Update on Rights to Continue Our UNIX Business

This Web page includes several documents that might be of interest to SCO's shareholders, partners, customers, and friends, and to others interested in SCO's activities to protect its intellectual property.

You may click an item in the Table of Contents, or, with your browser, scroll through the brief introductions to links found on this site. These links include (a) links to PDF documents, and (b) links to other web sites.

* Note that Web links to external sites are often changed by the managers and owners of those sites. SCO cannot, of course, be responsible for the administration of others' Websites. That is why we have posted PDF versions of these articles.

Table of Contents

UNIX Found in Red Hat Linux

A Memorandum from Robert Swartz to Steve Sabbath and Doug Michels dated Oct 4, 1999 reporting a character by character comparison between UnixWare 7, UnixWare 3.2, UnixWare 4.0, and UnixWare 4.2 and Red Hat Linux 5.2.

The report states, in part, "First, many portions of Linux were clearly written with access to a copy of Unix sources. This of course would be a violation of the License agreements under which Unix is distributed. Second there is some code where Linux is line for line identical to Unix. This is not entire programs but fragments of code and programs from various areas of the operating system. Thirdly there are also portions of the programs which appear to have been rewritten, perhaps only for the purposes of obfuscating that the code is essentially the same." [Read the full report HERE]

Protection of Software

On page 9 and 13 of "Brief of Amici Curiae Apple Computer, Inc., Digital Equipment Corporation, International Business Machines Corporation and Xerox Corporation in Lotus Development Corporation v. Borland International, Inc.  January 1994", IBM and friends write:

“The software copyright cases have also established that nonliteral elements of expression in computer programs are protected under the same principles that protect nonliteral elements of expression in other literary works--and, indeed, in all copyrighted works.  The Third Circuit established this basic Principle in the context of software . . . ‘ copyright protection of computer programs may extend beyond the programs’ literal code to their structure, sequence, and organization. . . . .  Every aspect of a computer program, including aspects that can be perceived by a program’s user, may be protected by copyright in accordance with general copyright principles as part of a single, unitary work.” [PDF]

Analysts Speak Out

"Legal Pad" with Roger Parloff, Fortune, answers the question, "Did SCO get Linux-mob justice?".
[PDF of Article]
[PDF of Article with Blog Comments
[URL - Read the entire article HERE]*

ZDNet author Paul Murphy writes, "Since Kimbal’s [sic] decision to decide on disputed testimony probably constitutes reversable [sic] error, this nonsense won’t stand for ten seconds if the case gets to the appeals court", "Once more on SCO", Jan 8, 2008, emphasis added.
[PDF of Article]
[URL - Read the entire article HERE ]*

ZDNet author Paul Murphy writes, "The key question, therefore, is why they [IBM] decided to waste the court's time with it - and my guess, because as regular readers known my belief is that SCO has a strong case, is first that they're trying to use IBM's financial strength to bankrupt SCO, and, secondly, that they're trying to establish a fundamental misrepresentation of the key issues as fact." "SCO vs. IBM: clarity as push approaches shove", March 12, 2007, emphasis added.
[PDF of Article]
[URL - Read the entire article HERE ]*

What SCO Purchased from Novell

Amendment No. 2 (dated 16 October 1996) is a revision of the Asset Purchase Agreement of September 19, 1995.

Section 1.1(b) of the Asset Purchase Agreement was amended 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." [PDF]

Documents Addressing the Issue of Royalties and Rights Retained

Addendum to the HP binary code buyout

In the Addendum to the HP binary code buyout, "NOVELL retained or has acquired all rights to outstanding and future HP binary code royalty and licensee fee payments, but not source code royalties (HP BINARY ROYALTY OBLIGATIONS"), NOVELL hereby warrants that as of NOVELL's signature date of this ADDENDUM as provided below, NOVELL has no present or future, or reversionary interest in any such source code royalties." [PDF]

Letter from Novell's legal department

In a letter from the Novell legal department, Novell admits that "... SCO assigns to Novell the right to negotiate directly with Cray Research concerning Cray's stated intention to operate under the SGI/Novell Software Agreement...." and "...SCO authorizes Novell to negotiate and conclude with Cray the issue of Cray's intention to operate under the SGI Agreements for all SVRX royalty-generating binary shipments." [PDF]

SCO's letter to Novell explaining SCO's ownership of and exclusive rights to license UNIX source-code.

SCO President and Chief Executive Officer, Alok Mohan replies to Frankenberg four days later, stating, "The agreement provided for Novell to receive the residual royalties from the in-place SVRX license stream, but SCO was to provide all account management and manage the relationships with the customers in order to further this agreed upon conversion.... It is my understanding that our agreements provide SCO with ownership and exclusive rights to license the UNIX source code.... I must protect the value of the assets SCO purchased from Novell. " Emphasis added. [PDF].

IBM Royalties and Rights Retained

1987 letter of agreement from AT&T and IBM regarding disclosure of source code and derivatives. [PDF]

Novell letter to SCO clarifying IBM's UNIX license

In a letter from Chairman, President, and CEO, Novell, Inc., Bob Frankenberg states, "...We are not granting IBM any additional rights beyond what they already have. With the minor exception of allowing IBM's VAR's to make minor modifications to AIX code to support unique hardware devices and allowing IBM's major accounts to make temporary fixes from AIX source code, the proposed transaction does not grant any addition rights beyond those granted other similarly situated UNIX licensees. Specifically no right to sub-license source code is being granted." Emphasis added [PDF]

Novell letter to SCO in response to the above letter re: IBM's UNIX license and royalty payments

Novell's Bob Frankenberg replies to SCO's Mohan's letter on April 29, 1996, in which he reiterates their mutually-agreed upon strategy for IBM's royalty payments. Note that Frankenberg does not contradict anything SCO's Mohan has said about ownership, exclusive rights, or the asset purchase. [PDF]

IBM Documents Regarding Linux

"Derived from UNIX" See Slide #38 of "Utilizing Linux in the Enterprise Environment" by Mark Murphy, Sr. Linux Solutions Specialist, IBM America's Linux Team", dated Aug 21, 2003 [PDF] [URL] Note: Subsequent to our posting the link to this presentation here, the document has been removed, thereby invalidating the link.

"UNIX was a pre-write of Linux" See Slide #4 of "IBM, Linux and You: Real Experience, Real Solutions... for Real Business" dated Sept 2003 [PDF] [URL]*

IBM Redbook entitled, "Linux for WebSphere and DB2": "It is beyond the scope of this book to explain how and why runlevels function the way they do, other than to say it was derived from UNIX System V and is an integral part of Linux." See page 50 of the PDF document (numbered page 36). [PDF] [URL]*

IBM Press Release: "IBM Puts Enterprise Power Behind Linux", Feb 2, 2000, in which they announce, "The source code for IBM's Journaled File System technology is now available for download from the Open Source and Linux zones in the IBM developerWorks website...." [PDF]

"JFS for Linux: Moving a file system to Linux", February 2002, by Steve Best, IBM Linux Technology Center states, "IBM introduced its UNIX file system as the Journaled File System (JFS) with the initial release of AIX Version 3.1. This file system, now called JFS1 on AIX has all the premier file system for AIX over the last 10 years..." is "... the new Journaled File System... on which the Linux port was based." [PDF]

Novell Documents

Many have asked us if Santa Cruz Operation in fact bought anything from Novell in 1995. The court found that Santa Cruz did obtain ownership and licensing rights to UNIX and UnixWare but that the pre-1996 copyrights were excluded. We believe these letters and statements either sent or signed by Novell soon after the transaction was closed in late 1995 tell the story.

Letter from Novell Senior Vice President DeFazio to Microsoft Corporation

In a letter from Novell's Senior Vice President Michael J. DeFazio to Microsoft, dated January 22, 1996, Novell acknowledges that, "...Novell transferred to The Santa Cruz Operation, Inc. ("SCO") its existing ownership interest in UNIX System-based offerings and related products...". [PDF]

Letter from Novell to X/Open

Letter from Novell, dated May 31, 1996, acknowledges that "NOVELL transferred to The Santa Cruz Operation, Inc. ("SCO") its existing ownership interest in UNIX® System-based software and related products, including UnixWare® offerings." And, "It makes immeasurably more business sense for SCO, as the owner of such offerings, to administer conformance to both the UnixWare product line and SCO's OpenServer® product line under a common contractual relationship." Steve Nunn, an officer of X/Open, signed the acknowledgement. [PDF]

Letter from Novell to Prentice-Hall, Inc.

Letter from Novell dated March 25, 1996 to Prentice-Hall, Inc., indicating that Novell has transferred to The Santa Cruz Operation, Inc. ("SCO") Novell's existing ownership interest in UNIX System-based offerings and related products (collectively "Transferred Products"), which includes "All releases of UNIX® System V and prior Releases of the UNIX System." "It makes immeasurably more business sense for SCO, as the owner of the Transferred Products, to handle directly with Prentice-Hall any matters that may become relevant under the subject Agreement". [PDF] [PDF highlighted]

Letter from SCO Countersigned by Novell to Tatung Company

Letter from SCO dated June 19, 1996, which was countersigned by Novell, in which ownership of the UNIX operating System was acknowledged to have been transferred from NOVELL, INC. to The Santa Cruz Operations, Inc. on December 6, 1995, by contract, which includes "All releases of UNIX® System V and prior Releases of the UNIX System." [PDF] [PDF highlighted]

Letter from Novell to SunSoft

Letter from Novell dated May 23, 1996 to SunSoft indicating that Novell has transferred to The Santa Cruz Operation, Inc. ("SCO") Novell's existing ownership interest in UNIX System-based offerings and related products (collectively "Transferred Products"). [PDF]

Email from Larry Bouffard, Novell's Worldwide Sales Director of UNIX Products

Email from Larry Bouffard, the Worldwide Sales Director of UNIX products for Novell, dated October 18, 1995, stating that SCO bought all information, contracts, assets, etc., pertaining to the UnixWare business and the old UNIX source code business. He also states that, "if a contract is for UnixWare or UNIX, it will be SCO's." [PDF]

Novell and Santa Cruz Operation Press Releases

SCO press release Sept 20, 1995: "SCO Acquires UNIX Business from Novell and Licenses NetWare Technology" [PDF]

Novell press release Dec 6, 1995: "Novell Completes Sale of UnixWare Business to The Santa Cruz Operation" [PDF] [URL]*

Novell press release Jun 6, 2003: "Novell Statement on SCO Contract Amendment" [PDF] [URL]*

1997 SCO Application re: Microsoft UNIX License Addressing Copyright Ownership

Santa Cruz Operation Inc. application regarding 1987 Microsoft/SCO license agreement. Application prepared in January 1997 by Brobeck Phleger & Harrison (the law firm that represented SCO in the 1995 asset purchase for UNIX with Novell) while Novell held a SCO board seat and was a major shareholder of SCO.

See paragraphs 3.4 "As a result of the chain of transactions described below, SCO has now acquired ownership of the UNIX program itself so that it no longer requires a license from anyone to produce UNIX products, " and 4.9 "Because it has acquired ownership of the copyright to UNIX from AT&T, SCO should be free to develop new UNIX based works without the necessity of a license from anybody." [PDF]

Selected Summary Judgment Slides

• Part 1. SCO’s claim that IBM Breached its UNIX License [PDF - 15 slides]
• Part 2. SCO’s Termination of IBM’s license for AIX [PDF - 8 slides]
• Part 3. SCO’s Linux Copyright Claim [PDF - 18 slides]
• Part 4. UNIX copyright ownership [PDF - 15 slides]
• Part 5. Novell’s Claim that it can Waive SCO’s Claims [PDF - 15 slides]

Legal Standard For Summary Judgments

“Summary judgment should not be granted unless the evidence, viewed in the light most favorable to the party opposing the motion, shows there are no genuine issues of material fact and the moving party is due judgment as a matter of law....” [PDF]