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Red Hat Sues SCO, Sets Up Legal Fund 787

Posted by simoniker
from the the-saga-continues dept.
An anonymous reader writes "Red Hat has released a PR Newswire article stating that it intends to sue SCO Group to prove that it doesn't infringe any of SCO's intellectual property regarding the Red Hat Linux platform, and to hold it accountable for its actions and smear campaign. They've also announced the creation of a legal fund, to which they've pledged $1M US dollars to fight complaints such as these, called the 'Open Source Now' fund."
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Red Hat Sues SCO, Sets Up Legal Fund

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  • by mao che minh (611166) * on Monday August 04, 2003 @03:11PM (#6608440) Journal
    Awesome. Maybe after the trial Red Hat and SCO can rub both of their one-dollar bills together and split on a Big Mac.

    I'm sorry, but IBM (the company that has made billions in revenue off GNU/Linux) should be floating the bill. Red Hat is too poor to be getting into a legal slug fest with a company that has literally transformed themselves into a litigation firm. IBM has the money to fight, while Red Hat might end up getting dragged through the proverbial legal-mud, and never really get anywhere.

    What might serve Red Hat better is to send their customers information regarding how absurd SCOs claims are, complete with the opinions of legal experts on the matter, like the OSDLs terrific "position paper" [slashdot.org]. The people, especially those in the corporate world, have to be clearly shown how absurd and evil SCOs actions have been. Litigation by a small company is going to be long, expensive, and perhaps in the end fruitless.

    Regarding the OSDL's paper, I personally like the analogy made concerning publishing houses:

    Imagine the literary equivalent of SCO's current bluster:
    Publishing house A alleges that the bestselling novel by Author X topping the charts from Publisher B plagiarizes its own more obscure novel by Author Y. "But," the chairman of Publisher A announces at a news conference, "we're not suing Author X or Publisher B; we're only suing all the people who bought X's book. They have to pay us for a license to read the book immediately, or we'll come after them." That doesn't happen, because that's not the law.

    • by SpaceLifeForm (228190) on Monday August 04, 2003 @03:16PM (#6608498)
      While I agree that it should be IBM doing this, it actually may be better in the long run that it is *not* IBM as it keeps the legal arguments cleaner this way.
      • by cshark (673578) on Monday August 04, 2003 @03:24PM (#6608582)
        Here's an interesting thought:

        If SCO is being "guided" by Microsoft, perhaps Red Hat is being "guided" by IBM. It would be essentially the same tactic, and would ultimately fit IBM's interests, and those of the open source community.

        Something like this really puts the burden of proof on SCO, and decide the validity of an IP suit once and for all. I applaud it, whoever is pulling the strings...
        • by isomeme (177414) <cdberry@gmail.com> on Monday August 04, 2003 @03:50PM (#6608859) Homepage Journal
          Brings to mind an interesting analogy:

          IBM = USA
          Microsoft = USSR
          Red Hat = South Viet Nam
          SCO = North Viet Nam

          Doesn't bode well for anybody concerned...
          • by isomeme (177414) <cdberry@gmail.com> on Monday August 04, 2003 @04:00PM (#6608929) Homepage Journal
            Wow, guess I touched a nerve with that one...overrated *and* offtopic, for a simple analogy? Seemed a reasonable one to me, too. Ah, well, the collective wisdom (cough) has spoken. :)

          • IBM = USA
            Microsoft = USSR
            Red Hat = South Viet Nam
            SCO = North Viet Nam

            Nah, man, you've got it all backwards. Microsoft is the perfect icon for capitalist greed, whereas those pinko commie bastards over at IBM are just *giving* away the software.
            • by Anonymous Coward on Monday August 04, 2003 @04:13PM (#6609076)
              Rubbish. Microsoft relies on the government-granted monopoly of copyright (and lately patent). Microsoft represents levels of control over information dissemination that Stalin could only dream of via DRM. Microsoft is fundamentally anticapitalist, and represents a 45-billion dollar black hole sucking in capital from companies that might have otherwise produced something physical and useful.
              • by MrResistor (120588) <peterahoff@noSPAm.gmail.com> on Monday August 04, 2003 @06:23PM (#6610204) Homepage
                Microsoft is fundamentally anticapitalist

                I'm not sure I would say that. Anti Free Market, sure, but not anticapitalist. In many ways I would say Microsoft is the pinnacle of capitalism.

                Funny how capitalism and communism in their purest forms are basically indistinguishable...

          • by Artifex (18308) on Monday August 04, 2003 @06:40PM (#6610321) Journal
            SCO = North Viet Nam


            SCO is more like North Korea, right down to the leaders making insane claims. North Korea wants to force a treaty and aid and they've threatened to consider it an act of war if the U.S. brings the matter into the UN, or pretty much says anything at all publicly, etc. Not too much different from SCO also wanting to force a payoff, and threatening to sue NDA-breakers, while also not making any openly-substantiated claims of injury.

            Of course, the difference is, North Korea can field a real threat, while we can assume that there are no critical defense or civilian systems that SCO dares screw with intentionally, and won't be affected even accidentally if SCO implodes, since its market share of enterprise and other markets was very small even before this lawswuit business began.
        • by robslimo (587196) on Monday August 04, 2003 @04:05PM (#6608979) Homepage Journal
          Nah. At the risk of taking a too cynical view, I think Red Hat may have observed the recent spikes in SCO's stock price and decided to do a little pumping themselves. Maybe they figure if the idiot investors of the world thought SCO's stock should be more valuable because they made waves with their lawsuit and general FUD, that Red Hat could appeal to the Linux loyalists and maybe the other half of the idiot investors and do a little pumping of their own.

        • by Lord_Dweomer (648696) on Monday August 04, 2003 @04:22PM (#6609180) Homepage
          Wonderful....

          M$: "SCO, I choose YOU!!!"

          IBM: "Go Redhat!!!"

          Both corporations throw pokeballs into the ring and out pops Daryl and whoever from Redhat. They toss various legal accusations around and defend with evidence. Finally, as SCO looks about beaten, and looks back at Billy Gates to call him back into the pokeball, he notices Gates walking away whistling like he was never a part of it.

      • by Creep73 (647258) on Monday August 04, 2003 @04:46PM (#6609390) Journal
        1. If the Red Hat vs. SCO goes to trial before SCO vs. IBM SCO will need to substantiate their claims earlier then they would have wanted giving IBM prep time.

        2. Red Hat may or may not be big enough to fight SCO however SCO will burn through money fighting them. This could be the first of several lawsuits brought against SCO because of its recent tactics.

        3. SCO is trying to convince Linux users to purchase Unix licenses to protect themselves from lawsuits. This type of blackmail should not be tolerated and could end up hurting companies like Red Hat. It would stand to reason that Red Hat would wish to protect their customers and this lawsuit should create confidence within the Linux market. (Something people have been worried about)

        I applaud Red Hat.
    • by Amiga Trombone (592952) on Monday August 04, 2003 @03:19PM (#6608519)
      I'm sorry, but IBM (the company that has made billions in revenue off GNU/Linux) should be floating the bill. Red Hat is too poor to be getting into a legal slug fest with a company that has literally transformed themselves into a litigation firm. IBM has the money to fight, while Red Hat might end up getting dragged through the proverbial legal-mud, and never really get anywhere.

      Red Hat is a preferred Linux provider to IBM, in fact they support all of 4 of IBM's platforms. They have a pretty tight partnership.

      What's good for IBM's bottom line is good for Red Hat's bottom line. Ultimately, IBM will be footing the bill. One way or the other.
      • by mortonda (5175) on Monday August 04, 2003 @03:36PM (#6608716)
        I think it also works well to let Red Hat be the barking dog to distract them while IBM prepares the death blow. :)
      • by gregmac (629064) on Monday August 04, 2003 @03:49PM (#6608845) Homepage
        Ultimately, IBM will be footing the bill. One way or the other.

        Actually, SCO's stockholders will likely be the ones to foot the bill. SCO has been doing nothing but spreading FUD about linux, directly to many of Red Hat's customers. They haven't proven anything yet (ie: won the court case), so how can they possibly tell customers they have to buy licences from SCO or face a lawsuit?

        IANAL, but I would think that regardless of whether or not SCO wins their case against IBM, they did damage to Red Hat's reputation (as well as Linux as a whole). If they were to win, then yeah, fine, they could send their letters. But they've put the decision in the hands of the legal system.

        SCO needs to learn you can't have your cake and eat it too.

    • by Black Parrot (19622) on Monday August 04, 2003 @03:20PM (#6608538)


      > I'm sorry, but IBM (the company that has made billions in revenue off GNU/Linux) should be floating the bill.

      I agree to an extent, but from another POV it's Red Hat rather than IBM that has most to lose. A goofball ruling might have IBM handing over a few Bills, but Red Hat would go out of business altogether.

      • by Stephen Samuel (106962) <samuel.bcgreen@com> on Monday August 04, 2003 @04:35PM (#6609298) Homepage Journal
        A goofball ruling might have IBM handing over a few Bills, but Red Hat would go out of business altogether.

        There's a second reason for RedHat to file it's own case against SCO: The SCO/IBM lawsuit is a complicated case that could go on for years. SCO could bury Linux under an avalanche of FUD by then. On the other hand, a lawsuit for declaratory relief could go much faster. In a realatively simple case, RH could simply say:

        • They've been selling code under the GPL,
        • They were clearly aware the code they're claiming ownership of as of their filings against IBM,
        • They were still selling the code as of that date
        • SCO is willfully frustrating the GPL community's ability to determine which code is supposedly SCO's -- and their CEO has stated that this is because he is afraid that the Linux community would excise such code.
        • These are the terms of the GPL
        • We request a declaration that all of the code distributed by SCO as of that date be declared licensed consistent with the GPL.

        The nice thing about this is that -- especially if it avoids any contentious facts, it could be ammenable to a summary finding in a few mnths rather than waiting a generation or two for the IBM suit to wind it's way through the courts.

        A declaration of GPLization of the code would pretty much absolve Red Hat of any claim by SCO. It might also leave SCO open to suits by Copyright owners of Linux that SCO has been in violation of the GPL by threatening users of that same code P>With a declaration that Linux is 'clean' visa-vis SCO, those secondary suits can afford to take the more leisurely pace that more commonly follow.

    • Indeed (Score:5, Insightful)

      by Faust7 (314817) on Monday August 04, 2003 @03:22PM (#6608551) Homepage
      The people, especially those in the corporate world, have to be clearly shown how absurd and evil SCOs actions have been.

      I almost think that not enough emphasis is being placed on this point. SCO should have notified of their intent to sue way, way, beforehand. What they did instead was basically say "Here's your month, and tell us how you're using Linux in each and every aspect of your company, and also pay us these fines." Sorry, can't do that. From a court's perspective, their claim of plagiarism may or may not be valid -- their method for going about this is definitely invalid.
    • I'm sorry, but IBM (the company that has made billions in revenue off GNU/Linux) should be floating the bill.

      Yeah, they shouldn't have to pay it, but remember they are also threatened by SCO, we all are. IBM might not have trouble staying afloat if SCO wins, but what about the other smaller companies like Redhat?

      I think they are playing things smart, by not only protecting their company but saving them money too!
    • Sure they are (Score:5, Informative)

      by missing000 (602285) on Monday August 04, 2003 @03:24PM (#6608575)
      Yahoo Finance reports that Red Hat [yahoo.com] has a market cap of 1.159 Billion, while SCO [yahoo.com] only has a 151.9 Million market cap.

      While market capitalization does not tell the whole story, it does show that Red Hat is a much more financially powerful company.

      With that and the fact that they almost certainly have a rock solid case, the fact is they should sue the shit out of SCO.
      • Re:Sure they are (Score:5, Interesting)

        by EvilTwinSkippy (112490) <yoda&etoyoc,com> on Monday August 04, 2003 @03:35PM (#6608711) Homepage Journal
        And to think people chide me for using Linux because I can't get support from a "real company."
      • Re:Sure they are (Score:5, Insightful)

        by Mr Bill (21249) on Monday August 04, 2003 @03:42PM (#6608783)
        It's interesting to see that we look at the amount of money a company has in order to figure out who is most likely to come out on top when it comes to litigation.
        • Re:Sure they are (Score:5, Insightful)

          by missing000 (602285) on Monday August 04, 2003 @04:01PM (#6608932)
          True, but it is a simple equation I'm afraid.

          The larger company, the better lawyers it can afford and the longer it can keep up an expensive legal battle.

          It may not be fair, but it is the way the legal system works.

          It's the golden rule. He who has the gold makes the rules.
          What an unfortunate side effect of corporations legislated as humans.
      • Re:Sure they are (Score:5, Interesting)

        by Su||uSt (151462) on Monday August 04, 2003 @03:58PM (#6608910) Homepage Journal
        Interesting, these are the market cap's for the various comapnies involved:

        SCOX: 146.2M link [yahoo.com]

        Red Hat: 1.142B link [yahoo.com]

        Novel: 1.337B link [yahoo.com]
        IBM: 139.9B link [yahoo.com]

        I find it kind of funny that those numbers are really close except RedHat/Novel have ten times the market cap SCO does and IBM has 100 times the market cap RedHat/Novel do. This isn't supposed to be important, just thought it odd that these numbers are almost exact multiples of each other.
      • Re:Sure they are (Score:5, Insightful)

        by geekee (591277) on Monday August 04, 2003 @04:08PM (#6609013)
        "With that and the fact that they almost certainly have a rock solid case, the fact is they should sue the shit out of SCO."

        Actually, they probably have no idea whether or not SCO has a case. This move is good, however, because it forces SCO to show their cards, like calling someone in poker to see if he's bluffing.
    • by Anonymous Coward on Monday August 04, 2003 @03:33PM (#6608694)
      The uncertainty around Linux is hurting RedHat now. This isn't necessarily a billion dollar lawsuit. They are basically just saying "put up or shut up". Maybe IBM will contribute to the fund. IBM is fighting its own lawsuit. Remember, IBM doesn't sell their own Linux, they package other RedHat and SUSE. Nobody should want IBM to open up its big bag-o-patents as this is somewhat of a Pandora's box.

      The important thing is that RedHat is trying to force SCO's hand rather than just waiting for SCO to start suing it or its customers. If there is infringing code, hopefully SCO will have to say what it is.
    • by CleverFox (85783) on Monday August 04, 2003 @03:40PM (#6608762)
      It is not about winning. It is about preserving image. SCO's image was automatically weakened by this lawsuit and RHAT's strengthened. I don't believe they will have to spend much money on this. Already, SCO's stock has dropped 16% today after RHAT's lawsuit announcement. That is a good thing.
    • by rve (4436) on Monday August 04, 2003 @03:48PM (#6608836)
      IBM is no more philantropical or free software friendly than SCO. They have only been promoting open standards (very) recently to cut costs. For them Linux is not a philosophy, but just an open standard, that is conveniently not under control of a competititor, and by investing in it, they probably have more control over it than any other company.

      In the long run they probably reckon that surrendering some of their IP to linux is cheaper than continuing to develop and support 3 different operating systems/platforms for essentially the same hardware.

      In short: IBM will float the bill only if it is in their own interest.

      p.s. IBM pay my rent. They are ace. I love IBM. \0/
      • by Pharmboy (216950) on Monday August 04, 2003 @05:36PM (#6609825) Journal
        In short: IBM will float the bill only if it is in their own interest.

        p.s. IBM pay my rent. They are ace. I love IBM. \0/


        I can't necessarily argue with your point, but I do remember the old joke "how do you make a penguin fly?" with the picture of a penguin (with the word "linux" on it) duct taped to a giant air plane (with the letters "IBM" on it)...

        Back when I first started messing with linux (redhat 4.2 days) it seems the best support for linux WAS IBM. I could be wrong, but either IBM was releasing enough info to write drivers or drivers, or all the hackers were using IBM servers. My experience was I could easily install an IBM box, but not so easy for other servers (think 5.2, 6.2 mainly) without patches.

        Also, I have only had to call IBM twice for parts for their boxes. Both times they were cheap boxes, and needed parts out of warranty. Both times they sent them free, including postage. Maybe it was in their interest somehow, I don't know, I wasn't anyone on their radar at all. But I still have several of their servers NOW, and can't wait for 4x 970cpu boxes to come out. First because they treated a guy with a crappy 386/ps1 pretty nice. Second, every IBM I ever owned, workstation or server installed linux really nice and easy. Third, they embraced Linux with more than words (to the tune of $1billion). And they have done a few other things, like contribute code to the GPL, which is more than any other company I have seen. (Compaq? HP? Sun? Dell?) Perhaps the anti-trust background and lawsuits of IBM's past made them wake up, and turn into a responsible company. I also like the fact that they make damn good equipment. (still drooling over 970s)

        Yes, they are another company out to make a buck, but my experience has shown they made it with ME by holding my hand, rather than walking on my back.
        • by swillden (191260) * <shawn-ds@willden.org> on Monday August 04, 2003 @10:40PM (#6612104) Homepage Journal

          Perhaps the anti-trust background and lawsuits of IBM's past made them wake up, and turn into a responsible company.

          I don't know if "responsible" is necessarily the right word, but it's definitely true that IBM's anti-trust problems of 20+ years ago have had a major impact on the company's corporate culture -- and the effect was a very good one.

          Everyone knows that if you want to be around for the long haul, what you need isn't just business, but *repeat* business. Find a way to hang onto the customers you have, and then focus on getting new ones. The obvious way to do this in the computer industry is with vendor lock-in, but IBM went down that road and found a world of hurt at the end of it. Since IBM was pretty much barred from playing the lock-in game, the company was forced to push open standards. In the process, IBM discovered that when you've got good technology, open standards and head to head competition can be very profitable.

          Then IBM realized that its size and stature in the industry meant that it was possible for customers to buy IBM consulting and services even when they were buying competitors product, *and* that doing services not only gave IBM an entre to more easily sell its products, but also provided great insight into what it was that customers needed. Those realizations only came about because of the newfound understanding of the value of openness, but they really reinforced that understanding, because if you want to sell technology services, you have to be seen as somewhat technology agnostic, with a real do-what's-best-for-the-client attitude -- though everyone understands that, all else being close to equal, the IBM people will recommend a Blue solution. And customers are cool with that.

          And that was IBM's big discovery: By being the vendor-agnostic integrator, you can give your own products a significant edge, and as long as you do good work, the clients will be perfectly happy with it. As long as they don't feel locked-in, customers *like* the security of a single technology provider, and no one else can play that game like IBM.

          Linux, apache, etc., play right into this, because IBM can be "neutral" without giving business to competitors. IBM's consultants can push clients toward Linux-based solutions -- and OSS is clearly as open and non locked-in as you can get, right? -- while simultaneously building some great hardware that runs it better than anyone else's (z-series, anyone?), plus lots of great software to keep pushing the hardware requirements. And they make money on the hardware, and the software, and the services professionals that are quietly painting the entire I/T infrastructure Blue.

          So, I wouldn't call it corporate "responsibility", exactly, but there's definitely an understanding in IBM that openness can be used as leverage to fend off the competitors while the company uses its massive resources to get and keep customers, and that this is ultimately a much more profitable and sustainable approach than trying to lock customers in, which just makes them want to escape.

    • by Picass0 (147474) on Monday August 04, 2003 @03:49PM (#6608847) Homepage Journal
      RedHat has to be in this fight.

      RedHat speaks, lives, and breathes GNU. They understand the real issues at steak in this fight, while the team of lawyers at IBM are looking at the cost benefits of fighting vs. settling.

      If SCO wins it's a disruption (big but not fatal) for IBM. It's a death nell for RedHat.

      IBM may have the deep pockets, but if the ruling went against Big Blue they could always resort to options that leave Linux hanging in the wind. IBM has the resources to build a new operating system from scratch if need be.

      And then there's the culture of OSS developers to consider. If RedHat doesn't throw down at some point, they will never be forgiven be the likes of the average /.er. RedHat is the flag bearer for Linux right now. That can change if the Linux culture turns against it. If RedHat does not defend Linux, people will remember that fact for a long time.

    • by MuParadigm (687680) <jgabriel66@yahoo.com> on Monday August 04, 2003 @08:10PM (#6611022) Homepage Journal

      "SCO did not respond to Red Hat's letter {requesting that SCO explain the bases for its allegations regarding Linux}, except to make a telephone call seeking to have Red Hat pay for an unneeded UNIX license."

      Darl: Hi, is Matt around?

      Operator: Matt who?

      Darl: Umm, I'm not real sure how to pronounce it... Matt, uh, SSS-Zulick?

      Operator: Hold on...

      (telephone ringing)

      Darl: Chris, can you believe these fuckers are suing us?

      Chris Sontag: Well, you know, once we get into court and show them what we showed the analysts under DNA-

      Darl: Chris, you're an idiot. Shut up.

      Female Voice: Hello, you've reached the office of Matthew Szulick. How can I help you?

      Darl: Uh, yeah, is Matt in?

      Matt's Admin. Asst.: I'm not sure. I can check for you. May I ask who's calling?

      Darl: Yeah, this is, uh, Darl McBride. From SCO?

      Admin: Please hold.

      (Muzak)

      Darl: Chris, I'm gonna put this on speaker for a moment.

      (pause)

      Isn't that the IBM corporate song?

      Chris: No... I don't think so. It's "Raindrops Keep Falling On My Head", isn't it?

      Male Voice: Matt here.

      Darl: (fumbles with speakerphone switch) Hey, Matt, how are you? It's Darl McBride here, from SCO.

      Matt: Yeah, Darl, what do you want?

      Darl: Look we got your letter here...

      Matt: Uh huh

      Darl: ... and, uh, I was wondering if we could settle this between us.

      Matt: What did you have in mind?

      Darl: Well, I've got this Unix license I could sell you real cheap, just between friends, I mean, hey, we're both CEO's here...

      (click)

      Darl: Matt? Matt, are you still there?

  • Story on ZDNet too (Score:5, Informative)

    by buzzdecafe (583889) on Monday August 04, 2003 @03:12PM (#6608449)
    This story is here as well:
    Red Hat files suit against SCO [com.com]
    • by bigjocker (113512) * on Monday August 04, 2003 @03:35PM (#6608713) Homepage
      From the ZDNET article:

      "We have asked the courts to declare no violation of intellectual property and trade secrets have occurred," Szulik said. "We've been patient, we've listened, but when our customers and the whole open-source community are threatened with innuendo and rumor, it's time to act."

      They can count on all the money I can spare. We have waited for a long time for a Legal Fund to be formed and here is it, let's put our wallets where our mouth is and start helping our side with the real tool that can deliver this FUDfest to an end (in the end the truth or justice will not be the fundamental matter to settle this): money.
  • Irony (Score:4, Funny)

    by InfinityWpi (175421) on Monday August 04, 2003 @03:13PM (#6608464)
    That million-dollar pledge? Will be used to pay the bandwidth costs for this Slashdotting.
  • by bloggins02 (468782) on Monday August 04, 2003 @03:13PM (#6608465)
    Does this help RedHat's customers? I mean, SCO can't really do anything to RedHat's customers while they are involved in a lawsuit with RedHat themselves?

    Or can they? I honestly don't know...

    • by Pieroxy (222434) on Monday August 04, 2003 @03:19PM (#6608516) Homepage
      The FUD can do a lot and convince customers to stay away from Linux (and therefore, RH). They are suing SCO to prove that they cannot sue their customers, and then to get big bucks from SCO on all the customers they have potentially lost because of the FUD.

      Since SCO claims that Linux stole them $1b, I guess RH can sue SCO for $1b too, it seems just fair.
      • by Anonymous Coward on Monday August 04, 2003 @03:28PM (#6608630)
        For a SWEET Publicity idea for SCO.

        They and Metallica should get together an throw a "free benefit concert" for promoting "fair protections for intellectual property." They could send out mailers to their dwindelling fanbase, and invite critics to come too. And then just when the show is about to start Darl McBride and Lars could get in their matching gold plated limos and start running over the assembled crowd.
    • by Arker (91948) on Monday August 04, 2003 @04:02PM (#6608937) Homepage

      Does this help RedHat's customers?

      Not really, because they were never in any danger to start with.

      But psychologically it's bound to be a big help. That's what they're suing over, essentially... the psychological damage SCO is trying to do by flinging around wild accusations that they can't back up, but which scare the bejeezus out of the PHBs that buy Redhat.

  • CNET article (Score:3, Informative)

    by davezirk (675803) on Monday August 04, 2003 @03:13PM (#6608469)
    CNET article about the suit: http://news.com.com/2100-1016_3-5059547.html
  • by blitzoid (618964) on Monday August 04, 2003 @03:15PM (#6608480) Homepage
    I love linux. I use it on my desktop. I use it on servers. I use it everywhere. And the stuff that SCO is claiming is simply mud slinging. I think it's safe to say that the very fact that they refuse to show their proof shows us that their claims are feeble at best.

    In any case, it was only a matter of time before companies like Red Hat started to act against SCO, not relying on IBM to do all the work. I wouldn't be suprised of SuSE and other major Linux companies started their own lawsuits.
  • by Papineau (527159) on Monday August 04, 2003 @03:15PM (#6608482) Homepage

    As seen on Yahoo Finance [yahoo.com]. Time to buy? :)

  • Heh.. (Score:4, Interesting)

    by Schezar (249629) on Monday August 04, 2003 @03:16PM (#6608496) Homepage Journal
    I would wager RedHat could claim damages to their business reputation for all that SCO has claimed. SCO is trying to scare people away from Linux (and into their license-fee income stream), but if they lose the IBM suit, their statements could be considered libel/slander.

    Also, I take this as a good sign that SCO has no chance to survive. The RedHat folk aren't stupid: they wouldn't enter this fray unless they were reasonably sure of success.

  • by kenp2002 (545495) on Monday August 04, 2003 @03:16PM (#6608497) Homepage Journal
    Went out and bought anoter copy of Red Hat at lunch and mail Red Hat $10 for the legal fund. If only 5% of slashdot readers followed suit :)
  • by Black Parrot (19622) on Monday August 04, 2003 @03:18PM (#6608507)


    As of now, Yahoo! is showing SCOX at 11.50 [yahoo.com]. It was well over 13 when I checked 4-6 hours ago. I don't recall seeing it below 12.50 since their lastest FUD manoevre a couple of weeks ago.

  • 90 million? (Score:5, Informative)

    by rawshark (603493) on Monday August 04, 2003 @03:19PM (#6608515)
    Red Hat has 90 million in cash and short terms, hardly "poor".

    http://biz.yahoo.com/fin/l/r/rhat_qb.html
  • by EvilTwinSkippy (112490) <yoda&etoyoc,com> on Monday August 04, 2003 @03:20PM (#6608533) Homepage Journal
    I think it's about time someone in the states threw their hat into the ring. (So to speak.) Given how SCO was handed it's hat by the German legal system in the LinuxTag suit, I think RedHat may have a good case.

    But just keep that one under your hat.

  • Article text (Score:4, Informative)

    by Kevin DeGraaf (220791) on Monday August 04, 2003 @03:23PM (#6608563) Homepage
    Red Hat Takes Aim at Infringement Claims
    Complaint launched against SCO claims, Red Hat pledges $1MM to create fund to protect Linux

    SAN FRANCISCO--August 4, 2003--Red Hat, Inc. (Nasdaq:RHAT) today made two significant announcements to protect Red Hat Linux customers and the worldwide Linux industry. First, Red Hat announced that it filed a formal complaint against The SCO Group, Inc. (Nasdaq: SCOX, "SCO"). The purpose of this complaint is to demonstrate that Red Hat's technologies do not infringe any intellectual property of SCO and to hold SCO accountable for its unfair and deceptive actions.

    "We filed this complaint to stop SCO from making unsubstantiated and untrue public statements attacking Red Hat Linux and the integrity of the Open Source software development process," said Mark Webbink, General Counsel at Red Hat. "Red Hat is confident that its current and future customers will continue to realize the significant value that our Red Hat Linux platform provides without interruption."

    To further protect the integrity of Open Source software and the Open Source community, Red Hat has established the Open Source Now Fund. The purpose of the fund will be to cover legal expenses associated with infringement claims brought against companies developing software under the GPL license and non-profit organizations supporting the efforts of companies developing software under a GPL license. Red Hat has pledged one million dollars to be provided as funding in this initiative. For more information please e-mail opensourcenow@redhat.com.

    "The collaborative process of Open Source software development which created the Linux operating system has been unjustly questioned and threatened," said Matthew Szulik, Chairman and CEO of Red Hat. "In its role as industry leader, Red Hat has a responsibility to ensure the legal rights of users are protected."

    About Red Hat, Inc.
    Red Hat is the world's premier open source and Linux provider. Red Hat is headquartered in Raleigh, N.C. and has offices worldwide. Its European headquarters is based in Surrey, UK, with offices throughout Europe. Please visit Red Hat on the Web at www.redhat.com.

    Forward-Looking Statements
    Forward-looking statements in this press release are made pursuant to the safe harbor provisions of Section 21E ofRed Hat Takes Aim at Infringement Claims
    Complaint launched against SCO claims, Red Hat pledges $1MM to create fund to protect Linux

    SAN FRANCISCO--August 4, 2003--Red Hat, Inc. (Nasdaq:RHAT) today made two significant announcements to protect Red Hat Linux customers and the worldwide Linux industry. First, Red Hat announced that it filed a formal complaint against The SCO Group, Inc. (Nasdaq: SCOX, "SCO"). The purpose of this complaint is to demonstrate that Red Hat's technologies do not infringe any intellectual property of SCO and to hold SCO accountable for its unfair and deceptive actions.

    "We filed this complaint to stop SCO from making unsubstantiated and untrue public statements attacking Red Hat Linux and the integrity of the Open Source software development process," said Mark Webbink, General Counsel at Red Hat. "Red Hat is confident that its current and future customers will continue to realize the significant value that our Red Hat Linux platform provides without interruption."

    To further protect the integrity of Open Source software and the Open Source community, Red Hat has established the Open Source Now Fund. The purpose of the fund will be to cover legal expenses associated with infringement claims brought against companies developing software under the GPL license and non-profit organizations supporting the efforts of companies developing software under a GPL license. Red Hat has pledged one million dollars to be provided as funding in this initiative. For more information please e-mail opensourcenow@redhat.com.

    "The collaborative process of Open Source software development which created the Linux operating system has been unjustly questioned and threatened,"
  • by David Hume (200499) on Monday August 04, 2003 @03:23PM (#6608573) Homepage

    They've also announced the creation of a legal fund, to which they've pledged $1M US dollars to fight complaints such as these, called the 'Open Source Now' fund."


    If wonder whether the OSNF (Open Source Now Fund) is a non-profit 501(c)(3) corporation? Should it be? If so, should Red Hat's contributions to it be tax deductible? While others will benefit from the fund, so of course will Red Hat.

    Also, who will be administering the OSNF? Will they work for or be connected to Red Hat? Who will make the decisions regarding the disbursement of funds, etc.?

  • by dcypher_67 (674764) on Monday August 04, 2003 @03:23PM (#6608574)
    They've thrown their HAT in the ring?
    Sorry, had to say it.
  • by Tsu Dho Nimh (663417) <`abacaxi' `at' `hotmail.com'> on Monday August 04, 2003 @03:25PM (#6608596)
    Red Hat filed the complaint in the U.S. District Court of Delaware. The seven-count suit seeks, among other things, a declaratory judgment that Red Hat has not violated SCO's copyrights or trade secrets, Red Hat CEO Matthew Szulik said at a news conference here on Monday.

    This is a SEPARATE issue from the "Open Source Now Fund". I havne't found a copy of the filing, but making unsubstantiated and untrue public statements about your competitors is a serious buiness law violation.

  • by tekrat (242117) on Monday August 04, 2003 @03:25PM (#6608599) Homepage Journal
    Does anybody else see this coming? Just as MS is secretly behind SCO, it's going to become clear that IBM is behind Red Hat. So, if I might make the Babylon 5 analogy...

    The Shadows are Microsoft and IBM are the Vorlons, while the Centauri are SCO and the Alliance is Red Hat...

    Each "First One" is trying to win their side of the war using the smaller races as the pawns in their larger game.

    Don't fall for it Red Hat, you're just doing what they want you to do! You got to choose to stand on your own and kick MS and IBM directly.

    Although, wouldn't it be great if the CEO of Red Hat shows up with a space ship and a 50megaton Nuke to blow a hole in Z'hadum (Redmond WA.)...

  • by Otter (3800) on Monday August 04, 2003 @03:26PM (#6608609) Journal
    In the sidebar [yahoo.com]:
    U.S. authorities are looking into charges that top modeling agencies have conspired to cheat their clients by charging inflated commissions and expenses, sources close to the case said on Monday.

    Last month a federal judge granted class action status to a complaint against several modeling agencies, including Elite Model Management and Ford Models Inc.

    The class is expected to be made up of thousands of models. The judge appointed the law firm of Boies, Schiller & Flexner as lead counsel.

    Elite and Ford are both top modeling agencies. Elite models include actress Lara Flynn Boyle as well as Lauren Bush, niece of President Bush. Ford represents supermodels like Christie Brinkley, Jerry Hall, Frederique, and Rachel Hunter.

    The suit, filed in Manhattan federal court, alleges the agencies fixed models' commission rates at 20 percent, twice the 10 percent allowed by state law for employment agencies. The models alleged that the defendants conspired to evade state pricing regulations by calling themselves model management companies.

    Hmmm, can we talk incessantly about this case instead? It certainly sounds like the courtroom scenes will be more eye-pleasing than anything we'll see in Red Hat vs. SCO.

  • Hmmm...Subpoenas (Score:5, Insightful)

    by radulovich (47127) on Monday August 04, 2003 @03:31PM (#6608662) Homepage
    This is quite interesting, and should impact SCO considerably. By initiating this action, Red Hat can enter the "discovery" phase, which will allow the lawyers (and developers?) to see the ALL of the code that SCO says infringes on their intellectual property.

    The end result should be that Red Hat will be able to wipe away the FUD, and get down to the bottom of what SCO really owns. Assuming SCO owns anything, Red Hat can then begin work on removing that code. Also, if Red Hat wins, they will probably get monetary damages, which always helps.

    Go Red Hat!

    (Now I suppose I should actually buy the distro instead of downloading the ISO's...)

    -Mark
  • Open Source Now Fund (Score:5, Interesting)

    by trisweb (690296) on Monday August 04, 2003 @03:32PM (#6608680) Journal

    "To further protect the integrity of Open Source software and the Open Source community, Red Hat has established the Open Source Now Fund. The purpose of the fund will be to cover legal expenses associated with infringement claims brought against companies developing software under the GPL license"

    I think the SCO suit is great for Redhat, but even better for the community is this legal fund. I don't know if it's non-profit, or how it works exactly, but ideally it would (and should) be a fund to help take care of any OSS-movement threatening lawsuits or legal issues. This is something Open Source has never had before, and that large corporations have always had. This may give OSS the support it needs to grow without threats from any company out to stop it -- like SCO. The way they describe it, it seems like something meant to be a "legal department" for Open Source.

    It may just be me, but I think that's the bigger picture here.

  • PayPal address? (Score:4, Interesting)

    by keyslammer (240231) on Monday August 04, 2003 @03:35PM (#6608714) Homepage Journal
    Hopefully they'll set up a PayPal address so individuals can donate to the fund. I could easily see that $1M doubling in no time.
  • by nsuttitinagul (318095) on Monday August 04, 2003 @03:38PM (#6608733) Homepage
    The SCO case has already inspired the ire of the entire Linux community. It's even made Germany make SCO's claim completely null and void within its borders.

    Considering that SCO is not doing well financially, is being countersued by IBM, and is still yet to provide concrete evidence, Red Hat might as well save its resources and stay out of this. Although it most certainly has a stake in the outcome of the argument, it's quite likely that their involvement will not bring about much change.

    That said, I commend Red Hat for doing what they're doing and, at the very least, making explicit the sentiment in Linux community feels for SCO.
  • by crovira (10242) on Monday August 04, 2003 @03:41PM (#6608771) Homepage
    somebody stood up and said "Yea? Well so'z your ol' man."

    The moment somebody didn't roll over and play dead, they were screwed. The whole thing will fall apart with SCO not being able to defend itself against a civil damages counter-suit. The Linux will probably will probably start a class action suit against SCO demanding trade-lost and punitive damages and it may come to criminal proceedings with SCO's CEO finhgting to stay out of "Club Fed."

    Then SCO's share holders will want to hang him by his SCrOtum because SCO's client base will get offers to move over to Linux for free and share price will free-fall.

    Want a prediction? SCO doesn't survive until X-Mass.
  • Go SCOX! (Score:4, Interesting)

    by kenl999 (166189) on Monday August 04, 2003 @03:47PM (#6608834)
    Even better news:

    SCOX [yahoo.com]

    compare the time on the PR notice with the start of the downward spiral...

    plonk!
  • by Clueless_Medic (694869) on Monday August 04, 2003 @04:00PM (#6608930)
    AT: The SCO Group, Inc. Third-Quarter Financial Results Conference Call WHEN: Thursday, August 14, 2003, 9:00 a.m. Mountain Daylight Time. HOW: If you would like to participate in the live call, you may dial 1.800.811.0667 or 1.913.981.4901; Passcode: 452322. You may also join the call in listen-only mode via Web cast. The URL is listed at http://ir.sco.com/medialist.cfm .
  • The actual complaint (Score:5, Informative)

    by mcgroarty (633843) <brian...mcgroarty@@@gmail...com> on Monday August 04, 2003 @04:02PM (#6608952) Homepage
    The actual complaint, not linked from the story, can be found here [lwn.net].
  • by jander (88775) on Monday August 04, 2003 @04:07PM (#6609005) Homepage

    I wonder if the primary purpose of the new fund would be to finance a class action suit by kernel developers against SCO for GPL violations? Think of it - Many individual developers could not afford to bring suit on their own against SCO, but they could if they were part of a class action suit funded by RedHat.

    The wording is kind of vague, but that is what the announcement implies to me.
  • About Time (Score:5, Insightful)

    by ickoonite (639305) on Monday August 04, 2003 @04:14PM (#6609088) Homepage
    It is about time some company/someone did something serious about this. IBM's just standing there, unmovable, almost playing with SCO, whose efforts to attack them are like water off a duck's back. It's a bit like a cat playing with a mouse before it eats it. And after Novell's rather brief and quickly-dismissed effort, we have been left wondering, to an extent...

    And of course, the users who matter, businesses - at least some of them - have been getting scared shitless by the threat of litigation. In these uncertain economic times, who can blame them? Slashdotters may see through SCO's FUD, but we are rather a fringe group in society as a whole, and the average Pointy-Haired just sees "Lawsuit!" and thinks "Run."

    Whether this be IBM-funded or a wholly Red Hat initiated effort (although the former seems far more likely, given the relationship between the two companies), it is much needed. Although the SCO FUD seems to have lessened somewhat in the past few days (I'm using that good ole indicator of Number of Slashdot Stories), the damage has been not inconsiderable.

    And then the Open Source Now Fund - such a wonderful response to Microsoft's undertaking to underwrite any legal costs incurred by their customers as a result of similar disputes. The community was, I think, left reeling somewhat as to this rather clever attack on open source, an attack which exploited its distributed nature of development and limited accountability. Once again, a solution has been found. (I suppose, perhaps, Michael Robertson might have done something otherwise...)

    Let's hope this whole mess is resolved reasonably quickly now. To be frank, questions ought to be asked of a country/legal system where a company can get away with such shocking behaviour for so long, but that, maybe, is for the aftermath...

    iqu :)
  • by GrouchoMarx (153170) on Monday August 04, 2003 @04:19PM (#6609145) Homepage
    Hey, if Apple gets their own section on Slashdot, why not a SCO section? There's more SCO news these days. :-)
  • by ukalum (682310) on Monday August 04, 2003 @04:56PM (#6609479)
    I used to work at FedEx and still have some friends there. One of them told me that FedEx wants to sign a huge contract with Redhat for a bunch of servers, but the FedEx legal department wants Redhat to indemnify FedEx against damages if SCO wins, which of course Redhat refuses to do.

    Consequently, FedEx has been talking to HP about buying the software through them rather than RedHat.

    I'm sure that there are other instances of Redhat's getting hurt by all of the garbage SCO is spewing. I would guess that at least one reason they're doing this is they can't afford to wait any longer for someone else (IBM) to.

  • Why this Matters (Score:5, Insightful)

    by Kismet (13199) <pmccombs@acmMONET.org minus painter> on Monday August 04, 2003 @05:17PM (#6609664) Homepage
    If you look at the competitive space where Linux is growing up, you see two kinds of companies striving for business.

    One kind of company sees the writing on wall. These companies realize what FLOSS is, and have redefined themselves under this new reality. These companies are usually content to compete on a level playing field in this respect. They are all trying to incorporate Linux and Open Source into their business, with various degrees of success. Most companies fit into this group: IBM, Novell, Oracle, SGI, Dell, etc.

    The other kind of company will settle for no less than complete domination of the market on their own terms: Sun and Microsoft. Sun is interesting because it wants to play both sides of the fence, but I gather they would rather NOT share in the Linux goodness with their competitors if they can help it.

    Microsoft will sit and deny that Linux is even viable until they are completely engulfed by it. Witness the Internet.

    These enemies of Linux and Free/Open Source have discovered their anti-Linux efforts to be futile. According to leaked Microsoft documents, smear campaigns were in fact counter-productive. The interesting conclusion was that the best attack on Linux was a legal attack. Apparently Microsoft's market research shows that fear of being sued is the biggest deterrent to Linux deployments.

    So this is their trump card. If they can stir up fear of litigation, they can point at Linux and say, "Look, no indemnification there! Buy us instead." SCO is just a pawn in this gambit - I don't think anyone expects them to survive the play.

    By providing a legal fund to developers of GPL software, Red Hat begins to undermine these tactics used by Microsoft and Sun.

    I like this fund because it appears to benefit the community as a whole and not just Red Hat customers. I sincerely hope that other companies pick up on this idea, and decide to contribute to the fund.

    If anything, this gives us an idea of how we can provide indemnification to Linux users in general. Perhaps a general fund for all Linux _users_ would be appropriate, with the option to purchase a renewable policy against it (from a community run non-profit group). The community could evaluate claims against this "insurance" and assign legal resources to litigate it if needed. At any rate, owning a policy would guarantee a level of financial coverage. Non-policy owners could also get help, depending on circumstances and the merits of their case.

    I see this as a way for the politicaly motivated community members to contribute where they might not be able to give code.
  • by walterbyrd (182728) on Monday August 04, 2003 @05:24PM (#6609725)
    Check out page 2, paragraphs 4 and 5:

    http://lwn.net/images/ns/rh-complaint.pdf
  • IANAL... (Score:5, Funny)

    by AVee (557523) <slashdot@NOspAM.avee.org> on Monday August 04, 2003 @05:41PM (#6609872) Homepage
    ...and that's a pity, because, again, that's the side were the money is made.
  • SCO's response (Score:5, Informative)

    by badasscat (563442) <basscadet75&yahoo,com> on Monday August 04, 2003 @07:58PM (#6610952)
    Forgive me if this is up here somewhere already, but I ran a search through the replies and didn't see it. This is SCO's amusing response, lifted off Yahoo's biz section - I would imagine this would actually be admissible as evidence of some of Red Hat's claims! (Particularly regarding the last two sentences.)

    Matthew J. Szulik
    CEO
    RED HAT, INC.
    1801 Varsity Drive
    Raleigh, NC 27606

    Dear Matthew,

    Attached is the letter I discussed with you during our July 31, 2003 telephone conversation. Instead of actually sending the letter, I thought it was best to telephone you and speak in person to see if we could resolve the issues between our companies short of litigation. We left the conversation with a preliminary agreement to meet and continue our discussions further.

    To my surprise, I just discovered that your company filed legal action against The SCO Group earlier today. You, of course, mentioned nothing of this during our telephone conversation. I am disappointed that you were not more forthcoming about your intentions. I am also disappointed that you have chosen litigation rather than good faith discussions with SCO about the problems inherent in Linux.

    Of course, we will prepare our legal response as required by your complaint. Be advised that our response will likely include counterclaims for copyright infringement and conspiracy.

    I must say that your decision to file legal action does not seem conducive to the long-term survivability of Linux.

    Yours truly

    Darl C. McBride
    President & CEO
  • by MoxFulder (159829) on Monday August 04, 2003 @08:40PM (#6611219) Homepage

    SCO System V for Linux [caldera.com]

    Uh... I just ran into this while browsing SCO's site. It seems to contain more vague threats and accusations, to the tune of "everyone using Unix apps under Linux has pirated SCO's libraries."

    Does anyone know what this is about?

  • by noldrin (635339) on Monday August 04, 2003 @10:08PM (#6611870)
    Kudos to Redhat for doing what the FSF should have already done. Now's the time to give money to Redhat or you may end up giving money to SCO instead. After years of free Linux use, I'm inclined to donate for it's future.

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