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Old news, but funny that WashPost thinks that Linux uses the General
Plublic License and that "SCO's clams are groundless". (Their claims
are groundless too presumably.) The Washington Post has 3-8 typos or
researchos every day that I notice. Do they not pay to have editors
anymore? Is it somehow more difficult to proofreed when everyone can
see the official copy and fix it electronically?? Couldn't they pay
proofreaders in India overnight for the low low price of $x???<br>
<br>
<br>
<a class="moz-txt-link-freetext" href="http://www.washingtonpost.com/wp-dyn/articles/A29675-2004Jun9.html">http://www.washingtonpost.com/wp-dyn/articles/A29675-2004Jun9.html</a><br>
<br>
Showdown With The Linux Gang<br>
One Company's Lawsuits Challenge Open-Source Code<br>
<br>
<br>
<br>
Darl McBride, chief executive of SCO Group, says Linux users have
rustled his company's Unix software code. (Tom Smart For The Washington
Post)<br>
<br>
<br>
<br>
By Jonathan Krim<br>
Washington Post Staff Writer<br>
Thursday, June 10, 2004; Page E01<br>
<br>
LINDON, Utah -- For a small but fervent cadre of computer enthusiasts,
the most popular Internet parlor activity over the past year hasn't
involved animated dungeons, dragons or warlords.<br>
<br>
Instead, it is real-life sleuthing to piece together a business puzzle:
How can a tiny, struggling software company based here at the foot of
the Wasatch Mountains afford to pursue a legal donnybrook with some of
the biggest names in corporate America?<br>
<br>
SCO Group Inc. is suing companies such as International Business
Machines Corp., Novell Inc., DaimlerChrysler and AutoZone Inc. -- and
threatening government agencies and more than 1,500 other firms -- over
their use of software called Linux.<br>
<br>
Many big companies and organizations have embraced Linux in recent
years because of its chief virtue: It's free. Developed and maintained
by a loose confederation of engineers, Linux is available to anyone and
can be modified by users, challenging the traditional model of software
controlled and licensed to others by a single entity such as Microsoft
Corp.<br>
<br>
SCO claims that pieces of code from another operating system that it
owns found its way into Linux, and the company is demanding a licensing
fee of $700 for every computer server running the software.<br>
<br>
In the process, SCO has become one of the most hated companies in the
country, and it has sparked a vitriolic war over the future of
software. Linux advocates regard SCO as part of a broader campaign to
snuff out the software, known by its smiling penguin logo.<br>
<br>
"There are some vested interests, Microsoft among them, to whom the
whole concept of Internet collaboration is a threat," said Eric S.
Raymond, a technology book author who was one of the first to take up
the fight against SCO more than a year ago.<br>
<br>
Working largely on their own time, Linux devotees apply their
collaborative model for creating software, known as open source, to
attack SCO and its case. Dozens of online detectives comb corporate
documents, analyze legal filings and publish everything they can find
about the company, its finances, management and connections to
Microsoft.<br>
<br>
One Web site focused exclusively on the case, known as Groklaw, was
started by a paralegal named Pamela Jones and now has roughly 5,000
contributors. Though it is ardently pro-Linux, the site has grown into
such an exhaustive archive of software history and law that attorneys
on both sides use it as a resource.<br>
<br>
"Our international membership means SCO can't do anything anywhere on
the planet without someone seeing it and telling on them," Jones said
in an e-mail interview.<br>
<br>
Redmond Shadow<br>
<br>
The strongest evidence pointing to possible Microsoft encouragement in
the SCO campaign is this: Early last year, Microsoft agreed it would
pay SCO an eyebrow-raising sum, as much as $16 million, to license its
technology, according to filings with the Securities and Exchange
Commission. Later, Microsoft executives brought SCO to the attention of
a venture fund, BayStar Capital, which ended up putting together
investments in SCO totaling $50 million.<br>
<br>
Microsoft spokesman Mark Martin said the company's sole involvement
with SCO was the license. He said it was needed because Windows makes
use of some code from software known as Unix, a version of which is
owned by SCO. Sun Microsystems also purchased a license from SCO.<br>
<br>
The cash infusions allowed SCO to hire one of the nation's most
prominent and expensive litigators, David Boies, to press its claims.
In one of the case's many odd twists, it was Boies who tormented
Microsoft when he served on the Justice Department's legal team in its
antitrust prosecution of the company in the late 1990s. To retain his
services, Boies's firm received a $10 million cut of the $50 million
investment SCO received, as well as 400,000 shares of SCO stock, which
could soar in value if the company prevails.<br>
<br>
Most troubling to companies, governments and other potential Linux
users is that SCO is going after them instead of the companies that
provided them with the software. Generally, they get Linux from
distributors such as IBM and Novell or Red Hat Inc., which make money
by selling installation and support and packaging other services to go
with it.<br>
<br>
"Companies like DaimlerChrysler and AutoZone have been dragged into
this as pawns in a bigger fight . . . and that is not logical," said
Daniel Egger, who heads Open Source Risk Management, which he hopes
will offer insurance to companies worried about copyright infringement
with open-source software. "They didn't write it. They are just end
users running it."<br>
<br>
Linux backers call this tactic the spreading of "FUD," tech-speak for
fear, uncertainty and doubt, to turn the marketplace against
open-source software.<br>
<br>
Tensions are so high that people on both sides claim they have received
threats to their safety. Groklaw's Jones said she closely guards her
privacy and base of operations after a menacing note appeared on an
Internet message board.<br>
<br>
SCO chief executive Darl McBride said he now sometimes carries a
handgun, and his wife sometimes gets threatening calls when he is away
on business. On Super Bowl Sunday this year, SCO's Web site was
temporarily shut down by a virus aimed at the company.<br>
<br>
"This case is a tinderbox," said Laura DiDio, a software analyst at the
Yankee Group research firm, who said that some "Linux loonies" have
harassed her over her research reports on the lawsuits, which generally
have favored SCO's legal position. "IBM is using Novell, and Microsoft
and Sun are using SCO to fight their battles for them."<br>
<br>
Linux leaders deplore harassment as the work of an errant few, but they
have no reservations about their desire to revolutionize the
fundamentals of the software industry.<br>
<br>
They believe that open-source collaboration yields better software,
because more minds are put to the task. And they argue that
operating-system software is now so essential to the economy that it
should be a basic commodity that is cheap, or free, so that users can
better spend their resources tailoring it to fit their needs and using
it to expand their businesses.<br>
<br>
"When that happens, some people lose, but everyone else wins, because
things getting cheaper raises the general wealth level and raises
productivity," said Raymond, the author.<br>
<br>
Disputing the Benefits<br>
<br>
McBride calls these arguments tantamount to a death sentence for a
multibillion-dollar software industry that has helped propel the United
States to economic and technological leadership in the digital era.<br>
<br>
In March, he sent a letter to every member of Congress warning that
Linux threatens the country's economic well-being and even its national
security. <br>
<br>
<p><nitf> "Each Open Source installation displaces or pre-empts a sale
of
proprietary, licensable and copyright-protected software," he said in
his letter. "This means fewer jobs, less software revenue and reduced
incentives for software companies to innovate."</nitf>
</p>
<p>
<nitf>If open-source advocates want to give away their wares, McBride
said, they can do so. But he insists they cannot take code from
SCO-owned Unix, put it into Linux and distribute it for free. </nitf>
</p>
<p>
<nitf>He sometimes describes the company's predicament in the
down-to-earth language of the cattle business in which he was raised.</nitf>
</p>
<p>
<nitf>"We went out one day and our Unix cows were missing," McBride
said he told his father in trying to explain the case to him. "We
looked in the Linux pen, and there's a bunch of them in there that have
our brand on them . . . in this case the copyright. Someone took our
cows and we want 'em back -- it's as simple as that."</nitf>
</p>
<p>
<nitf>SCO officials acknowledge that the firm, formerly known as
Caldera, was likely going out of business before pursuing its Linux
licensing program. The company purchased rights to Unix code from
Novell and sells it to some companies, but McBride said that business
cannot compete with Linux's free distribution model.</nitf>
</p>
<p>
<nitf>For its part, Microsoft has been on the offensive against Linux
for years, often labeling it one of the company's greatest competitive
threats. Calling it "viral" and a "cancer," officials have lobbied the
Pentagon, other agencies and foreign governments not to use it, while
stepping up efforts to win business customers by being more flexible in
Windows licensing negotiations.</nitf>
</p>
<p>
<nitf> More recently, the firm's public rhetoric has moderated.</nitf>
</p>
<p>
<nitf> "Developers should be free to use whatever license they choose,"
Martin said. "But Microsoft wants people to be aware of the benefits
and drawbacks."</nitf>
</p>
<p>
<nitf> Last month, however, a think tank heavily funded by Microsoft,
the Alexis de Tocqueville Institution, issued a lengthy study
questioning whether developers of Linux, including patriarch Linus
Torvalds, appropriated substantial amounts of code from other systems.</nitf>
</p>
<p>
<nitf> Torvalds denies the charge, as do developers quoted in the study
who say its author distorted their views. But Torvalds recently told
Linux developers that when they add features or refinements to the
software, they should certify that the code was not improperly copied.</nitf>
</p>
<p>
<nitf>Even the most hardened Linux advocates, including Torvalds, doubt
that Microsoft inspired SCO to bring its lawsuits. But they contend the
software giant knows how to exploit a golden opportunity when it sees
one.</nitf>
</p>
<p>
<nitf>For them, news of the $50 million investments in SCO had the
whiff of a smoking gun. Why would a Northern California venture capital
firm, BayStar Capital, and the Royal Bank of Canada sink a combined $50
million into a company that acknowledged that Linux was so overwhelming
its Unix business that its only hope of survival was its lawsuits?<br>
</nitf></p>
<p><nitf>It was then that one of the online gumshoes scored his biggest
coup: Raymond was leaked a memo from an SCO consultant suggesting that
Microsoft was behind those investments, and more.</nitf>
</p>
<p>
<nitf> "Microsoft will have brought in $86 million for us including
BayStar," wrote Michael Anderer to SCO Vice President Christopher
Sontag in an e-mail dated Oct. 12. "Microsoft also indicated there was
a lot more money out there and they would clearly rather use BayStar
'like' entities to help us get significantly more money if we want to
grow further or do acquisitions."</nitf>
</p>
<p>
<nitf>Responding to the clamor, SCO said the e-mail was authentic, but
that Anderer had gotten many details wrong, including Microsoft's
involvement. Like Microsoft, McBride said there is no connection
between the two beyond the licensing deal. </nitf>
</p>
<p>
<nitf>McBride said he thinks Anderer, who worked with him at a previous
company, was trying to inflate the size of deals he brought to the
company.</nitf>
</p>
<p>
<nitf>"We hired him as a consultant to help put together some licensing
deals with Microsoft, which he did," McBride said. "Consultants have
fee arrangements, and . . . the more dollars they can attribute to
something they are doing, then obviously the bigger their fee would be."</nitf>
</p>
<p>
<nitf> From his home office, Anderer said he could not discuss the
issue because of a nondisclosure agreement with SCO. He said he was
disappointed when he heard McBride's response to the memo. </nitf>
</p>
<p>
<nitf>BayStar, meanwhile, said it was introduced to SCO by Microsoft
officials.</nitf>
</p>
<p>
<nitf>"I would not have known about the existence of SCO, but for the
introduction by Microsoft," BayStar President Lawrence Goldfarb said in
an interview.</nitf>
</p>
<p>
<nitf>SCO officials say the introduction was made by a former Microsoft
employee, but Goldfarb said he was approached by two current, senior
Microsoft executives whom he did not name except to say they were not
Chairman Bill Gates or chief executive Steven A. Ballmer.</nitf>
</p>
<p>
<nitf> Goldfarb added that Microsoft's involvement stopped at the
introduction, and that Microsoft is not an investor in BayStar. </nitf>
</p>
<p>
<nitf>"We're a pure financial animal," Goldfarb said of the venture
capital firm. The terms of the investment deal were attractive, he
said, with BayStar purchasing $20 million worth of preferred shares
that paid an ongoing dividend. The firm mitigates its risk by shorting
the common stock of the company it is investing in.</nitf>
</p>
<p>
<nitf>Goldfarb said BayStar researched SCO's legal claims before
investing and believes they have merit, giving the BayStar investment
potentially high returns.<br>
</nitf></p>
<p><nitf> He added that he agrees with concerns held by SCO, and
Microsoft, that contractual terms for Linux designed to keep it free --
known as the General Public License -- can undermine ownership rights
of software that might be used in the same network environment.</nitf>
</p>
<p>
<nitf> <font size="-1" color="#000000" face="Arial,Helvetica"><b>'This
Sucking Effect' <br>
</b></font> <br>
Under
this view, software that is enhanced to work in conjunction with Linux
might be labeled a Linux derivative, which the public license then
requires to be distributed for free.</nitf>
</p>
<p>
<nitf> "The GPL has this sucking effect of grabbing your IP
[intellectual property], sucking it in and destroying your property
rights," McBride said.</nitf>
</p>
<p>
<nitf>Torvalds, the Linux founder, ridicules that notion.</nitf>
</p>
<p>
<nitf> "Having a hole in your head has this sucking effect," Torvalds
said, firing back at McBride. "The GPL doesn't 'grab' any IP at all.
The only thing that is desperately trying to grab other people's IP is
Darl McBride and company."</nitf>
</p>
<p>
<nitf>Still, some Linux advocates such as Bruce Perens, former
open-source strategist at Hewlett-Packard, say the GPL has some
"ambiguities." But Perens argues these are easily resolved. An even
bigger assault on Linux looms, he fears, through the assertion of
patent rights by big software firms. </nitf>
</p>
<p>
<nitf>If any company were to worry about threats to intellectual
property, it would be IBM, which holds more patents than any other firm
in the world. But the company has staked a portion of its business on
Linux, selling services and add-ons to other companies and institutions.</nitf>
</p>
<p>
<nitf>IBM officials declined to comment on the lawsuit. The company
said that it has had no problems working with all types of licenses.</nitf>
</p>
<p>
<nitf>"If you understand and adhere to the terms and conditions, you
can work with the software," said IBM spokeswoman Trink Guarino.</nitf>
</p>
<p>
<nitf>In its lawsuit against SCO, Red Hat -- the country's largest
Linux distributor -- has asked a judge to declare Linux free of
infringed code. Meanwhile, organizations such as the National Retail
Foundation have issued statements that, based on their research, SCO's
clams are groundless.</nitf>
</p>
<p>
<nitf>As for SCO, it has had a rocky past few weeks. Its stock, which
soared when it began its lawsuit campaign, has since dropped
dramatically.</nitf>
</p>
<p>
<nitf>More recently, the Royal Bank of Canada dropped out of the
picture, selling two-thirds of its stake to BayStar and converting the
remaining $10 million into SCO stock, which it can sell on the open
market.</nitf>
</p>
<p>
<nitf>Initially, BayStar also sought a refund of its investment, which
could have stripped SCO of much of its cash.</nitf>
</p>
<p>
<nitf>"We do not like to be in the public forum," Goldfarb said. "We
were not happy with what we thought was a cavalier attitude [by SCO
management] . . . in dealing with investor relations and the press.
This is an issue of grave importance."</nitf>
</p>
<p>
<nitf>But recently, BayStar said it was satisfied with SCO management.</nitf>
</p>
<p><br>
<nitf><br>
</nitf></p>
<p></p>
<br>
<br>
<br>
<br>
sdw<br>
<pre class="moz-signature" cols="72">--
<a class="moz-txt-link-abbreviated" href="mailto:swilliams@hpti.com">swilliams@hpti.com</a> <a class="moz-txt-link-freetext" href="http://www.hpti.com">http://www.hpti.com</a> Per: <a class="moz-txt-link-abbreviated" href="mailto:sdw@lig.net">sdw@lig.net</a> <a class="moz-txt-link-freetext" href="http://sdw.st">http://sdw.st</a>
Stephen D. Williams 703-724-0118W 703-995-0407Fax 20147-4622 AIM: sdw
</pre>
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