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Notice this Notice? ~ by Dr Stupid (Groklaw)

[Posted June 17, 2004 by corbet]

Groklaw tries to figure out whether Novell really sold the Unix copyrights by looking at the actions of the parties involved - and, in particular, what sort of copyright notices they put into the Unix code. "oldSCO's handling of the UnixWare source code in the years following the deal seem to me most consistent with those of a company that had obtained the right to freely derive from and sell products based on the code, but inconsistent with those of a company that had been granted, or believed they owned, the copyrights on that code."
to post comments

Caldera CEO Ransom Love in 2000: "We *don't* own the IP to open server"

Posted Jun 17, 2004 16:48 UTC (Thu) by NZheretic (guest, #409) [Link]

Your going to need to use the old realplayer to view the stream,
realplay rtsp://media.cmpnet.com/technetcast/pgm0086/tnc_393_150.rm

From Technetcast LinuxWorld 2000:Ransom Love Keynote

Linux and the Chasm: Where Are We? Caldera President Ransom Love explains what it will take for Linux to be adopted accross the entire landscape... Also: SCO acquisition... COSMOS, a workstation management system...
At the end of the speech Ransom Love clearly states:
There is one element of Open Server that is not coming over, we don't own the IP , we just own all the rights for distribution, ongoing development for the Open Server and that has to do with tax and other considerations

Notice this Notice? ~ by Dr Stupid (Groklaw)~ Huh?

Posted Jun 18, 2004 2:11 UTC (Fri) by danw6144 (guest, #14336) [Link] (6 responses)

A fundamental tenet of contract law is that the parties
are held to the definition of their own terms
when clearly expressed in the contract language.

Amendent Two modifies the APA:
A. With respect to Schedule 1.1(b) of the Agreement,
titled "Excluded Assets", Section V, Subsection A shall be
revised to read:
All copyrights and trademarks, except for the
copyrights and trademarks owned by Novell as of the date of
the Agreement required for SCO to exercise its rights with
respect to the acquisition of UNIX and UnixWare
technologies. However, in no event shall Novell be liable to
SCO for any claim brought by any third party pertaining to
said copyrights and trademarks.

So what does the "acquisition of UNIX and UnixWare
technologies" mean?

The APA states:
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
2.10. Technology. To the knowledge of Seller, as of the date
hereof, Seller owns, co-owns or is licensed or otherwise
entitled to use rights to all patents, trademarks, trade
names, service marks, copyrights, mask work rights, trade
secret rights, and other intellectual property rights
and any applications therefor, and all maskworks, net lists,
schematics, technology, source code, know-how, computer
software programs and all other tangible information or
material, that are used in the Business as currently
conducted (the "Seller Intellectual Property Rights").

Here Novell represents the kinds of things it considers
be included in the scope of the meaning of "Technology" as
it is used in the APA:
1. patents
2. trademarks
3. trade names
4. service marks
5. copyrights
6. mask work rights
7. trade secret rights
8. other intellectual property rights and any applications
therefor
9. maskworks
10. net lists
11. schematics
12. technology
13. source code
14. know-how
15. computer software programs
16 all other tangible information or material
that are used in the "Business" as currently conducted.

Anything on the above list that is copyrightable by law
that used in the "Business" and that is not *specifically*
excluded by schedule 1.1(b) (as amended) is "UNIX
technology" subject to the "acquisition" by SCO.

The APA describes "acquisition":
ARTICLE I
THE ACQUISITION
1.1 Purchase of Assets
(a) Purchase and Sale of Assets. On the terms and subject to
the conditions set forth in this Agreement, Seller will
sell, convey, transfer, assign and deliver to Buyer and
Buyer will purchase and acquire from Seller on the Closing
Date (as defined in Section 1.7), all
of Seller's right, title and interest in and to the assets
and properties of Seller relating to the Business
(collectively the "Assets") identified on Section 1.1 (a)
hereto. Notwithstanding the foregoing, the Assets to be so
purchased shall not include those assets(the "Excluded
Assets") set forth on Schedule 1.1 (b):

No extrinsic or parol evidence is needed to clarify the
meaning of "rights with respect to the acquisition of
UNIX and UnixWare technologies" as they are clearly defined
by Novell's contract language.


Notice this Notice? ~ by Dr Stupid (Groklaw)~ Huh?

Posted Jun 18, 2004 4:39 UTC (Fri) by bojan (subscriber, #14302) [Link]

> No extrinsic or parol evidence is needed to clarify the meaning of "rights with respect to the acquisition of UNIX and UnixWare technologies" as they are clearly defined by Novell's contract language.

If everything is so clear, why did judge Kimball keep the case? It is obvious from his discussion that it _isn't_ clear what (if anything) in terms of copyright was transferred through the APA and its amendments. That is precisely what the case SCO v. Novell will be all about, although SCO don't want it to be.

Notice this Notice? ~ by Dr Stupid (Groklaw)~ Huh?

Posted Jun 18, 2004 5:04 UTC (Fri) by chohman (guest, #5519) [Link] (1 responses)

You'll have to forgive me if I observe your analysis is oversimplistic.

If the contract said "we are selling you the Technology as defined in section 2.10", it would be clearer. That's NOT what it says. Indeed, it specifically excludes copyrights "except for [those] required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare". No one seems quite sure what that means, particularly in view of the fact that Novell, under the contract terms, continued to receive the lion's share of licensing revenue. If you actually read Dr Stupid's analysis, the original SCO seems at best conflicted as to whether they acquired copyrights to the code that the new (intentionally renamed to confusue the issue?) SCO claims as theirs.
The contract section you quote (2.10) also doesn't claim that Novell owns all of the copyrights involved, only that it "owns, co-owns or is licensed or otherwise entitled to use" them. It would be no mean feat to sell copyrights that you don't own, and by most accounts, the BSD vs AT&T case suggests that perhaps no-one owns copyright on some of the code at issue.
I supose that all this money could be getting wasted on lawyers even though the answers are obvious, but that doesn't seem too likely to me.

And, of course, none of this bears in the issue of whether any of the "sacred IP" has been misappropriated into Linux.

Notice this Notice? ~ by Dr Stupid (Groklaw)~ Huh?

Posted Jun 18, 2004 5:23 UTC (Fri) by bojan (subscriber, #14302) [Link]

> Indeed, it specifically excludes copyrights "except for [those] required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare". No one seems quite sure what that means [...]

Precisely, judge Kimball included.

If it were clear on face of the contract that SCO own the copyrights, judge would send the case to the state court. If it were clear that SCO don't own the copyrights, it would dismiss the case immediately. None of that happened and interpretation of the text of the contract in the light of section 204(a) of the Copyright Act will follow (i.e. is the contract a transfer of copyright or not).

It is important to note that transfer of copyrights _must_ be in writing, so any oral evidence anyone may be wishing to present will most likely not be heard (i.e. Darl won't get the chance to say that "he was in the meeting" :-), because it doesn't matter. Copyright law is unambiguous - the transfer must be in writing. So, the judge and maybe even the jury will get to decide if the writing (APA + amendments) is good enough to satisfy 204(a).

Notice this Notice? ~ by Dr Stupid (Groklaw)~ Huh?

Posted Jun 18, 2004 5:27 UTC (Fri) by aUZqo1w5 (guest, #22411) [Link] (2 responses)

IANAL, but I don't agree with your interpretation that the nature of the asset transfer is so clear-cut. The language seems to be quite vague and ambiguous to me.

The "Technology" list in 2.10 is qualified with "that are used in the Business as currently conducted". In the recital, "Business" seems to be defined as follows: ""Seller is engaged in the business of developing a line of software products currently known as Unix and UnixWare, the sale of binary and source code licenses to various versions of Unix and UnixWare, the support of such products and the sale of other products ("Auxiliary Products") which are directly related to Unix and UnixWare (collectively, the "Business")"".

What specific "technologies" were used to conduct the "Business"? Were UNIX copyrights needed to execute the "Business"? It doesn't seem apparent to me if they were. If so, for what versions?

I don't believe this clearly states what technologies are being transferred contractually, let alone to meet a federal copyright 204a requirement.

Notice this Notice? ~ by Dr Stupid (Groklaw)~ Huh?

Posted Jun 18, 2004 10:29 UTC (Fri) by danw6144 (guest, #14336) [Link] (1 responses)

>What specific "technologies" were used to conduct the "Business"?
>Were UNIX copyrights needed to execute the "Business"? It doesn't
>seem apparent to me if they were. If so, for what versions?

It's not the rights required to "execute" the business but the rights needed for the "acquisition" of the business.

"...Seller will sell, convey, transfer, assign and deliver to Buyer and
Buyer will purchase and acquire from Seller on the ClosingDate (as defined
in Section 1.7), all of Seller's right, title and interest in and to the assets and properties of Seller relating to the Business..."

It is obvious "source code" was an intrinsic part of the technology related to developing a line of software products:

"Seller is engaged in the business of developing a line of software products currently known as Unix and UnixWare, the sale of binary and source code licenses to various versions of Unix and UnixWare".

Here are the versions contemplated:

"All rights and ownership of UNIX and UnixWare, including but not
limited to all versions of UNIX and UnixWare and all copies of UNIX and
UnixWare (including revisions and updates in process), and all
technical, design, development, installation, operation and maintenance
information concerning UNIX and UnixWare, including source code,..."


Notice this Notice? ~ by Dr Stupid (Groklaw)~ Huh?

Posted Jun 18, 2004 11:15 UTC (Fri) by bojan (subscriber, #14302) [Link]

> It is obvious "source code" was an intrinsic part of the technology related to developing a line of software products:

"Source code" != "Copyright".

I know of companies that paid millions of dollars to get the source and a licence to make derivatives, but they have not been given the copyrights. Even better, the code they purchased wasn't at the complexity level of Unix and it was written in Cobol. So, it doesn't just follow that copyrights must have come across. I think judge Kimball will be, well, the judge of that.


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