Trade Practices Act Is Basis for Australian Complaint Against SCO

Is SCO breaking the law? Con Zymaris explains the Open Source Victoria complaint in Australia and offers advice for reporting SCO to the correct regulatory agency in your country.

Open Source Victoria has filed a complaint with the Australian Competition and Consumer Commission against SCO. The tactic of using unsubstantiated claims and extortive legal threats to extract money from millions of Linux users may well be illegal in many countries, including Australia.

Darl McBride, CEO of The SCO Group, spun his company's latest attack on Linux this way: "SCO has found a way to give Linux users a legal way to run Linux." As if SCO has found a way to do Linux users a favour!

SCO's latest action was the recent registration of copyright to the legacy UNIX SYSTEM V source code, on which the company's already claimed copyright publicly. Regardless, this in no way affects Linux. Copyright registration is a simple filing procedure that formally registers a claim and does not in any way constitute proof of ownership.

Although this particular salvo from SCO seems to be one more round in a possibly long and tedious legal affair, what SCO has done finally is given average Linux users a chance to raise a serious legal objection. Here's why.

In many countries there exists consumer protection legislation that prevents any organisation from running schemes that try to convince consumers they owe that organisation something when they clearly do not. This type of consumer protection generally is called Misrepresentation of Need. For example, it prevents domain name registration scammers from hitting up hapless consumers for money, offering these consumers renewals on their domain name registrations made to look like the consumers have no choice but to comply and pay. In Australia, quite a number of these firms have ended up in court, taken there by the Australian Competition and Consumer Commission. It is to this Commission that Open Source Victoria, along with many other Australian Linux users, have filed complaints.

When Linux users use their countries' laws to protect against SCO's latest actions, SCO backs off from trying to use this suspect tactic. The German organization LinuxTag already has forced SCO to remove its claims from the web site, and SCO has not been able to make the so-called licensing offer there.

SCO has yet to prove the existence of any disputed source in the Linux codebase. With its insistence on withholding public disclosure of any worthwhile evidence in this case, SCO gives the impression that a recent piece by Bryan Taylor refutes the major claims that SCO has made. SCO stopped offering source code access under NDA to qualified C programmers after Ian Lance Taylor, author of much open-source and proprietary software, reported, "The code is fairly trivial--the kind of stuff I wrote in school. The similar portions of the code were some 80 lines or so. Looking around the Net, I found close variants of the code, with the same comments and variable names, in sources other than Linux distributions."

SCO will find it extremely difficult to cement its claims in court, and until it does, the company is spreading fear to extract money from innocent and unsuspecting users. It is this fact that we are now taking advantage of to raise action against SCO itself.

So, what can you do? You can try and locate your local version of the consumer laws that prevent misrepresentation of need scams. In Australia, we have the Australian Trade Practices Act. Here's some of the snippets from that Act.


    Misleading or deceptive conduct

    (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.


    False or misleading representations

    A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:

    (c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;

    (Specifically, SCO seems to be claiming that the purchase of a UnixWare license grants the benefit of permitting legal use of Linux, which is not the case. Thanks to Andrew Pam for this)

    (f) make a false or misleading representation concerning the need for any goods or services; or

    (g) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

    (Specifically, SCO seems to be claiming that Linux users need to purchase a license from them, a license that has not been proven in court to be a constituted requirement.)

You can use this emphasis and language content to help you find the equivalent laws in your legal domain. Next, you need to prepare a complaint to file with your consumer watchdog, and some background information on this whole subject for their watchdog investigators to ruminate on.

SCO has offices in numerous countries. See if your country has one. If so, provide your watchdog with local company information. Filing a complaint against the local representation will have a chance of working. Filing it against an off-shore concern probably will not.

SCO's latest press release, which elucidates the protection money request, is here. You should alert your consumer watchdog that you believe that SCO is entering into conduct both misleading and deceptive to all Linux users in your country. SCO has no verified claims whatsoever on Linux, and the company is using the press to scare Linux users into forking over money for protection.

Remember, you may be well versed in IT, Linux and this whole fiasco, but the watchdog groups likely are not, so any help you can offer works to speed up their investigations.

To see why The SCO Group has no claims to any such money, read this detailed analysis and the recommended articles it cites.

If we raise enough of a tsunami, SCO may think twice about pursuing this action against Linux users in countries that have consumer protection. We, the community, are using this style of defense as a signpost of warning to any others who attempt such unjustifiable acts against Linux or other open-source software in future.



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Section 202, Copyright Act 1968 (C'th)

Anonymous's picture

It's not only the Trade Practices Act that SCO has to consider. Before they even threaten to assert copyright against any Australian Linux user, they had better read this provision of the Copyright Act, very carefully, lest they want an Australian court to settle the matter of their supposed ownership of Linux code:

Section 202: Groundless threats of legal proceedings

(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding in respect of an infringement of copyright, then, whether the person making the threats is or is not the owner of the copyright or an exclusive licensee, a person aggrieved may bring an action against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats, and may recover such damages (if any) as he or she has sustained, unless the first-mentioned person satisfies the court that the acts in respect of which the action or proceeding was threatened constituted, or, if done, would constitute, an infringement of copyright.

(2) The mere notification of the existence of a copyright does not constitute a threat of an action or proceeding within the meaning of this section.


Reading about SCO wanting money from *ME* for using Linux, I thi

Anonymous's picture

So hey SCO! Do y'know what? I wrote GPL code and you've stolen it and put it in your UnixWare and OpenServer. Which code? Of course I can't tell you! I won't tell you! But the code is mine! So gimme money! Now!

Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

The SCO case against Linux, and the reactions of the media and business shows that many people have swallowed the line that there is no way that a group of engineers and programmers could possibly create something "new" and provide it for free - therefore it _must_ have been stolen. Therefore there is tacit agreement, without investigation, that this group infringe copyrights, patents or IP law.

The scary thing about this is that it almost being said that only corporations can be creative and produce something new - which is very far from the truth since corporations never produce innovation, people do. What corporations used to provide was community - an environment where cooperation, delevelopment and design could occur between people. In todays world this is no-longer requried. The internet was created by the mindset that people can work together effectively without a corporation around them and this in turn has created groups of visionary people who work together and produce world leading software.

The truth is that the GPL and its similar licenses create the most innovative form of licensing, there are no secrets and lock-in, value and financial reward are possible through services. Competition is there to provide better and more cost effective services. This is in fact an evolution of competition.

This is more competitive that typical capitalism, which relies on secrets, patents and licenses to create lock-in, poor service and delivery because there is no real competition.

There is no new thing under the sun...

Anonymous's picture

The scary thing about this is that it almost being said that only corporations can be creative and produce something new

That's the Gospel According to Microsoft (the Clone Arranger rides again).

Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

RICO in the United States can be used to seize all of SCo's assets including any real porperty owned by the parties, their investors, their litigants, their legal fees, any money they have earned from this scam and any money they may have in svaings, goods and real property. It was used in the S&L Scandal, and it can be liberally applied here as well. That would be the ultimate lesson. Justice may be blind, but she shouldn't be as asleep as she is on this one.

Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

Why nobody tells to the companies targeted by SCO that IF they pay to SCO they CAN'T CONTINUE to use LINUX. At least that's how I understand GPL.

Why there's nobody in community who will sue SCO for GPL infrigment. (I'll give my 10 bucks for that).


Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

it can be liberally applied here as well

Liberally! I love it! How appropriate. The RICO laws and their use against corporations is a typical liberal abuse of our democratic system. Liberals get these laws instituted to interfere with and unfairly punish corporations who are the driving force behind our economy. Liberals whine and pander to big government and big union bosses wherever possible to ensure their corrupt interests get served ahead of those of law abiding citizens of this country. If you people really have an issue with SCO why don't you hash it out where it belongs, in the open market, not by encouraging big government sponsored, liberally biased laws like RICO.

Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

um..ok...I'm conservative (vehementally some of my friends tell me :) and, uh, that's just ignorant.

The free, open market is what is killing SCO (which is working correctly). they are fighting to prevent their death.

RICO (and as someone pointed out above, Oregon state law) are more there to ensure the market remains fair.


Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

If SCO were working in the free market they would have long ago published all the code that they claim is actually theirs.

Actually the only claim that SCO supposedly has is that IBM violated a contract clause and disclosed propietary code.

It is a long ways from arguing about code publication, which in fact they should prove has harmed them, and threatening Linux users, and then offering a license. That smacks like a protection racket to me.

Germany, now Australia seem to be leaning for court day first and then you collect.

Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

McBride nice to see ya ...SCUMBAG


Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

If you're going to try to sound like a conservative, at least try to sound intelligent. First off we don't have a democratic system, that's tyranny. We have a republican government, albiet a democratic republic it is still representative government.

Now that we have that out of the way explain to me how SCO is doing this in the open market or how M$ used the open market. Don't be a maroon. Using goons for extortion may be okay with you and SCO's use of attorneys for it might seem first class to you. However SCO didn't buy legacy code and start filing lawsuits to compete in the open market. In case you didn't notice their revenue has been sinking like the Titanic.

It's true however that a number of people try to demonstrate a small degree of intelligence suggesting RICO simply because they are incensed by SCO. RICO allows for heavy criminal prosecution of organized crime types when you can only prove a tiny amount of the scope of crime going on. To even use it they have to do something like use the mails for an illegal activity. You are at least correct that this is a weak and far reaching attempt that takes the place of demonstrable real criminal activity.

Con Zymaris is right as usual here. Consumer protection laws should be in effect at this time. The SEC should be looking inot SCO's latest aquisition as well as stock being dumped by top execs too, but some of this requires something more than the appearance of impropriety to send the bastards to jail.

Re: Trade Practices Act Is Basis for Australian Complaint Agains

Anonymous's picture

So how long have you worked for SCO?

Derivative Action

Anonymous's picture

Find someone with shares in SCO or if you have shares in SCO and bring a derivative action on behalf of all shareholders of SCO against management of SCO . SCO's management actions could have seriously negative long term consequences to shareholder value.

Pursuit in the USA

Anonymous's picture

So has anyone in the States pursued a similar course of action? Or is everyone just sitting it out?

Re: Pursuit in the USA

Anonymous's picture

It appears that in the USA this may best be handled at the state level. For example, in Oregon I found the following:

646.608 Unlawful business, trade practices; proof; Attorney General