IT’S OVER!!! Jury says Novell owns Unix not SCO

So why am I excited over this? This civil suit is basically the mother of all patent troll lawsuits. A “patent troll” is a company who, for whatever reason, owns a patent (or sometimes a copyright) and rather than using that Intellectual Property (IP) to produce goods and services, they spent most of their company resources on suing other companies that they feel treads on their IP. SCO and it’s former evil overload Darl McBride, are just such a “patent trolls”.

“Unix” is sort of a nebulas term. It was/is a brand name of an Operating System for large mainframe computers systems created by AT&T in the 1970s. It is also the name of a set of standards that other Operating Systems for both Mainframes and Personal Computers conform too, including the free OS called Linux.

In the 1990 SCO produced a Unix OS of their own that sold to vendors. Ironically one of my first IT administration jobs was for a company who used SCO Unix. In the late 1990s, there was a convergence of several “open source” a grass root movements including Richard Stallman’s GNU, Linus Troveld’s Kernel and several others. This convergence created a completely free and open source Operating System, which came to be called “Linux”.

For most basic home and business computer operators, there is a basic misconception that when you exchange money for software you are “buying” that software. In fact, you are not “buying” the software, but rather purchasing a “license” or a right, to use that software under a specific set of conditions. The “license” you purchase does not give you the right to modify that software in any way, and in most cases does not give you the right to sell or transfer your rights to that software to someone else.

“Open Source” is a term that refers to software in which the creators of their project give away the underlaying source code used to create the program. In effect not just providing a “license” to use the software but also providing the means by which a skilled computer use, modify, and continue to distribute his or her modifications along with the original. While most often “Open Source” is synonymous with “free”, “free” is a very wide ranging word. “Free” can refer to the price (or lack thereof) for the software, but it also refers to the rights conveyed with the transfer of the software. While most people who participate in Open Source pay no money for the software, there are rules under which “free” software operates. Most notably is that if you add functionality to an open source software package, you can never “charge” for either your additions or the original. This does not mean that open source programers are “volunteers”, in fact most open source writers are quite well paid. But the model by which they are compensated is different than that of tractional authors. In the open source world programers are paid to solve specific software problems, to do they use the source code created by other open source programers and add/modify that work to suit their needs. These additions and modifications are then added back into the overall software, and as a result other time the underlay software grows better and better. In this model, programers are paid for their labor, not for their IP. Sadly, in most major software firms today, programers are paid for their labor because they are forced to turn over any rights they have to their creation to their employer.

With the explosion of the internet in the late 1990s, many companies decided to use Open Source software, including Linux, because it was less expensive than propriety products from companies like Microsoft. Also, open source software adapts faster than propriety software because the teams working on these projects are motived by solving problems, and not motivated by marketing product. So in the fast changing world of the internet, the need for speed and free cost, is the reason why Linux is the number one server platform of the Web.

One one company “owns” Linux, and because Open Source is created by a community of programers who have remodeled the traditional software licensing regime, any and all code within those programs is free of “copyrights” and “patents” in the traditional sense. While this made open source software packages “free” in terms of cost, it also made it highly difficult for larger establish companies to use legal and governmental tactics to protect their business models. Though they still are trying.

In the early 2000s, a long establish network company, Novell, decided to breath life into it’s company by trying a new business model. They would offer service and support for Linux installations. The underlying software would still be free, but as a company they would offer Novell branded Linux and a premium product on which certain enterprise level software products which, contained no open source code, would be sold and run. To it’s credit, Novell did it’s research, and this new model did not in any way violate existing open source rules, though some in the open source community where vocally apposed to Novells actions on the grounds that this business model was against the spirit, if not the rule, of open source.

Of course, because of all the advantages of open source, proprietary companies like SCO, Microsoft, and Sun, were losing massive amounts of market share in the 1990s and 2000s. In an attempt to use law in place of competition, these companies launched several court challenges to Linux on various fronts. These suits were for the most part dismissed lacking merit, and recently companies like Microsoft have turned from court action to government action, trying to lobby world governments away from open source. However, one of these frivolous anti-Linux lawsuits took hold in the case of SCO vs. Novell.

SCO’s assertion is that they “owned” Unix, and because their where similarities between Unix and Linux, Linux volated SCO patents. Because SCO couldn’t sue “Linux”, they choose to sue Novell as a commerical vendor for Linux. The reason for this stems from some agreements between Novell and SCO at a time before open source when Novell was trying to market Unix products. When Novell abandoned it’s Unix ambitions in favor of Linux, SCO felt that they could use these agreements as an overall challenge to Linux itself.

In the abstract, SCO legal strategy had several fronts. First, they wanted to extract licensing fees from users of Linux. The ideal being that if Linux inferred on Unix, SCO had some right to compensation for the use of it’s IP by users of Linux. Second, they wanted to stop Novell from commercially selling Linux. Up until this point there had not be a commercial vendor of Linux, and success of the hybrid open/closed source and service model would devastate not only them, but the whole proprietary software industry. Third, and some would say most important, SCO wanted to create a climate of “fear” around businesses use Linux.  This strategy almost worked, as I clearly remember having discussions with business owners about the civil liability exposure of using Linux.

Over the course of the 2000s, SCO entrenched itself in the lawsuit world, to the point of abandoning all software production and hinging it’s companies survival on these lawsuits. In addition to suing Novell, they also sued Autozone, Daimler-Chrysler and IBM. Emboldened by their bullying, SCO then launched a bizarre tacit.

They started SCOsource which was a company based around requesting user of Linux “register” and pay a licensing fee to avoid being sued. This was my first involvement in these affaires as a company I was consulting for was a target of this SCO extortion attempt. I remember this funny conversation where the cooperate lawyer, the CEO, and I were in a meeting. The cooperate lawyer was obviously concerned over the litigation issue, and this meeting was an attempt to sort out a strategy. I remember advising them that we should tell SCO to “shove-it” and the lawyers face went very pale. In the end we dodged the extortion, but apparently $2,000,000+ was collected by SCO under the scheme. Something good did come of it, as it was part of what inspired me to learn more about the law.

Because SCO had virtually abandoned all other software production, they began to run short on cash. In 2003 a company called Baystar invested $50,000,000 in SCO. As it turns out Microsoft had been the broker behind the deal and it was quite obvious that Microsoft had made the play in an attempt to remove Linux as a competitor. In light of the controversy, Baystar withdraw a marjory of their funding.

By 2005, SCO had hit bottom, with delisted from NASDQ looming, the company eventually filed Chapter 11 bankruptcy in 2007. Court ruling after court ruling kept falling against SCO on all their legal fronts. SCO watchers, including myself, began to hope that this company would soon die and all the lawsuits with it, but the battle kept going.

By 2009, SCO litigation with Novell was almost a joke. Almost every major point in the case had  been in Novell favor. Novell’s plan in the case was simple, they choose not to argue that Linux did not infringe on Unix, but instead to argue that they Novell owned Unix, and not SCO based on the prior agreements they had with SCO. Ironically, it had been decided that Unix was indeed owned by Novell and not SCO by a pervious summer judgment motion, thus rendering the “meat” of the SCO case moot even before the jury trial. The only ray of light for SCO came in August 2009 with the Appeals Court Ruled that the question of Unix ownership was a matter for the jury.

Despite a Judge that was overly sympathetic with SCO durning the trail, the jury unanimously deiced that Novell and not SCO owned Unix. Prior too this case, other anti-Linux SCO litigation had been put on hold pending the outcome of SCO vs. Novell. Because of this, it seems unlikely that SCO has any hope of pursuing these cases. While the jury verdict can be appealed by SCO that seems unlikely that given SCOs finical position that they will. But…..

While the SCO is not dead quite yet, this is a moment to stop and cheer the forces of progress, freedom, and openness in a time that has seen the good guys lose more battles then we have own lately. However, with SCO finally dies, I may throw a party.

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