SCO v. IBM
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On March 6, 2003, the SCO Group (formerly known as Caldera Systems) filed a $1 billion lawsuit in the US against IBM for allegedly “devaluing” its version of the UNIX operating system. The amount of alleged damages was later increased to $3 billion, and then $5 billion. SCO claimed that IBM had, without authorization, contributed SCO's intellectual property to the codebase of the open source, Unix-like Linux operating system. In May 2003 SCO Group sent letters to members of the Fortune 1000 and Global 500 companies warning them of the possibility of liability if they use Linux. Because of this, the stock price of SCO's stock (Nasdaq stock symbol SCOX) skyrocketed to around $20 in October of 2003, although it quickly returned to just under $5 per share, very near its original, pre-lawsuit level. For more information, see this table (courtesy Yahoo!), showing SCOX stock price history.
Since then, the claims and counter-claims made by both sides have escalated, with both IBM and Linux distributor Red Hat starting legal action against SCO, SCO making threatening remarks toward Linux users who do not take out SCO UNIX licenses, and SCO starting lawsuits against Novell (see also Linux#SCO Litigation), AutoZone and DaimlerChrysler.
On September 30, 2003, Judge Kimball granted the SCO Group's request for a delay until February 4, 2004, “to file any amended pleadings or add parties to this action”. The schedule was amended again on July 1, 2005. The trial is currently scheduled to begin in February 2007.
In an “Order Granting in Part IBM's Motion to Limit SCO's Claims” dated June 28, 2006, Federal magistrate judge Brooke Wells, presiding over discovery aspects of the case, barred SCO from asserting 187 of the 198 claims that IBM had moved to exclude from the lawsuit for lack of specificity[1], stating “many of SCO’s arguments and much of Mr. Rochkind’s declaration miss the mark”, and comparing SCO's tactics with those of an officer who accuses a citizen of theft, but will not disclose what the citizen is accused of stealing. “Certainly if an individual was stopped and accused of shoplifting after walking out of Neiman Marcus, they would expect to be eventually told what they allegedly stole. It would be absurd for an officer to tell the accused that ‘you know what you stole I'm not telling.’ Or, to simply hand the accused individual a catalog of Neiman Marcus' entire inventory and say ‘it's in there somewhere, you figure it out.’” [2][3]
This leaves a total of about 100 claims, none of which have been judged on their merits, at issue out of the 294 originally put forth by SCO. Judge Kimball ruled earlier that dispositive motions may not be submitted until after the end of discovery, so neither side has been permitted to ask for summary judgement. However, it is worth noting that IBM (in their motion challenging the 198 claims) pointed to a claim that was sufficiently specific and could be shown to be an original disclosure by Intel, not IBM. Since the recent ruling, SCO's stock price has declined to around $2.2–$2.5 per share (early-August 2006).
This is just one of a series of lawsuits in which SCO is involved. Other lawsuits in which SCO is involved are Red Hat v. SCO, SCO v. Novell, SCO v. AutoZone, SCO v. DaimlerChrysler.
[edit] SCO's claims
SCO's lawsuit has been consistent only in its claim of breach of contract (since the abandonment in early 2004 of its claim of misappropriation of trade secrets). SCO's initial claims were:
- Misappropriation of trade secrets
- Unfair competition
- Interference with contract
- Breach of IBM Software Agreement
On July 22, 2003, SCO amended its complaint. It added two new claims:
- Breach of IBM Sublicensing Agreement
- Breach of Sequent Software Agreement
On February 27, 2004 SCO amended the complaint again. It dropped the trade secrets claim, but added the following claims:
- Breach of Sequent Sublicensing Agreement
- Copyright infringement
- Interference with contract
- Interference with business relationships
SCO's claims in press releases and interviews have changed repeatedly as the affair has progressed. SCO has also both claimed and denied that the alleged copyright violations involved the Linux kernel. Computerworld reported Chris Sontag of SCO as saying:
- "It's very extensive. It is many different sections of code ranging from five to 10 to 15 lines of code in multiple places that are of issue, up to large blocks of code that have been inappropriately copied into Linux in violation of our source-code licensing contract. That's in the kernel itself, so it is significant. It is not a line or two here or there. It was quite a surprise for us."
SCO refuses to allow access to the samples of code containing the alleged copyright violations except under a non-disclosure agreement (NDA). SCO's NDA would not only require that the signer keep confidential which lines of code SCO contested, but would also require that they hold confidential any information SCO told them, even if they already knew that information before being informed of it by SCO; all Linux kernel developers have considered this to be far too restrictive, so none of them has signed it. However, at SCO's annual reseller's convention in August of 2003 they revealed two short sections of code they alleged were copyright violations, and images of Darl McBride's presentation of this code were soon after published on German computer magazine publisher Heinz Heise's website. [4]
On May 30, 2003, SCO Group's CEO Darl McBride was quoted as saying that the Linux kernel contained "hundreds of lines" of code from SCO's version of UNIX, and that SCO would reveal the code to other companies under NDA in July. [5] To put this into context, David Wheeler's SLOCCount estimates the size of the Linux 2.4.2 kernel as 2,440,919 source lines of code out of over 30 million physical source lines of code for a typical GNU/Linux distribution. Therefore, as per SCO's own estimate, the allegedly infringing code would make up about 0.001% of the total code of a typical GNU/Linux installation. [6] SCO has since upwardly revised this figure to over a million lines of code, however. [7]
SCO's major claims have now been reported as relating to the following components of the Linux kernel:
- symmetric multiprocessing (SMP),
- non-uniform memory access (NUMA) multiprocessing,
- the read-copy-update (RCU) locking strategy,
- This technique is widely believed to have been developed at Sequent Computer Systems, who were then bought by IBM, who holds several patents (including 5,442,758) on this technique.
- SGI's Extended File System (XFS),
- IBM's JFS journaling file system
These claims flow from the accusation of breach of contract. The contract between IBM and AT&T (to which SCO claims to be successor in interest) allows IBM to use the SVR4 code, but the SVR4 code, plus any derivative works made from that code, must be held confidential by IBM. According to IBM's interpretation of the contract, and the interpretation published by AT&T in their "$ echo" newsletter in 1985, "derivative works" means any works containing SVR4 code. But according to SCO's interpretation, "derivative works" also includes any code built on top of SVR4, even if that does not contain, or even never contained, any SVR4 code. Thus, according to SCO, any AIX operating system code that IBM developed must be kept confidential, even if it contains nothing from SVR4.
[edit] Free software/open source community reaction
The lawsuit caused moral indignation and outrage in the free software and open source communities, who consider SCO's claims to be without merit, even cynically dishonest. Open source advocates' arguments include:
- that the Linux operating system was unlikely to contain UNIX code, as it had been written from scratch by hundreds of collaborators, with a well-documented provenance and revision history that was entirely in the public view;
- that it made no technical sense to incorporate SCO UNIX code in Linux, as Linux had the technical features that are claimed to have been appropriated already implemented before SCO UNIX had them;
- that even if Linux and SCO UNIX had some code in common, this did not necessarily mean that this code was copied to Linux from SCO UNIX -- perhaps the common pieces of code had been legitimately copied from another open source operating system, perhaps a BSD-derived one, or one of the historical Unix versions previously released by SCO;
- that SCO (see Caldera Systems) had begun as a Linux company, and has added many Linux-like features to SCO UNIX, and any common code may have in fact been copied from Linux into SCO UNIX:
- and furthermore, that if such reverse copying from Linux itself had occurred, that the distribution of SCO UNIX binaries containing GPL'd contributions may therefore require SCO either to remove their product from the market until GPL'd code has been removed, or to release their source code under the GPL to their users;
- that even if Linux did contain copied SCO UNIX code, the UNIX source code had already been made widely available without a non-disclosure agreement, and therefore had no trade secret status (as a judge found in USL v. BSDi);
- that even if Linux did contain some UNIX code, the SCO Group had lost any right to sue IBM for trade secret or other intellectual property infringement by distributing Linux itself (their Caldera distribution) under the GNU General Public License (GPL), both before and after their announcement;
- and finally, that even if SCO were to have a valid claim against IBM, their distribution of Linux under the GPL precludes them from pursuing any other user of Linux.
SCO and its officers have been the subject of much criticism by the free software community, some of whom have stated that SCO's behavior may amount to illegal conduct. Indeed, SEC filings reveal that senior SCO executives dumped their personal holdings in SCO shortly after counter-suits were filed by IBM and Red Hat, lending credence to the idea that the lawsuit's primary purpose is manipulation of SCO's stock price. SCO Group's CEO Darl McBride has been the subject of particular criticism, because of his extreme statements to the press.
On May 30, 2003, Linus Torvalds was quoted by IDG.net as saying, regarding the case:
- "Quite frankly, I found it mostly interesting in a Jerry Springer kind of way. White trash battling it out in public, throwing chairs at each other. SCO crying about IBM's other women. ... Fairly entertaining."
In an interview on June 23, 2003, Torvalds responded to SCO's allegation that Linux development had no process for vetting kernel contributions:
- "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 Inquirer reported on June 15, 2003, that an unnamed Linux kernel programmer has written to SCO, threatening action based on their distribution of a Linux distribution that, according to their own claims, contains code not licensed under the GPL. According to the letter reproduced there, the programmer claimed that SCO's doing so was an infringement of his own copyright. SCO's response to this letter is not known.
On June 25, 2003, Eben Moglen, the counsel for the Free Software Foundation, released a fuller statement regarding the SCO lawsuit. In this statement, he reiterates many of the points made above, and states that:
- "As to its trade secret claims, which are the only claims actually made in the lawsuit against IBM, there remains the simple fact that SCO has for years distributed copies of the kernel, Linux, as part of GNU/Linux free software systems. [...] There is simply no legal basis on which SCO can claim trade secret liability in others for material it widely and commercially published itself under a license that specifically permitted unrestricted copying and distribution."
On March 10, 2003, the Open Source Initiative (OSI) released a position paper on the SCO vs IBM complaint, written by Eric S. Raymond, president of the OSI and author of The Cathedral and the Bazaar.
On May 16, 2003, Groklaw, a website founded by journalist/paralegal Pamela Jones began covering the SCO litigation on a daily basis, and became a voice for the community to express its views of SCO's claims, as well as being an experiment in applying Open Source principles to legal research. The SCO Group has singled the site out as a particular thorn in its side.
On July 31, 2003, the Open Source Development Labs released a position paper on the ongoing conflict [8], written by the FSF's Eben Moglen.
[edit] The GPL issue
Within a few months of the filing of the lawsuit, Eben Moglen, the Free Software Foundation's legal counsel, stated that SCO's suit should not concern Linux users other than IBM. In an interview with internetnews.com, he was reported as saying:
- "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," ...
- "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," ... "From the moment SCO distributed the Linux kernel under GPL, they licensed the use. Always. That's what our license says."
Apparently noticing the incongruity of their selling a Linux distribution while suing IBM for stealing their intellectual property and giving it to the developers of that operating system, the SCO Group then announced on May 14, 2003 that they would no longer distribute Linux. According to their press release, "SCO will continue to support existing SCO Linux and Caldera OpenLinux customers and hold them harmless from any SCO intellectual property issues regarding SCO Linux and Caldera OpenLinux products."
SCO currently claims:
- Any code belonging to SCO that might have been GPL'd was done by SCO employees without proper legal authorization, and thus is not legally GPL'd.
- That for code to be GPL'd, the code's copyright owner must put a GPL notice before the code, but since SCO itself wasn't the one to add the notices, the code was never GPL'd.
[edit] The GPL and the US Constitution
During a certain period of its litigation against IBM, SCO alleged that the GPL violates the United States Constitution. This allegation was dropped however from SCO's claims in April 2004 in " SCO's Answer to IBM's Second Amended Counterclaims", as can be seen on Groklaw [9].
SCO originally based its views on the following considerations.
Section 8 of Article One of the United States Constitution states that
- [Congress shall have power] to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.
Since the GNU General Public License for the most part disclaims exclusive rights, SCO claimed that its use violates this clause. SCO's argument asks the court to limit both Congress's discretion in implementing the copyright clause, which the Supreme court refused to do in Eldred v. Ashcroft, and copyright holders' discretion over the enjoyment of their exclusive rights. The GPL specifically prohibits, in section 7, distribution of software in jurisdictions where the laws are incompatible with the GPL, so a ruling that upheld SCO's constitutional argument would prevent distribution of Linux (and other copylefted software) in the United States.
Other commentators disagree however. One such commentator, Tom Carey, partner and chairman of a Boston intellectual property law firm, even went so far as to say "Attacks on the GPL are far-fetched and a little bit desperate." (see [10]). Stacey Quandt, principal analyst at Quandt Analytics, remarked, "SCO's prior claim that the GPL was unconstitutional was equivalent to Microsoft's claims about open source being un-American—totally ridiculous." (see [11]).
Professor Eben Moglen, on leave from the Columbia University law faculty for the year 2006-2007, speaking as counsel to the Free Software Foundation (FSF) who is responsible for drafting the GPL, also takes this view. He says, "I believe the constitutionality attack on the GPL is not a tenable legal argument but is rather a public relations argument." In a talk at Harvard in February, he addressed the issue of constitutionality by referring to Congress' recent extension of copyright term limits. "It turns out that there's no such thing as an unconstitutional copyright rule," he said, "if Congress passes it, and if it observes the distinction between expression and idea." (see [12])
If dropping the allegation that the GPL is unconstitutional from SCO's actual filed complaints is any indication, SCO group (or at least its legal counsel) agrees that having the GPL found to be in violation of the US constitution is not a realistic prospect.
[edit] Novell enters the controversy
Novell entered the controversy by publishing on May 28, 2003, a press release concerning the SCO Group's ownership of UNIX. "To Novell's knowledge, the 1995 agreement governing SCO's purchase of UNIX from Novell does not convey to SCO the associated copyrights," a letter to the SCO Group's CEO Darl McBride said in part. "We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected."
SCO later claimed to have discovered an amendment to their contract with Novell transferring partial ownership to SCO. Novell stated that the amendment "appears to bear a valid Novell signature, and the language, though convoluted, seems to support SCO's claim that ownership of some copyrights for Unix did transfer to SCO"; Novell also said that it could not find its own copy of the amendment.
But in subsequent letters to SCO that Novell released as part of a press release on December 22, 2003, Joseph LaSala Jr., Novell's general counsel, argued that the amendment provided for a copyright transfer only under certain conditions that SCO has allegedly failed to meet.
SCO was quick to dismiss Novell's claims. The same day, during a conference call to discuss SCO's quarterly financial results, SCO CEO Darl McBride said "We see this as a fraudulent filing of copyright notices ... and we'll take the appropriate measures as necessary with our legal team." SCO made good on this threat on January 20, 2004, when it filed SCO v. Novell.
[edit] Fear, uncertainty and doubt
A number of Linux supporters have characterized SCO's actions as an attempt to create fear, uncertainty and doubt about Linux. Many believe that SCO's aim is to be bought out by IBM. Others have pointed to Microsoft's subsequent licensing of the SCO source code as a possible quid pro quo for SCO's action.
Univention GmbH, a Linux integrator, reported on May 30, 2003 it was granted an injunction by a Bremen court under German competition law that prohibits the SCO Group's German division from saying that Linux contains illegally obtained SCO intellectual property. If the SCO Group continues to express this position, they would have to pay a fine of €250,000. A similar injunction was sought around the same time in Poland.
On July 23, Open Source Victoria announced that they had filed a complaint with the Australian Competition and Consumer Commission, "asking the ACCC to investigate the SCO Group's activities in light of their unsubstantiated claims and their extortive legal threats for money against possibly hundreds of thousands of Australians."
SCO Group then filed subpoenas for Richard Stallman and Linus Torvalds on November 13, 2003. [13]
[edit] IBM's AIX license
Reuters reported that the SCO Group intended to revoke IBM's license to use UNIX code in their AIX operating system on Friday, June 13, 2003 if no resolution is reached before then. IBM responded that they believe that SCO has no power to do so, as their license is "irrevocable". On the following Monday, June 16, 2003, CNET News.com reported that SCO had announced it had terminated IBM's license. IBM continues to distribute and support AIX, and the SCO Group now states that they will be seeking an injunction to force IBM not only to stop selling and supporting AIX, but to return to the SCO Group or destroy all copies of the AIX operating system.
[edit] IBM counterclaims against SCO
On August 6, 2003, IBM filed its counterclaims against SCO. [14] [15] It made 10 counterclaims:
- breach of contract
- Lanham Act violation
- Unfair competition
- Intentional interference with prospective economic relations
- Unfair and deceptive trade practices
- Breach of the GNU General Public License
- and four counts of patent infringement
In response to these counterclaims, SCO has asserted that the GPL is unenforceable, void, and violates the United States Constitution. If these claims are true, then the GPL'd applications that SCO continues to distribute (like Samba) are being distributed without the permission of the copyright owners of those applications (since the permission was the GPL itself), which would be illegal. Thus some speculate that, in order to remain legally consistent, SCO will claim that software that has been GPL'd is actually in the public domain.
On September 25, 2003 IBM amended its counterclaims bringing the total number of counterclaims to 13. The new counterclaims are:
- Copyright infringement
- This counterclaim involves an alleged copyright infringement by SCO of GPL-licensed IBM code in the Linux kernel. Some commentators have pointed out that if SCO manages to invalidate the GPL, they are highly likely to be caught by this counterclaim, as it is of the same form as their claim against IBM.[16]
- Promissory estoppel
- Declaratory judgment
On March 29, 2004 IBM amended its counterclaims again. It dropped one of the patent infringement claims, but added 2 new Declaratory judgments of Noninfringement of Copyrights. One of these seeks a declaration that IBM's AIX-related activities do not infringe any of SCO's copyrights. The other one seeks a similar declaration about IBM's Linux-related activities.
[edit] Discovery
The discovery portion of the lawsuit has been dragging on for an unusual amount of time. The basis for SCO's suit is that any code developed on top of SVR5 is a derivative work of SVR5 (which would include AIX), and that IBM has publicly admitted to contributing AIX code to the Linux kernel. Since SCO has never seen the AIX code, it has, as part of the discovery process, deposed IBM for the AIX code, so that it can compare AIX code to Linux kernel code. IBM, rejecting SCO's concept of derivative work, has deposed SCO for which lines of code it claims are infringing. SCO has responded that it can't determine which code is infringing until it has had the chance to look at the AIX code.
On December 5, 2003, in the first oral arguments relating to the discovery process, a judge granted IBM's two motions to compel against SCO, and deferred consideration of SCO's motions until later. This gave SCO a 30 day deadline to provide "with specificity" which lines of code in Linux they claim form the basis of their case. This was widely regarded as a first-round victory for IBM. [17] PDF
On June 28, 2006 Judge Brooke Wells granted IBM's motion to dismiss most of SCO's case, citing in part SCO's inability to provide any evidence to back up their claims:
- In December 2003, near the beginning of this case, the court ordered SCO to, "identify and state with specificity the source code(s) that SCO is claiming form the basis of their action against IBM." Even if SCO lacked the code behind methods and concepts at this early stage, SCO could have and should have, at least articulated which methods and concepts formed "the basis of their action against IBM." At a minimum, SCO should have identified the code behind their method and concepts in the final submission pursuant to this original order entered in December 2003 and Judge Kimball’s order entered in July 2005. [18] (paragraph 30)
[edit] Examples of controversial code revealed
- SCO reveals a sample of alleged copied code at a reseller show: see Why SCO won't show the code
- Code appears to be 1) historical UNIX code (ate_utils.c atealloc) and 2) of BSD origin (BPF: Berkeley Packet Filter by Jay Schulist)
- The code (atealloc) has been in the IA64 version of Linux for a short period of time. It is no longer in Linux after having been removed on July 4, 2003, since much better alternatives existed. See This Rebuttal by Greg Lehey
- UNIX creator Dennis Ritchie confirms that either he or Ken Thompson wrote this (atealloc) code, which is released under the BSD licence: see Ancient UNIX Released Under What Terms? and SCO Slideshow
- This code therefore appears to be perfectly legally incorporated into Linux, as originally believed by Linux advocates
- It is claimed that SCO removed original license text from UNIX source, allegedly violating the BSD licence; see Embarrassing Dispatches From The SCO Front
[edit] Copyright claims, December 2003
In late December 2003, new developments involving copyright claims emerged.
Novell registered their claim to the copyright of original UNIX source code, effectively challenging SCO's registration of the same code. [19] [20]
SCO Group claimed in a press release to have sent DMCA notification letters alleging copyright infringement [21][22] Alleged copies of these letters were posted online at Groklaw and LWN. The letters give the names of 65 files in the Linux source code tree which supposedly incorporate "copyrighted binary interfaces". A rebuttal by Linus Torvalds was then posted on Groklaw.
[edit] See also
- SCO v. IBM Linux lawsuit: Press coverage has an extensive list of links to articles in various publications.
- Groklaw is the most detailed source of information on the progress of the case.
- The following page on Groklaw is a comprehensive list of unsealed documents as of Oct 10, 2006 [23]
[edit] Documents
- Caldera's announcement for the licensing of certain Unix versions under the BSD license
- Greg Lehey's analysis of the code that SCO alleges is in violation of their copyright
- Bruce Perens' analysis of the code that SCO alleges is in violation of their copyright
- Eric Raymond's analysis of the code that SCO alleges is in violation of their copyright
- Photograph of a piece of controversial code, taken at SCO Forum
- Photograph of a piece of controversial code, taken at SCO Forum
- The FSF's / Eben Moglen's reply to SCO's claims that the GPL is invalid
- OSDL press release for a Q&A paper written by Lawrence Rosen
- SCO press release: "The SCO Group Announces Final Termination of IBM / Sequent's Contract to Use or License Dynix Software"
