Elizabeth Phillips for HP

HP evasively claims that its Linux-product indemnification promise is not connected or associated with its Unix license(s). In his telephone press conference, HP's Martin Fink noted:

So just to recap, we have not signed any Linux-specific agreement with SCO and have not exchanged any monies for the indemnification.

However, if HP's perpetual Unix license(s) can be piggybacked onto its Linux products, then there would be no need for HP to sign any Linux-specific agreement with SCO or to have exchanged any monies for the indemnification. We discussed that with HP spokesperson Elizabeth Phillips Thursday by phone and by e-mail. Here are excerpts from the e-mail discussion about the Unix license piggybacking.

MozillaQuest Magazine: Does not HP's Unix license give it the right to distribute SCO-owned Unix code that might be in any Linux-based solution sold by HP? Does that not make it pretty easy for HP to extend the HP Linux-based-solution indemnification?

MozillaQuest Magazine: I notice that Martin Fink avoided answering questions about this subject in the Q & A part of the press conference. However, the Unix licenses that the major sub-licensees such as HP, IBM, Sequent, and so forth have appear to be identical as to the legalities -- and only the names of parties, dates, etc., appear to be different. Moreover, these standard-form Unix licenses are now public by virtue of their incorporations as exhibits in the SCO v IBM lawsuit pleadings.

Elizabeth Phillips: As per our conversation, you are speculating on this topic based on your review of IBM's Unix license.

MozillaQuest Magazine: It also appears that these standard, major Unix licenses would give companies such as HP the right to include SCO-owned Unix code and/or derivative code in any Linux-based solutions provided by the major licensee, in this case HP. Is this correct?

Elizabeth Phillips: no reply.

MozillaQuest Magazine: Therefore, do not HP customers buying Linux-based solutions from HP actually, in effect, have a sub-license via the SCO-HP Unix major license to use HP Linux-based solutions that might include SCO-owned code and/or derivative code?

Elizabeth Phillips: no reply.

MozillaQuest Magazine: It appears from the Unix licenses that were made public as exhibits to the SCO v IBM lawsuit pleadings, that under the "perpetual" licensing companies such as IBM and HP paid a large one-time fee that allows them to distribute Unix and/or a Unix derivative without paying any further fees to SCO. So, does that mean that SCO is not receiving any revenue from HP sales of Unix software?

Elizabeth Phillips: no reply.

[break]

Martin Fink at press conference (responding to Robin Miller, NewForge): "You're not giving up any of your rights under the GPL. What we're saying is the vast majority, 99.999% of our customers do not touch the source code. So a condition of indemnification is that they can't modify the source. So think about it as we're indemnifying the binary Linux distribution that they received from us. Now, if the customer chooses to go modify the source, but I want to stress that's a one in 10,000 kind of situation right now that is our experience, then they are losing the indemnification by doing that."

"What we're indemnifying is the binary that we ship."

MozillaQuest Magazine: This certainly seems to me that your HP SCO-Linux indemnification is a matter of piggybacking HP's Unix license as a sub-license to its HP Linux customers, correct?

Elizabeth Phillips: That is your speculation.

Martin Fink at press conference (responding to Robin Miller, NewForge): "But if you modify the source code you lose indemnification. If you want to make that modification and continue to maintain your indemnification, then you need to contact HP and we'll look at that, and we may very likely still provide the indemnification for that change. But we will only do that once we are contacted, and we'll do it on a case-by-case basis."

MozillaQuest Magazine: This seems to me that you are doing the case-by-case review in order to make sure the modifications comport with your license to distribute and to modify SCO-owned Unix code, is not that so?

Elizabeth Phillips: No, we are doing a case-by-case review because each customer's Linux deployment is different.

[break]

Martin Fink at press conference (responding to Todd Weiss, Computer World): "the most pragmatic and real material difference we could make is rather than for example offer other lawsuits or counter-sue or any of these other options, the best option that we could take was to look at what it would take to indemnify our customers. We did that and said, "That is a risk that is acceptable to HP." So we did that, and so we're providing the indemnification. So it's just that these are big complex issues, and it takes a long time to work through them all, and we did that. So now we were able to come out with more of a big bang associated with that. "

MozillaQuest Magazine: It seems there is not much reason to sue for something you already have a contractual right to do. Instantly, your Unix licenses give you a contractual right to modify, sub-license, and distribute SCO-owned Unix code. So, in reality your HP SCO-Linux indemnification program is merely a matter of promising your HP Linux customers that HP will enforce its Unix license rights should SCO initiate any legal actions against any HP Linux customers, is this not so?

Elizabeth Phillips: Again, that is your speculation.

Please note that Elizabeth Phillips never says that HP is not piggybacking its Linux-product distribution on its Unix license(s). Rather she just says that our questions and comments about that are speculation -- and she is correct, it is speculation -- more correctly, it is deduction based upon inferences drawn from the set of facts available to us for analysis. In other instances she does not even reply to the questions. But nowhere does she directly deny that HP is piggybacking its Linux-product indemnification on top of its Unix license.

Moreover, because we are drawing inferences about the possibility that HP's indemnification of its Linux-product customers is founded upon a theory of piggybacking its Linux products on its Unix license does not mean the speculation is incorrect. Whether the deductions are correct might never be discovered or unveiled until such time as SCO might sue a HP Linux-product customer and we see what defense HP offers -- or until HP is more forthcoming in discussing these issues.

Regarding Elizabeth Phillips' insistence the Unix license piggybacking is speculation, Tom Carey noted:

If HP were to flatly deny that there is UNIX license piggybacking going on, I would tend to believe HP, if for no other reason than because of the potential securities law exposure for making misleading statements. But so far, all HP has done is to sidestep your direct questions. It looks to me like HP has some tricks up its sleeve, and it doesn't want to talk about them so as to keep SCO guessing.

However, so far HP has not clearly and specifically denied that there is Unix license piggybacking involved in its Linux-product indemnification program. Thus Unix license piggybacking cannot be ruled out!

There is an interesting extension of the Unix license piggybacking if it can be done. It could be that most any first-level Unix licensee could also provide Linux products without the need for users of those Linux products to purchase SCO IP Licenses for Linux.

So, if you are a Unix licensee, check the nitty-gritty legalese of your Unix license. Under the proper circumstances, you might be able to distribute Linux products without fear of SCO being able to win a lawsuit about your distributing Linux products.

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