The fight between SCO and IBM regarding Linux code will, if nothing else, bring intellectual property issues to the forefront in open source development.
The SCO Group is trying to win the right to collect royalties on Linux, citing the use of proprietary code in Linux. The case, which first revolved around trade secrets, patents and copyright infringement, has now come down to a contract dispute between IBM and SCO, which has brought into question contract language between IBM and Novell. The case's outcome could raise substantial intellectual property issues in open source development projects. Even though the trial is slated for October 2005, IBM and Novell have already made a number of counterclaims in attempts to get the case thrown out altogether.
The most recent is a counterclaim by IBM that the SCO Group, in distributing Linux via its Web site, used more than 783,000 lines of IBM copyrighted code. On that basis, IBM believes the court should immediately grant IBM summary judgment and a permanent injunction in the SCO case. In other words, IBM asserts that SCO in its lawsuit ostensibly attacks the validity of the General Public License, or GPL—the open source licensing agreements under which software is developed and modified. IBM contends that should the GPL be "renounced" as a result of SCO's lawsuit, then logically SCO acted in violation of IBM's copyrights in distributing SCO versions of Linux.
That counterclaim had not yet succeeded as of press time.
Should that counterclaim fail in getting the case thrown out, the issue may boil down to whether SCO—when it bought Unix from Novell almost a decade ago—got all the copyrights and licensing with it, or whether Novell retained the right to ensure that IBM got full rights to Unix. That is the matter of ambiguity and confusion, as Linux is said to contain Unix code. The interpretation of the contracts could determine who owns Unix and who, if anyone, owns Linux.
SCO contends that in 1995, there was an asset purchase agreement involved in the purchased rights to the Unix OS, including licensing rights and existing contracts. "We even put in an amendment in '96 to further clarify it," claims Marc Modersitzki, SCO spokesperson.
In the SCO suit against IBM, the accusation is that IBM was privy to design concepts used in joint Unix projects with SCO and then released material built on those concepts as open source Linux code. "As a Linux distributor in the past, we started looking at what we had on the Linux side of the fence and what we were selling to customers," says Modersitzki. "As we looked at Unix and open source libraries running on Linux, we thought it was great, but then noticed some of our proprietary stuff was already in there. That's where we got worried."
SCO contends that IBM agreed in its contracts that the code in question was proprietary.
"We see the trade press frying us as a nemesis to open source. However, we fully believe in open source and in Linux; we do use Apache Web servers and other open source projects in our software development. We support, contribute and use open source," says Modersitzki. "We take issue with what happens when something proprietary is contributed to open source that shouldn't have been. Should it automatically become open source property for everyone to use, just because it sees swift uptake?"
If IBM is proven to have taken a proprietary concept and opened it up to the open source community, thus bolstering the sophistication and momentum of Linux, it could have precipitated a market loss to SCO.
What It Could Mean
If nothing else, the SCO suit has opened some people's eyes to the fact that one does not have to steal code outright to possibly be held liable: "It is the concept more than the code; its the concept of the pin, not the shape of the pin," explains George Weiss, vice president of Gartner's server group. "This lawsuit has demonstrated that should certain lines of code in other products reflect similar design concepts, messy patent issues could arise."
If IBM wins, SCO's efforts to collect royalties on Linux products could be deemed a breach of the GPL. Although most concede it is a clever way for IBM to "call SCO's bluff," few seem to think it will succeed in getting the case thrown out completely. Similar summary judgment requests by IBM and Novell have been denied in the past.
Even though these lawsuits focus on contract disputes more than on users deploying Linux, there could be repercussions for CIOs and developers. For the former, it enforces a need for indemnification in case of lawsuits; for the latter, it means possibly having to offer declarations of origination to the open source community. That means developers would have to declare that they have rights to the code and concepts so that contributions of code can be tracked and verified as non-proprietary. As a result, ex-employees of other companies may think twice before contributing ideas that are not their own.
"There is no tremendous reluctance right now to use Linux products or open source, but the case has made companies aware of who contributes to products—especially in big group projects, like SourceForge or Linux," says Peter Moldave, Partner, Gesmer Updegrove LLP, a high-technology law firm that represents standards-setting consortia. He acknowledges, however, that in dealing with large groups in whose ranks there could be employees stealing from employers, it would be difficult to notice commonality, unless someone is driven to compare code with a competitive product. "It's important to draw a distinction between open source development like MySQL, which is backed by one company, or that of SourceForge or Linux, which are created by groups of individuals, rather than one company. The latter makes it more difficult to know who will take responsibility."
For that reason, users and developers should have contingency platforms in place where possible … in case some sort of an injunction is put in place to stop users from using the code." However, Weiss concedes, injunctions are usually not suddenly imposed without notice: "Usually, there is time for hearing the case," he says, "which would give the Linux community time to address the issue."
Some users of open source are being targeted by new indemnification insurance companies that sell insurance to cover court costs if intellectual property or patent issues arise. Companies like HP, Novell and Red Hat, for example, have certain levels of indemnity to cover users' patent infringement lawsuits. They know the intellectual property of software is never totally secure. For that reason, license fees today embed the cost of litigation if the provider should have to go to court, as well as costs for support and documentation.
A small percentage of open source licensees are paying license fees on a per-server basis so if they are sued, they are covered. Modersitzki claims that last quarter SCO had $700,000 worth of licensing fees for its SCO IT license of Linux. While SCO wanted a massive community of users to pay such licensing fees to ensure protection of their Linux code, only a small percentage have done so.
Comfort Zone
One reason a small percentage of people are paying to protect their Linux code is that users have been in a comfort zone, believing that the outcome of the pending lawsuits will have minimal impact on their deployments. "They are confident that if a scan of the coding in Linux reveals a violation of SCO IP [intellectual property], re-releases and workarounds would then come out of the open source community to eliminate questionable code," says Weiss.
With the slow pace of the SCO-IBM lawsuit, users will either wait until the outcome, prolonging deployments, or they can take the risk if they feel the ramifications would be minimal. "Either way, I think users will lay low, as highly visible users may become targets, should the lawsuit go in favor of SCO," observes Weiss.
That could be why so many in telecom are reticent about publicly announcing Linux or open source deployments.
If SCO wins, people could either stop using Linux, or roll back their Linux to a version prior to the 2.4 kernel. Under that outcome, Modersitzki assures, "Linux would go forward. Our customers want Linux, so we would continue with the IP licensing program."
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