Michael Eriksson's Blog

A Swede in Germany

The trial of the year

with 2 comments

Right now, a trial of great importance is underway: The battle between Novell (the good guys) and SCO (the bad guys) concerning the rights to Unix. Unfortunately, most people seem to be entirely unaware of it.

Why is this battle so important?

In order to understand this, a brief overview is needed, and will be given below. By necessity, it will be an over-simplification: The story is extremely convoluted, involves many parties, and is stretched over a very long time. For those interested in more details, I recommend Wikipediaw; for those truly interested, there are enormous amounts of material present at Groklawe or, in German, Heisee.

Some forty years ago, the operating system Unix takes its first steps at AT&T. This little toddler is to grow into one of the dominating server and workstation operating systems for several decades—and to be the progenitor of both Linux and Mac OS X.

In the early nineties, AT&T sells the rights to Novell (the first of the combatants). In 1995, some of these rights are sold to SCO (confusingly, not the second combatant). Here however, we encounter the point of contention: Which rights, exactly?

Only in 2000 does the second combatant, then called Caldera, enter the arena by buying the Unix business of the original SCO. Not long thereafter, Caldera changes its name to SCO Group, in an effort to capitalize on the strong brand-name of the original SCO, which it has also bought. Meanwhile the original SCO departs from our tale.

Having had a few less than successful years, SCO looks for a solution to its money problems, and in 2002 it begins the dangerous gamble of claiming more extensive rights to Unix than it was acknowledged to have—and that Linux would contain significant portions of unlicensed Unix code. Calls for proof are raised; none is given.

In 2003, all hell breaks lose. A slew of law suits are started: SCO v. IBM, Red Hat v. SCO, SCO v. Novell, SCO v. AutoZone, SCO v. DaimlerChrysler. Claims and counter-claims are made, and litigation that lasts until at least 2010 ensues. SCO’s most noteworthy claim: IBM owns it one billion dollar (yes, billion) relating to its alleged and allegedly illicit use of intellectual property allegedly belonging to SCO. This amount was later increased to five billion… To make matters worse, this has the appearances of pilot case, with more to follow upon success.


Side-note:

The above paragraph has been revised for two errors since the original publishing:

  1. When checking the numbers, I overlooked the increase to five billion dollars.

  2. I claimed that even one billion was far more than SCO was every worth. While I still hold this statement to be true, it is technically wrong, seeing that Caldera had a market capitalization of more than that shortly after its IPO. That number, however and IMO, was severely hyped, did not reflect actual sales and prospects, and dwindled soon afterwards. (See also CNET on the IPOe or historical share-price informatione of SCO.)

Generally, I gathered most facts from a few timelines on the given links, without revisiting the case to a greater depth. (I followed the case with great interest in the early years, but with the passage of time…) Correspondingly, there may be other errors in detail—not, however, in the big picture.


In parallel, SCO tries to leverage its claims in other ways, e.g. by trying to bluff companies merely using Linux into purchasing “anti-dote” licenses as protection against potential law suits for larger amounts.

As time goes by, SCO becomes more and more focused on these lawsuits, seeing the rest of its business disappear. It is now in a do-or-die situation—win the jackpot in court or end up in bankruptcy. It has become a company effectively geared at just one thing—litigation.

Because SCO is never able to produce evidence, it has little success, often see its claims struck down by summary judgments, and only manages to stay above the water-line through injections of additional capital, including from Linux’, Unix’, and Apple’s archenemy—Microsoft. Those claims that are not struck down are often stayed awaiting one of the other cases, either SCO v. IBM or SCO v. Novell.

In the autumn of 2007, the issue seems to be concluded: A summary judgment falls, stating that Novell is the rightful owner of the relevant Unix rights, which pulls out the carpet from all other cases; and SCO is effectively bankrupt.

However, hanging by a thread and protected by Chapter 11, SCO manages to remain to in the fight—and in August 2009, an appeals court finds that parts of the summary judgment were premature and must be treated in a full trial. This trial is now underway, expected to be concluded in the coming week (knock on wood).

As should be clear even from this greatly simplified overview, the situation has been highly chaotic, and great stakes are involved. Those who dig into the sources given above will find more chaos yet, including many other examples of highly disputable behaviour on the part of SCO—and many cases of infighting and internal intrigues.

Now, why is it important that SCO lose this trial? Mainly, were SCO to win, it would set a dangerous precedent with regard to making legal claims bordering on the frivolous, extorting money by means of legal threats, and making grossly misleading accusations against other organisations: The justice system is abused often enough as it is—with a SCO victory, we could see a flood of lawsuits where failing companies try to ensure their survival by suing wealthier companies, possibly causing immense damage to third parties along the way. In addition, it is still conceivable that a SCO victory could do great damage to the companies and communities involved in developing Linux, and similar lawsuits against other members of the extended Unix family would not be inconceivable—and consider if Linux takes a severe hit at the same time as Apple is locked up in ten years of costly litigation: All of Gaul could well be conquered by the Redmonds this time.

Notably, while the probability that SCO will win sufficiently many battles is small, the stakes are sufficiently high that there is still reason to be nervous. In football terms: We may be a few minutes away from the end of the fourth quarter and have a two-touchdown lead—but the game is the Superbowl.

The issue of ObamaCare may be more important, but neither the OJ trial(s) nor the actual Superbowl holds a candle.

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Written by michaeleriksson

March 21, 2010 at 4:20 pm

Posted in Uncategorized

Tagged with , , , ,

2 Responses

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  1. You’re a Unix guy, huh? You and my husband both.

    Lorena

    March 23, 2010 at 12:59 am

    • Indeed, I am. Still, these questions would be important to me even if I did not have a heart for Linux/Unix. The consequences in terms of “evil” litigation would be the same, and monopolies are bad—in particular, when Microsoft is involved. (As can be seen not just on the desktop, but also where e.g. browsers were concerned in the late ninetiees and the early noughties.)

      michaeleriksson

      March 23, 2010 at 5:11 am


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