These incestuous relations were much the norm for the time in the computer world and the sharing of information followed much the same traditions of academia, share freely and build upon each others' work.   That is exactly what happened.  Many academics as well as businesses had access to the Unix code and would fix bugs, add features and new tools which were shared ... and AT&T incorporated many of them into the versions of Unix that they licensed and distributed.

One of the centers for academic development of Unix was the University of California at Berkeley.   As early as 1978 a group at Berkeley had been distributing its own version of Unix known as Berkeley Software Distribution.  With the, perhaps strained, blessing of the University a group of researchers had formed BSDI and was selling that distribution.

In 1990 USL realized that Unix was a valuable commercial property and attempted to end free distribution outside their control.   USL v BSDI ended with a settlement which resulted in BSDI being allowed to continue to distribute its version of Unix (after replacing some files).  The full terms of the settlement were not publicly known until 2004 when it was published on Groklaw but it was widely known and understood that most Unix copyrights were considered impaired subsequent to the finding of Judge Debevoise.

So there have long been AT&T free versions of unix-like operating systems available, aside from the "official" Unix.  But it was widely thought that the "baton" of such copyright as remained for Unix righteously passed from USL to Novell thence to Santa Cruz, then presumably to Caldera International in 2001 which renamed itself in 2002 to "The SCO Group".

Linux of course, begun in 1991 and still presided over by Linus Torvalds, has grown to ascendancy as foremost of the "free" unix-like systems, seriously challenging both AT&T derived Unix and Microsoft operating systems in the server market, holding a share of embedded systems, and now poised as a potential threat even on the hitherto Microsoft and Apple owned desktop markets.   That phenomenal growth has attracted attention and created business opportunities.  IBM in particular now does billions of dollars of business annually supporting Linux in various ways.  It has also caused envy.

In late 2002 The SCO Group (SCOX as per its NASDAQ symbol) through its officers and agents began asserting that Linux impinged upon its rights to Unix.   In March of 2003 they filed suit against IBM claiming various malfeasance under contract and Unix rights related to IBM's Linux activities.

Now the SCO v. IBM lawsuit is vast and complicated -  in large part because SCOX has been very unspecific about its various claims - but a large number of watchers of this suit are doubtful that SCOX could prevail even if they are found to own the residual Unix copyrights.   In a ruling on the October 2004 hearing, presiding Judge Dale A. Kimball he found it "astonishing" that SCOX failed to demonstrate any specific copying from Unix to Linux.   Even today, with discovery in this case complete, the courts have allowed allegations involving only 326 lines of code in Linux proper (the kernel or core of the operating system) to remain at issue.  And many of those lines come not from Unix code, but from IBM's own work.

But without ownership of Unix code copyrights, SCOX's case comes tumbling down, another decaying monument to avarice and hubris.

Shortly after the IBM case was filed, Novell who was now actively interested in Linux announced that its reading of the APA, particularly schedule 1.1(b) Excluded Assets, that neither SCOX nor its predecessor Santa Cruz, actually owned the Unix copyrights.  There was some confusion (even on Novell's part, evidently) following the discovery of APA Amendment 2 by SCOX, but many observers are still convinced that SCOX does not have a valid claim to the Unix copyrights.  

SCOX then sued Novell for "slander of title", claiming that they did own the copyrights and that Novell's contrary statements were tortuous interference with their business.  This may have been something of a rather strategic blunder.   Indeed Judge Kimball,  has already said in a prior ruling (p 10) "there is substantial doubt" about whether the APA even with Amendment 2 constituted a copyright transfer.  Given the explicit requirements for a copyright transfer, this is judicial restraint telling SCOX "you'd better come up with more than this!".

Unfortunately for SCOX they have not come up with better.   They have entered numerous declarations and depositions by numerous people saying "they should have", "they must have", "I thought so".  But none which say "they did".  

Without a bill of sale listing copyrights to specific works as an item in the sale, SCOX is left pleading that the intent of the APA and Amendment 2 was to transfer those rights despite the Judge's previously expressed misgivings.     But no matter what others say about the contract, SCOX is faced with the fact that the APA is an "integrated contract".  Its own words are the highest authority for what it means.  The judge is only allowed to consider evidence outside the words of the contract where there is ambiguity in the meaning of the contract itself.

To this end, SCOX has referenced numerous related contracts and documents by which they try to imply that everyone thought Santa Cruz had the copyrights and that Santa Cruz needed them to conduct its business, and that Novell had no valid reason not to transfer the copyright.

A business contract is a working functional document.  Every clause is presumed to be there for a specific legal or business purpose. Conceivably, if SCOX can raise enough doubt about there not being business reasons to not have transferred the copyrights in the initial APA and that Amendment 2 existed for the purpose of curing that oversight in the face of evident need by Santa Cruz, then Judge Kimball might be moved to consider evidence beyond the amended contract.  Then SCOX might have a chance to set its depositions and interpretations against those of Novell.

But last month Novell filed the declaration of Tor Braham.  This is devastating to any hopes SCOX may have had to raise enough doubt in Kimball's mind about the business reasons for the copyright exclusion to consider it ambiguous.  Braham gives those reasons in clear simple terms.

Braham was the attorney at the Wilson,  Sonsini, Goodrich & Rosati law firm whom Novell charged with drafting the agreement with Santa Cruz.   He kept meticulous notes of his marked up drafts and correspondence with his opposite numbers at Brobeck, Phleger & Harrison representing Santa Cruz and included many of them in his declaration.

Novell wanted to get out of the Unix licensing business to concentrate on developing Netware and related products, so it was willing to entertain Santa Cruz's proposal to allow Santa Cruz to continue developing UnixWare based on Unix.   But there were problems with such a deal.  According to Braham "For example,  Santa Cruz did not have the cash to buy both the UNIX assets that Novell had purchased from USL in 1993 plus the UnixWare business.  SCO's financial health also raised serious concerns about Santa Cruz's viability as a company." (para 7).

The solution to this was that Novell would continue to receive the royalty revenue stream from Unix licensees, but Santa Cruz would act as agent and receive a 5% administrative fee.  "Novell was receiving an annual SVRX revenue stream of approximately $50 million.   Novell's copyright ownership, in particular, would permit Novell to continue to have rights to this revenue should Santa Cruz go bankrupt;  the rights to the revenue would follow the copyrights to Novell." (para 14).

Nor did Amendment 2 to the APA change that.  In the declaration of Allison Amadia,  the lawyer at Anderson & Karrenberg who negotiated Amendment 2 on behalf of Novell, says,  "I told Mr. Sabbath that while Novell was willing to affirm that Santa Cruz had a license under the original APA to use Novell's UNIX and UnixWare copyrighted works in its business, Novell was not going to transfer ownership of any copyrights to Santa Cruz through Amendment No. 2". (para 10).  And later: "Should, after Amendment No. 2,  Santa Cruz believe its license to use Novell's copyrighted works was insufficient and that it needed ownership of any particular Unix or UnixWare copyright rights because ownership of such copyrights was "required" to run its business, I believe Santa Cruz would have to have made such a request to Novell." (para 15).

So there it is in black and white from the lawyers who wrote the contract and Amendment 2..  A clear business reason why Novell did not assign the copyrights in the Santa Cruz deal.   A judge may not consider extrinsic evidence to a contract when the intent of the contract is clear,  but there is no reason for him not to consider that the best extrinsic evidence - from the lawyer who wrote it - says that it means and is intended to mean what it says.

The best response SCO has yet mustered is the declaration of G. Gervaise Davis III who asserts that it would be normal for copyrights to follow the business in such cases.   In a simple buyout that would undoubtedly be true, but the Novell/Santa Cruz deal was not a simple buyout.   He avers that Novell's rights to use Unix technology would be protected in bankruptcy by the later executed Technology Licensing Agreement (TLA) between Santa Cruz and Novell.  But thunderously loud by its absence is any commentary on how Novell would have protected its business interest in the Unix licensing revenue stream in that event.

That business reason, retaining revenue rights in the face of SCO bankruptcy, is particularly poignant - and more than a little presciently ironic - in that Novell has represented to the court that SCOX is in clear jeopardy of bankruptcy at the present time and asserts that SCOX owes it more than $25 million in SVRX licensing revenues from SCOX's Microsoft and Sun deals.

It is indeed strange that SCOX undertook this adventure without ownership of the copyrights.   Even if there were code in Linux which was improperly derived from Unix, any revenue SCOX received from it would have had to pass through to Novell.  Stranger still that SCOX would launch lawsuits and make public statements about ownership of those copyrights which would open them to serious, perhaps personal, legal liabilities.

There is little doubt at this time that SCOX knew before launching its suit against IBM that it did not own the copyrights.   When Caldera, prior to changing its name to "The SCO Group, bought the Unix assets from Santa Cruz,   Wilson Sonsini for Santa Cruz represented to Caldera: "except that Assignor may not be able to establish a chain of title from Novell, Inc but shall diligently endeavor to do so as soon as possible." (Novell's Memorandum in Support of Novell's Opposition ... ).  SCOX president Darl McBride called Novell asking for the copyrights several times as early as February 2003, and  SCOX chairman Ralph Yarro in May of that year called Novell to ask for changes to the original APA.

So the documents show that Santa Cruz never received copyrights (impaired from USL v BSDI anyway) from Novell for simple and sound business reasons explained by their attorneys of the time.  Caldera, aka SCOX could not then have bought them from Santa Cruz as they didn't own them.   And SCOX knew before launching its campaign against Linux and IBM that they didn't own them.   We know now why Santa Cruz did not receive the copyrights.

(UNIX is a trademark of The Open Group)

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