From: merlin@neuro.usc.edu (merlin)
Newsgroups: misc.legal
Subject: AT&T vs. BSDI --> 4.3BSD-NET2 distribution requires AT&T license!!!
Date: 21 Jul 1992 02:08:14 -0700
Organization: University of Southern California, Los Angeles, CA
NNTP-Posting-Host: neuro.usc.edu
Keywords: AT&T 'Death Star' rises over BSDI's horizon [Tel. 1-800-800-4BSD

[For people in comp.unix.sysv386 -- two products were recently released in
field test versions with a production version intended in the near future.
Berkeley Software Design, Inc [Tel. 1-800-800-4BSD] has offered full source
code for a product called 'BSD/386' based on the publically available code
made available via numerous archive sites from the UC Regents 4.3BSD-NET2
UNIX software distribution.  Willian and Lynne Jolitz have offered the full
sources for an alternative product called '386BSD' which is also based on
the publically available UC Regents 4.3BSD-NET2 UNIX software distribution.
'BSD/386' sells for $1,000 for the full source and $200 for a binary right 
to copy.  '386BSD' is available from numerous public archive sites without
any charge of any kind.]

[The UC Regents 4.3BSD-NET2 software was claimed not to contain any AT&T
derived source code -- as a consequence it was believed by many people to
be an appropriate base for development of extremely inexpensive versions
of 'Berkeley UNIX' compatible operating systems.  This claim is disputed
by AT&T as described below.]

[This note is not an advertisement of any kind.  I am not connected with
AT&T, ATTIS, USG, USDL, USL (or whatever AT&T would like to be called in
the near future), Bell Laboratories, UC Regents, CSRG, BSDI, or the Jolitz 
Development Team.  This is simply an expression of concern about litigation 
which will have a dramatic effect on whether or not AT&T is allowed to have
monopoly interest in operating systems derived from publically available 
source codes.  Frankly, I am curious about the ultimate judge's decision.]

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Two days ago I told a colleague in Psychology that the world had changed
-- we spent several hours talking about the possibilities for good which
arose from the free or at least very low cost release of 386BSD & BSD/386.

However, AT&T [and it's massive army of high paid staff attorneys] have
fired the first shot in a legal action which may doom such possibilities.

Tomorrow I'm going to have to tell him the forces of darkness and greed
have decended to crush hope of using UNIX in extremely low cost systems.

The bottom line is that AT&T claims NET2 is contaminated with intellectual
property misappropriated from AT&T -- perhaps not direct copies of source
code -- but at least ways of doing things (trade secrets) -- and therefore
any system derived from NET2 requires an AT&T source code license [it used
to be about $10,000 to get an AT&T source license].  The threat is twofold

o  AT&T can sue anyone who has any assets or any prospect of assets for
   each and every copy of an operating system maintained or allowed to
   be copied by any individual without payment of the AT&T license fee

o  AT&T can withdraw it's contribution from any organization which would
   permit the maintenance or copying of systems derived from 4.3BSD-NET2

AT&T's complaint 92-1667 filed in US District Court--New Jersey claims:

o  AT&T authorized the UC Regents to distribute certain works derived
   from their UNIX software to third parties ... subject to restrictions

   o  Those restrictions include a requirement limiting such distribution
      to persons who have also acquired licenses from AT&T or USL

o  'Networking Release 2' contains software code that was copied from, 
    based upon, or derived from, code licensed to the Regents by AT&T 

o  Any operating system derived from 'Networking Release 2' requires a 
   license from AT&T or its successor, USL

AT&T's entire complaint is contained in a false advertising and unfair
competition claim based on BSDI's brochure which states BSDI sources are 
not derived from AT&T code --and-- do not require an AT&T source license.

AT&T's 1-MAY-92 interrogatory (a series of questions to an adversary) asks:

o  Whether anyone related to BSDI has ever had access to AT&T UNIX sources

o  How much employee time was spent to develop BSDI's source code product

BSDI's motion to dismiss and subsequent press releases argue that AT&T has
not made out an adequate case of copyright infringement -- and -- therefore
cannot maintain their claim of false advertising or unfair competition 
until they prove what BSDI would like to say is a simple copyright claim.  

However, the AT&T claim is not a copyright claim -- it is a claim that BSDI
incorporated intellectual property belonging to AT&T into the BSDI product.
The intellectual property may be in the form of copyright, patent, or trade 
secret protected material.  While NET2 may not literally contain any direct
copies of AT&T source code -- it is very possible it contains a translation
or adaptation of copyrighted material -- or it may contain a patented means
of performing some task -- or it may be based on knowledge of the original
techniques [trade secrets] embodied in the AT&T source code.  Hence, AT&T
only has to prove that someone involved in CSRG's NET2 release or in BSDI's 
BSD/386 development had access to AT&T licensed materials at some time in
his/her lifetime to trigger the spectre of contamination of BSDI's product.

BSDI's position is in stark contrast the Phoenix BIOS project where two
teams of engineers worked in parallel -- one team developing a functional
specification by studying the original IBM BIOS ROM chip codes -- and a
second completely independent and compartmentalized team developing code.
There is no suggestion either CSRG or BSDI made any effort to institute
similar means to prevent the incorporation of AT&T technology in BSD/386. 

Further, AT&T's question about the time investment of BSDI in bringing out
their product [compared with their own cost over many years] will likely go
a long way toward supporting their unfair competition claim.  If it took a
small company like BSDI only a couple of years with a small team of people
to produce BSD/386 vs the multi year investment of a corporate giant - then
it is very possible AT&T may prevail on the unfair competition claim.

On a final note, BSDI's own press release states that:

  Although USL has not sued the University of California, we expect that
  USL (or its parent, ATT) will threaten to review or withdraw research
  grants made to any university or research institution using or
  distributing software based on NET2 ...

All in all, this filing by a corporate giant with virtually unlimited funds
for legal expenses would seem to spell the doom of 'free' UNIX projects as
they are presently conceived.  There is simply too much risk someone with a
prior exposure to AT&T source codes could manage to contaminate the product.

Sigh, AJ

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Alexander-James Annala
Principal Investigator
Neuroscience Image Analysis Network
HEDCO Neuroscience Building, Fifth Floor
University of Southern California
University Park
Los Angeles, CA 90089-2520
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