I said I'd dissect SCO's Reply Brief in Support of Its Motion to Dismiss, so, picking up my probe and scalpel with gusto, here goes.
First, it is a cynical document. The overview is that they are asking the judge to either dismiss Red Hat's case or, failing that, either grant them a stay until the IBM case is settled or consolidate the two cases by sending the Red Hat case to Utah. They warn her they will submit a motion requesting that relief, if she fails to grant SCO's Motion to Dismiss. Both a stay and a consolidation would mean Red Hat'd have to wait years for any relief. In short, SCO doesn't want to talk about their proof this exact minute, so they would rather not have their day in court.
Oh, and SCO says the GPL is trying to destroy copyright law. And furthermore, the GPL forbids proprietary ownership, so that means no one can own it. They do know better, but that is what they wrote to Judge Robinson. I guess they hope that she doesn't know any better.
You have two choices wading through their spinach: either laugh or throw up. I leave it up to you. There is a third choice, I suppose, nod off. But when your enemy is talking, I think it's prudent to pay close attention. So, let's hold our noses and dig in, going through the document sequentially.
You might want to review the information on declaratory judgments on this page, beginning at the heading "3.The Declaratory Judgment Act." It will help you follow along, although its focus is patents, and it's harder to get a declaratory judgment in a patent case, and this case isn't about patents, so bear that in mind. Remember this all began with Red Hat filing for a declaratory judgment, followed by SCO's Motion to Dismiss, which Red Hat opposed, and now SCO is replying.
SCO's Reply is divided into three basic arguments:
1. The Court lacks subject matter jurisdiction
2. SCO's conduct does not violate the Lanham Act
3. Red Hat's Lanham Act claims are barred by the First Amendment
The Court Lacks Subject Matter Jurisdiction
This is the section that is the longest. It's the part where they try to convince the judge that there is no actual controversy in the declaratory judgment sense, because they say they didn't threaten to sue Red Hat. If they can get the judge to agree with them on this one point, the declaratory judgment request by Red Hat is dismissed. That's why they spend the most time on this. Also I expect they spent a lot of time on it because it's their weakest area, because they surely sounded like they were going to sue Red Hat to you and to me. Now they must persuade the judge that they never said that and nothing that they said or did meant it either.
They start by complaining about Red Hat using selected quotations that they say are misleading. That's to get the judge to think badly about Red Hat. But the truth is, you have to cut the quotations you use somewhere, so that's just a judgment call. They, however, try to paint it as deliberately done to make points underhandedly. Yawn.
Next, they say that Red Hat lacks a protectable interest in the Linux kernels, the 2.4 and 2.5 kernels at issue, because the GPL "prohibits any proprietary interest and provides that they may be freely copied by anyone."
This silly and false statement is actually a very devilish use of the word "proprietary". When we talk about open source versus proprietary software, we mean that proprietary is the kind where you are not allowed to look at the code. Open source is the kind where you can. Usually, proprietary companies are corporations like SCO or Microsoft. So, when I hear the phrase,"proprietary software", I'm thinking along those lines.
But in the law, proprietary means something else, and they are trying to confuse the two in the judge's mind, or at least in the public's mind, so she'll think Red Hat has no proprietary interest because it's not a proprietary software company. She won't be confused, but I'm guessing they hope the rest of the world will be. Or maybe they are confused themselves.
Here's the legal definition of the word "proprietary" as used in the law, from Steven H. Gifis' "Law Dictionary", 2d Edition:
"Proprietary: owned by a particular person."
First, the GPL does not forbid owning the code. You can't GPL your code unless you do own it. Second, the Linux kernel is copyrighted code, with the GPL license on top, and the GPL does not negate the copyright interest. The kernel has many authors, who each have a copyright in their portion of the kernel, the part they wrote. In turn, there is a collective copyright in the total kernel. Do you have a proprietary interest in code when you own the copyright? Obviously, yes.
And while anyone can download it, that doesn't mean they can do whatever they please with it. There are license terms. License terms means somebody owns the code and lets you use it, subject to the owner's terms.
Second, Red Hat has a copyright interest ownership in the portions of the kernel it wrote, and they have their own distribution, which is "proprietary" in the legal sense, available by subscription and you can also buy it as a product in a box at places like Amazon, or any other distributor, and you can also sign up for various subscription plans and there are different support contracts for most of their products. Does that sound like a commercial enterprise to you? All of their products include the kernel. It's an integral part of what they are selling. Also we should note that the RedHat Enterprise Edition kernel is not a stock kernel.org kernel, but one that has been customized by Red Hat, and this customized kernel is what they offer in all of their product offerings. They also allow you to download some of the software for free, if you know how, but then you are on your own.
So, does the GPL forbid code being owned by a particular person? No. It does not. It requires it. Does Red Hat, as one of the authors of the copyrighted code they wrote and donated to the kernel, have ownership rights over that code? Yes. Does Red Hat, then, using the legal definition, have proprietary rights to the kernel? Yes. You see how devilish this argument is? They are trying to confuse everyone by using a word that has both a legal meaning and a marketplace meaning that essentially are contradictory. You'll see later why.
The way they wrote this part, SCO seems to be trying to argue that proprietary code, in the general business meaning of the word, meaning owned by a company that forbids you to look at the code, is the only kind that can be protected under the law, and the proprietary business model, as opposed to the open source model, the only one the legislators intended to protect. Very crafty. Very wrong, but very crafty.
Next, they argue that there was never a "direct threat" against Red Hat. Their initial argument could be summed up as saying, "We never said the exact words, 'We are going to sue you,' so there was no direct threat." They also state that SCO never directly contacted Red Hat, so that proves they didn't make any direct threats. (However, they seem to have forgotten thisApril interview in which McBride said he did contact Red Hat.) Actually, what it would prove, if true, is that they failed to mitigate their damages, if any. Then they sum up by saying, "So, you see, your honor, there was never a direct threat of litigation."
The law doesn't require a direct threat. Indirect will do. They know that, so SCO goes on to discuss whether the totality of the evidence supports there being a reasonable apprehension of suit from other types of statements and actions that could be viewed as an indirect threat sufficient to justify Red Hat coming to court for relief.
Here, they sound like a battering husband, explaining his wife's screams to the police when they show up at his door. "It's nothing. She's just excitable." Its first specious argument has to do with the statement by McBride that there would be "a day of reckoning" for Red Hat. They downplay that, saying he didn't mean litigation against Red Hat. No, no, nothing of the kind. He meant if SCO won the IBM suit, Red Hat would then have the opportunity to pull out the offending code and voluntarily pay up for any past offenses.
Right. No threat there.
Anyway, the law isn't interested in what he meant, as I understand it. It's interested in what Red Hat thought he meant and what a person of normal intelligence would have understood his words to mean. If someone told me I had hurt them and now I will face a day of reckoning, I'd take it as a threat. Wouldn't you? Some things are just obvious.
Red Hat argued that the 1,500 letters sent to its customers or potential customers constitute a threat, but SCO says they have taken their words in that letter out of context by not quoting them in full. When they said they would vigorously defend their IP rights, they meant by means of the IBM lawsuit, not by suing Red Hat or end users.
Juxtapose that with McBride's statement in Friday's teleconference that SCO leaves open that very possibility, as reported in this news story:
"SCO is in the process of following up on letters sent to 1,500 enterprises this year, advising them that they may be in violation of SCO's intellectual property rights in their use of Linux. 'Our goals is not to go out and start suing companies,' McBride said. 'But, as we go down that path, if we have certain companies out there that are using Linux and we're unable to come to a resolution or reach an impasse, then we absolutely will reserve the option of (taking) the legal path as the remedy to go resolve that.'"
So, which party correctly interpreted the letter? And of course, that isn't an isolated remark. In August, a headline in TheStreet.com called them "Litigious SCO". And for more, just click on our new Quote Database, and you will see a long list.
Even if it were true that the phrase in the letter about a vigorous defense of its IP referred to the IBM lawsuit, the phrase doesn't preclude other actions in addition to the IBM lawsuit. And if that were all SCO meant, why send warning letters to the 1,500 companies at all? See, this is why people hate lawyers. Red Hat argued that threatening its customers was sufficient to qualify as a threat against them. Take a look at this spin SCO's lawyers put on that ball:
"Moreover, the statement in SCO's letter that 'legal liability that may arise from a Linux development process may also rest with the end user,' similarly does not rise to a threat by SCO against Red Hat customers. This observation does nothing more than raise a theoretical question subject to various interpretations and legal arguments. Clearly, this statement does not place a customer in reasonable apprehension of suit, since it does not include an 'unmistakable threat of litigation.'"
Is that what you got out of that letter? That nobody would be sued? They were just having a theoretical legal discussion? And that SCO never intended to frighten folks into buying a license? We here on Groklaw sent them a letter that if they tried to enforce their threats, we'd take legal action. Would we have done that if we didn't believe there was a threat against us, the end user? I have several Red Hat distributions that I paid for, so I'm a Red Hat customer. I took SCO's remarks as a threat.
The license they are offering precisely guarantees they won't sue you if you buy it; if there was no threat to sue, exactly what have they sold those poor saps who signed up? If the answer is nothing, I think fraud might come into the equation, and not just in a theoretical legal discussion, either.
Next, SCO says Red Hat hasn't identified a single customer that SCO has accused of infringement. Well, now, that depends on whether you accept their interpretation of why they sent those 1,500 letters and why they are selling those licenses. Here, SCO is hoping for a TKO.
SCO tries to undermine Red Hat's use of the case Aralac, Inc. v. Hat Corp of Am., 166 F.2d 286, 292-93 (3d Cir. 1948). I can't find a free version of for you. It's an old case, so it's hard to find on the internet, except through paid services like Lexis. I did find a dissenting opinion by one judge, (the dissent wasn't about the case) that mentions this case. I don't think SCO would like the use to which it was put by this judge in his dissenting opinion in Alagrant v. Evergreen Valley Nurseries, LTD.:
"Bearing in mind the remedial character and legislative purpose of the Declaratory Judgment Act, we have repeatedly emphasized that the Act should have a liberal interpretation. Exxon Corp. v. Federal Trade Comm., 588 F.2d 895, 900 (3d Cir. 1978); Simmons Aerocessories v. Elastic Stop Nut Corp. of Am., 257 F.2d 485, 489 (3d Cir. 1958); Aralac, Inc. v. Hat Corp. of Am., 166 F.2d 286, 291 (3d Cir. 1948). Indeed, federal courts's jurisdiction over declaratory judgment actions are limited by just two primary considerations: the action must present a case or controversy and it must be ripe for disposition." [emphasis added]
So this judge believed that the case stands for the proposition that judges shouldn't dismiss declaratory judgments , which is what SCO is asking its judge to do, if they meet the two simple tests he lists, that there is a controversy and that the case can be settled by a declaratory judgment. By that reasoning, SCO would likely lose.
SCO then launches into an argument that because Red Hat doesn't control the kernel, it has no "proprietary interest", and hence there can't be an actual controversy. It does control its own customized version of the kernel. Note how they describe it on their web site:
"All products in the Red Hat Enterprise Linux family are based on a common software core--kernel, libraries, development toolchain, and utilities. This provides a homogeneous environment ideal for simplifying multi-system and desktop-to-datacenter configurations. The immediate benefit: simplified deployment of distributed applications, and a consistent environment for users and system administrators across the entire family. . . . Introduced in September 2003, Red Hat Enterprise Linux, version 3, includes a broad range of new features: .... Based on Linux 2.4.21 kernel: Red Hat Enterprise Linux uses the latest stable Linux kernel with numerous additions from the Linux 2.5/2.6 kernels."
In short, they roll their own, so SCO is all wet here. And, they also have copyrighted code their employees were paid to write and contribute to the kernel, so that also gives them a proprietary interest. They are trying to negate all of this obvious evidence of Red Hat being a company with goods in interstate commerce, a requisite for Lanham Act claim, by saying that they lack a proprietary interest because anyone can dowload the kernel freely over the internet.
What are the odds of a judge agreeing with that novel concept of commercial and copyright law, that you have no ownership interest if you ever allow anyone to have a copy for free? If that were so, then SCO had and has no ownership interest in OpenLinux, because it's still available for download under the GPL license and it has been for years and years. Poof. Copyright gone, ownership interest gone, if we accept SCO's nonsensical argument. And what was Caldera IPO based on, if they had no proprietary interest in their Linux products? If Red Hat has no ownership interest, then neither do they. Do they know all this? What do you think?
If their reasoning were correct, then Microsoft has no proprietary interest in Internet Explorer. You can download that for free over the internet, too. Ah, but it has a EULA, someone may say, so it isn't just a free-for-all. The Linux kernel has a license too, the GPL, and it's not a free-for-all either. There are terms that limit what you can do with it. What, pray tell, is the difference?
For a company that is stating that copyright trumps the GPL, they seem to breezily ignore the copyright interests of kernel contributors, and here they actually have the nerve to argue the exact opposite of what they are arguing in IBM's case. In the IBM case, they say the GPL is trumped by copyright. Here, they argue that the GPL trumps copyright. I don't think they can have it both ways.
Groklaw readers, as usual, have already taken a look at the copyright notices in the kernel and come up with proof of copyrights belonging to Red Hat. There really is something amazingly effective about legal research using the open source method. Here is one example, found by Dr. Stupid:
/* 2 * Adaptec AAC series RAID controller driver 3 * (c) Copyright 2001 Red Hat Inc. 4 * 5 * based on the old aacraid driver that is.. 6 * Adaptec aacraid device driver for Linux. 7 * 8 * Copyright (c) 2000 Adaptec, Inc. (email@example.com:
And agriffin reports his findings:
"The 2.6.0-test7 kernel has several explicit Red Hat, Inc. copyright statements. For example:
[root@minerva src]# rgrep -R '*.c' 'Copyright' ./linux-2.6.0-test7/ | grep 'Red Hat, Inc.' | wc -l 76
[root@minerva src]# rgrep -R '*.h' 'Copyright' ./linux-2.6.0-test7/ | grep 'Red Hat, Inc.' | wc -l 37
"There are 76 c source code files that contain a Red Hat, Inc. copyright assertion and 37 header files. There are, in fact, more Red Hat, Inc. copyrighted files that just use the '(C)' notation."
An anonymous Grokker adds this contribution:
# find linux-2.4.20-8/ -name '*.c' | xargs grep -l 'Copyright' | xargs grep 'Red Hat, Inc.' | wc -l
# find linux-2.4.20-8/ -name '*.h' | xargs grep -l 'Copyright' | xargs grep 'Red Hat, Inc.' | wc -l 37
"There's a couple duplicates from my commands (places where the copyright message gets printk'ed or MODULE_AUTHOR'ed as well as being included in the file) but you get the gist of it. Of course, SCO's attempt to paint the kernel as 'a process with which plaintiff has had no connection' would be ludicrous even if Red Hat just redistributed Linux without developing it themselves.
"SCO is also expressing the er... interesting... theory that because the Linux kernel is freely redistributable, they can say whatever they want about it because Red Hat doesn't have a 'sufficient economic interest' to defend it. I suppose this is a reasonable mistake on Caldera's part, but they should check out Red Hat's quarterly reports and disabuse themselves of the notion that just because they couldn't make money distributing Linux, nobody else can either."
Next, they attack a Red Hat case that they offered to prove that an implied threat is enough to establish an actual controversy. SCO tries to distinguish the current facts by saying that in that case, letters were sent with the implied threat, and SCO never sent any letters (um, how about 1,500 of them?) so therefore the case doesn't apply, as if the only way to convey an implied threat is by letter. It also tries to hide behind the argument that they never set a deadline for Red Hat or its customers, so that means there was no threat. Puh-lease. As if I could say, "I'm going to kill you," and it carries no legal weight as a threat unless I tell you when, what you must do to avoid it, and when the cutoff date is to get it done.
Next, SCO repeats a case it used in its original Motion to Dismiss, so that means they may be having trouble coming up with any new ones. Not a good sign for SCO. They say that they have never made any express charges of infringement against Red Hat. I'm guessing that they crossed their fingers behind their backs when they wrote that. Anyway, this is all hot air, because the issue under the law isn't was there a threat; the issue is, is there a controversy? Deciding if there is a controversy is a case-by-case matter, and it depends on the totality of the facts, not on certain words or actions.
Red Hat pointed out that the license itself is a threat. Not so, says SCO, and they argue, and yes, now I am starting to laugh, that they found cases where offering a license on a patent doesn't constitute a threat, like their offering their license, which specifically protects buyers from a lawsuit by them, wasn't a threat to sue anybody. And remember that part about it being harder to get a declaratory judgment in a patent case?
Litigators are a breed apart. Not all lawyers have the stomach to be a litigator, and you can see why, reading this. Imagine having to say things like this for a living. Not that any lawyer actually has to. SCO just has a knack.
Next, they use a case, Bonterra America v. Bestmann, 907 F.Supp . 4 (DDC 1995) and say it stands for the proposition that "the fact that a customer curtailed relationship with plaintiff to avoid any possible risk of suit for infringement does not serve to create in plaintiff a reasonable fear that defendant would sue plaintiff for infringement", as if that is all that happened in the current case. Again, this is a rehash, using the same case they put in their Motion to Dismiss. They must be hoping this judge can't think clearly. Or has short term memory issues. It's not good to repeat yourself like this. They spent three paragraphs on this case in their Motion to Dismiss. She will remember that. I even remembered.
Incidentally, when you see ungrammatical sentences like that in a legal document, it often means the lawyer was working too fast and just copied the header info on the case. If you use Lexis, for example, at the top of the page, they'll list headers, in abbreviated sentences, telling you what the case is supposed to prove. It's an aid to researchers. But you're not really supposed to quote the header. You're supposed to actually read the case to see if it fits your facts.
Then, SCO tries to beat back the impact of another Red Hat case, Treemond Co. v. Schering Corp., 122 F.2d 702. By the way, why do they respond to all these cases? They have to or they're sunk. Red Hat found some very strong cases. But significantly, after quoting from Treemond, SCO fails to answer it meaningfully. It's a big hole in their argument. All they say is that their threatening language wasn't as threatening as the language used in Treemond. That's a judgment call, not a strong legal argument, so it's up to the judge to agree or not. They didn't offer any cases to counter it, which is what you normally would want to do. I'm sure they looked for some.
Here is how Red Hat used the Treemond case:
"In addition to the allegations that SCO addresses in its motion, Red Hat alleges a second set of facts that independently establish an actual controversy between Red Hat and SCO: SCO has sought to coerce Red Hat's customers into paying for a license with SCO to use Red Hat LINUX. Further, Red Hat has alleged that while explaining its licensing program at its recent conference call on July 21, 2003, SCO specifically stated that it anticipated such a disruption (Complaint 61.) The Complaint quotes the transcript from the SCO's conference call: 'And so I'm guessing that those end users are going to be looking around to the vendor or vendors involved in supplying [LINUX software] to them whether it's Red Hat or IBM and saying, "What's up, guys? You know what's happening here?" But, you know, that is going to be their beef with their particular vendor.' (Id.)
"The Third Circuit has found that such public statements aimed at the plaintiff's customers establish an actual controversy. Treemond Co . v. Schering Corp., 122 F.2d 702, 705 (3d Cir. 1941) (reversing dismissal of complaint for declaratory judgment of patent invalidity and noninfringement based on finding that defendant's notice in trade journal threatened purchasers with suits if they purchased plaintiff's product). SCO's motion must be denied on this basis as well."
SCO needed to effectively counter this case that supports Red Hat's claim that SCO's public statements and the licensing program are sufficient to establish an actual controversy. In my opinion, SCO failed.
Next, their argument is that even if the judge doesn't agree with them that Red Hat had no reasonable apprehension of litigation justifying their declaratory judgment action, the judge still should dismiss it. Here's why they say she should do that: because the IBM case, they say, will settle "most, if not all" of the issues raised by Red Hat anyway. Most? They seriously think she will say most is enough? The other problem with this argument is that it won't. But they argue that Red Hat, in effect, should wait its turn. First, let the courts decide if there is any infringing code. If the courts say there isn't, then Red Hat could bring the action.
That is an odd argument to advance in a declaratory judgment case. First, by that time, Red Hat's business could be so badly disrupted by SCO's shenanigans that there'd be no way to be made whole. They are, after all, already offering the license, despite not having proven a thing in any court of law, or anywhere else. The chief purpose of a declaratory judgment action is to force the other side to court, to get a decision, so a threatening party can't make threats and never actually bring a lawsuit and just destroy your business that way, without you being able to do anything about it. Here, SCO is arguing that the judge should let it do what the Declaratory Judgment Act was written to prevent. Note this from the earlier linked page explaining the Act:
"Outside of the patent field, declaratory judgment actions can be used to prevent tortious acts -- before they occur -- by allowing any interested party to obtain a declaration of the respective rights and legal relations of the disputing party where an actual controversy exists. The object of a declaratory judgment is to avoid the accrual of damages by seeking a court's determination of the rights of parties."
Duh. In effect, they are asking the judge to let Red Hat's damages build and build for a couple of years. Red Hat is asking that SCO be made to stop saying misleading things about its products, and SCO says there's no need to setttle this until 2005, and meanwhile they will keep on talking and offering those licenses, despite not having proven any of their IP claims in any court of law or anywhere else. And if the IBM case is won by IBM, Red Hat would hardly need to bring a declaratory judgment action then, would it?
Something else strikes my eye. They repeatedly state that the argument is over the 2.4 and 2.5 kernels. But in the teleconference they claimed that their IP is in the 2.6 kernel too, so the IBM case isn't going to settle all the issues, because it isn't even discussing the 2.6 kernel.
And it doesn't settle the specific question Red Hat is asking them to settle: Red Hat is asking the judge to declare that Red Hat is not infringing SCO's copyright. How could the IBM case settle that? Correct, it can't.
SCO's problem is it looks at all issues only from their own standpoint. It's to their benefit to make Red Hat wait, and so they argue it should happen. Then they reach and stretch and twist the law around to try to make it fit. That isn't so rare, but I've never seen such an ill fit as this. Red Hat is alleging that SCO is hurting their reputation and their business. Solving the copyright issue one way or another does not address the trade libel, misleading advertising, and other tort issues it has raised. If Red Hat wins on those issues, it will collect money damages. But if IBM wins, no money damages will go to Red Hat. It has to establish its own torts, so SCO's pretense that they should just let the IBM matter go first ignores the damage Red Hat is claiming. Of course, that is probably because they don't care a bit if they are hurting Red Hat's business, because their purpose is to slow or stop Linux adoption, judging by their behavior. In fact, they have a new program to encourage people to migrate away from Linux. They are saying to the judge: please let us continue to really hurt Linux adoption for another couple of years by making Red Hat wait. It's a breathtaking request, and I can't see why a judge would grant it, and I've tried hard to think of any conceivable reason why she would.
Then, bully fashion, SCO tells the judge that if the court does not dismiss for lack of jurisdiction and does not dismiss by exercising its discretion (the two arguments SCO has so far advanced), it should either stay the Red Hat action until the IBM case is finished or "transfer it to Utah where the previously-filed IBM action is currently being prosecuted." Now I am laughing out loud. Looking for a little home town advantage, eh? Like the judge is going to do that. Both SCO and Red Hat are Delware corporations. Red Hat's home town advantage venue, though, would be North Carolina, where it is located physically. So Delaware is kind of neutral territory, and the judge isn't likely to send the case to another state where one of the parties will have an advantage. I just can't see that happening, barring other factors I don't know or have somehow missed. I think SCO knows she isn't likely to grant that request, so it adds a threat:
"Indeed, if this Court does not dismiss this action, SCO intends to file a motion to stay and/or transfer to Utah."
Judges love to be threatened. They teach a course in how to do that in law school. That's how effective that technique is. Not. It seems that what SCO wants is a time delay, by hook or by crook. If they can't get it from the judge one way, they'll get it another way. I don't think judges like to be told what to do Or Else. They are hoping, perhaps, the judge will find them so aggravating to deal with, she'll just send them to Utah to get some peace. I know I'd like to send them someplace to get some peace. But she has other options. Judges have a lot of options, particularly in fashioning declaratory judgment relief.
SCO's conduct doesn't violate the Lanham Act
Section II begins the section in which SCO tries to tell the judge that they did not violate the Lanham Act. It sets forth the five elements that Red Hat must meet to establish a Lanham Act claim, a) a false or misleading statement about its product or another's product; b) deception or a tendency to deceive a considerable portion of the relevant consumers; c) significant deception likely to influence purchasing decisions; d) that the goods advertised are in interstate commerce; and e) a likelihood the plaintiff will be injured. So far, so good.
Then, SCO trots out the argument that Red Hat has no product, because it has no proprietary interest or ownership in Linux 2.4 and 2.5 kernels and that "indeed no one has such an interest". Well, now, why do they say that? Because they claim no one purchases the kernel because, they say, it's "free". I don't believe they are saying this out of confusion over is it free as in speech or free as in beer. They are saying it because unless you have goods in interstate commerce, you can't bring a Lanham Act claim. You can read about that here.
Standing for a claim of false advertising, which is what Red Hat has accused SCO of, "requires plaintiff to be a competitor," they say, and because the kernel is freely distributed, Red Hat can't allege any ownership interest. My, how they struggle with the GPL.
I can't see any judge buying such an argument, because it isn't factually true. Even if the judge did buy it, on appeal she would be reversed. True facts are what judges are looking for, most particularly. This section simply beats all for knock-down, drag-out gall. The funny part is, I bet they congratulated themselves when they thought it up.
I think when this is all over, I might write a book about this case, and the theme, beyond just telling the SCO saga and Groklaw's story, will be how the GPL tripped up some of the best lawyers on the planet and made them fall down and go boom.
This must mean they have absolutely no one on their side who is a GNU/Linux person, or he or she would have explained the GPL to them before this document was submitted. Do you realize how many wins we have had already, just from SCO's absolute incapacity or unwillingness to understand the GPL? The only hope they have, and it's a long shot, is that the judge suffers from a similar incapacity.
But is it really an authentic inability to comprehend it? Let's look at the evidence. First, they are lawyers. They read licenses for a living. Caldera released its products under the GPL for years. No, let me correct that. They *sold* their products for years, released under the GPL. So do they know that GPL code can be sold? And that a company can have a copyright interest in GPL code? Obviously, they do. They contributed code to the kernel themselves. Canopy's Ralph Yarro just did an interview in which he stated that many of the companies in the Canopy Group are Linux companies. This isn't Greek to them. So do they believe the nonsense they just told the judge?
SCO is protected by the First Amendment
Finally, in section III, we reach the end of their three arguments, that they are protected by the First Amendment and can therefore say all the bad things about Linux they want to. Besides, they say, Delaware lets you say bad things if you are involved in a lawsuit and it's speech in that context. Their line of reasoning goes like this: commercial speech has a lesser protection under the First Amendment, but their speech wasn't altogether commercial. It has some "protected, non-commercial elements". They quote from a case that they themselves say "is not controlling in this instant matter", to which this reader's reaction is, why, then waste my time with it? The reason they quote it is because the judge in the case wrote about there being speech in publications in that case that "clearly contained elements of both" commercial and noncommercial speech. SCO analogizes itself. It didn't make product comparisons denigrating Red Hat's product , they argue, (and since they are claiming Red Hat has no product, it's no wonder they feel free to make that argument), but rather all SCO's statements "involve expressions of its legal rights, granted by copyright and contract law". But fellows, maybe you forgot, the IBM case isn't about copyright infringement. It's a contract case, so anything you said about copyright infringement wouldn't be protected by your participation in that lawsuit. You didn't send IBM one of those 1,500 letters, did you? And if SCO wanted to protect its copyrights, all it has to do is file a copyright infringement action and prove that it has a copyright on some code that is in Linux inappropriately.
Next SCO mentions another case, Riley, which they also acknowledge isn't apposite to the instant case. And indeed reading the quotation about the public need to hear "information and advocacy" about charitable contributions, the subject matter of that case, it's hard not to wonder what are they thinking.
Well, reading on, they explain, with flowery detail, that this case involves public issues of importance. It's not just a commercial dispute between the makers of two products. It's about the noble quest to establish that IP has value and must be protected, and because of that, they should be allowed to say bad things about Linux 'til the cows come home, because the public has an interest in the issue and needs to hear it discussed. Oh. It's a public service they are performing when they attack Linux.
Then they make the single most incredible argument I have ever seen in any case I have ever read in my entire life. It deserves some bold type: They actually argue that the GPL is designed to destroy the economic value of copyrights.
This is beyond wrong. It's Alice in Wonderland, off-with-their-heads talk. They can't be lying here, can they, no matter what the evidence may be for that in other sections, because they'd know then that their argument is laughable? If my attorney offered such an argument on my behalf, I believe I'd report him to the Ethics Committee or sue for malpractice. But no, they aren't kidding. They somberly wrap themselves in a cloak of self-righteousness, like the Man of La Mancha, and seriously argue the point. Their Point of Points.
I had to take a break and just laugh for a while and then come back to this, because it's so incredibly enjoyably, deliciously silly. As one Grokker noted in a comment here the other day, this must be the Attack of the Pointy Headed Bosses (PHBs). In Utah, copyright trumps the GPL, SCO says. In Delaware, the GPL destroys copyrights. No. Not enough. It's designed by evil masterminds to destroy copyright. I'm thinking they may want to rethink their plan to get this case moved to Utah. Somebody might notice they speak with forked tongue.
OK, here's what they say on the holy topic of copyrights: essentially, they accept as true that no one will pay for software that can be freely downloaded. Ipso facto, the GPL is against money for software. Really, that's what they say, only they say it in highfalutin' legalese, with a fervor worthy of Joan of Arc:
"The reason this line of argument is relevant and important in the instant case is that the speech Red Hat complains of is entirely and unequivocally intertwined in SCO's attempts to publish and defend its intellectual property rights, including copyright and contract rights, protected by law in the face of withering pressure by Linux software advocates to make operating system software free and thereby destroy the economic value of software copyrights so highly protected under the U.S. Supreme Court cases cited above. The speech must be protected because it involves critical and timely public issues about legal rights of the type held by SCO. As such, SCO's speech in this case involves an issue of significant importance to our digital society; it is not just an issue between Red Hat and SCO."
I'm not making this up. They really said that. They then sneak into the document, as if it supported how important this subject is to us, the public, the fact that there is a mountain of press about this case, (and it's handy to collect because they have paid their PR company to create it), as if it were a demonstration of the importance of the sacred topic they advance, as opposed to being a combination of paid-for PR results and the public's fascination in watching this company commit suicide-by-judge before our very eyes. It's like a car wreck. You just have to look.
I think I may safely state that none of the hundreds of thousands of readers who visit Groklaw every week do so because they are interested in the question as framed by SCO here, because despite the insignia SCO has sewn onto its banner and held high as they unjustly charge the Linux community, we know that one of the freedoms of the GPL is the right to sell GPL software, yes, sell it... for ...gasp...money. Here is the relevant information from the GPL FAQ page:
" Does the GPL allow me to sell copies of the program for money? Yes, the GPL allows everyone to do this. The right to sell copies is part of the definition of free software."
SCO may find it incomprehensible that anyone would pay money for something they can get for free, but I do, for one, because I find it more convenient to buy CDs than to download. So, there you go. I am a witness that they are ... I debate which phrase of Linus Torvalds to insert here. I'll leave it to you. Feel free to be creative and build on his work, in true open source fashion. (Just check for copyrights first, you pirates. And prior art. And none of that "don't ask, don't tell" use of other peoples' methods and ideas, either. What? No ideas left? Then stop being creative. There are more important things in the world than progress. Like money, for instance.)
How are copyrights going to be protected in a digital age, SCO calls out to the judge full-throated, if SCO can't speak out? Listen, guys, you can calm down. Nobody wants your worn-out UNIX code. We've told you from day one: if you can show us any infringing code, we'll take it out that very day. We don't want it. Problem solved. There is, therefore, no need for your quest, you phonies. And the GPL, in fact, relies upon copyright. You could say it is built on it. That's how much it isn't attacking copyrights.
Your Impossible Dream has nothing to do with protecting your copyrights, we don't believe. What we think you want is to steal *our* copyrighted code and get the masses so worked up with hypocritical arguments in the media that they will let you do it, so you can make out like bandits from code you didn't write and have no "proprietary interest" in. We also believe you may have already stolen our code and are terrified we'll find out you have taken our copyrighted, GPL work and put it in your proprietary, hidden software code. If you've done that, you would need to destroy the GPL before anyone finds out and makes you either take out the code or GPL your own software.
So, recovering my composure, that is their argument. They should be allowed to badmouth Linux because it's a newsworthy topic of "public importance that cannot be overstated." I think I'll lose my composure again for one little minute, long enough to say this: people died for the First Amendment. The founding fathers of America believed in the values expressed in the Constitution deeply enough to give their lives to make it a reality. To see SCO debase the First Amendment by using it try to shield their weasel behinds from the legal consequences of their low-down, mean-spirited, unprovoked, dishonest attacks on the GNU/Linux community is a kind of, well, a kind of secular blasphemy. Yes. No less.
They are telling the judge and the whole world a lie: that the GPL is attacking their copyrights. They want the judge to allow them to tell this lie, because lots of news clippings show people are interested in hearing what they have to say. How noble. How inspiring. How rotten to the core. They know, because we have told them, in public and in private, that we don't want their copyrighted code.
What they are not telling the judge is an ugly truth: they can't compete with GNU/Linux software and they want to use the law to prop up their dying business. What a quest. The right to use lies in the media and the law to destroy your competition instead of competing in the marketplace fair and square. I guess the scripture is true: some people really do worship money. SCO is all worked up about losing money because a better product than theirs has come along that people prefer. How dare the community come up with a better mousetrap? And a product they can't steal or coopt? That is their real beef, but they don't dare to say it that plainly.
Happily, we're done, because my lip is curling so much, I might tip my chair over.
There is also a letter attached, from Mark Heise, one of the SCO attorneys in the IBM case, offering to testify as a witness in the Red Hat case about two things: the letter SCO sent Red Hat after Red Hat apparently asked SCO to sign a stipulation that it would not sue them or Red Hat's customers, and SCO refused. He's willing to testify about that settlement letter. That indicates to me that SCO is plenty worried about how those discussions went leading to that letter and they feel they must tell their side of the story, because the letter doesn't look so good. Then he offers to testify about the GPL. The GPL? Now that I'd pay money to see. Mark Heise an expert witness on the GPL. He's such an expert, he attaches the GPL itself, which so far from attacking copyright law says this about how the GPL protects your rights:
"We protect your rights with two steps: (1) copyright the software, and (2) offer you this license which gives you legal permission to copy, distribute and/or modify the software."
Yes, that is what it says. The first step is to copyright the software. That's what the GPL is built on, you befuddled and/or hypocritical SCOfolk, on copyright law. Later, in the GPL exhibit, it adds:
". . . each file should have at least the 'copyright' line and a pointer to where the full notice is found."
Then it gives an example:
"one line to give the program's name and an idea of what it does. Copyright yyyy name of author"
I hope this judge reads exhibits. If she does, she surely will not miss that, even if SCO's "GPL Expert" Heise did.
Do they think they can fool the judge with this argument? Unless she is a lot stupider than I am, I'd say that is unlikely. And by the way, Judge Robinson is far from stupid.
I have to say that predicting court cases is risky business. And it's certainly true that judges do try to consolidate two cases for the sake of judicial economy. But if the judge grants SCO's Motion to Dismiss or sends this case to Utah or grants a stay, I'll be more than surprised.
But I don't expect that to happen. For one thing, SCO didn't ask for the judge to send them to Utah or for a stay until after Red Hat had already responded. Now it throws in the idea, but not by means of a motion, and as a result Red Hat has no opportunity to respond. The odds of SCO getting a yes on either request on this document seem extremely slim, therefore. Unfortunately, SCO has already told us that they won't take no for an answer and will file yet another motion as soon as this one is denied, if it is. I don't know how long it'll take for the judge to get sick of SCO's delaying tactics or to recognize them for what they are or even if she will. But she should. I hope it won't take long and that she'll give them short shrift, but there are no guarantees in a courtroom. I do have an opinion, however, on the merits of this document. I was decidedly underwhelmed. And I hope Judge Robinson feels the same. We should know in about a month.