Page Two

By Peter Galli  |  Posted 2004-03-08 Print this article Print

The legal picture for SCOs customer lawsuits is complicated. Experts such as Mark Radcliffe, a licensing attorney at the technology law firm Gray Cary Ware & Freidenrich LLP, in Palo Alto, Calif., say the latest lawsuits will be challenging for SCO.

In the lawsuit filed last week in U.S. District Court in Las Vegas against auto parts retailer AutoZone, SCO alleges copyright infringement due to the use of Linux. SCO claims AutoZone violated its Unix copyrights by running versions of Linux that contain code, structure, sequence and/or organization from SCOs proprietary Unix System V code.

"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 it bought from Novell under the Asset Purchase Agreement. The ownership issue may prove a powerful defense for AutoZone and will probably prevent the issuance of a preliminary injunction," Radcliffe said.

In the DaimlerChrysler lawsuit, filed in Michigans Oakland County Circuit Court, SCO contends that the company violated SCOs Unix license by failing to certify compliance with the terms as required by the license. In December, SCO demanded that Unix licensees certify that they had not moved the companys Unix technology to Linux.

But according to Radcliffe, Novell has a "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 does not comply, Novell can do so on SCOs behalf."

The SCO Group in the Courts

SCO is suing ...

  • IBM for more than $5 billion in damages; IBM has countersued
  • Novell, which has claimed ownership of Unix copyrights
  • AutoZone, alleging copyright infringement due to the use of Linux
  • DaimlerChrysler, alleging it violated its Unix license

    Additional reporting by Shelley Solheim
  • Technology providers and vendors do not expect the latest legal actions to discourage Linux adoptions.

    John Parkinson, chief technologist for the Americas at Cap Gemini Ernst and Young U.S. LLC, in Chicago, said the consulting services company is telling its clients that if the business case for going with Linux was present in the first place, its still there today.

    Leigh Day, a spokeswoman for Linux provider Red Hat Inc., in Raleigh, N.C., also does not expect the latest lawsuits to have any impact on demand for Linux. "Over the past few quarters, we have had good success in attracting new customers," Day said. "In the quarter to November we reported 3,500 new customers and have seen an incremental demand for our enterprise Linux products from large companies. That came while SCO was suing IBM, Novell, us and threatening to sue users."

    Columbias Moglen noted the risk SCO is taking in filing these user lawsuits, saying that if they are not settled quickly, other enterprises will be even less likely to buy the Unix license from SCO that grants immunity for using Linux and will simply sit back and see how these cases are resolved.

    "By bringing these lawsuits, SCO has made its licensing program effectively a dead letter until it wins some of these lawsuits," Moglen said. "So if were in for months and years of motions and moving slowly towards trial, and in the meantime its licensing program isnt going anywhere, what is SCO?"

    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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