We have shown a line-by-line comparison of this code to anyone willing to sign a nondisclosure, of which there have now been hundreds of individuals that have done so. Each time that we license this Unix System V code to corporations and universities around the world, we include a confidentiality clause. We cannot break the very terms of our contracts with licensees just so we can publicly show this code. We expect our licensees to hold to the terms of our contracts with them, and they expect the same of us. Are there negotiations going on with IBM to settle this before it becomes a protracted courtroom battle? What would it take for you to accept a settlement?
There have been no discussions with IBM worth noting. It's difficult to suggest what it would take to accept a settlement because of so many factors involved with the violations that took place. We'll have to cross that bridge if/when we get there. The code you displayed at the SCO Forum was later scoffed at by Linux advocates and experts as code covered by a BSD license that allows sharing of that code. Were those the best examples of the code in question you have?
This was one example of misappropriated code that went into Linux. I would characterize it as the tip of the iceberg. Was it our very best example? I think we are saving our very best examples for the courtroom, where we will ultimately have to try our case.
We respectfully disagree that this was code covered by the BSD license. Our contention is that this code comes from Unix System V, which is owned by SCO. Why have you chosen to go after Linux customers in addition to IBM?
SCO has really been left with no other choice but to request that commercial customers of Linux compensate SCO for our intellectual property with a license fee. The hardware vendors don't take responsibility for infringements in Linux because, technically, they aren't distributors. The distributors pass the hot potato to business end users by shielding themselves with the GPL by saying, 'This product has no warranty and no indemnification.' So now if Linux has problems, including misappropriated intellectual property going into Linux, the end users are left holding this hot potato. Do you truly expect any enterprise or smaller business to pay for a license?
We truly expect any commercial user of Linux based on the 2.4 kernel and later to properly compensate SCO for our intellectual property by paying us a license fee. What do you say to the conspiracy theorists who contend Microsoft is somehow behind your actions?
People are more than welcome to read our SEC filings to know the level of activity that we have with all of our partners, including Microsoft. You've said that the offending code cannot be 'cleaned' from Linux. Why not?
I'm not sure that it can't be. The question becomes, will it? Beyond the 80 or so lines of code that we show under nondisclosure to interested parties, we have identified some examples of more than a million lines of code that have gone into Linux in the form of programs and files such as NUMA (non-uniform memory access), RCU (read, copy, update), and the JFS (the Journal File System from AIX). I haven't seen anyone in the Linux community racing to remove these million lines of code from Linux yet. And even if this code were to be removed, should not SCO receive some kind of compensation from those commercial users whose businesses benefited from using it? It's much more than an issue of cleaning. What's your response to Red Hat's claim that SCO will drag the suit out in order to run up the price of SCO's stock and that SCO and its holding company -- The Canopy Group -- are using SCO's 'wrongfully inflated stock price' to transfer huge sums of money to Canopy?
SCO has done nothing to drag out its suit with IBM. The courts determine when a case will come to trial and the judge in this case set the trial date for April 11, 2005. The timing of court cases doesn't determine a company's stock valuation. Investors determine how attractive a stock is and how much they will pay for that stock. SCO and Red Hat have similar numbers for revenue, earnings, etc., yet Red Hat is currently valued at $1.79 billion. SCO is valued at $211 million. Is Red Hat overvalued or is SCO undervalued? That's a question for the investment community to answer.
Canopy is a majority holder of SCO shares and, if SCO succeeds, then Canopy will succeed, too.
Is the open source development process flawed in your opinion, with regard to intellectual property?
Yes, in that there is no rock-solid mechanism in place for checking in code and assuring users that this code is clean and doesn't infringe on others' intellectual property. Until that mechanism is in place, there will more than likely be problems with others' IP going into Linux. Will you carry out your promise to bill Linux customers for a SCO Unix license?
SCO has not had to invoice commercial Linux users yet for their use of our Unix code. We are satisfied with the level of interest and compensation that we have begun receiving from Linux end users for our IP. Any regrets about how this has played out? If so, what are they?
It's too bad that the Linux development process couldn't prevent misappropriations of Unix software code.
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The only thing we are concerned with is protecting our intellectual property. Any software or hardware vendor out there that owns intellectual property knows that they have to protect it. If you let others steamroll your intellectual property, then why or how are you going to stay in business? How does Sun's and HP's decision to indemnify Linux customers impact your actions?
Many of these vendors are coming to the aid of their customers, which is a good thing for that vendor and their business. However, any hardware vendor that wants to indemnify their Linux customers is also bringing upon themselves a huge financial burden.