It's not illegal per se. If it were, BitMover would be suing (or, at least, they'd have legal standing to sue) OSDL. On the other hand, it does go against the original agreement between BitMover and Linus, where they said "we'll provide you with our product and space on our server for free if you don't try to create a competing product while you're using our free stuff."
Okay, that makes sense then ... and explain why it mentioned the OSDL employees in the article, which, at first it seemed like it wouldn't matter.
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