Tom Carey for the Public's Interest
We discussed the HP indemnification issues with Thomas C. Carey via e-mail. He is a programmer turned lawyer and now is a partner at Bromberg and Sunstein. He chairs the firm's Business Practice Group. His law practice includes licensing and transferring software, technology and other knowledge-based content, and lots more.
MozillaQuest Magazine: Does not HP's Unix license give it the right to distribute SCO-owned Unix code that might be in any Linux-based solution sold by HP?
Tom Carey: I have not seen HP's Unix license, and will assume for purposes of this discussion that it is identical to IBM's UNIX license, including Amendment No. X that was attached to SCO's complaint as Exhibit D.
Tom Carey: The AT&T License Agreement, as amended in Amendment X, does authorize the distribution of source and binary versions of Unix. No per-copy royalty is payable to SCO for such distributions.
MozillaQuest Magazine: So does that not make it pretty easy for HP to extend the HP Linux-based solution indemnification?
Tom Carey: "Easy" is a relative term. There remain a number of open questions and risks. For example, does Linux now contain code that was developed as part of Project Monterrey, after the date of Amendment X? If so, the license terms (if any) applicable to that software are unclear. Quite possibly no existing Unix license covers this problem. Furthermore, the use of a later Unix license to cover a prior distribution of Linux is a band-aid applied to a prior copyright violation that might not undo damage already done.
Tom Carey: There is the further problem of the potential inconsistency between the Unix license terms and the GPL. Will HP have to demand that customers give up rights with respect to their copies of Linux that the GPL grants them? The answer is clearly yes, because HP is requiring the indemnitees to agree not to modify the software, except under restricted conditions. Is there possible liability to the Free Software Foundation? Could the FSF enjoin this indirect modification of the GPL? Perhaps. If it did, would HP still be on the hook for indemnification? Again, it is possible. So HP may find itself in a morass, even if it has a clever strategy for piggybacking its Unix license.
MozillaQuest Magazine: I notice that Martin Fink avoided answering questions about this subject in the Q & A part of the press conference. However, the Unix licenses that the major sub-licensees such as HP, IBM, Sequent, and so forth have appear to be identical as to the legalities -- and only the names of parties, dates, etc., appear to be different. Moreover, these standard-form Unix licenses are now public by virtue of their incorporations as exhibits in the SCO v IBM lawsuit pleadings.
MozillaQuest Magazine: It also appears that these standard, major Unix licenses would give companies such as HP the right to include SCO-owned Unix code and/or derivative code in any Linux-based solutions provided by the major licensee, in this case HP. Is this correct?
Tom Carey: Under tightly controlled conditions, that is possible, yes. I address those controls elsewhere in my comments.
MozillaQuest Magazine: Therefore, do not HP customers buying Linux-based solutions from HP actually, in effect, have a sub-license via the SCO-HP Unix license to use HP Linux-based solutions that might include SCO-owned code and/or derivative code?
Tom Carey: It is possible that HP can create an umbrella for them by licensing UNIX in parallel to licensing Linux. But just distributing a copy of Linux under the GPL does no good, unless there is a separate contract addressing UNIX licensing, and subjecting Linux to far more restrictive terms than the GPL calls for, or permits. Does that get SCO off of the backs of the HP customers? SCO can still sue them, but HP will step in and defend. Then SCO has a deep pocket to go after for every Linux license that HP grants.
MozillaQuest Magazine: I think this paragraph seems to support the notion that HP is piggybacking its Unix license with SCO into the HP-distributed Linux indemnification offer.
Tom Carey: You are probably onto something there. The HP lawyers have probably analyzed this and decided that (i) they have enough strength on the basis of the argument you suggest to give SCO a really hard time, and (ii) it makes great business sense to tie the indemnification to Linux running on HP hardware. It creates a closed universe of protection that gives HP a competitive edge in the Linux world.
MozillaQuest Magazine: It appears from the Unix licenses that were made public as exhibits to the SCO v IBM lawsuit pleadings, that under the "perpetual" licensing, companies such as IBM and HP paid a large one-time fee that allows them to distribute Unix and/or a Unix derivative without paying any further fees to SCO. So, does that mean that SCO is not receiving any revenue from HP sales of Unix software?
Tom Carey: If HP's license reads like IBM's that is right.
MozillaQuest Magazine: This certainly seems to me that HP SCO-Linux indemnification is a matter of piggybacking HP's Unix license as a sub-license to its HP Linux customers, correct?
Tom Carey: Yes.
MozillaQuest Magazine: This seems to me that HP is doing the case-by-case review in order to make sure the modifications comport with its license to distribute and to modify SCO-owned Unix code, is not that so?
Tom Carey: Yes, that seems to be correct. Amendment X permits only certain types of source code modifications. It expressly forbids modifications designed to port the operating system to a different hardware platform. So HP is probably trying to avoid crossing the lines drawn by Amendment X.
MozillaQuest Magazine: It seems there is not much reason to sue for something HP already has a contractual right to do. Instantly, HP's Unix licenses gives HP a contractual right to modify, sub-license, and distribute SCO-owned Unix code. So, in reality the HP SCO-Linux indemnification program is merely a matter of promising HP Linux customers that HP will enforce its Unix license rights should SCO initiate any legal actions against any HP Linux customers, is this not so?
Tom Carey: In a fashion, yes. But it must establish a UNIX license in order to provide coverage that does not subject HP to undue risk. And I would not in any way minimize the fact that HP is really stepping up to the plate here. You may look at the theoretical risk and dismiss it, but litigation, even if you win, is a very expensive and distracting event. HP is willing to go through this in lieu of having its customers do the same. This adds real value to the Linux proposition, even if it corrupts some of the purity of the GPL as it applies to those customers. (Emphasis added.)
Tom Carey: Off point here, but an interesting sidebar: In reading Amendment X more carefully, I noticed a surprising clause, one that I doubt is in the HP contract. The last sentence of section 6 substantially loosens the restrictions on IBM's ability to develop software products that are based upon ideas learned from reviewing the UNIX code and documentation. In its original agreement with AT&T, IBM reserved the right to do so, provided that the employees who worked on the project did not refer to UNIX software products (including the documentation) while doing so. In Amendment X, that proviso was stricken. Thus, IBM was free to have programmers develop Linux contributions while looking at UNIX source code!!! Is it possible that these lax rules led some at IBM to get sloppy, and engage in direct copying? Only time will tell. (Underlining in original. Boldface emphasis added.)
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