Q&A: SCO Group CEO Darl McBride

Through a series of corporate buyouts over the past 10 years or so, SCO Group (formerly called Caldera International) found itself owning the legal rights to the original development work done on UNIX during the 1970s and 1980s by Bell Labs, the research group that first developed the software.

Since the Linux operating system is based on UNIX, Lindon, Utah-based SCO has now launched legal
against Linux users saying some of its rights are being
violated. The charges stem from SCO’s contract
with IBM . And while SCO has maintained its position, Linux proponents say volunteers that can freely download the code develop the open source software.

CEO Darl McBride says free downloads do not mean that the code itself is free and that the notion of a free lunch when it comes to Linux is an idea that is going the way of the Dodo bird. McBride said his company is currently negotiating with some 15,000 different companies around the world desperately trying to collect the money it’s owed.

Internetnews.com sat down with McBride before his keynote at the inaugural cdXpo show in Las Vegas. The show is produced by Jupitermedia, and parent company of this Web site.

Q: Much has been said about your position on the UNIX code. Does it have that much value?

SCO owns the underlying core source code that feeds all the major versions of UNIX around the world. The thing that has been interesting and hard for people to put their arms around
is the notion that we are just a little company with revenues less than $100
million, and how could we be in such a dominant control position for what is
a $21 billion UNIX marketplace. It’s like you own the Ark of the Covenant of
the computer industry — it’s just there — and people can’t take that away
from us. We started a year ago saying that we are going to enforce our
intellectual property. We next found immediate violations with respect to
contracts that we have with UNIX vendors primarily in this case IBM.

found that those contract violations were tainting Linux. As we got in the middle of the Linux code base, we found numerous copyright violations independent of IBM’s problems with Linux. Ever since we came out with that announcement it’s been a real firestorm of controversy.

In spite of this being controversial, it doesn’t change the fact that our ownership rights on UNIX are rock solid. It doesn’t change the fact that we have copyright violations that we can point to in Linux. In fact, I would argue that the strength of our case is what has created such a firestorm and controversy.

Q: You and executive vice president Chris Sontag have repeatedly said you are trying to work through issues to achieve justice without putting “a hole in the head of the penguin.” How do you want people to respond to that given that you have suspended your own Linux distribution and your partnership with UnitedLinux?

When you look at the GPL [general public license], it says that when you have a copyright violation, you either have to strip the copyright and take that work out of Linux — or — you have to shut Linux down. The nature of the violations to our IP we found are in such a broad nature that it would be virtually impossible to strip it out. And so now you are looking at the prospect of shutting down Linux or paying SCO a royalty.

Either one makes it very difficult considering how Linux is set up. We have shut down our own distribution of Linux pending trying to get this issue resolved.

Q: This past summer, SCO was contacted by the leadership of the Linux community to provide an opportunity to settle the issue. SCO was offered the opportunity to present its case and in doing so, any of its IP that was present in Linux source would then be removed and protected.
You would think SCO would want to jump at this opportunity, but you turned
down this “Gift Horse”. Why?

It wasn’t a peace offering as much as it was a “Show us what you’ve got”
session. The thing about it is we have shown code. The Linux leadership has
come out and said that the code was not supposed to be in Linux and they
have since removed it. They have said Linux 2.4 and previous versions are
tainted with this code. They have said that in the future versions that this
will not be there. When you say that but you don’t do anything to address
the underlying issues, which people are copying the 2.4 kernel and shipping
it around. We are still seeing copyright violations being committed and the
damage is still occurring on a daily basis, yet the other side said, “What
is the problem? Look, we took it out of the future versions.”

We showed over a million lines of code and where it has existed. [Linux
creator] Linus Torvalds has told me that the Linux kernel has around 5
million lines of code. This derivative code accounts for 20 percent of the
Linux code base.

Q: Talk about your methodology moving from an IP provider to an IP
licensing company. What lessons can be learned here?

The significant lesson learned here is that intellectual property does
matter. This country was built on a basis of capitalism and coming up with
some idea to protect it through patents, copyrights, trademarks, all kinds
of legal mechanisms. And that is what we are doing here. We are protecting
what is rightfully ours that we’ve paid hundreds of millions of dollars for
over the years. And I think this is sending a very strong message to the
world that, capitalism is alive. The ability to protect your property is
still solid and we think this important going forward.

The question is: the GPL going to reign supreme? Are copyrights going to
be destroyed? Is the whole world going to turn into a free software
environment? Or is it going to be the traditional software licensing model
continuing of protecting your IP – Being able to profit from that and then
upon generating profits gong off and doing new innovations and new
technologies. We think the latter is going to come out in then. The reason
this is such a big issue in the marketplace is that SCO is at the center
point of the argument. Whichever SCO goes on this, that side is going to
build itself up a seriously amount of momentum.

We think the GPL is not going to make it. We think that it is so
unfriendly to businesses. Companies are worried about protecting their own
intellectual property assets.

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