Putting some meat on legal news' bones.

When you want to know more
about a legal story . . .
but don't know where to look.

IANAL. I am a paralegal, so if you have a legal problem
and want advice, this isn't the place. Hire an attorney
instead. Research is, however, what paras do, so here
I am sharing things I have found in my research.

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Monday, June 2, 2003

Hey, quick! Anybody Got a Lid For This Coffin?

Forrester says businesses should continue with all Linux plans, for three reasons based on "a risk/benefit analysis: the cost benefit of migrating to low-cost Linux from high-priced UNIX, the unlikelihood that tiny SCO will have the funds to go after even one or two of the 1500 companies it sent warning letters to, and the fact that in their view IBM will build a consortium to pay off SCO of just buy it and shut it down.

"Open source is too powerful and pervasive to be stopped. Open-source software, like music downloading, is a social phenomenon that uses the Internet to circumvent obstructions to distribution. This doesn't mean that licensing laws or intellectual property rights disappear. But it does mean that companies must accept the Internet-enabled distribution phenomenon and build new business models that support it--such as Apple Computer recently has done with music downloads."

An attorney with Foley & Lardner in LA, Michael Overly says a review of the code by anyone other than the judge "means absolutely, positively nothing" in determining the merit of SCO's claims.

He didn't say this, but the obvious reason is: how would you know for sure that what they showed you was really their code and not something they whipped up specially for the occasion? That is precisely the difficulty with proprietary software. You can't look and see. In contrast, everything put in GNU/Linux is chronicled by date and what and who. Additionally, there is the issue of fair use. Even if similar code is found, according to Overly, that doesn't prove infringement necessarily. "If I take a piece of code that someone has written, take it verbatim but expand on it and use it for a completely different work, that may or not be copyright infringement," he said.

An excellent coverage of the SCO controversy is here. Note especially the additional resources links at the bottom of the page.

And Newsforge has an interesting opinion (that originally appeared as a comment on Slashdot), saying users of GNU/Linux are currently in less legal danger than users of Microsoft's SQL Server 7, thanks to the Timeline win over Microsoft in their contract dispute over Timeline's patents. Timeline's Memo sounds rather like SCO's letter to the 1500 companies it mailed to:

"This memorandum is intended to help third parties analyze potential patent infringement(s) as it relates to their own product offerings. It is Timeline[base ']s position that any party on notice of the existence of the [OE]511 patents has a legal duty to investigate and form a reasoned opinion on infringement. That is not Timeline[base ']s duty. And, if a party forms an opinion that there is infringement, then its duty is to procure a patent license, or modify its products to [base "]design around[per thou] an infringement, or cease any further use, license, maintenance, etc. of the product. Otherwise, the users, manufacturers, and distributors are subject to statutory claims for treble damages for willful infringement similar to those embodied in RICO, Anti-trust and Consumer Fraud statutes.

"The [OE]511 patents can apply to stand alone software products or combinations of software products. Of particular focus at this time are products used in conjunction with Microsoft SQL Server 7.0 or after. All Microsoft products stand-alone are licensed. But whether a combination of products infringes all the elements of a valid claim of a Timeline patent must be examined. If so, then whether the non-Microsoft code or product provides at least one of the material steps in such infringement must be determined. In that case, the step(s) provided by the third party product or code is not covered by Microsoft[base ']s license. The user, licensee, licensor, or manufacturer must secure its own license or stop any further use."

The Register quotes the president of Timeline as saying that damages facing SQL Server developers could be in the millions. A Timeline press release back in February announcing the judgment, appears to be threatening legal action against SQL Server developers and users, "...particularly those Microsoft customers who relied on Microsoft's assurances, failed to investigate them thoroughly, and knowingly continued to provide material steps in an Infringing Combination. These infringers, if any, may face treble damages for the entire three and one-half years the case was tied up in the courts. Microsoft is not a law firm. Relying on its advice should not constitute acting in good faith; which is the required defense to treble damages for failure to investigate and honor patents once on notice of their existence.'"

The press release quoted in full in the Register, headlined "Microsoft Vs. Timeline Final Judgment Affirms Timeline Patent Rights; SQL Server Users Could Face `Staggering' Damages", says this in relevant part, though I recommend reading it in full:

"'Why Microsoft would mislead its own customers, arguably inducing them to act in a manner potentially to their great detriment, was initially very difficult for us to understand,' Osenbaugh continued. 'We assumed Microsoft simply felt that someone would successfully challenge the Timeline patents or that Timeline would capitulate before Microsoft's statement came back to haunt it. And Microsoft openly supported a number of third parties who unsuccessfully challenged the validity of the Timeline patents.

"'But, in hindsight and even though Timeline won the litigation, we must admit Microsoft's approach apparently worked for it. The monies spent on legal fees were inconsequential to them. Between the litigation and the false press release, Microsoft effectively froze Timeline out of leveraging its patent-protected niche in the SQL Server market for over 3 1/2 years. This time period was long enough for Microsoft to launch its now openly stated strategy to become dominant in the ERP and Analytics software market historically serviced by its own customers.'"

Could this be the case that gave SCO its "brainstorm" strategy, to use a long-drawn-out legal case to hopefully slow down Linux adoption in the business market just long enough for MS and SCO to come up with a Unix-Windows merge, so MS can address security issues with its products fast? It has to do it somehow, because both customers and the government are fed up with MS security issues. Of course, this would be an admission MS can't fix its security flaws and adequately compete with Linux in this area without UNIX help. With SCO in an alliance, it doesn't have to actually write better software, just find a way for them to play nicely together.

A confirming opinion on MS's motives regarding UNIX and security here.

I looked at IBM's site, and there is not one word anywhere about this case. Not a press release. Nothing. There is, however, a white paper you can download on significant savings businesses can realize from adopting Linux. Look for the link just below this wording:

"Analysts have confirmed: Linux is the least expensive platform to deploy and operate, yielding significant cost savings over the long term.

"How can you lower your total cost of ownership utilizing Linux? Learn how in the white paper, 'Total Cost of Ownership for Linux in the Enterprise' by the Robert Francis Group (RFG)."
comment [] 2:29:15 AM    

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