SCO not exactly the lovable little guy

By Lee Gomes
The Wall Street Journal

August 12, 2003

Sometimes in a David and Goliath story, you want to root for Goliath.

SCO, a small Utah software company, has made news lately by suing IBM, in its capacity as a big user of Linux. SCO also has its sights on all the other users of Linux, the free operating system that most people consider a bright spot of the modern tech world. Linux, after all, is run by volunteers, and its ever-growing popularity keeps Microsoft up at night. In other words, what's not to like?

Its goody-goody reputation, of course, shouldn't save Linux from legitimate intellectual property claims. But SCO doesn't appear to have any -- although its stock is up sevenfold since it started acting as if it did.

SCO has certain ownership rights to Unix, a predecessor to Linux. It has decided Linux infringes on those rights, and is seeking $1 billion from IBM and up to $700 from every Linux user.

Among the many bizarre things about the complaint, though, is that SCO itself used to be a Linux company called Caldera, and as such eagerly distributed free of charge the very same software it now is claiming infringes its copyrights.

A new CEO came up with the business strategy in the fall. But a new plan doesn't immunize the company from the precedents it helped set. It's as if a magician gave away his secrets, then started suing his audience for learning how he did his tricks.

SCO is claiming widespread copyright violations in Linux. So far, it has shown only one example to outsiders, and only to those who have signed a nondisclosure agreement -- such as Ian Lance Taylor, a San Francisco Linux developer.

Restricted by the agreement in what he can say, Taylor described the infringing code as a trivial 80 or so lines of software (out of a total of 4.6 million in all of Linux!). Despite SCO's frequent insinuations to the contrary, Linux developers take copyright quite seriously. Recently, the Web site Slashdot posted an item about another small section of Linux similar to Unix. Within weeks, the code was replaced.

SCO says it won't identify all the infringing code in Linux because Linux developers would quickly replace it. But isn't that exactly what someone alleging a legal injury should, for starters, want -- to stop being injured? Damages for past injuries can always come later.

Or maybe SCO knows that if it laid out its cards, people would just walk away from the table laughing at its hand -- rather than pay a license fee.

Or is collecting these license fees SCO's real endgame? Computerworld recently ran an article detailing how SCO's backers are cashing in its stock in a complex transaction involving purchase of a company owned by the Canopy Group, a Utah investment concern that also owns a big chunk of SCO.

An SCO spokesman said the report's allegations of a "shell game" weren't true, and added that SCO has no control over its stock price.

SCO says it is bringing its suit now because it only recently learned of the copyright violations in Linux. Overall, the company says it is just trying to protect its intellectual property.

In reality, this is all just another inning in the common American business sport of "patent shakedown." Perhaps SCO and its superstar attorney David Boies -- who by fighting Linux has lost whatever populist credentials he gained by defending Napster and Al Gore in Florida -- thought IBM would cough up "go away" money, rather than fight. If that was the case, they miscalculated. IBM last week sent SCO not a check, but a thundering countersuit.

SCO and its supporters might do well to study the last time a specious intellectual property claim was lodged against Linux.

In 1995, William Della Croce Jr., of Boston, attempted to win the trademark to the term "Linux," claiming he had been the first to use it and demanding 10 percent royalties from Linux businesses. The Linux community promptly went to work -- exactly as it is doing today.

In the end, not only did Della Croce lose, he also had to pay legal fees. For good measure, the Linux trademark, previously unassigned, was given to Linus Torvalds, the system's creator.

Copyright 2003