[conspire] SCO Group Launches War Games

Rick Moen rick at linuxmafia.com
Sun Aug 12 22:42:53 PDT 2007

It's true!  But it's just an amusing namespace collision:

   Troops from the Shanghai Cooperation Organization (SCO) member states
   -- China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan --
   have taken part in the war games underway in northwest China. [...]

SCOX (the erstwhile software firm in Lindon, Utah) closed on the NASDAQ 
at $1.56, this past Friday, shortly before Judge Kimball handed down the
partial summary judgement.  Suggested cheap entertainment for Monday
morning:  Check http://finance.yahoo.com/q?s=scox , to watch what

Their next 10-Q statement, due out on Halloween, should also be fun:

Cribbing in part from (of course) Groklaw.net, here are the remaining
cases and remains of cases:

SCO v. IBM (including IBM's 2nd Amended Counterclaim aka "Oh yeah?  I sue 
   you right back" charge):  

   Alleges that IBM wrongfully donated (unidentified) code to the Linux 
   kernel that was encumbered by (unidentified) trade secrets disclosed 
   by SCO to IBM.  Alleges that IBM violated its AT&T System V software 
   licence (thus, breached contract) and related obligation of 
   confidentiality by "supporting, assisting and promoting the transfer 
   of UNIX technology to Linux, and using its access to UNIX technology 
   to accomplish this objective", by transferring unspecified "Unix System V 
   source code, derivative works, modifications, documentation related 
   thereto and methods based thereon" to India without export permission 
   from SCO, by helping implement in Linux NUMA support, AIX JFS, PPC 32- 
   and 64-bit support, enterprise LVM code, threading, cluster support, 
   PPC 32- and 64-bit support, various service / scaling / performance 
   improvements and other areas in the 2.4 and later kernels that SCO 
   claims are (for unspecified reasons) proprietary to SCO (impliedly 
   trade secrets?), by stating an intention to open-source IBM AIX 
   (ditto, vaguely claimed to be proprietary to SCO, and in fact claimed 
   to be a "Sublicensed Product from SCO").  Alleges that IBM did likewise 
   regarding the AT&T Unix System V licence bought by Sequent Computer 
   Systems (which company IBM bought), and IBM's open-sourcing of 
   Sequent's Dynix/ptx OS under GPLv2, which SCO likewise claims to be 
   SCO-proprietary for unspecified reasons.  Alleges that IBM violated 
   a "Sublicensing Agreement" by continuing to offer IBM AIX after SCO 
   ordered them to cease doing so.  Alleges that IBM's continued
   activity to "reproduce, prepare [unspecified] derivative works of, 
   and distribute UNIX software, source code, object code, programming 
   tools, and documentation related to UNIX operating system technology
   constitutes copyright violation.  Alleges IBM unfairly competed by 
   revealing (unidentified) SCO trade secrets ("source code, methods, 
   trade secrets and confidential information"), breaching contract and
   related obligation of confidentiality, and contributing (unspecified) 
   "protected source code and methods" to the Linux kernel.  Alleges 
   IBM interfered with SCO's contractual relations with its customers 
   including Sherwin Williams and AutoZone by "inducing" them to "breach 
   their corporate licensing agreements" by action to "reverse engineer,
   decompile, translate, create derivative works, modify or otherwise use
   the UNIX software in ways in violation of the license agreements" 
   in unspecified ways that are implied but not stated to involve Linux
   development.  Alleges likewise regarding IBM's Sequent division.
   Alleges that IBM wrongfully interfered with SCO's existing and
   potential business relationships with Hewlett Packard and others,
   by informing them that "IBM was discontinuing doing business with
   SCO", and suggesting that they do likewise.

   SCO seeks minimum US $10^9 for breach of contract, plus injunction
   ordering IBM to cease offering AIX and other "protected Software
   Products" and prevent their donation to open source.  Seeks a second
   minimum US $10^9 for breach of contract by publishing IBM AIX.  Seeks
   a third minimum $10^9 for breach of contract regarding Sequent's AT&T Unix 
   System V licence and a fourth minimum US $10^9 regarding Dynix/ptx
   (along with the same sort of inunction as for AIX).  Seeks actual, 
   statutory, and punitive damaages concerning copyright violation.
   Seeks a fifth minimum $10^9 for unfair competition.  Seeks actual 
   and punitive damages for "tortious interference" with SCO's business.  
   Seeks an injunction against IBM putting more "protected Software
   Products" into open source.

   IBM's Second Amended Counterclaim (SCO infringement of IBM copyrights
   and patents, breach of contract):

   Alleges SCO violated express contractual duties under IBM's software 
   licence to Unix System V (and related mplied covenant of good faith 
   and fair dealing), including "purporting to terminate IBM's irrevocable
   and perpetual UNIX rights and/or refusing to provide IBM adequate notice
   and opportunity to cure its alleged misconduct".  Alleges infringement of
   IBM's trademark rights by causing customers to have "confusion and
   mistake [...] as to the characteristics of IBM's goods, products and/or
   services".  Alleges related unfair competition.  Alleges "tortious 
   interference" with IBM's current and prospective business partners by
   false and misleading statements about IBM not having the right to 
   distribute AIX, Dynix, and Linux.  Alleges "related unfair and
   deceptive trade practices" as defined in New York state law.  Alleges
   copyright violation against IBM through redistribution of its 
   contributions to the Linux kernel in breach of IBM's GPLv2 conditions
   for such redistribution (e.g., SCO imposing additional restrictions).
   Asserts (in a related claim) that SCO had created the expectation
   ("promise") that it would redistribute IBM's Linux contributions only
   under GPLv2 terms, creating good-faith reliance on that promise, and 
   so should be barred as a matter of legal equity from doing otherwise
   completely aside from matters of copyright violation.  (in law, this
   is called the doctrine of "promissory estoppel", and is a type of 
   quasi-contract.)  Alleges that SCO violated Library of 
   Congress-registered IBM copyrights on 16 IBM codebases in the Linux 
   kernel, by redistributing that code with restrictions beyond IBM's
   specified GPLv2 terms.  Alleges that IBM should be granted a 
   declaratory judgement (a protective finding from the court) that 
   AIX, Dynix, and IBM's contributions to Linux do not infringe SCO's 
   purported copyright to Unix.  Alleges that SCO has violated, in its
   UnixWare and OpenServer product, two IBM data-compression patents 
   an IBM data-transmission patent, and an IBM clustering patent.
   Alleges that IBM should be granted a declaratory judgement that 
   SCO has violated contractual obligations towards IBM, has violated
   IBM's trademark rights, has engaged in unfair and deceptive trade
   practices, has violated IBM copyrights, and has violated IBM 
   patents, and is barred by promissory estoppel from asserting 
   proprietary rights to IBM GPLed Linux kernel code that SCO has 

   IBM seeks compensatory and punitive damages on various items, treble 
   patent damages, declaratory relief cited, and injunctive relief barring
   SCO from continuing any of the violations cited.

SCO v. Novell (some remaining unfair competition, breach of contract,
   and breach of implied covenant of good faith and fair dealing claims; 
   next court date Sept. 17):  

   Alleges (or rather, alleged) that Novell committed "slander of title" 
   in stating in public that it, not SCO, owned the basic copyrights to 
   Unix and UnixWare, that Novell breached contract, carried out unfair 
   competition, violated a non-compete agreement, violated a contract of 
   good faith and fair dealing that was implicit in their (Novell and 
   oldSCO's) explicit Asset Purchase Agreement (APA) and Operating 
   Agreement contracts.  

   SCO sought injunction requiring Novell to assign all relevant copyright 
   registrations to SCO, and cease claiming to own copyrights to Unix 
   and UnixWare.  Sought slander of title damages.  

   Novell's Amended Counterclaims alleged that SCO committed slander of 
   title against Novell's copyrights (granted by Kimball's summary 
   judgement), that SCO failed its obligations under oldSCO's APA 
   contract with Novell, that SCO failed to pay royalties owned Novell 
   under the APA, that SCO violated the APA (which gives Novell the sole 
   right to cancel Unix licences, or to issue new licences for Unix System 
   V) by purporting to cancel IBM and Sequent's Unix licences, and by 
   issuing new Unix System V licences to Sun and Microsoft.  

   Novell seeks damages for slander of (copyright) title an injunction 
   requiring that SCO withdraw its copyright registrations, plus one 
   ordering SCO to fulfill its obligations under the APA, and sought 
   creation of a trust to hold royalties SCO has collected to safeguard 
   them against SCO's financial losses.  (Judge Kimball denied the 
   request to order a trust, on grounds that it's currently uncertain 
   how _much_ in royalties SCO owes to Novell.)  Novell also asks for 
   restitution of those royalties and a full accounting, for declaratory 
   relief that Novell owns the copyrights (granted), for punitive damage 
   to punish the unauthorised Sun and Microsoft licence agreements, and 
   an injunction forbidding SCO from violating the APA further.

Red Hat v. SCO:  Seeks declaratory relief (a protective finding from
   the court) that Red Hat's products don't infringe any SCO copyrights 
   or trade secrets that might exist, given SCO's claims in public to the 
   contrary.  Seeks declaratory relief that SCO's campaign to vilify the
   legality of Linux violates Red Hat's trademark rights (the tort of 
   "trademark disparagement") and constitute deceptive trade practices, 
   entitling Red Hat to treble damages, and constitute unfair competition,
   tortious (wrongful) interference with prospective business, and 
   trade libel / disparagement.  Seeks an injunction prohbiting SCO from
   any further such actions.  Case is stayed (deferred) until resolution
   of SCO v. IBM.

SCO v. AutoZone:  Alleges AutoZone infringes SCO's (now proven nonexistent)
   copyrights by using Linux in business.  Seeks damages under the
   Copyright Act (17 USC 504) and to enjoin AutoZone from further use of 

SCO v. DaimlerChrysler:  Alleges DaimlerChrysler infringes its licence
   to use AT&T System V software (and thus breaches contract) by
   failing to send SCO a required annual report certifying its ongoing
   compliance with that licence's obligations.  The legal complaint 
   also claims that Linux is a (in an unspecified fashion) derivative 
   work of Unix System V, which would make DaimlerChrysler's use of 
   Linux a further breach of its AT&T Unix contract.  However, SCO doesn't 
   seek damages for the Linux usage in this trial; it merely implies the 
   threat of a future complaint for so doing in (alleged) violation of 
   DaimlerChrysler's Unix contract's terms.

Oddly enough, it's conceivable that SCO Group might eventually win the
DaimlerChrysler case, if it lasts long enough.  However, its position
has been crippled in all the rest of the cases, and Kimball's recent 
judgement may cause the firm's complete collapse before much else
happens in _any_ of the cases.

More information about the conspire mailing list