SCO Says IBM's Irrevocable License is Revocable

Or, the outcome of the case might turn on as yet overlooked documents that already have been made public. For example, here is an excerpt of an e-mail discussion between MozillaQuest Magazine and SCO's Blake Stowell that took place in early May 2003.

Blake Stowell: As for the question about the license being irrevocable, in Exhibit D, Amendment X, (you will find this on our IBM lawsuit Web site), it specifically says:

"Upon payment to SCO of the consideration in the section entitled" Consideration", IBM will have the irrevocable, fully paid-up, perpetual right to exercise all of its rights under the Related Agreements beginning January 1, 1996 at no additional royalty fee. However, if IBM requests delivery of additional copies of source code of the Software Product, IBM will pay the fees listed under Section 1 (b) of Soft-00015 Supplement No.170. Notwithstanding the above, the irrevocable nature of the above rights will in no way be construed to limit Novell's or SCO's rights to enjoin or otherwise prohibit IBM from violating any and all of Novell's or SCO's rights under this Amendment No. X, the Related Agreements, or under general patent, copyright, or trademark law."

MozillaQuest Magazine: SCO has not alleged any general patent, copyright, or trademark law violations in its Caldera v IBM Complaint. Moreover, afaik, SCO does not have any patents of the Unix code nor does it own the Unix trademark. Additionally, Linus Torvalds owns the Linux trademark.

MozillaQuest Magazine: My reading of this is that it does not demean the irrevocable nature of the contract. It only gives SCO a right to enjoin/prohibit violations of the agreement. It does not even give SCO a contractual right to seek damages for contract violations.

Blake Stowell: In other words, the license to IBM is perpetual and irrevocable, so long as IBM honors the contract that they have signed with SCO. If they violate the terms of their contract, then the contract is no longer perpetual and irrevocable.

MozillaQuest Magazine: Please see above.

Blake Stowell: Wouldn't you agree?

MozillaQuest Magazine: No, Please see above.

MozillaQuest Magazine: IMHO, if you want to claim that IBM has violated the agreement, you have to state specifically, clearly, and with particularity how IBM has violated the agreement. Then you have to show the exact language in the contract that says the contract may be revoked for such violations.

Blake Stowell never did show us any documented rhetoric that specifically allows SCO-Caldera to terminate IBM's perpetual, irrevocable license, which is set forth in Amendment X.

Interestingly, however, SCO to some degree did what we suggested then in that discussion in its later Amended Complaint. There, SCO states more specifically, more clearly, and with more particularity how IBM has violated the Unix license agreements. (Perhaps we should send SCO's lawyer, David Boies, a bill for the law lesson.)

We found some language that does seem to allow SCO to terminate IBM's Unix license in a part of the said Exhibit "D". It is in the Reference Source Code Agreement, which is dated 2-5-98. Amendment X is dated 10-17-96. That language does seem to grant SCO-Caldera the right to terminate IBM's irrevocable Unix License.

Under paragraph 1.02 of the Reference Source Code Agreement SCO may terminate all IBM's Unix license rights.

1.02 If YOU fail to fulfill one or more of YOUR material obligations under this Agreement, SCO may, upon its election and in addition to any other remedies that it may have, at any time terminate all the rights granted by it hereunder.

Does that not give SCO authority to terminate IBM's Unix License and override the perpetual, irrevocable license granted to IBM under Amendment X?

We discussed SCO's Amended Complaint and related issues with Thomas C. Carey, a programmer turned lawyer, via e-mail while this article was in development. He does not believe that paragraph 1.02 of the Reference Source Code Agreement SCO is applicable. Please check our interview with Tom Carey in an (upcoming soon) companion article, Are SCO's Rebuilt IBM Lawsuit and Unix License Revocation Winners -- Or More SCO FUD?.

IP attorney Mark Radcliffe noted:

Irrevocable means you can't terminate, you can only get injunctive relief (stopping breaching the agreement), otherwise irrevocable would have no separate meaning.

Another proviso is that the facts alleged in SCO-Caldera's Amended Complaint are true, correct, and honest. So far, IBM has not put forth any facts in the SCO v IBM lawsuit itself to challenge the facts as set forth in SCO-Caldera's original Complaint or Amended Complaint.

Until such time as IBM does set forth facts in its court filings that challenge the facts as alleged by SCO, the lawsuit presumption lies in favor of SCO's allegation being true and correct. The Amended Complaint clearly has shifted the burden of proof from SCO-Caldera to IBM, for now.

None of this means there is any purloined code in the kernel.org Linux kernel or the GNU/Linux operating system. To the contrary, the evidence shown to date in SCO's traveling code side-show and circus is that the allegedly purloined code is in the Linux-based system of an IHV (independent hardware vendor) -- and SCO has shown only 80 lines of identical Unix and Linux code in that IHV's Linux-based system.

Also, please keep in mind that this lawsuit is about breach of contract and other torts. It is not about copyright infringement, per se. More about that further on in this article.

On the other hand, IBM could mount an affirmative defense rather than challenge SCO on the facts. For example, IBM might try to mount an affirmative defense that JFS (Journaling File System), NUMA (Non-uniform Memory Access) software, RCU (Read, Copy, and Update), and other such technologies are well-known and therefore, IBM did not violate any confidentiality agreements by helping the Linux kernel developers incorporate those technologies into the Linux kernel.

However, so far IBM has not mounted an affirmative defense. So far, IBM has not mounted any sort of effective defense to the SCO v IBM lawsuit!

IBM listed seven affirmative defenses in its Answer to the original Complaint. But, all IBM did was to make a boiler-plate list of seven affirmative defenses without substance.

Conversely, the statement made by IBM's Trink Guarino Tuesday that IBM owns the copyrights for the work we've done in AIX, JFS, RCU and the code that takes advantage of NUMA hardware indicates that IBM will have a very strong defense to SCO's claims -- when and if it introduces evidence to support that statement in the SCO v IBM lawsuit proceedings.

Please see the first two parts of our series about SCO-Caldera's IP claims plus its intentions to enforce and license its intellectual property rights.

SCO-Caldera & the GNU/Linux Community: The SCOsource IP Matter

SCO-Caldera & the GNU/Linux Community: Part 2, Under the Iceberg's Tip