SCO to Red Hat: you have no complaint [LWN.net]

Red Hat filed suit against the SCO group back at the beginning of August. At that time, SCO's response was nothing if not aggressive:

Be advised that our response will likely include counterclaims for copyright infringement and conspiracy. I must say that your decision to file legal action does not seem conducive to the long-term survivability of Linux.

That response was filed on September 15; thanks to Groklaw, the text of SCO's response is now available online. It reads rather differently than Darl McBride's preview had suggested. Rather than escalate the fight with counterclaims and conspiracy charges, SCO is now trying to make the whole thing go away.

The core of SCO's argument is that it has never actually threatened to sue Red Hat, so Red Hat cannot ask for relief. There is nothing to be relieved from.

There are no allegations that SCO has contacted Red Hat and informed it that its product violates SCO's copyrights. Nor has SCO done so. There are no allegations that SCO has conveyed to Red Hat either expressly or implicitly that it intends to sue Red Hat to enforce its copyrights. Nor has SCO done so. There are no allegations that SCO has sued any other entity for infringement. - Nor has SCO done so.

If you go back to SCO's response to the suit, the company quotes a letter saying:

At the time of your letter, we had expected the possibility of a global resolution of SCO's intellectual property claims against all Linux-related companies that would have likely included Red Hat. This effort has apparently stalled, through no fault of SCO.

SCO's Linux license FAQ contains this statement:

All distributions of Linux 2.4 and later versions of the kernel contain major infringments, regardless of whether Linux is being used in a commercial or non-commercial environment.

Since Red Hat is unarguably a "Linux-related company," the first statement above could certainly be read to imply the existence of intellectual property claims against it. Since Red Hat's products include 2.4 and later kernels, the second statement is a clear claim that Red Hat's products contain "major infringements." But now SCO is trying to say that such claims do not exist.

This quote is also worth noting:

Red Hat, however, has never had any license from SCO providing access to SCO's trade secrets or other confidential information and, to SCO's knowledge, has not stolen or otherwise misappropriated any of SCO's trade secrets or confidential information. Therefore, unlike companies that have contractual obligations to SCO, Red Hat has no legal or factual basis for apprehension of suit by SCO with respect to trade secrets or confidential information it has licensed from SCO, and its claims in Count II can be summarily dismissed.

So, if you work with Linux, and you have never signed a contract with SCO, you should have little to worry about. SCO states here that it has never claimed that Red Hat Linux (at least) infringes upon its copyrights, and SCO states explicitly that Red Hat cannot have stolen its trade secrets. If nothing else, SCO's statements serve as another warning against signing contracts with that company.

SCO goes on to say that, even if Red Hat could prove that it is right to be worried about being sued, the court still should not hear the case.

The previously filed SCO v. IBM Case addresses most, if not all, of the issues of copyright infringement and misappropriation. If these issues are decided against SCO in that case, then Red Hat's lawsuit becomes unnecessary.

One wonders how the IBM case can handle "most, if not all, of the issues of copyright infringement" when, as stated earlier in SCO's response, "There are no allegations that SCO has sued any other entity for infringement. Nor has SCO done so." The IBM case is a breach of contract case which has nothing to do with copyright infringement. One presumes that the judge in the Red Hat case will notice that.

SCO claims that the rest of Red Hat's complaints (mostly variations on violations of fair trade laws) should be dismissed because SCO's behavior is a simple exercise of its first amendment ("freedom of speech") rights.

SCO's Public Statements fall outside the scope of the Lanham Act and related state law claims and are protected under the First Amendment to the U.S. Constitution. The Public Statements also address or relate to pending or potential litigation and are privileged under the common law doctrine of litigation immunity.

According to SCO, even its "Linux license" is actually speech related to ongoing litigation, and thus protected. A footnote in SCO's filing makes the interesting additional claim that "SCO has never asserted in any statement that individual, non-corporate users of Linux may be liable to SCO, or otherwise would need to purchase a right to-use-license."

The filing finishes out with this fun little argument:

Indeed, SCO's Public Statements are also part of a wider debate in the technology and music industries about the scope of intellectual property protection in a digital age. As open source software development becomes prevalent and digital music can be downloaded for free, many people are simply ignoring copyright and patent laws. Many public commentators recognize this disintegration of property rights as a danger to our economic system. In a small way, SCO's Public Statements are part of this debate. This is an additional factor that weighs in favor of holding SCO's Public Statements as fully-protected speech, not subject to the Lanham Act or associated state law claims. It would pervert the First Amendment to allow the Lanham Act to chill broad debate about the relative merits, and problems, with open source software.

Free software developers are, in other words, the moral equivalent of those who distribute copyrighted music over the net. And it is SCO's right to be "part of this debate" by making its claims against Linux.

The conclusion that comes from a thorough reading of SCO's response is clear: SCO does not want this fight, and is doing what it can to make it go away. This is not a surprising position; a company which has picked an intellectual property fight with IBM has little need or desire for other legal distractions. SCO's move for dismissal looks weak, however, especially when one considers that it has contradicted many of its own claims in public statements elsewhere. The Red Hat suit is not good news for SCO, and it is unlikely to be shrugged off so easily.

SCO is also weakening any case it might have against any other Linux-related company. After going to such lengths to state that Red Hat has nothing to fear from SCO, and that the IBM case covers everything, SCO will will have to find some truly compelling "new evidence" before it can turn around and file another Linux-related lawsuit. As SCO backs away from its increasingly indefensible claims of direct infringement, all it really has left is a contract dispute with IBM. It is not surprising that SCO wants to free itself of the Red Hat suit and concentrate on its one, big fight.

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October 15th ... October 15th

Posted Sep 23, 2003 17:19 UTC (Tue) by jre (subscriber, #2807) [Link]

The timing of this suit is becoming increasingly awkward for SCO, as the promised date approaches for the infamous "Linux license" invoices to go out. Groklaw has put SCO on notice that it faces multiple lawsuits and possible criminal prosecution as soon as they start sending invoices. Additionally, it tends to undercut SCO's case (to say the least) to start sending invoices so soon after arguing that Red Hat's fears are groundless. Perhaps the most revealing comment is that SCO "had expected the possibility of a global resolution" at the time Red Hat announced its intention to file suit. No kidding -- SCO gambled that at least a handful of the 1500 threatened companies would roll over and pay them off, letting them hold another press conference and claim grand success with their "licensing program" (without naming names, of course). That gamble is looking like a bust right about now.

SCO is in a tight spot -- either they start sending invoices, and release an avalanche of legal action against them, or they quietly forget to send invoices, revealing themselves to be cowards as well as bullies. Whatever they do, the market will notice, and react.

If SCO chooses option (A), the response is obvious: let loose the dogs of war!

But if, as is more likely, they choose option (B), I propose we embarrass the hell out of them. Every time a SCO spokesman speaks in public, there should be someone with a sign reading "Hey, Darl -- where are the invoices?" At the next Chris-und-Darl conference call, that should be question #1. I also like noyfb's suggestion: let's see how many web sites would like to put up a big "SCO bluff clock" a la James Randi, showing how many days the threatened invoices are overdue. After months of frustration and anger, it's about time we had some fun!