SCO NDA Offers Little Information, Much Risk

by Don Marti

On May 14, SCO VP Chris Sontag offered to show evidence of SCO's infringement claims against Linux, under a non-disclosure agreement, to an independent panel of experts. SCO has released the text of the agreement, and we include it below.

Dan Ravicher, an attorney who specializes in free software and open-source issues at the firm of Patterson, Belknap, Webb & Tyler, said in an interview there are three key problems with the NDA. First, Ravicher said, "SCO can pick and choose among all its evidence" to show only the parts that back up the company's claims. "They're agreeing to let you see the half of the picture that they want you to see", he added.

Second, the NDA does not exclude information that the recipient obtained in ways other than from SCO. If SCO showed a patent or other public document to someone bound by the NDA, that person would not be allowed to discuss it even if he or she had been previously aware of it, Ravicher said. "The definition of confidential information is much larger than I've seen in any other agreement", Ravicher said. "It covers a lot of stuff that wouldn't be, by a textbook definition, confidential."

Finally, the NDA requires any dispute to be settled in the state of Utah, which could be "pretty onerous" for people outside the state. "They could sue me and make me go to Utah to prove I didn't disclose confidential information", Ravicher said.

Ravicher's interview does not constitute legal advice, and anyone considering signing an NDA should consult with his or her own legal counsel.

"If someone wants to enter this despite all those bad parts, it's a free country", Ravicher said. "I'm not saying someone should or should not do this, but these are things that you should be aware of."

Chris DiBona, the former Slashdot editor and Damage Studios co-founder who Linus Torvalds suggested for the panel, said he does not think anyone actively involved in kernel development or planning to contribute to free software projects should sign the NDA. But he said he wants to find out if other software experts would be interested in participating. The following are the qualifications this person should have:

  • Can sign an NDA with SCO without endangering existing open-source projects, including BSD, Linux, other kernels or other projects.

  • Experience with a large scale software project in C, with some low level systems work.

  • No business connection to SCO or any company involved in a legal case with SCO.

  • No direct connection to SCO as a licensee.

  • Not bound by an existing NDA that would prohibit him or her from expressing his or her opinion on this matter.

  • Have the time to do the work involved.

If you meet these qualifications and are interested in participating, you can contact [Linux Journal], and we will put you in touch with the right person at SCO.

[Linux Journal] publisher Phil Hughes has instructed Linux Journal staff not to accept the NDA because of concerns that it may interfere with the publication's normal work, which can involve reading and publishing Linux kernel code.

The following text is the version of the NDA we received from SCO on Wednesday, June 4, 2003:

          Confidentiality and Nondisclosure Agreement
      This  Confidentiality and Nondisclosure Agreement is  dated
June ____, 2003 and is by and between the following Parties:
          SCO:      The SCO Group, Inc.
                    355 South 520 West
                    Lindon, Utah 84042
          RECIPIENT:     ______________________________
      WHEREAS,  The  SCO  Group, Inc. ("SCO")  possesses  certain
Confidential  Information,  including  source  code   and   other
proprietary information, and
      WHEREAS,  RECIPIENT  desires  to  review  the  Confidential
Information,  and thereafter to generally summarize  portions  of
the  Confidential Information without revealing the  confidential
source  code  itself,  or  its design methods  and  concepts,  or
specific comparisons of code;
      NOW THEREFORE, IN CONSIDERATION of the mutual promises  and
agreements   made   herein,   and   other   good   and   valuable
THE PARTIES agree as follows:
      1.    Disclosure  of  Confidential Information.   RECIPIENT
desires  that  SCO  disclose  to RECIPIENT  certain  Confidential
Information  relating to SCO's Unixware and SCOsource  businesses
and  certain  statements  SCO has made publicly  regarding  SCO's
property  relative  to  the  Linux operating  system.   RECIPIENT
acknowledges  that it will receive access only to  a  portion  of
information relevant to these issues.
      2.    Purpose.   RECIPIENT warrants that  the  Confidential
Information disclosed by SCO to RECIPIENT shall only be used  for
the  purposes of (a) evaluating SCO's public statements regarding
its  UNIX source code and attendant rights and the ways in  which
those UNIX rights affect one or more distributions of Linux,  and
(b)  evaluating  whether  RECIPIENT's or  other's  use  of  Linux
violates  any of SCO's UNIX-related source code or other  rights.
Following RECIPIENT's review of the Confidential Information,  it
may  publicly  offer its general opinion on and a general,  brief
summary  of  the Confidential Information it has seen.   However,
RECIPIENT  shall  not  divulge details or  specifics  as  to  any
Confidential  Information with respect to specific  source  code,
files,  derivative  works, modifications or  design  methods  and
concepts  it  has  seen,  nor shall it divulge  any  third  party
information  it  has  seen,  either  in  source  code,  products,
contracts or in other third party Confidential Information.
     3.   Definition of Confidential Information.  " Confidential
Information"  means  any  and  all  data,  technology,  research,
inventions,  intellectual  property,  trade  secrets,  know  how,
computer  programs,  source  code,  file  names,  file  trees  or
extensions,  works  of authorship, products, processes,  methods,
customer  names, plans, forecasts, prices, business  information,
financial information, and other information shown or relayed  by
SCO to RECIPIENT  on _______________________ [date].
      4.   Protections.  RECIPIENT shall not disclose or transfer
any  Confidential  Information to any  other  person  or  entity.
RECIPIENT shall not use Confidential Information except  for  the
purpose  and by the methods described in Paragraph 2.   RECIPIENT
shall  use  its  best efforts to ensure against  any  disclosure,
transfer  or  use  of Confidential Information  not  specifically
authorized by SCO in writing.
      5.    Employees.   Access  to Confidential  Information  by
RECIPIENT's employees shall be limited by RECIPIENT to  employees
having  a  specific need to know.  RECIPIENT shall be responsible
for its employees and their compliance with this Agreement.
     6.   No License.  SCO is not obligated to grant to RECIPIENT
any  license or right under any patent, trade secret,  copyright,
trademark or other intellectual property right of SCO.
     7.   No Obligation to Disclose.  SCO has no obligation under
this   Agreement  to  disclose  to  RECIPIENT  any   Confidential
Information which SCO elects to withhold.
      8.    Injunctive Relief.  It is understood and agreed  that
damages  are  an inadequate remedy in the event of  a  breach  or
intended or threatened breach by RECIPIENT of this Agreement  and
that  any  such  breach by RECIPIENT will cause  SCO  irreparable
injury  and damage; accordingly, RECIPIENT agrees that SCO  shall
be  entitled, without waiving any additional rights  or  remedies
(including monetary damages) otherwise available to SCO  at  law,
or  in  equity,  or  by  statute, to  preliminary  and  permanent
injunctive  relief  in  the event of  a  breach  or  intended  or
threatened breach by RECIPIENT.
      9.    Severability.   In  case  any  one  or  more  of  the
provisions contained herein shall, for any reason, be held to  be
invalid,   illegal,  or  unenforceable  in  any   respect,   such
invalidity, illegality or unenforceability shall not  affect  any
other  provisions of this Agreement, and this Agreement shall  be
construed   and   enforced  as  if  such  invalid,   illegal   or
unenforceable  provision(s)  had  never  been  contained  herein,
provided that such invalid, illegal or unenforceable provision(s)
shall  first  be curtailed, limited or eliminated to  the  extent
necessary    to    remove   such   invalidity,   illegality    or
unenforceability with respect to the applicable law as  it  shall
then be applied.
     10.  Final Agreement.  This Agreement constitutes the final,
complete  and  exclusive  agreement  between  SCO  and  RECIPIENT
concerning  the  subject matter of this Agreement and  supersedes
all    prior   agreements,   understandings,   negotiations   and
discussions,  written  or oral, between SCO  and  RECIPIENT  with
respect  thereto.  Any modification, recission  or  amendment  of
this  Agreement shall not be effective unless made in  a  writing
executed by SCO and RECIPIENT.
      11.  Waiver.  Any waiver of, or promise not to enforce, any
right  under  this  Agreement shall  not  be  enforceable  unless
evidenced by a writing signed by the Party making said waiver  or
     12.   Construction.  The headings in this Agreement are  for
the purpose of convenience only and shall not limit, enlarge,  or
affect  any of the covenants, terms, conditions or provisions  of
this  Agreement.  This Agreement represents the wording  selected
by  the  Parties to define their agreement and no rule of  strict
construction shall apply against either Party.
      13.  Governing Law, Jurisdiction and Attorney's Fees.  This
Agreement shall be governed and enforced in accordance  with  the
laws of the state of Utah, without regard to its conflict of laws
principles,  and  RECIPIENT  hereby  consents  to  the  exclusive
jurisdiction  and venue in courts (whether federal or  state)  in
the  state  of Utah.  RECIPIENT waives all defenses  of  lack  of
personal jurisdiction and forum non conveniens.  In any action to
enforce  any right or remedy under this Agreement or to interpret
any  provision  of this Agreement, the prevailing party  will  be
entitled  to  recover its reasonable attorney's fees,  costs  and
other expenses.
      14.   Authorization.  The persons signing  below  represent
that  they  are authorized to execute this Agreement for  and  on
behalf  of  the Party for whom they are signing and to bind  said
Party to the terms of this Agreement.
                           Authorized                  Signature:
                               Name                      (print):
     The SCO Group, Inc.  ("SCO")
                           Authorized                  Signature:
                               Name                      (print):

Don Marti is Editor in Chief of Linux Journal.

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