SALT LAKE CITY—Last August, the nail was poised over SCO's coffin when Judge Dale Kimball ruled that Novell never relinquished the copyrights to UNIX, but nobody really knew when it would be driven home. The decision meant that SCO could be on the hook for as much as $20 million in unpaid royalties. Not long afterwards, SCO filed for bankruptcy, but that Chapter 11 filing was only able to delay the inevitable trial to determine how much Novell was owed. That long-awaited trial began this week, and Ars was on hand to report.
Last year, the court ruled that Novell owned the copyrights to original AT&T UNIX source code and derivatives, including SVRX (System V, Release X), and threw out the case. Now, the countersuit brought by Novell is being heard, and should be finished up this week. Novell has repeatedly said it has no interest in suing Linux users over UNIX copyrights, which would be against its interests now that Novell has ties to the open-source community through openSUSE and SUSE Enterprise Linux Server and Desktop distributions.
I entered the courtroom yesterday at 8:30 AM, a few minutes after the proceedings were scheduled to begin. SCO senior vice president Chris Sontag was already on the stand, being questioned by Novell. When asked, "Is there any UnixWare code in Linux?" the answer was, "There very well could be, [...] I've never done that analysis, never seen that analysis." Sontag also testified that there was no difference between the Microsoft and Sun licenses for UnixWare, saying, "They were equal."
After Sontag was dismissed, Novell called SCO CEO Darl McBride to the stand. He was briefly questioned on his experience working for Caldera, which later became SCO. When he joined the company (then Caldera) in 2002, it was in bad financial shape, losing $24 million in the previous quarter. To combat the downward spiral the company was in, McBride testified that he had gone around to various executives in the company and asked them what they thought could improve the situation. One of the execs told him that Caldera owned code in Linux from UNIX SVRX, UnixWare, and SCO OpenServer.
SCO CEO Darl McBride takes the stand
McBride said that SCO holds the rights to UNIX and that "many Linux contributors were originally UNIX developers." Specifically, he said, "We have evidence System V is in Linux,"—directly contradicting what Sontag had previously testified. Due to the witness exclusion rule invoked by both parties, McBride was not present during Sontag's testimony and wasn't aware of what had been said. McBride's claims also directly contradict internal SCO memos from 2002, which reveal that the company's own extensive source code audits had uncovered no UNIX code in Linux.
McBride attempted to reinforce his argument with analogy. "When you go to the bookstore and look in the UNIX section, there's books on 'How to Program UNIX' but when you go to the Linux section and look for 'How to Program Linux' you're not gonna find it, because it doesn't exist." Then came the real humdinger, and my jaw dropped when I heard the following come out of his mouth: "Linux is a copy of UNIX, there is no difference [between them]."
Novell grilled McBride for the better part of 10 minutes about "filling a form 10-K or 10-Q with the SEC that contained a false statement." Novell's counsel reiterated that two separate 10-Q forms filed by SCO did not include Sun or Microsoft revenue generated by UnixWare licenses. McBride adamantly denied any wrong doing, saying that the licenses were for the trunk of SCO intellectual property consisting of multiple brands, not the UnixWare product branch. This was the most hostile point of the day, with the council asking him the same question in several different ways. After two hours on the stand, McBride stepped down.
Greg Jones, VP of Technology at Novell, was called as a witness. Jones was asked if SCO ever told Novell that it would sue Linux users. He said, "No, never that specific." When asked if SCO notified Novell under the Asset Purchase Agreement Amendment 2 that it would enter into a license with Microsoft, he said, "No."
Jones testified that SVRX code is in Solaris and that he had discovered several cases of this. At that point, Novell entered into evidence at least 21 examples of OpenSolaris code that had been taken from the SVRX code base (one such example can be found on the OpenSolaris web site) and re-licensed under Sun's open-source CDDL license.
He further testified that the agreement between SCO and Sun was "extraordinary" in allowing a move from a proprietary license to an open-source license, and if Novell had been asked, it would have prevented SCO from entering into that agreement. He said the same thing regarding the Microsoft agreement with SCO, as well as the agreement between SCO and Computer Associates.
After Greg Jones stepped down from the stand, Novell rested, and SCO called John Maciaszek, who worked for AT&T starting in 1966 and moved on to be product manager for Unix System Laboratories (USL). He worked for Novell in a similar role when Novell acquired USL and now works for SCO part-time and is semi-retired. He was asked to detail some of the differences between SVRX v4.2MP (the first multi-processor version), and Unixware 2. He went on to say that UnixWare 1 is based solely on System 5 4.2 uni-processor code.
Maciaszek said that when he worked for AT&T, the company always granted a right to use all prior versions of UNIX at no cost when licensing the current version. UnixWare included source code for OEMs to provide customized identical branded versions or to port to another architecture.
"We use the one line of code rule. If you took one line of code from UnixWare and used it in a derivative work, that work would become subject to a UnixWare license," Maciaszek said.
After that beautiful quotation which highlights everything wrong with the way copyright law works in today's world, Maciaszek stepped down. The court recessed for a short while, then reconvened for the summary judgement hearing.
SCO played with fire and got burned.
During the hearing, it became clear what SCO is trying to accomplish by attempting to degrade the value of prior versions of SVRX. Novell is suing it for unjust enrichment, and SCO is trying to limit the damages Novell can collect as much as humanly possible. SCO argues that it was not authorized to execute license agreements and that interested third parties such as Sun and Microsoft should get their money back, but it says that Novell is not entitled to hold the money in the interim. If you purchased a license from SCO that was unauthorized, the argument is that you'll need sue them to get it back. Since SCO is currently in bankruptcy proceedings, that could be difficult.
When SCO sent threatening letters out to Fortune 1000 companies in May of 2003, it probably didn't expect this to be the result.
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