[glug-t] Open Letter on Copyrights

Open Letter on Copyrights
From Darl McBride, CEO 

--------------------------------------------------------------------------------
 

December 4, 2003 

An Open Letter: 

Since last March The SCO Group (?SCO?) has been involved in an increasingly 
rancorous legal controversy over violations of our UNIX intellectual property 
contract, and what we assert is the widespread presence of our copyrighted UNIX 
code in Linux. These controversies will rage for at least another 18 months, 
until our original case comes to trial. Meanwhile, the facts SCO has raised 
have become one of the most important and hotly debated technology issues this 
year, and often our positions on these issues have been misunderstood or 
misrepresented. Starting with this letter, I'd like to explain our positions on 
the key issues. In the months ahead we'll post a series of letters on the SCO 
Web site ( www.sco.com ). Each of these letters will examine one of the many 
issues SCO has raised. In this letter, we'll provide our view on the key issue 
of U.S. copyright law versus the GNU GPL (General Public License). 

SCO asserts that the GPL, under which Linux is distributed, violates the United 
States Constitution and the U.S. copyright and patent laws. Constitutional 
authority to enact patent and copyright laws was granted to Congress by the 
Founding Fathers under Article I, § 8 of the United States Constitution: 

Congress shall have Power ? [t]o promote the Progress of Science and useful 
Arts, by securing for limited Times to Authors and Inventors the exclusive 
Right to their respective Writings and Discoveries. 

This Constitutional declaration gave rise to our system of copyrights and 
patents. Congress has enacted several iterations of the Copyright Act. The 
foundation for current copy protection in technology products is grounded in 
the 1976 Copyright Act. The 1976 Act grew out of Congressional recognition that 
the United States was rapidly lagging behind Japan and other countries in 
technology innovation. In order to protect our ability to innovate and regain 
global leadership in technology, Congress extended copyright protection to 
technology innovations, including software. The 1976 Act had the desired 
effect. The U.S. economy responded rapidly, and within 10 years had regained 
global technology leadership. 

Most recently, Congress has adopted the Digital Millennium Copyright Act 
(?DMCA?) to protect the intellectual property rights embodied in digital 
products and software. Congress adopted the DMCA in recognition of the risk to 
the American economy that digital technology could easily be pirated and that 
without protection, American companies would unfairly lose technology 
advantages to companies in other countries through piracy, as had happened in 
the 1970's. It is paramount that the DMCA be given full force and effect, as 
envisioned by Congress. The judgment of our elected officials in Congress is 
the law of the land in the U.S. copyright arena, and should be respected as 
such. If allowed to work properly, we have no doubt that the DMCA will create a 
beneficial effect for the entire economy in digital technology development, 
similar to the benefits created by the 1976 Copyright Act. 

However, there is a group of software developers in the United States, and 
other parts of the world, that do not believe in the approach to copyright 
protection mandated by Congress. In the past 20 years, the Free Software 
Foundation and others in the Open Source software movement have set out to 
actively and intentionally undermine the U.S. and European systems of 
copyrights and patents. Leaders of the FSF have spent great efforts, written 
numerous articles and sometimes enforced the provisions of the GPL as part of a 
deeply held belief in the need to undermine or eliminate software patent and 
copyright laws. 

The software license adopted by the GPL is called ?copy left ? by its authors. 
This is because the GPL has the effect of requiring free and open access to 
Linux (and other) software code and prohibits any proprietary use thereof. As a 
result, the GPL is exactly opposite in its effect from the ?copy right ? laws 
adopted by the US Congress and the European Union. 

This stance against intellectual property laws has been adopted by several 
companies in the software industry, most notably Red Hat. Red Hat's position is 
that current U.S. intellectual property law ?impedes innovation in software 
development? and that ?software patents are inconsistent with open source/free 
software.? Red Hat has aggressively lobbied Congress to eliminate software 
patents and copyrights. (see http://www.redhat.com/legal/patent_policy.html ). 

At SCO we take the opposite position. SCO believes that copyright and patent 
laws adopted by the United States Congress and the European Union are critical 
to the further growth and development of the $186 billion global software 
industry, and to the technology business in general. 

In taking this position SCO has been attacked by the Free Software Foundation, 
Red Hat and many software developers who support their efforts to eliminate 
software patents and copyrights. Internet chat boards are filled with attacks 
against SCO, its management and its lawyers. Personal threats abound. At times 
the nature of these attacks is breathtaking ? the emotions are obscuring the 
very clear and important legal issues SCO has raised. This is to be expected 
when the controversy concerns such deeply held beliefs. Despite the raw 
emotions, however, the issue is clear: do you support copyrights and ownership 
of intellectual property as envisioned by our elected officials in Congress and 
the European Union, or do you support ?free? ? as in free from ownership ? 
intellectual property envisioned by the Free Software Foundation, Red Hat and 
others? There really is no middle ground. The future of the global economy 
hangs in the balance. 

As SCO prepares new initiatives to protect our intellectual property rights, we 
do so with the knowledge that the most powerful voices in our democratic 
process give clear support to the intellectual property laws we seek to 
enforce. As stated above, the United States Congress has adopted the Digital 
Millennium Copyright Act to give clear and unequivocal protection to copyright 
management information distributed with software. We are also in accord with 
important decisions of the United States Supreme Court in the copyright area. 
In the case of Eldred v. Ashcroft, decided earlier this year, the United States 
Supreme Court gave clear and unequivocal support to Congress's authority to 
legislate in the copyright arena. The European Union remains firmly in support 
of intellectual property laws, as embodied generally in the Berne Convention. 

Thus, SCO is confident that the legal underpinning of our arguments is sound. 
We understand that the litigation process is never easy for any party involved. 
Our stance on this issue has made SCO very unpopular with some. But we believe 
that we will prevail through the legal system, because our position is 
consistent with the clear legal authority set down by the U.S. Congress, the 
U.S. Supreme Court and the European Union. 

To understand the strength of this authority, it is interesting to read the 
recent U.S. Supreme Court case, Eldred v. Ashcroft , 123 S.Ct. 769 (2003). In 
Eldred , key arguments similar to those advanced by the open source movement 
with respect to copyright laws were fully considered, and rejected, by the U.S. 
Supreme Court. This suggests that however forcefully Open Source advocates 
argue against copyright and patent laws, and whatever measures they take to 
circumvent those laws, our intellectual property laws will carry the day. 

The majority opinion in Eldred was delivered by Justice Ginsberg, in which 
Chief Justice Rehnquist and Justices O'Connor, Scalia, Kennedy, Souter and 
Thomas joined. Dissenting opinions were filed by Justice Stevens and Justice 
Breyer. In Eldred , the petitioner argued that the Copyright Term Extension Act 
enacted by Congress in 1998 was unconstitutional. The U.S. Supreme Court 
disagreed, ruling that Congress had full constitutional authority to pass the 
Extension Act. The Court's analysis of the constitutional foundation of the 
Copyright Act applies directly to the debate between SCO and FSF / Red Hat 
regarding intellectual property protection for software. 

SCO argues that the authority of Congress under the U.S. Constitution to 
?promote the Progress of Science and the useful arts?? inherently includes a 
profit motive, and that protection for this profit motive includes a 
Constitutional dimension. We believe that the ?progress of science? is best 
advanced by vigorously protecting the right of authors and inventors to earn a 
profit from their work. 

The Free Software Foundation, Red Hat and other GPL advocates take the contrary 
position. The FSF and Red Hat believe that the progress of science is best 
advanced by eliminating the profit motive from software development and 
insuring free, unrestricted public access to software innovations. The Free 
Software Foundation was established for this purpose. The GPL implements this 
purpose. Red Hat speaks for a large community of software developers dedicated 
to this purpose. However, the U.S. Supreme Court has dramatically undercut this 
position with its guidance in Eldred in how to define the term ?promote the 
Progress of Science and the useful arts?? under the Constitution. 

In Eldred , the U.S. Supreme Court addressed for the first time in recent 
history the Constitutional meaning of the term ?promote the Progress of Science 
and the useful arts?? Seven Supreme Court justices defined the term one way ? 
and SCO agrees with this definition. Two dissenting justices defined the term 
differently. 

Let's consider the dissenting view. Justice Breyer articulated a dissenting 
view that the Constitutional objective of ?promot [ing] the Progress of 
Science? is oriented to benefit the general public good, rather than create a 
private reward for authors. Justice Breyer posited: 

The Clause does not exist ?to provide a special private benefit,? ? but to 
?stimulate artistic creativity for the general public good?. The ?reward? is a 
means, not an end. 

123 S.Ct. at 802-03. Under this view of the U.S. Constitution, Justice Breyer 
would find a Congressional act unconstitutional if, among other things, ?the 
significant benefits that it bestows are private, not public.? Of course, this 
argument is at the very core of the positions advanced by the Free Software 
Foundation, Red Hat, and the General Public License. According to the FSF, Red 
Hat and under the GPL, private benefits are impediments to the general 
advancement of science and technology, and need to be eliminated entirely from 
the software industry and the process of software development. 

But, unfortunately for the FSF, Red Hat and others, this dissenting view was 
squarely rejected in the majority opinion delivered for the Court by Justice 
Ginsberg. The majority position specifically acknowledges the importance of the 
profit motive as it underpins the constitutionality of the Copyright Act. In 
expressing this position, the majority opinion stated as follows: 

Justice Stevens' characterization of reward to the author as ?a secondary 
consideration? of copyright law ? understates the relationship between such 
rewards and the relationship between such rewards and the ?Progress of 
Science.? As we have explained, ?[t]he economic philosophy behind the 
[Copyright [C]lause ? is the conviction that encouragement of individual effort 
by personal gain is the best way to advance public welfare through the talents 
of authors and inventors.? ? Accordingly, ?copyright law celebrates the profit 
motive, recognizing that the incentive to profit from the exploitation of 
copyrights will redound to the public benefit by resulting in the proliferation 
of knowledge?. The profit motive is the engine that ensures the progress of 
science.?? Rewarding authors for their creative labor and ?promot [ing] ? 
Progress? are thus complementary; as James Madison observed, in copyright 
?[t]he public good fully coincides ? with the claims of individuals.? The 
Federalis
 t No. 43, p. 272 (D. Rossiter ed.1961.) Justice Breyer's assertion that 
?copyright statutes must serve public, not private, ends? ? similarly misses 
the mark. The two ends are not mutually exclusive; copyright law serves public 
ends by providing individuals with an incentive to pursue private ones. 

123 S.Ct. at 785, fn. 18; emphasis in original. 

Based on the views of the U.S. Congress and the U.S. Supreme Court, we believe 
that adoption and use of the GPL by significant parts of the software industry 
was a mistake. The positions of the Free Software Foundation and Red Hat 
against proprietary software are ill-founded and are contrary to our system of 
copyright and patent laws. We believe that responsible corporations throughout 
the IT industry have advocated use of the GPL without full analysis of its 
long-term detriment to our economy. We are confident that these corporations 
will ultimately reverse support for the GPL, and will pursue a more responsible 
direction. 

In the meantime, the U.S. Congress has authorized legal action against 
copyright violators under the Copyright Act and its most recent amendment, the 
Digital Millennium Copyright Act. SCO intends to fully protect its rights 
granted under these Acts against all who would use and distribute our 
intellectual property for free, and would strip out copyright management 
information from our proprietary code, use it in Linux, and distribute it under 
the GPL. 

We take these actions secure in the knowledge that our system of copyright laws 
is built on the foundation of the U.S. Constitution and that our rights will be 
protected under law. We do so knowing that those who believe ?software should 
be free? cannot prevail against the U.S. Congress and voices of seven U.S. 
Supreme Court justices who believe that ?the motive of profit is the engine 
that ensures the progress of science.? 

Sincerely, 

Darl McBride
President & CEO
The SCO Group, Inc. 

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