On August 4, Red Hat filed suit against The SCO Group in
U.S. District Court in Delaware. For those who are interested, the full
text of the complaint is available in
, but be warned: it's 1.3MB, and the result of a poor
scanning job. To save our readers time, bandwidth, and eye strain, we've
gone through and summarized the important parts of the complaint.
The first 13 paragraphs summarize the nature of the complaint. SCO, it is
said, is pressing untrue claims in order to "create an atmosphere of
fear, uncertainty, and doubt about Linux." The IBM lawsuit is
mentioned, along with the initial trade secret claims. Then, the focus of
the case shifted:
SCO apparently recognized that the supposed "secrets" that SCO
itself was making publicly available through its own Linux
distribution do not qualify as trade secrets. Accordingly, SCO
recently has changed the focus of its campaign against Linux. SCO,
which has itself developed and sold a version of Linux for years,
now claims to have suddenly discovered that Linux contains computer
software code that was copied from another, competing operating
system that SCO claims to own - Unix.
SCO, it is said, is doing all of this because its business is failing.
In sum, SCO's campaign is designed both to slow the growth of
Linux, and to reverse its failing fortunes by convincing Linux
users that they need to pay SCO a license fee to use the lower-cost
Linux operating system.
The complaint then says (paragraph 7) that SCO has targeted Red Hat in
particular, "repeatedly meeting with financial analysts who cover Red
Hat's stock and ... among other things, inviting certain of Red Hat's
institutional investors to a briefing....'
Red Hat sent SCO a
letter on July 18 (included in the complaint) asking that SCO back up its claims.
"SCO did not respond to Red Hat's letter, except to make a telephone
call seeking to have Red Hat pay for an unneeded Unix license."
The next few paragraphcs (14-17) identify the parties involved and
establish that the court has jurisdiction in this case.
Section IV begins with the history of Linux (pp. 18-27), starting with
Richard Stallman. Red Hat's business is described (pp. 28-32) in rather
glowing terms; SCO's business (pp. 33-36) does not fare so well.
Paragraphs 37 to 69 are the core of the complaint, describing SCO's
actions against Linux and Red Hat in particular. Paragraph 43 notes
that SCO is still distributing Linux source. Subsequent paragraphs look at
the copyright claims and SCO's unwillingness to back them up with evidence:
46. SCO's copyright infringement claim fares no better than its earlier
trade secret assertions. Once again, SCO hides behind a
smokescreen of secrecy, refusing to identify with specificity the
lines of code in Linux that allegedly have been "copied" from Unix.
47. To identify the allegedly copied code, however, would enable
those who created that code to demonstrate that it is not the
property of SCO, was not copied from Unix, and was developed
independently by engineers - including those at Red Hat - who
contribute to the open source software.
48. There is nothing "confidential" about SCO's claims of copyright
infringement. Inasmuch as the Linux code is publicly and freely
available for anyone in the world to see, there is no legitimate
reason for SCO to hide behind a veil of secrecy in making its
allegations about Linux.
Red Hat's summary of the situation (p. 59) pulls no punches:
SCO's illicit strategy is transparent - make loud public claims
about alleged intellectual property rights, provide no detail
(since it does not exist) and hope to use the time-honored
technique of creating fear, uncertainty, and doubt to slow the
growth and use of Linux, damage the business of Linux providers
such as Red Hat, coerce unwarranted fees from Linux users by
threats of litigations, and, upon information and belief, even
create enough nuisance value to be acquired while running up the
price of SCO's stock in the short term, thereby creating various
financial opportunities to wrongfully enrich the originators of
The harm to Red Hat's business is documented in following paragraphs with
descriptions of Linux deployments put on hold, Gartner quotes, etc. The
recent drop in Red Hat's stock price is also mentioned.
Paragraph 69 states that SCO's newly inflated stock price, meanwhile,
has been used to transfer millions of dollars to the Canopy Group.
Starting with paragraph 70, Red Hat provides the seven "counts" that make
up its complaint. They are:
- Red Hat's products do not infringe upon any of SCO's copyrights. A
declaratory judgement is requested to state that no such infringement
exists (pp 70-73).
- Similarly, there is nothing in Linux which violates any SCO trade
secret; another declaratory judgement is requested to that effect
- Red Hat claims that SCO is engaged in false advertising which is
intended to deceive Red Hat's customers and other Linux users (pp
- Red Hat claims that SCO is making use of deceptive trade practices
in violation of Delaware law (pp 87-90).
- Red Hat claims that SCO's actions constitute unfair competition (pp
- Red Hat claims "tortious interference with prospective business
opportunities" (pp. 95-100).
- The final count claims "trade libel and disparagement" on SCO's
parts (pp 101-105).
For each of the last five claims, Red Hat is asking for (1) a
permanent injunction forcing SCO to stop, and (2) payment of damages
to Red Hat for the harm it has sustained - and lawyers fees, of course.
The complaint has one exhibit - Red Hat's letter to SCO asking for
specifics on SCO's claims.
It will be most interesting to see how SCO responds to this suit, and how
things proceed in court. If SCO does have evidence to back up its claims,
Red Hat's suit could have the effect of forcing that evidence into the
light of day rather sooner that might otherwise happen. For SCO, the
choice could be between laying out its cards or finding itself subject to
declaratory judgements and injunctions in the near future. In the end, of
course, we have to wait to see what happens in court.
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