This is a long story. I will try to give a condensed version justice, unlike what some judges involved in the case have done.
- 1995 – Novell sells its UNIX business to The Santa Cruz Operation, SCO. SCO cannot afford the price so takes only the business operation and passes royalties/licence fees back to Novell. They sign an Asset Purchase Agreement that explicitly excludes copyright. Later, they amend the agreement to include agreement to transfer copyrights needed to conduct the business.
- 2001 – SCO operates the business until 2001 without transferring the copyrights. They change their name to Tarantella and sell the UNIX business to Caldera Systems who then change their name to The SCO Group.
- 2002 – SCOG hires Darl McBride to be CEO. Until that time Caldera/SCOG had been a GNU/Linux company with bright prospects. They lost a lot of money but just missed the dot.com bubble with an IPO. RedHat caught the wave and became very liquid. McBride looked for another source of revenue and, seeing that GNU/Linux and UNIX operating systems had some files in common, tried to transfer the copyrights in order to sue users of the GNU/Linux operating system. Novell refused because GNU/Linux was in their business and SCOG’s UNIX business did not need the copyrights as proven by six years of operation.
- 2003 – SCOG sues IBM and AutoZone for use of GNU/Linux, claiming they owned the copyrights. Novell intervened to overrule SCOG as it had a right to according to the 1995 APA. SCOG sued Novell for Slander of Titile. RedHat sued SCOG in self-defense.
- 2003-2007 – Giving SCOG all kinds of slack, the Federal Court in Utah allowed many millions of documents and versions of software back to the ancient days of UNIX/AIX at IBM. It boils down to who owns the copyrights. SCOG provided no evidence that it did. Judge Kimball was “astonished”. SCOG v AutoZone and RH v SCOG fizzled because they hinged on the results of the other two cases. In 2007, Judge Kimball finally put the brakes on SCOG by ruling that SCOG did not get the copyrights, by summary judgement, the plain law of contracts applied to the case and ordered SCOG to pay royalties to Novell. SCOG then filed for Chapter 11 bankruptcy even though they were not bankrupt, technically. This automatically stayed all litigation including a referral of the matter to arbitration in Switzerland under the UnitedLinux agreement to which Novell and SCOG were parties agreeing not to sue each other over IP.
- 2007-present – Once again the courts, this time bankruptcy court in Delaware, gave SCOG all kinds of slack. Without even having to show that protection was needed or desirable, the court stayed all litigation. Judge Gross even extended the time in which SCOG had exclusive control of the reorganization. No reorganization happened. In 2009, Judge Gross appointed another judge, Cahn, to be trustee in Chapter 11 with a particular role to evaluate the litigation as well to manage the financial affairs. SCOG appealed and got the Tenth Circuit Court of Appeal to order the trial to resume without some of the summary judgements being effective. They wanted the jury to decide whether copyrights transferred even though the copyright law states their must be an explicit transfer and there was not, Judge Cahn has virtually folded up the legitimate business to pay the lawyers ahead of creditors and to borrow millions from insiders to keep the farce going. Yesterday, Judge Gross signed the order permitting this. Judge Kimball has recused himself and the new judge in SCOG v Novell has again given all kinds of slack ruling that some of the summary judgements notwithstanding SCOG gets another chance to prove matters to a jury that were previously decided by a judge, even some matters that SCOG had not appealed.
The loan agreement from Yarrow and a few others includes provisions that if the debtor, SCOG, defaults, the group of insiders gets all the assets and walk away, subverting justice entirely. Why would two judges agree to let insiders in a bankruptcy have preference over creditors? That might be reasonable if the litigation has any chance of success but it has not. The copyright legislation is very clear. There must be an explicit transfer of copyright. Even if SCOG owned the copyrights, IBM has proven that they did not violate them, being the original authours of the code they contributed to Linux. So the outcome of this if let stand is that the insiders get to terrorize businesses that use GNU/Linux for years more until the dust settles. Even the death of SCOG will not stop this. Only the US Supreme Court can, in a year or two. Novell has appealed the Tenth Circuit result. There is a 200 page copy of a document purporting to be their request for certiorari on the web. We should have confirmation soon. The deadline for application has passed. I am hopeful that the SCOTUS will see the undermining of copyright law as sufficiently urgent to put this matter to rest ASAP.
You can read all the latest gory details including documents at GROKLAW which has grown in prominence as it follows these cases from the beginning.
If a few judges had demanded SCOG produce some evidence before starting on this campaign of litigation, how different would be the world of GNU/Linux today. Many businesses would have adopted it years earlier. Most now see that SCOG has no hat, cattle or even a dog in these cases. Why cannot the judges in Utah see that?
Update: I have put in the link to the PDF of the purported petition. The Question is:
QUESTION PRESENTED
Section 204(a) of Title 17 of the United States Code provides: “A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.”
The question presented is:
Whether Section 204(a) requires a writing that specifies which copyrights were conveyed, or whether, as the court of appeals held, requires only that the written instrument could be construed to convey some copyrights, leaving the factfinder to determine which,if any, copyrights were conveyed.
Lets hope the Supremes grant the petition and give prompt hearing and ruling.
