* Does SCO really have claims to sue Novell?
I know, I know. I keep promising a NetWare newsletter edition that doesn’t contain the word “Linux.” And there will be one. Soon. I promise. But not this time.
In the last issue, I talked about SCO CEO Darl McBride’s threat to sue Novell. He claims that Novell’s planned acquisition of SuSE Linux would put Novell in violation of a non-compete clause in the various documents signed when the Unix property was turned over to the then-named Santa Cruz Operation.
SCO has now pointed to the relevant document on its Web site (see link below) and it does make interesting reading. If your browser doesn’t take you to the section of the document entitled “TECHNOLOGY LICENSE AGREEMENT,” then scroll down about two-thirds of the way from the top to reach it. I draw your attention to Section II.A.(2), which states that Novell shall have a non-exclusive, non-terminable, worldwide, fee-free license to:
“…subject to paragraphs B and C of this Section II, to sublicense and distribute, and authorize its customers to sublicense and distribute, such Licensed Technology and modifications thereof, in source and binary form; provided, however, that (i) such technology and modifications may be sublicensed and/or distributed by NOVELL solely as part of a bundled or integrated offering (‘Composite Offering’); (ii) such Composite Offering shall not be directly competitive with core application server offerings of SCO, and (iii) the Licensed Technology shall not constitute a primary portion of the value of such Composite Offering. SCO understands and acknowledges that such restrictions on sublicensing and/or distribution shall not affect any rights specifically retained by NOVELL under the Asset Purchase Agreement, including but not limited to rights under Transitional Contracts…”
This appears to state that Novell may use any of the technology covered in this agreement (which means, in effect, anything in Unix System V Release 4) and incorporate it into a service or application provided it’s not the “primary portion” of the offering. Novell couldn’t offer “Novell Unix” without SCO’s approval, for example.
Further, the product offered by Novell could not directly compete with SCO’s core offerings. One joke making the rounds is that since SCO’s “core offering” appears to be “threats to sue,” Novell shouldn’t have any problems releasing an operating system. The questions that arise, then, are:
1) Does SuSE Linux incorporate any of the “licensed technology” covered by the agreement and does that technology make up a “primary portion” of SuSE’s product?
2) Would SuSE Linux compete directly with SCO’s core offering?
3) Do Paragraphs B and C have any effect?
Question 1 is the whole thrust of the lawsuit SCO brought against IBM as well as the threatening letters it has sent to Red Hat and SuSE customers. Since SCO hasn’t revealed any details of its charges, we’ll have to wait for a court to rule. Whether it’s a “primary portion” won’t be known until SCO reveals those details.
Question 2 seems simple on its face: Does Linux compete with Unix? Any reasonable person would say it did. The agreement seems to say that all three conditions must be met. Should SCO prevail in its lawsuit against IBM, it would be in a good position to claim that Novell was in violation. But Question 3 leads to an interesting bit of information.
Novell sold Unix and UnixWare to the Santa Cruz Operation. Some years later, the Santa Cruz Operation sold its name and all its operating systems to Caldera of Linden, Utah. What had been the Santa Cruz Operation was re-named Tarantella (https://www.tarantella.com/).
Last year, Caldera changed its name to the SCO Group (see editorial link below). So the SCO that’s threatening Novell isn’t the same SCO to which Novell sold Unix. Did you follow that? Now let’s look at Paragraph B of the Technology License Agreement:
“In the event of a Change of Control of SCO, and commencing with the effective date of such Change of Control, the proviso in subparagraph IIA(2) setting forth restrictions on the sublicense and/or distribution of Licensed Technology and modifications thereof shall cease to exist.”
Now, I am not a lawyer but it certainly appears that there’s been a “change of control,” which should render the non-compete clause null and void. It sure sounds like McBride is once again playing fast and loose with the truth.
