Novell Challenges SCO Position, Reiterates Support for Linux

    PROVO, Utah, May 28 /PRNewswire-FirstCall/ -- Defending its interests in
 developing services to operate on the Linux platform, Novell (Nasdaq:   NOVL)
 today issued a dual challenge to The SCO Group over its recent statements
 regarding its UNIX ownership and potential intellectual property rights claims
 over Linux.
     First, Novell challenged SCO's assertion that it owns the copyrights and
 patents to UNIX System V, pointing out that the asset purchase agreement
 entered into between Novell and SCO in 1995 did not transfer these rights to
 SCO. Second, Novell sought from SCO facts to back up its assertion that
 certain UNIX System V code has been copied into Linux. Novell communicated
 these concerns to SCO via a letter (text below) from Novell(R) Chairman and
 CEO Jack Messman in response to SCO making these claims.
     "To Novell's knowledge, the 1995 agreement governing SCO's purchase of
 UNIX from Novell does not convey to SCO the associated copyrights," Messman
 said in the letter. "We believe it unlikely that SCO can demonstrate that it
 has any ownership interest whatsoever in those copyrights. Apparently you
 share this view, since over the last few months you have repeatedly asked
 Novell to transfer the copyrights to SCO, requests that Novell has rejected."
     "SCO claims it has specific evidence supporting its allegations against
 the Linux community," Messman added. "It is time to substantiate that claim,
 or recant the sweeping and unsupported allegation made in your letter. Absent
 such action, it will be apparent to all that SCO's true intent is to sow fear,
 uncertainty, and doubt about Linux in order to extort payments from Linux
 distributors and users."
     "Novell has answered the call of the open source community," said
 Bruce Perens, a leading proponent of open source. "We admire what they are
 doing. Based on recent announcements to support Linux with NetWare services
 and now this revelation ... Novell has just won the hearts and minds of
 developers and corporations alike."
 
     Text of the letter from Novell to SCO:
 
      Mr. Darl McBride
      President and CEO
      The SCO Group
 
      Re:  SCO's "Letter to Linux Customers"
 
      Dear Darl:
 
     As you know, Novell recently announced some important Linux initiatives.
 These include an upcoming NetWare version based on the Linux kernel, as well
 as collaboration and resource management solutions for Linux.
     Put simply, Novell is an ardent supporter of Linux and the open source
 development community.  This support will increase over time.
     It was in this context that we recently received your "Letter to Linux
 Customers."  Many Novell business partners and customers apparently received
 the same letter.  Your letter compels a response from Novell.
     As we understand the letter, SCO alleges that unnamed entities
 incorporated SCO's intellectual property into Linux without its authorization.
 You apparently base this allegation on a belief that these unnamed entities
 copied some UNIX System V code into Linux.  Beyond this limited understanding,
 we have been unable to glean any further information about your allegation
 because of your letter's vagueness.
     In particular, the letter leaves certain critical questions unanswered.
 What specific code was copied from UNIX System V?  Where can we find this code
 in Linux?  Who copied this code?  Why does this alleged copying infringe SCO's
 intellectual property?  By failing to address these important questions, SCO
 has failed to put us on meaningful notice of any allegedly infringing Linux
 code, and thus has withheld from us the ability -- and removed any
 corresponding obligation -- to address your allegation.
     As best we can determine, the vagueness about your allegation is
 intentional.  In response to industry demands that you be more specific, you
 attempt to justify your vagueness by stating, "That's like saying, 'show us
 the fingerprints on the gun so you can rub them off.'"  (Wall Street Journal,
 May 19, 2003)  Your analogy is weak and inappropriate.  Linux has existed for
 over a decade, and there are plenty of copies in the marketplace with which
 SCO could attempt to prove its allegation.
     We are aware that you recently offered to disclose some of the alleged
 Linux problems to Novell and others under a nondisclosure agreement.  If your
 offer is sincere, it may be a step in the right direction.  But we wonder
 whether the terms of the nondisclosure agreement will allow Novell and others
 in the Linux community to replace any offending code.  Specifically, how can
 we maintain the confidentiality of the disclosure if it is to serve as the
 basis for modifying an open source product such as Linux?  And if we cannot
 use the confidential disclosure to modify Linux, what purpose does it serve?
     In your letter, you analogize SCO's campaign against the Linux community
 to that of the record industry against major corporations whose servers
 contained downloaded music files.  There are crucial differences between the
 two campaigns.  The record industry has provided specific information to back
 up its allegation, while SCO steadfastly refuses to do so.  In its allegation
 letter, the record industry provides evidence of allegedly infringing activity
 that is specific to the targeted company.  This offers the company real notice
 of the activity, sufficient information to evaluate the allegation, and an
 opportunity to stop the activity if it determines the allegation is true.  If
 SCO wants to compare its actions to those of the record industry, it should
 follow the example set by that industry and present specific evidence of the
 alleged infringement.
     SCO claims it has specific evidence supporting its allegation against the
 Linux community.  It is time to substantiate that claim, or recant the
 sweeping and unsupported allegation made in your letter.  Absent such action,
 it will be apparent to all that SCO's true intent is to sow fear, uncertainty,
 and doubt about Linux in order to extort payments from Linux distributors and
 users.
     This true intent becomes clearer when one considers various public
 statements you and other SCO personnel have made about SCO's intellectual
 property rights in UNIX.  SCO continues to say that it owns the UNIX System V
 patents, yet it must know that it does not.  A simple review of U.S. Patent
 Office records reveals that Novell owns those patents.
     Importantly, and contrary to SCO's assertions, SCO is not the owner of the
 UNIX copyrights.  Not only would a quick check of U.S. Copyright Office
 records reveal this fact, but a review of the asset transfer agreement between
 Novell and SCO confirms it.  To Novell's knowledge, the 1995 agreement
 governing SCO's purchase of UNIX from Novell does not convey to SCO the
 associated copyrights.  We believe it unlikely that SCO can demonstrate that
 it has any ownership interest whatsoever in those copyrights.  Apparently, you
 share this view, since over the last few months you have repeatedly asked
 Novell to transfer the copyrights to SCO, requests that Novell has rejected.
 Finally, we find it telling that SCO failed to assert a claim for copyright or
 patent infringement against IBM.
     SCO's actions are disrupting business relations that might otherwise form
 at a critical time among partners around Linux technologies, and are depriving
 these partners of important economic opportunities.  We hope you understand
 the potential significant legal liability SCO faces for the possible harm it
 is causing to countless customers, developers, and other Linux community
 members.  SCO's actions, if carried forward, will lead to the loss of sales
 and jobs, delayed projects, canceled financing, and a balkanized Linux
 community.
     We, like others, are concerned about the direction of SCO's campaign.  For
 now, we demand that SCO either promptly state its Linux infringement
 allegations with specificity or recant the accusation made in your letter.
 Further, we demand that SCO retract its false and unsupported assertions of
 ownership in UNIX patents and copyrights or provide us with conclusive
 information regarding SCO's ownership claims.  In the future, we hope SCO will
 adhere to standards of strict accuracy when stating its rights in UNIX.
 
      Sincerely,
      Jack L. Messman
      Chairman, President and CEO
 
     About Novell
     Novell, Inc. is a leading provider of information solutions that deliver
 secure identity management (Novell Nsure(TM)), Web application development
 (Novell exteNd(TM)) and cross-platform networking services (Novell
 Nterprise(TM)), all supported by strategic consulting and professional
 services (Novell Ngage(SM)).  Novell's vision of one Net -- a world without
 information boundaries -- helps customers realize the value of their
 information securely and economically.  For more information, call Novell's
 Customer Response Center at 888-321-4CRC (4272) or visit
 http://www.novell.com .  Press should visit http://www.novell.com/pressroom .
 
     NOTE:  Novell is a registered trademarks; Nsure, exteNd and Nteprise are
 trademarks; and Ngage is a service mark of Novell, Inc. in the United States
 and other countries. *  All third-party trademarks are the property of their
 respective owners.
 
 

SOURCE Novell, Inc.
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