Making Sense of the SCO Suits

By Peter Galli  |  Posted 2004-03-05 Print this article Print

Legal experts explain the differences in the two SCO lawsuits and what they mean to Linux users.

The SCO Group Inc.s latest lawsuits against two Linux users, AutoZone, Inc., and DaimlerChrysler Corp., are very different and bring their own set of legal challenges for the Lindon, Utah, company. Mark Radcliffe, a Linux expert and licensing attorney at the national technology law firm Gray Cary Ware & Freidenrich in Palo Alto, Calif., says the lawsuit against AutoZone alleges copyright infringement due to the use of Linux. "The problem is that Novell has disputed that the copyrights were transferred to SCO. Without that copyright, SCO may only bring suit under the licenses that SCO purchased from Novell under the Asset Purchase Agreement [APA]. The ownership issue may prove a powerful defense for AutoZone and will probably prevent the issuance of a preliminary injunction," he said.
The Daimler lawsuit contended that Daimler violated its Unix license by failing to certify its compliance with its terms as required by the license. "SCO demanded that many of its Unix licensees provide a certification under their license in a letter sent late last year.
"However the letter demanded a certification that went significantly beyond what was provided for in the Unix licenses. In addition, Novell has its silver bullet provision under the APA to block SCOs actions under these licenses. This provision permits Novell to amend, supplement, modify or waive provisions of the Unix licenses sold to SCO," Radcliffe said. Novell also retained the unusual right to require SCO to follow its directions to "amend, supplement, modify or waive" these licenses and, if SCO did not comply, Novell could do so on SCOs behalf, he said, adding that Novell has already exercised this right for IBM and SGI. Officials at AutoZone and DaimlerChrysler declined to immediately comment on the lawsuits, as did officials at Novell and IBM, citing their ongoing litigation with SCO. Eben Moglen, a law professor at Columbia University in New York and general counsel for the Free Software Foundation, said there is no clarity about how the various SCO lawsuits will aggregate or in what sequence they will be taken. "But there are some logical priorities," Moglen said. "There is a claim between IBM and SCO concerning contract essentially independent of the dispute over the code in Linux. Then theres the claim that SCO has brought against AutoZone on the basis of copyrights that it says it has. "It is at the same time in litigation against Novell, claiming that it owns those copyrights, despite Novells denial that it does. Novell was allegedly the seller of those Unix copyright interests to SCO. "If SCO loses in the case with Novell on the copyright front, it cannot maintain SCO against AutoZone. So, in theory, the court in SCO against AutoZone should await the conclusion of SCO against Novell," he said. But the case brought by SCO against DaimlerChrysler revolves around the fact that Daimler is not obeying its contracts with SCO, which also appears to be independent of the SCO versus Novell and SCO versus AutoZone lawsuits, Moglen said. Next page: An additional complexity.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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