The 1994 USL-Regents of UCal Settlement Agreement - PDF and text

by Pamela Jones

November 28, 2004

Finally, we have legally obtained the settlement agreement [PDF] between USL and The Regents of the University of California settling their 1990s lawsuits, thanks to Groklaw's dburns, who figured out that California has a Public Records Law, under which he made persistent application to obtain this document. Finally, after dotting all the i's and crossing all the required t's, he received the document from The Regents of the University of California's Office of the General Counsel, with a cover letter that reads in pertinent part:

"This is in further response to your request for legal filings, deposition transcripts, court orders and settlements in the California Superior Court case no. 717864-3. We have determined that the confidential 1994 settlement agreement between UNIX System Laboratories, Inc. and The Regents which was not filed with the court, may be disclosed to you under the Public Records Act."

And so the bullying by secrecy is over.

It's a peace treaty between the parties, neither of whom actually agrees that the other's claims are necessarily true, but they agree as to what each will do going forward to lay down their arms. USL claimed ownership over certain files, as you can see in the opening words of the settlement:

"1. USL contends it is the owner of the intellectual property rights in portions of certain computer operating system software (the 'UNIX System')."

Contending and proving are two different things. The University agrees that portions of its software "were developed independently by University personnel and others and portions of said releases were derived from versions of the UNIX System licensed to the University" and USL acknowledges that it "incorporated material derived from the BSD Releases in versions of the UNIX System". The parties then go on to work out their differences.

There are four categories the parties place various files into, categories they agreed to, not you and I, to settle the action, "Restricted Files" (Exhibit A), "UNIX Derived Files" (Exhibit B), which includes 23 files USL approved for release in BSD4Lite, and "Unrestricted Files" (Exhibit C).

"Restricted Files" are files contained in Net2 which "USL contends contain materials from the UNIX System and/or use or disclose methods and concepts in the UNIX System and whose further distribution is restricted pursuant to this Settlement Agreement." To put a finer point on it, these are files that *the University* agreed they wouldn't further distribute. They also agreed to "take reasonable steps" to "encourage" everyone with access to Net2 to switch to 4.4 BSD(Lite).

In addition, the University agreed that USL could "undertake an effort to advise persons of USL's contention that the Restricted Files may contain material that is proprietary to USL." "Contention." "May contain..." The University isn't even signing off on USL's contentions. And I note what seems like a Get-Out-of-Jail-Free card, in section 3c:

"c. USL agrees that it shall take no action against any person who utilizes any methods and concepts in the Restricted Files which as of this date have become available to the general public by acts not attributable to the University, its employees or students. Nothing in this provision shall limit USL's rights against a third party arising out of a breach of any license agreement with USL or AT&T."

Now we know why SCO keeps telling us the case is "just a contract" case, why it has a penchant for suing only those who are, or were, their licensees, and why it sued IBM instead of Red Hat. USL preserves its rights against licensees under the license agreements. I see no expanded rights against third parties who are not licensees, just the preexisting right to try to sue them, with the same likely outcome that USL experienced when it tried to sue the University and BSDi, using the same lame copyright claims that the judge back then found so unconvincing. The University agrees it won't stand in USL's way if they sue third parties:

"7. Further Participation in Litigation. The University agrees that it will not actively assist or support BSDI's defenses or counterclaims in the Federal Action or the efforts of any other party who asserts in any action the right to copy, use, or disclose to non-licensees of USL any of the material contained in the Restricted Files or the invalidity of USL's proprietary rights in the UNIX System. However, nothing in this provision shall prohibit the University from responding to any discovery permitted a third party under federal or state law or from defending any claim that may be asserted against the University or the Individual Regents."

USL makes the same assertion about "UNIX Derived Files", that they contain materials USL contends is derived from or based on UNIX, but which the parties agree the University can freely distribute under the terms of the settlement, meaning with a copyright notice and list of "restrictions on use and distribution" as per clause 2e:

"e. Without waiving any of its proprietary rights therein, USL agrees that UNIX Derived Files listed in Exhibit B, or any material therein, may be freely distributed by the University and may be freely reproduced and redistributed by others without payment of any royalties or fees and without execution of any license agreement with USL and/or the University, provided such files or portions thereof include, in text form, a USL Copyright Notice and the same list of restrictions on use and redistribution of the software presently contained in the Net2 version of the file. Attached as Exhibit F is a copy of said notice which has been agreed upon by the parties."

Notice the "may be freely reproduced and redistributed by others" part? I believe SCO tried to tell us they never gave Linux any such right to use, even with a copyright notice, but doesn't this clause seem to pull the rug out from that assertion? Here are some review links on SCO's position.

In turn, USL, in 3(f), agreed to "affix the University Copyright Notice and the University Acknowledgment" on all the files listed in Exhibit C, the "Unrestricted Files," all the rest of the files in Net2, which the University asserted were derived from BSD Releases "which are contained in the UNIX System or are otherwise distributed by USL". I wonder if they have? Remembering the SCOForum disastrous unveiling, I'm thinking maybe not. Perhaps some of you out there can tell us. USL agreed not to take any action based on the use or distribution "by any person" of the Unrestricted Files.

Finally, the second Get-Out-of-Jail card is that everything in 4.4 BSD(Lite) "may be publicly distributed to third parties free of any claim by USL of restrictions on its use or further distribution."

All the rest is FUD. Surprised?

What seems the most significant to me is that instead of filing this agreement with the court and getting the court to sign off on it, instead they agreed to file for a dismissal of the action and keep it just between the two of them. I see USL claiming it has certain rights, which may or may not be upheld if it ever went to a lawsuit, except with respect to the University, based on this settlement. Maybe they would be, maybe they wouldn't with respects to third parties. Feel free to correct me if you lawyers out there disagree, but that is how it reads to me.

dburns did most of the transcription, for which I thank him. I'm sure we all thank him for all he did. I did Exhibit C, and it had to be done by hand because the original is fuzzy, so please do let me know of any errors or typos. In certain cases, I simply had to make an educated guess as to what a letter was. I know with your expertise, you'll catch any mistakes, and we'll be able to perfect the list. For anything that matters, go by the original, of course. We strive for accuracy, but I can't guarantee it. Also, for those directly affected by this information, seek an attorney's opinion on what it all means. I am not one, as you know. Our contribution is simply to make it available.

Copyright 2004 -