[TriLUG] Dispelling some of the SCO Bull....

[al johnson]

Thought everyone might enjoy the following analysis of the "SCO FUD". It 
explains why IBM should win this legal battle. However, as anyone who's been 
in court, or observed a court in action (think about the murder trial of O.J. 
Simpson) knows, it is possible for legal "non-sense" to prevail. ---Al Johnson
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----------  Forwarded Message  ----------

Subject: Penguin on Thin Ice?
Date: Thu, 26 Jun 2003 17:18:21 -0400


Penguin on Thin Ice?
Why IBM Should Win in the Fight to Save Linux
By ANUPAM CHANDER
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Thursday, Jun. 26, 2003

Earlier this year, SCO, a Utah-based software company, filed a
multi-billion dollar unfair competition lawsuit in Utah federal court
against IBM, one of the world's leading information technology
companies.

The suit arose because IBM has made a strong push towards using the
ever more popular Linux operating system for computers.  (It's not
alone; Linux is used by millions of people the world over, in
companies, government offices, and private homes.)  But SCO claims -
astonishingly - that Linux is an illegal derivative of software SCO
acquired from others years ago.

Though IBM is the only defendant, SCO's suit threatens Linux as well.
Thus, the suit has captured the attention of the computing industry.
Indeed, it has even inspired comedy - in the form of a parody of SCO's
CEO set to a Gilbert and Sullivan tune.  But at the same time, it has
also generated FUD--"fear, uncertainty, and doubt"--among Linux users.

SCO has benefited from its decision to file the suit.  During the last
year, its share price had dropped to as low as $0.60 a share.  Since
the day its suit was filed in March, SCO's stock has traded up,
currently trading above $10.00 a share.

But that rise in stock price may be illusory, for it seems unlikely
that SCO's suit has any true merit.  Rather than unfair competition,
what likely occurred between SCO and IBM was healthy competition - the
kind that helps consumers, and the economy, by pushing quality up and
prices down, and increasing efficiency.

A Brief History of Operating Systems, from AT&T to the Penguin

To understand this suit, it's necessary to review a bit of computing
history that now seems quite ancient.

Three decades ago, AT&T created a computer operating system called UNIX
to run its telecommunications network.  (An operating system is a
computer program that allows one to run other, more specialized,
computer programs.  Microsoft Windows is today's popular example.)
UNIX was widely adopted by corporations and other institutions.  For
the most part, AT&T and subsequent groups developed UNIX in a
proprietary form--claiming exclusive rights to it.

Then, about a decade ago, a young Finn named Linus Torvalds introduced
an operating system (named Linux, after its creator) that did some of
what UNIX did.  Linux proved remarkably successful.  The community of
Linux users adopted a mascot--the penguin - as a sort of trademark.

Unlike UNIX, Linux was open and free. Anyone the world over could
examine its code and improve on it. A key to Linux's success was that
its license (dubbed a "copyleft" instead of a "copyright") required
users also to give away their own modifications to the software for
free.

The joint collaboration of programmers around the globe, most of whom
would never meet, created a powerful operating system.

In 2000, rather than fight Linux, IBM decided to embrace it, committing
one billion dollars to developing the software.  It installed Linux
(not Microsoft Windows) on many of the personal computers it sold and
Linux (not UNIX) on its large mainframe computers.

Meanwhile, over time, SCO acquired certain rights to other companies'
versions ("flavors" in the lingo of techies) of the original,
proprietary operating system UNIX. And even as it was developing UNIX
itself, IBM licensed some of these flavors from these companies.

Finally, to further complicate matters, IBM also collaborated with SCO
on yet additional enhancements to UNIX.  But in 2001, IBM decided to
abandon that collaboration.

SCO's Suit Against IBM: The Proof of the Pudding Is In the History

All these facts provide the background for SCO's current lawsuit.

SCO's theory is as follows.  When IBM originally licensed UNIX, it
signed contracts with companies such as AT&T.  But IBM violated those
contracts, later, by using information it gained working on UNIX to
improve Linux.

Why does SCO care if IBM violated its contracts with AT&T and other
companies? Because SCO claims that it is a "successor in interest"
under those contracts. While it did not write UNIX, it claims to have
acquired rights to the operating system over time from other companies.

Is SCO correct?  Only close scrutiny of all the relevant history and
relevant contracts can determine that question.  Meanwhile, several
legal principles make the situation even more complex.

Several Key Legal Principles May Undermine SCO's Case

The first principle - which is also common sense - is that one cannot
sell (or give away) a proprietary interest that one no longer possesses.

So even if companies purported to give UNIX rights to SCO, their
supposed grant of interest would be void if they earlier had given the
same rights to IBM or if they had otherwise relinquished them.  You
can't sell what you no longer own.

The second principle is that a party's rights can be affected by its
later conduct - which can constitute a "waiver," giving away rights.
Until recently, SCO was a willing player in the Linux movement,
releasing code under the open source ("copyleft") license.  Everything
that happened to Linux was in the open.  Yet SCO delayed in suing.

That delay triggers not only the waiver doctrine, but also similar
equitable doctrines such as laches.  Indeed, SCO may run afoul of the
relevant statutes of limitations as well.

The third principle is that what's good for the goose is good for the
gander.  Here, IBM is not the only one who has to abide by its
contracts; SCO does too.  This may cause SCO problems.

When it used Linux in software it released, SCO - like everyone else -
had to agree to Linux's "copyleft" licenses.  In doing so, SCO arguably
gave up prior rights:  "Copyleft" licenses, as noted above, gave
everyone the right to copy code freely, and to make improvements on it.

The fourth principle is that a suit must not only establish a right, it
must also show the defendant violated it.  The court must ask: Even if
SCO had extensive rights to UNIX and never waived them, did IBM
actually violate those rights by supporting Linux?

Again, the answer lies in the history and contracts, but a certain
degree of skepticism seems warranted.  Would IBM really have agreed to
give up developing other operating systems, in exchange for being able
to work on UNIX?  IBM is, after all, the pioneer of such operating
systems as OS/2.

Could Linux Only Have Come From UNIX Know-how?  It Seems Unlikely.

Meanwhile, at the crux of SCO's suit is its claim that its predecessors
- the companies from which it says it purchased rights to UNIX - had
crucial know-how.  Indeed, it says this know-how was so crucial that it
was necessary to Linux's success.

In its complaint, SCO claims, in essence, that without its UNIX
contracts, IBM was nothing, and without IBM, Linux was nothing.  But
both of these claims, like SCO's allegations, are dubious.

First, let's look at Linux: Was it nothing before IBM?  Of course not.
Engineers collaborating through the open source movement created
extremely sophisticated work even without a major corporate patron.

SCO alleges that "as long as the Linux development process remained
uncoordinated and random, it posed little or no threat to SCO...."  But
in truth, Linux was always coordinated - just by many different hands.
Linus Torvalds himself calls the Linux development process "directed
mutation."

Second, let's look at IBM: Was it nothing without the know-how it
gained through its UNIX development contracts?  Hardly.

IBM is hardly a novice when it comes to systems engineering.  It has
extensive experience with Intel-based microcomputers (SCO's original
specialty). Indeed, more than two decades ago, IBM introduced the
personal computer based on the Intel microprocessor.  Plainly, IBM's
engineers are quite capable of invention and advancement, even without
SCO's assistance.

 From A Policy Perspective, Closed Software Is Perilous

How does the suit fit into the open software versus closed software
debate?  I believe the answer is that it demonstrates the virtues of
open software.

Some would disagree, however.  On its website, SCO quotes a suggestion
that computer "[s]ystem administrators must be admonished to submit
open-source code to inspection for potential violation of patents."

And Microsoft has recently been arguing that the SCO case proves that
open source software is bad policy for software corporations.
According to Microsoft, open source software may lead to repeat patent
violation: After all, as the SCO suit shows, you can never be sure
where a piece of code, contributed by a volunteer, came from.

But in truth, it is closed, proprietary software that is the real
villain here. After all, partnering with SCO and its predecessors on
UNIX projects was what got IBM in trouble in the first place.  It's the
proprietary claims over UNIX that form the basis of SCO's suit.

More generally, companies trying to derive more revenue from their
intellectual property portfolio may lash out at licensees.  But
licensees of open source software distributed under a permissive
license do not have to worry about this possibility.

For instance, might Microsoft someday claim that software using Windows
"derives" from Windows and unfairly competes with Microsoft's business?
  Because Windows software is proprietary, the possibility never can be
fully ruled out.

Proprietary interests, especially in intellectual property, tend to
breed confidentiality - as anyone who ever signed a nondisclosure
agreement with a fledgling dotcom with a "brilliant business idea" well
knows.  And confidentiality, in turn, breeds conspiracy theories, and
allegations of theft - or unfair competition, or breach of contract, or
the like.

In contrast, if there is something amiss in open code, it will be more
difficult to hide.  Thus, Linus Torvalds retorted, "I allege SCO is
full of it and that the Linux development model is the most transparent
process in the whole industry."  Torvalds himself has provided the most
compelling reason SCO's suit must fail: Had information truly been
misused in Linux's open source software, everyone and his brother - and
his foreign penpal - would have been well aware of it.

The final policy argument in favor of open source software is, of
course, societal. At some point, information that is widely studied in
universities, reprinted in college textbooks, and advanced through
academic scholarship must be considered public domain.

For this reason, SCO's claims that its intellectual property rights
extend to basic computing features of large operating systems cannot be
allowed to stand. Otherwise, there will be no such thing as truly open,
free software - and as a consequence, there will effectively be an
economy-dragging tax on information technology.