Caldera/SCO Press Conference of Monday, 2003-07-21

Major points:

o Caldera/SCO have just registered SysV copyrights with the Library of
Congress Copyright Office, a procedural requirement for pursuing
copyright infringement in court that, in itself, conveys no rights.
o Caldera/SCO point to Linux's lack of warranty protection (as if warranty
claims for software were ever feasible); says IBM avoided copyright
liability by avoiding direct distribution. (This impliedly justifies
today's legal threat against end-users.)
o Caldera/SCO offer Linux end-users the alleged carrot of offer to purchase
a UnixWare 7.1.3 licence with binary-only Linux support, using the
implied stick of copyright-infringement litigation against them, and
tort claims against other parties including contributory infringement.
o Actual existing Caldera/SCO v. IBM court case is completely unchanged,
and they have filed no new court actions.
o Caldera/SCO imply that they'll be demanding payments (structured as
UnixWare licensing) from Linux end-users, starting with commercial users.
o Alleged infringement is described as: directly copied SysV code,
directly copied code from SysV-derived OSes, and use of SysV "methods
and concepts". Note that SCO claim controlling copyright interest
over third-party-originated code written by any licensee -- if you
become their licensee, they assert that they own what you subsequently
create -- as well as over ideas in addition to creative expression
(copyrighted code).
o Caldera/SCO still give no evidence of allegedly similar code originating
in SysV as opposed to a common source, but just reiterate without
evidence their assertion that some code originated in SysV.
o Caldera/SCO decline to comment on possible adjustments to their
earnings outlook.

[Disclaimer: Since I heard this only once and have no recording to work
from, the following uses a considerable amount of paraphrasing. Little
of it is verbatim exact quotation. I hope to correct the text after
gaining access to a voice recording. ]

Present: Stowell, Sontag, Boies, McBride.

Referred to SCO on-line press room for press materials.

McBride speaks: Reminds listeners of May 2003, 1500-company letter.
Now says enterprise use of Linux 2.4 contains code misappropriated from SysV
or works "protected" by SysV licensing: (1) Literal copying from SysV and
(2) copying from SysV-derivative works. (3) Indirect copying of structure,
sequence, and organisation.

Caldera/SCO have now registered their SysV copyrights, so they can enforce.

Say IBM have avoided liability by avoiding direct distribution, and by
avoiding issuing a warranty, transferring liability to the user. SCO
now claim enforcement rights against end-users of 2.4 and 2.6 kernels,
and so are offering UnixWare 7.1.3 licence for Linux use. Working
details on pricing and volume discounts.

David Gordon, Bloomberg News: Asks confirmation that they're
pursuing copyright claims.

McBride: It started as a contract case, and this copyright matter
(following registration of the copyrights) is new, broadening the case.

Peter Galloway, eWeek: What if they're stubborn customers? Will you sue
end-users? Doesn't this have to wait until after the IBM case?

McBride and Boies: Initial case was a contract case. This is a new
matter, against people we don't have existing contract relationships
with. We don't want to sue; are offering an alternative.

Issue with IBM is distinct, a contract issue initially. Individual
customers separately have no right to improper use, and are liable
without regard to the IBM case.

Steve Takahashi, SJ Mercury News: Can you describe offending code, who
put it there? What's cost of a valid licence?

McBride: Direct line-by-line including developer comments, SMP/NUMA/RCU
code in SysV-derivative works, non-literal infringing of methods and
concepts that are still within our rights.

Don Marti, Linux Journal: Looking at Ian Lance Taylor's comments; will
SCO show evidence that the code was copied from Unixware?

McBride: Points to Dynix, says it's not even questionable where it came
from, isn't BSD.

Todd Weiss, ComputerWorld: What was the name of the licence you're
offering?

McBride: UnixWare 7.1.3 licence.

Richard Waters of Financial Times: What penalties can you claim on
copyright infringement; what are you planning to assert?

Boies: Copyright laws offer a range of penalties. Statutory damages,
plus actual damages if you can prove them. Also penalties for willful
violations.

Robert Mayna, Cooper-Beech Capital: What does this mean for Linux
distributions such as Red Hat?

McBride: This is a complex issue. We have broad rights against anyone
who has touched the code. No decision about where we'll assert our
rights. We can assert contributory infringement.

David Banks, Wall Street Journal: Did you just now register the
copyright? Why not earlier?

McBride(?): We did start filing a few weeks ago. You usually do this
only when you're doing infringement actions. Copyright Office doesn't
require registration for copyright protection, only for litigation.

Wolfgang Brunner, Tech Channel: Are you going after every Linux user,
or just enterprise users?

McBride: We have lots of options. Our primary concern is commercial
users of Linux, so that will be our starting point.

Laura Didio, Yankee Group: How can we be sure this code didn't come
from elsewhere? Did you have discussions with Linux gurus such as
Torvalds?

(I think they simply reasserted that the code came from SysV.
Didn't address question about contract with Torvalds, except to start
a sentence with "We have done e-mail exchanges with...", and leave it
hanging.) McBride: We agree with what Torvalds has written to date,
i.e., that the case was (then) a contract dispute with IBM, but it's a
new case today.

Reese Stevenson, Reuters: Anything about discussions with IBM about
settlement? Given number of Linux installations out there, are you
prepared to change your earnings outlook?

McBride: No news about IBM. Evaluating earnings, can't talk about that yet.

Steve Shankland, CNET: Given success of Linux and not UnixWare, aren't
you becoming an IP shop?

McBride: We're getting recourse for our product that has been damaged
illegally. The bulk of our 300 employees are still working on product.
Besides, IBM do IP enforcement, too.

John McCaulen, of (?): Doesn't this move contravene GNU licensing?

McBride: We've put in a runtime-only license on binaries of our
product, allowing people to run both binaries without licence conflict.

Thor Olavsrud, Jupiter Media: What deadline prior to litigation?

McBride: We haven't set one, just rolling this out, talking to users,
will see how it goes.

Gordon Halflin, Illuminata: Are SCO contending that contributions from
any Unix vendor to Linux infringe?

McBride: No, not at all. Just Unixes derivative of ours.

Larry Greenline, InfoWeek: What is licensing for end-users versus Linux
distributors?

McBride: This is a binary, run-time licence only.

[missed name] [partially inaudible]

Jennifer Follet, CRN: Would contributory infringement create liability
for VARs and [integrators?]?

McBride: Could be.