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SCO's Reply Memorandum in Support of Expedited Motion for a Protective Order
Thursday, June 10 2004 @ 06:20 AM EDT

Here is SCO's Reply Memorandum in Support of SCO's Expedited Motion for a Protective Order, their final document filed to try to persuade the court to delay certain depositions. It's an argument they lost Wednesday at the telephone hearing. Our thanks to Steve Martin for the text version.

It's rather comical to read the document, knowing that they lost the decision. Reading them argue that IBM is so unfair not to let them postpone the depositions and how sensible it would be to delay and how unfair to SCO if they are unable to get the delay, etc., all expressed with at least pretended indignation, rings hollow in the light of the knowledge that the Honorable Brooke Wells told them their request was denied, because they brought the objection too late and because of the inconvenience to the witnesses being deposed, IBM's arguments exactly. Evidently they are not so unfair after all.

So, the deposition of Mr. O. L. Wilson, then Manager, Software Sales and Marketing at AT&T, who executed the 1985 IBM-AT&T agreement for AT&T, and is thus presumably in a position to testify as to AT&T's intentions with respect to derivative works, and David Rodgers, who was at Sequent, will go forward as scheduled today, something SCO was clearly wishing fervently it could postpone.

*******************************

Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE
[address, phone]

Stephen N. Zack (admitted pro hac vice)
Mark J. Heise (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone]

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION


THE SCO GROUP, INC.

Plaintiff,

v.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant.
REPLY MEMORANDUM IN
SUPPORT OF SCO'S EXPEDITED
MOTION FOR A PROTECTIVE
ORDER


Case No. 2:03CV0294DAK

Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells

Plaintiff The SCO Group, Inc. ("SCO") respectfully submits this brief reply in support of its Expedited Motion for a Protective Order.

Contrary to IBM's assertions, SCO acted diligently in attempting to address the issue of the timing of the depositions at issue. For reasons set forth in SCO's reply memorandum in support of its pending Motion to Amend the Scheduling Order, the compounded impact of discovery problems in this case reached an untenable point requiring SCO to request an expedited hearing on that motion. On June 2, 2004, within just two business days of learning that the Court had scheduled an expedited hearing on SCO's Motion to Amend the Scheduling Order and a full week before the depositions noticed for next week were to begin, SCO contacted IBM about rescheduling next week's depositions. Immediately after IBM's counsel responded that IBM would not agree to postpone the depositions, on June 3, 2003, SCO gave IBM advance notice and then filed its protective order motion.

Significantly, IBM's opposition brief fails to address SCO's argument that it would be inefficient and inconvenient to proceed with the depositions next week in light of the status of discovery as outlined in the pending Motion to Amend the Scheduling Order. As discovery stands, one of two outcomes would ensue from proceeding with the depositions: (1) SCO would not be permitted to ask questions of the witnesses regarding relevant documents that have not yet been produced and/or that SCO has not yet had a fair opportunity to review (because they were among the 670,000 pages of documents that IBM produced in March and April); or (2) the depositions would be subject to being reopened once SCO has had an adequate opportunity to review IBM's relevant documents (including documents not yet produced). The first outcome would be plainly unfair to SCO, while the second outcome would be plainly inefficient.

Moreover, contrary to IBM's suggestion, SCO does not contend that IBM acted unreasonably in scheduling the depositions in the first instance to comply with the scheduling order. Rather, SCO contends that under the circumstances it is not reasonable to proceed with a discovery schedule whose status the District Court has seen fit to address on an expedited basis the very day the depositions are scheduled to begin.

Accordingly, SCO respectfully submits that, as set forth in its opening brief, the sensible course is to suspend the depositions in order to permit the District Court to resolve the pending Motion to Amend the Scheduling Order before rescheduling them.

DATED this 4th day of June, 2004.

Respectfully submitted,
By: _______signature_________
HATCH, JAMES & DODGE
Brent 0. Hatch
Mark F. James

BOIES, SCHILLER & FLEXNER LLP
Stephen N. Zack
Mark J. Heise

Counsel for Plaintiff/Counterclaim Defendant


CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing was served on Defendant International Business Machines Corporation on this 4th day of June, 2004, by fax copy to:

Alan L. Sullivan, Esq.
Todd M. Shaughnessy, Esq.
[phone] Snell & Wilmer L.L.P
[address]

Evan Chesler, Esq.
[phone] Cravath, Swaine & Moore LLP
[address]

and also by U.S. Mail, first class, postage prepaid to:

Donald J. Rosenberg, Esq.
[address]


_________[signature]__________


  


SCO's Reply Memorandum in Support of Expedited Motion for a Protective Order | 267 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Etc Here Please
Authored by: Anonymous on Thursday, June 10 2004 @ 06:35 AM EDT
to keep them all together, thanx

[ Reply to This | # ]

Washington Post article today
Authored by: Anonymous on Thursday, June 10 2004 @ 06:57 AM EDT
Interesting Washington Post article. Nice pic of Darl with his horse and a cowboy hat. THe story summarizes the history of SCO's attack, and has some choice quotes:

"The GPL has this sucking effect of grabbing your IP [intellectual property], sucking it in and destroying your property rights," McBride said.

Torvalds, the Linux founder, ridicules that notion.

"Having a hole in your head has this sucking effect," Torvalds said, firing back at McBride. "The GPL doesn't 'grab' any IP at all. The only thing that is desperately trying to grab other people's IP is Darl McBride and company."

[ Reply to This | # ]

"Liar, Liar" tactic
Authored by: Khym Chanur on Thursday, June 10 2004 @ 07:59 AM EDT
I'm wondering if SCO's lawyers are desperate enough to try a tactic similar to the delaying tactic used in the comedy film Liar, Liar: throw themselves down a flight of stairs several times, and then claim that some thug beat them up and they're in no condition to attend the deposition. Or, better yet, claim it was a Linux commie thug who did it, and that all of SCO's lawyers are in fear for their lives, since Darl is carrying a gun and hired bodyguards. Then they can have the depositions rescheduled to take place at "secure locations", and when SCO's lawyer shows up at the deposition, another SCO employee, pretending to be a Linux commie, will call in a bomb threat from a pay phone. SCO not only gets delays, but gets the PR of painting Linux advocates as psychotics.

Of course, it's very unlikely anything like this will happen, but it's fun dreaming up conspiracy theories.

---
Give a man a match, and he'll be warm for a minute, but set him on fire, and he'll be warm for the rest of his life. (Paraphrased from Terry Pratchett)

[ Reply to This | # ]

TSCOG's Lawyers don't actually respond to IBM's arguments, Re: SCO's Reply Memorandum
Authored by: martimus on Thursday, June 10 2004 @ 08:12 AM EDT

TSCOG's lawyers ignore the best attack IBM levels at their logic for delaying the depostions. TSCOG is AT&T's purported successor in interest, and to the extent that any relevant documents are needed to be available for the review of the TSCOG attornies, TSCOG are the ones that should have them. I know they are trying to achieve their goal of delay, and pointing this out would just hole their ship so to speak, so knowing that the motion was gunned down, and the depositions have already taken place is a surreal bit of humor.

[ Reply to This | # ]

OT: Microsoft patents "To Do" list...
Authored by: archonix on Thursday, June 10 2004 @ 08:17 AM EDT
Microsoft patents to do lists

Lawsuits planned against the forgetful?
Well bugger me six ways to sunday. What will they think of next?

---
The only money being made here is by Sue, Grabbit and Rune.

[ Reply to This | # ]

SCO's 2nd quarter results - 7 figure EVI deal was 11,000.00
Authored by: Anonymous on Thursday, June 10 2004 @ 08:54 AM EDT
http://biz.yahoo.com/prnews/040610/lath040_1.html

lawyer fees 4.8 million to get 11K ///

NOT GOOD!

[ Reply to This | # ]

NEWS FLASH
Authored by: dodger on Thursday, June 10 2004 @ 09:00 AM EDT
http://biz.yahoo.com/prnews/040610/lath041_1.html

SCO Notifies Berlin, Stuttgart and Frankfurt Freiverkehr Stock Exchanges of
Unauthorized Stock Listing

I wonder if this is just a way to get their name in the papers or if there is a
reason why a company wants to restrict trading in their stock. Maybe by
restricting who handles the transactions, they can exert more control over the
stock and its price (needed for pump and dump).

FYI I am just reading G. Richard Shell's book "Make the Rules OR your
Rivals Will". What an eye opener into the market place and it's
lobbiest/legal underpinnings. He tells about Ford's historic fight against the
Selden Patent and how he finally won that fight. And how the Railroads created
laws to slow down the trucking industry - ever wonder what all those weigh
stations for truckers are doing at the side of the roads - thank the Railroads -
they came up with the idea to tax truckers, make them weigh in regularily and
created the argument that the national roads were damaged by heavy trucks and
other drivers endangered by heavy loads. This 'tactic' was simply a technique to
slow the truckers down and make them less profitable.

I guess that's where the term 'railroaded' comes from.

[ Reply to This | # ]

Quite Entertaining
Authored by: dmscvc123 on Thursday, June 10 2004 @ 09:20 AM EDT
<<On June 2, 2004, within just two business days of learning that the
Court had scheduled an expedited hearing on SCO's Motion to Amend the Scheduling
Order and a full week before the depositions noticed for next week were to
begin, SCO contacted IBM about rescheduling next week's depositions>>

What circular logic. The mere fact that the judge will have a hearing about
rescheduling is not a logical reason to reschedule.

[ Reply to This | # ]

Significance of SCO press release about German stock exchanges
Authored by: Anonymous on Thursday, June 10 2004 @ 09:40 AM EDT
But I think I understand the likely significance of SCOX's press release today
(which does not explicitly stated in their press release).

I think SCOX is likely saying that their share price is being driven down by
short-selling in Germany (since they say that they are buying back their own
stock it's not entirely clear to me whether they would be damaged by this, even
if it's true)

A number of other companies have made similar claims in recent weeks. Here is
the sequence of events as far as I can tell.

1. In the 2nd half of May, and early June, a number of companies complained
about unauthorized listings (see item 2 also). For example ( you can find plenty
more in Google, and in Yahoo news)

* 18 May
http://home.businesswire.com/portal/site/altavista/index.jsp?ndmViewId=news_view
&newsId=20040518006158&newsLang=en

Aegis Assessments Inc. ... learned today that it was one of more than 200 U.S.
publicly traded companies listed by the German brokerage
firm Berliner Freiverkehr on the Berlin Stock Exchange without the company's
knowledge or authorization.

Part of a scandal that the financial media has dubbed "StockGate," the
listings appear to be part of an effort by domestic and foreign brokers to
circumvent the recent NASD and SEC restrictions against "naked short
selling." Short selling is a trading practice whereby investors borrow
stock from a broker to sell with the hope that the stock price will decline
before they have to return the shares back or cover their position. However,
naked shorting involves groups of people working together to manipulate the
market by selling fictitious shares of stock in an effort to force a company's
share price to go down. By listing the company's common stock on the Berlin
Stock Exchange, market manipulators sought the benefit of an
"arbitrage" loophole that none of the present regulations was designed
to close.

* 24 May

http://fsnews.findlaw.com/articles/prnewswire/20040524/24may2004001332.html

Provectus Pharmaceuticals, Inc. (BULLETIN BOARD: PVCT) has learned that the
company is slated to be listed on the Berlin Stock Exchange along with more than
200 U.S. publicly traded companies recently listed without authorization.

The listings appear to be part of an effort by domestic and foreign brokers to
circumvent recent National Association of Securities Dealers (NASD) and U.S.
Securities and Exchange Commission (SEC) restrictions against so-called
"naked short selling." Naked shorting involves groups of people
working together to manipulate the market by selling fictitious shares of stock
in an effort to force a company's share price to go down.


* 28 May http://ww3.komotv.com/Global/story.asp?S=1903723

NHC Communications Inc. (TSX: NHC) ... has learned that it was one of several
public companies listed by the German brokerage firm Berliner Freiverkehr on the
Berlin-Bremen Stock Exchange without the Company's knowledge or consent.

Press releases issued by numerous public companies and other media sources
indicate that the unauthorized listing of the Company's common shares on the
Berlin-Bremen Stock Exchange may be part of a broader scheme perpetrated by
certain brokers based in the United States and abroad who sought to manipulate
markets in an effort to force share prices down and then take advantage of
short positions. The Berlin-Bremen Stock Exchange may have been used in order to
circumvent specific restrictions introduced by the National Association of
Securities Dealers (NASD) in the United States and the United States Securities
and Exchange Commission (SEC) to prevent such manipulation.

* 1 June http://www.abc25.com/Global/story.asp?S=1908116

"SmarTire Systems Inc. (OTCBB: SMTR) has learned that it is one of more
than 200 U.S. publicly traded companies whose stock has been listed on the
Berlin-Bremen Stock Exchange" ... "The listings appear to be part of
an effort by domestic and foreign brokers to circumvent therecent NASD and SEC
restrictions against "naked short selling.""


* Here's links to many more in Google

http://www.google.com/search?hl=en&ie=ISO-8859-1&q=unauthorized+stock+li
sting+berlin

http://news.google.com/news?q=unauthorized+stock+listing+berlin&hl=en&lr
=&ie=UTF-8&sa=N&tab=wn



2. Berlin stock exchange rejected the complaints on or about June 3

http://www.miami.com/mld/miamiherald/business/national/8830583.htm


3. An SEC hearing on this issue was apparently planned (this is a good
explanatory article after a slightly sensational beginning):

http://www.investors.com/breakingnews.asp?journalid=21575009&brk=1


4. SCO's press release is dated June 10th

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=SVBIZINK3.story&STORY=/www
/story/06-10-2004/0002190893&EDATE=THU+Jun+10+2004,+08:01+AM


5. I am not qualified to make any points of the merits of the arguments
involved. I would note if you look at article 3, it does say that 122 companies
were named, and 109 were not, so it is possible that SCO is one of the 109 (they
do not seem to be one of the 122 judging by that article).

[ Reply to This | # ]

SCO conference call questions - Important + Urgent
Authored by: Anonymous on Thursday, June 10 2004 @ 10:03 AM EDT
Sorry to repost this (also made variation on this post in couple of other recent stories). BTW all quotes supporting what I believe SCO has previously said can be found in the quotes database.

Anyway...
But it is SCO's conference call June 10th, and they have indicated to the press
that they will be talking about the cases.

I would like to encourage any journalists (or Groklaw readers who know any
journalists) to ask some pertinent questions about the case, so we can hear what
SCO is currently claiming. The idea is not trip Darl up or make him look a
fool, but to clarify if SCO's position on any of the issues has changed during
the course of the litigation. (a side effect might be IBM quoting them in future
memoranda)

I think journalists covering this story have an obligation to the community to
ask these types of questions, as they have previously published SCO's claims,
and SCO's clams seem to have changed somewhat in recent months.

Here are my key questions:

(1) Does SCO have evidence of copyright violations in Linux?

(2) How many lines of code are involved?

(3) Is IBM infringing SCO's copyrights with respect to Linux?

(4) Has SCO shown IBM the copyright violations as part of the litigation?

(5) How much damages are SCO entitled too? As the trial process seems to be
taking a long time, will it increase as the trial goes on?


Here is my justification for each question

For Q(1) - SCO have previously claimed to have such evidence (e.g. at SCOforum
2003). IBM in their summary judgement motion says SCO has not or has not been
able to present any such evidence. SCO has said in various memos that they need
further discovery from IBM (all iterations of AIX and Dynix) in order to specify
the copyright and contractual violations.

For Q(2) - SCO has previously claimed millions of lines of infringing code (e.g.
at SCOforum 2003) identified by 3 teams of experts (check the quote database).
However this on the faces appears to be substantially at a discrepency with what
SCO produced in January in response to the court's first discovery order, and
more recently in April in response to the 2nd discovery order.

For Q(3) - Again SCO has suggested on various occassions that this is the case.
e.g. around June 2003 they made a number of statements along these lines. I
would like to know if SCO still claims this or not

For Q(4) - Darl has said that they have shown IBM the infringing code. Have
they? And when? I raise this question because IBM essentially says in their
partial summary judgement that SCO has produced ("adduced") no
evidence of copyright violations.

For Q(5) - The law suit is currently claiming $5bn of damages. Darl has
indicated on more than one occassion to the press damages might be as much as
$50bn, and going up by $1bn per week (Stowell has said similar things about
$50bn). Do SCO still believe they are entitled to $1bn damages per week? I have
noticed that SCO have sought to the delay the trial by several months and having
a pending motion on this. Will they claim $1bn damages per week for this extra
period if the court does decide to delay the trial?

Thanks to all journalists
Quatermass

[ Reply to This | # ]

670,000 pages of documents
Authored by: Anonymous on Thursday, June 10 2004 @ 10:45 AM EDT
It's amusing that SCO is complaining about its workload: "that SCO has not
yet had a fair opportunity to review (because they were among the 670,000 pages
of documents that IBM produced in March and April)"

I guess that's what happens when you throw an overly broad subpeona at IBM -
they bury you under it! Wonder how many nazgul and IBM management or technical
people contributed to putting together all those documents?

Do we get to see all 670,000 pages of discovery here on Groklaw? <-:
(Actually, I know this stuff isn't public)

[ Reply to This | # ]

I don't know how to submit articles on Groklaw
Authored by: tomansley on Thursday, June 10 2004 @ 10:49 AM EDT
The link to submit an article seems to be down but anyway, I foudn this at
http://www.adti.net and thought it might interest people

Open source tip of the day. Open-sourcers hate to pay for copyrighted material
-- even when it's the much-admired prose of Lee Gomes at The Wall Street
Journal. How to read Gomes for free, given the strict copyright policies at
Dow-Jones? Answer: click here, to be whisked to Linux Today, where there's a
large archive of links to many of Gomes's magazine and Journal articles, posted
free at sites such as lucifer.com, news.excite.com, and even zdnet.com. "I
always read Gomes off the Linux Today links," chirps a correspondent to
AdTI's message boards. Warning: Sometimes the links go down, as the DJ
barristers comb the world for pirated Journal content. "I have one word for
you in that case," another Gomes fan writes: "google cache." Well
two words. "But it beats having to shell out $300 for the
d---Journal."

If anybody can send this to PJ it might be worth an article.

Cheers

Tom

[ Reply to This | # ]

Obvious patents
Authored by: Anonymous on Thursday, June 10 2004 @ 11:25 AM EDT
I think that some kind of simple rules shall be allowed to quickly invalid
obvious patents.

For example a rule stating that if what the patent propose can be done with
already existing tools at the time of filling and less than a thousand char of
code it is invalid.

That process is simple and would allow to make invalid lots of patents by simply
providing the aforementioned code. It would also implicitly state that something
that can be done with less than a thousand char of code is obvious.

[ Reply to This | # ]

OT: MS patents "To Do" list... Prior art?
Authored by: Asynchronous on Thursday, June 10 2004 @ 11:26 AM EDT
US Patent No. 6,748,582, granted and assigned on Tuesday to Microsoft, covers the use of a "task list" in a software-development environment. The patented technology essentially integrates certain comments left in the source code of an application under development with an accompanying checklist. Leave a "TODO" comment in the source code, and an authoring application automatically creates an item in the task list. Check an item off on the task list, and the corresponding source code comment is changed.
Sorry... but doesn't this already exist in other development environments such as PHPEdit?

From the help file (PHPEdit v0.8.0.28):

About This document explains the use of PHPEdit's 'TaskReport' module. This module allows the generation of reports, containing a list of unfinished tasks of an application (to do's), based on comments inserted in the application's source files.

Syntax Comments in the source code of the application must follow a special syntax and have to be placed inside the comments of the application. They must start with the keywords @todo for a pending/unfinished task or @done for a completed task.

[ Reply to This | # ]

Key points from conference call
Authored by: Anonymous on Thursday, June 10 2004 @ 11:28 AM EDT
1. They attribute writeoff to goodwill and intangibles ($3m I think) to Novell

2. They plan on streamlining Unix business until it is profitable in itself.
They expect revenue on Unix per Q to stablilize at $10m per quarter.

3. Project Q3 revenue = $10m-$12m

4. They summarize BayStar series of transactions as selling 2.x million shares
at $37m, as ending up being a stock sale of common stock at $13.x per share.

5. They say they have enough to fund lawsuits for several years

6. Wins claimed - CBS pharmacy. McDonalds, Lucent, Geotronics, BMW (Germany),
Toshiba (Jpan), various Chinese banks, Korean Ministray of Admin, UK dept of
navy, UK PizzaHut (I missed some)

7. Unix division aim to efficient for +ve cashfow in 2004

8. Largest releases of upcoming product releases in 2004. Coming up: Unixware
7.1.4, Smallfoot embedded Unix available this month. SCOoffice server 4.1 -
email coming next month. In August - Vintella Authentication from SCO. New
version of OpenServer, OpenServer Legend in Q1 2005 (haven't they already
announced all these?)

[ Reply to This | # ]

WAY OT But can we offer any help?
Authored by: stevec on Thursday, June 10 2004 @ 11:30 AM EDT
I found the following plea for help on the convea website.
If there is an open-source community, please help us out or we might just disappear before it started getting interesting.

From the news article he somes very upset by the actions of a commercial company stealing his product and has tried to settle the matter directly with them without success.
I know this has nothing to do with SCO but it would be a shame to see a good product disappear due to theft.


---
IANAL - nor do I want to be!

[ Reply to This | # ]

OT: Real Time Commentary on SCO Conference Call
Authored by: nealywilly on Thursday, June 10 2004 @ 11:35 AM EDT
Go to the Message Board for SCOX on Yahoo Finance.

Live WebCast also available if you have RealAudio (sorry I don't have the links
for either).

Gotta run!

[ Reply to This | # ]

SCO's Reply Memorandum in Support of Expedited Motion for a Protective Order
Authored by: Anonymous on Thursday, June 10 2004 @ 11:38 AM EDT
Let me get this straight:
Rather, SCO contends that under the circumstances it is not reasonable to proceed with a discovery schedule whose status the District Court has seen fit to address on an expedited basis the very day the depositions are scheduled to begin.
So, it's unreasonable to schedule these depositions, because the court has heard and denied our request to delay them. Clearly, because the court heard our request, the court is acknowledging that delay is in order.

[ Reply to This | # ]

OT: Irony
Authored by: Asynchronous on Thursday, June 10 2004 @ 12:05 PM EDT
From Globe Technology, Royal Bank of Canada hires consultants from International Business Machines to help them with a software issue.

[ Reply to This | # ]

SCO Group Second Quarter 2004 Webcast and Conference Call
Authored by: clark_kent on Thursday, June 10 2004 @ 12:08 PM EDT
This is hilarious.

"Er, eh, ah... Solaris Open Source? Sun has been the best licensee of Unix.
When they say Open Source, one may think of Open Source in a certain context. We
have "opened" Unix in many ways. Microsoft has something called Shared
Source..."

Sorry. Open Source Solaris. Sounds like open and freely available source code to
me. Not just the phrase "Open Standards" but "Open"
"Source." Quit mincing words, Jack!

"We are confident.."

I am glad you feel that way, SCO.

Sounds like the discussion is centered, not on investment and R&D (there is
a bit,) but more on Linux, IBM, and litigation.

Darryl says they are providing ample information to the courts and says IBM and
Open Source poeple say "you haven't showed us the code." In my
opinion, they did not show the code, they gave ample information. That is it.
They are saying the truth, hinding behind the potential ignorance of investors
and non-tech people.

Ooh. Some guy says, "you can see the code. That is what open source
is." Darryl is stepping around the comment. Darryl, take the code, compile
it, and see if it works like the other versions do.

Stick your protective seals up your nose Darryl. You are hiding!

[ Reply to This | # ]

Them Cows Them Cows Ya all
Authored by: Anonymous on Thursday, June 10 2004 @ 12:16 PM EDT
"We went out one day and our Unix cows were missing," McBride said he
told his father in trying to explain the case to him. "We looked in the
Linux pen, and there's a bunch of them in there that have our brand on them . .
. in this case the copyright. Someone took our cows and we want 'em back -- it's
as simple as that."

Old McBride you see I am an old rancher and my eye sight is not that good.
Would you mind having your men cut the cows you claim are yours and get them
over here by da fence so we can take a good look. You see Old Mc unless we can
see your actural brand on da actual cow I am going to shoot ya all dead to
rights for attempting to steal my herd. Last time I checked cow stealing is a
crime. If only old west law would apply in this situation. You know what they
did to people who try to steal someone elses cattle in the old west. Lets just
say the judical process was a lot more swift and very permanent.

Karl

[ Reply to This | # ]

OT - Motley Fool
Authored by: Anonymous on Thursday, June 10 2004 @ 12:56 PM EDT
Just can't resist this one:
"Management blamed the slow sales on a "lack of SCOsource licensing
revenue." SCOsource is the Linux users' shakedown program. Apparently, no
one is paying up. It took in $11,000 last quarter. That's not a typo. President
and CEO Darl McBride paid more lip service to "increasing shareholder
value," but you really have to wonder about the viability of his vision
when his firm's most engrossing initiative brings in less money than the guys
who mow lawns in my neighborhood. By the way, McBride was paid more than $1
million last year -- most of it in cash -- to preside over this impending
disaster."
more at http://biz.yahoo.com/fool/040610/1086881820_2.html

[ Reply to This | # ]

  • OT - Motley Fool - Authored by: Anonymous on Thursday, June 10 2004 @ 02:25 PM EDT
SCO conference call - rought transcrition
Authored by: Anonymous on Thursday, June 10 2004 @ 01:00 PM EDT
Here is a list of links to a quick work up of the call from the "Yahoo! Message Boards: SCOX"

Part 1

Part 2

part 3

part 4

part 5

part 6

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BitTorrent of SCO Conference Call today.
Authored by: kb8rln on Thursday, June 10 2004 @ 01:06 PM EDT

Ok here is the Bittorrent of the SCO Conference Call today in mp3 format.

http://sco.penguinman.com

---
Di rector Of Infrastructure Technology (DOIT)
Really this is my Title so I not a Lawyer.

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OT: Conference call - Obfuscations 'R' Us
Authored by: Anonymous on Thursday, June 10 2004 @ 01:16 PM EDT
The last caller was the only one to ask meaty questions.
He asked, among other things, why SCO needs AIX in order
to find infringing code in Linux. This very simple and
obvious question elicited an evasive and confusing
response from Darl. He continues to conflate the IBM
contract issues with the Linux infringement issues,
characterizing the case as too complicated for simple
answers.

The case is not complicated at all. Kevin McBride talked
about three buckets: trade secrets, copyrights, and
contract. It turned out that the first bucket is empty.
IBM is now taking the systematic approach of declaring the
second bucket empty before moving on to the third.

But SCO wants none if it. By conflating the second and
third buckets, or by declaring the second bucket
irrelevant (without admitting it's empty), SCO can stall
the case while they ask for more code, which is really
only relevant to the third bucket, if that. When asked
why they don't present more evidence to IBM, they say that
they need more AIX versions.

Kevin McBride was probably demoted for trying to clarify
this case. Clarity is the last thing that SCO wants.

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SCO's claims on German stock listings rebuffed and disputed
Authored by: Anonymous on Thursday, June 10 2004 @ 01:54 PM EDT
http://www.tomshardware.com/hardnews/20040610_114554.html

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A note fromTSCOG's lawyers to 'the teacher'
Authored by: tangomike on Thursday, June 10 2004 @ 02:38 PM EDT
"We just noticed that we have homework due next week that we agreed to do
months ago. There's been so much piled on that we aren't ready; we kinda lost
track. Plus, we got a whole bunch of stuff we asked for, but we haven't had time
to go through it all, in case there's something juicy (we hope).

Please give us at least another week."

Somebody else mentioned the movie 'Liar, Liar'. At least beating yourself up
(autoretrophrenology?) would have looked more sincere. This is just whining and
wimping, and blaming it all on IBM. It's fun to read, though.




---
To The SCO Group - please come back when you pass a Turing test.

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Conference Call Very Unprofessional?
Authored by: Anonymous on Thursday, June 10 2004 @ 02:45 PM EDT
Was it just me or did the call seem very unprofessional? It got started about 10 minutes late. Then the operator/host couldn't read the script without error. I thought the new CFO did a good job (with what he had to work with). On the other hand Darl (not pronouce like Daryl, but with a long "a" as in "Car") was a mess.

He was obviously reading from a script. Still there were many um's, ah's and "and's". Perhaps he should join Toastmasters. For some reason it sounded like he was trying to change the script while he was reading it. Perhaps it was related to the cell phone ringing in the background during the call. Was it one of SCO's lawyers?

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Don't let SCO hide the Vultus ball
Authored by: Anonymous on Thursday, June 10 2004 @ 03:46 PM EDT
Everybody is talking about the SCO comments concerning Novell and IBM cases
(which I guess we knew would be part of the conference call), the loss in
revenue, the German markets etc.

There is another ball that SCO successfully moved most of the attention off.

That is they had a major write-off concerning last year's Vultus acquistion.

This write-off tells you that they now feel that they paid too much to acquire
Vultus from, wait for it, Canopy.

Lucky for Canopy, ain't it?

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Two new Attourneys For Novell
Authored by: bsm2003 on Thursday, June 10 2004 @ 04:04 PM EDT
NVL27 PDF

NVL28 PDF

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Nice article in the Times: " SCO revenue takes a tumble"
Authored by: Anonymous on Thursday, June 10 2004 @ 04:31 PM EDT
The article ana lyzes revenue of SCO in the second quarter.
One small quote (hopefully it matches the "fair use" rules):

"SCO's legal actions have riled Linux advocates, triggered new intellectual-property protections for Linux users and programmers, and don't seem to have stopped the fast growth of the open-source operating system."

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One point I don't understand
Authored by: Anonymous on Thursday, June 10 2004 @ 04:33 PM EDT
Pamela Jones says that SCO is using delaying tactics purely to stretch out the proceedings - make them drag on as long as possible.

This does not make sense.

SCO's total net tangible assets are about $42 million. (That's calculated from its balance sheet published today: assets, minus "intangible assets", minus current liabilities). And it is burning cash at the rate of about $10 million per quarter (also from its accounts published today). The burn rate is increasing because its revenue is disappearing fast and it's increasing its legal expenses.
So at the most optimistic (for SCO) estimate, the company cannot last for more than one year. (The Baystar buyback hardly affects this calculation at all - the Baystar deal involved SCO paying dividends to Baystar, and coincidentally, the buyback amount is similar to what SCO would have had to pay in dividends).

Therefore, the best defense to an SCO lawsuit would seem to be: delay the proceedings for one year, then SCO ceases to exist.

It does not make sense for SCO to delay. There is something going on here that we do not understand.

And, please, don't reply that Darl is an idiot. He pulled in over $1 million from SCO last year. There are a lot of people who wish they were half as smart as that. Call him bad, evil, immoral, a crook if you like, but don't call him stupid because he's a great deal smarter than you are.

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OT: SCO stock price
Authored by: Anonymous on Thursday, June 10 2004 @ 05:06 PM EDT
SCO's stock price tanked today. It ended down $.55 to close at $4.89, a drop of
more than 10%. Of even greater interest was the volume -- 315,480 shares.
That's almost 10 times the volume of a normal day for this company. There's no
question that investors don't like to hear bad news, so it's not much of a
surprise that they're starting to dump the stock. The only question is, who's
buying those shares?

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SCO Finance question?
Authored by: pcoady on Thursday, June 10 2004 @ 05:34 PM EDT
I am not terrible at reading financial statements, but I cannot see where SCOX
had 8 million positive cash flow (as stated in the SCOX conference call) over
the past quarter or *year*. Except for the "one shot" revenue from
the MS
license (i.e. 'investment') both operations and 'other' have been overall
losers.
Depreciation and tax advantages can often make a negative P&L yield a
positive cash flow, but I don't see 8 mil of yield in SCOX and I definitely
don't
see positive cash flow going forward. Can someone enlighten/correct me on
this question?

Second point: SCOX seemed to credit MS revenue in one shot, but today said
the EV1's license revenue would "start" showing in this quarter. There
are very
good reasons and rules for accruing revenue 'all at once' or over the time of
the contract that yields the revenue. However it is not usual to account one
sale by one method and a second by another. Anyone care to comment?

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Perhaps Canopy already knew SCOG was going down
Authored by: Anonymous on Thursday, June 10 2004 @ 05:59 PM EDT
Perhaps Canopy already knew SCOG was going down at the time they sold Vultis.
Get the money out of SCOG before it evaporates.

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