What is SCO on about?

Few people working in IT are unaware that SCO has attacked Linux. Beyond that, even for the experts, making sense of the merits of the claims and counter-claims is a matter of a heady mixture of fact, opinion and pure speculation.

Few people working in IT on the planet are unaware that an organisation called SCO has attacked Linux. Beyond that, even for the experts, making sense of the merits of the claims and counter-claims, who is suing who, who is behind it all and who is likely to win is a matter of a heady mixture of fact, opinion and pure speculation.

In such situations, the usual course is to do nothing and sit back and let the parties fight it out.

SCO's strategy, however, has been to threaten users worldwide by making its claims against them on its webbite. SCO's threats are accompanied by an offer of immunity from claims. In essence, the offer of immunity for Linux users is an insurance policy licence which SCO calls the SCO Intellectual Property Licence for Linux.

Introductory pricing is on SCO's site.

The licences are quoted at $US199 per client and $US699 per server for one CPU, rising to $US4999 for eight CPUs, and increasing by $US749 for each additional CPU.

SCO's insurance policy wording is summarised by SCO in this way:

“The licence gives end users the right to use the SCO intellectual property contained in Linux, in binary format only. End users who purchase this licence will be held harmless against past and future copyright violations of SCO’s intellectual property in binary format in Linux distributions.”

However, many of the issues that arise from the SCO actions are not related to intellectual property and the licence does not assist in understanding or protection of users. The easiest way to illustrate some of these issues is to pose those issues as questions. The emphasis on some questions needs to be stressed as this article can only deal with a few of the many issues .Some of the questions are:

Question: If SCO's action against IBM is also based on trade secrets, does the licence cover that IP?

Answer: No, SCO’s licence is merely a licence to use SCO's IP.

Question: If I take a licence from SCO but it turns out that no SCO IP is used in the code I am running or SCO's claims are wrong, what are my rights for a refund?

Answer: No rights are provided in the licence. You are taking a licence for past and future use.

Question: How then do I determine whether I am buying anything of value?

Answer: You are buying an insurance policy; the value of what you are paying for is the reduction of risk, not the functionality as the functionality is not identified.

Question: I can buy Windows for less; doesn't SCO have to be competitive?

Answer: No. SCO is offering an insurance policy which settles part of SCO's alleged claims. In fact SCO suggests in its FAQs that users “Consider migrating ... to an alternative operating system”. It does not say whether, if a user does migrate, it will still not bring a claim.

Question: How then do I assess the risk that I need to buy SCO's insurance cover for?

Answer: The only way to assess the risk is either to put yourself in a position that you can legally rely on SCO's claims or to establish the risk for yourself by requesting that SCO allow you to inspect the code. You would, for safety, need to have those representations or have the code supplied directly from SCO.

Question: But surely SCO has registered the copyright in the US therefore the US government has confirmed SCO's title?

Answer: Registration of copyright is not like registration of a patent. It is a long and complex subject as to what registration of copyright in the US means (we do not have a system of registration in New Zealand), but can best be illustrated by pointing out that registration of computer code does not even require delivery of a copy of the code to the US government. In essence, registration is government acknowledgement that a claim to title has been made at a point in time of some code that is not disclosed.

Finally, it should be noted that there are already questions being asked about SCO's right to register as it appears that SCO may have had to register years ago if it wanted the government time stamp that is US registration.

Question: I understand there may be other claims of ownership for this code (for example, that some of the code may rely on IBM patents); does SCO's insurance policy cover that possibility and indemnify me from other claims?

Answer: No.

Question: Your previous answer must be wrong as on SCO's FAQ page SCO says, “Does everyone who uses Linux need a SCO Unix IP Licence for Linux? End users running Linux 2.4 or later versions for commercial purposes need a SCO IP licence.”

Answer: SCO has indeed made very definite statements. But these statements are already being challenged and the German courts have gone so far as to prohibit SCO from making some of the statements. The previous answer and this question illustrate one of the fine legal points that will have to be resolved in due course. That point is that SCO is making statements in its FAQ's separately to the wording of its licence (or insurance policy). The law does provide users with rights of action if SCO is wrong. In particular in this case, if SCO is wrong and its title is not clear and there are (as already claimed by IBM and others) other IP rights, SCO may have committed an offence under the Fair Trading Act of misleading or deceptive conduct. You will need to keep an evidentially provable copy of the FAQs. The problem will be that even if SCO is wrong, if you have paid over the money, SCO is outside the jurisdiction of the New Zealand courts so any court action may be fruitless.

The SCO case has been welcomed by many in the Linux community because the thought is that if there is any offending code it will be rooted out and replaced and the lesson will have been learnt in relation to ensuring the provenance of code is checked out before inclusion in the kernel.

That does not help the IT manager that has Linux installed as to what to do on SCO's offer nor help those that want to use Linux but are not concerned about the risk from SCO.

SCO in the US has the advantage of being able to claim its damages from mighty companies like IBM. If IBM is at fault then the innocent user in New Zealand has nothing to fear from the past because that is IBM's problem. Having said that it has to be noted that IBM has very vigorously rejected SCO's claims. If IBM wins then the probability is that that will be then end of the SCO adventure.

The big question is if IBM is at fault and somehow some of the secret SCO code has to stay in the kernel and remain secret, is there a fair way for SCO to be compensated without destroying the GPL, Linux and the users being held to ransom with offers of insurance? Despite the law looking like an ass, at this point, the law is rarely stupid and this problem of copyright mix-ups is dealt with every day all round the planet.

The first step is for users to get together and discuss their many options. This is being done and the New Zealand Open Source Society has taken the lead. If you are affected or merely interested follow up here.

This column does not constitute legal advice. Horrocks is a partner of Clendon Feeney. Disclosure of interest: Clendon Feeney is the official solicitor for the NZ Open Source Society. Horrocks’ views are his own and he welcomes comment.

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