intellectual property)."

"So is anybody clean? What about Apple and Microsoft?" I wondered. "Sun is clean," he said?but he gave no answer in regards to Apple and Microsoft.

"But I thought that Microsoft had signed a license agreement?" "No," Sontag said. Microsoft merely licensed an "applications interface layer."-- Chris Sontag, 2003-06-16

"GPL has the same derivative rights concept [as UNIX]," according to Sontag: "Once contributed, code cannot be removed." But Sontag says that the UNIX code which was GPL'ed by AT&T licensees was GPL'ed illegally, without the permission of the copyright holder?allegedly SCO.

Sontag explained that the GPL makes it quite clear that only the copyright holder can contribute code. So if the contributor did not actually own the code then it was never actually GPL'ed.-- Chris Sontag, 2003-06-16

"The fact that there are other companies infringing our contract... (means) there could be other complaints," Sontag said.-- Chris Sontag, 2003-06-16

"This termination not only applies to new business by IBM, but also existing copies of AIX that are installed at all customer sites. All of it has to be destroyed," Sontag said.-- Chris Sontag, 2003-06-16

"We gave IBM notice that they're in violation of the contract that they had," Sontag told Reuters.

"If they continue to ignore the termination order and with the damages that will rack up every day, we're not in a hurry to settle anymore."-- Chris Sontag, 2003-06-16

After sifting through e-mails from the Linux developers' mailing list, Sontag says SCO has examples of programmers from AT&T licensees offering to write UNIX code into Linux, and can identify where those UNIX fragments turned up in the codebase.

[...] Sontag explained that Linux has "no gatekeeper mechanisms to check the code getting into Linux." Furthermore, it is SCO's position that Linux used to be a "hobbyist" OS, and the "vast majority" of Linux developers had "good intentions." But now that Linux is entering the commercial arena, SCO wants to collect on its royalties.-- Chris Sontag, 2003-06-16

When I asked Sontag to confirm if he told me that "Linux endusers are innocent bystanders," he responded "no," that he was speaking in terms of AIX, not Linux. He added that Linux users know they are getting an OS totally without IP warranties of any kind. AIX users are innocent bystanders, but SCO had to exert pressure on IBM.-- Chris Sontag, 2003-06-16

"IBM, as the original sole author to a particular piece of code, has full copyright rights, and they (not SCO) can use the code they wrote themselves in any way they see fit," Torvalds said.-- Linus Torvalds, 2003-06-16

"It's not our side that isn't identifying the code. We'll work damn hard to identify everything they care to name," Torvalds said. "In fact, the source control system is out there in the public, and it identifies the source and the reason for patches," mentioning the BitKeeper repository he's used for the past two years to keep track of code in the heart, or kernel, of Linux.-- Linus Torvalds, 2003-06-16

"I think that's a clear signal," said Gray Cary, an attorney at Mark Radcliffe, who said that a company's first response to an intellectual-property infringement lawsuit is a countersuit based on that company's patents. "I think that's code for 'stand by for the hurricane.' You're going to find a stack of patents about 5-feet high that your product infringes that's going to run up the cost of litigation.'" -- Gray Cary, 2003-06-17

I have had customers express concern about it. Two major customers of mine have already told me that they're going to slow down their rollouts on Linux and wait to see how this develops. So it has put a wrinkle in the equation. Am I concerned about it? No. As long as the customers are soliciting and getting my help to either get more apps migrated from Unix to Linux or from NT to Linux, I'm doing the work anyway.

I and my customers are going to watch and see how the thing unfolds. As an industry person, I think it's rather a shame. The Linux platform serves a segment of the market, and I hate to see this being challenged by a very established player. Ultimately, it hurts our industry and innovation. If you stop the open-systems movement because of something like this, it limits innovation and it only favors the big boys. You want an open environment that players can add value to and thereby expand IT budgets -- not shrink them. I think it's very unfortunate that this garbage is being thrown around. A small group of players just wants to protect the status quo.

Our industry right now needs some capital growth. Let's, for starters, create more jobs for the people who have been displaced. This is not the time for the industry [players] to fight among each other to slow down the innovative process.-- John Chen, 2003-06-17

"Regarding Linux and open source software, Mr. Zeitler made it clear that he believes vendor strategies to lock customers in to a proprietary environment will fail," Elling wrote in his note. "He believes customers are now looking for choice in their operating environments and that they are very careful not to get locked in to any one vendor."-- George Elling, 2003-06-17

"Our Unix license is irrevocable, perpetual and fully paid up. It can't be terminated," Fay said.-- Mike Fay, 2003-06-17

"In light of SCO's legal dispute with IBM over Unix licensing rights, Sun wants to reaffirm that it has no licensing issues with SCO as it pertains to its Solaris operating environment and that Sun's previous licensing agreements give Sun complete Unix IP rights in relation to Sun's Solaris operating systems. For Unix, this includes Sun's Unix development and Sun's Unix development agreements and subsequent licensing transactions," he said.-- John Loiacono, 2003-06-17

"IBM has chosen to continue the actions that violate our source code and distribution agreements," said Darl McBride, president and CEO of SCO. "Over the last several months, SCO has taken all of the steps outlined in the Unix licensing agreements to protect its rights. Today SCO is requesting that the court enforce its rights with a permanent injunction. IBM no longer has the authority to sell or distribute AIX and customers no longer have the right to use AIX software."-- Darl McBride, 2003-06-17

"The ultimate enforcement agreement is the courts. The amended filing also deals with the issue of damages and our legal view is that IBM has no right to derive any benefit from AIX after June 13, and we are seeking the AIX revenue stream going forward in amended damages. That's what puts the teeth in it for us and if IBM wants to move their whole AIX revenue stream onto the table here we're certainly willing to discus that with them," he said.-- Darl McBride, 2003-06-17

"There's a big concern that if you just drag this out in a typical litigation path, where it takes years and years to settle anything, and in the meantime you have all this uncertainty clouding over the market, it's not a positive."-- Darl McBride, 2003-06-17

"We can sit there and talk to IBM all day long, but if in fact users are running systems that have basically pirated software inside, or stolen software inside of their systems, they have liability. We're not saying that they created that liability; we think there are a number of parties along the way that generated that. But we feel like we have an absolute requirement to let them know what was going on as we went down this path."-- Darl McBride, 2003-06-17

"We have every right in the world to revoke their right to use the software. We have been through the 100-day cure period and we did not get resolution, so we have every right to revoke their license," he said.

SCO had met with IBM after it informed them it intended to revoke their AIX license, and had taken nine people to see them, from business staff to technology staff to its attorneys and had given them "every opportunity to sit down and work through this. But we continually got the cold shoulder from IBM. They have not solved the problem so we are taking the next step: enforcing the very strong contract rights we have," he said.

SCO also decided to go for a permanent injunction to prevent IBM from shipping AIX rather than first starting with an audit of its customer base, McBride said. "We're not going to play softball at this point, we are simply going to go in and enforce our rights by seeking a permanent injunction," he said. -- Darl McBride, 2003-06-17

"We have this intellectual property that we've started approaching vendors about. IBM is one we approached; Microsoft was another. We had about four big vendors in the last quarter that we talked with. With two of them, we signed deals."-- Darl McBride, 2003-06-17

"IBM will continue to ship, support and develop AIX, which represents years of IBM innovation, hundreds of millions of dollars of investment and many patents," IBM said.-- IBM PR, 2003-06-17

Although the AIX and Linux questions are somewhat different, the action is "another shot across Linux's bow," said analyst Victor Raisys of the SoundView Technology Group. [On SCO's purported AIX license revokation]

Raisys said he doesn't expect the case to be settled in the near future, which means customer uncertainty about Linux could continue -- a negative for Red Hat.-- Victor Raisys, 2003-06-17

"We have all the rights to SCO we could possibly need. We bought them out 10 years ago; that's why we can indemnify customers running Solaris (or any other distribution of a Sun product). The only Linux we're shipping comes from Red Hat, and they, as far as I know, do not have the rights SCO claims they need. [Red Hat] has liability because they are exposed without a license. We, as a supplier, don't have that liability. Our customers do and Red Hat does, but by virtue of the expansiveness of our original license, we have rights that protect us (but not suppliers) from the fruit of the poisonous tree." Referring to the code that was "leaked" into the Linux kernel, Schwartz said, "IBM has liability independent of who delivers the product or who delivered IBM code into Linux."-- Jonathan Schwartz, 2003-06-17

"We have a recognition of the fact that it's not the end users that have caused this problem, it's IBM's actions that have caused this problem. Our preference would be for corrective action on the part of IBM," SCO's Sontag said. "If we need to, we will enforce all our rights, even with IBM's end users."-- Chris Sontag, 2003-06-17

"Unless a judge dismisses the case as being completely meritless, or a guardian angel like IBM comes along, acquires SCO, and drops the case in the early going, I'm afraid that this could drag on for a minimum of three years and probably longer."-- Undisclosed SOURCE, 2003-06-17

"The damages that we're requesting of the court are equal to all of the AIX-related business that IBM would realize following Friday the 13th of June," SCO spokesman Blake Stowell said. Stowell said that SCO is basing its request on industry figures which show IBM's AIX business "anywhere from as low as $30 billion to as high as $50 billion."-- Blake Stowell, 2003-06-17

"They need to correct the actions they've been taking with regard to our Unix source code and that's ultimately what we want," SCO's Stowell said Thursday with regard to SCO's resolution terms.

[...] "While revoking of that license would make [IBM's] customers' licenses obsolete, at this point in time we've elected not to take that approach with customers," Stowell said. "That's not to say we won't at some point. But we see the customer as an innocent bystander right now."

He added, "What we would encourage AIX customers to do right now is make IBM assure them that they'll do everything they can to try and bring this to full resolution. I think that IBM needs to indemnify their customers and right now I don't see how they can do that."-- Blake Stowell, 2003-06-17

"Let me state clearly that we are not a party to any suit. We are confident that we have every right to distribute Red Hat Linux."-- Matthew Szulik, 2003-06-17

"I care deeply about IP (intellectual property) rights. I've personally got more IP rights than the average bear, and as the owner of the copyright in the collective of the Linux kernel, I shepherd even more. It's what I do, every day. I personally manage more valuable IP rights than SCO has ever held, and I take it damn seriously,"-- Linus Torvalds, 2003-06-17

"Most I.B.M. customers are taking the view that I.B.M. will take care of this problem, however it turns out," said Amy Wohl, president of Amy Wohl Associates, a research firm in Narbeth, Pa.-- Amy Wohl, 2003-06-17

Yarro won't apologize for the IBM lawsuit. "I'm not a guy who goes away quietly in the night. I fight," he says. "If you take something from me, if you break a promise, I'm going to come after you."-- Ralph Yarro, 2003-06-18

"SCO Unix revenues went from $200m-$250m in 1999 to $60m. That could certainly be considered material impact,"-- Laura DiDio, 2003-06-19

"What he's doing is baseless because the important point is that the Unix System V source code has never been provided to any entity without a full source code agreement with full confidentiality, and very strict provisions."-- Chris Sontag, 2003-06-19

"In the 1970s and 1980s AT&T was extremely powerful and was able to insist on strict language in its contracts,"-- Blake Stowell, 2003-06-19

"Despite Linux, there is still a strong Unix market with many competitors,"

[...] "It is far from clear that they have built a scaleable 64-bit operating system for the marketplace even now,"-- George Weiss, 2003-06-19

"Linux could still be used; it just wouldn't be free," Stowell said. "These people are upset because they've been enjoying a free ride for some time. They're upset their free ride will potentially be gone."-- Blake Stowell, 2003-06-21

Jonathan Cohen of JHC Capital Management, who is buying shares, says that even if SCO settles for just 10% of the $1 billion, "the impact on the bottom line of SCO, with a market cap of just $115 million, would be huge." Settlement or no, SCO is on track to generate earnings in fiscal 2004 (ending Oct. 31) of $13 million, or $1.30 a share, says Cohen, who sees SCO doubling in 12 months.-- Jonathan Cohen, 2003-06-23

SCO CEO Darl McBride believes IBM's Unix business is worth a "huge number, multibillions of dollars" a year.

[...] McBride described SCO as "entering the end game" and as being ready to start discovery.

[...] SCO's suit against IBM stems from its sensational claim that IBM misappropriated IP from the Unix operating system that SCO now owns and put it in Linux - in some cases line-by-line - to make it enterprise-class in a hurry, destroying the economic value of Unix and aggrandizing IBM's own new Linux business.

Sequent Computer, now owned by IBM, has been added to the suit, McBride said. SCO has found a "truckload of code at the high end" from Sequent, a Unix licensee, in Linux, he said.-- Darl McBride, 2003-06-23

As far as I can tell, SCO doesn't have any IP claims. Their lawsuit isn't about IP claims; it's about some contract dispute with IBM. The only IP issues they have brought up in a verifiable way has been the RCU [Read Copy Update, a way to access data structures that may be changing on multiple CPUs with less locking than normal] work that IBM did, and that SCO doesn't have any IP rights to that I can see: the patents are all IBM, and the code was written by (and thus copyrighted by) IBM too. Well, it was Sequent at the time, but they're all IBM now.-- Linus Torvalds, 2003-06-23

I don't generally sign NDAs even with friendly companies, because it can hinder my work. I'd be crazy to sign one with SCO. Especially as signing an NDA would make the act of then seeing their claims totally useless, since I couldn't then go out and search the public for the sources. However, now that SCO is starting to talk a bit more about what they seem to object to, I have less and less interest in seeing the code. As mentioned, the stuff they seem to be complaining about they have absolutely no IP rights to that I can tell.-- Linus Torvalds, 2003-06-23

Q: SCO alleges that you need to focus more on getting clarification as to where the code that goes in the Linux kernel comes from. Do you have any plans to change the current Linux development model?

No. I allege that SCO is full of it, and that the Linux process is already the most transparent process in the whole industry. Let's face it, nobody else even comes close to being as good at showing the evolution and source of every single line of code out there. The only party that has had serious problems clarifying what they are talking about is SCO, and now when details start emerging like with RCU, it's clearly about IP that they had nothing to do with, and don't even own. I'm sure that they are confident that they own the collective work of Unix, but that's a separate thing entirely legally from being the actual copyright owner of any specific section of code.-- Linus Torvalds, 2003-06-23

Cohen said the company's stock has done well this year on the back of solid fundamentals.

It has an enormous base of intellectual property rights, he added.

The company is locked in a legal battle with IBM. SCO Group claims IBM is releasing proprietary Unix code to the free Linux operating system without permission, the Associated Press reported.-- Jonathan Cohen, 2003-06-24

"As we move into discovery, this will be very nice for us because now we get to go in and talk to all their people, their customers. We get to really shake things up and get in to find out what really is going on over there,"-- Darl McBride, 2003-06-25

"The people that have looked at this, both our legal teams as well as independent people coming from the outside, say: 'These contracts are bullet-proof. This is a very strong contract right you have,'"-- Darl McBride, 2003-06-25

"The reality is that we are going into discovery right now and that might be the vehicle to be able to investigate what we need there anyway."-- Darl McBride, 2003-06-25

"We have other rights under the contract we are looking at. For example, we can audit IBM customers. SCO has audit rights on its customers,"-- Darl McBride, 2003-06-25

"We have other rights under the contract we are looking at. For example, we can audit IBM customers. SCO has audit rights on its customers," he said.

"The reality is that we are going into discovery right now and that might be the vehicle to be able to investigate what we need there anyway."-- Darl McBride, 2003-06-25

I would love to have this behind us and move on. IBM has put the brakes on to try and slow things down. And to the extent that it wants to do that, I am saying that we are prepared to go the distance on this. But I would prefer to get this resolved and move forward.-- Darl McBride, 2003-06-25

In discovery you get to go in and investigate the things that relate to the case, and there are a broad range of things that relate to Linux and AIX. We will be going in with a fine-toothed comb and coming up with every detail.-- Darl McBride, 2003-06-25

So as we move into discovery this will be very nice for us, because now we get to go in and talk to all their people, their customers. We get to really shake things up and find out what really is going on over there.

Now, by going into pre-discovery, we have strong enough claims. We'd be fine to go to court just on what we have before discovery.-- Darl McBride, 2003-06-25

We have taken every step possible. Now it's for the courts to step up and enforce the contract rights that we have.

The people that have looked at this - both our legal teams as well as independent people coming from the outside - say: 'These contracts are bullet-proof. This is a very strong contract right you have.'

The way IBM is responding is very interesting. They haven't filed for an injunction; they haven't filed for the summary judgement enforcement to be dismissed.

When you have what people would call nuisance cases then you usually go in and try and knock those out with a summary judgement motion, or something to cause them to be dismissed. IBM has actually done none of that.

In fact, it took the opposite approach of not talking about it at all. So we're perfectly fine to go through whatever time it takes to get resolution on the legal path on this.Now, as of 16 June, we also increased our claims amount to include all AIX-derived hardware, software and services, given that they are now - in deriving that revenue - on an unauthorised route for use of the software.-- Darl McBride, 2003-06-25

"It's not that there is a shortage of companies that are in violation, but we are not trying to announce a litigation path. For now we are trying to get things resolved with IBM."-- Darl McBride, 2003-06-26

"[When] people who have legitimate businesses and legitimate intellectual property which they want to protect see our code [they] shake their heads and say 'We can't believe IBM is doing this'. So we are already seeing the public opinion start to turn,"-- Darl McBride, 2003-06-26

SCO chief executive Darl McBride declared that it is "a no-brainer" that the code was in Linux.

"When you look inside in the code base and you see line-by-line copy of [SCO's Unix] System V code, not just the code itself but comments to the code, titles that were in the comments and humour elements that were in the comments, you see that everything is taken straight across," he explained.

McBride claimed that everything was exactly the same, except that the copyright notices had been stripped out. "There could not be a more straightforward case on the Linux side," he said.-- Darl McBride, 2003-06-26

It threw Novell out in front of the bus a couple of weeks ago and Novell got run over.

It's a unique situation when a company as powerful as IBM has somebody coming at it with such strong claims as we have in a very public forum.-- Darl McBride, 2003-06-30

Q: Have you got any plans to sue any other company in the near future?

Right now we're focused on IBM. It's not that there's a shortage of companies in violation but, in terms of our resolve issues, we are not trying to announce a litigation path. For now, we are trying to get things resolved with IBM.-- Darl McBride, 2003-06-30

Those guys know what is going to come out in discovery, and you hear a lot of rumours on the street that they are going to buy us out.

Well, I bet that's exactly what they want to do. The last thing they want to hear is the testimony that is going to come out.-- Darl McBride, 2003-06-30

We have other rights under the contract that we are looking at. For example, we can audit IBM customers. SCO has audit rights on its customers. The reality is that we are going into discovery right now and that might be the vehicle to be able to investigate what we need there anyway.-- Darl McBride, 2003-06-30

Yeah. That one is a no-brainer. When you look in the code base and you see line-by-line copy of our Unix System V code - not just the code itself, but comments to the code, titles that were in the comments and humour elements that were in the comments - you see that everything is taken straight across.

Everything is exactly the same except they have stripped off the copyright notices and pretended it was just Linux code. There could not be a more straightforward case on the Linux side.-- Darl McBride, 2003-06-30

"The real question customers should be asking [their software suppliers] is, 'Will you indemnify us if SCO prevails?' " said DiDio. "'If you won't, why not? And if you will, to what extent will you indemnify us?'"-- Laura DiDio, 2003-07-07

"I saw what appeared to be a word-for-word copy of about every third line of code in the central module of the Linux kernel," said Enderle of Giga Information Group, who viewed the alleged code violations two weeks ago. "The lines of code contained typos, misspellings and even copyright disclaimers. It appeared to constitute a violation of the license."

Enderle said the CELF companies are "probably betting that much of this will be resolved before they reach the point where they have to make a huge commitment." But if the legal plot thickens, he said, many large corporations will back away from Linux. "If I'm a manager in a large, branded company, the last thing I want is very visible litigation that puts my company's brand name at risk," he said.-- Rob Enderle, 2003-07-07

"The 1,500 companies who received letters from SCO [about potential infringements] should be worried, big time," said Rob Enderle, a research fellow for the Giga Information Group (Santa Clara, Calif.). Based on what he saw, Enderle said, "The evidence appears to be very compelling."-- Rob Enderle, 2003-07-07

"Members of that consortium are lining up in droves to view that source code," the spokesman said.-- SCO PR, 2003-07-07

By the way, I'm getting really tired of the "proprietary IP" thing. How many times do I have to repeat that the SCO case isn't about IP at all, and that SCO has just been spouting crap when they have brought up their FUD about IP issues.-- Linus Torvalds, 2003-07-08

None of the SCO accusations have anything to do with IP rights; they're all about contracts between IBM and SCO. All the IP rights blathering by SCO was just that--blathering--the kind of "holier than thou" stuff where they tried to look like they had some moral high ground. The fact is that the stuff they have actually mentioned (RCU etc.), was all IBM's intellectual property.-- Linus Torvalds, 2003-07-08

"Now we know why Sun was so absolutely confident about where they stand in this whole thing that they were essentially able to turn it into some marketing and sales FUD (fear, uncertainty and doubt) of their own," Illuminata analyst Gordon Haff said.-- Gordon Haff, 2003-07-10

"Microsoft has identified the GNU GPL as their biggest competitor and is making sure that it does not lose any deals on price to GPL'd software in Europe. That had a lot to do with why they took a license; their goal is to make the GPL look bad," he said.-- Bradley Kuhn, 2003-07-10

"Actually, Microsoft and Sun Microsystems discussed with us, and got licenses from us. I expect we can repeat it with some Japanese counterparts," said McBride.

He added that SCO and Hewlett-Packard were in discussions about Unix licensing. However, he did not reveal the names of companies he would meet during the visit.-- Darl McBride, 2003-07-10

"I am here to speak to large Linux vendors about their businesses, so that both sides can find mutually acceptable solutions for the alleged Linux IP infringement issues," said McBride in response to the question about the purpose of his visit to Japan.-- Darl McBride, 2003-07-10

Asked about Novell's copyright claims with regard to Unix System V, Nugent would only say that when the transfer deals took place, "not all things were transferred and the things that were transferred are not necessarily the things that will help [SCO's] case."-- Alan Nugent, 2003-07-10

"We've always made sure we're very aboveboard," Smith said. "We've made sure the i's are dotted, the t's are crossed." Before the newest contract was signed, Sun had spent $82 million acquiring rights to use Unix, Smith said.-- Brett Smith, 2003-07-10

"We're in the process of registering them with the Copyright Office," Stowell said. "We expect it to be completed within about six months."-- Blake Stowell, 2003-07-10

"I have a different license than what IBM purchased," he said. "I wanted complete ownership of my IP, so I bought IP rights outright."-- John Loiacono, 2003-07-11

"The motivation we have is very different from what they have for licensing," he said. "I never want to be lumped into any categories with Microsoft other than profitability," he said.-- John Loiacono, 2003-07-11

Sun's license is one of several it has signed with the various owners of the Unix System V source code, of whom SCO is the latest, since 1994, said John Loiacono, the vice president of Sun's Operating Platforms group. The most recent license, signed in February of this year, "licensed several hundred drivers to connect, essentially, peripheral devices to the operating system," he said.-- John Loiacono, 2003-07-11

"It doesn't really pertain to whether [IBM] purchased an additional license or not. What it really comes down to is whether they honored their contract or not," he said. "This isn't blackmail money," he added.-- Blake Stowell, 2003-07-11

Bill Claybrook, a former computer programmer and now an analyst at Aberdeen Group, Inc. in Boston, says there was no question he was looking at "identical pieces of code. It is unlikely coded comments could be identical by pure chance." The problem, he says, is "I don't know where the code came from." He says the question that developers are debating is, if it was copied, who copied whom? "It's going to be a hard thing to prove." Most programmers, he says, side with IBM and "don't believe IBM did anything wrong."

He notes SCO has since stopped distributing its Linux solution. "SCO doesn't care about Linux." The problem, he says, is the uncertainty that a lawsuit brings and the fact that it will "drag on." Drag it on long enough, he says, and the "Linux market could be destroyed."-- Bill Claybrook, 2003-07-17

"We haven't seen the Linux momentum slow in the market at all. We're not going to try this case in the press. We're going to defend this vigorously in court."-- Trink Guarino, 2003-07-17

"The lawsuit represents more than just a licensing squabble between two companies or the efforts of a small UNIX/Linux company to dig into the deep pockets of IBM."

He says Linux customers will "be forced to consider their legal liability due to intellectual property issues around Linux and open-source software." Raisys says Linux clients are "struck with a lot of uncertainty" and he expects "some firms will put them (Linux deployments) on hold until they get better clarity."

[...] "You won't see this thing settled for quite a while."-- Victor Raisys, 2003-07-17

"I am considering the use of Linux for an initiative at TD Waterhouse and will continue to do so until more information about SCO's claim becomes available. I believe (Linux) will be an effective tool in lowering the TCO (Total Cost of Ownership) of technology."-- Richard Rzasa, 2003-07-17

"It certainly is an interesting situation," Richard Rzasa, CIO of TD Waterhouse in New York, says of the litigation. "Linux has been demonstrated to be a viable operating system for the enterprise." Given that CIOs are focused on return on investment and doing more with less, Linux "is an attractive alternative to UNIX processors, while maintaining the reliability and manageability of the environment."

Rzasa says, "I believe that firms committed to Linux will keep moving forward, and others who are considering Linux will also keep it in the mix."

That's because, "From what has been made public, there is not yet enough specificity in SCO's claim to render a strong opinion, although they have begun to exhibit some of the disputed code to industry analysts," says Rzasa.-- Richard Rzasa, 2003-07-17

"I don't think anyone has enough information to make a decision about Linux going forward and whether you're going to be liable for it."

The source says he has some small Linux deployments for "minor services," such as running the corporate Web site. "I think, to some degree, the lawsuit seems like a lot of hot air. (But) from the standpoint of a CIO, how do you know for sure? The uncertainty around it could slow the growth of Linux."-- Undisclosed SOURCE, 2003-07-17

SCO spokesman Blake Stowell says the purpose of the lawsuit is to "protect our source code. We would like them to stop misappropriating our software." As for the shot across the bow of corporate America, he says, SCO asked the companies to "seek opinions of legal counsel to see if they should continue to use or implement Linux. We're not going to tell you what to do."

[...] "I would say that if the promise of Linux is too good to be true, then it probably is."-- Blake Stowell, 2003-07-17

SCO is "hoping that even if 99 percent of Linux customers laugh in their face, that there will be sufficient large companies who, for what is presumably going to be a relative drop in the bucket of their IT budgets, can potentially eliminate a cloud over their heads," he said.-- Gordon Haff, 2003-07-18

"My attorney general would have choked me if I exposed the state to that kind of legal threat," he recalled.-- Larry Singer, 2003-07-18

"Linux is open-source code and freely available from many sources," an IBM executive confided. "With DB2, it's our software and the terms and conditions of the contract (that) make clear the level of indemnification."-- IBM SOURCE, 2003-07-18

Stowell declined to provide specific details of SCO's new licensing program, saying only, "we're working on some details to try and create some kind of a licensing program for Linux users to be able to run Linux legally."-- Blake Stowell, 2003-07-18

"It's one of those things we revisit, but at this juncture, we haven't seen a need to make changes with regard to that," said Mark Webbink, Red Hat's general counsel.

"There's a cost to that," he continued. "I asked at a conference of lawyers last fall for a show of hands who'd be willing to pay more if they had indemnification. There was silence and then laughter. It was overwhelming. A lot of customers will act like (indemnification) is a big deal, but is it a big enough deal to pay?"-- Mark Webbink, 2003-07-18

"Realistically, the likelihood of IBM's [AIX] customers being sued by SCO is next to zero. The absolute worst case scenario is for them to have to pay a licence fee, and this is next door to zero," he said.

"There is no need for anyone to run to IBM for indemnification. In a fight between a terrier and an Irish wolfhound, it's the yappy little dog that makes the most noise. But that doesn't mean it will win the fight."-- Gary Barnett, 2003-07-21

"It is not necessary to resolve the IBM case" to deal with other issues, Boies said. While the case works its way through the court system, Linux corporate users don't have the right to take advantage of SCO's IP in Linux, he said, adding, "If the conduct is improper, the conduct is improper."-- David Boies, 2003-07-21

"SCO intends to use every means possible to protect the company's Unix source code and to enforce its copyrights."-- David Boies, 2003-07-21

"What started as a contract case, involving people we have business relationships with, has now broadened to a copyright case involving people we may not have relationships with," Boies said. "We do intend to pursue this, but we intend to pursue it carefully and judiciously."-- David Boies, 2003-07-21

"All they can do is try to get money from Linux users by guaranteeing them that if they pay now, they will be compliant and avoid the headache of litigation down the line," Carey said. "But, given the licensing conditions of the GNU General Public License, which governs Linux and does not allow royalty or license payments, any such move is also likely to be strongly contested."-- Thomas Carey, 2003-07-21

Carey said this indicates that SCO's strategy is to let "the pot simmer for years and let people get increasingly worried about the legal risk."-- Thomas Carey, 2003-07-21

"They are striking the right note of righteousness and responsibility," she told NewsFactor. "They have said they are willing to work with users by creating a pricing plan for them."-- Laura DiDio, 2003-07-21

"I think that from a legal point of view, we're in the incredibly early days" of this legal fight, Eunice said.

For some users, the offer may be enticing, depending on the cost of the special Unix licenses, he said. Some may see it as a "cheap insurance policy" to protect them against eventually being sued by SCO, he said. On the other hand, because the case isn't even yet in the courtroom, the risk for users is essentially unchanged from recent months, Eunice said.

"I don't see it as something that should incite an enterprise Linux customer to do any more than they did last week," he said. "The threat level increases a bit, but mainly because the perception that SCO is a psycho killer, not that the case has changed."-- Jonathan Eunice, 2003-07-21

"For the first time in history, SCO is in a position to bring a copyright infringement case against a third-party company," Ferrell said. "It's really time for them to put up or shut up. There should be nothing barring them from bringing a lawsuit."

A successful lawsuit will likely be a crucial step in convincing many companies that they need to pay, Ferrell added. "There needs to be a validation of the infringement," he said. "It's probably not going to be enough for SCO just to write a letter saying 'We believe the Linux code you're using violates Unix copyrights.'"-- John Ferrell, 2003-07-21

"lawsuit filled with sound and fury, and signifying nothing".-- Sam Greenblatt, 2003-07-21

"I'm not sure I really see the option where SCO in the long term succeeds in collecting a tax on every copy of Linux sold, because that really destroys what Linux is," Haff continued. "It seems to me that either someone ends up buying SCO, or SCO basically succeeds in destroying Linux."-- Gordon Haff, 2003-07-21

"I don't feel they have much to go on at this point," said Hock, president of the Orlando, Fla.-based Linux solution provider. "Customers know that SCO has been a dying beast, and they see this as a last breath or effort to retain some sort of market share," he said.-- Douglass Hock, 2003-07-21

"From a free-software and open-source perspective, what SCO is trying to do looks a lot like extortion because they believe SCO has no rights to the Linux code and may now be preparing to charge people for its use," he said.-- Bradley Kuhn, 2003-07-21

"I think that all of these moves are based on the presumption that they will win in their litigation," Kusnetzky said. "And I don't know if that presumption will happen" because it hasn't been heard yet or decided in court.

"I believe it is an attempt to use the fear, uncertainty and doubt ... to increase their revenues and their position," Kusnetzky said. "I'm not so sure it will end up endearing SCO to the open-source community, to the Linux community or to the Unix community ... but that doesn't seem to be something that bothers them at all."-- Dan Kusnetzky, 2003-07-21

And during the period of time shortly after filing the lawsuit until recently when they came back and responded, we had a 60 day period there where we turned 3 different teams of code programmers loose on the codebases of AIX, Unix and Linux. And they came back with - independently - we had the three teams - one was a set of high-end mathematcians, rocket scientist, modeling type guys. Another team was based on standard programmer types. A third team were really spiffy on agent technology and how all of this technology was built in the first place. So the three teams came back independently and validated that there wasn't just a little bit of code showing up inside of Linux from our Unix intellectual property base. There was actually a mountain of code showing up in there.-- Darl McBride, 2003-07-21

"For several months, SCO has focused primarily on IBM's alleged Unix contract violations and misappropriation of UNIX source code," McBride said. "Today, we're stating that the alleged actions of IBM and others have caused customers to use a tainted product at SCO's expense."-- Darl McBride, 2003-07-21

"For several months, SCO has focused primarily on IBM's alleged Unix contract violations and misappropriation of Unix source code," said Darl McBride, president and CEO of SCO Group. "Today, we're stating that the alleged actions of IBM and others have caused customers to use a tainted product at SCO's expense. With more than 2.4 million Linux servers running our software, and thousands more running Linux every day, we expect SCO to be compensated for the benefits realized by tens of thousands of customers. Though we possess broad legal rights, we plan to use these carefully and judiciously."-- Darl McBride, 2003-07-21

"For several months, SCO has focused primarily on IBM's alleged UNIX contract violations and misappropriation of UNIX source code," said Darl McBride, president and CEO, The SCO Group. "Today, we're stating that the alleged actions of IBM and others have caused customers to use a tainted product at SCO's expense. With more than 2.4 million Linux servers running our software, and thousands more running Linux every day, we expect SCO to be compensated for the benefits realized by tens of thousands of customers. Though we possess broad legal rights, we plan to use these carefully and judiciously."

"Following the distribution of our letter to the Fortune 1000 and Global 500, many prominent companies using Linux contacted SCO to ask, 'What do you want me to do?'," added McBride. "Today, we're delivering a very clear message to customers regarding what they should do. Intellectual property is valuable and needs to be respected and paid for by corporations who use it for their own commercial benefit. The new UnixWare license accomplishes that objective in a fair and balanced way."-- Darl McBride, 2003-07-21

"For several months, SCO has focused primarily on IBM's alleged Unix contract violations and misappropriation of Unix source code.

"Today, we're stating that the alleged actions of IBM and others have caused customers to use a tainted product at SCO's expense."-- Darl McBride, 2003-07-21

"SCO now has broad legal rights against end-users," Darl McBride, president and CEO of SCO, said Monday. "We intend to use these rights carefully and judiciously."-- Darl McBride, 2003-07-21

"Take away the code in question and you're left with Linux 2.2."-- Darl McBride, 2003-07-21

"This isn't a matter of changing a line or two of code. If all of the infringing code were removed today, Linux would have little multiprocessor code left and would be totally ineffective for enterprise use," McBride said.-- Darl McBride, 2003-07-21

"Though we possess broad legal rights, we plan to use these carefully and judiciously," he added.

"Intellectual property is valuable and needs to be respected and paid for by corporations who use it for their own commercial benefit. The new UnixWare licence accomplishes that objective in a fair and balanced way."-- Darl McBride, 2003-07-21

"Today is really the formalization of our going down the path of broadening our case to go beyond just contracts to include copyrights," McBride said. He added, "Today's announcement really is a new front that we're opening up."-- Darl McBride, 2003-07-21

"Today's announcement is really a new front that we're opening up" with existing enterprise Linux customers, McBride said. "It gets you clean, it gets you square with Linux without having to go into the courtroom."-- Darl McBride, 2003-07-21

"We agree on the point that this case started out as a contracts case against IBM. As of today, it's a different game," McBride said today in a conference call with reporters and analysts.

"SCO's Unix IP has been misappropriated into Linux," he said. "SCO is giving customers [of any Linux distribution] the opportunity to run Linux legally."-- Darl McBride, 2003-07-21

"We're not talking about BSD code," he said. "We're talking about high-end SMP code that has been donated in the past year or two and has not made the rounds through BSD."-- Darl McBride, 2003-07-21

Although it started off as a contracts problem, as we've gone in and done our full analysis of the code base, it is very clear that we have a copyright problem with the code that's in Linux today.-- Darl McBride, 2003-07-21

And if you look, if you do a comparative analysis, the code in 2.2 kernel is very simple, doesn't allow for a lot of scalability, not high reliability in terms of where this stuff runs. When you go to 2.4 and beyond, you're seeing Linux run inside of enterprises. Data-grade, carrier-grade Linux and the SMP - the symmetric multi processing, the ability to scale up to many processors in terms of a Linux box - is way beyond where it was in 2.2. One thing I will make clear here, Dan, is we're drawing a line on 2.2 and 2.4. The massive amounts of code we're seeing show up in Linux today that relates to our IP really came along the lines of 2.4 kernel.-- Darl McBride, 2003-07-21

But let's go back to the basis of our claims which is there is a huge amount of code inside of the Linux kernel today that is improperly there that has come from system vendors that we have contracts with.

That... what that does is it creates copyright violations inside of there, some of it coming straight from our source tree. So yes there are direct line-by-line codes.-- Darl McBride, 2003-07-21

IBM approached us and said "Hey let's do this thing called Project Monterey. Let's go to market together, file this thing with the justice department. Let's create 54% of the market share going into the new millennium." It was all set up and then after the project was all done from a techonolgy standpoint, IBM backed off and didn't go to market with us.

And at the same time they did that, they jumped in bed with Red Hat and went off and started distributing Red Hat.

Now just because they did that doesn't mean -- I mean at one level, yeah we can be upset and we can whine and moan about it -- but that doesn't create technically a legal violation. What creates the violations are when they actually go out and take our code, contribute that into open source that in fact does boost Red Hat. It does boost the other distros. And at the same time our revenue comes down from 230 million down to 60 million. At the same time the Linux marketplace is just booming.-- Darl McBride, 2003-07-21

McBride claimed SCO has found three distinct areas of infringement:

Direct line-by-line code taken from SCO's Unix System V, which he noted made its way into Linux from various vendors, "primarily other than IBM" Direct line-by-line code taken from derivations of Unix System V code, like IBM's AIX; McBride noted that its contracts with Unix vendors prevent those companies from donating any code based on or derived from the Unix System V kernel Non-literal infringement which stems from code which borrows from the concepts and structure of Unix.-- Darl McBride, 2003-07-21

Right, so what happens here is there's a difference between a distribution of a code base and a donation of code. Because we were distributing Linux does not mean that we had donated code to Linux. In fact the GPL is very specific that it protects users or code developers who have had their code improperly donated into Linux. That is in fact the part that shuts down the GPL. If you have tainted code that's in there you have to in fact stop shipping, if we came out and put a claim against one of the Linux distributors. That's why we haven't done that at this point. If you look at the code that is out there. So we just found out about this a couple of months ago and when we did, immediately we came out and we suspended our shipment of Linux until this gets resolved.

So we're really protected on two fronts. The GPL actually protects us on this front and then if you look at copyright law, copyright law is just as explicit in terms of saying a copyright owner cannot accidentally give their rights away. You have to actually sign your rights away and we have never done that.-- Darl McBride, 2003-07-21

So, what we have is the main code base of Unix. We have the source tree here of System V if you will, that SCO owns, and then what you have are multiple branches off from that tree that go into many of the OEM vendors that have been selling Unix over the years. Unix last year was a 21 billion dollar marketplace. All of those verions of unix tied back to SCO's branch. So what happens here is SCO owns the main source trunk and they have derivative rights control on the branches that are out there. So when you have an AIX or an HPUX or Fujitsu or wherever the various version is coming from, they have the rights to go sell and promote their branches and the derivative works they do on those branches, but they don't have the right to donate that or give it away. They have to keep all of those works in confidence.-- Darl McBride, 2003-07-21

The lawsuit was launched back in March. It was after a period of several months where we had found intellectual property violations and contract problems. We launched the lawsuit on March 7. We had a hundred day notice in place at the time we put the lawsuit in place that if we did not have these contract issues resolved then we would in fact be canceling or revoking the AIX license. On June 13, we in fact did revoke the AIX license agreement as per our contract rights.-- Darl McBride, 2003-07-21

The part with Linus that I would agree with him on is that it started out as a contracts case about IBM - and Linus and I have shared emails along the way and I've guess we've chosen to agree to disagree. The point that we fully disagree on at this point is whether it is an intellectual property problem or not. Although it started off as a contracts problem, as we've gone in and done our full analysis of the code base, it is very clear that we have a copyright problem with the code that's in Linux today.

Now one thing that is late-breaking and fresh news for you and all the listeners out there is that last week, middle of the week, we did receive our registered copyrights back on the Unix code base. And the copyright registrations are interesting because they do in fact give you the ability to go seek injunctive and damages relief from end users.-- Darl McBride, 2003-07-21

We think that there are a lot of ways that we get justice. Our main thing right now - it's just a little bit like what's going on in the music industry, the film industry. It's very clear in the film industry when the video comes out 2 weeks ahead of the release date of the showing that there's been an infringement. It's very clear with the online music sharing there are problems. They're working through their issues in different ways. We very clearly have problems here. How we work thorugh and get justice to that? We're open to as far as how that works out. Does it happen at an end user level? Does it happen at an OEM level? Does it happen at a Linux distributors level? We're looking at all of those options right now.-- Darl McBride, 2003-07-21

Well, another report that I saw that Bill [Claybrook] wrote basically said from what I saw there seem to be claims that seem to be very legitimate and if everything I saw was correct I think then the industry has a problem. So I think depending on which press report and how they want to twist his words, you come up with different conclusions. But very clearly the two or three I've seen and the report that he in fact wrote on it was very strongly weighing in on our side.-- Darl McBride, 2003-07-21

Well, I think the thing that is clear here is that we have code that is massively showing up inside of Linux 2.4 today. There's a couple million servers out there in the marketplace, and if you go back to early 2000, maybe 2001, and go forward, you have a lot of versions of Linux that are running that are tainted.

So I think the implications are pretty simple. We either get square with users that are using our code improperly and true up on that front. Or, well, in any case we do that. But then I think in terms of the go forward is the real question.

The real question is does the Linux community want to roll the codebase back?

I mean I actually agree with the points that Linus is making around "show us the code, we'll go back and fix this." The problem is we are talking about hundreds of thousands of code that have come from 25 year veterans of putting symmetrical multi processing together.

When you take that code out, you know, to the extent that you can redo it with your own workings and have it there ready to go tomorrow, great. Most likely what happens is this rolls back to a pre-2000 state on the Linux codebase.

On the other hand if we want to leave the code in there and keep going and there's a way for SCO to get compensated for the damaged goods that are out there, then we're fine with that too.-- Darl McBride, 2003-07-21

Well, there's no doubt we're not winning the Miss Congeniality contest of the software industry now. But I think if you step back and look at it, in terms of if we really are right with what we're saying, and we're 100% convinced we are and the world is coming around to that. The few dozen people that have come in, taken the time to take a look at our code, take a look at our claims have unanimously walked out of our Lindon, UT offices with the same conclusion that "Yeah you guys do have some pretty powerful claims here." They then turn to "What's next? What are you going to do next?"

So I believe that as our claims are now being validated and as we start to gain wins in this area, I believe that it will turn, it will come back round and people say "Well, OK, there were problems." In the end of the day though, what I would say is we're not trying to kill Linux. I mean we're not attacking Red Hat right now which if we did, by definition, could end up shutting down Linux tomorrow.-- Darl McBride, 2003-07-21

Yeah well, the Novell thing. They came out and made a claim that held up for maybe four days and then we put that to bed. If you go back and talk to Novell I guarantee what they'll say, which is they don't have a claim on those copyrights anymore.-- Darl McBride, 2003-07-21

"SCO is telling companies that if they buy a license they will be protected, but they are basing their claims on allegations, not facts," she told NewsFactor. "Why would customers pay unless they know they have to?"

Businesses using Linux may want to wait until the battle between SCO and IBM is settled. "Larger companies can wait this out -- and tell SCO to 'show us the proof, and don't try to shake us down,'" Quandt suggested.-- Stacey Quandt, 2003-07-21

"It's a very smart strategy, if it works," said Mark Radcliffe, an intellectual property attorney with Gray Cary. "If the price is low enough, better to buy a certainty than get tangled in a murky war."-- Mark Radcliffe, 2003-07-21

"Since the year 2001 commercial Linux customers have been purchasing and receiving software that includes misappropriated Unix software owned by SCO," said Chris Sontag, SCO senior vice president.

"While using pirated software is copyright infringement, our first choice in helping Linux customers is to give them an option that will not disrupt their IT infrastructures. We intend to provide them with choices to help them run Linux in a legal and fully paid-for way."-- Chris Sontag, 2003-07-21

"Since the year 2001 commercial Linux customers have been purchasing and receiving software that includes misappropriated UNIX software owned by SCO," said Chris Sontag, senior vice president and general manager, SCOsource intellectual property division, The SCO Group. "While using pirated software is copyright infringement, our first choice in helping Linux customers is to give them an option that will not disrupt their IT infrastructures. We intend to provide them with choices to help them run Linux in a legal and fully-paid for way."-- Chris Sontag, 2003-07-21

"Since the year 2001, commercial Linux customers have been purchasing and receiving software that includes misappropriated Unix software owned by SCO," said Chris Sontag, senior vice president and general manager of SCOsource, the company's intellectual property unit. "While using pirated software is copyright infringement, our first choice in helping Linux customers is to give them an option that will not disrupt their IT infrastructures. We intend to provide them with choices to help them run Linux in a legal and fully-paid for way."-- Chris Sontag, 2003-07-21

Further lawsuits against other Linux distributors are "a possibility," Sontag said in March, but he added that SCO "believes the majority of our licensees are appropriately upholding their licenses."-- Chris Sontag, 2003-07-21

"SCO CEO Darl McBride is going to take another shot across the bow over the next few weeks," said a senior executive at a major software company. "We know it's coming, and there's nothing we can do but wait."-- Undisclosed SOURCE, 2003-07-21

The UK IBM Computer Users' Association has now written to IBM asking that it provide "assurances that IBM's customers and our members will not suffer any financial or operational loss from this dispute".

The letter added: "We would hope that IBM would compensate [customers] for any inconvenience caused to them."-- UKIBMCUA STAFF, 2003-07-21

"We are in the process right now of considering what they could do to come into compliance," Stowell said. Asked by eWEEK if a fee is a possibility, Stowell said that it "could be."-- Blake Stowell, 2003-07-21

"We now have the right to enforce our copyrights with all end users," company spokesperson Blake Stowell told NewsFactor. "Our intention is not to press legal action. But for those customers who are unwilling to pay for the intellectual property we own -- and that they are using -- we will take any action necessary to extract a license from them."-- Blake Stowell, 2003-07-21

"IBM isn't enhancing its position in this," said Ray Titcombe, chairman of the UK IBM Computer Users' Association.

"I'd have liked to see them be a great deal more supportive to their customer base; to go that extra mile that says 'We are that confident that we will act as guarantors.'"-- Ray Titcombe, 2003-07-21

What concerns us is anyone suggesting that they own Unix without defining what that means. And certainly to say, 'We own Unix,' as SCO Group suggested for a while, is not accurate. They own the System V Release 4 code and the software that goes with that. They don't own 'Unix' as such, and the reason that we're very concerned about that is because we were given the Unix trademark, to be the custodian for the industry and to use it as an indicator that products do conform to the single Unix specification. The Unix trademark, especially on servers, should only be used in conjunction with products that have been certified to be in conformance with the single Unix specification. If we muddle the market, then you get a situation where no one knows really what they're buying.-- Allen Brown, 2003-07-22

"SCO seems to be asking customers to pay for a license based on allegations, not facts," she said. Leigh Day, a spokeswoman for Red Hat Inc., one of the largest distributors of Linux, said, "We feel completely confident that what we're offering to customers is not in violation of valid intellectual-property rights."-- Leigh Day, 2003-07-22

"IBM has merely been saying to its customers, 'we'll support you,'" Didio said. "They have been downplaying the importance and the legitimacy that this case is going to go anywhere. I don't think this is a reasonable course for IBM to take in dealing with customers."

She added, "I would expect them to defend their position vigorously. However, what I don't think is reasonable at this point is for IBM to just tell customers 'we'll support you' without describing the nature of that support. They need to really say what their position is. Is there a liability cap on indemnification?" -- Laura DiDio, 2003-07-22

"Linux right now has a lot of momentum behind it. SCO doesn't want to be in the position of spoiling the party for all of these Linux vendors. They want to keep the focus squarely on IBM."-- Laura DiDio, 2003-07-22

"SCO won't be stupid about the pricing. They won't gouge customers,"-- Laura DiDio, 2003-07-22

"That's not too bitter a pill to swallow if it removes the cloud hanging over a Linux deployment or potentially having to pay damages,"-- Laura DiDio, 2003-07-22

"They went out of their way to say they are holding Linux customers harmless," she said. "They're not being greedy. Under the law, if they prevailed [in the IBM suit], they could hold the infringers liable."-- Laura DiDio, 2003-07-22

Didio said that she had been told by SCO that about 45 or 50 of the companies that received a letter, about 3.5 percent, have since contacted SCO and held discussions. "I think if they come out with a reasonable cost structure, and are willing to be flexible on payment schedules and pricing, they have a good chance," Didio said. "Out of 1,500, if they even sell 50 licenses, that's a considerable amount of money."-- Laura DiDio, 2003-07-22

Yankee Group senior analyst Laura DiDio is advising customers not to dismiss SCO's licensing offer, despite the arguments of those who think SCO's claims will not be taken seriously in court.

"The customers who received these 1,500 letters from SCO have been told this isn't going anywhere," DiDio told TechNewsWorld. "I don't think anyone should listen to such empty assurances."-- Laura DiDio, 2003-07-22

"I do not consider it a significant step in the lawsuit in any way, although they will probably paint it differently,"-- Brian Ferguson, 2003-07-22

"Linux is set to grow pretty dramatically," Mr. McBride said in an interview. "Do we all want to move forward together and we get a piece of that? Or do we want to turn the clock back to where it was a few years ago?"

[...] "Even if you take an average number, it gets to a few billion [dollars] pretty quickly," Mr. McBride said.-- Darl McBride, 2003-07-22

"As far as I can see, they're saying people who don't need licenses should take them and people who need them for distribution should take a license that is incompatible with GPL," Moglen said. "It sounds more like pressure, or making threats in order to get money from people."-- Eben Moglen, 2003-07-22

"A lot of these folks were asking how they can run Linux without infringing on our code," he said. "The way to do that is to purchase the license."-- Blake Stowell, 2003-07-22

"We're asking to be compensated for businesses' use of our software," he said.-- Blake Stowell, 2003-07-22

"The former clause allocated too much risk to third parties," said Laura DiDio, an analyst at the Yankee Group. "Intellectual property issues relating to Microsoft software are entirely in the control of Microsoft."-- Laura DiDio, 2003-07-23

"IBM is not aware of any Unix System V Code in Linux. SCO needs to openly show this code before anyone can assess their claim. SCO seems to be asking customers to pay for a license based on allegations, not facts,"-- Trink Guarino, 2003-07-23

"Open Source Victoria (OSV) is bemused by the suggestion that any of the Linux source code contains proprietary UNIX code or trade secrets. Linux code has always been released worldwide in a way that allows anyone with some coding knowledge to inspect and compare the source code without any fee. In fact the Open Source movement encourages people to inspect and review code for quality assurance and educational purposes.

This open distribution of code allows SCO to inspect the Linux code at any time and the revision control systems in place mean that the times and nature of code changes and additions are published on the Internet as a matter of free public record. That SCO hasn't notified anyone of alleged code incorporation until now is telling.

We believe that it will be very difficult for SCO to prove that any such codes or technologies within Linux were in fact obtained inappropriately from SCO's base of intellectual property. SCO likely knows this, but persists with the case as perhaps its only means of attempting to slow uptake of Linux."-- Con Zymaris, 2003-07-23

"Our first and primary concern comes from commercial users who are benefiting from this," said CEO Darl McBride. "This is very targeted towards the people that are using Linux, which is end users."-- Darl McBride, 2003-07-24

"SCO has not demonstrated that any infringement exists, nor has it established that it owns derivative works in Unix. Nothing has been proven to establish that such a license is needed."-- Red Hat PR, 2003-07-24

"The average person on the IT floor knows there are issues because of the SCO-IBM lawsuit, but in terms of understanding the details about risks, there's not a well-developed understanding I see among our customers," Ballmer said.-- Steve Ballmer, 2003-07-25

"The open-source community, IBM and other vendors will find some way to right all of this, and it is extremely unlikely that any users will have to cut checks to anyone for anything."-- Adam Braunstein, 2003-07-25

"SCO is being opportunistic ahead of the lawsuit with IBM by exploiting nervousness and trying to create as much fear, uncertainty and doubt as possible," said Andy Butler, research director at Gartner.

He explained that Gartner is not authorised to give legal advice but has advised clients that "they should not be blasé and should follow events carefully if they have significant Linux exposure".

"Users should not start waving their cheque books as there is no legal precedent for what SCO is demanding and it is not clear what laws have been broken," he added.-- Andy Butler, 2003-07-25

Butler believes this is an attempt by SCO to "hobble the open source movement by depressing the market for evolving the source code".

"Agreeing to using Linux in run-only, binary format would mean that Linux code would become like proprietary Windows or Solaris code," he explained.

"Users would have no right to change or distribute the source code. The source code would remain locked away. SCO is trying to derail the Linux train."-- Andy Butler, 2003-07-25

"Nobody is saying they need to be careful because of SCO," he said. "We do a lot of work with software vendors in the finance and banking industry and they are all migrating to Linux because that's what the customers say they want.

"Customers are not saying that they'll stop using Linux. None have come to us expressing concern."-- Greg Carlow, 2003-07-25

"I'm sure they're [IBM is] telling customers it's their problem, not the customers' problem," Claybrook said. "They're saying they'll stand behind anything [the customers] purchased."-- Bill Claybrook, 2003-07-25

"That [no indemnification from IBM] is not acceptable," DiDio said. "Certainly, SCO is saying, 'We're not going away; We're taking the necessary steps to enforce [copyrights].'"-- Laura DiDio, 2003-07-25

"Will it affect the lawsuit? Probably not, but appearances are everything," DiDio told TechNewsWorld. "SCO is framing the picture and putting it in focus."-- Laura DiDio, 2003-07-25

"One thing about the GPL is that you can't just license IBM Linux, or Red Hat Linux," Gates said. "The way the GPL works, if you license any Linux, you have to license all Linux."

"Here you have a product without R&D controls, and it's not part of a cross-license," he said. "Given the high level of functionality, you'd think it would have patents.

"Companies that are doing R&D have by and large entered into cross-licensing agreements," he said. "Microsoft and IBM did cross-licensing 10 years ago, when we were small. But Linux is not covered by most of these cross-licenses."

"The whole IP thing is begging to get attention because it's not a scenario that existed in the past," Gates noted. "The SCO suit is largely related to trademark and copyright."-- Bill Gates, 2003-07-25

"There's no question that in cloning activities, IP from many, many companies, including Microsoft, is being used in open-source software," Gates said. "When people clone things, that often becomes unavoidable."-- Bill Gates, 2003-07-25

SCO's actions are neither too trivial to be dismissed nor too significant to spur changes in plans, but SCO and its lawyers have "many, many legal hurdles...to overcome," Illuminata's Gordon Haff said. "That SCO's claims are not laughable but merely enormously suspect is no reason for corporations to start a Chicken Little routine at significant cost."-- Gordon Haff, 2003-07-25

"We will ignore SCO's demands and wait and see what happens.

"We purchased Red Hat in good faith and are up and running and have contractual agreements with them. We would be daft to set a precedent.

"I don't see that SCO's claims will make a huge impact on the freeware market as it is so well established."-- Adrian James, 2003-07-25

"Rather than go out and just say, 'Let's go sue everybody now,' we're coming out with a well-thought-out program," SCO's CEO Darl McBride said last week while announcing the plans. "Essentially, the legal fairway we're working with just got a lot wider," he said.-- Darl McBride, 2003-07-25

"Signing a license based on allegations and not facts just doesn't make sense," she said.-- Stacey Quandt, 2003-07-25

"RFG believes corporate users of Linux should not discontinue their deployments, because the merits of SCO's case appear to be extremely thin," RFG analyst Chad Robinson said. "SCO appears to be attempting to extort funds from the Linux market without substantiating its claims in ways that allow users to respond."-- Chad Robinson, 2003-07-25

"SCO is asking customers to pay money based on pure unsubstantiated threats, without offering any facts.''

The memo told IBM sales representatives: "Remember, we are counting on you to make sure that customers with questions or concerns get the correct facts.''-- IBM SOURCE, 2003-07-25

"I think they are taking the threat seriously otherwise they wouldn't be informing their salespeople about that,'' he said. "We've had a lot of customers suggest they'd be interested in taking out a licence.''-- Blake Stowell, 2003-07-25

"We're not attempting to extort funds out of users. We're only trying to be compensated for the use of our software in Linux," company spokesman Blake Stowell said Friday. "We have been substantiating our claims, because we showed our Unix source code in Linux to more than five-dozen people, and we're willing to show it to individuals in the future."-- Blake Stowell, 2003-07-25

"We've had several companies indicate that, when we begin offering this license, they plan to take out a license," Stowell said.-- Blake Stowell, 2003-07-25

He advised companies that use Linux not to just "contact SCO to discuss its claims, compensation requirements and your potential future liability" but also to "delay deployments of (Linux) application and database servers if they involve critical applications that must be unencumbered of intellectual property infringement claims."

Weiss also advised Linux users in a research note to see if Unix or Windows can substitute for Linux, to consider outsourced computing operations "that transfer license issues to a third party," and not to "ignore the problem by hoping IBM will win or settle its lawsuit."-- George Weiss, 2003-07-25

If some customers do begin signing SCO licences, others could quickly follow, according to a Gartner advisory on the matter published this week.

George Weiss, vice president and research director at Gartner, said it would take only "a few large enterprises" to negotiate a licence fee before others join them.

This could create a "hybrid open-source and proprietary software contract", which would mean that Linux use would remain licence-free as long as certain features of the operating system are not used.

According to SCO, Linux kernel 2.4 includes code that aids symmetric multiprocessing (SMP) scaling. Weiss said that enterprises that are only using Linux for simple tasks -- such as basic Web serving or as a firewall -- will not require the latest version or the SMP functionality and will be able to "fence off" the systems from licence obligations, while more powerful systems could be liable to pay licence fees.-- George Weiss, 2003-07-25

"In an uncertain world, our strategy is to conduct business consistent with the highest probability outcome, which is that this matter will get resolved in a minimally disruptive manner," he says. "Linux is strategically important to N.C. State and we are, of course, following the legal developments with great interest. I anticipate that IBM's lawyers will go head-to-head with SCO's lawyers and the final resolution will most likely not materially impact our business models and practices."-- Sam Averitt, 2003-07-28

"Linux will be tougher and more competitive when this is over," he says. "Many of the questions that people have about Linux and open-source software will be resolved in this process."-- Vince Freeh, 2003-07-28

Vince Freeh, an assistant professor of computer science at NCSU, believes the SCO lawsuit is a "desperate measure by a dying company. SCO can see the handwriting on the wall. It has an inferior product to Linux and this lawsuit is its only chance for survival."

"Both IBM and Red Hat have lawyers that can explain the situation to the customers' lawyers and make them comfortable with the issue," he says. "I don't see where Red Hat has to react to the lawsuit at all. They just have to make statements that keep their customers comfortable with what is going on."-- Vince Freeh, 2003-07-28

"Red Hat does not have to be involved in the SCO lawsuit to see some effects long term," he says. "If enough customers get concerned about the liability involved in running Linux, it will negatively impact Red Hat in the long run."-- Victor Raisys, 2003-07-28

"Does SCO have to prove its case? Of course," DiDio said. "The big risk is if it goes to trial and the unthinkable happens and SCO wins, there will be penalties and damages to pay."-- Laura DiDio, 2003-07-29

"SCO has wisely elected to adopt a flexible and reasonable position on the licensing fees it seeks from IBM corporate customers... SCO is well advised to pursue its current course and not seek retroactive fees dating back two years ago when IBM first shipped Linux 2.4."-- Laura DiDio, 2003-07-29

"They [IBM] have steadfastly refused to publicly state whether they would indemnify customers and to what extent," DiDio said of IBM. "If I'm a CIO, that makes me nervous."-- Laura DiDio, 2003-07-29

Yankee Group senior analyst Laura DiDio told TechNewsWorld that she knows of at least one customer that chose Microsoft's Windows over a Linux deployment from IBM because of the SCO claims.

"This is not going away," DiDio said. "At every juncture of this complex, convoluted case, SCO has stepped in and said, 'Yes, we own this, and yes, we're going to enforce it.'"-- Laura DiDio, 2003-07-29

"[SCO] is licensing that code freely under the GPL," Moglen told TechNewsWorld. "How or why anybody would need to get another license from them is beyond me. It's under the GPL."-- Eben Moglen, 2003-07-29

"I don't want to speculate [on the outcome of the lawsuit] but I'm thrilled to death SCO can't revoke our Unix licence.

"We can indemnify our users and if anybody's nervous about [IBM Unix flavour] AIX or Linux we've got Solaris on x86 [32-bit processors] and Solaris in the data centre. We run like the wind. We're open. There are no down sides."-- Scott McNealy, 2003-07-30

Potential liability "is one of the things an end user must consider with using open-source code," she adds.-- Melise Blakeslee, 2003-07-31

"They're trying to scare people into buying these licenses as protection," Aberdeen's Claybrook says. SCO Group "may have been wronged. But I don't know why everyone in the world has to pay for it, even before they've won their lawsuit."-- Bill Claybrook, 2003-07-31

"In the interim, the case will be tried in the court of public opinion."-- Laura DiDio, 2003-07-31

"Linux community to work overtime promoting their respective points of view to influence the opinions of corporate customers, the media, and analysts. Such posturing is designed to make one or the other party blink."-- Laura DiDio, 2003-07-31

"Don't touch open source software unless you have a team of intellectual property lawyers prepared to scour every single piece [of the open source code]. We offer indemnification, but many suppliers do not. A lot of companies are going to get very disappointed as we move forward. It will become a very challenging intellectual property issue," he told Sun's Technology Forum in St Andrews, Scotland, this week.-- Scott McNealy, 2003-07-31

"IBM shared derivative works with the Linux community," says Chris Sontag, senior VP and general manager of SCO Group's SCOsource division. "That's been very damaging to SCO. It was not IBM's code to contribute."-- Chris Sontag, 2003-07-31

"My CIO and I have had conversations about what SCO is doing, but we have no plans to change our direction," says John Weeks, director of technology for Mutual of Enumclaw, a division of Enumclaw Insurance Group. [...] "We're even thinking about adding Linux partitions to our mainframe," he says.-- John Weeks, 2003-07-31

"Don't ignore the problem by hoping IBM will win or settle its lawsuit, which could take a year or more. An IBM win would not prevent SCO from pursuing individual claims, which, if successful, could cost far more in penalties than buying a SCO licence would," advises George Weiss, a Gartner analyst.-- George Weiss, 2003-07-31

"IBM really needs to say whether it will or will not indemnify," DiDio said. "If they won't, they should say so. It would give customers a much better idea of where they stand."-- Laura DiDio, 2003-08-01

"There's a lot going on behind the scenes," Yankee Group senior analyst Laura DiDio told TechNewsWorld. "Not necessarily coming out to say they support SCO or coming to their defense, but I think there are a lot of behind-the-scenes machinations." [About Microsoft]-- Laura DiDio, 2003-08-01

"They stepped right up and certainly they are supporting them tacitly," DiDio said. [About Microsoft]-- Laura DiDio, 2003-08-01

The analyst also said there is a possibility that a larger IBM rival -- such as HP, Oracle or Sun -- might take up the SCO cause by buying the company.

"Then IBM doesn't have a small company -- but an equal -- going after them," she said.-- Laura DiDio, 2003-08-01

However, when asked if Microsoft was supporting or helping SCO behind the scenes, Stowell said "not at all."

"This is something we've been doing completely independently of anyone," he said.-- Blake Stowell, 2003-08-01

``The SCO case is one of the best things that could have happened for Linux right now,'' said Don Marti, editor in chief of Linux Journal. He added: ``Having a common enemy always brings a community together.''-- Don Marti, 2003-08-03

Stowell at SCO responds that the 80-line example comes directly from an SCO Unix licensee's contribution to Linux and is one of many examples of copying the company has identified.

Stowell says numerous Fortune 500 Linux users have asked how they can get a license from SCO....-- Blake Stowell, 2003-08-03

``Hey what can I say?'' Torvalds wrote in an e-mail to the Mercury News. ``They're full of it.''

He then dissected SCO's legal arguments. He said the Linux open-source community developed multiprocessing and sophisticated memory capabilities on its own. He adds of SCO: ``They haven't shown a line of code to anybody who can then verify where it came from, which shows just how shaky their allegations are.''-- Linus Torvalds, 2003-08-03

``Think of an anthology of short stories -- the editor of the anthology unquestionably owns the copyright on the book. Yet the original author of each story still owns the copyright to his particular story, and as a result it is quite common to find good stories duplicated in multiple anthologies.''

He adds: ``In this particular case, SCO is one `editor of an anthology' and Linux is another. And if IBM's stories -- and stories of others, for that matter -- show up word for word, that in itself doesn't imply any copyright violations.''-- Linus Torvalds, 2003-08-03

Of course, we will prepare our legal response as required by your complaint. Be advised that our response will likely include counterclaims for copyright infringement and conspiracy.

I must say that your decision to file legal action does not seem conducive to the long-term survivability of Linux.-- Darl McBride, 2003-08-04

"They've gone to our customers and business partners numerous times and have said publicly that Linux is infringing. We want the truth. We want them to stop engaging in unfair business practices. Basically what we're saying is put up or shut up," Szulik says.-- Matthew Szulik, 2003-08-04

"Assuming for the moment that SCO is off-base in its allegations, this complaint is enough to rock SCO to its foundations." Still, "A lot will depend upon the vigor with which the matter is pursued. My presumption is that the suit is serious and will be pursued with full force."

But Carey warns, "SCO is in some danger even if its allegations are correct, simply because SCO has put everyone in an impossible position. What can they (a Linux distributor or end-user) do if they don't know which code is infringing? If, to that unfairness, you add a conclusion that SCO has its facts wrong, then SCO's liability to Red Hat and others could be very substantial. And if SCO knows (or should know) that its facts are wrong, then you can kiss the company good-bye."

Last, but far from least, Carey thinks that there's "a potential securities fraud action is buried within the pleadings. Red Hat speaks of Canopy Group (SCO's primary owner) having raked in millions in cash since the start of this affair. Red Hat notes that its own stock price has declined 20% in a month. This is the stuff of securities lawsuits. Red Hat could amend its claims to include a securities law claim, or another law firm could bring a class action lawsuit against SCO on behalf of selling Red Hat shareholders who have been harmed by the low price they get. Finally, it is conceivable that the SEC or the Justice Department could take an interest in this, viewing it as market manipulation."-- Thomas Carey, 2003-08-05

"IBM should provide some indemnification protection, even if they put a cap on their liability. These customers need indemnification. These are not mom-and-pop shops."-- Laura DiDio, 2003-08-05

"I think SCO will try to get some licensing fees, but until they do something to indicate they're going to take people to court, it's not going to happen," he said.

If SCO is successful with its intellectual property claims, however, such licensing prices will help kill Linux, Haff said.

"If you take away the price advantage and essentially eliminate the open-source development model, what do you have left?" he asked. "There's nothing magical about Linux from a technical perspective...And you're probably cheaper behind Windows or using Solaris," Sun Microsystems' version of Unix.-- Gordon Haff, 2003-08-05

"I was expecting someone to make this move. By SCO going to the media rather than a court, it was only a matter of time that someone would take the move of trying to legally force SCO to show the Linux community what they've been complaining about." He adds, "After Eben Moglen's paper (Questioning SCO) appeared, it was only a matter of time before someone took SCO to court."-- Dan Kusnetzky, 2003-08-05

"Red Hat's lawsuit confirms what we've been saying all along-Linux developers are either unable or unwilling to screen the code" that goes into the Linux kernel, McBride said. "Red Hat is selling Linux that contains verbatim and obfuscated code from Unix System 5."-- Darl McBride, 2003-08-05

"The reality here (is that) IBM and Red Hat have painted a Linux liability target on the backs of their customers," he said. "Due to IBM's and Red Hat's actions, we have no choice but to fight the battle at the end-user level."-- Darl McBride, 2003-08-05

"We're absolutely, 100-percent going to fight for our intellectual property rights," he said. "If we don't get there with licensing, we will have to move to enforcement actions."-- Darl McBride, 2003-08-05

"Those who have received Linux under one license are not required to take another license simply because SCO wishes the license it has already been using had different terms." In short, "I don't see how SCO can get around the fact that they gave people GPL Linux."-- Eben Moglen, 2003-08-05

"I'm not going to put all my servers on Linux just because Linux is cheaper. There are lots of downsides to it. A lot of people who are running Linux aren't even thinking about it," Sommer says.-- Steven Sommer, 2003-08-05

"They're selling you the IBM name. The reason you go with a major vendor is that you feel they are going to be responsible for what they sell you," says Steven Sommer, chief information officer at Hughes Hubbard & Reed, a law firm in New York. "Indemnification is a big part of everything we do. If I'm running a mission-critical system, then, yeah, sure as hell I want to be indemnified."-- Steven Sommer, 2003-08-05

"We believe it is necessary for Linux customers to properly license SCO's IP," Chris Sontag, senior vice president and general manager of SCOsource, said. "The license insures that customers can continue their use of binary deployments of Linux without violating SCO's intellectual property rights."-- Chris Sontag, 2003-08-05

"That's all we're concerned with," Stowell noted. "We're not planning to go after noncommercial users with this license."-- Blake Stowell, 2003-08-05

"The collaborative process of Open Source software development which created the Linux operating system has been unjustly questioned and threatened," said Red Hat CEO Matthew Szulik. "Red Hat has a responsibility to ensure the legal rights of users are protected."-- Matthew Szulik, 2003-08-05

"We have asked the courts to declare that no violations of intellectual property and trade secrets have occurred. We've been patient, we've listened. But when our customers and the whole open-source community are threatened with innuendo and rumor, it's time to act."-- Matthew Szulik, 2003-08-05

Red Hat general counsel Mark Webbink said the primary goal of his company's new lawsuit is to "stop SCO from making unsubstantiated and untrue public statements attacking Red Hat Linux and the integrity of the Open Source software development process."-- Mark Webbink, 2003-08-05

"Nobody in the Linux community has stepped up to protect the user," says George Weiss, analyst at Gartner Group, in Stamford, Conn. "Nobody has said, 'We will defend you against any legal claim in systems that you purchase from us that are Linux-based.' If IBM were to say they would indemnify users that would send a signal to the user community that they feel confident that the code they integrated with their system is free of violation. That would be a big sigh of relief. If IBM were willing to do that, then we really would believe there is no substance to this case."-- George Weiss, 2003-08-05

"You'd like to think that SCO should have some legitimate claims because they're going through a lot of trouble ... On the other hand, a lot of people are questioning whether they do have legitimate claims."-- Bill Claybrook, 2003-08-06

"Most people right now are ignoring it [the suit] one way or another," said Erwin Frise, systems manager for the Berkeley Drosophila Genome Project, after hearing Szulik's speech.-- Erwin Frise, 2003-08-06

"In music file-sharing, end users who are trading are clearly breaking the law and have every reason to know they are breaking the law by committing copyright infringement," he said. "In the Linux litigation ... I think most if not all of those users are unaware they may be violating any laws in the first place."

"Right now I think the legal rights to the software are unclear," Isenberg added.-- Doug Isenberg, 2003-08-06

"David Boies takes cases because he likes to try interesting cases," said Jeff Neuburger, an intellectual property lawyer at the New York-based firm Brown Raysman Millstein Felder & Steiner. "I don't think the fact that he's representing SCO means they have a good case or not."

[...] "IBM is a very careful company that understands intellectual property very well," Neuburger adds. "Knowing IBM, my hunch is they have a very good argument that they've done nothing wrong."

[...] "SCO is taking an aggressive position. They've hired a very high-profile litigator, but they seem to be trying a lot of this case in the press as opposed to the court room," he said. "That calls into question what their true motivation and objective is."-- Jeff Neuburger, 2003-08-06

But in the long term, SCO's actions have the potential to dampen Linux's growth until the issue is resolved, Soundview analyst Victor Raisys said in a research note Tuesday....

Raisys has an underperform rating on Red Hat shares, which he believes are overvalued.-- Victor Raisys, 2003-08-06

One analyst whose hedge fund bought shares of SCO sees things differently. "I think there is a lot of meat on the bone here, so to speak, in terms of there being a strong case," says the analyst, who requested anonymity. Among the reasons he cites:

* The company and its executives have staked their reputation and their futures on the case.

*The company is showing evidence -- actual code -- making it a clear-cut case.-- Undisclosed SOURCE, 2003-08-06

"These are challenging times," Red Hat CEO Matthew Szulik said more than once Tuesday in his keynote address at LinuxWorld. "I ask for your help. I ask for your participation."-- Matthew Szulik, 2003-08-06

"I honestly haven't seen volumes change," and even though "obviously customers have lots of questions, but I think most customers are pretty savvy," and "almost everyone in the business has been sued at one point or another, and they know there are mechanisms around this, and they know ultimately things get resolved and life goes on."-- Irving Wladawsky-Berger, 2003-08-06

"We remind customers they are being sued about allegations that haven't been proven in court, period. That is it. In our legal system, until proven in court, these are unproven allegations. That is all we are telling customers, that these are unproven allegations." Added Wladawsky-Berger, "We have been telling people that these things will get settled in court like every intellectual property issue, and we are defending ourselves very aggressively here. Things are happening, let it play out in court."-- Irving Wladawsky-Berger, 2003-08-06

"There are risks in any environment, anyone's software that you buy," said Mike Balma, HP's Linux systems strategist. "People have choices, and we're seeing that they're continuing to vote with their feet."-- Mike Balma, 2003-08-07

"Unlike SCO, IBM has been very careful not to make inflammatory statements. So when IBM fires a broadside it is a very carefully prepared action, which will be very carefully executed," said Gary Barnett, principal consultant at Ovum. "If SCO is wrong, IBM is absolutely right to ask for compensation."

"IBM has more patents than anyone, and more money and more lawyers than SCO. SCO will be bled dry before it can make its case," he added.-- Gary Barnett, 2003-08-07

"This is going to be very interesting. SCO still hasn't declared what bits of code are offending. It's a very risky strategy [SCO] is pursuing.

"The other partners in the UnitedLinux consortium, especially SuSE, are reaching the stage of frustration with SCO. The SCO case is starting to put some hesitancy into users who are asking more questions, although it hasn't hit revenues yet. It is not helpful."-- Mike Davis, 2003-08-07

"For the first time in the history of the industry, we have a major operating system platform that's being pushed on end users and at the same time the users take it, they're being told buyer beware--you own all the inherent intellectual property risks with this product," said Darl McBride, SCO's chief executive.-- Darl McBride, 2003-08-07

"The SCO threat seems to have generated far more heat than light," Nicholas Petreley, Evans Data's Linux analyst, said in his analysis of the survey. "Fully 88 percent of developers responding say that the SCO vs. IBM intellectual property lawsuit against Linux will have absolutely no effect on their plans, probably no effect, or they have no opinion on the matter. Only 6 percent are certain the SCO lawsuit will affect their plans, and another 6 percent think the lawsuit will probably affect their plans. Obviously, the SCO strategy of keeping its evidence against IBM secret (or made available only through second-hand sources who are under non-disclosure agreements as to what they can report) has limited impact of its litigation threats."-- Nicholas Petreley, 2003-08-07

"Our review of source code and documents appears supportive of SCO claims, though we are not legal experts and IP matters are not always transparent," Deutsche Bank Securities analyst Brian Skiba said in a research note Thursday after visiting SCO's headquarters in Lindon, Utah, Wednesday.

"A direct and near-exact duplicate of source code appears between the Linux 2.4 kernel and Unix System V kernel in routines shown to us."-- Brian Skiba, 2003-08-07

"They said it was from another hardware vendor, but they didn't say who," Skiba told internetnews.com. "I think it's clear that they didn't mean HP or Sun."

He added, "We didn't discuss it, but I didn't get the feeling that the issues with IBM were related to literal copying. I think the issue with IBM is predominantly around derivative work."-- Brian Skiba, 2003-08-07

"I think now that IBM has stepped up, you'll see more and more companies get involved [in litigation]," AMR Research analyst Allison Bacon told NewsFactor. If a big hardware vendor like Hewlett-Packard gets involved, "that's when SCO should call it quits," she said.-- Allison Bacon, 2003-08-08

"If you're new to Linux, maybe it would be a good idea to hold off for a while," she said. "If you already have Linux running in some part of your business, then keep with it. It's going to take a while until anything comes out of [the litigation]."-- Allison Bacon, 2003-08-08

"I expect to see an iterative raising of more issues in a very well-defined and pre-planned strategy," he said.

"We can expect IBM to significantly raise the pace now. It is sending a clear signal that it is not going to cave in quietly and pay off SCO."-- Gary Barnett, 2003-08-08

"The entire Linux community is saying to customers, 'You're on your own,'" DiDio said. "That's not a place I want to be."-- Laura DiDio, 2003-08-08

"The technical merits of the case . . . are extremely complex," she said. "The industry can expect to see a hard-fought, protracted legal battle that may last for years."-- Laura DiDio, 2003-08-08

"Because Linux is replicating Unix ... Linux plus fee equals Unix," he said. "It sort of begs the question of why don't you just run Unix?"-- Darl McBride, 2003-08-08

According to my source, the pro said Microsoft ponied up because "SCO needed money for their lawsuit problem."-- Microsoft SOURCE, 2003-08-08

"Certainly, we'll take it one suit at a time," SCO spokesperson Blake Stowell told NewsFactor. "I don't think the company's bitten off more than it can chew," he added. "Certainly, we wouldn't have gone down this path if we didn't think we could litigate the IBM lawsuit to the full extent."-- Blake Stowell, 2003-08-08

"Our hope is that all of them will be [taking out licenses]," he said. "I don't think that any of them want the alternative, which is litigation."-- Blake Stowell, 2003-08-08

"I don't know that these actions directly defend the user against SCO's threat to litigate," Gartner's Weiss said. "But I think they're an indication that the user isn't thrust completely into the wilderness."-- George Weiss, 2003-08-08

"This has gotten to be quite fascinating," said George Weiss of Gartner Research. "You can see the balance of power around the claims and counterclaims starting to shift now . . . It's about IBM suing SCO now, on the basis of IBM's own patents.

"IBM is bringing to bear its major resources and deep pockets, moving from a defensive posture to an offensive one with the overall result of tying up SCO's resources and expenses," he added, noting the Utah company also faces a suit filed Monday by top Linux distributor Red Hat Inc.-- George Weiss, 2003-08-08

"It is impossible to know whether any money was exchanged in this deal, since terms were not disclosed," Ferrell said. "However, with litigation over the need for a SCO license pending, I would expect that anyone signing up now would be doing so at rock bottom, fire-sale prices."

[...] "If a company is truly concerned about infringing SCO, they should set aside licensing fees but wait to make any payment to SCO until the legal fog in this case clears," Ferrell said.

"Companies signing up now should insist on a most-favored-nation's agreement--their payments are no higher than any other license--and some form of protection in the event that SCO's claim of copyright ownership fails," Ferrell said.-- John Ferrell, 2003-08-11

"One could imagine SCO making some particularly nervous CEO or CIO a sweetheart 'first licensee' deal just so they could send out this press release," Haff said. "In any case, though, I fully expect that some companies will just not want to get involved in any potential litigation and will pay up just to make SCO go away."-- Gordon Haff, 2003-08-11

"This situation is rather odd in a lot of ways," said Gordon Haff, a senior analyst at Illuminata (Nashua, N.H.). For instance, SCO was formerly Caldera International Inc., a Linux distributor and developer before it abandoned Linux to focus on Unix, Haff noted.-- Gordon Haff, 2003-08-11

Haff claims if SCO did detail all the allegedly infringed code, developers could write new code to replace it, defusing the situation.

[...] If SCO is successful in establishing its claims, "Linux would die," said Haff. But he doesn't expect that will happen."It's hard to say what will happen in a complicated legal case, but from my perspective this is a Hail Mary pass from a company that the market has passed by," said Haff.-- Gordon Haff, 2003-08-11

"From observing what's a priority and what's talked about at Tivo, this has not been one of those things," he said.-- Tivo PR, 2003-08-11

"One reason Linux is used is because it's inexpensive. SCO's action would defeat that objective," Singh said.

[...] Singh called SCO's decision to charge OEMs "attempted extortion, based on fear, uncertainty and doubt" as the company has not disclosed which code as at fault. He noted embedded Linux was also unlikely to contain any UnixWare System V code, as this is used on large systems.-- Inder Singh, 2003-08-11

The embedded Linux licensing move is "extortion based on fud [fear, uncertainty and doubt]. They are out to shake down people for what they can get," said Inder Singh, chairman of the Embedded Linux Consortium and chief executive of embedded Linux and real-time operating system maker LynuxWorks (San Jose). Neither the consortium nor his company has had any communications from SCO on the royalty demand, Singh said.

"We will wait until they show us something," that infringes their code, before taking any action on the licensing move, he added.-- Inder Singh, 2003-08-11

SCO denied that it offered a special deal. SCO spokesman Blake Stowell said the unnamed company paid a "slight discount" to the price SCO announced last week. The unnamed company bought licenses "for a large number of servers" and will have to pay more if it buys more Linux servers, Stowell added.-- Blake Stowell, 2003-08-11

Another approach could be for customers to "get vendors to step up and provide legal defense and indemnity," protecting the customers from lawsuits that regard the software they buy, Gartner analyst George Weiss said.-- George Weiss, 2003-08-11

"This Fortune 500 company recognises the importance of paying for SCO's IP that is found in Linux and can now run Linux in their environment under a legitimate licence from SCO," said Chris Sontag, SCOsource general manager and senior vice president.

"We anticipate this being the first of many licensees that will properly compensate SCO for our IP."-- Chris Sontag, 2003-08-12

"When IBM walked away from Project Monterey it put a dagger into the heart of SCO. Santa Cruz Operation lost its heart at that point and sold ts business to Caldera."-- Darl McBride, 2003-08-13

"I have a hard time seeing any court saying this license [GPL] isn't enforceable," in part because it covers so much important software. "Courts pay attention to that pragmatically, and it's legally relevant because the consequences [of overturning it] would weigh heavily."-- James Boyle, 2003-08-14

"I don't expect SCO is going to try and enforce this and yank out Dynix any more than they're yanking AIX," DiDio said. "It's still a long shot. They've got an uphill battle, and the burden is on them. But they're setting themselves up for a very big payday if they do win."-- Laura DiDio, 2003-08-14

"The suit is obviously heating up with all sides upping the ante," Yankee Group senior analyst Laura DiDio told TechNewsWorld. "Separately, each legal action is complex and confusing, and it could take years to resolve this."-- Laura DiDio, 2003-08-14

DiDio said some companies might find the SCO license more attractive than the possibility of litigation, but most will stand firm on resisting the license, which other analysts have called "nonsense," at least until the case gets closer to trial next year.

"The legal posturing by all parties will have little impact on Linux deployment going ahead," she said. However, she added that legal successes by SCO and lack of indemnification on Linux "could prove a boon to Linux rivals such as Microsoft Windows, HP-UX, Sun Solaris."-- Laura DiDio, 2003-08-14

SCO's attack on the GPL is a "very interesting argument from a legal angle," says Brian Ferguson of McDermott, Will & Emery in Washington, an intellectual-property attorney who has no connection to the free-software movement. "If a court says that's not an enforceable clause, it's going to cause some concern," among free-software developers.-- Brian Ferguson, 2003-08-14

Q: What sorts of organizations are expressing interest in IBM's Solaris to Linux migration program?

There's a huge amount of interest in moving off Solaris onto an open infrastructure. In a number of industries people want to migrate from a proprietary solution like Solaris and, at the same time, consolidate so they're running a single platform--ASPs, ISPs, various organizations who have clusters and need help. And basic server farms, whether it's the finance industry, high-performance industry, and so on.

There are some industries that haven't started moving that we think will. The telcos are a good example. The telco space has been dominated by Sun, they've been very successful in that space. Linux is becoming carrier-grade ready, the base technology's getting good enough. And I think starting in 2003 you're going to see a number of deployments moving from Sun to Linux. Those people are going to want help from this migration team--helping them port their applications, restructure their infrastructure, helping them with basic training and education. We're going to see some very large deployments. The infrastructure is really ready to go to Linux.

[...] Q: Would you say that the Solaris to Linux program is a direct assault on Sun?

Yes. This is a space where we collaborate and cooperate in building infrastructure, and we compete fiercely at Linux business. We want to attract as many customers as possible moving from Solaris to Linux. Although we don't get all Linux customers, we expect to have a bigger piece of that pie. You bet, it's a direct competitive move, and we think it's something that's going to be successful, it's going to drive a lot of business for us. As to how successful it'll be, we'll just have to see. The intent is not only to move customers from Solaris to Linux, but to make them happier when we do that, give them a lower cost, a just-as-reliable solution that's open, standard, and portable.

Q: How does IBM's interest in Linux affect AIX?

Very complementary. AIX is the best enterprise Unix. So today if you need that big 24-way SMP with high-availability, Linux doesn't run there yet, that's what you use AIX for. On the other hand, AIX has never been very successful in enterprise compute farms, an area where Linux has been running very well. The technology's actually getting closer together--we've taken a lot of knowledge from AIX and ported it to Linux. But most people are now programming above the OS layer, increasingly the layer above the OS is standard. You write a J2EE application, it runs on Linux, AIX ... The underlying OS is becoming irrelevant. Linux, as it matures, will become the commodity Unix across the industry. When that happens, we'll help our customers transition. The key thing for customers is that the programming layers really come off the operating system and up into the middleware. So if you write to WebSphere or J2EE, the OS is becoming just part of the infrastructure that most people don't see.-- Daniel Frye, 2003-08-14

It [SCO] will argue that the GPL itself is invalid, says SCO's lead attorney, Mark Heise of Boies Schiller & Flexner LLP. Mr. Heise says the GPL, by allowing unlimited copying and modification, conflicts with federal copyright law, which allows software buyers to make only a single backup copy. The GPL "is pre-empted by copyright law," he says.-- Mark Heise, 2003-08-14

"industry support from partners is strengthening."

"I believe that the silent majority is actually behind SCO in this case," he said. "Others with [intellectual property] they want to protect, they are hoping that SCO is going to prevail. We've been called into the fight, and we're not backing down. We continue to gain in credibility."-- Darl McBride, 2003-08-14

"The silent majority is behind SCO, and they're hoping that SCO prevails in the end. It gives other companies the ability to monetize their intellectual property."-- Darl McBride, 2003-08-14

"There are two major operating systems in play around the world--Unix and Windows. Microsoft owns Windows, and we own Unix."-- Darl McBride, 2003-08-14

"We're cautiously optimistic," he said. "We've done a lot of models on this [Linux licensing], and the models are pretty exciting."-- Darl McBride, 2003-08-14

"We've felt from Day 1 in this case that building your [business] on the GPL is like building your headquarters on quicksand," McBride said. "Everyone is terrified that their intellectual property is going to get sucked into this GPL machine and get destroyed."-- Darl McBride, 2003-08-14

Wednesday, a spokesman said Microsoft thinks "the industry would benefit" from a court ruling on the GPL.-- Microsoft PR, 2003-08-14

The SCO Group, Inc. encourages its directors and executive officers to sell the stock held by them through plans designed to qualify for the protections provided by Rule 10b5-1 under the Securities Exchange Act of 1934.-- SCO PR, 2003-08-14

Eric Raymond, a free-software developer in Malvern, Pa., says he is concerned about the possibility that a judge could invalidate the GPL. Although he thinks that's unlikely, Mr. Raymond says free-software advocates have created an alternative license that they believe would survive court challenge. Mr. Raymond says the potential new license has won a powerful backer: Linus Torvalds, the Finnish developer of Linux, who has agreed to use the alternative license for Linux if necessary.-- Eric S. Raymond, 2003-08-14

"You really have a choice," Stowell said. "You can stand up and do something about code that has been mishandled by the open-source community, or you can let them roll you over. We chose to stand up and fight."-- Blake Stowell, 2003-08-14

"Darl McBride is a very pragmatic person. You can be sure he weighed all the risks before he set forth upon this course," she said. "There is no way he didn't know the gamble he was taking. And in this case, it really is somebody betting the company on one huge gambit or roll of the dice."-- Laura DiDio, 2003-08-15

"For large enterprises, particularly in vertical markets, such as financial services, legal indemnification is a requirement, not an elective," DiDio noted.-- Laura DiDio, 2003-08-15

But, said IBM spokesperson Trink Guarino, "SCO has yet to show us evidence that we violated our agreement with them."

"We withdrew Dynix/ptx and the associated hardware from the market long ago, long before the lawsuit was filed," she told NewsFactor. "This appears to be yet another attempt by SCO to generate press coverage."-- Trink Guarino, 2003-08-15

"Someone who understands the GPL license may actually say [SCO] was in violation of that license because if you ship the product, you're required to make the source code available," Kusnetzky said.-- Dan Kusnetzky, 2003-08-15

"They are supposed to be a Unix software company. Look at the Unix revenue stream -- it is declining."

[...] "One cannot hope to have long-term relationships with customers and/or suppliers once you threaten them."-- Dan Kusnetzky, 2003-08-15

For SCO, the legal battle with IBM is a "bet the company" endeavor. "They face some pretty severe challenges, because the licensing is based upon a presumption that they will win the court case with IBM," Kusnetzky said.

"There is only a finite window of time where this current strategy could work," he said, "and that time is the time of uncertainty prior to it being settled in court."-- Dan Kusnetzky, 2003-08-15

"The magnitude of our SCOsource licensing opportunities and our confidence in the SCOsource revenue pipeline is growing each quarter,"-- Darl McBride, 2003-08-15

"We have very strong capabilities to fight the legal fight to whatever level it has to go,"-- Darl McBride, 2003-08-15

"How long do they really think their $3.1 million will last in the courts?" he said. "They are like a little mouse flipping off the eagle, and in this case the eagle has the law on its side," Perens said.-- Bruce Perens, 2003-08-15

But SCO's Stowell said that "We gave them 60 days to secure the contributions from Dynix/ptx, which was a breach of contract, and they chose not to do anything.

"So by the terms of our contract we terminated their license."-- Blake Stowell, 2003-08-15

"If Linux is going to take its place as an enterprise server and desktop operating system alongside Unix and Windows and Netware and Apple Macintosh, it has got to be certified ready and worthy not just from a technical standpoint but from a business standpoint,"-- Laura DiDio, 2003-08-18

"The thing about Linux is, you can talk about a free, open operating system all you want, but you can't take that idea of free and open and put it into a capitalist system and maintain it as though it is some kind of hippie commune or ashram," she said in a phone interview from her home in Massachusetts. "Because if you can do it like that, at that point I'm like, 'Pass the hookah please!'"-- Laura DiDio, 2003-08-18

DiDio did not sign an NDA to see SCO's code -- doing so is against the Yankee Group's policy -- but she says she did give the company her word that she would not violate the terms of the agreement. It is not clear whether she was shown the same code that Taylor was shown, but she was slightly more impressed by what she saw. "It appeared as though the Unix System V code" -- that is, SCO's code -- "complete with the developer notes had been copied and pasted right into Linux," she said. "OK now, that said, that is not empirical proof of anything. It's just what it looked like to me, and they showed us snippets of things, so I can't state with absolute certainty what it meant. But what I came away thinking was that if this is what it appeared to be, then SCO has a credible case."-- Laura DiDio, 2003-08-18

If IBM and Red Hat refuse to indemnify their customers, they're not necessarily saying they believe their customers are at risk; "they're saying that there are unknowable things in the world -- including potential intellectual property issues -- and for them to stand up and offer a potentially open-ended indemnification would be fiscally irresponsible," he says. "I think executives and lawyers get very nervous about indemnification clauses."-- Gordon Haff, 2003-08-18

SCO could also go after end users who are improperly using Linux for actual damages and seek an injunction to prevent further usage of the infringing material, Heise said, adding that this is playing out as the case of the century as it looked at rights, copyright and usage in this Internet and Web age.

[...] By selling Linux itself, SCO has not assigned all of its copyright ownership to the GNU General Public License. "SCO did not put a copyright into the GPL and authorized the usage of that code in Linux," Heise said.-- Mark Heise, 2003-08-18

"In a nutshell, this litigation is essentially about the GNU General Public License and all it stands for. That license has not yet been challenged or tested in court, but it is now going to be. We are also firmly and aggressively challenging the notion that Linux is a free operating system," McBride said.-- Darl McBride, 2003-08-18

"The past year had been much like a Bond movie, with attacks and counter attacks, but in the end Bond never dies," he said to applause.

[...] "We have tripled our cash position over the past four months. SCO is actually going into business, not out of it, and we have turned the company around. We are proud of that, and the future going forward is bright. We have no long-term debt, cash balances are improved and we have reduced costs," he said.

[...] "Is SCO going out of business? No, we're going back into business. We will also increase shareholder value over the next year," McBride concluded.-- Darl McBride, 2003-08-18

"The very DNA of Linux is coming from Unix," he said.

"The attacks will continue, and we will fight back. We are on a hill, and we intend to fight this until we have it beat. We are not going away," McBride said, adding that the question underpinning SCO's actions is whether software should be free.

Free software "will have a negative impact on us all. When the list price is zero, the margin doesn't matter. SCO is fighting for the silent majority, and what happens here will affect you all," he said.

While the notion of an open-source community is a "good idea; when companies step across contractual lines and even totally erase the line, then we have a huge problem. In a nutshell, that is what has happened here," McBride said to loud applause.

[...] "After attacking us, Novell's CEO [Jack Messman] was then irate that we had not told him there was an amendment to the contract between us that clarified our copyright ownership of Unix. He seemed to believe that we knew about it but weren't telling them so they could attack us and look foolish. Go figure," he said.-- Darl McBride, 2003-08-18

"They have found already a mountain of code," he said. "The DNA of Linux is coming from Unix."-- Darl McBride, 2003-08-18

"We are in the process of contacting them about coming into compliance and taking a UnixWare license from us. If they refuse to do so, we will sue them directly and see them in court,"-- Darl McBride, 2003-08-18

"We have been pushed into a corner, and we will fight back," he said. "We find ourselves in the middle of the battle of the century and will continue to be subject to attack. There are rumors of pies in the face for McBride and [senior vice president Chris] Sontag here," he said, quipping that there were also rumors of SCO protesters on the Strip carrying signs saying "SCO to Hell."-- Darl McBride, 2003-08-18

"We will take legal action against any company that violates our intellectual property. We have no fear about going to court as we have nothing to hide. The sooner the court hears and rules on the issues in this matter, the better for us," he said.-- Darl McBride, 2003-08-18

"We're fighting for a right in the industry to make a living selling software," McBride said. "The whole notion that software should be free is something SCO doesn't stand for. We have drawn the line. We're supposed to be excited about that and we're not."

[...] "I would argue that you will come to an understanding that the thing we're fighting for is same thing you're going to be fighting for. If you're a reseller, when the list price [of a Linux product] is zero, the margin doesn't matter. That's where it goes. We are fighting a battle that will have an impact for all of you, for all those with IP."

[...] "This is a huge play around IP," he said. "Globally, it's not just about Red Hat and IBM. There are a lot of issues around IP with music, and in Hollywood. We are in the software industry having these issues and this can have a significant impact going forward. The evidence we have is strong."-- Darl McBride, 2003-08-18

"We're fighting for the right in the industry to be able to make a living selling software," McBride told the audience. He compared this right to the ability "to send your children to college" and "to buy a second home."-- Darl McBride, 2003-08-18

Big Blue was "hoping the matter would just go away. We expect them to throw everything they can at us before finally coming to the table to negotiate a settlement. Their countersuit is just part of that," he said.-- Darl McBride, 2003-08-18

I personally haven't sold any shares [laughter]. Look, Red Hat executives have sold over 500,000 shares just since January. [Other SCO execs] sold shares to offset tax losses but does not know more than that.-- Darl McBride, 2003-08-18

I've talked to him [Linus Torvalds] via e-mail. He's very pragmatic and tends to be a racehorse with blinders on. ... He doesn't want to know about IP or [commercial issues]. He readily admits that IBM has put a lot of code in Linux and says if you want to pursue it [legally], go ahead. But I said to him, 'I appreciate you didn't create the problem, but you have inherited it.' But he won't sign an NDA.-- Darl McBride, 2003-08-18

That's like if someone comes into your house while you're sleeping, takes your jewels, and as you start chasing them down [to retrieve your property], and now they want to say you're the one doing the bad thing.-- Darl McBride, 2003-08-18

The Canopy Group [of Utah] is an investment company. Those are just ignorant statements about SCO's business. Hundreds of customers like and use SCO's Unix products.-- Darl McBride, 2003-08-18

They're putting this on a [slow, legal] path. But customers have been putting pressure on IBM to get this resolved. This is not a case IBM can get knocked out on--they'd be filing motions to dismiss the case [if they thought they could win]. Our case is up to $3 billion--they'd have to come up from a few hundred million dollars to settle. Every month we keep finding more and more [Linux code that violates our Unix System contract]. We'd want a settlement and royalty [on Linux] going forward.-- Darl McBride, 2003-08-18

We cleaned up the list. We had 16,000 names in our database, but about 5,000 names were marketing fluff that we sent materials to. This is the real number.-- Darl McBride, 2003-08-18

We tried to move this along, but IBM kept asking for delays. Now with the counterclaim and patent infringement, it could go even longer. IBM can put this on a slow track [with additional legal moves]. But IBM might be throwing hard balls to [get ready] for the soft pitch [to settle].-- Darl McBride, 2003-08-18

"Of course, Heise's statement is nothing but moonshine, based on an intentional misreading of the [US] Copyright Act that would fail any law school copyright examination."-- Eben Moglen, 2003-08-18

"I think that's the real problem of the SCO lawsuit is that it raised all these concerns," he say. "A company or a product has to deal with fear -- fear exploited by its enemies, its competitors. This fear has to be explained away by the company. What we have to do is tell people, 'Look, software is written by human beings and human beings do things -- and we are undertaking a process to minimize risks.'"-- Lawrence Rosen, 2003-08-18

"This is unlike the big debate that's going on in music," he says. "Remember, you're not an infringer just because you played a piece of copied music -- you're an infringer because you copied it or distributed it. With Linux, you're typically just using it, not selling it or copying it. If I'm just using it, how am I infringing?"-- Lawrence Rosen, 2003-08-18

"Make no mistake, SCO will continue to look for ways to create fear, uncertainty and doubt -- FUD, not facts, remains the focus of SCO's efforts," Bob Samson, an IBM vice president, wrote. "As the lawsuit continues, understand that the industry will resolve it. In the meantime, if you get questions, as always, send them to this ID or contact your local counsel."-- Bob Samson, 2003-08-18

"A number of entities have violated contracts and contributed inappropriate content into Linux," Sontag said.-- Chris Sontag, 2003-08-18

"I can understand one or two lines being in common," said Sontag, who is charged with maintaining the company's intellectual property rights surrounding Unix. "But when you're talking about this level of variables being the same?the comment sections all being the same, it's problematic."-- Chris Sontag, 2003-08-18

"We have an improbable Linux development process. The current 2.5 kernel contains features and functionality that took years and years to be developed in Unix. With Linux we've seen it develop from a baby to a race car driver in three or four years," he said.

[...] Sontag said Linux customers have several choices: stop running Linux or scale back to version 2.2; find another platform that has the appropriate licenses and usage rights; or pay SCO a licensing fee to run Linux in binary form with the appropriate IP from SCO.

"We have a very strong case, we have the evidence, we have the contracts and are confident of our position and the rights to defend ourselves," Sontag said.-- Chris Sontag, 2003-08-18

"We have rocket scientists who have applied their spectral recognition and pattern analysis to software, which has yielded amazing results. We have found needles in the Mount Everest-sized haystack," Sontag said.

[...] Turning to derivative works that have found their way into Linux, Sontag said these include NUMA (non uniform memory access), Read Copyright Update (RCU), Journal File System and schedulers. "A number of entities have violated their contracts and contributed inappropriate code to Linux. That's how Linux has advanced so quickly and found its way into the enterprise so soon," Sontag said.

"We have an improbable Linux development process. The current 2.5 kernel contains features and functionality that took years and years to be developed in Unix. With Linux we've seen it develop from a baby to a race car driver in three or four years," he said.-- Chris Sontag, 2003-08-18

"I think they've got a very firm case," he said, after looking at the code. "It's not just one line. It's huge chunks."-- Neil Abraham, 2003-08-19

"Taking out that code would be like trying to take out the middle 30 floors of a 60-storey building. The top floors will fall and crush those below," he said.-- Darl McBride, 2003-08-19

"We are not asking you to get in our shoes," he said. "We are fighting the battle for you."-- Darl McBride, 2003-08-19

"We have not built in any refunds in our licensing model. The product is there and it's being used," he said.-- Darl McBride, 2003-08-19

"Even if there is literal copying, you'll have to say, 'What's the source of the code?'"-- Stuart Meyer, 2003-08-19

"It's compelling," he said. "Some people were either extremely sloppy, or copied and thought no one would go after them."-- Don Price, 2003-08-19

"Given the nature of this case and that there may be a significant period of time before it's resolved and that people were clamoring to see it, we decided to show a few pieces of evidence," said Chris Sontag, senior vice president of the SCOsource unit, which is charged with protecting SCO's Unix-related intellectual property.

As of the end of the day on Monday, more than 150 people had seen the code presentation, which the company said includes a small portion of the infringing code it has found so far. Sontag said the company has uncovered more than a million lines of copied code in Linux, with the help of pattern recognition experts.-- Chris Sontag, 2003-08-19

"This shows 80 lines out of 100 that are completely identical to System V code. This should not be in Linux," said Chris Sontag-- Chris Sontag, 2003-08-19

When asked for a comment this morning, Linus Torvalds had this to say about McBride's claim of a million lines of SCO code in Linux: "He's lying."-- Linus Torvalds, 2003-08-19

"I want to see the code myself just to substantiate the claims SCO is making, so when I talk to my customers about the credibility of the lawsuit, I can say I saw it for myself," said Ungetti, whose company is a reseller for SCO. "If they're interested in using Linux, they're concerned they may be adversely affected; my SCO customers are concerned that if the company loses the lawsuit, it may be out of business."

[...] "The spelling errors and comments (copied into the code) are the real kicker. To me, that's the nail in the coffin," Ungetti said.-- Bob Ungetti, 2003-08-19

"That's a problem for SCO," he told TechNewsWorld. "They need the uncertainty. If they are too specific, the problem will get fixed."-- Phil Albert, 2003-08-20

"Unix is an old operating system, so it's been around a while, but that doesn't necessarily mean SCO has less of an issue with it," said Albert. "The argument is not that SCO created these portions; even if they didn't, they still own the copyright on it."-- Phil Albert, 2003-08-20

"It's almost nonsensical to think the legal domain could keep up," he said. "To think that there should be a level of oversight to something so fast-moving, creative and dynamic is pie-in-the-sky thinking." To hold software activity hostage by a series of legal maneuvers "doesn't seem possible," he added.-- Dana Gardner, 2003-08-20

Yankee Group senior analyst Dana Gardner told TechNewsWorld that SCO's code revelations are simply part of a public-relations campaign that mirrors the software company's legal campaign, which might take years to resolve.

Gardner said SCO is showing enough code to pique the interest of the industry but not enough to allow a remedy to the alleged copyright infringements. Some have said it would be relatively simple to dispense with the SCO code or any of the modules that use it if the industry knew which lines were in violation.

"It seems as though they're trying to have it both ways," he said. "They're claiming that they're being injured to the tune of $3 billion plus, but they can't show you where it hurts."-- Dana Gardner, 2003-08-20

"That is a big challenge for them," Gillen said. "Like it or not, they really are trying to use scare tactics to get customers back. They don't see it as scare tactics," but many users feel they're being "coerced into a decision that they're not ready to make."

"Arguably, (users) are being forced to become a SCO customer," he said.

[...] "I don't know if that's going to necessarily turn the market around for them," he said.-- Al Gillen, 2003-08-20

"End users are improperly using this copyrighted material, and under copyright law SCO is entitled to damages and injunctive relief," he said.-- Mark Heise, 2003-08-20

"The fact that SCO was selling Linux didn't convert all of its copyrights," he said. "The fact that this stuff was in the Linux kernel wasn't known by SCO until recently. You can't inadvertently, accidentally give away your copyright," Heise added. "The GPL says that the legal copyright owner has to assign copyright to the GPL. SCO hasn't done that."-- Mark Heise, 2003-08-20

"Sometimes a relationship with Microsoft can be a double-edged sword," he said. "It's a very interesting web that is woven with all the intricacies of a Microsoft relationship."-- Jeff Hunsaker, 2003-08-20

"The reason we tried to elevate the discussion beyond SCO versus IBM or SCO versus Linux is because when you personalize the fight for partners and customers they realize that the notion of free software is going to put out of business a number of companies."-- Jeff Hunsaker, 2003-08-20

"We just do not believe that enterprise customers can bet their business on any operating system that is based on the GPL," he said. "We believe this will all come to a head and something will break with the GPL."-- Jeff Hunsaker, 2003-08-20

"I think we have an incredible opportunity. The same way Linux is trying to catch up to us (with enterprise-mandated features), we can get ahead of them."-- Darl McBride, 2003-08-20

"The music business has lost billions of dollars because of music file sharing on the Internet," he said. "That has the effect of destroying intellectual property.

"What fundamentally is on the line here is whether the market's going to move into free software or not," he added. "The whole notion that software should be free is something that SCO doesn't stand for. We've drawn a line."-- Darl McBride, 2003-08-20

"There's a bouncing ball that ends up in the hands of customers because of the GPL," said McBride.-- Darl McBride, 2003-08-20

"There's going to be a lot of attacks," he said. "Hang in there and go with us."

"Is SCO going out of business?" McBride asked. "No, SCO's going into business."-- Darl McBride, 2003-08-20

"This is a hill that we will defend," said McBride. "We will die on this hill before we will go away... but our plan is not to die."-- Darl McBride, 2003-08-20

"Very clearly, we've got this heritage of Unix" [...] "It's like a house that hasn't been maintained in a few years. We're going to come back and spruce this place up."-- Darl McBride, 2003-08-20

"We're fighting for the right in the industry to be able to make a living with software," he told the company's partners and customers. "We are fighting battles that will impact everyone. We're protecting IP not just for us, but for you."-- Darl McBride, 2003-08-20

"We've been holding our tongue on the GPL until IBM put it on the table," said SCO's president and CEO, Darl McBride. "I predict that the GPL is not stable in its current form because copyright law pre-empts the GPL."-- Darl McBride, 2003-08-20

"I think that these are probably the best examples that SCO has to show and they're awful," said Perens. "They would not stand up for a day in court."-- Bruce Perens, 2003-08-20

"We're the owners of the Unix (AT&T) System V code, and so we would know what it would look like," he said. "Until it comes to court, it's going to be our word against theirs."-- SCO PR, 2003-08-20

"The vast majority of the code [in violation] is the derivative work from IBM, so that's a great place to start," Sontag stated. "We're talking about more than one million lines of code that can be remedied."-- Chris Sontag, 2003-08-20

"There is no warranty for infringement of intellectual property [in the GPL], so all of the liability ends up with end users."-- Chris Sontag, 2003-08-20

"Those who have chosen to ignore the license are more in a situation of potential willful infringement," Sontag said.-- Chris Sontag, 2003-08-20

``Their assertions are incorrect. The source code is absolutely owned by SCO,'' said Chris Sontag, general manager of the company's software licensing arm. ``In fact, SCO knows exactly which version of System V the code came from.''-- Chris Sontag, 2003-08-20

If, for example, their [IBM's] copyrighted materials are finding their way into the GPL, does that suddenly strip them of their rights? We don't think the GPL applies. We believe it is pre-empted by the federal copyright law.-- Mark Heise, 2003-08-21

We believe that although the GPL is being tossed into the fray, it is pre-empted by federal copyright law.-- Mark Heise, 2003-08-21

"Even though IBM looks like they're not really involved in it, they're very involved," he said. "From a PR standpoint, they're able to extract themselves from (the dispute), and so they throw Red Hat at us, they throw Novell at us, they have (Open Source Initiative President) Eric Raymond on their payroll. They have all these guys that they fund and then they just step back and watch the fracas go on."-- Darl McBride, 2003-08-21

"We have absolute direct knowledge of this. If you go behind the scenes, the attacks that we get that don't have IBM's name on them, underneath the covers, are sponsored by IBM," McBride said.-- Darl McBride, 2003-08-21

"You've got all of these guys and it looks like the whole world is coming against SCO. It's really IBM that has wired in all of these relationships," he said. "That's why it looks like they're sitting back and not doing anything. It's us fighting a whole bunch of people that they put on the stage."-- Darl McBride, 2003-08-21

"Are these their best examples?" open-source leader and well-known Debian developer Bruce Perens asked during an interview Wednesday. "Their examples are bogus."-- Bruce Perens, 2003-08-21

"In fact, SCO knows exactly which version of Unix System V the code came from and which licensee was responsible for illegally contributing it to Linux," said Chris Sontag-- Chris Sontag, 2003-08-21

To clarify, the code we showed in Vegas was Unix System V code that was copied line for line from UNIX into Linux. It was contributed by a UNIX licensee, which was not IBM. It was shown not to build our case against IBM, but it was shown to identify that there are issues with Linux. Linus can have his opinion of Darl McBride and what was shown, but ultimately, we will have to show our proof in a court setting and convince a jury that we have been wronged by IBM, not this other UNIX licensee that we showed the code from. That will be a separate issue. As the company that owns the UNIX System V source code, we think we're sufficiently qualified to identify this code.-- Blake Stowell, 2003-08-21

As a lawyer, I'm always hesitant to show anything, so I'm probably not a good person to ask. I think it really was the company feeling the need to educate the world. They had heard one too many times: "There's nothing there; this is ridiculous."-- Mark Heise, 2003-08-22

SCO has carefully thought out that a business resolution is the licensing agreement because SCO is no different than any other company in the United States. Business solutions are always better than litigation solutions. They want to resolve this on terms that are fair to the company, as well as the industry in general. If they can't do that, then they are going to court and they are entitled to receive substantial damages that are owed to them for material that was improperly used in the 2.4 version of the [Linux] kernel. Whether they are paid by IBM or by hundreds of other people, they are committed to making sure they are compensated for their valuable knowledge and copyrights.-- Mark Heise, 2003-08-22

What if, during the course of discovery or another time, you find that the code was originally under the GPL? SCO is not the one that put its copyrighted System 5 source code into the GPL. It was another Unix licensee that violated the terms of their licensing agreement.

Using that hypothetical [example], if Caldera put something into the GPL, with copyright attribution, the whole nine yards, they can't make the claim about what that thing is that they put in there. But that doesn't mean that -- well, let's use an example. Let's say you have a hundred files, and you put one of your hundred files under the GPL. That doesn't mean you've lost the rights to your other 99 files. So I don't think it's going to have an impact.-- Mark Heise, 2003-08-22

Why show the code? Why show the contracts? Why show anything? Because SCO is committed to educating people about their rights to ownership and allowing people, with their own eyes, to see what code is out there, because I think you've seen throughout a lot of the open-source media: "There's nothing to this litigation. There are no lines of code out there. They keep claiming there (are), but we don't believe that." We are addressing that. We're educating the public in general that, well, there is in fact infringing code, both direct line for line and obfuscated code, derivative works, non-literal -- it's there.[We] just don't want the rest of the world to believe that it's not [there], that this is some sort of smoke and mirrors. It's not.-- Mark Heise, 2003-08-22

"I do not dispute that this letter was distributed and that Caldera at the time allowed 16-bit, non-UNIX System V code to be contributed to Linux for non-commercial use", Stowell wrote in an e-mail interview.

[,,,] When asked for clarification on the "non-commercial" assertion, Stowell replied by e-mail, "That is what I was told by Chris Sontag."-- Blake Stowell, 2003-08-22

?They said they hired three separate independent teams of experts to analyze their code, including one from MIT, and that the findings appear to corroborate the fact that the code had been taken from Unix and put into Linux,? said Laura DiDio-- Laura DiDio, 2003-08-25

Paul Hatch, a SCO spokesman, wrote in a statement to The Tech, ?To clarify, the individuals reviewing the code had been involved with MIT labs in the past, but are not currently at MIT. Unfortunately, due to contractual obligations, we cannot specifically name the individuals.?-- Paul Hatch, 2003-08-25

"It's like a house that hasn't been maintained in a few years," McBride said. "We're going to come back and spruce the place up."-- Darl McBride, 2003-08-25

"It was kind of weird, because they told me they had hired a team at MIT," said Robert McMillan, a correspondent for the IDG News Service. "And then they kind of backpedaled."

?Chris Sontag told me that [they] had a group of mathematicians ?who were at MIT? working on this,? McMillan wrote in an e-mail after checking his notes. ?In subsequent interviews SCO said that these guys had been at MIT and were no longer there.?-- Robert McMillan, 2003-08-25

?We?re the owners of the Unix (AT&T) System V code, and so we would know what it would look like,? the company told McMillan and the IDG News Service. ?Until it comes to court, it?s going to be our word against theirs.?-- SCO PR, 2003-08-25

Blake Stowell, confirmed that ?at least one of the groups was a link to MIT?-- Blake Stowell, 2003-08-25

"He's [Bruce Perens] wrong, he doesn't have examples of the evidence. We do. He is trying to put a happy face on a problematic situation for the Linux community," Sontag said. "Try as they might to come up with arguments to bolster their position, the facts and everything we know are extremely strong in SCO's favor."-- Chris Sontag, 2003-08-26

"It was an example of our ability to find moderately changed or obfuscated code, it was not an example we are using in court," Sontag said. "If they want to go off and make a big defense on that, they are welcome to it."-- Chris Sontag, 2003-08-26

"The Linux GPL itself asserts that the valid legal copyright holder has to place a notice at the beginning of their copyrighted work, the source code, identifying the code and the GPL. It requires an overt action. SCO has not contributed its code, and as soon as we became aware of the copyright violation we suspended our distribution," Sontag said.-- Chris Sontag, 2003-08-26

"U.S. and international copyright law asserts you cannot inadvertently and accidently assign your copyright to someone else," Sontag said.-- Chris Sontag, 2003-08-26

"Raymond has basically said that the open-source community has to stop this," Stowell said.

[...] "We're glad he is encouraging the open-source community to stop the attacks," Stowell said, "although I don't think that Eric Raymond and SCO share the same ideas about open source and intellectual property."-- Blake Stowell, 2003-08-26

"There simply is no future outside of open source, with Linux front-and-center. Though the closed-source model will continue to work for certain areas of software (end-user applications, for example), open source will devour infrastructure software. Novell has realized this and is acting accordingly. Even Microsoft seems to get this. I can hardly attend an open source conference without tripping over a few Microsofties. Those that don't align themselves with the open source revolution will be destroyed by it. It's that simple."-- Matt Asay, 2003-08-28

"[I] was interested to see that SCO insiders [the other] week were selling SCO stock at greatly inflated prices. If in fact IBM has misappropriated and infringed SCO code, SCO shareholders will deservedly be handsomely compensated. If, however, we come to learn that SCO management is falsely creating turmoil in this struggling tech economy for the purpose of jacking and dumping their stock; SCO's legal troubles will be just beginning."-- John Ferrell, 2003-08-28

"While I can't predict for certain what actions SCO may take, I feel confident that SCO will not seek damages or loyalties from individual Linux users."-- Steve Hill, 2003-08-28

"This isn't the way I'd go about it, [handling the SCO case]" says Love. "But I hate the litigation shop label after all Ray Noorda's done."-- Ransom Love, 2003-08-28

"An IBM executive stood up and basically announced, 'We're moving our AIX (Unix) expertise into Linux, and we're going to destroy the value of Unix,' " says McBride, who contends that the statement alone was a violation of IBM's AIX contract. McBride says that's when they started digging deeper and uncovered the copied code.-- Darl McBride, 2003-08-28

"IBM has a vast reach to a large number of people in open source. IBM doesn't touch hundreds of thousands directly, but with their strong reach and influence to companies and people in the open source community, in particular Linus Torvalds and Eric Raymond, IBM gets its message out." He goes on to say that "Novell is trying to get in [the attack] by trying to co-coordinating with IBM along with Red Hat and SuSE."

Specifically, "companies have approached me and told me that IBM had tried to get them to stop working with us, even companies that are competitors to IBM. We've also had customers come up and say IBM will penalize us if we keep working with SCO." McBride explains that, for the most part, these haven't been SCO resellers or customers, but mostly software developers. He adds, "We're in the discovery stage and this will be part of the filing and we will show direct information that IBM is the source of some of these attacks coming at us."-- Darl McBride, 2003-08-28

"If IBM drags the case out into several years, we will consider seeking damages from Linux customers," says McBride.-- Darl McBride, 2003-08-28

"It's interesting to wake up in the morning because you never know what will happen on a given day. You realize you're in the middle of the hurricane. I was brought in to run this company, and then when we decided to start protecting our IP, our first decision was whether we were going to fight or get taken out early. Since we made that decision to fight for our property rights, as we unravel the yarn, it just becomes bigger than you thought it could possibly be going in."-- Darl McBride, 2003-08-28

"We believe that Linux infringes on our Unix intellectual property and other rights," SCO's letter said. "We intend to aggressively protect and enforce those rights."

[...] "The business model of Linux distribution is broken; it's like the business model of the dotcoms. Running your company on Linux is like running your company on Napster."-- Darl McBride, 2003-08-28

"We have customers in two camps, those who respect intellectual property, and those who don't. We're setting the standard. The whole world doesn't spin around a free model. There's no free lunch."-- Darl McBride, 2003-08-28

?We're absolutely not going away, and they're not giving up, so we got a big problem,? says Mr McBride.-- Darl McBride, 2003-08-28

Immediately, he says, he started thinking about ?how to monetise our assets??ie, Caldera's rights to UNIX. Roughly as apes and humans allegedly have common ancestors, several operating systems can trace their lineage to UNIX, including Linux. Sure enough, says Mr McBride, he soon found ?massive and widespread violations? of Caldera's intellectual property in the Linux code. At a more general level (and surprisingly for a Linux distributor), he found the entire free-software trend ?communistic?, he says: ?We don't get the whole free-lunch thing.?-- Darl McBride, 2003-08-28

The Linux battle, however, ?is not about suing but about doing the right thing,? Mr McBride insists.-- Darl McBride, 2003-08-28

To McBride, the real issue is "the future of IP rights in the 21st century."-- Darl McBride, 2003-08-28

"Here are these people who claim we are pirates but refuse to say where and how"-- Bruce Perens, 2003-08-28

"In order to win in court, particularly with a jury trial in Utah, baiting the community into DoS attacks, protests, etc., merely serves to substantiate the case that the community wants to destroy SCO financially and the jobs that come with it. With the loss of jobs in the IT sector, particularly in Utah, where Novell, Caldera/SCO, and others have struggled as of late, a jury will likely be sympathetic to SCO's problems even if the community is able to dispute SCO's allegations of theft." In short, "SCO is the 'troll' and the community has been keeping it well fed."-- Drew Spencer, 2003-08-28

"My sense of SCO's action of late is that it has formulated a strategy by which it intends to extract the most value it possibly can from the IP it purchased when Caldera bought SCO in order to either liquidate it (as occurred with Caldera first generation) or re-launch the company as something totally different. With the R&D expense involved with trying to keep two operating systems up-to-date with the hardware development and what amounts to the destruction of any business development opportunities with the hardware vendors and ISVs, it's probably pretty safe to say that SCO doesn't want to be in the OS business anymore."-- Drew Spencer, 2003-08-28

"I once worked for a company involved with the Open Source community. I enjoyed the time that I worked there trying to build a business around contributions from a development community. I joined that company when the 2.2 kernel was in wide distribution." But, he says, "Since coming to SCO and reading over the contracts held with other licensees such as IBM, Sun, HP, and many others, I too have come to the realization that SCO intellectual property has indeed been contributed into Linux. I haven't been just drinking the SCO Kool Aid. I understand the company's case, I've read every word of each contract, every exhibit in our case, and I understand that there are people and organizations that have issues with our viewpoint. I believe in what we are doing in protecting our intellectual property. I hope at some point we can find a solution where SCO can be properly compensated for its IP and the Open Source community can move forward unhindered in creating great software."-- Blake Stowell, 2003-08-28

"there are some people -- press, open source companies, and opinion leaders, like Eric Raymond, in the industry who don't know what's going on."

"I don't find it frustrating. It takes a lot of work and I look it as a challenge. Every time the open source community fires back with an issue I have to reply and that takes up bandwidth on my side. [But] I think it's been a good exchange of opinions. I think each side understands the other's viewpoint now even if they don't agree with each other."-- Blake Stowell, 2003-08-28

"Dig into Canopy and you'll see we make much more money than we have in lawsuits. I'm in the business of growing tech companies, and if I need to litigate to protect them, I'll do that." Even if it means a rash of bad press, like the SCO case. "I've never worried about public image. I don't manage other people's money, we're self-perpetuating. Image has little impact, if any."-- Ralph Yarro, 2003-08-28

"People like to point out to me that we're in an odd location here in "nowhere Utah," says SCO chairman and Canopy Group President and CEO Ralph Yarro. "There isn't a lot of investment money in Utah, so we've created an infrastructure of companies that support each other. Cross-pollination between companies allows me to provide benefits - health plans, retirement plans - for my little start-ups so they can hire the best talent and stay competitive."-- Ralph Yarro, 2003-08-28

"No. SCO has never planned to sue Linux companies."

[...] "No. SCO has never made concrete plans to sue anyone."-- SCO PR, 2003-08-29

"Just because we aren?t ?planning? to sue Linux companies doesn?t mean we won?t. We tried to avoid suing Red Hat, but they seemed to bring the litigation upon us, not us upon them. Also, just because we are saying that we won?t sue Linux companies doesn?t mean that we won?t sue Linux customers".-- Blake Stowell, 2003-08-29

But what I find interesting is how it shows that the SCO people are having such a hard time with the truth. They've said several times that the code they have found is not "historic Unix" code and "not BSD" code, which they know you can't infringe, since BSD has been shown to be independent, and Caldera itself released the historic code in 2002. To counter the open-source people's contention that any shared code is likely of BSD or "ancient Unix" origin, [SCO has] claimed several times how it's "modern System V" code that they have clear ownership of. That's despite massive proof to the contrary, going back three decades.-- Linus Torvalds, 2003-09-01

If SCO can actually show code that is truly infringing, I and a lot of other people are going to figure out where it came from and remove the offending code. That goes without question. However, I clearly don't expect that to be the case. We expect to see more of the same: BSD code, or other code that is just commonly available to both parties, like the ancient Unix archives, or code that just looks similar because it is based on public standards.

So the main reason we want to see the allegedly infringing code is that we think it's likely that it's not infringing at all. And I'm certainly willing to back that up with a promise to remove any code they point to that we can't show is ours or open.-- Linus Torvalds, 2003-09-01

Q: SCO and its lawyers say that even if that were a solution, they would still want damages for the illegal use of their code in Linux until the "fix" was implemented. Who, they ask, would compensate them under this scenario? Your thoughts on this?

Hey, until they can be bothered to show something real, I don't think it's even worth discussing.-- Linus Torvalds, 2003-09-01

They are smoking crack. Their slides said there are [more than] 800,000 lines of SMP [symmetric multiprocessing] code that are "infringing," and they are just off their rocker. The SMP code was written by a number of Linux people I know well, so their claims are just ludicrous. And they claim they own JFS [journaling file system technology], too. Whee. They're not shy about claiming ownership of other people's code-while at the same time beating their breasts about how they have been wronged. So the SCO people seem to have a few problems keeping the truth straight, but if there is something they know all about, it's hypocrisy.-- Linus Torvalds, 2003-09-01

"How can copyright law pre-empt a copyright holder who says, 'I don't want to limit people's ability to reproduce?' " Boyle asked. "The GPL people are the people who own the code. They can do with it whatever they want."

Boyle said, however, that he knows of SCO's position only through newspaper and Internet accounts, and acknowledged that there might be more to SCO's position.

"From the outside, it appears so bizarre and so ridiculous that I fear their argument is being misstated," he said.-- James Boyle, 2003-09-02

"It appears to be a totally bizarre argument," said James Boyle, a professor at Duke University's law school (Durham, N.C.). "It's hard to imagine what they're thinking."-- James Boyle, 2003-09-02

"Privately, in meetings we've had with them, some very large companies in the IT industry have told us that they have a lot of problems with the GPL," said the SCO Group spokesman.-- SCO PR, 2003-09-02

"I can't see why a company would pay this, since it is all based on allegations and hasn't been proven in court," she said.-- Stacey Quandt, 2003-09-02

"SCO continues to use tactics of brinkmanship, and it is certainly possible that the companies that get invoices could become future defendants," she said.-- Stacey Quandt, 2003-09-02

"For one thing [replacing the offending code] doesn't solve the past problems," he said.

Red Hat and SuSe are also "significantly underestimating the size of the problem", said Sontag. "The amount of Unix code in Linux could be greater than 25%."

He also pointed out that only SCO has the right to look at its Unix code and it has no intention of allowing others such as Red Hat to review it.-- Chris Sontag, 2003-09-02

"We're not planning on...suing some commercial user of Linux from the start," he said. "We'll give ample opportunities to get the license before we do that."-- Blake Stowell, 2003-09-02

But Tuesday, SCO spokesman Blake Stowell said the company will begin the more active approach of sending invoices requesting payment to commercial Linux users, "probably some time this month."-- Blake Stowell, 2003-09-02

SCO's invoicing strategy "could backfire," DiDio said. "The danger for SCO is that they alienate those companies who might have been considering paying a licensing fee. This might be too pushy."-- Laura DiDio, 2003-09-03

The invoices "are an interesting gambit," Yankee analyst Laura DiDio told NewsFactor. Yet the company "cannot enforce" its payment demand, because its legal claim is still pending, she noted.-- Laura DiDio, 2003-09-03

"It's difficult for me to see very many corporations who are going to be willing to start shelling out money for licenses," said Illuminata Inc. analyst Gordon Haff. "One can imagine some companies with a modest degree of exposure finding that paying a few dollars is less potential hassle than dealing with potential exposure down the road. But risk averse as corporations are, one has to believe that this is a small number."-- Gordon Haff, 2003-09-03

In an effort to collect the licensing fees, SCO will invoice "known companies that are using Linux and who have been very public about their use of Linux," Stowell said.

The amount of the invoice "depends on the server installation" a given company has, he said, adding that the invoice amount will be based on the $699 per processor figure. Larger users will get a slight discount, he explained.-- Blake Stowell, 2003-09-03

The invoices will be sent out to "several thousand companies," SCO spokesperson Blake Stowell told NewsFactor.-- Blake Stowell, 2003-09-03

[...] SCO received over 900 telephone calls in the week after it went public with the licensing plan, and some of those calls have now begun turning into licensing deals, according to company spokesman Blake Stowell. The company has signed up at least one additional customer since it sold its first IP License for Linux on Aug. 11, he said.

Stowell declined to reveal the identity of the new customer or say how many other customers SCO may have signed up, but he did say that almost all of the company's 100 sales representatives are now spending time selling the Linux license, and that SCO is readying thousands of invoices that it plans to send to Linux users worldwide before Oct. 15, when the per-processor price of an IP License for Linux will double to $1,400.

"Over the last month or so, employees in our company have been doing research on various companies using Linux , and that's what they've based who they would send invoices to," said Stowell.

[...] "For the most part, these are big business types of customers," said Stowell. "Initially it will start in the U.S., and will make its way internationally."-- Blake Stowell, 2003-09-03

?It?s foolish for anyone to go out and buy licenses for Linux because there is a very good chance that you won?t have to at all,? he says. ?And if you do have to, it isn?t going to be any more than it is now. So why bother??-- Bill Claybrook, 2003-09-04

'But Linux is an unauthorised derivative of Unix and there is significant Unix code in Linux ... some 1,000,000 lines,' he said.-- Kieran O'Shaughnessy, 2003-09-04

'It's not a pump-and-dump act,' O'Shaughnessy said. 'SCO's contention is that ... the contribution of Unix code into Linux has significantly damaged its [SCO's] business.'-- Kieran O'Shaughnessy, 2003-09-04

?If you think about how little you pay for Linux as it is, $699 for a box just to not have to deal with it is not that bad,? says an IT executive, who asked not to be named. ?For me, the issue is it?s an annoyance.?

The user says he hasn?t offered to buy an IP license for Linux, but if an invoice arrived on his desk he?d pay. ?For anything less than $5,000, I would just pay them to make it go away,? he says.-- Undisclosed SOURCE, 2003-09-04

"If a company looks at that [SCO's code presentation] and still refuses to take out a license it's very possible that it would be at that point that we would take legal action," he says. "And that's when it would probably be proven in a court of law."-- Blake Stowell, 2003-09-04

"It's not the user's fault" that the licensing issue has arisen, but users are caught in the middle, Stowell added. "It's the [software] distributor's fault and the open-source community's fault for allowing it to get in there," he said.

Even if SCO were to eventually lose the IBM case, customers who don't pay the SCO licensing fee requests could be sued separately, Stowell said. "There will most likely be some kind of lawsuit," he said. "I don't think that SCO is completely dependent on the SCO/IBM case to prove that Unix is in Linux."-- Blake Stowell, 2003-09-04

?The trial specifically just addresses Unix derivative code that IBM contributed to Linux,? he says. ?This [SCO Intellectual Property Linux License] would certainly cover that, but in addition the license also covers line-by-line copying of direct Unix System code from Unix into Linux. We?ve never accused IBM of direct line-by-line copying.?-- Blake Stowell, 2003-09-04

?We felt that the document in question on our German site, which was written in English, was an oversight on our part and we are currently deciding whether to appeal the fine or to just pay,? Stowell says.-- Blake Stowell, 2003-09-04

The invoices, which will be sent out sometime this month or next, ?help formalize the process of buying a license,? says SCO spokesman Blake Stowell. [...]

?We are doing a lot of research on who?s using Linux and where they?re using it. Beyond that I don?t have any other details as to how we may invoice companies,? Stowell says.-- Blake Stowell, 2003-09-04

"Even if they win -- which first of all seems fairly inconceivable -- one can't really see all the Linux users ponying up and paying SCO money," Haff said. "I think, more likely, they'd stop using Linux.

"Much of Linux's appeal is that it's cheap," he noted.-- Gordon Haff, 2003-09-05

"They certainly didn't undertake what they're doing to win a popularity contest," Illuminata analyst Gordon Haff told NewsFactor. "Did they realize how unpopular they'd be? Hard to say," he added. "But they must have realized that there was going to be a pretty strong backlash from this."-- Gordon Haff, 2003-09-05

"They are supposed to be a Unix software company. Look at the Unix revenue stream -- it is declining."

[...] "One cannot hope to have a long-term relationships with customers or suppliers once you threaten them."-- Dan Kusnetzky, 2003-09-05

O'Shaughnessy suggested the report of an invoicing program "did not ring true," saying it contradicted strategy discussions he had had with his counterparts in the U.S. just two weeks ago. The company had, he said, no plans to distribute invoices to commercial -- or non-commercial -- Linux users in Australia.-- Kieran O'Shaughnessy, 2003-09-05

"Based on our discussions with the company, we believe that one of the next steps SCO may take will be to sue a Linux customer resulting in additional anxiety and confusion in the Linux market."-- Soundview STAFF, 2003-09-05

The SCO Group is supposed to start sending out "thousands" of bills this month demanding payment of what is effectively a Linux tax, according to SCO spokesman Blake Stowell. At least that's the plan, he said. It may not come together at all or it may not come together by the end of this month, he said.-- Blake Stowell, 2003-09-05

The first customer, SCO revealed, has two Linux servers, which got SCO US$1400. A month later, another customer purchased the Linux licenses. We don't know how many servers that customer had, but it's likely not a lot, or SCO would have mentioned it. Guesstimating heavily and figuring a generous five servers, which gives SCO a grand total of US$4900 of acquired license fees in a month's time.-- Brian Proffitt, 2003-09-06

"I am grinning a grin that should frighten the thieves and liars at SCO out of a week's sleep."-- Eric S. Raymond, 2003-09-08

"I have called SCO three times, and each time, an operator took my contact info and said I would get a call back. But I have heard nothing. The operator said there were legal concerns that have held up the release of the licenses," Sandine said. "I was told that as soon as the concerns are resolved and the licenses are released for purchase, the sales staff will begin returning calls."-- Gary Sandine, 2003-09-08

"Since we announced that the license was available, we have been taking orders from various companies and customers interested in purchasing them," he said. "As of Tuesday [Sept. 2], we actually began making the license available. Selling it and mailing it to someone is not something we've actually done as yet, but as of today we are able to do that."-- Blake Stowell, 2003-09-08

"[While] we are not hellbent on suing someone, we are willing to take that step against any company that is not willing to comply with our copyrights by taking out a license," he said.-- Blake Stowell, 2003-09-08

Stowell said SCO was careful in crafting the license to avoid giving users the impression that "we were giving them a Unix license with carte-blanche availability to do whatever they wanted to with the code." SCO also wants customers to be aware that the license is a binary, run-time-only license to the Unix code found in Linux. It does not give them the right to change that code or contribute it to other programs, Stowell said.-- Blake Stowell, 2003-09-08

"Nobody's really liable, so to speak, for the code that comes out," Claybrook said. "I think that people should be accountable. You shouldn't just accept open-source software under the [General Public License] as being all right."-- Bill Claybrook, 2003-09-09

"People will be trying to do something about [the issues]," Claybrook said. "They are going to start looking at what code goes into Linux and other open-source software, a lot of which is in heavy use."-- Bill Claybrook, 2003-09-09

"You've got to have some checks and balances to know the code you're using with the open-source community is okay; you have to know more about it," Claybrook said. "That sort of flies in the face of the open-source idea, but now there's enough code in real, serious products in use that it's needed."-- Bill Claybrook, 2003-09-09

The Lindon, Utah, company says its blueprint for Unix software is embedded illegally in versions of the Linux operating system, an open-source system that's rapidly growing, largely at the expense of the company's Unix software.

The company sent shock waves through the ranks of Linux users in March when it sued IBM for $1 billion, charging it with taking parts of Unix code and introducing them into Linux.

IBM filed a countersuit, asserting that SCO has no right to extract licensing fees for the software.

Until May, SCO was a distributor of Linux. Its Linux version included code contributed by many individuals and companies, including IBM.

Company officials last month expanded their claim, demanding that users of the freely distributed system pay $699 a year for each PC running Linux or face lawsuits.

Officials in mid-August said the company swung to a profit in its fiscal third quarter as revenue rose 30%. They said they expected fiscal fourth-quarter revenue to increase from a year ago.

"The company has the ability to earn in excess of $3 a share over the next couple of years," Cohen said. The stock, which opened Tuesday at $16.52, is inexpensive, he said.-- Jonathan Cohen, 2003-09-09

"The bottom line is that SCO has no basis for a claim against us,"-- SGI PR, 2003-09-09

"I think Darl McBride wants to show the open-source community he can be reasonable and that, hopefully, we can meet our objective of protecting our intellectual property while at the same time allowing Linux to go on," Stowell said.-- Blake Stowell, 2003-09-09

"This is an issue that's not going away for the open-source community," says Bill Claybrook, the Aberdeen Group's open-source research director. "I'm not a big fan of the way SCO Group is doing what they're doing, but I thought Darl did a good job of outlining things in the GPL model that people have been concerned about."-- Bill Claybrook, 2003-09-10

"This is going to hurt the open-source community's credibility as a whole," DiDio says. "I can't attest to SCO's claims, but they have the right to file a lawsuit."-- Laura DiDio, 2003-09-10

"They have not made a case. We want them to show us the code, line by line, and we will fix it. There will be no negotiations until they do that," he said.

[...] "We view SCO's conduct as intolerable."-- Eric S. Raymond, 2003-09-10

"What we found was that the infringements went way beyond just IBM's involvement and that other parties had contributed things improperly... in going through the process, we counted over a million lines of code that we allege are infringed in the Linux kernel today out of a total code base of five million," added McBride.

Nevertheless, IBM was the source of most of that allegedly tainted code, said McBride: "The vast majority of that did, in fact, come from IBM and when we say IBM, the majority of that actually came from IBM's acquisition of Sequent."-- Darl McBride, 2003-09-11

People ask why we haven't sued Red Hat. We haven't sued Red Hat because then the GPL [general public license] grinds to a screeching halt, and all shipping distributions of Linux must stop. This whole process is going to make Linux and open source stronger with respect to intellectual property. Today, there's no vetting process to make sure the code that goes into open source is clear. We're trying to work through issues in such a way that we get justice without putting a hole in the head of the penguin.-- Darl McBride, 2003-09-11

The simple thing we would like to see going forward is that there's a business model around Linux that allows companies like ours to be able to get compensation when their IP is showing up inside Linux. Secondly, that there would be a process with Linux to ensure that the [code] that is going in there is valued and IP-protected.-- Darl McBride, 2003-09-11

The world is moving to a Unix operating environment, and SCO owns the intellectual property rights to it. When you snap off a branch from the Unix tree and try to graft it onto the Linux tree, that's out-of-bounds. It's time to step up and claim the ownership rights that are rightly ours.-- Darl McBride, 2003-09-11

We are staring down the barrel of hundreds of thousands of lines of code that enabled Linux to go from a mom-and-pop operating system to a big-time, enterprise-class OS at Fortune 100 companies. It's really interesting to see what happens when people see the code, when they see how blatant the copying is.-- Darl McBride, 2003-09-11

We've stepped up with 80 direct lines of code and derivative works that amount to thousands of lines - and we're saving the rest for the courtroom. How many clothes does Winona Ryder have to steal before it's not OK? You get to a certain point where property rights are either valuable or they're not.-- Darl McBride, 2003-09-11

"They continually seem to be in denial on a lot of these things, and as long as they are they won't be in a position to negotiate or to come to an amicable conclusion," he said.-- Blake Stowell, 2003-09-11

"They keep saying we are not showing the code, that we are being deceptive," Stowell said. "But we have shown it, literally, to hundreds of people now. . . . We have been very forthcoming. The programs we have identified make up about 20 percent of Linux."-- Blake Stowell, 2003-09-11

On the SCO Group's actions against open source, McCabe said IT managers in Australia are not losing sleep over the company's threats. "[If anything] SCO has cut their own throats by threatening their customers," said McCabe.-- Bruce McCabe, 2003-09-15

"It's not the same SCO that we started doing business with 18 years ago."-- Erik Monninkhof, 2003-09-15

"This response . . . is really them not wanting to get to the truth in this manner, and really delaying our ability to get to the truth," Sims said.

SCO's arguments for dismissal also struck the attorney as "ironic, given that before we brought this lawsuit there was something in the press from SCO almost daily about Linux infringing on [SCO Group's] rights.

Our goal is to get this resolved as soon as possible," Sims added. "We will let the truth come out in the proceedings and not try to battle this out in the press."-- Bryan Sims, 2003-09-17

"We really view Red Hat's suit as being unnecessary," SCO spokesman Blake Stowell said Tuesday. "Our only argument is with IBM; we have no argument with Red Hat, no contracts with them, and we have not made legal threats against them.

"We have only said that we want to protect our intellectual property and that our intellectual property was making its way into Linux," he added.-- Blake Stowell, 2003-09-17

"If SCO were to win on the derivative-works claim, it would basically ratify an enormously broad ? claim that would affect almost everything to ever touch Unix and would have implications for an enormous variety of products from an enormous variety of vendors,"-- Gordon Haff, 2003-09-19

"If SCO wins, two things are going to happen," says Chris LeTocq, an analyst at Guernsey Research. "One, there will be a fairly massive rewriting effort; two, if there's any indication that this rewriting effort is likely to take any length of time, SCO is suddenly going to find itself purchased."-- Chris LeTocq, 2003-09-19

Actually, the scary part about open source is you don't know where the code came from because nobody will indemnify it. And so we use open source as a technology company to build systems. You saw us build Mad Hatter (Sun's Linux desktop software) almost entirely out of open-source components. You shouldn't try this at home, because you don't have an intellectual property arsenal to fight a SCO (Group) or a Microsoft or somebody else if they came after you, and as a media company you can't ignore copyright. Whereas we can give you software indemnification. We can give you worldwide service and support. And we'll promise you quarterly upgrades of the technology with full integration with the rest of the environment.-- Scott McNealy, 2003-09-19

"It is SCO's expressed intention to destroy the possibility of open-source licensing," he says. "Therefore, if SCO wins, the hacker culture dies. It's pretty much that stark."-- Eric S. Raymond, 2003-09-19

Also, let me really clear about our Linux strategy. We don't have one. We don't at all. We do not believe that Linux plays a role on the server. Period. If you want to buy it, we will sell it to you, but we believe that Solaris is a better alternative, that is safer, more robust, higher quality and dramatically less expensive in purchase price. How much is the nearest competitor's cheapest enterprise offering? And it doesn't come with a portal server, application server, Web server messaging, calendaring, clustering, high availability services and directory services provisioning. Give me a break. Ours is $100 an employee. How much is theirs? Bring it on. We will also indemnify you for Solaris, and if IBM says you don't need it, then why do they have so many lawyers suing people over patent and copy violations.-- Jonathan Schwartz, 2003-09-19

IBM is being so hypocritical. If the issue is a non-issue, why don't they indemnify their customers? And if you don't need to indemnity, why do you have the world's largest patent litigation team inside IBM suing the bejesus out of the entire industry, holding them up for ransom on IP that you claim is yours that they have purloined. Well, go look in the mirror guys. This will tear that company asunder. How do they resolve this? If they settle with SCO, that will simply fuel the next 50 IP claims against IBM. Even if SCO goes under, the claim will last a lot longer than the company. I think, moreover, we will continue to drive Solaris as an operating system on Intel, recognize what's happened to IBM, which made an enormous tactical error. The only operating systems that have credibility on Intel are Microsoft Windows, Solaris and Linux. Which one of them does IBM do? They don't own their own operating system that runs on the volume platform. So they will continue supporting other people's platforms. So will HP. While they have done a superb job of telling the world that Linux is the future, but sadly it may be true for them because they don't own an OS. We, on the other hand, have a safe, compelling and affordable product called Solaris that runs on Intel, Opteron and SPARC.-- Jonathan Schwartz, 2003-09-19

If you use Linux on the server, even if we sold the distribution to you, you are on your own. If you buy our Java desktop solution [which includes SuSe Inc. Linux] you are completely indemnified as long as you run it as a desktop solution. And by the way, don't take our desktop product and put it on the server. We are indemnifying them for our products. If we incorporate someone else's component we will make sure that we can indemnify it. I have licenses to all those issues that SCO is suing IBM for. If I didn't have them, I certainly wouldn't indemnify them.-- Jonathan Schwartz, 2003-09-19

We took a license from AT&T initially for $100 million as we didn't own the IP. The license we took also made clear that we had rights equivalent to ownership. When we did the deal with SCO earlier this year we bought a bunch of drivers and when we give money to a company oftentimes we get warrants, which is part of the negotiations. I have warrants in 100 different companies, we have a huge venture portfolio. I can't do anything about the perception that's out there and to be blunt, I don't care as those people aren't going to drive our future-customers are.-- Jonathan Schwartz, 2003-09-19

"Linux adoption continues to grow in spite of the SCO lawsuit," analyst Victor Raisys of Soundview Technology told NewsFactor, "but I think the suit is having an effect on the Linux market."

[...] "I'm not sure that the Linux community can really make an assessment on whether the damage to Linux will be great or not great," says Raisys, "until we really know the hand that SCO is holding."-- Victor Raisys, 2003-09-22

Many firms currently using the Unix platform are raring to go with Linux, said Forrester analyst Ted Schadler, using Intel (Nasdaq: INTC) chips rather than expensive ones such as those made by Sun Microsystems (Nasdaq: SUNW) . "We've talked with companies who say they're tired of paying the 'Sun tax,'" he told NewsFactor.-- Ted Schadler, 2003-09-22

"Our conclusion ... was that the most pragmatic and real material difference we could make is rather than ... offering other lawsuits or countersuits ... to indemnify our customers."-- Martin Fink, 2003-09-24

"Today's announcement is about accountability and protecting the customer while the other vendors sit on their haunches," Fink said. "By doing this, HP is showing its leadership and demonstrating its true commitment to Linux."-- Martin Fink, 2003-09-24

"We're giving the green light to customers to move forward on their Linux deployments,"-- Martin Fink, 2003-09-24

'On the contrary, we have not found that customers are not concerned about the current litigation [between SCO and IBM].'-- Martin Fink, 2003-09-24

'We have not signed any Linux-related agreement with SCO,' he said, 'Nor have we exchanged any monies.'-- Martin Fink, 2003-09-24

Martin Fink, H-P's vice president for Linux, said the company considered a countersuit against SCO, but ultimately decided to guarantee indemnification for its customers against any SCO legal action instead. "Countersuits just raise more of a legal cloud,"-- Martin Fink, 2003-09-24

"It's quite a savvy move by HP," Yankee Group senior analyst Dana Gardner told TechNewsWorld. "For the community at large and those that like Linux but want as little risk as possible, HP is giving them a pretty good deal."-- Dana Gardner, 2003-09-24

Gardner viewed the HP indemnification differently, saying that HP is "calling SCO's bluff" and that HP likely found its risk was low enough to offer the protection.

"I would expect HP has done its homework and views the risk as acceptable," Gardner said. "They must have gone through the code to determine whatever risk is there is acceptable. It really points out that Linux is less risk than what SCO is saying."-- Dana Gardner, 2003-09-24

"Now that HP has done that, I suspect that IBM will make a similar move," he said.

[...] "I don't think HP is admitting that problems exist in Linux," he said. "It's admitting that the SCO Group might attack its customers and rather than lose a budding business ... they are taking steps to reassure customers that if The SCO Group does attack them, that they have a big friend, a big partner."

"It's kind of like HP stepping forward and saying, 'If SCO Group is attacking you, they're attacking us,' " Kusnetzky said. "I don't think that HP in any way, shape or form is agreeing to the original premise of The SCO Group's litigation that somehow their intellectual property ended up in Linux."-- Dan Kusnetzky, 2003-09-24

"It's laudable that H-P is stepping up to protect its users, but this will put a huge burden on the company."-- Darl McBride, 2003-09-24

"Indemnification is really meaningless. All of the various parties offering it will only refund your purchase price for their software, not your real damages. So, you get nothing that you would not get just by downloading the software from one of the sites that distribute Open Source without charge. Then again, SCO's rantings are just as meaningless, and they have zero chance of prevailing in court, so indemnity is easy to offer.

"People who consider indemnity important need to look more deeply into it."-- Bruce Perens, 2003-09-24

HP's actions this morning reaffirm the fact that enterprise end users running Linux are exposed to legal risks. Rather than deny the existence of substantial structural problems with Linux as many Open Source leaders have done, HP is acknowledging that issues exist and is attempting to be responsive to its customers' request for relief. HP's actions are driving the Linux industry towards a licensing program. In other words, Linux is not free.-- SCO PR, 2003-09-24

"Well. the first thing that occurs to me is this: HP obviously doesn't think SCO is going to win its case. They're one of the perpetual Unix licensees from way back; if they thought indemnification were a substantial risk, it would have cost them nothing to take SCO's side -- and they actually have some reason to do so, in order to slow the erosion of their high-margin HP-UX business.

"The second thing that occurs to me is that this is a move to one-up IBM in the Linux-server business increasingly important to both firms."-- Eric S. Raymond, 2003-09-24

"We really thought about it [Linux indemnification] and we decided we were just going to move forward and assume all risk ourselves," the representative said. "This is what we want to do to protect our customers."-- HP SOURCE, 2003-09-24

"What it means is that HP is willing to indemnify its customers from any lawsuits that come from us," Stowell said. "That certainly doesn't mean that they won't come from us."-- Blake Stowell, 2003-09-24

"Hey, as long as they aren't paying SCO for it or similar, I'm all for it."

[...] "As we don't believe SCO has a case, and we're willing to put our money on it,' indemnification is wonderful. It might be a cynical marketing tactic, but if people are asking for it, why not?

"But I haven't got any inside scoop in what went on. I'd be disappointed in HP if they made some agreement with SCO. It's the old 'we don't negotiate with terrorists' thing ..."-- Linus Torvalds, 2003-09-24

Your IBM funded-man [...] Let them know that I have no problem AdTI would be happy to accept far less money than those guys are getting to support our research.-- Ken Brown, 2003-09-25

'It's like our big brother coming to help deal with the schoolyard bully,'-- Joe Eckert, 2003-09-25

'We just haven't felt the desire, the pressure, the need to offer this - we haven't been pressured by our customers at all,' he said. 'Our Linux business is doing great, particularly the enterprise sector where we're seeing triple digit growth year on year.'-- Joe Eckert, 2003-09-25

'Wow, they put a great spin on that, don't you think?' [SCO on HP indemnification]-- Joe Eckert, 2003-09-25

"IBM's position has not changed. We will fight this in court."

She said HP's announcement, rather than supporting SCO, appeared "to flow from the belief that SCO's claims against Linux are baseless. We agree."-- Trink Guarino, 2003-09-25

I'm not privy to the information they have. But, it's not the path I, or our group, would have gone down. I think Caldera investors who wanted a quick return pressured the management. They seem to think that short-term, possible gains are more important than long term ones, which is unfortunate.

I don't believe that the suit is good for the company or Linux. I do believe IBM has not played clean with SCO. Still, with UnitedLinux they were a tremendous help. But, on the other hand, unlike other Linux companies, Caldera/SCO didn't get IBM investments, and of course, there's always Monterey.

Now, the suit has taken on a life of its own, and there's a lot of posturing for the suit going on that people now believe in. That said, there are many business relationship issues that the open-source community isn't aware of between SCO and IBM. But now it's become an ongoing feud between SCO and the open-source community.

I don't know if there's really an intellectual-property case or not. It's possible SCO discovered something that I don't have the information on. I do think, though, that it's very unfortunate that what should have been a contract dispute has become an industrywide fight.-- Ransom Love, 2003-09-25

We didn't want to spend years clearing out the old copyright issues in the face of corporate opposition. So, instead we worked on Linux Kernel Personalities to bring Linux application compatibility to SCO Unix (formerly UnixWare) and OpenServer.

[...] We were no longer thinking about mixing code; we were trying to create a common development environment. We were trying to keep the Unix and Linux kernels separate, while tying them to common APIs and ABIs.-- Ransom Love, 2003-09-25

We looked at the GPL for many years. We thought it had problems, For me, the GPL was not the open source license I would have chosen for commercial opportunities, but if I were trying to establish an open standard, I'd use GPL.

Fundamentally, the only business model that works with GPL is a subscription service, one like Caldera had and where Red Hat has with its enterprise Linux distributions. The GPL might be questionable in court, but for what Richard Stallman intended, it's not flawed at all.

But, that said, I wouldn't want to test the GPL in court, particularly given Caldera's history of voluntary compliance with it.

If you start down a path, and you get high-powered attorneys and [then] you begin to believe things you might not have at the beginning.-- Ransom Love, 2003-09-25

We wanted to combine Unix's improved symmetric multiprocessing with Linux so that it would have both excellent clustering and SMP.

Indeed, at first we wanted to open-source all of Unix's code, but we quickly found that even though we owned it, it was, and still is, full of other companies' copyrights.

The challenge was that there were a lot of business entities that didn't want this to happen. Intel [Corp.] was the biggest opposition.-- Ransom Love, 2003-09-25

We were really excited about Monterey as the next product step for Caldera/SCO. With it, we would move a combined Unix and Linux to a 64-bit platform. We were counting on it, and senior IBM executives had assured us that they wanted Monterey.

Then, IBM decided to name it AIX 5L (on August 22, 2000, 20 days after Caldera had bought SCO), and they wouldn't release [Monterey] on Intel. That became a real problem for us. SCO had depended entirely on Monterey on IA-64 for the future of our Unix and Linux product lines. IBM did offer some payment for our development troubles, but it was insufficient.-- Ransom Love, 2003-09-25

"H-P's offer to indemnify its customers looks to me more like an indication of H-P's confidence that it will prevail than an admission of any weakness in its case,"-- Eric Prager, 2003-09-25

Eric Raymond [...] called SCO's comments "a truly brazen piece of spin." [...]

"What HP is saying is they really don't think SCO has a chance in hell of winning its lawsuits," Raymond said. "HP also may be trying to 'one-up' IBM. They are duking it out with IBM for leadership in Linux distribution. They both see the other as a principal rival."-- Eric S. Raymond, 2003-09-25

The issue that keeps me, and our customers up at night isn't whether we have a Linux strategy-it is whether we have a Java and Web services strategy.-- Jonathan Schwartz, 2003-09-25

"I think this comes from a few individuals in the open-source community, which tends to paint a bad picture of the community as a whole," he said. "I think most in the open-source community are good, hard-working developers that want to create some great things. It's unfortunate that a few bad apples spoil the image of the whole group."-- Blake Stowell, 2003-09-25

"We did get up pretty early today," SCO spokesman Blake Stowell said. "We wanted to have something ready before the market opened, to get our side out."-- Blake Stowell, 2003-09-25

Since the response to its appeal [Linux licensing] was adequate, SCO didn't send bills to thousands of Linux users, company spokesman Blake Stowell said.-- Blake Stowell, 2003-09-25

"SCO wants to spin it that they're getting more leverage in the lawsuit," said Matt Yarbrough, an intellectual-property lawyer at Fish & Richardson in Dallas. "What they are hoping for is a settlement from all of these folks."-- Matt Yarbrough, 2003-09-25

I have no problems with it...like I said, I'd be happy to have a check from IBM too. Its just time to end the mythology that Linux is something that people who are above "money" sell. Linux is a business product. It makes money. It makes more money as it is advertised, promoted and sold, etc. Linux salesman are capitalists, not philanthropists. I don't see a difference, nor do I think it is objectionable.-- Ken Brown, 2003-09-26

"They [IBM] are a party to the lawsuit, so they can't indemnify," says Rob Enderle of the Enderle Group.-- Rob Enderle, 2003-09-26

"One of the new counterclaims is that SCO infringed IBM's copyrights by, among other things, copying and distributing IBM contributions to Linux without permission after SCO's rights under the General Public License (GPL) were terminated due to their breach," wrote Bob Samson, IBM's vice president of systems sales in the e-mail.-- Bob Samson, 2003-09-26

"IBM seems to be trying to drive a wedge where one does not exist," the spokesman said, "HP cannot provide a blanket indemnification for every Linux user."-- HP SOURCE, 2003-09-26

"We're the copyright holder for the core Unix operating system. If we want to charge someone a licensing fee for using our copyrighted software that's gone into Linux, then we have that prerogative," he said. "If we want to continue to distribute Linux to our existing customers, we can do that because we own the copyrights on that Unix software."-- Blake Stowell, 2003-09-26

"[Canopy] sees a technology and knows whether you can wrap a business around it," he says. "They invested in the early stage, took the risk. Fortunately, Altiris has proven successful and provided a good return for them."-- Greg Butterfield, 2003-09-28

"...analysts such as myself are expressly prohibited from owning stock in any of the companies (or any subsidiaries) that we cover. We are also not allowed to accept gifts valued at more than $25 from any professional contacts. I have absolutely no professional or personal bias as to which company prevails in the ongoing litigation. My only concern is how the legal wranglings will affect enterprise customers..."-- Laura DiDio, 2003-09-28

"...I did state to several reporters -- including Bob Mims of the Salt Lake City Tribune -- that I have known Mr. McBride for many years going back to his tenure as a Novell executive and I have always found him to be extremely professional and pragmatic. My relationship with Mr. McBride is no different than my relationship with the many other product managers and executives that I know from IBM, Microsoft, Oracle, Cisco, to name just a few..."-- Laura DiDio, 2003-09-28

"In his day, Ray Noorda was very forward-thinking, able to focus in on the trees and yet still see the forest and beyond," she says. "He had a public persona as a sort of svelt Santa Claus, but behind closed doors, Ray really knew now to wheel and deal. He could be ruthless when he had to be."-- Laura DiDio, 2003-09-28

"By my observation, Ralph has a clearly defined instinct for the practical and confidence to run contrary to conventional wisdom," the governor said. "That's a recipe for successful investment."-- Mike Leavitt, 2003-09-28

"Without the funding of the Canopy Group during this period, Utah would have at least 1,000 fewer very high-paying jobs," he says. "Canopy has been a vital funding source in light of the brutal capital markets [tech] companies have faced."-- Richard Nelson, 2003-09-28

"Canopy Group never understood how to be our partners," he wrote in online comments. "They've chosen to screw us one last time on the way out the door. Let's do our best to turn it back on them."-- Bruce Perens, 2003-09-28

I've tried to stay away from distractions. But especially since they have started threatening to send invoices to Linux users, it may eventually escalate to the point where I have to start taking legal steps.-- Linus Torvalds, 2003-09-28

Oh, Linux has grown up, and it's running with a crowd that I certainly never expected, like I.B.M. and Hewlett-Packard. That's not the issue. SCO is claiming parenthood of that child and now wants to make money off the earnings of that child. Even though SCO has refused to undergo the technical equivalent of DNA testing, and even though my (and other people's) DNA is probably all over Linux.-- Linus Torvalds, 2003-09-28

The thing is, at least to me personally, Microsoft just isn't relevant to what I do. That might sound strange, since they are clearly the dominant player in the market that Linux is in, but the thing is: I'm not in the ''market.'' I'm interested in Linux because of the technology, and Linux wasn't started as any kind of rebellion against the ''evil Microsoft empire.'' Quite the reverse, in fact: from a technology angle, Microsoft really has been one of the least interesting companies. So I've never seen it as a ''Linus versus Bill'' thing. I just can't see myself in the position of the nemesis, since I just don't care enough. To be a nemesis, you have to actively try to destroy something, don't you? Really, I'm not out to destroy Microsoft. That will just be a completely unintentional side effect.-- Linus Torvalds, 2003-09-28

"I grew Canopy out of Linux, period," he says. "Many of the people in our companies are guys who can easily stand up and say we, too, are contributors. And it's not that I want to take any credit for Linux; let someone else decide what our contributions have been.

[...] "But we have funded many Linux companies, developed and supported them," Yarro adds. "I still support Linux, but I don't support Linux in its tainted versions, or people taking copyright information and contributing it."-- Ralph Yarro, 2003-09-28

"I would prefer to be a peacemaker than to fight," Yarro says. "But I don't have the luxury to pick who steals from us, who attacks us. All I can do is decide whether or not we will defend ourselves."

[...] "We don't care how big you are. If you mess with us, we're going to take you on, even to our utter destruction, whatever occurs. We fear nobody, and we are respecters of no persons."-- Ralph Yarro, 2003-09-28

"Long before my grandfather allowed me to wield a hammer, I dug ditches, moved lumber, hauled rocks and bricks," Yarrow recalls, adding with a chuckle, "I learned heavy manual labor was not an interest."-- Ralph Yarro, 2003-09-28

"A lot of people are going to see the move as HP saying they stand behind what they sell, even if it's open source," Aberdeen Group research director Bill Claybrook told the E-Commerce Times. "Whether that's true in every case is another matter, but it might be enough to calm some frayed nerves."-- Bill Claybrook, 2003-09-29

"IBM's approach seems to be to stand up in front of the train and offer to take the direct hit," IDC analyst Dan Kusnetzky told the E-Commerce Times. "Maybe they figure they don't need to prove to their partners and customers that they're willing to take on the fight, because they already have."-- Dan Kusnetzky, 2003-09-29

The offer [HP's indmnification] "will sway some [Linux] buyers who are concerned," IDC analyst Dan Kusnetzky told NewsFactor.

"IBM is taking a different approach, because this is IBM's usual approach to litigation," he said. "Publicly they're very quiet and genteel. When it comes time to go to court, they come in with massive firepower.

"IBM probably has more intellectual-property attorneys than the total number of SCO Group employees," he said. "They have experience in protecting IBM's interests for decades."-- Dan Kusnetzky, 2003-09-29

"They will never get this into the courtroom," he predicted. "The arguments will remain over what right does SCO have to the millions of lines they have claimed in Linux."-- Bruce Perens, 2003-09-30

Q: What about your worst deal?

Well, I'm not going to name them, but I have done two deals in which, in effect, we were defrauded. The sellers lied about material information. If we had known, we would have never done the deals. If we were a litigious group we would have probably sued them. In these two situations the management had material information that they knew something bad was going to happen; we gave them money and then, right thereafter in both cases, it happened, and we lost our money.-- Lawrence Goldfarb, 2003-10-01

"Our license is fully paid and it is unterminable," she said. "We don't believe that they can terminate the license and we don't believe that we are in breach of contract, but we have yet to receive specific information."-- SGI PR, 2003-10-01

"There have been violations of their contract through contributions by SGI to Linux of Unix System V derivative code,"-- Blake Stowell, 2003-10-01

"We have become much more aggressive this year in protecting our intellectual property," SCO Group spokesman Blake Stowell said.-- Blake Stowell, 2003-10-01

SCO spokesman Blake Stowell said Tuesday that he understood the extension is being sought "for the purpose of gaining documents from IBM related to the patents they claim. . . . Some of the patents aren't even filed with the U.S. Patent Office, as far as we can learn."-- Blake Stowell, 2003-10-01

"I think you'll see Linux start to take over some backend database management systems first, then as more ISVs (independent software vendors) move applications to Linux, you'll see Linux move more and more into data centers," said Bill Claybrook, research director Linux and open source for Boston-based analyst firm Aberdeen Group. "Linux scales more than enough now. It's a matter of users requiring ISVs to move more applications onto Linux."-- Bill Claybrook, 2003-10-02

"People believe that if SCO does win, the code they own will just be replaced," says Aberdeen Group analyst Bill Claybrook.-- Bill Claybrook, 2003-10-02

"Our license is fully paid and non-terminable. They can't terminate it." she said. "We don't believe that their allegation of breach of contract has any merit."-- Marty Coleman, 2003-10-02

"The fact of the matter is, SCO is one company," she said. "Even if the suit is dismissed, it does not preclude some other organization from filing suit on this; the GNU Linux GPL has never been challenged."-- Laura DiDio, 2003-10-02

Yankee Group senior analyst Laura DiDio told LinuxInsider that SCO has been aware of "blatant SGI violations" for a year, and the lack of action thus far indicates SCO may not want to take additional legal action. "I don't think [SCO] wanted to do this," she said. "They wanted to keep it focused on IBM because they didn't want to bite off more than they could chew."

By aligning itself with the IBM side of the dispute, SGI might be putting SCO in a bind by forcing it to fight "a war on all fronts," according to DiDio.-- Laura DiDio, 2003-10-02

Greg Estes, vice president of corporate marketing for SGI, said the SCO letter was vague and wasn't followed by any attempt to discuss the issues.

"They haven't talked to us about any specifics," he said. "We got a letter from them--I wouldn't characterize that as negotiation. We didn't even get a courtesy call from them."

Estes said SGI was confident it was in compliance with all conditions of its non-terminable contract with SCO, which covers the Irix version of Unix included on most of the systems SGI ships. "We don't intend to stop shipping our Irix systems," he said. "We think the allegations are totally without merit."-- Greg Estes, 2003-10-02

"We were getting quite a (few) inquiries from customers" on SCO, says H-P's vice president of Linux, Martin Fink. "Now, our customers don't have to worry."-- Martin Fink, 2003-10-02

"SGI flagrantly permitted the copying and use of our proprietary information without any knowledge of the identities of the recipients" and "subjected our source code to unrestricted disclosure, unauthorized transfer and disposition, and unauthorized use and copying."-- Darl McBride, 2003-10-02

Daniel St. Gelais, a consultant with Quebec City, Canada's InfoTech, recently delivered a Linux-on-the-desktop presentation to the local government there, only to have it temporarily derailed by a fear of backlash from the SCO Group.

"They figured it was very serious and said that maybe this was a system they could go without," St. Gelais said. "The government was going to migrate to a new platform. They viewed Linux as the platform for the next decade."

Civic leaders in Quebec took notice of the SCO Group's threat to seek licensing fees from Linux users, and that forced them to reconsider their Linux movement.

"They didn't know how the issue was going to play out. They didn't want to put effort and time on something that was not going to go on," St. Gelais said.

Recently, however, things reversed course again for the Quebec government, St. Gelais said, once it saw that IBM and Red Hat Inc. were countersuing. "They are open and ready to be part of a pilot to use open-source software, especially Linux," said St. Gelais. "I advise anyone not to be afraid to make a Linux proposal to their decision makers."-- Daniel St. Gelais, 2003-10-02

The hottest ?cold? technology is Linux, an operating system that comes free, except for maintenance costs. In March, Forrester, an IT consultancy, found that 72% of corporate IT managers were intending to move their server-computers to Linux from Microsoft and Unix software.

This trend briefly seemed to be in jeopardy, after SCO, a firm that owns the copyrights to Unix, claimed that Linux contains bits of Unix that violate SCO's intellectual property. This summer, SCO started threatening to sue Linux users. To experts, this looked like a ploy by a failing company to extort money. Nonetheless, according to Forrester, it intimidated some 16% of firms into slowing their adoption of Linux.

They probably became less shy on September 24th, when HP, which makes about $2 billion in sales from products that use Linux, said it would indemnify customers against any lawsuits brought by SCO. Other vendors are likely to follow, unless SCO gives up first. With tech this cold, Linux is too hot not to handle.-- Economist STAFF, 2003-10-02

"It would mean that they would have to either stop shipping it, or either destroy or return all copies of Irix to SCO," Stowell said.-- Blake Stowell, 2003-10-02

"It's not something we would consider until October 14th and not something we would do unless SGI refused to fix the violations of the agreement," he said, referring to requirements that include removal of contributions related to Unix System V by SGI and the Linux community.-- Blake Stowell, 2003-10-02

"Our review was focused on the code we contributed to Linux; however, we did run the Comparator code on the Linux 2.4.21 kernel. The process involves using subjective judgment to review similarities identified by the tool,"-- Greg Estes, 2003-10-03

However, when asked what happened when his company was served with a request to pay a SCO licence for Linux, panellist Ric Francis, Safeway's CIO, said: "I told them to stick it. At the end of the day it is never going to fly. It's the last dying breath of a company that is never going to make money."-- Ric Francis, 2003-10-03

"Making minor amendments to its XFS file system doesn't cure the breach. SGI must do more as outlined [in the August letter] to cure all of their breaches."-- Blake Stowell, 2003-10-03

"These releases have already taken place in Linux," he said. "You still have all these machines out there that haven't applied patches that are still benefitting from this Unix System V code."

Any line-by-line contribution of SCO's code to Linux was "not trivial," he added.-- Blake Stowell, 2003-10-03

"We don't believe that SGI has taken all of the steps necessary to cure all of the breaches, and in fact in our letter to them, we state 'SGI's breaches of these agreements cannot be cured'.

"Nonetheless, we will provide SGI with two months to remedy all violations of these agreements."-- Blake Stowell, 2003-10-03

Another point that Darl feels strongly about is the idea that the OS level is being marginalized because of Open Source and what will Open Source marginalize next? The database market? Vertical market apps? Darl believes strongly that intellectual property rights in a digital age need to be respected and that we need to retain the value that's been created in software.-- Blake Stowell, 2003-10-03

I think that people have seen what individuals in the Open Source community have done to SCO (DoS attacks, slamming SCO on message boards, etc.) No one wants to suffer the same kinds of attacks or animosity that SCO has, especially if they've been perceived as a good community member in the past.-- Blake Stowell, 2003-10-03

Linux users need to respect the copyrights that SCO has that they are infringing upon. Do we want to be heavy handed with end users? We absolutely don't want to be. Does SCO need to be compensated for software code that is currently in use in Linux? Yes. End users have a choice. They can go back to using Linux based on the 2.2 kernel which includes no infringing code, or they can continue using SCO's UNIX code as it is being found in Linux and properly compensate the company for using it.-- Blake Stowell, 2003-10-03

Q: But asking Linux users to buy a SCO licence before SCO's claims are proven justifiably raises the ire of the open-source community - my concern is that once the specific code in question is out there, then Linux people will remove it and replace it with a 'clean room' substitute, as they will not relish the prospect of continuing dealing with such a readily litigious company.

This is sort of like telling someone that you're going to steal their car for a few years, but you'll bring it back and everything will be okay between the two of you. Can the community replace the code in question? They can certainly try, but programs like NUMA, RCU, JFS, XFS and others have taken multiple years to develop and would be very difficult to replace overnight. We're happy to show any individuals under a NDA some of the code in question. Beyond an NDA which some individuals find too limiting, we've already identified some of the above programs.-- Blake Stowell, 2003-10-03

Replacing SCO code in Linux won't replace the licensing situation currently facing commercial customers of Linux. Did they benefit from this code for a period of time? Certainly. Will they need to compensate SCO for the period of time that they benefited from using this code? Absolutely.-- Blake Stowell, 2003-10-03

SCO has never had a goal of destroying Linux. We wanted Linux to survive and to move forward in a way that was beneficial to the distributors and to proprietary vendors like SCO. This is why we never filed suit against any of them. Linux will have a difficult time gaining momentum as long as worries about its legal liability continue to persist (not just from SCO, but from any proprietary vendor). Even Michael Dell of DELL Computer recently stated that Linux sales to large enterprise customers had slowed. This is an issue that needs to be resolved for the good of the whole I.T. industry.-- Blake Stowell, 2003-10-03

The way we see it, the suit that we currently have against IBM will be proven in a court of law by a jury and the outcome of that could certainly have ramifications for the Open Source community. I think the case could prove to point out that the policing of code going into Open Source software needs greater vetting by the software developers to make sure it is "clean code" rather than a rip off of someone else. The vast majority of Open Source development is done in a proper way by hard working developers, but a few companies have spoiled things for Linux recently. Open Source can be a great model when done properly.-- Blake Stowell, 2003-10-03

UNIX licensees such as IBM, Sequent and SGI have really kept SCO's hand in Linux by contributing UNIX System V derivative code into the Linux 2.4 kernel. As long as vendors continue to contribute our UNIX derivative code into Linux, SCO will have a hand in Linux for a very long time to come.-- Blake Stowell, 2003-10-03

We've certainly tried to handle things in a diplomatic way with many of them [Linux distributors]. One example of this is 5 days before Linuxworld in San Francisco this year, our CEO had what he felt was a good, diplomatic phone call with Matthew Szulik, Red Hat's CEO. They left things in an amicable way and SCO and Darl McBride felt like we were making some progress with Red Hat. 5 days later on the first day of Linuxworld, Red Hat filed suit against SCO. This seemed to fly in the face of the conversation we had with them only 5 days before. It seems that some companies in the industry would rather use deception rather than try and work things out diplomatically, one-to-one.-- Blake Stowell, 2003-10-03

We've certainly tried to handle things in a diplomatic way with many of them. One example of this is 5 days before Linuxworld in San Francisco this year, our CEO had what he felt was a good, diplomatic phone call with Matthew Szulik, Red Hat's CEO. They left things in an amicable way and SCO and Darl McBride felt like we were making some progress with Red Hat. 5 days later on the first day of Linuxworld, Red Hat filed suit against SCO. This seemed to fly in the face of the conversation we had with them only 5 days before. It seems that some companies in the industry would rather use deception rather than try and work things out diplomatically, one-to-one.-- Blake Stowell, 2003-10-03

"I thought it was one of the best responses (to SCO) that I had seen. Instead of getting deeply offensive and heaping abuse on SCO, they took a more productive approach, attempting to see what the claims might be," he said.-- George Weiss, 2003-10-03

"If they continue doing things like this until the lawsuit goes to court in 2005, they will have everybody not liking them," Aberdeen Group research director Bill Claybrook told TechNewsWorld. "There won't be anyone left that doesn't hate them."-- Bill Claybrook, 2003-10-06

"In order for SCO to thrive, they've got to sell a product," she said, referring to SCO's current focus on its IP. "Certain organizations may not want to do business with them because they caused a conundrum here that the industry probably didn't need."-- Laura DiDio, 2003-10-06

"SCO seems to be waging this as a PR campaign, and not just in the courts," IDC analyst Dan Kusnetzky told NewsFactor.-- Dan Kusnetzky, 2003-10-06

"SCO doesn't want a remedy -- they want it to look as bad as possible," says open-source software advocate Bruce Perens. "They're doing everything they can to portray other engineers and firms using Linux as thieves. Nothing could be further from the truth. Software engineers have no motive to steal code -- and, in fact, we want to fix it."

[...] "We're not talking about a lot of code here. How long would it take to remedy this?" he asks. "About a day."-- Bruce Perens, 2003-10-06

SCO spokesperson Blake Stowell told TechNewsWorld that his company is "kind of mixed" on SGI's action and letter.

"While it's good of them to make an effort to try and remove code which may have been misappropriated into Linux, they also minimize the code having gone into Linux," Stowell said.-- Blake Stowell, 2003-10-06

"I think that the way SCO is going about it is ethically and morally wrong," says Avi Bercovich, director of a graphics design company in Amsterdam. "It wouldn't impact my purchasing or deploying of SGI hardware. If anything, I would buy double the SGI gear I need just to spite SCO."-- Avi Bercovich, 2003-10-07

SCO should apply some of the money it's shelling out in legal fees in its suit against IBM and Linux users to its channel efforts. The company's ARC scores were a train wreck in the enterprise operating systems category. Who cares what line of code is buried inside some obscure Linux program that can trace its roots to IBM's Unix license dating back to the Partridge Family? SCO partners clearly don't appreciate the company's products. And if the folks at Sun who make and market Solaris are laughing, they had better stop--their scores were even worse.-- Robert DeMarzo, 2003-10-08

Beyond the 80 or so lines of code that we show under nondisclosure to interested parties, we have identified some examples of more than a million lines of code that have gone into Linux in the form of programs and files such as NUMA (non-uniform memory access), RCU (read, copy, update), and the JFS (the Journal File System from AIX). I haven't seen anyone in the Linux community racing to remove these million lines of code from Linux yet. And even if this code were to be removed, should not SCO receive some kind of compensation from those commercial users whose businesses benefited from using it? It's much more than an issue of cleaning.-- Chris Sontag, 2003-10-08

It's too bad that the Linux development process couldn't prevent misappropriations of Unix software code.-- Chris Sontag, 2003-10-08

Q: The code you displayed at the SCO Forum was later scoffed at by Linux advocates and experts as code covered by a BSD license that allows sharing of that code. Were those the best examples of the code in question you have?

This was one example of misappropriated code that went into Linux. I would characterize it as the tip of the iceberg. Was it our very best example? I think we are saving our very best examples for the courtroom, where we will ultimately have to try our case.-- Chris Sontag, 2003-10-08

SCO has really been left with no other choice but to request that commercial customers of Linux compensate SCO for our intellectual property with a license fee. The hardware vendors don't take responsibility for infringements in Linux because, technically, they aren't distributors. The distributors pass the hot potato to business end users by shielding themselves with the GPL by saying, 'This product has no warranty and no indemnification.' So now if Linux has problems, including misappropriated intellectual property going into Linux, the end users are left holding this hot potato.-- Chris Sontag, 2003-10-08

There have been no discussions with IBM worth noting. It's difficult to suggest what it would take to accept a settlement because of so many factors involved with the violations that took place. We'll have to cross that bridge if/when we get there.-- Chris Sontag, 2003-10-08

Yes, in that there is no rock-solid mechanism in place for checking in code and assuring users that this code is clean and doesn't infringe on others' intellectual property. Until that mechanism is in place, there will more than likely be problems with others' IP going into Linux.-- Chris Sontag, 2003-10-08

"I'm not going to cast moral judgment," says George Weiss, an analyst and vice president at Gartner Research. "But there is a sense one gets that the whole lawsuit is a means to generate revenue and quick acceleration in stock price in hopes that a buyout would occur from a deep-pocketed company such as IBM. [The selling] doesn't surprise me."-- George Weiss, 2003-10-08

"we have refuted that SCO is doing anything improper or is in breach of Australian trade practices legislation".-- Kieran O'Shaughnessy, 2003-10-10

I have read over SGI's licenses and I've found no place where it says it is irrevocable. Why would anyone in their right mind sign over a license to anyone that was not revocable?

"Congratulations sir, I know you were speeding and drunk at the wheel, weaving in and out of your lane, but lucky for you, you had one of these drivers' licenses that is irrevocable. Have a nice day." There is no such thing as an irrevocable license. You have to abide by the statutes of a license or it can be revoked.

You can't take code based on a license you signed, change it a little and then give it away for free (as in the case of XFS from SGI). If SCO allowed companies to contribute derivative UNIX code to Linux and give it away for free, it would destroy the value of all other versions of UNIX, including SCO's own, not to mention the versions of UNIX made by SUN, HP, IBM, SGI, Sequent, Hitachi, Fujitsu, Siemens, and every other one of the 6,000 other licensees. Why would SCO not have such a provision in their licenses? This line of thinking is absolutely ludicrous.-- Blake Stowell, 2003-10-10

"All roads lead to Canopy," said Laura Didio, a computer industry analyst at the Yankee Group. "They've been pretty clever in the way they've played this."-- Laura DiDio, 2003-10-13

"It's not surprising they would offer some kind of settlement issue just to avoid the GPL being litigated. MontaVista has been a big proponent of the GPL and says they're doing quite a nice business because of it," Ferrell said.

[...] "As time goes on, with each month and quarter that passes, I think the GPL becomes stronger and stronger," he said.-- John Ferrell, 2003-10-13

"These guys are making fraudulent accusations," said Bruce Perens, an open source software advocate. "They've had time to understand that they're wrong."-- Bruce Perens, 2003-10-13

"If there are transcripts and pleadings that have been sealed in which Lineo makes the innocent infringement argument, that's a defense that I.B.M. and others could use in their lawsuits," said Jack Russo, an intellectual property lawyer at Russo and Hale in Palo Alto, Calif. "There is not a lot of law in this area and my sense is they are worried that this is something that I.B.M. could run with."-- Jack Russo, 2003-10-13

SCO spokesman Blake Stowell pointed to the case as evidence that open-source software such as Linux needs to be handled and tracked more carefully. "Fundamentally, there needs to be some mechanism in place to better police open source," he said.-- Blake Stowell, 2003-10-13

"It appeared to us that Lineo, which was still in its original incarnation, was distributing computer software to its customers or potential customers that had code in it that appeared to be written by MontaVista but that had all of the MontaVista copyright information stripped out of it," Wachal said.-- Jason Wacha, 2003-10-13

"I know I've been painted in a rough light. I hope that our companies are our legacy and not our lawsuits."-- Ralph Yarro, 2003-10-13

"The question is: 'How can we fix this issue and move forward?' " he said. "I'd like to see Linux survive."

[...] "SCO picked a big fight and it flowed over to the Linux environment and we found ourselves in an awkward position," he said. "For better or for worse it's one of the cautions and dangers and flaws for the model. It happened to Lineo and has happened to several others."-- Ralph Yarro, 2003-10-13

"HP is just exercising an option for people who want to feel safer," said Bill Claybrook, research director at Aberdeen Group Inc., in Boston. "[Similarly,] people who develop open-source software generally don't have a warranty, but that doesn't mean they can't."-- Bill Claybrook, 2003-10-15

Investing in SCO is like buying a "lottery ticket," Cornett said Wednesday. "I think at the end of the day, the lottery ticket is not a winner," he added. "They will not prevail in their lawsuit against IBM."

[...] "I think it's a stretch to think that an appellate court is going to overturn 100 years of copyright law," he said.-- Dion Cornett, 2003-10-15

"SCO is putting itself in contention with its customers," Quandt told internetnews.com in an e-mail interview. "The Microsoft and Sun licensing agreements provided the company significant revenue. A question to ask is how likely is it that other companies will follow? Given the growing adoption of Linux with increasing enterprise capabilities it is doubtful that other IT firms will participate. Ultimately the SCO lawsuit against IBM will mostly likely amount to a small footnote in the broader history of Linux maturation and use."-- Stacey Quandt, 2003-10-15

"The executives have said we haven't had to do it yet," SCO spokesman Blake Stowell said of the invoice plan. "They're happy with progress in the licensing program."-- Blake Stowell, 2003-10-15

"We are thrilled to receive this ranking among our peers," said SCO spokesman Blake Stowell. "We have been having some good quarters of profitability, two straight most recently, along with growing cash balance and much better financials."-- Blake Stowell, 2003-10-15

SCO extended the "introductory pricing" offer, because it didn't have time to make the offer globally, Stowell said. "The rationale was that this pricing had not been rolled out in certain regions of the world, where we wanted to offer this introductory pricing in a timely manner," he said.-- Blake Stowell, 2003-10-15

"They could pull off a David versus Goliath here," she said. "This is the type of risk that financial and industry analysts like to see businesses take. It actually could yield some results."

Still, DiDio reiterated Deutsche Bank's warning that, "This remains an extremely risky venture. We don't know how this will all turn out."-- Laura DiDio, 2003-10-16

"BayStar Capital looks to invest in growth-oriented firms with strong management, substantial market opportunity and solid, comprehensive business plans, and we believe that all of those fundamentals are in place for SCO to succeed," said Lawrence Goldfarb, General Partner, BayStar Capital. "SCO owns the most predominant UNIX software assets in the I.T. industry, has a 20 year history of providing trusted software solutions to end users around the globe, and an aggressive and seasoned management team focused on generating profitable growth."-- Lawrence Goldfarb, 2003-10-16

"If they send out the invoices, they really have to follow that up with some action, if they're not paid. Otherwise it looks like their bluff has been called," he said.

Invoicing could also expose SCO to lawsuits, the analyst said. "It's one thing to file a lawsuit against a specific company, and it's another thing to present invoices to a large number of end-user companies, many of whom will regard them as fraudulent and take counter-action," Haff said.-- Gordon Haff, 2003-10-16

"The momentum in the marketplace continues to shift in SCO's direction," said Darl McBride, president and CEO, The SCO Group. "Over recent months, we have made significant strides forward in our on-going effort to protect and enforce the Company's intellectual property rights through SCOsource. During the same period, we have been steadily strengthening our core operating business, and in the coming weeks, we look forward to providing the industry and Wall Street with additional details on our plans and initiatives. Now, with a $50 million investment from BayStar, we believe we have secured the capital necessary to fund all aspects of the long term growth of this Company."-- Darl McBride, 2003-10-16

"SCO will collapse when it becomes clearer that they really have no more evidence to show," he said. "It will be sad for the stockholders left holding the bag."-- Bruce Perens, 2003-10-16

"They clearly looked at the cost of pursuing these invoices and saw that the cost was not worth the gain," said Forrester principal analyst Ted Schadler. "It's clear SCO is reaching for IP validation. They do own [Unix] IP. The question is, do they have the ability to exert control over Linux? The broad consensus is they can't. The court of public opinion has made its decision."-- Ted Schadler, 2003-10-16

"For anyone out there that was doubting we had the necessary funds to fund that litigation, they should rest easy now," Stowell said.-- Blake Stowell, 2003-10-16

"I think we were happy we were building cash and that we were profitable, but if you want to be able to do some big things on the level we would like to do them, then having that cash available immediately certainly helps," Stowell said.-- Blake Stowell, 2003-10-16

"This is the first major financial analyst firm that has provided a recommendation for our company," SCO spokesman Blake Stowell said. "They based their recommendation on a lot of thorough research and digging into the prospects for our company."-- Blake Stowell, 2003-10-16

"We didn't actually get the license on our price list and make that available for distribution until early September," he said "It was our own fault that the license was getting out there a little later than we'd hoped."

[...] The invoicing plans have now been delayed indefinitely, said Stowell. "At this point we're pleased with the progress we've made on the licensing end, and we feel it's not something that we need to do at this time," he said.

Though they are not being invoiced, Linux users are still being contacted. They are being telephoned and being sent e-mail messages by SCO's sales force who offer to meet with them and explain the licensing plan, Stowell said. "Certainly if we don't have to send out the invoices that would be our preference. It's a more aggressive step," he added.-- Blake Stowell, 2003-10-16

PR Director Blake Stowell told us the company was, 'very satisfied with the way things are going, so it's not something we feel we need to do at this point.'

He added the caveat that this was not necessarily a permanent decision. Furthermore, the licence will still be available. 'We're still approaching companies [to buy the licence], we're just not invoicing them.'

Stowell said that 'several other companies,' had taken up the licence since the company announced that a Fortune 500 company had signed up in August.-- Blake Stowell, 2003-10-16

"There is no coming back from the dead if they lose," Weiss said. "It's all or nothing."-- George Weiss, 2003-10-16

"What speculators should also consider is the downside: SCO has suffered such enormous damage to its image, if judgments go against them the ability to pick up and carry on a viable business thereafter will be next to impossible," said George Weiss, vice president and research director at Gartner Inc.

"Effectively, it's a total 'bet the farm' or lose all. An investment firm that would advocate such a position stands to damage its own reputation with such speculation," he added.-- George Weiss, 2003-10-16

The concept of judicial economy argues very strongly in favor of consolidating the two cases. The basic question facing Red Hat is whether or not SCO proprietary code, allegedly stolen by IBM, is in Linux. Both cases should come out the same way, depending upon the underlying facts. I am not aware of SCO actually moving to consolidate the two cases, however, so its arguments about judicial economy seem a little disingenuous right now. There are tactical reasons why Red Hat would not want to get mixed up in the IBM suit. It will likely take years to resolve. Red Hat is probably looking for a quick resolution of just the copyright issue. Thus, while Red Hat's complaint will survive a motion to dismiss, SCO will likely follow up with a motion to consolidate out in Utah.-- Thomas Carey, 2003-10-17

The real question, then, is whether Red Hat has a reasonable apprehension of being sued by SCO for copyright infringement. SCO has been somewhat coy about this, avoiding any specific threat to sue Red Hat soon. Nonetheless, it has claimed that Linux infringes its copyright, it has mentioned Red Hat publicly in connection with that alleged infringement, it has sent warning letters to many, many Red Hat customers, and it is now in litigation over that very infringement. Is that enough to convince a court to assert jurisdiction for purposes of a declaratory judgment? Probably, but there is no guarantee. Right now, the most a court will do for SCO is dismiss the declaratory judgment action but give Red Hat permission to amend its complaint to beef up the jurisdiction argument. Sooner or later, Red Hat should be able to persuade the court to hear its theory of copyright non-infringement.-- Thomas Carey, 2003-10-17

"The SCO case is like a speed bump in the history of Linux and something which will strengthen Linux. It brings focus on IP and I think that?s a good thing. SCO has a very bad case, it doesn?t seem like they have a case at all. It?s difficult to understand why they?d be playing the way they?re playing if they had a good case".-- Eireik Chambe-Eng, 2003-10-17

"From our vantage point, [SCO] offers real opportunity for small and medium businesses, and more so those customers who are served by these businesses."-- Randy Edgerton, 2003-10-17

"When you go through the list of potential outcomes of the SCO case, you find Linux coming out stronger. I?m tempted to think that we?re lucky to have SCO as a contender in that game. In all the history of Linux it?s the first case to come up".-- Juergen Geck, 2003-10-17

"SCO has all but extinguished the respect they worked to earn from users in the past, and the litigations, threats, and lies about the validity of their licensing have eliminated confidence in open source users everywhere," said Shaun Guth, an open source developer in Sunnyvale, Calif. "This latest round of funding is just a front for more attacks against the GPL on the basis of so-called intellectual property."-- Shaun Guth, 2003-10-17

Any suggestion that SCO is gaining in the Unix market is "ludicrous," said Gordon Haff, analyst for market researcher Illuminata. "Today, they're inconsequential from a product perspective," Haff said. While SCO does earn revenue from its installed base, "obviously, the thrust of their business model, if you want to call it one, is litigation."-- Gordon Haff, 2003-10-17

"But who would trust [SCO] after the IBM suit?" he said. "And they have threatened end-user customers with litigation. In effect, they have destroyed themselves as either a Unix or Linux supplier."-- Dan Kusnetzky, 2003-10-17

"No one knows what will happen, but we do know that it's going to take a while before we get there," Kusnetzky said. "If you're going up against IBM, and the entire open-source community to a certain extent, you need deep pockets to go the distance."-- Dan Kusnetzky, 2003-10-17

"Reality is dawning on SCO. They've yet to release details of exactly what is the subject of the case; no litigation has gone ahead as yet and, in the meantime, Hewlett Packard has said it will indemnify HP Linux users against any litigation with SCO," he said.

"Apart from a handful of enterprises, businesses aren't playing ball with SCO, which is not seeing the success it anticipated with the legal case against IBM."-- Neil Macehiter, 2003-10-17

"We said we wanted to give customers a chance to step up and work with us," McBride said Friday. "We're getting good feedback and a pipeline that's healthy." However, the company hasn't ruled out proactively invoicing Linux users in the future if its licensing program stalls.-- Darl McBride, 2003-10-17

O'Shaughnessy moved to clarify the local position after the company's US spokesperson, Blake Stowell, said one of the reasons for the extension was that SCO had not had the time to make the [discount] offer globally. "The rationale was that this pricing had not been rolled out in certain regions of the world, where we wanted to offer this introductory pricing in a timely manner," he said. O'Shaughnessy said given that the licences were not due to be available in Australia and New Zealand until the end of the year, the two-week extension in the US was irrelevant.-- Kieran O'Shaughnessy, 2003-10-17

"For the past three years, it's been a very tough time to find investors in technology, but a lot of people think the worst is behind the tech market."

[...] "The honest truth about playing in the courtroom is that whoever's wallet is bigger stands to endure the longest," Deutsche Bank's Skiba says. He also adds that, while BayStar is making a "speculative and risky investment," the firm doesn't inherit any liability for SCO Group's lawsuits in the event the company should lose.-- Brian Skiba, 2003-10-17

"We view this financing as a positive sign the company is increasingly equipped to take on larger challenges ahead," the authors wrote in the new report. "The funding puts to rest any concerns about sufficient cash to pursue legal challenges and ongoing investment."-- Brian Skiba, 2003-10-17

"If and when it is proven their claims are correct, then that is a different matter. At this point for SCO to threaten invoices on a product the have not proven to own is nothing short of extortion," said one anonymous reader. "The real reason they continue to stymie, balk and otherwise carry on with nonsense is they know they have no valid case. It is their hope they can find an appropriate court environment to hijack Linux."-- Undisclosed SOURCE, 2003-10-17

"This is a company investing in a company, not investing in the possibility we may win a lawsuit," he said. "They aren't investing as a bet on litigation; this is a bet on the core businesses of our company -- the licensing and selling of the Unix OS."-- Blake Stowell, 2003-10-17

McBride, who said he was personally spending a couple of days a week on SCO's IP interests, claimed that big company Linux users were writing checks for SCO licenses.

He declined to discuss who they were or how many they were or the size of the checks.-- Darl McBride, 2003-10-18

Dana Gardner, an analyst for the Yankee Group, predicts an improved Linux will emerge from the SCO/IBM case, which he likened to "a speed bump" for a "runaway train."-- Dana Gardner, 2003-10-19

"The ability to modify technology in the 21st century is power," Moglen says. "And it either belongs to a few, or to everybody. ... Those who control the behavior of technology control lives."-- Eben Moglen, 2003-10-19

The case "raises a cloud of skepticism about the Linux code itself, and whether it's completely clean and free of encumbrances. It's SCO's word against the Linux community, essentially," says George Weiss, a Linux analyst for the Gartner Advisory Service.

Linux operating software is deployed on millions of computer servers around the world, Weiss says. An SCO victory would stunt the growth of Linux, he says, through imposition of licensing fees or the shutdown of countless systems while Linux is rewritten.

SCO has revoked IBM's Unix license; if enforced, that move could affect billions of dollars' worth of business for Big Blue, Weiss adds.-- George Weiss, 2003-10-19

The open-source community needs to scrutinize its methods, to respect private intellectual property, says Ralph Yarro, CEO of the Canopy Group and a major SCO shareholder.

"Humanity will benefit from Linux as it goes forward. It's important for it to survive and continue," he says.

But, Yarro adds, "these processes need to be looked at very closely, so customers can feel comfortable deploying it."-- Ralph Yarro, 2003-10-19

"We believe that SCO's allegation have no merit. We don't believe SCO has any basis for terminating our fully paid Unix license," Pratt said.-- Warren Pratt, 2003-10-20

"For the most part, what SCO has effectively been doing is trying to increase the level of concern surrounding Linux," he speculates. "They're not trying to kill the platform, but what they're trying to do is to get people to license the product from them, so they've become like an insurance company: You pay SCO money, you don't have to worry about them anymore, your problems go away."-- Rob Enderle, 2003-10-21

"They're going to find a company that is very risk-adverse, one that has a very visible brand so that people will recognize it, and then they're going to hit it with pretty much everything they've got, send a message back to the community saying, 'If we can do it to this brand, we can do it to you,'" he says.-- Rob Enderle, 2003-10-21

"They've got apparently one Fortune 500 company to sign up, and who knows what kind of discount they were given. On the other hand, that's 499 Fortune 500 companies that haven't signed up, and, in fact, I would have thought that they would have signed up more than that," concludes Illuminata's Haff. "So it's possible that they could do something to demonstrate to [Fortune 500 customers] that they're serious about this."-- Gordon Haff, 2003-10-21

"[Sending an invoice] is a very specific act with a very specific response that's really required by companies. On one level, a company could ignore it, but if you are a company and receive a bill from somebody, frankly, it's not very smart to just ignore it," points out Gordon Haff, a senior analyst with consultancy Illuminata.

[...] "I could very easily see a company receiving a bill that it did not consider to be valid and referring it to a state attorney general for fraudulent billing," he concludes. "Whether or not that's a counter move that would necessarily hold up in court, it's kind of part of a set of events that could be very well set in motion by invoicing in that way."-- Gordon Haff, 2003-10-21

"They can sue companies until the cows come home. Unless and until it is proven in a court of law that Linux infringes on SCO-held code, and that the GPL is invalid, and that IBM was responsible for putting that code in, they are not licensing, they are racketeering. They are more or less doing a shakedown of companies for 'protection,'"-- James Melin, 2003-10-21

But no one's ever made any money in Unix operating systems. Unix has always been an enabler of the hardware platform. We went into the RISC hardware business, and we needed an operating system. Arguably we could have literally written one from scratch. We took the Unix System V kernel and we made modifications, the same as everybody else did in the eighties.

In the current decade, the market clearly is moving down the path toward Linux. Linux will run on a variety of different chip sets; it certainly runs quite nicely on the Power chips. In the future, we'll see more and more customers run Linux on Power instead of running AIX on Power, and to us that's fine. AIX has always been an enabler. All the money in the Unix market has been made in hardware, in middleware on top of Unix, in applications and services on top of Unix. But not in Unix operating systems -- that's not where the payback has been.-- Steven Mills, 2003-10-21

They [SCO] sued us ahead of them coming to us. They did not declare they had an issue: "IBM, would you work with us to resolve this issue?" They just simply filed suit. They decided to take the initiative away from the business people and hand it over to the lawyers. If you want to sue me, you have to deal with my lawyers. If you want to talk about a business problem, we can work on a business problem. If you have a proposal based upon some set of facts where you think IBM has done something and you'd like IBM to correct that, you could have come forward to us and showed us what the issue was and asked us to correct it.-- Steven Mills, 2003-10-21

"I think their [SCO's] strategy here is to discredit before the fact a lot of the potential witnesses [in the Open Source community] that IBM is going to call in the lawsuit, because a lot of these guys are going on the record with detailed attacks against [SCO's actions]," he suggests. "In a lawsuit, you want your side to stay quiet until they're on the stand. Look at IBM-you've barely heard anything from them."-- Undisclosed SOURCE, 2003-10-21

"As soon as they sell the first one [Linux license], litigation will be started from all quarters," he predicted. "I think the people from The SCO Group realized that if they opened that box, they'd never be able to close it again."-- Dan Kusnetzky, 2003-10-22

"I think the chances of collecting from small businesses are very small, because they have very little to lose," he said. "They don't necessarily know whether they have SCO or Linux. The only time they care about their computer is when it crashes."-- Tony Lawrence, 2003-10-22

Q: Comment accueillez-vous le fait que votre procès contre IBM ne sera jugé qu'en 2005 ?

Ce délai nous fait du mal. D'un autre côté, étant donné que nous avons révoqué le contrat Unix d'IBM, ce dernier nous devra, selon nous, de 40 à 50 milliards de dollars par an si la justice nous donne raison. Parallèlement, cinq millions de serveurs avec un noyau Linux 2.4 ou supérieur ont été déployés. Ce qui représente des milliards de dollars.

[English: Q: How do you feel about the fact that the IBM case won't go to trial until 2005?

The delay is hurting us. On the one hand, given that we have revoked IBM's Unix license, they owe us, according to our calculations, 40 to 50 billion dollars per year, if we win our case. On the other hand, 5 million Linux servers with the Linux 2.4 kernel or higher have been deployed. This represents billions of dollars.]-- Darl McBride, 2003-10-22

Remplacer le code incriminé ne paraît pas envisageable, même si nous serions les premiers à approuver une telle solution. Mais il s'agit de millions de lignes et non de quelques dizaines. De plus, les parties empruntées sont précisément celles qui ont rendu Linux apte au déploiement en entreprise, comme SMP ou Numa. Nous invitons donc les entreprises à se mettre dans la légalité en achetant notre licence pour l'utilisation du code binaire de Linux, ou en revenant à une version de Linux antérieure à 2.4, qui suffira probablement à certaines sociétés.

[English: Replacing the illegal code seems unimaginable, even if we would be the first to approve such a solution. But we're talking about millions of lines of code and not a few dozen. On top of that, the pieces that were taken are precisely what makes Linux a viable solution for enterprise deployment, like SMP and NUMA. We therefore invite enterprise users to properly license Linux by purchasing our run-time-only Linux license or downgrading to a version of Linux prior to 2.4, which will probably be enough for some companies.]-- Darl McBride, 2003-10-22

"I don't think that any company is going to see a lawsuit rolled out to them that hasn't been given an honest and fair chance to purchase a license," he said.-- Blake Stowell, 2003-10-22

"We're trying to execute on this licensing plan (by) really starting to deal with the very top players and working our way down," said Blake Stowell, a SCO spokesman. "After the company has rolled this out to the Fortune 1000 and we're satisfied with how the program is going ... we'll then roll it down to small to medium businesses."-- Blake Stowell, 2003-10-22

"My advice is business as usual. Just keep deploying [Linux]," he concluded.-- James Governor, 2003-10-24

"The company's actions on licensing do not seem to be in good faith," he said. "Despite this latest wrinkle they are still threatening everyone."-- James Governor, 2003-10-24

"If we did choose to extend [it] we wouldn't announce that until 1 November," he said. [On the Oct 31 deadline for a half-price Linux license]

But he recommended smaller companies to contact SCO in order to "get locked in" to the lower price.

"If they wait, then there is a chance they will end up paying the higher licence price when the price goes up later on," he said.-- Blake Stowell, 2003-10-24

"[SCO is] a company of 330 employees with limited resources for doing outreach or handling incoming inquiries on these licences," Blake Stowell, director of public relations at SCO, told vnunet.com.

"For this reason, we have asked our sales force to limit their focus right now to the largest audience that we've had the most interaction with, that being the Fortune 1000."-- Blake Stowell, 2003-10-24

"Arguing that (a patent) covers too many people isn't an effective defense," he said.-- David Byer, 2003-10-27

"I come down with Eben on this one," said David Byer, a partner with the Patent and Intellectual Property Practice Group at Testa, Hurwitz & Thibeault LLP. "This really is a matter of a third party adopting the terms of the FSF," he said. "The fact that (IBM) adopted the FSF form doesn't mean that they can't enforce their rights."-- David Byer, 2003-10-27

In reading Amendment X more carefully, I noticed a surprising clause, one that I doubt is in the HP contract. The last sentence of section 6 substantially loosens the restrictions on IBM's ability to develop software products that are based upon ideas learned from reviewing the UNIX code and documentation. In its original agreement with AT&T, IBM reserved the right to do so, provided that the employees who worked on the project did not refer to UNIX software products (including the documentation) while doing so. In Amendment X, that proviso was stricken. Thus, IBM was free to have programmers develop Linux contributions while looking at UNIX source code!!! Is it possible that these lax rules led some at IBM to get sloppy, and engage in direct copying? Only time will tell.-- Thomas Carey, 2003-10-27

It is hard to imagine under the current circumstances that HP will be liable for $150,000 per copyright violation. Such liability can only arise if SCO proves to the court that the copyright violations are willful. Given SCO's refusal to identify the code that is alleged to be infringing, proof of willful violation is all but impossible. Absent willful violation, the measure of statutory damages is "not less than $750 or more than $30,000 as the court considers just." Again, until SCO goes public with the exact code that it is talking about, what is just? Since SCO's own licensing program is under $1,000, that is the likely range of a "just" level of statutory damages.

[...] The question of indemnification for off-the-shelf software is relatively novel. And even in industries where indemnification is common, providing collateral to secure the indemnity is the exception rather than the rule. So I am not alarmed by HP's position that they can shoulder the financial burden, and asking people to look at the HP balance sheet for proof. $13B in cash; $2B annual profit. That should be enough to cover any likely SCO claims.-- Thomas Carey, 2003-10-27

MozillaQuest Magazine: It seems there is not much reason to sue for something HP already has a contractual right to do. Instantly, HP's Unix licenses gives HP a contractual right to modify, sub-license, and distribute SCO-owned Unix code. So, in reality the HP SCO-Linux indemnification program is merely a matter of promising HP Linux customers that HP will enforce its Unix license rights should SCO initiate any legal actions against any HP Linux customers, is this not so?

Tom Carey: In a fashion, yes. But it must establish a UNIX license in order to provide coverage that does not subject HP to undue risk. And I would not in any way minimize the fact that HP is really stepping up to the plate here. You may look at the theoretical risk and dismiss it, but litigation, even if you win, is a very expensive and distracting event. HP is willing to go through this in lieu of having its customers do the same. This adds real value to the Linux proposition, even if it corrupts some of the purity of the GPL as it applies to those customers. (Emphasis added.)-- Thomas Carey, 2003-10-27

MozillaQuest Magazine: So does that not make it pretty easy for HP to extend the HP Linux-based solution indemnification?

Tom Carey: "Easy" is a relative term. There remain a number of open questions and risks. For example, does Linux now contain code that was developed as part of Project Monterrey, after the date of Amendment X? If so, the license terms (if any) applicable to that software are unclear. Quite possibly no existing Unix license covers this problem. Furthermore, the use of a later Unix license to cover a prior distribution of Linux is a band-aid applied to a prior copyright violation that might not undo damage already done.

There is the further problem of the potential inconsistency between the Unix license terms and the GPL. Will HP have to demand that customers give up rights with respect to their copies of Linux that the GPL grants them? The answer is clearly yes, because HP is requiring the indemnitees to agree not to modify the software, except under restricted conditions. Is there possible liability to the Free Software Foundation? Could the FSF enjoin this indirect modification of the GPL? Perhaps. If it did, would HP still be on the hook for indemnification? Again, it is possible. So HP may find itself in a morass, even if it has a clever strategy for piggybacking its Unix license.-- Thomas Carey, 2003-10-27

MozillaQuest Magazine: Therefore, do not HP customers buying Linux-based solutions from HP actually, in effect, have a sub-license via the SCO-HP Unix license to use HP Linux-based solutions that might include SCO-owned code and/or derivative code?

Tom Carey: It is possible that HP can create an umbrella for them by licensing UNIX in parallel to licensing Linux. But just distributing a copy of Linux under the GPL does no good, unless there is a separate contract addressing UNIX licensing, and subjecting Linux to far more restrictive terms than the GPL calls for, or permits. Does that get SCO off of the backs of the HP customers? SCO can still sue them, but HP will step in and defend. Then SCO has a deep pocket to go after for every Linux license that HP grants.-- Thomas Carey, 2003-10-27

MozillaQuest Magazine: This seems to me that HP is doing the case-by-case review in order to make sure the modifications comport with its license to distribute and to modify SCO-owned Unix code, is not that so?

Tom Carey: Yes, that seems to be correct. Amendment X permits only certain types of source code modifications. It expressly forbids modifications designed to port the operating system to a different hardware platform. So HP is probably trying to avoid crossing the lines drawn by Amendment X.-- Thomas Carey, 2003-10-27

"SCO, regardless of what anyone wants to say, is marching on," DiDio said.

[...] Significantly, DiDio noted, famed attorney David Boies is handling SCO's case on a contingency basis.

[...] That such an attorney would agree to handle SCO's case with no guarantee of a fee unless SCO wins suggests the Utah-based company has a good chance of success, DiDio said.-- Laura DiDio, 2003-10-27

"They've become a renegade in their own movement," Yankee Group analyst Laura DiDio told NewsFactor. "Everyone's saying, 'They're trying to harm the open-source movement.'

"The folks in UnitedLinux probably feel that SCO has a much different agenda from what they have," she said.-- Laura DiDio, 2003-10-27

"UL [UnitedLinux] doesn't have an awful lot of meaning at this point," Illuminata analyst Gordon Haff told NewsFactor.

"SCO is no longer a player. TurboLinux, while it always had strength in the Far East, is very clearly a regional Linux distributor. And Connectiva is a regional distributor.

"In fact, when you hear companies talk about what Linuxes they support, you don't even hear United Linux mentioned," he said.

"UL really is SuSE, at this point, for all intents and purposes," Haff said. "Essentially you've ended up with Red Hat and SuSE as the two worldwide enterprise-Linux distributions."-- Gordon Haff, 2003-10-27

"The proper enforcer of a copyright is the copyright holder," said Eben Moglen, general counsel for the FSF. "IBM says, 'You're using a copyrighted work of ours in a fashion which is prohibited by the Copyright Act, and you're doing so without our permission. You owe us damages and you must stop.'"

[...] "If SCO says the GPL isn't valid permission, then they have no valid permission," he said. "Redistributing copyrighted works without permission, we are told by the RIAA (Recording Industry Association of America Inc.) and MPAA (Motion Picture Association of America) every day, is stealing."-- Eben Moglen, 2003-10-27

"If we're in violation of them [IBM's counterclaim patents], then just about every other vendor in the entire software industry is in violation of them," SCO's Stowell said in an interview. "What they're claiming is something that is a common practice within the software industry."-- Blake Stowell, 2003-10-27

"The Free Software Foundation is the only entity that can enforce the GPL so, in effect, IBM is barred from trying to enforce the GPL with SCO," wrote Blake Stowell, a SCO spokesman, in an e-mail response to questions.-- Blake Stowell, 2003-10-27

MozillaQuest Magazine: Also, how does HP's Linux indemnification program fit in with HP's Unix license?

Blake Stowell: They are really two separate things from two very different sides of their business. HP does a healthy UNIX business from HP-UX, and also from the HP servers that ship with UnixWare and OpenServer from SCO. We believe that HP's UNIX license is in good standing the same way that Sun's and others are in good standing by honoring the terms of that license.

The Linux side of HP's business is an area where we really have very little interaction since having suspended the sales of Linux products from SCO.-- Blake Stowell, 2003-10-27

MozillaQuest Magazine: But would that not allow a first-level Unix licensee to include "Unix" code and add that into a Linux product that licensee distributes and then consider that combination of Linux-product code and "Unix" code to be a derivative work of the first-level licensee?

Blake Stowell: No, that would be a violation of their UNIX license. A licensee can't use their UNIX license to cover their UNIX work and then try to have that carry over to also cover any Linux business. It only covers their UNIX products. If you take HP as an example, HP-UX is an authorized derivative of UNIX that was developed within the bounds that HP's and SCO's license set, but any Linux distribution that HP distributes with their hardware is considered an unauthorized derivative. Their UNIX license doesn't cover this.-- Blake Stowell, 2003-10-27

MozillaQuest Magazine: Does not the standard first-level Unix License such as the ones HP, IBM, Sequent, SGI, Sun, and so forth have allow those first level licensees to sell Linux products that might have SCO-owned and or copyrighted Unix code in them?

Blake Stowell: UNIX licensees have the right to license UNIX, create derivative works based on that license (in the case of HP they created HP-UX) and create a healthy UNIX business based on that. The UNIX license doesn't address Linux, other than to say that you can't take the UNIX code and contribute it outside of the company's derivative work.-- Blake Stowell, 2003-10-27

MozillaQuest Magazine: From your press release about the HP indemnification program, it seems that SCO approves of that program, is that correct?

Blake Stowell: I wouldn't say that we necessarily approve of the program, only that if we were in HP's shoes, we would probably do the same thing. HP feels compelled to protect their customers, so from that standpoint, they are doing everything they can to accomplish that. At the same time, if they want to indemnify their customers in this way, they are taking on a pretty huge financial burden by doing so.-- Blake Stowell, 2003-10-27

Right now, SCO is only selling this license to the Fortune 1000. SCO's sales team is focused right now on these much larger companies. We would still encourage customers from small-to-medium businesses to contact SCO to let us know of their interest in the license and to be assured of receiving the lower price for the license that we are currently offering, but we aren't actually selling or shipping any licenses to that group yet.-- Blake Stowell, 2003-10-27

SCO's Blake Stowell notes that HP is taking on a pretty huge financial burden with its Linux-product indemnification program. He also told MozillaQuest Magazine: I highly doubt there is any danger of such a program plunging them into bankruptcy.-- Blake Stowell, 2003-10-27

SCO's position is that anyone running Linux for commercial business purposes, based on the 2.4 kernel or later, should contact SCO to obtain a SCO IP License for Linux.

Blake went on to say: In the case of HP, they are saying, "don't worry about purchasing a SCO IP License for Linux, because if SCO approaches you to purchase one, we will step in and either purchase a license for you or we will protect you from any legal claims that SCO may make against you for not having purchased a license." SCO's position on this is that HP customers can either purchase a license now, or they can have HP pay for this license later. Either way, a license will have to be in place to properly compensate SCO for this intellectual property.-- Blake Stowell, 2003-10-27

SCO's position is that anyone running Linux for commercial business purposes, based on the 2.4 kernel or later, should contact SCO to obtain a SCO IP License for Linux. Purchasing Linux from a UNIX licensee like HP, IBM, or any other company doesn't absolve them from having to purchase the SCO IP License for Linux.

In the case of HP, they are saying, "don't worry about purchasing a SCO IP License for Linux, because if SCO approaches you to purchase one, we will step in and either purchase a license for you or we will protect you from any legal claims that SCO may make against you for not having purchased a license." SCO's position on this is that HP customers can either purchase a license now, or they can have HP pay for this license later. Either way, a license will have to be in place to properly compensate SCO for this intellectual property.-- Blake Stowell, 2003-10-27

Phil Albert [...] called SCO's unconstitutional claims "weird,"

[...] Albert said SCO is "shooting [itself] in the foot" with its response to IBM's counterclaims.

"For SCO to say 'We're in possession, but the license is not valid and is unconstitutional' -- that leaves them in the position of copyright infringer," Albert said. "That's kind of the inconsistency."-- Phil Albert, 2003-10-28

"This is the kitchen-sink kind of response," Berkowitz said of SCO's court filing. "This is dumping everything with the kitchen sink. This is throw everything at the wall and see what sticks."

"[...] I'm sure they did sufficient research to raise those defenses -- they're not woefully inappropriate," he said. "But some of them appear to be a stretch. It's just unusual to see these sorts of defenses under the facts in this case."-- Jeff Berkowitz, 2003-10-28

"The GPL has never been tested before. This is raising the stakes on that," said David Byer, an intellectual-property attorney and partner at law firm Testa Hurwitz & Thibeault law firm. If a ruling comes out declaring the GPL void, "a lot of people are going to be potentially in a pickle."-- David Byer, 2003-10-28

"There are some high ironies that IBM, one of the largest obtainers of patents in the world, ends up being the defender of the GPL, which is derived from the Free Software Foundation and the open-source community, which is generally skeptical and worried about overly broad patent protection," Byer said.-- David Byer, 2003-10-28

"It's just rubbish," said attorney and Columbia Law School professor Eben Moglen. "There's nothing about giving permission to copy, modify or redistribute that violates the U.S. Constitution or any other law of the United States." [About SCO's disparagement of the GPL in its countersuit reply]-- Eben Moglen, 2003-10-28

Bruce Perens [...] blasted SCO's challenge to the GPL's constitutionality as being "way over the top.

Federal law "establishes the right to license copyrights in return for some compensation, which is what the GPL does," Perens said. "The only difference between our licenses and those used by everyone else is that they ask for cash; we ask for some rights regarding derived works."

[...] "What we have here . . . isn't really a serious legal filing. It's just an attempt to delay the inevitable day that the case gets thrown out of court," Perens said.-- Bruce Perens, 2003-10-28

"Apart from the patent issues, SCO views the GPL issues as much more significant," company spokesman Blake Stowell said Tuesday. "SCO's copyrights still stand. Congress has drawn a boundary between proprietary and open source."-- Blake Stowell, 2003-10-28

"I'd be confident if we had any reservations that misappropriated code had gone into Samba, we ourselves would stop shipping it, and we would recommend to our users they stop using it," Stowell said. But of assuming responsibility for a Samba lawsuit, he said, "I don't think we could."

[...] "If IBM is so confident that Linux is free and clear, why don't they indemnify their users against any lawsuit SCO could bring against them?" Stowell said.-- Blake Stowell, 2003-10-28

"Fortunately, we live in a country governed by the rule of law, and I think we'll find out that the GPL is pretty solid."-- Joe Eckert, 2003-10-29

"It appears that SCO has denied many of the facts supporting IBM's counterclaim. But IBM strongly believes its counterclaim and we look forward to trying this case in a court of law."-- Trink Guarino, 2003-10-29

"SCO has distributed under GPL for years, and continues to do so. That means that SCO has permitted everybody to copy, modify and distribute that code. They can't go back now and say people don't have a right to distribute that code.

"In order to run the scam that it is running, demanding people pay license fees to them for use of the Linux kernel, SCO has to say the GPL doesn't do what the GPL says it does," he argued.-- Eben Moglen, 2003-10-29

Eben Moglen [...] called SCO's claim "an act of self-parody."

"It's an indication of the desperation of SCO's legal position," he told NewsFactor. "By wrapping itself in big language about the Constitution and export control law, SCO is just trying to confuse people."-- Eben Moglen, 2003-10-29

When SCO returns to that the supposed defense that the GPL is invalid, that is not actually a defense of any kind. Even if it were true, which it is not, that there is some legal impediment to the use of GPL, all that would stand for would be that SCO has no permission to redistribute IBM's copyrighted work.

Every week, somewhere in the newspaper that you read is a statement by Mr. Valenti of the MPAA, or by some authority at the RIAA saying that redistributing other people's copyrighted work without permission is stealing.

I don't necessarily agree with that characterization, but I would point out that what IBM says, perfectly correctly, SCO is doing is precisely what RIAA and MPAA say is stealing: namely, the redistribution of copyrighted work without permission.

SCO's response, that the permission given to some people - which happens to be my license, the GPL - is not legally valid, does not change the fact that they have no permission and are illegally redistributing IBM's work.

Now, as to what SCO says that the GPL violates the United States constitution, it is simply nonsense. I have studied the United States legal system for my entire adult life. In addition to this work that I do on behalf on the Free Software Foundation, I earned a PhD in American Legal History, and have taught legal history throughout my academic career at front-rank law schools here and elsewhere in the world. I clerked at the United States Supreme Court. I have done a fair amount of studying of constitutional law. I don't see any basis of any kind anywhere for this absurd claim that giving somebody permission, using a certain form of words, to copy, modify, and redistribute copyrighted work in some way violates the United States constitution. That's ludicrous.-- Eben Moglen, 2003-10-30

'If you bought UnitedLinux from SCO, then SCO will hold you harmless.'

[...] 'The only thing we can do is indemnify for SCO-owned code. We can't possibly indemnify customers for code misappropriated [from other sources].'-- Blake Stowell, 2003-10-30

I'm a bit nervous about the U.S. legal system. Not SCO in particular, but just the randomness. It seems that anybody who has a business that's bigger than a lemonade stand really needs to be aware of legal issues, right?

But to some degree I'm fairly happy (that) SCO does seem to have no case at all, which means that when it eventually gets resolved, which can take way too long - the IBM people seem to think it is easily dragging into 2005 - we will actually have a legal precedent, which is good. But it's bad to have it drag out.-- Linus Torvalds, 2003-10-30

The scary point is that all the same problems exist in proprietary source too. It's just that you don't get caught. Right? So it's not about open source versus anything else. It's really about "Oops. Now they actually see us doing this stuff. And so we'd better be careful."-- Linus Torvalds, 2003-10-30

I read [a] document from a well-known financial analyst firm that said that they were recommending SCO to the [high-risk-oriented] investor, that the stock could rise to $45 a share in some given time frame because of the potential of this intellectual property issue they have over the Linux community. [They were] saying 'Hey, why don't you go for it.'

So, if there are people in the financial investment community doing that, then why not venture capital companies? And, of course, for the executives of SCO, if the stock price were to ever reach even half that amount, they might bail out anyway. So this is turning into kind of a casino game.-- George Weiss, 2003-10-30

I think that this [money] is really kind of a gift from the venture capitalist who thinks that maybe there's a chance of a big payoff here and that [SCO] needs the money to sustain their campaign. So it's not surprising that that is one of their tactics. [On the BayStar investment.]

I can't say much more about it, other than that I think they're playing a strategic game of banking on intellectual property as an important revenue generator to drive up their stock price and then, if and when that should happen, to get out of the market, essentially, or sell themselves out to the highest bidder.

My feeling was that the other part of the business was pretty much getting destroyed in the process. So it looks like an end game to me.

[...] [What] was their Linux business is probably totally destroyed now. I was even talking about the other parts of the business aimed at their customer install base and extending their software portfolio and things like that. The amount of community ill will that they're generating is going to work against them over the long term, even if they have good products.-- George Weiss, 2003-10-30

"They are now truly ingrained in the open-source community," Bill Claybrook of Aberdeen Group told NewsFactor. "The question is, what will Novell do with SuSE? And what does this mean for SuSE's customers?"-- Bill Claybrook, 2003-11-04

"SuSE became more vulnerable after the SCO Group, which has worldwide offices, pulled out of United Linux. IBM has a great need to maintain viable and strong distributions. So a bit of me says this is directly as a result of SCO's actions," he said.-- Mike Davis, 2003-11-04

"It's difficult for any high-tech company to transition to a new market. And now Novell has to meld two separate technologies and two very different corporate cultures," she told NewsFactor.-- Laura DiDio, 2003-11-04

"They have to prove that they can rise to the challenge and create a Linux-based, end-to-end platform," Gardner told NewsFactor. That said, he added that embracing Linux is a good move, based on its growing popularity.-- Dana Gardner, 2003-11-04

"Responding to customer demands for open, standards-based computing, Novell has been dedicated to a cross-platform vision for four years now, and Linux is an increasingly important part of that strategy," said Jack Messman, chairman and CEO of Novell. "The acquisition of SUSE LINUX will complete Novell's ability to offer enterprise-class Linux solutions to our customers from the desktop to the server. No other enterprise Linux vendor has the operating system experience and the worldwide technical support capabilities that Novell will be able to deliver. Novell is bringing our significant resources to bear to help customers adopt Linux with more confidence, giving them the freedom of choice Linux provides without the anxiety over whether an open source solution can truly be relied on for mission-critical functions."-- Jack Messman, 2003-11-04

"We chose SUSE LINUX because they are a clear market leader in Linux technology for the enterprise," Messman said. "With this acquisition, Novell will be the only billion-dollar software company with a Linux distribution and a worldwide ecosystem around it. A worldwide technical staff of more than 600 has been trained to support Linux. The acquisition of SUSE LINUX completes our technology stack from the desktop to the server."-- Jack Messman, 2003-11-04

"Novell understands the power of open, standards-based computing, and has been moving in that direction for some time," said Richard Seibt, CEO of SUSE LINUX. "Novell's global reach, marketing expertise and reputation for security, reliability and global enterprise-level support are exactly what we've been seeking to take SUSE LINUX to the next level. We've also been impressed by the incredible loyalty and competence of Novell customers and business partners, and we're looking forward to joining forces to help customers gain the benefits of Linux and to help Novell continue to expand its role in the open source community."-- Richard Seibt, 2003-11-04

"Novell has a complete stack of software, which will make organisations very comfortable getting the same support they expect from proprietary products, even though it's open source from top to bottom," said Dan Kuznetsky, an analyst at IDC. The Linux strategy "gives Novell an opportunity to refocus...and significant hopes for growth," he said.-- Dan Kusnetzky, 2003-11-05

"The Internet created -- and creatively destroyed -- great wealth. It also created a culture legitimizing intellectual property theft," said McBride. "When you defend intellectual property, you speak an unpleasant truth. People don't like to hear unpleasant truths. The alternative to this fight, however, is the death of an industry and thousands of jobs lost."-- Darl McBride, 2003-11-05

"We are extremely pleased to have Dan join our Board of Directors at this time," said Darl McBride, President and CEO of SCO. "He is a proven financial and IT industry executive and possesses the respect and leadership that will be a strong value to our Board."-- Darl McBride, 2003-11-05

"Novell is delving deeper into the Linux business, which is hard to make money in, and Novell is having a hard time doing that already," Rhinelander said. "They still have to make the mental transition from the 'NetWare company' to a company that is Linux-first with services."-- Tom Rhinelander, 2003-11-05

"I personally would like to see more competition on the desktop, because that is the area where Linux deployments are still weak," said Chad Robinson, an analyst at the Robert Frances Group. "It's a complex topic and not something a small company can tackle alone."-- Chad Robinson, 2003-11-05

The SuSE Linux deal "gives current Novell customers some confidence the company is on a track...that seems to take advantage of Novell's strengths, and it's a viable strategy for the future. And that's different from Novell of the past, which had six strategies in six years," Rueppel said. "This will slow the erosion of NetWare in their installed base."-- Philip Rueppel, 2003-11-05

"We didn't do this (deal) to compete with Microsoft," said Chris Stone, vice chairman in the office of the CEO at Novell. "Our objective is to reduce the impediments to Linux in the enterprise."-- Chris Stone, 2003-11-05

"Dan Campbell brings a wealth of experience to SCO's Board of Directors and strengthens our continued commitment to principles of sound corporate governance and building investor trust," said Ralph Yarro, Chairman of the Board of Directors of SCO.-- Ralph Yarro, 2003-11-05

"Novell must have had its lawyers pore over the deal. It has plainly taken a judgement that SCO's case has no merit. SCO is toast," he declared.-- Gary Barnett, 2003-11-06

"This really is very, very good news for Linux," Gary Barnett, principal analyst at Ovum, told vnunet.com. "It's a very important move and will change the landscape of the world of Linux."-- Gary Barnett, 2003-11-06

"Novell has a totally integrated suite of products with NetWare at the bottom and a layer of products on top.

"It could substitute NetWare with Linux and offer a totally integrated stack. It's down to whether they offer the two [SuSE and NetWare] in parallel or substitute NetWare."-- Andy Butler, 2003-11-06

"Novell will have to convince the more evangelical elements of the Linux community that what it is doing with SuSE is nothing like what happened with Caldera. Novell has made its position clear that it is part of the anti-SCO lobby."-- Andy Butler, 2003-11-06

"(SCO) has mystified a lot of people in how they've characterized their defenses, for example, the unconstitutionality of (the GPL)," Byer said. "It's not clear what that means and I know there's a lot of folks in the industry who are curious as to what SCO means by that."-- David Byer, 2003-11-06

"At the same time, it's worth it for everybody to acknowledge that there's this storm that's going on outside the window and it makes sense to discuss any code that might be implicated by the SCO lawsuits," Byer said. "It's part of the typical risk analysis that you would perform for any client in these circumstances."-- David Byer, 2003-11-06

"There are provisions that are ambiguous and subject to interpretation," David Byer, intellectual-property attorney and partner at the US-based law firm Testa Hurwitz & Thibeault . "The provisions about modifying the program and including it in your own program are certainly not perfectly transparent. There's a lot of debate about what some of those provisions mean."-- David Byer, 2003-11-06

"IBM's investment in Novell is consistent with the company's history related to Linux. We've invested in a number of Linux distributors, including Red Hat, SuSE, and TurboLinux, in the past as a way to ensure customer choice in the market. Today's investment also helps assure IBM's customers that there will be strong, continued support for SuSE Linux across our family of eServers and suite of middleware offerings."-- Michael Darcy, 2003-11-06

"SuSE became more vulnerable after SCO, which has worldwide offices, pulled out of United Linux," he explained.

"IBM has a great need to maintain viable and strong [Linux] distributions. So a bit of me says this is directly as a result of SCO's actions."-- Mike Davis, 2003-11-06

"I would guess that the creaky, old original GPL will be changed after this suit in response to the result," Gary Glisson, intellectual property attorney for Stoel Rives LLP, said in an email response to questions. "Those changes themselves are likely to be a point of great dispute and discussion, but they will happen."

While it's impossible to predict the new GPL, Glisson said, "My guess is that whatever the change, it will be written in clearer terms that the present GPL language."

[...] "What does not kill the open-source community will make it stronger," Glisson said. "Regardless of the outcome of this specific case, I think the open-source community will survive and continue to proliferate."-- Gary Glisson, 2003-11-06

"German-U.S. integration is one of the hardest problems in business. Just look at DaimlerChrysler," he said.-- James Governor, 2003-11-06

Big Blue "faced a stark choice - put some money in, or think about delivering its own distribution" of Linux, Governor said.

[...] "IBM has been reluctant to step up to the plate when it came to customer calls for a client-side open-source strategy," he said. "It looks like Novell is trying to reinvent itself with a strategy in exactly that direction."-- James Governor, 2003-11-06

RedMonk's Governor said he learned that SuSE had proposed that Sun Microsystems buy the company, but Sun rejected the offer. Sun was not immediately available for comment.-- James Governor, 2003-11-06

"Novell has a pretty dismal record in expanding beyond their original roots, but with Ximian and now this, they're certainly positioned to become a major competitor to Red Hat," said Illuminata analyst Gordon Haff.-- Gordon Haff, 2003-11-06

"What's good for Linux is bad for Microsoft," Haff said, and Tuesday's deal has the potential to "further erect fences around Windows."-- Gordon Haff, 2003-11-06

"There is nothing that I have ever run into in my life that gives the slightest color or substance to a claim that this particular form of copyright permission some how comes into conflict with the Constitution of the United States," Moglen said. "It's not even a claim that can be met with a straight face."

[...] "GPL undermines SCO's threat against users of free software," Moglen said. "If it weren't for the threat against users of free software, SCO would be a tiny little company suing IBM on contract claims, and the market would look at that and think, 'You're a tiny, little company suing IBM on contract claims, so you're not worth much.'"-- Eben Moglen, 2003-11-06

"Part of my job is to make sure that our strategic investment goes into areas that are not commodities," Nugent told me. "The base operating system is an example of such a commodity."

[...] "Yes, the operating system itself is a commodity, Nugent added, "But the distribution is not." But if that didn't make it clear, this next statement did: "By doing this, we can make sure there are no problems with dependencies [in Novell's application stack] or intellectual property."-- Alan Nugent, 2003-11-06

"It shows a deep skepticism if not outright disdain for the SCO claims," Radcliffe said. "Or else they wouldn't be spending this amount of money."

In particular, the acquisition plan could indicate that IBM has faith in a provision that Radcliffe termed a "silver bullet" in the 1995 Asset Purchase Agreement under which Novell sold Unix to SCO Group's predecessor. [...]

"Maybe (IBM) believes its silver bullet is actually a platinum bullet. If you spend a lot of money, you obviously have a lot of confidence in that part of the situation," Radcliffe said.-- Mark Radcliffe, 2003-11-06

"When you own the core Unix source code and the core Unix operating system and you're licensing it out to third parties, you have to expect that they will abide by the terms of their contract," he said. "I suppose the only thing we could do to stop the flow of Unix into Linux is to simply stop licensing Unix, but that's simply not something that the company's going to do."-- Blake Stowell, 2003-11-06

Tuesday's deal [Novell will acquire SUSE] means IBM and Novell "are willing to take on a great deal of risk," spokesman Blake Stowell said. "The intellectual-property issues in Linux are controversial and unsettled, and it appears it may be that way for a very long time."-- Blake Stowell, 2003-11-06

"I would expect them [companies using Linux] to continue ratcheting up the pressure to get (Linux) users to pay license fees," Weiss said. "If you want to be in the crosshairs and you don't mind threatening letters, then you can be more public about your use of Linux."-- George Weiss, 2003-11-06

"Linux is expected to be the predominant, or near predominant, operating system in the Unix space, and one of the major operating systems in most enterprises by 2006," Weiss said.-- George Weiss, 2003-11-06

"That just sends me right up. If I had explosives, I'd be in Salt Lake City,"-- Thaddeus Beier, 2003-11-07

"And the way that was structured was very interesting," DiDio said, "It's a no lose proposition for IBM, which receives convertible preferred stock in Novell that it can sell short, if need be, to get [its] money back in a hurry."

[...] "You must recognize that SCO and Novell are both character actors in the larger tableau, which is all about Microsoft and IBM going after one another. It is no coincidence to me that several weeks ago, SCO received financing from Microsoft, and then IBM turns around and finances Novell. And that is what all this is about, ultimately -- high-tech politicking by proxy."-- Laura DiDio, 2003-11-07

"There have always been rumors to the effect that IBM (NYSE: IBM) would acquire Novell -- or Lucent (NYSE: LU) or AT&T," Yankee Group analyst Laura DiDio told NewsFactor. "It never happened, obviously, but I think the end game for Novell could very well be to get acquired."

[...] "Over the years, they have become a much less attractive target than they once were." Now, though, with the SuSE acquisition, as well as the August purchase of Linux desktop provider Ximian and other acquisitions over the years, Novell is about as attractive as it has ever been. "The time is ripe," DiDio says.-- Laura DiDio, 2003-11-07

"They would make a great target," he told NewsFactor. "I have been watching them for years to see if anyone would buy them. It's a conversation people traditionally have about Novell."

[...] "You have to consider each possible acquirer on a case-by-case basis," Enck said. "There are drawbacks to almost every scenario."-- John Enck, 2003-11-07

"We think this licensing initiative is going to work," says Lawrence Goldfarb, managing partner. "We spent a lot of time calling around to potential licensees, and we believe SCO is going to sign enough companies to make this an interesting growth story."-- Lawrence Goldfarb, 2003-11-07

"Microsoft bankrolling a test case in the area of who owns the code for open source is not really so surprising. Microsoft understands that money talks."

But Governor added that the lawyer deal was very tawdry and showed that SCO was now a shell, not a software company any more.

"The great shame is that SCO did have a fond place in many hearts in open source history. But this isn't even the same SCO," he said.-- James Governor, 2003-11-07

"They're using a ton of Linux in Hollywood, so they've become a lightning rod for us," says Darl McBride, SCO's chief executive.

[...] "It's hypocritical for them to be going around saying that they don't want their stuff to be given away for free, but at the same time saying, Boy, this free stuff sure is cool,'"he says.-- Darl McBride, 2003-11-07

"We're going to force people down a path," McBride says. "They can choose licensing or litigation. If someone says they want to see a court ruling before they pay, we'll say, Fine, you're the lucky winner. We'll take you first.' I'd be surprised if we make it to the end of the year without filing a lawsuit."-- Darl McBride, 2003-11-07

Happy to play the heavy, he tells of receiving voice mail recently from an anonymous caller who challenged him to a fistfight, leaving a callback number, "if you have the guts." Feeling playful, he had his secretary contact the irate critic and offer to set an appointment for the clash. The caller declined.-- Darl McBride, 2003-11-07

... some have signed up [to license Linux from SCO], though it won't name any. "We're ahead of plan," Sontag says.-- Chris Sontag, 2003-11-07

"You would have to be Nostradamus to know how all this would end," Yankee Group analyst Laura DiDio told NewsFactor.

"SCO, regardless of what anyone wants to say, is marching on."

[...] "But even if SCO were to settle with IBM tomorrow, there could likely be copycat lawsuits filed," DiDio noted. Either way, Novell will need to be on solid legal ground as it begins to market its Linux solution in certain industries, she said. "Government organizations, the healthcare, banking and financial industries -- by law or by shareholder demand, these organizations will require indemnification."-- Laura DiDio, 2003-11-10

"Novell continues to claim it has rights of past trademarks that indemnifies them from the suit," Gartner analyst John Enck told NewsFactor. "SuSE claims that it had a partnership with SCO and it is indemnified as well. SCO, of course, doesn't see it that way and doesn't appear to be giving any signs of budging."-- John Enck, 2003-11-10

"Novell kept talking about the excellence of the technology," said Mr. Kusnetzky of IDC, "while Microsoft's message was that their products were good for your business."-- Dan Kusnetzky, 2003-11-10

"People remember Novell as a company they used to buy things from in the 1980's," said Dan Kusnetzky, vice president for systems software research at IDC, a market research company.-- Dan Kusnetzky, 2003-11-10

"IBM had a stake in this, and we at Meta believe one of the reasons why they made this investment was to make a statement about Linux and their role as a major player."

[...] "The possibility of someone like, say, an Oracle (Nasdaq: ORCL) or Sun joining IBM to support a single investment in a Linux enterprise would clearly be detrimental to Microsoft," he said. "As single players, these companies probably could not stand up against Microsoft and win. But if they used a liaison such as Novell to present a common front, then they could," he speculated.-- Earl Perkins, 2003-11-10

"The purchase itself is good news for those companies that have a stake in this fight," Meta Group analyst Earl Perkins told NewsFactor. "What Novell is saying to SCO is, 'Go ahead and do what you want. There is a strong enough case supporting our side for us to go forward with this acquisition.'"-- Earl Perkins, 2003-11-10

"These [Novell executives] are not the same people who made the Unix and Word Perfect decisions. The company has become much more pragmatic and maintained a consistent focus for the last two years."

[...] "They need to replace the cash cow that was once Netware. And that is how they aim to do it -- if they can."-- Earl Perkins, 2003-11-10

"If you're having trouble compelling discovery, you go to outside sources," says Brian Ferguson, an attorney at McDermott, Will & Emery, a Washington, D.C., law firm.

[...] "IBM needs to get answers from analysts about why they wrote positive reports and from Baystar about why they invested," Ferguson says.-- Brian Ferguson, 2003-11-11

"We expected IBM to conduct a fishing expedition at some point," says Herbert Jackson, managing director of Renaissance Ventures, a small investment company in Richmond, Va., that first bought SCO shares 18 months ago, before SCO filed its lawsuit, and it has bought more since the suit was filed. In April of this year Renaissance published a research report stating that the SCO lawsuit was "well founded."-- Herbert Jackson, 2003-11-11

"It is time for SCO to produce something meaningful. They have been dragging their feet and it is not clear there is any incentive for SCO to try this in court," he says.-- IBM PR, 2003-11-11

"I view this as an attempt to bully and intimidate analysts--to try to cow them into silence," says Christopher Sontag, executive vice president at SCO, in Lindon, Utah. [on IBM subpoenas to analyst firms and a SCO investor]-- Chris Sontag, 2003-11-11

Some executives have sold shares but only small amounts and mostly "to cover tax consequences on restricted stock," Sontag says.-- Chris Sontag, 2003-11-11

Sontag says SCO has provided 1 million pages of documents to IBM and that IBM in return has provided only 100,000 pages to SCO. "The foot-dragging is on the part of IBM," he says.-- Chris Sontag, 2003-11-11

"I can access the code. I can access the tools. I can access the people. We're working together to build something as a community."

[...] "I think it's completely bogus, they haven't shown anything."-- Jason Holt, 2003-11-12

"It has become the biggest issue in the computer industry in decades."

[...] "The stakes are extremely high. The balance of the software industry is hanging on this."

[...] "This thing would not be as big a deal as it is if we did not have a case. So instead of waiting for a judgment where they might lose, they're trying to shut us down in the short-term with cyber-attacks or personal attacks."

[...] "If SCO loses this case, software becomes free, there's going to be a downward spiral."-- Darl McBride, 2003-11-12

"It is time for SCO to produce something meaningful. They have been dragging their feet, and it is not clear there is any incentive for SCO to try this in court."-- IBM PR, 2003-11-12

"They are trying to coerce and intimidate," Stowell said, referring to Big Blue's subpoenas. "I think what they're trying to do is that if you're a potential investor in our company or an industry analyst that says anything even remotely favorable toward SCO, you're going to be subpoenaed by IBM."-- Blake Stowell, 2003-11-12

SCO spokesman Blake Stowell said he did not know what the subpoenas asked for, but "I know that some of them have been served."-- Blake Stowell, 2003-11-12

"If they continue doing things like this until the lawsuit goes to court in 2005, they will have everybody not liking them," Aberdeen Group research director Bill Claybrook told LinuxInsider. "There won't be anyone left that doesn't hate them."-- Bill Claybrook, 2003-11-13

"barring some kind of settlement, this is going to be protracted, hard-fought legal battle"-- Laura DiDio, 2003-11-13

"In order for SCO to thrive, they've got to sell a product," she said, referring to SCO's current focus on its IP. "Certain organizations may not want to do business with them because they caused a conundrum here that the industry probably didn't need."-- Laura DiDio, 2003-11-13

"I have to think that SCO's management knew they were going to subpoena the biggest names in the free software and open-source movement. Torvalds and Stallman? Come on, they knew," says Brian Ferguson, an intellectual property attorney at McDermott, Will & Emery, a Washington, D.C., law firm, who has been following the case.-- Brian Ferguson, 2003-11-13

"SCO continuing to try to turn what is a contract dispute into a media event and thus produce over a shadow over a whole Linux market with perhaps no justification."

"If SCO is hoping to find that Richard Stallman [founder and head of the Free Software Foundation], Linus Torvalds or IBM put misappropriated Unix code into Linux, they will be disappointed. Richard, Linus and IBM do things right," Kusnetzky added.-- Dan Kusnetzky, 2003-11-13

"IBM said they were looking at the technical issues in the case, and their subpoenas don't reflect it," he said.-- Mark Modersitzki, 2003-11-13

"We believe that all of the individuals that we subpoenaed have a recognized leadership role in the development of Linux," Modersitzki said. "Everybody knows they're a part of the Linux community, and certainly their testimony will be part of the case."-- Mark Modersitzki, 2003-11-13

Modersitzki also countered reports that have suggested that SCO is making this move [its subpoenas] in response to IBM Corp.'s subpoenas of investment banks and The Yankee Group, which have been viewed as siding with SCO.

He flatly denied the suggestion. "There is no connection," he said.-- Mark Modersitzki, 2003-11-13

"SCO has yet to show us any evidence that we have violated our agreements with them," the company has said.-- IBM PR, 2003-11-13

"We're seeking information from these individuals because of their recognized leadership roles in the evolution of Linux," a SCO spokesman said today. "We believe that their technical views will help to illuminate important issues related to the development of Linux and the validity of the GPL."-- SCO PR, 2003-11-13

"While citing a desire to understand what specific parts of Linux code are involved in this case, [IBM] has not chosen to subpoena any technical experts, but instead has subpoenaed those who have made investments in The SCO Group, along with one industry analyst who has said only that SCO's case should be taken seriously," the SCO spokesman said. "In some ways, IBM's list of subpoenas look less like an effort to unravel the critical technical issues of the case, and more like an effort to intimidate SCO investors."-- SCO PR, 2003-11-13

"SCO is suing IBM for violating a contract. We don't even know what the contract said. In terms of the resolution of that lawsuit, the Free Software Foundation is entirely uninvolved," he says.

[...] "I am concerned about long-term entrenched confusions such as referring to a version of our GNU OS as 'Linux' and thinking that our work on free software was motivated by the ideas associated with 'open source.' These confusions lead users away from the basic issue: their freedom. By comparison, the events involving SCO are transitory and almost trivial," Stallman says.-- Richard Stallman, 2003-11-13

"We believe the reason that IBM put out the subpoenas that they did was to intimidate," Stowell said.

"They're trying to say to the marketplace, 'If you invest in SCO, or if -- as an industry analyst -- you are even remotely favorable toward SCO, then we're going to serve you with a subpoena.'"-- Blake Stowell, 2003-11-13

"I don't know how these things work, and I will have to get a lawyer to tell me what to do," he said.-- Linus Torvalds, 2003-11-13

"If I were a judge and IBM and SCO came to me with that list of people, I'd probably throw the whole thing out, because this whole list is nonsense," he said.-- Bill Claybrook, 2003-11-14

"Linus (Torvalds) is the only one who seems worth subpoenaing," said Bill Claybrook, a research director with Aberdeen Group Inc. who has also examined SCO's source code. "The rest of them don't have any information that would lead a judge to determine whether code had been copied."

"The list that I read seemed nonsensical to me," said IDC analyst Dan Kusnetzky, speaking of SCO's list of subpoena targets. "The SCO Group has been playing this as a media event," he said.-- Dan Kusnetzky, 2003-11-14

OSDL said it has "agreed to fund legal representation for Torvalds and any other employee of the lab who may be involved in the litigation."-- OSDL PR, 2003-11-14

"They're just stirring up mud," Raymond said. "They've got a hearing coming up ... on December 5 on IBM's discovery request and there's a substantial possibility that the judge might quash this case because SCO has failed to respond to IBM's discovery request," he said.-- Eric S. Raymond, 2003-11-14

"Oh would I like to make a court appearance regarding this one," said Hans Reiser on the ReiserFS mailing list.-- Hans Reiser, 2003-11-14

"These are more litigation bills that The SCO Group will have to pay for. Maybe they can find some more investors."-- Dan Kusnetzky, 2003-11-18

"But what they don't see is that we're trying to defend the rights of capitalism for the silent majority," McBride says. "Linux leaders pound the table about a community-driven model where everything is free, and that's the flip side of capitalism. This country was founded on capitalism, the right to make a profit for what you own, not give it away for free."

[...] "It's like back on the farm where we had to break a new colt and try and tame them," McBride says. "You'd get bucked off and thrown into the fences, and with your back bleeding, you'd get back up and do it again."-- Darl McBride, 2003-11-18

"He [Matthew Szulik] stood up during his keynote, with me in the audience, and said he was going to take SCO head on," McBride says. "And two weeks later at Linux World, IBM [announced it] imported AIX into Linux.

"When people are lining up against you on all sides and taking shots at you, you have to fire back," he says.-- Darl McBride, 2003-11-18

Along the way, over the last several months, once we had the copyright issue resolved where fully we had clarity around the copyright ownership on Unix and System V source code, we've gone in, we've done a deep dive into Linux, we've compared the source code of Linux with Unix every which way but Tuesday. We've come out with a number of violations that relate to those copyrights.

[...] With respect to your other questions, we have gone through and shown the Linux community a bunch of code. We sat down in August and we shared with them the derivative works code that was out there and one sample file that was out there on a direct copyright infringement. The Linux community has said they have removed the copyright-infringed file. That was a very small number of the infringements we see out there, which will address the coming up version of the 2.6 kernel. It doesn't address the fact that the 2.4 kernel is out there today. Companies are copying, sharing, spreading that around. That, essentially, is not cleaned up, it is still out there as an issue. But more importantly, what we are announcing today is a substantial number of copyright issues that relate to a settlement agreement that is already in place around the BSD settlement from the 1994 time frame. As we move forward, we will be outlining those issues.

From a time line standpoint, one thing that you can expect to see from us, Larry, this is again separate from the IBM issues and the contract issues there. By the way, we have shared the code in question there with IBM under the litigation event. They know what we're talking about there. On the copyright front, expect us to be showing this to the end-use customers as we go forward as one event, and then also the, as David mentioned, you know, a set of customers that we will follow up on, in the time frame that David talked about.-- Darl McBride, 2003-11-18

Going forward we have three dials. The core business, we think that's bottomed out and there's upside now with new products coming. We haven't had a new product in our OpenServer base in years and years.

The second dial is the 2.5 million Linux servers out there today that are paired with our intellectual property in them. We have a licensed product $699, $1,399. Chris [Sontag] is driving that and that's another multi-billion-dollar revenue opportunity

The third bucket has to do with the IBM settlement. We filed that at $3 billion. Every day they don't resolve this, the AIX meter is still ticking....-- Darl McBride, 2003-11-18

Our goal is not to blow up Linux. People ask why we don't go after the distributors...'If you have such a strong case, why not shut down Red Hat?' Our belief is that SCO has great opportunity in the future to let Linux keep going, not to put it on its back but for us to get a transaction fee every time it's sold. That's really our goal.

To the extent that we have to take it down and put it on its back, we're fully prepared and willing to do that.

[...] The last time I checked the CEO was in charge of shareholder value, not standing around the campfire singing Kumbaya with the Linux world. So far, I'm pleased with where we're going..-- Darl McBride, 2003-11-18

Our goal is to take the Linux thing and get that tightened down and then swing back around on AIX. We're sort of fine to let the AIX thing tick, because the longer it goes, when we actually end up in courtroom, we can go back to June 13, 2003, and add damages. We're sort of fine to let that one run. I don't sense they've stopped shipping AIX and both sides right now are kind of on the Linux battlefront.-- Darl McBride, 2003-11-18

The breadth of damage that's been done here, it's like cleaning up the Exxon Valdez... the code violation that is going on inside of Linux between derivative work, copyrighted work, it's not unsubstantial.-- Darl McBride, 2003-11-18

The funny part is we didn't even talk to Microsoft about this outside the normal public interest level things... when we talk to them it's about what's happening in the marketplace. [I know] there is this feeling that something's happening here... . It's funny when I talked to IBM earlier this year, before we did anything, it wasn't even clear where the IP problems were. We just said we were going to start investigating IP issues, and IBM said, 'You're just giving Bill Gates an early Christmas present.' Bill Gates? This is about our IP! What are you talking about? This was the immediate reaction at IBM and the open source guys. Unfortunately for them, it's just not reality.

If people want to talk about conspiracy theories, they should spend some time poking what IBM, SUSE and Novell are talking about and what the 'Chicago 7' talked about in Chicago in July [2003. That was a group of companies with] a half a trillion dollars in market cap talking about what to do about SCO.-- Darl McBride, 2003-11-18

They [IBM] have more attorneys than we have employees. They have those [Cravath, Swaine and Moore] guys and their own people .What they said when they first saw the lawsuit was that 'the skies over Utah would be blackened with attorneys before this is all done.'

[...] This is a David and Goliath battle. The might and sheer size of IBM against the legal stone that we have, and it just so happens we have a very good legal stone and we have a guy named David [Boies] carrying the slingshot. So we like our chances.

The legal stone is clearly coming from David. He used to be with Cravath. It is an epic battle. The guy at Cravath supporting IBM used to work for David. [He's] Evan Chessler. So now you've got that sub-plot of the Grasshopper and Master thing.-- Darl McBride, 2003-11-18

"They (SCO) are doing some incredibly dorky things", he said, "and saying so many things that probably are not true." He gave credit where due, saying SCO's moves "do seem to be propping up their stock price... and as long as they keep that value up, they can take millions of dollars out where you won't see it." He also said, "They are a Microsoft proxy. And this is the way we will see Microsoft fighting open source in the future. There are any number of other proxies out there that would be glad to take millions of dollars in license fees from Microsoft."-- Bruce Perens, 2003-11-18

If I were a commercial end user independent of anything else, given the nature of the GPL I would avoid modifying the code, I would avoid doing anything that could be considered a distribution of my application. If I'm Merrill Lynch and have a trading application proprietary to Merrill Lynch and deploy it across all my trading desks, if that deployment occurred where the Linux OS and app are distributed togetherm there are arguments that Merrill would have to provide their proprietary trading application in source form to everyone. That's a problem. I'm sure all of Merrill's competitors would love to get that but it's hard for a company to be financially viable when all of the basises are shared.-- Chris Sontag, 2003-11-18

Q: Have you identified exactly what code is at issue here?.

We've identified a lot of different things. Early on when we filed against IBM, people wanted us to show the code, even though we're fighting a legal case and that's where it's appropriately vetted, we decided to take at least one example and show that. We had to do so under NDA, because if you're comparing our System V code, it is not released without confidentiality agreements. If you sign an NDA -- a number of journalists, analysts and customers have seen the example we showed -- a substantial amount was a cut and paste job, a few lines changed, but substantial body. You don't have to be a programmer at all to see copying had occurred. It wasn't just ten lines of code, that example was over 80 to 100 lines of code. Later some of the Linux people said that code shouldn't have been there, Bruce Perens said it was development problem and 'we've taken it out.' My analogy is [that's] like a bank robber with posse in pursuit swinging back by the bank and throwing the money back in... .

In that one example, copyrighted code had been misappropriated and there's substantial benefit out there that has still not been rectified. There are other literal copyright infringements that we have not publicly provided, we'll save those for court. But there are over one million lines of code that we have identified that are derivative works by IBM and Sequent that have been contributed into Linux that we have identified and there's been no effort by Linux leaders to start acting and rectify that situation.

It's kind of hollow words that we are not showing code, because we have shown examples and if we keep showing it, they'll just take that out and say 'no harm no foul.' That doesn't solve the problem.-- Chris Sontag, 2003-11-18

We haven't identified any specific IP issues with Samba and that's why we continue to work with it. But if there were issues in the future we'd make appropriate decisions then. We've put some open source components into our products and likely will continue to do so in the future. That's not the issue, the issue is the GPL and its pushing IP liability issues unfortunately to the end user when they were likely not the ones causing the problems and those who've inappropriately taken our IP and contributed it predominantly Linux in violation of our contracts, in violation of our copyrights.-- Chris Sontag, 2003-11-18

You don't have to be a programmer at all to see copying had occurred. It wasn't just ten lines of code, that example was over 80 to 100 lines of code. Later some of the Linux people said that code shouldn't have been there, Bruce Perens said it was development problem and 'we've taken it out.' My analogy is [that's] like a bank robber with posse in pursuit swinging back by the bank and throwing the money back in... .

[...] It's kind of hollow words that we are not showing code, because we have shown examples and if we keep showing it, they'll just take that out and say 'no harm no foul.' That doesn't solve the problem.-- Chris Sontag, 2003-11-18

"If SCO succeeds in winning even some of its points in court, big business support for Linux will disappear," he said.-- Michael Gartenberg, 2003-11-19

"The pending acquisition of SuSE Linux does not violate any agreement between Novell and SCO," Mr. Lowry said, adding that Novell considered SCO's claims unsubstantiated. "We are full-speed ahead on Linux."-- Bruce Lowry, 2003-11-19

"It's crazy," [...]

"This started off as a contract dispute with IBM, then we discovered [alleged SCO-owned Unix code] within Linux," McBride said. "Now we have a firestorm of controversy and anger from many in the Linux community."-- Darl McBride, 2003-11-19

"The world, especially here in America, is shifting to one that is an information society," McBride said. "In the future, is that $229 billion in software still going to be there? Or in the case of the Free Software Foundation's goal, is proprietary software going to go away?"-- Darl McBride, 2003-11-19

"There is no doubt that the GPL is at risk right now, but let's all keep in mind the history of this. We are not the ones who put it there. That came from IBM," he said.-- Darl McBride, 2003-11-19

"With the personal threats to our lives we have had to rachet up security both for our company and for certain individuals," McBride said.-- Darl McBride, 2003-11-19

He said prior to SCO's $3 billion lawsuit with IBM, he had been warned that "if we started talking about IP infringements inside of Linux, the company would be crucified by the Linux community."

"I went back to my CEO 101 book," he said. "I didn't see in there that the Linux community was one of my constituents."

McBride also disputed that he was a "sue-happy cowboy," with one concession. "On my birth certificate, under my father's occupation, it says cowboy," he said. "So I will admit to being a cowboy, but not sue-happy."-- Darl McBride, 2003-11-19

"I just don't buy it," said Bruce Perens, a Berkeley, Calif.-based Linux developer and open source advocate. " This is just an effort to discredit the open-source community.

"If there were real threats, the police would be there instead of husky fellows with radio tubes in their heads," he said.-- Bruce Perens, 2003-11-19

"However, there are some elements who have an almost religious zealousness about Linux," he added. "In some ways, that can be scary for anyone opposing their positions."-- Chris Sontag, 2003-11-19

SCO's Sontag emphasized those suits, which could begin within 90 days, will target only "the larger commercial users of Linux. We have already said that for noncommercial use of Linux we will not be taking any action."-- Chris Sontag, 2003-11-19

"They knocked on one door and didn't get any money, and now they're moving to the next door," said Phil Albert, a partner at intellectual property law firm Townsend and Townsend and Crew LLP, in San Francisco. "Part of their strategy may be that it doesn't really matter if they have any copyright claim."-- Phil Albert, 2003-11-21

"Once you sue a company for a quarter billion dollars you have an impact against everyone else," Chander said. "It doesn't depend then on the merits of the claim but the risk of sitting out there and waiting to be sued."

[...] "SCO realized the gig will be up in two or three years from when there's a ruling on the Red Hat case," Chander said. "So what do they do? They hit the cash register as much as possible between now and then."-- Anupam Chander, 2003-11-21

"SCO's claim strikes me as rather odd, even 'novel,' " Chander wrote in a follow-up e-mail interview. "Has Novell really 'used' the technology it received from SCO by purchasing SuSE and distributing SuSE's products? It would seem to me that Novell would only be misusing the technology if it actually infused that technology into Linux."-- Anupam Chander, 2003-11-21

"Also, doesn't SCO have to be selling something for Novell to compete?"

[...] "Users are afraid, just from the cost of possibly having to defend a lawsuit," he says.-- Jurgen Geck, 2003-11-21

"As often seems to be the case, with SCO, we haven't heard anything directly from them on this and they haven't filed a claim against us, we heard it first through the press," he said.-- Bruce Lowry, 2003-11-21

BayStar's Larry Goldfarb, a frequent investor in techonolgy companies, says his due diligence led him to conclude the stock could be worth "multiples" of the nearly $17 a share his firm paid for its stake.-- Lawrence Goldfarb, 2003-11-22

Gideon Kory, an analyst at Roth Capital Partners, explains that from an IT manager's view, "Linux is the best thing that has happened in IT in the last 20 years, and then up comes SCO and tries to spoil the party."-- Gideon Kory, 2003-11-22

"We found they were taking part of AIX and giving it away to the open-source community," McBride said in an interview last week. "That's as blatant a foul as you can get on this."-- Darl McBride, 2003-11-22

"At $15, it's a call option," he says. "If they win their $3 billion at trial, that's about $185 a share, or 20% less after Boies gets his share. It's a lottery ticket." [...]

Skiba points out that there are over two million servers running Linux; at $700 each, the potential revenue is well over $1 billion just from existing systems. Another possibility would be for someone--IBM, say--to buy the company and put a halt to the litigation.

Skiba's earnings estimates for the company make the stock look cheap on a fundamental basis: He sees earnings of 87 cents a share in the fiscal year that ended Oct. 31 [...] and $1.84 in fiscal 2004, which would leave the stock at less than 10 times earnings.-- Brian Skiba, 2003-11-22

But, as Yankee Group analyst Laura DiDio told NewsFactor, "the case will ultimately be decided in court, and like any other court case, SCO's side will be heard and considered."-- Laura DiDio, 2003-11-24

"SCO stands by its claims and looks forward to proving it in a court of law," A SCO representative told internetnews.com. "As we try to provide a SCO IP license, members of the Fortune 500 that we have communicated with either by mail or face to face really only have two choices -- license or litigate."-- SCO PR, 2003-11-24

"It could be a few companies -- it could be a half dozen," SCO Group spokesperson Blake Stowell told NewsFactor. [On targets of SCO suits over Linux]-- Blake Stowell, 2003-11-24

"If you want to talk about desperate, it's the Free Software Foundation," McBride told SearchEnterpriseLinux.com. "If you go by what it says in the GPL, if you infringe on someone else's code, the only recourse is to either take it out or shut down the distribution. This validates our claims, and their only solution is to shut down Linux. If they shut down Linux, it's an unmitigated disaster."

[...] "The question is not whether the code can be cleaned, but at what level? If you go back to the way Linux was in the mid-1990s, that's the only version I see working," McBride said. "We are not trying to kill Linux."

McBride said the System V Unix code IBM allegedly contributed to the Linux kernel can stay, so long as SCO is reimbursed with a "royalty."

"We are trying to deal with the problem, but we are shouted down, so we'll go to court, put our case on the table and say, 'Here we go boys; here's the problem,'" McBride said. "It's either clean it up or shut it down, and this kind of cleanup is an Exxon-Valdez kind of cleanup. It's not simple."

[...] "It's clear to me that people are trying to shut us down. But I've talked to Linux developers who know their code is in there and have said to me, 'There has to be a better way to work this out,'" McBride said. "This does have the potential to shut down Linux. The longer the clock ticks, the [greater the] potential for this to end up in court. And as this happens, the more excited we get. If this plays out favorably in court, the possibility of huge punitive damages coming our way is very high.

"People talk about April 2005 [the projected court date] as being eons away, but we're almost in 2004, and it's starting to look like it's not so far out."

[...] "I think every public company has a price tag on them; whether that would be acceptable, shareholders determine that," McBride said. "From the management team's standpoint, we're happy where we are. We are not trying to sell the company. We are trying to get compensation from the marketplace."-- Darl McBride, 2003-11-25

"We're a fairly tight-knit community who have been working together five years, and if a new person with 100,000 lines of code [tried to contribute], it would stick out like sore thumb," Morton said. "You can tell when something has grown up in a different environment and is ported over to another [platform]. We've gone though Linux and looked at all the major subsystems, and we couldn't come up with anything. We mentally took a walk though the kernel and came up with a blank."

[...] "There was one obscure file system written by a person employed by SCO and Caldera, but he said he developed it on his own time," Morton said, adding the person got his boss' approval via e-mail. "We were quite comfortable with that."

Morton acknowledged that the XFS and JFS file systems, which were originally developed under a Unix license and then ported over to Linux, could be a sticky issue that lawyers can exploit. "SGI did develop it. It could be [SCO] has a legitimate case there, not technically, but on the letter of the law," Morton said.-- Andrew Morton, 2003-11-25

'The GPL technically isn't "enforceable" because it's not a contract. It's a license,' he said. 'The GPL is permission from a copyright owner to use the code as long as you also abide by a set of rules... If you violate these rules, your permission to use the code is automatically revoked.

'Thus, if SCO has violated the GPL by not allowing IBM to use [its] code, it is not a "breach" of a contract that must be enforced but rather a situation where whatever permission SCO had to use and modify GPLed code is now revoked - making SCO itself a copyright infringer. This is important because companies who infringe copyrights cannot sue other companies for infringing code that they derived through the process of infringement. In other words, if SCO violated the GPL, they can't sue IBM for copyright infringement on any code that was subject to the GPL.'-- Jason Schultz, 2003-11-25

"It will most likely happen prior to the end of this calendar year," said Blepp, referring to litigation from SCO. "This is now up to the legal teams to get the filing done, but it would not surprise me if the first would happen soon."

[...] "A typical reaction is 'let's see what happens when the IBM case is over, and then we will consider a licence'," he said. "But those two issues have nothing to do with each other. The IBM is about breach of contract, and any case against Linux users is completely different."

[...] "We first offer information to explain the case to companies and why we are doing what we are doing," said Blepp. "Then if they do not comply we ask for legal advice and engage the customer to get their legal advice, and offer a way out for them by getting a licence from SCO. If the customer says 'I don't see the case', or 'let's wait until the IBM case is over' -- we keep saying the cases are separate -- then we say we need to move forward because we have clearly stressed that we will claim the rights we strongly believe we have."

When SCO files its first lawsuit, Blepp said, it will provide more code examples to prove its case.-- Gregory Blepp, 2003-11-26

"The courts will have to sort out where the code in question came from, which could be difficult," said Aberdeen Group analyst Bill Claybrook. A definition of "derived works" also may be required to determine copyright claims, he told NewsFactor.-- Bill Claybrook, 2003-11-26

"OSDL firmly believes that the Linux kernel development process, under the guidance of Linus Torvalds, has proven to be an extremely effective means to produce powerful software for more than 10 years now," said Stuart Cohen, CEO of OSDL. "Recent public criticism of the Linux development process shows a lack of understanding as to the rigor imposed by Linus himself and the development community at large. It is a process built on the scientific method of peer review."-- Stuart Cohen, 2003-11-26

'It's been a long time since the AT&T/BSD agreement. When so much time has passed and so many people have used the software, I don't think many judges would be eager to shut all of that down or make so many little guys pay up to SCO.'

[...] 'Just because you include a few files as part of a huge operating system without permission doesn't necessarily mean its a copyright infringement. There is a doctrine called "deminimus infringement" where small infringements don't really count. So it depends if these few files were a big deal or not as to whether SCO really has anything there to complain about.'

[...] 'Moreover,' says Schultz. 'if SCO then released its own Linux distribution under the GPL, that would presumably trump any previous restrictions they made on BSD, since the Linux distribution was more recent. It would certainly seem reasonable to me to assume Linux was legal if SCO released their own version under the GPL, which it appears they did.'-- Jason Schultz, 2003-11-26

"This shows how contradictory the GPL really is," he said. "One section requires copyright holders to post a notice indicating that their software can be contributed under the license."-- Blake Stowell, 2003-11-26

"We have not yet decided what company we will sue for Unix intellectual property rights. At this time, we don't even have a date for when we will decide except that it will be by the end of our already started 90-day clock," Stowell said.-- Blake Stowell, 2003-11-26

'SCO really has no need for a back up plan. We're confident of the evidence that we have. I think as we uncover more and more, end users will become more convinced that they really should purchase a SCO Intellectual Property Licence.'

[...] 'SCO can't really comment on Apple because we have not looked at them yet. Today, we're only focused on Linux'-- Blake Stowell, 2003-11-26

SCO's PR Director Blake Stowell told us that a case between AT&T and Berkeley Software Development (BSD) was settled where the latter had to remove certain files and reinsert copyrights that had been stripped out. 'Some of these same files have now gone into [the Linux kernel] (both those that had to be removed because they were never supposed to be in BSD in the first place, and the files for which copyright attribution had been stripped away. The copyright attribution has still been stripped away as they were contributed into Linux). This is a violation of SCO's copyrights,' he said.

'We haven't yet gone down the path to determine how the code got into [the Linux kernel]. We only know that the code is in there... the problem really impacts the Linux business user more than anyone else, because all liability rests with them,' he added.-- Blake Stowell, 2003-11-26

"This is just one more paper that tries to describe what apparently seems to be a defence for the open-source movement. To us from the first scan there is nothing particularly new and nothing that gives a new direction to our approach." [On Eben Moglen's OSDL paper]

[...] "We haven't in our claim against against IBM mentioned the word GPL. That and all following discussion were brought into the discussion by IBM and we are very well prepared to challenge it. In the coming weeks and months we will clarify that," said Blepp. "The case with users of Linux is completely different," he added. "Here, we are protecting our rights by going to the end user. We request that they accept a clear position and if that is not met we will likely to go the way of litigation."-- Gregory Blepp, 2003-11-27

"We're just beginning the planning stages of integration with Novell right now, so there's not a whole lot of detail," said SuSE vice president of corporate communications Joseph Eckert.

"But we do see the next arena as enabling the systems management -- enabling a greater access to those who use open-source applications by creating a standard to which all of that can be written," he told NewsFactor. "We believe that will enable an unlimited amount of flexibility in creating middleware solution stacks."

[...] "Here we have this world-class sales and channel infrastructure in Novell that we simply could have tried to grow organically over the next five to 10 years, but with Novell we have it instantly," he said. "We have a partner that feels same way about open source that we do, shares the same ideals, and already talks about service-oriented architecture, so we have this service organization behind us helping to build and manage the solution stacks for customers and partners."

[...] "We're not planning to sue anybody, so I'm not seeing where the competition is," he said. "As far as I know, they're nothing more than a litigation company right now, not a software company."-- Joe Eckert, 2003-11-28

"The idea behind UnitedLinux was to create an enterprise-ready operating system. Novell supports that and looks forward to taking it to another level." He would not comment further, except to say: "There are no immediate plans to change the distributions or remove any underlying technologies. [But] we don't know what will happen with the baseline distribution beyond 2004."-- Kevan Barney, 2003-12-01

"I don't usually believe in these behind-the-scenes things," said Bill Claybrook, research director at Aberdeen Group. "My feeling is, one of the reasons IBM is investing this $50 million in Novell is they want to make sure they keep Linux. SUSE is the primary operating system for IBM across all their platforms."-- Bill Claybrook, 2003-12-01

"Their [Unix offerings] are not being demanded by anybody," Claybrook said. "You have to go with the flow if you want to make money." [On Wind River]

[...] "If you're going to be in that market, it's important to be with OSDL," Claybrook said. "It's also important to add them to the work group because they're the largest of all embedded OS vendors."-- Bill Claybrook, 2003-12-01

"For Linux to take its place alongside UNIX, Windows, and NetWare in the enterprise, it must be worthy in both a business and technological sense. That means strong indemnification," DiDio wrote in a recent note about the issue.

"Earlier this year, in advance of the SCO lawsuit, Microsoft revamped its indemnification program and now provides customers with the industry's most comprehensive protection against liability. Now, HP has similarly stepped up and will offer SCO-specific indemnification with no liability cap," DiDio said.

[...] "By denying its customers the coverage, IBM is reducing Linux to a yard-sale operating system," DiDio said. "Even used cars come with limited warranties. IBM has world-class technology and a global services organization that is second to none. It is a driving force on every major standards committee, including the emerging Web Services market. However, when it comes to Linux indemnification, color Big Blue yellow!"-- Laura DiDio, 2003-12-01

"This seems to be a real departure in strategy for Wind River, which did not appear to be in the Linux camp before this," Yankee Group senior analyst Laura DiDio told LinuxInsider. "Clearly, Wind River had some choices to make."

[...] "I think that these are good steps for them," DiDio said. "The 'charge' has been sounded and vendors are looking for the next big area of opportunity where there's an even playing field and money in the near term. This is it."-- Laura DiDio, 2003-12-01

"In all my years of writing about the technology industry, I've never seen anything like this," she said. "This has become such a highly charged, emotional issue that I think folks are losing sight of the practical issues."

[...] "While open source is generally a good thing, I would have concerns about running a business on code that could be changed by anybody, anytime," she said. "Open source has its place in the enterprise among everything else that's out there. But I think the debate has become so emotionally charged that some technology and business management issues around open source are getting lost. At some point it's got to settle down."-- Julie Giera, 2003-12-01

The "very nature of open source makes it extremely difficult for the vendor to ensure that all development of the open source platform has been accounted for, and that intellectual property is protected," she said.

"IBM's argument is that by its very nature, open source platforms could be changed (by the client, - for example) leaving vendors like IBM defending potential intellectual property liability claims for a platform or components they cannot control."

But still, "Big Blue cannot expect its customers to pay hundreds of thousands, if not millions of dollars, for software that could someday be useless - or worse, software that could be a ticking time bomb of legal liability."-- Julie Giera, 2003-12-01

"Novell is a big, well-known brand that will add credibility and momentum to the acceptance of Linux in the enterprise." And although she hasn't spoken directly with Novell since the acquisition was announced, Hunter is sure there will be no short-term impact for UnitedLinux customers.

"SUSE was the maintainer of UnitedLinux and will continue to do that," she said. "We have contracts in place with SUSE that make sure that member companies get maintenance and updates, and we have confidence that those contracts will continue." Hunter would not comment on future implications. "It is still too soon to know for sure what will happen long-term."

[...] "It isn't free to join. Some of the [Linux developers] that were potential targets simply could not afford to make the same level of investment that the [UnitedLinux] member companies are making, [and] we wanted the investment to be fair," she said, adding that the organization is not currently seeking new members.-- Paula Hunter, 2003-12-01

"I think there's a lot of litigation around SCO," said Messman. "Novell continues to call on SCO to make public their claims, which remain unsubstantiated. We're not holding back because of SCO's unsubstantiated claim."-- Jack Messman, 2003-12-01

"IBM has put the journal file system from AIX into Linux," said Stowell. "They've put various programs from their Dynix operating system, which they got when they acquired Sequent," he said, citing specific features such as non-uniform memory access (NUMA), Remote Copy Update (RCU) and "various schedulers and high-end symmetric multiprocessing technology [into Linux]."

Stowell added, "These are derivative works that they are contractually not able to contribute to Linux. I'm not sure we can be more specific than that. That's pretty specific. We've also publicly said that all those programs make up over a million lines of code."

[...] "The only thing Novell continues to receive, to my knowledge, are some royalties from Unix customers that they had at the time they sold the Unix operating system," said Stowell, adding that it would have been "stupid" for his company to have bought rights to Unix without also buying enforcement rights to its licenses.-- Blake Stowell, 2003-12-01

Yankee Group analyst Laura DiDio, who saw the code, said she thinks SCO "seemed to make a compelling argument" but added that "they were showing us snippets, and you cannot draw a definitive conclusion based upon that."-- Laura DiDio, 2003-12-02

"Delay implementing Linux, no way," said John Arechavala, network and systems manager for Carroll College in Milwaukee. "McBride has no claim."-- John Arechavala, 2003-12-04

"My biggest concern has nothing to do with SCO. Rather, my biggest concern is converting a collection of legacy Sun hardware into a viable server base for Linux," said Jay Cuthrell, chief technology officer for integrator and service provider NeoNova Network Services, in Morrisville, N.C. "The concern is whether to use Aurora, Gentoo or Debian [and whether it's stable] -- not on the latest SCO ramblings."-- Jay Cuthrell, 2003-12-04

"We've taken the central issues of the case, Linux and the GPL, and essentially keyed on the leaders of those movements," McBride said. "We're going to bring in the guy who started the whole thing [Torvalds] and the father of the GPL [Stallman]."

[...] "When we bought Unix, we had language in there concerning non-competition. Novell cannot take its Unix property and compete against us," said McBride, a former Novell executive. "When the transaction is done, we'll see what we're going to do."-- Darl McBride, 2003-12-04

In an interview with CRN, McBride acknowledged that the company's plan to file a major copyright-infringement case against a Linux customer motivated the release of the letter, which he said provides a legal foundation for the case. His letter also was precipitated by the release of an Open Source Development Lab (ODSL) paper [...]

SCO's claims are not without legal merit, McBride asserts.

"IBM put the GPL on the table" three months ago as part of its defense against SCO's lawsuit, McBride said [...]

"We think they're hiding behind a shield made of rice paper," McBride told CRN. "If they put that on the litigation table, there will be collateral damage. But IBM put it on the table."

[...] "It will be the subject of a major debate, but we like our chances by the ruling of the court," a confident McBride said.-- Darl McBride, 2003-12-04

SCO Group CEO Darl McBride recently told SearchEnterpriseLinux.com that the Unix and one-time Linux vendor continues to meet with commercial Linux users on a one-on-one basis and continues to sell them Unix licenses.

[...] "We've talked to companies about Linux and they're not doing it, or if they are using it, they take out a license. We have yet to have a one-on-one where a company has said straight out 'no' and forced us to litigate," McBride said. "We know what's going on. We're a public company and, with all the disclosure we have to do, the last thing I'm doing is telling a bunch of lies. We have companies that are signing up, and we are going to protect their identity because they have requested confidentiality."-- Darl McBride, 2003-12-04

"It's consistent with the approach of trying to have this thing tried in the court of public opinion," said Jeffrey Neuberger, an IP lawyer at the New York firm Brown Raysman Millstein Felder & Steiner. "If it wasn't for the fact that David Boies is representing them, I'd say that they were acting in desperation."-- Jeff Neuburger, 2003-12-04

"It's amazing that this type of letter gets any attention. We're trying to get these issues resolved in court and instead we're seeing delay tactics," said a Red Hat spokeswoman. "I think that should be examined instead of these further allegations that SCO brings to the media."

SCO recently moved to delay the discovery portion of its legal dispute with Red Hat, she said.-- Red Hat PR, 2003-12-04

McBride's argument has its "fundamental facts wrong," said Linux creator Linus Torvalds. "I'm a big believer in copyrights," Torvalds wrote in an e-mail interview. "Of all the intellectual property (laws), copyright ... is the only one that is expressly designed so that individual people can (and do) get them without having scads of lawyers on their side."

"If Darl McBride was in charge, he'd probably make marriage unconstitutional too, since clearly it de-emphasizes the commercial nature of normal human interaction, and probably is a major impediment to the commercial growth of prostitution," he wrote.-- Linus Torvalds, 2003-12-04

"Since May, SCO has been saying they have proof of copyright violations by IBM and the rest of the Linux community, yet they've provided nothing that's been very convincing," Ferrell said. [...] "It seems if you're trying to get people to pay, it's reasonable to show them what the violation is."-- John Ferrell, 2003-12-05

"IBM has said all along SCO has failed to show evidence to back its claims. We are very pleased the court has indicated it will compel SCO to finally back up its claims instead of relying on marketplace FUD" (fear, uncertainty and doubt), spokeswoman Trink Guarino said.-- Trink Guarino, 2003-12-05

Now, why does this matter so much to IBM? Putting aside the fact that we need to know what it is that we supposedly did so that we can defend ourselves, the SCO Group's activities are not limited, Your Honor, to telling the world how great their case is. They are threatening Linux users with lawsuits. It's like they're standing outside the Barnes and Noble, Your Honor, and a customer walks out having purchased a new Linux book, and the SCO Group says, Wait a minute. Stop right there. That Linux book includes our Unix property. You pay us or we're going to sue you, and if you have a problem with it, go talk to IBM. They know what they did. They took the secrets out of Unix and they stuck them into Linux. Take it up with them. We showed them what the evidence is.-- David Marriott, 2003-12-05

We don't believe they had any evidence at the time they filed this case, and we don't think they have any evidence now. And we submit we're entitled to hear from them what it is they think they have that IBM has done. If they're not required, Your Honor, now to provide the answers to these questions, then we're going to be in the dark as to what the case is about, we're not going to be in a position to defend ourselves and we're not going to advance this case to a just and a prompt resolution.-- David Marriott, 2003-12-05

Now, confidential information, Your Honor, is a very different animal. Confidential information is not treated as a trade secret, necessarily, under the law. We have a unique case here. The confidential information we're talking about is stuff that Mr. Marriott's client created but we didn't ever get to see.-- Kevin McBride, 2003-12-05

Now, that leads us to a very interesting point. Do we have again -- and I'll only do this once more and I won't repeat it after that -- do we then have a contract case? Do we have trade secrets? Do we have confidential information which is neither a trade secret or a copyright?-- Kevin McBride, 2003-12-05

Now, Your Honor, we would submit that if this was a case of first impression for the Ninth Circuit, it underscores -- this is an undeveloped area of law that turns on issues of law and fact and they're intertwined. That's getting us back to the Rule 33 question that we were making.-- Kevin McBride, 2003-12-05

The -- what we need to get our arms around collectively, on our side and on IBM's side, is a clear definition of what source code is at issue, what source code is potentially an infringement. Before we discuss whether it's a trade secret or a copyright or anything else, the most important thing is for both of us to come to grips with the universe of source code, the documentation and methods and concepts that we believe are at issue so we can argue about them.-- Kevin McBride, 2003-12-05

The evidence that our executives have talked about in the public has had to do with Unix System 5 code contributed by Silicon Graphics. Has nothing to do with IBM. Now, the evidence against IBM that our executives have talked about, Your Honor, that we know IBM has contributed into Linux, specifically, and we've talked about this, relate to the code that came from Dynix, that is the NUMA code and the RCU code.-- Kevin McBride, 2003-12-05

There is no trade secret in Unix system files. That is on the record. No problem with that. There are trade secrets from Unixware, which is SCO's version of Unix that was given to IBM in the joint development project.-- Kevin McBride, 2003-12-05

This stuff you did in derivative works, you own it, but you contributed to Linux improperly, and, therefore, we have a claim in state law contract for breach of confidential information, which is completely separate from trade secrets.-- Kevin McBride, 2003-12-05

Unix is the corporate operating system of choice that all corporations use at the Fortune 1000 level and significantly below that. It just works better than Microsoft Windows when you have a large distributed environment. So companies have used Unix for 20 years or more. AT&T made all this stuff.-- Kevin McBride, 2003-12-05

We gave IBM all of our knowledge that we had spent 16 months developing about how to run Unix on Intel processors. We had that. That's trade secret stuff. IBM didn't have any of that. We gave it all to them in the joint development project. And at the same time, IBM is developing Linux without telling us. So we sail along. We give them all this trade secret information. This is the core of our trade secrets case, the joint development agreement between the companies that started in the 1997 time frame called Project Monterey.-- Kevin McBride, 2003-12-05

Your Honor, if we have it in computer readable form, our experts can analyze it. Unless we have it from IBM, we can never know the ways they've improperly taken their derivative work code and made Unix better in violation of our contract. That would be an injustice, Your Honor.-- Kevin McBride, 2003-12-05

In response to IBM's complaint, Stowell said, "If a company wants code, it's the other party's decision to provide that any way they feel like providing that."-- Blake Stowell, 2003-12-05

One Fortune 500 company signed up for SCO's program to buy Unix licenses for running Linux, but Stowell said Northrop Grumman was not that company.-- Blake Stowell, 2003-12-05

SCO's attorneys "decided to notify the court they will be adding (copyright claims) as part of the claims. There will be a new filing on that coming out in the near future," SCO spokesman Blake Stowell said.-- Blake Stowell, 2003-12-05

"One of the problems SCO has is that they're a successor to an operating system that was always in a never ever world between proprietary and open source," said Tom Carey, an IP attorney and partner in Bromberg & Sunstein, Boston, who examined the contract IBM signed with SCO, and said the language leaves much room for interpretation.-- Thomas Carey, 2003-12-06

"SCO still has produced no evidence of actual infringement," said Tim Dion, a software engineering manager and Linux supporter who did not specify his company's name. " I ask for only one thing. Mr McBride, just show us the code. Stop playing games and show us the infringement."-- Tim Dion, 2003-12-06

"The idea that SCO owns enough of the intellectual property contained in and represented by Linux is absolutely preposterous," said Ron Herardian CEO of e-mail integrator Global System Services, based in Mountain View, Calif.

"Whatever code, if any, that SCO can legally prove it owns the rights to will simply be expunged from Linux. SCO will never see a penny from these suits. And any attempt to sue a company that is merely using Linux without first winning a prerequisite IP case is frivolous."-- Ron Herardian, 2003-12-06

SCO's fourth-quarter profit was similar to the third quarter's 19 cents a share because of the attorney costs, spokesman Blake Stowell said today. The net loss was 26 cents in the fourth quarter a year earlier. The company doesn't give profit forecasts, Stowell said.-- Blake Stowell, 2003-12-06

"It's more of the same, more of the same," Szulik wrote in an e-mail to CRN. "I am sure the Founding Fathers would have produced the facts for all to see by now."-- Matthew Szulik, 2003-12-06

"It's difficult to make any judgment," said George Weiss, a vice president with the Gartner Group, noting he has heard conflicting accounts about how the alleged code was contributed to the Linux kernel. "I split into two parts. There are IP and copyright laws that have to be respected, but whether SCO has a legitimate case has to be determined by the court."-- George Weiss, 2003-12-06

"IBM said all along that SCO has failed to show evidence to back its claims. IBM is pleased that the Magistrate Judge has indicated she will compel SCO to back up its claims instead of relying on marketplace uncertainty and doubt," Darcy said.-- Michael Darcy, 2003-12-10

"It's perfectly legitimate" said Stephen Gillers, a law professor at New York University. [On SCO retaining Kevin McBride]-- Stephen Gillers, 2003-12-10

"it raises the question, 'Does the company think it's getting somebody with sufficient independence?' given the family relationship."-- J. Kelso, 2003-12-10

"SCO is working with law enforcement officials and gathering information through mechanisms that we have in place to help us identify the origin of these attacks," said SCO spokesman Blake Stowell in a statement. "We deplore these activities by those who try to intimidate or harass legitimate businesses through cyber terrorist tactics while hiding their true identity."-- Blake Stowell, 2003-12-10

"We delayed our earnings release until the investors are in agreement with our lawyers on how exactly they'll be compensated," said Blake Stowell, SCO's spokesman.

[...] "But there are still various accounting rules on how to account for such a big $50 million investment, and we have until Dec. 22 to do that," he said.

Separately, SCO plans to ask IBM at a hearing scheduled Jan. 23 to produce its "Sequent Dynix code or one of the programs allegedly contributed into Linux, and the code from AIX, another UNIX-based operating system IBM had allegedly appropriated," Stowell said.-- Blake Stowell, 2003-12-10

"We have a lot of different firms assisting us on this case. We felt (Kevin McBride's) talents and resources could be useful," said SCO spokesman Blake Stowell.

Stowell said Kevin McBride has been involved "from the start of the case" and his hiring was approved by SCO Group's board of directors. He hadn't previously done legal work for the company, Stowell said.-- Blake Stowell, 2003-12-10

"I can assure you that we are expending significant amounts of resource and money to combat this activity," Carlon said. "In doing so, as a result of these attacks, we have to spend money that we might not be able to spend elsewhere."-- Jeff Carlon, 2003-12-11

"I would say (the attack) has been extremely detrimental to our ability to operate as a company," Jeff Carlon, director of IT infrastructure for SCO, said. "It has significantly impacted our ability to support customers."

Carlon estimated the damages to the company, particularly in loss productivity, could be in the "10s of thousands of dollars, if not in the 100s of thousands of dollars."-- Jeff Carlon, 2003-12-11

"The thing we have to keep in mind is that this is not something that we are doing," said SCO's Carlon, referring to the attack. "This is not something that we have made up. It is an illegal activity that is having a sizable impact on our company."-- Jeff Carlon, 2003-12-11

"There is no way to fully prevent the attack; we are somewhat at the mercy of the guy that is doing the attack," he said.-- Jeff Carlon, 2003-12-11

"This is a very sophisticated, planned attack," Carlon said.

[...] "Whatever we do the person will be able to modify (the attack) and chase us around, anyway," Carlon said. "When the illegal activity stops, then we can go back and operate normally as a company."

[...] "This is not made up or a hoax of any kind," Carlon said. "I've been in the technology management business for 20 years, and would never have anything to do with activities like that."-- Jeff Carlon, 2003-12-11

"I don't think too many people like them," Claybrook said. "I haven't talked to a single person or company that has any sympathy for SCO. The reason is the way they've conducted the lawsuit and the contention that anything that goes through System V, they own."

[...] "I don't think anybody's scared of them at all," he said. "I don't think anybody's worried. The fact that they're suing IBM and it will get settled and the whole thing will be over keeps people from worrying."

Claybrook added that he believes IBM is going to win.

[...] "I think one of the reasons they continue to put the heat on people to buy a license is because they don't think they're going to win the case," Claybrook said.-- Bill Claybrook, 2003-12-11

"A SYN flood would have been trivially preventable," said David Conrad, chief technology officer for Nominum, an Internet infrastructure technology company. "Every major operating system vendor in the world could have defeated it."-- David Conrad, 2003-12-11

"A SYN flood would have been trivially preventable," said David Conrad, chief technology officer for Nominum, an Internet infrastructure technology company. "Every major operating system vendor in the world could have defeated it."-- David Conrad, 2003-12-11

"The vast majority of these [threats] have been of the crank-call variety," McBride said. "We have hired the best personal security team. They have worked through these threats and determined that some have come from people with records who have done time in the big house. We take these very seriously."-- Darl McBride, 2003-12-11

"The kind of mail we get on a daily basis has some egregious things in it," Modersitzki told TechNewsWorld. Echoing SCO head Darl McBride, Modersitzki claimed the severity of threats and attacks on the company Web site illustrates two things: It is an emotional issue, and "we've got something here that people are concerned about."-- Mark Modersitzki, 2003-12-11