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SCO's Conference Call and AutoZone Report
Thursday, June 02 2005 @ 01:21 AM EDT

It was an extremely short conference call, and by far the most boring, but at least they didn't kill any kittens live on air or gratuitously slander any private individuals. They announced at the beginning that they would only take questions about their "core Unix business". Blake Stowell, Darl McBride and Bert Young attended.

They increased revenues in their Unix business this quarter slightly, so they are cash flow positive in that area. They are launching their new product later this month. They made money from selling their TrollTech stock. They had lower expenses this quarter.

There were only two questions. Mr. McBride seemed a little startled that there were no further questions. Maybe the last conference call left a bad taste in people's mouths. You need a mighty strong stomach to listen to SCO these days. Or maybe nobody cares what they say any more, because it is so spun. People hate being spun.

No questions were allowed about the litigation, but they felt free to speak about it. The only thing they said about SCO v. IBM was that the Magistrate Judge ruled on IBM's motion for reconsideration, "giving IBM some relief on deadlines and some other matters," and they characterized it that she strongly reinforced her order and ordered all public and private contributions to Linux turned over. I keep telling them Linux is developed in public. Please review our article about the Linux development process, so you'll see what a wild goose chase they have the court on. Of course, the judge did something far more dramatic than rule on deadlines. She reduced the number of individuals whose files IBM needed to turn over from 3,000 to 100. Does that match SCO's description of the order? Make up your own mind. She acknowledged that when making her prior order, she was not fully informed. Heaven knows that can happen if you listen to SCO talk.

On the denial of the G2 motion to intervene, he said that the judge told the parties to take another look at sealed documents, and now, McBride said, many important documents would soon be available. One can only hope that will include SCO documents. McBride mentioned the Novell hearing on May 25th, and he said the judge took it under advisement but he said SCO is confident they'll get to do discovery. I have no idea what he bases his confidence on. They do so enjoy discovery. That brings us to AutoZone.

On AutoZone, as you'll recall, the judge gave SCO a period of limited discovery, to see if they wished to bring a preliminary injunction against AutoZone, if they felt they could demonstrate the irreparable harm they claimed.

They have decided not to try for a preliminary injunction. That is the bottom line.

But here's the SCO spin. McBride said SCO has concluded their discovery and filed a report with the court. SCO found through discovery, he alleges, "many instances of copying of programs containing SCO OpenServer code." (Keep in mind, however, that "many instances of copying of programs" isn't the same as many instances of *illegal* copying. The facts are very much in dispute.) AutoZone has now removed all of the "SCO code and proprietary information", he said, and denies all infringement and any harm. SCO is therefore not pursuing a preliminary injunction "at this time." The report does not address their claim of infringement in Linux, because of the stay, he said. However, I note that the report itself acknowledges on page 4 that "the Court did not explicitly limit discovery" to just AutoZone's migration to Linux, but SCO thought the Court indicated something like that. I saw nothing like that in the order or the hearing, but that is SCO's story and they are sticking to it.

In short, when you strip away the distracting wrapping, they didn't find anything worth bringing to the court by means of a preliminary injunction. Did you think they would?

Instead, we get more unsupported and so-far unverifiable allegations. 91 pages of PR. That's all there ever is with these folks. All hat and no cattle.

As just one example, they take AutoZone technical employees to task in the Report, saying they "admitted" that "they didn't consult copyright counsel or any counsel prior to or during" the migration process. But if you read the deposition of Bob Celmer, one of the AutoZone employees they are referring to, on page 19 of the Report, what they actually asked him was whether he knew if anyone had consulted an attorney prior to deciding to switch to Linux, and he answers, "I don't know." Why would a programmer know that? The legal department would have done that, not the technical staff. The fact that techies don't know something like that doesn't mean it wasn't done. Again, on page 20, the attorney persists, asking if an attorney was consulted to determine if migrating from OpenServer to Linux "was appropriate or legal under those licenses" and Mr. Celmer again says he doesn't know. From that, SCO's attorneys tell the judge the above spun version. Does SCO really believe no user of OpenServer is allowed to switch to Linux? If so, it might explain their business difficulties.

And on page 8, they say they found AutoZone copied two COFF files, Compx and Decompx, "which were programs that it had licensed from a third party which contained SCO code onto all 3500 of its machines located in the United States and Mexico and has been using those files since at least January 2000." Can you imagine? What a crime. They licensed some code from somebody else, binaries to boot for which AutoZone did not have the source code (for proof of that, see page 24, a portion of the Bob Celmer deposition attached to the Report) and SCO claims rights to that code. The same page of the Report also says that AutoZone thought it had not used either Compx or Decompx programs since 2003. They copied it onto all the servers, used it from 2000 to 2003, they originally guessed, without any way of viewing the code, found out some servers still had the two files on them after 2003, and bingo, a crime of great magnitude from two files that they licensed from someone else, and likely had no reason to think were infringing anybody's code. On page 26 of the Report, the deposition of Celmer again, he points out that some of the programs they found when they went looking in discovery don't even run in Linux, so they couldn't use them, even though they were still there on the servers. Some were pre-Y2K. In short, stuff nobody even knew was still there.

A visit from SCO is like being audited by the BSA, I gather. Two files from a third party morph into thousands and thousands of AutoZone infringements. And the irreparable harm from this "crime" is quantifiable as what? Anyway, they are all deleted now. SCO is so scraping the bottom of the barrel with this.

Just as a friendly reminder, do you remember the "mountain" of "infringing" code IBM allegedly donated to Linux that melted into nothingness under the cold light of the courtroom? I think I'll keep that firmly in mind as I evaluate the new claims about AutoZone, if you don't mind, particularly since they don't acknowledge any wrongdoing at all.

There have been a lot of questions, McBride said, about SCO's motives in bringing its various litigations and suggestions in the media (I believe he means moi) that SCO was offbase in bringing the court cases, but the report now shows, he claimed, that AutoZone, by its own admissions, copied their code. Except, he just told us that AutoZone said they didn't infringe. We are back in Wonderland, I guess, trying to use logic on language that isn't logical in the real world. They wouldn't discuss AutoZone in detail or respond to any questions about it, naturally.

He told everyone to obtain the documents referred to from the courts, read them and reach your own conclusions. So, here is their report [PDF and huge], the one he was referring to, with attachments. By all means read it carefully, remember it's SCO speaking, see if you can comprehend what the alleged infringement offenses are, note that AutoZone denies any offense whatsoever, compare the depositions with SCO characterizations, and then make up your own mind about SCO's claims and their validity. And here is the Magistrate Judge's Order on IBM's motion for reconsideration, so you can compare the way SCO characterized it today with the document itself. Finally, here is the order denying G2 et al's motion to intervene.

The spin didn't work with Business Week. Their headline reads: "SCO Group posts $1.96 million loss for 2Q":

The SCO Group Inc. posted a second quarter loss because of competition in the corporate server market and expenses for a lawsuit accusing IBM Corp. of copying confidential code into the open-source Linux operating system.

Lindon, Utah-based SCO lost $1.96 million, or 11 cents per share, in the three months ending April 30. That compared to a loss of $14.7 million, or $1.04 a share, for the period a year earlier.

Revenue dropped by nearly $1 million to $9.3 million, with SCO citing competitive pressure on the company's UNIX products and services for the decline. The company said UNIX remained profitable, however, and it plans to release an upgraded version June 22 after years and millions of dollars of development.

That's the story that went out on AP, and it's everywhere. So if SCO thought the AutoZone story would be the headline, they miscalculated. What everyone is reading is about a $1.96 million loss this quarter, the 5th quarterly loss in a row.

We've divied up the SCO AutoZone report into 8 pieces, all PDFs, so those of you on dialup won't choke:

The Report itself

Declaration of David S. Stone

Deposition of Bob Celmer

November 24, 2004 letter from David J. Stewart to David S. Stone -- this is the letter to compare with SCO's characterizations in its Report, in my opinion, particularly page 3:

AutoZone's IT personnel also discovered that the "Spirit" server had some OpenServer compiled programs on it because of a recent restoration of the server after a crash. Historically, this server was used as both a development server and the home of AutoZone's revision control system. At one time, each AutoZone programmer had an account on the server to develop, compile, and test programs. Several years ago, AutoZone's IT department decided to stop providing developer accounts on the Spirit computer, and the machine transitioned to serving onlly as the home for AutoZone's revision control system. Spirit recently crashed and, during its recovery, it was converted from SCO OpenServer to Red Hat Linux. All of the files that were on Spirit were loaded back onto the machine during the recovery process to make sure that a complete restoration was achieved, and this resulted in many SCO compiled programs being loaded onto the machine. These programs were located both in the RCS system and in the developer's home directories. All of these programs (1,130) were removed from the server by October 26, 2004, after copies and backups were made. . . .

Finally, we have reviewed the relevant OpenServer agreements between SCO and AutoZone. These agreements are still in place and do not include any prohibitions on AutoZone's use of OpenServer compiled code on Linux machines. Accordingly, most of the OpenServer compiled code discussed above is properly licensed, and AutoZone is under no legal obligation to delete or recompile the code. Nevertheless, because AutoZone does not need the code to be compiled under OpenServer to serve its purposes (or in some cases, because AutoZone no longer needs the code at all), AutoZone has removed or recompiled the code as a courtesy to your client and to avoid any further issue regarding these files in this litigation." From such as this, SCO would like you to draw the conclusion that they have a case.

January 11, 2005 email from David J. Stewart to David S. Stone

Excerpts of the James Greer deposition transcript

March 4, 2005 letter from Douglas L. Bridges to David S. Stone

AutoZone's Responses to SCO's First Set of Interrogatories and First Request for the Production of Documents

It may take a few moments for them all to resolve properly.


  


SCO's Conference Call and AutoZone Report | 292 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCO's Conference Call and AutoZone Report
Authored by: alansz on Thursday, June 02 2005 @ 01:42 AM EDT
Some Autozone programmer should have spoken to counsel? I bet SCO would like
that - perhaps they could inadvertantly obtain the privileged memo through
discovery and then try to disclose it to impugn the company's motives?

[ Reply to This | # ]

"All hat and no cattle"
Authored by: Anonymous on Thursday, June 02 2005 @ 01:46 AM EDT
The perfect characterisation. (-:

[ Reply to This | # ]

Corrections
Authored by: IRJustman on Thursday, June 02 2005 @ 01:50 AM EDT
Post 'em if ya got 'em!

[ Reply to This | # ]

OT linkage
Authored by: IRJustman on Thursday, June 02 2005 @ 01:57 AM EDT
Be sure to make links clickable per the instructions, and be sure to post as
HTML.

[ Reply to This | # ]

I wish, I wish.
Authored by: Anonymous on Thursday, June 02 2005 @ 02:09 AM EDT
I wish there was a PJ for every corporation in the world. Somebody to watch over
all their actions and words and then expertly disect their spin so we all can
see the weird pathology of the american corpration.

Thanks PJ. I hope you insipire ten thousand clones for ten thousand other
corporations.

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: mcleodnine on Thursday, June 02 2005 @ 02:12 AM EDT
...they would only take questions about their "core Unix business".

Odd that they set the ground rules in such a way as to completely ignore the other half of their two-pronged revenue stream - the IBM lawsuit. If I was an investor (I'd rather chew broken glass) I'd be keen to know how this money-maker will take SCOX "TOO TEH MOON!"

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: belzecue on Thursday, June 02 2005 @ 02:20 AM EDT
"All hat and no cattle"

Oh, the sweet Kodak moment when Darl reads this :-)

[ Reply to This | # ]

The bad news
Authored by: Anonymous on Thursday, June 02 2005 @ 02:57 AM EDT
The bad news is that they have succeeded in drastically reducing their quarterly
loss, i.e. the rate at which they are burning through their capital. At the new,
lower, burn rate, SCOX could survive for another 2 years. Two more years of FUD,
mudslinging, and lawyers' wranglings distracting the GNU/Linux world.

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: urzumph on Thursday, June 02 2005 @ 03:57 AM EDT
There have been a lot of questions, McBride said, about SCO's motives in bringing its various litigations and suggestions in the media (I believe he means moi) that SCO was offbase in bringing the court cases...

I didn't know that Moi worked in the media.... ;)

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: senectus on Thursday, June 02 2005 @ 03:58 AM EDT
Could someone post the total losses for the last 5 qtrs?
Thanks.. :-)

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: Anonymous on Thursday, June 02 2005 @ 04:25 AM EDT
Ghost, not logged in...

Their loss has gone up dramatically...
If it were not for the income from the seale of the trolltech shares, they would
be up towards a real loss of about 2.7 million. The income from the shares,
reduced the hit they took quite a bit.

[ Reply to This | # ]

Catch-22
Authored by: amiloride53 on Thursday, June 02 2005 @ 04:26 AM EDT
"As just one example, they take AutoZone technical employees to task in the
Report, saying they "admitted" that "they didn't consult
copyright counsel or any counsel prior to or during" the migration
process."

And in the SCO v. IBM case, SCO has desperately been trying to get on the public
record the fact that an IBM project manager consulted with the legal department
before releasing Monterey code, as an indication of IBM's guilt. In SCO's eyes,
you're darned if you do and darned if you don't.

[ Reply to This | # ]

Bob Mims on SCOX figures
Authored by: fudisbad on Thursday, June 02 2005 @ 05:34 AM EDT
Click here
Revenues for Utah's SCO Group continued to slide during the second quarter, but the company still managed to slash its net losses by nearly 75 percent.

SCO, best known for its $5 billion federal lawsuit against IBM stemming from alleged misappropriation of its Unix code in the freely distributed Linux operating system, saw its earnings for the quarter ending April 30 dip to just under $9.26 million, compared to almost $10.14 million a year ago.

However, net losses shrank dramatically from $7.68 million ($1.04 per diluted share) for 2004's second quarter to $1.96 million (11 cents per share) this year.

Plus a quote from our second favourite "analyst", Laura DiDio.

---
See my bio for copyright details re: this post.
Darl McBride, show your evidence!

[ Reply to This | # ]

Is it my imagination, or has tSCOg
Authored by: dmarker on Thursday, June 02 2005 @ 05:39 AM EDT

actually realized that attacking Groklaw is like yanking a lion's tail whilst
barefoot and without transport in the middle of a very large savanna plain.

I sense a change in the way tSCOg are dealing with the 'Groklaw/PJ' issue. I
even believe they may be calling off most of the hounds they may previously have
sic'd onto Groklaw/PJ in their cause, such as Mr Lyons, because the realization
has hit them post MOG, that such transparent tactics only build Groklaw's
support and increases the global auroa and force of anger and that has engulfed
them and their antics, especially this year.

I really do get the feeling tSCOg as an entity are treading far more lightly
than we have ever seen them do before.

But, who really knows :-)

Doug M

[ Reply to This | # ]

An ironical outcome
Authored by: cricketjeff on Thursday, June 02 2005 @ 05:41 AM EDT
No doubt many Groklawists are aware of the current fun and games in the EU over
a consitution. (Actually it isn't about a consitution but a treaty about a
constitution but never mind).
One of the sillynesses in this process has been that in the UK the people in
favour of the constitution are largely desperate that it should be defeated in
other countries, since it requires unanimity to be adopted and they are certain
they can't win here if it loses everywhere else they don't have to prove that.
Why does this relate to the SCOundrels?
Well looking at the sorts of hoops AZ have leapt through and still been pursued
I find myself thinking, what if SCOG won?
How would M$ feel?
Who would buy any software from a company that could sue you if one tiny bit of
code from an obsolete version could get you in court if you had to restore a
server from a backup tape? This would impact M$ especially hard because its
windowing software spreads itslef all over the hard drive like a dirty dog
spreads mud over the shagpile. It would be commercial suicide to ever install
any closed source software at all! This would be an excellent outcome for real
computing. This doesn't mean I think SCOG will win nor that I really hope it
will (in fact it makes it far more likely it will lose, who wants to be the
judge that closes down commercial software?) but it is the sort of thought that
provokes a flicker of a smile...

[ Reply to This | # ]

Autozone's Store Replenishment Interrupted
Authored by: om1er on Thursday, June 02 2005 @ 06:43 AM EDT
Since I have a fairly good understanding of automated replenishment systems in
retail, the part in the report about 650 Autozone stores having their
replenishment programs fail (after some of SCO's precious IP was removed) really
caught my eye.

This automated ordering of items for resale is critical to the success of stores
and companies. Typically, the order from a store needs to arrive at
headquarters within a small window of time, or the store will not have the
delivery truck arrive with all of the items they need to restock. Failure of
the programs causes a mad scramble on several levels of the organization.

The fact that Autozone had 650 failures, and that those failures can be traced
back to what is probably viewed as just total harrasment from SCO, will most
certainly leave a very bad taste in Autozone's mouth. I can be fairly certain
that SCO has lost that customer forever - and for the simple reason that this
lawsuit caused Autozone lots of problems internally and probably caused them
lost sales. Just because of two tiny, third party applications that were built
on an SCO box and then copied to in-store processors.

I know I'd be honked if I'd had to clean up that mess on an emergency basis.
SCO really has no right to complain about those programs, just because they were
compiled on an OpenServer system, unless we live in a very strange world indeed.
They certainly should not be making a federal case of it. It just blows my
mind that they would.

But then, I don't get paid gazillions of dollars to make other people's lives
miserable.

Just my $0.02.

---
Keeping an eye on the bouncing ball.

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: Hop on Thursday, June 02 2005 @ 08:10 AM EDT
>>>But here's the SCO spin. McBride said SCO has concluded their
discovery and filed a report with the court. SCO found through discovery, he
alleges, "many instances of copying of programs containing SCO OpenServer
code."<<<

From an IT perspective, you never do something major to your servers without
making backups first. Odds are SCO discovered that AZ had made backups before
they started the software swap. It's standard practice and certainly not
illegal. I guess once their IT group destroyed the backups with the old code,
everything was right with the world. The downside is that Darl could spin it as
"copying" without placing it in context.

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: Anonymous on Thursday, June 02 2005 @ 09:16 AM EDT
SCO got only two questions because all they would discuss
was their core business, but not law suits. There was
nothing left to discuss.

[ Reply to This | # ]

AZ PI - did judge tell SCO: do discovery only if you will do PI?
Authored by: jdg on Thursday, June 02 2005 @ 09:29 AM EDT
I thought that the judge warned tSCOg that if they asked for discovery for PI
they had better do a PI. Can csome of those that understand this issue comment.

---
SCO is trying to appropriate the "commons"; don't let them [IANAL]

[ Reply to This | # ]

Will SCO try to settle and will Autozone agree
Authored by: codswallop on Thursday, June 02 2005 @ 09:30 AM EDT
It looks legally like SCO has 2 choices as to how to pursue the case. They can
either keep their Linux claims in the case, or drop them in favor of just what
they found. In that case the only question would be ownership of the copyrights
on the library. This might not be enough to stay the case, since the copyrights
aren't monolithic. SCO just needs valid copyrights to some of the code for
infringement. On the other hand which copyrights they own affects the damages.
Still the issue would be different from the Novell case.

The point of doing this would be to force Autozone to settle. Statutory damages
on 110,000 cases of infringement would be a tidy sum. Now, of course, there are
a number of reasons the number would be much smaller, but it represents a real
risk for Autozone. If you add to this the cost of litigation and the disruption
of discovery, it might be cheaper to settle. But, since there are other factors,
such as anger at SCO and not wanting to be extorted, economic issues may not
dominate. Autozone could believe they have a good case and still settle, if they
view this as purely a business decision.

Why would SCO take this route? If they could get some cash and also get Autozone
to buy Linux IP licenses at a discount as part of the settlement (we've seen
this one before), they could declare victory. On the other hand, they lose the
test case they claim they wanted. Everyone would know it was a money thing and
didn't say anything about the validity of SCO's claims. Also the judge might not
cooperate by saying what he would do if SCO were to go this route. If SCO had to
drop the Linux part of the case before they knew if this would allow them to
proceed, they'd be taking a big risk. Autozone would never consider settling a
stayed case.

Maybe the lawyers here can add something. Their could well be procedural issues
I missed.

---
IANAL This is not a legal opinion.
SCO is not a party to the APA.
Discovery relevance is to claims, not to sanity.

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: Anonymous on Thursday, June 02 2005 @ 09:55 AM EDT
WTF - how can copying programs you paid for and licensed be illegal - if you
changed os's so what - it is the program you paid for you should be able to do
what you want - they didn't have source so they couldn't change it - they just
moved it to a different box because they upgraded from their crappy old box.
wasn't part of the advantage of buying the program was that is was probably
posix compliant and could run on any posix compliant system?

Ya - this will get them new customers - what morons.

[ Reply to This | # ]

Third-party software question
Authored by: Anonymous on Thursday, June 02 2005 @ 10:12 AM EDT

Is SCOX planning on pursuing any legal action against the third-party that distributed those two files to Autozone? If it is (somehow) illegal for Autozone to be using those two files, then surely it is illegal for that company to be distributing that valuable code.

--

[ Reply to This | # ]

SCO's Conference Call Audio
Authored by: Anonymous on Thursday, June 02 2005 @ 10:20 AM EDT
I don't see a link to the audio anywhere above. The call can be listened to at mms://rx-wes-sea26.rbn.com/farm/*/shareholder/shareholder/wmdemand/050601c ald.asf. Plug that URL into your Windows Media-compatible player -- works fine with mplayer, e.g.

I have an ogg recording of it, but am not sure if it's legal to post.

[ Reply to This | # ]

SCO's Conference Call and AutoZone Report
Authored by: zjimward on Thursday, June 02 2005 @ 10:48 AM EDT

Reading the deposition of Bob Celmer I figure I'm as guilty as him in doing
migrations. Of course, I believe that scripts and other utilities are not part
of the operating system. Any one that looks at a layer chart for an OS can see
that the kernel is the OS and every thing else sits on top of it. Yes, the
scripts may be licensed by SCO, but I believe this is not a cause of major lines
of the OS have been copies. Second, if SCO is going to follow this path then
every business in the world is guilty of this during migration. Probably, even
SCO has done this themselves when converting some one from AT&T Unix to SCO
Unix. There seems to be a bit of "Fair Use" and making it impossible
for a business to continue to be productive and make money here.

[ Reply to This | # ]

AutoZone Licenses a little help please.
Authored by: rsteinmetz70112 on Thursday, June 02 2005 @ 10:50 AM EDT
I believe that Autozone had the right under their license for OpenServer to use
all or any part of the operating system on any machine they own provided they
didn't exceed the number of servers or users per server they agreed to.

The standard two page OpenServer 5.0.0 Software License Agreement for OpenServer
includes this language "You may load, copy or transmit the Software in
whole or in part, only as necessary to use the Software on a single personal
computer or workstation,"

It seems pretty clear to me that you can use all or part of "the
Software", down to a very few files.

I have been unable to find my copy of the Development System License, but If I
Remember Correctly it grants you the right to create and distribute binaries
without limitation or payment of royalties. I hope someone here can find a copy
and confirm that.

Nothing in the filing indicates which files were copied on to Linux systems but
I got the impression they were files which AutoZone compiled themselves. If so
then Autozone may have a license to link to SCO static libraries and distribute
them to whoever they wish, as a part of their development system license.

The remaining piece of the puzzle is the compx and decompx files. I have been
unable to locate any clear reference to them, and again hope someone here may
know something about them. Apparently AutoZone purchased several versions of
these files for different computer systems and are still using them on AIX and
some other systems.

---
Rsteinmetz

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

SCO having nothing, they know it - and what can AutoZone do?
Authored by: Anonymous on Thursday, June 02 2005 @ 12:15 PM EDT
If SCO thought they had something, they would have filed for a preliminary injunction to stop AutoZone doing again whatever it was that AutoZone had done before. They didn't.


By "meaningless", I mean that the report is of no real value to the court in progressing the case. It's not attached to any motion. It's not really in response to any court order. And the report itself is not something that will be considered when eventually adjucating this case.

- A cynic might speculate that the report is intended for PR purposes, especially since as a court filing it is privileged from slander/libel accusations.

- A real cynic (tinfoil?) might even speculate that SCO wants to emphasize the disruption caused to 650 AutoZone stores, as part of the leverage in support of their "pay up now before we prove anything" campaign,

- And even a non-cynical person can see that SCO certainly values the PR aspect of this report, what with Darl McBride repeatedly telling everybody to read it.


Let's look in detail at SCO's allegations in this report: (remember this is taking SCO's factual allegations as correct, in other words giving SCO the benefit of any doubt, but there may be later dispute about the underlying facts of some of these issues)

(A) That certain AutoZone employees did not consult with attorneys at certain points during the migration.

So darn what?

I got out of bed this morning, without consulting an attorney - but it doesn't mean that I'm guilty of anything.

I ate breakfast this morning, without consulting an attorney - and that also doesn;t mean that I'm guilty of anything.

And I wrote this post today, without consulting an attorney - and that also doesn't mean that I'm guilty of anything.

Copyright infringement turns on (1) "copying" protected materials without permission, and (2) whether those materials are protected by a valid copyright. There is no element in a copyright infringement case for "not consulting with an attorney". (amusingly we might also remark that in the IBM case, SCO is arguing that IBM employees who did consult with an attorney, are therefore guilty of something).

In any case, AutoZone says they have permission:
p60 AZ-52 - From AZ's attorneys to SCO's:

Finally, we have reviewed the relevant OpenServer agreements between SCO and AutoZone. These agreements are still in place and do not include any prohibitions on AutoZone's use of OpenServer compiled code on Linux machines. Accordingly, most of the OpenServer compiled code discussed above is properly licensedm, and AutoZone is under no legal obligation to delete or recompile the code. Nevertheless, because AutoZone does not need the code to be compiled under OpenServer to serve its purposes (or, in some cases, because AutoZone no longer needs the code at all), AutoZone has removed or recompiled the code as a courtesy to your client and to avoid any further issue regarding these files in this litigation.


(B) That AutoZone copied certain files originally compiled on OpenServer to Linux.

Well... p60 AZ-52 - From AZ's attorneys to SCO's - rather suggests that AutoZone has permission to do this anyway.

But if it is a copyright infringement to do this - then why isn't SCO filing for a preliminary injunction to stop them doing it again? As AutoZone says they've already stopped, no or minimal bond should be required for such a preliminary injunction.... I think that SCO knows in its heart of hearts, that AutoZone does have permission to do this.



So we get to AutoZone's response to this report. I don't know which options are open to them, but there are several alternatives I can think of (and a question to marbux, AllParadox, webster et al, might be which of these is possible and/or likely)

1. Don't bother to responding to SCO's report, because it's meaningless

2. File some kind of counter-report on what AutoZone found during discovery

3. Ask for the report to be stricken from the record (or better yet, court privilege removed - I don't know if this is even possible).

4. As SCO contends that there are two copyright infringements by AutoZone, namely (i) the copying of these files during migration to Linux, and (ii) copyright infringements in the Linux operating system itself -- and SCO contends that part (ii) is stayed -- maybe AZ is in a position to file a summary judgement motion on part (i), using the OpenServer agreements, notwithstanding the stay on the case. I don't know... but it's an interesting question.


Quatermass
IANAL IMHO etc

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SCO didn't need Autozone's source?
Authored by: Anonymous on Thursday, June 02 2005 @ 12:24 PM EDT

Page 2, Footnote 1:

While SCO requested that AutoZone produce the original source code for binaries running on its Linux system, AutoZone objected and refused to do so on various grounds including undue burden... Accordingly, the conclusions set forth in this report are based upon review of the programs in binary form and related documents and data produced by AutoZone.

Apparently, besides not needing the source from Sun or HP to declare them free of SCO code, they didn't need the source from AutoZone, either. I bet IBM wishes they knew that magic trick.

Paul C.

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COMPX - Possible lead
Authored by: Anonymous on Thursday, June 02 2005 @ 12:42 PM EDT
There seems to be some mystery over the compx and decompx utilities

I wonder if it's possible this *may* be it (it may *not* be too!):

Once a upon a time there was BBS software called "Waffle". I think it
was UNIX based.

I'm not sure who wrote it, but somebody called Roy M. Silvernail, I think wrote
a utility for it called "COMPX"

Mr Silvernail's web site appears to currently be http://www.rant-central.com/
and formerly was I think http://www.scytale.com


This is a guess and may be, most likely is, completely wrong... but it's the
only idea I have.

Quatermass
IANAL IMHO etc

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SCO's Conference Call and AutoZone Report
Authored by: Kaemaril on Thursday, June 02 2005 @ 02:19 PM EDT

On AutoZone, as you'll recall, the judge gave SCO a period of limited discovery, to see if they wished to bring a preliminary injunction against AutoZone, if they felt they could demonstrate the irreparable harm they claimed.

(SCO is) therefore not pursuing a preliminary injunction "at this time."

How does this work? Surely, if SCO want to claim/believe they are being irreperably harmed, they've got to go for the injunction now? I mean, they can't just sit back for six months, file for an injunction, and claim they've been irreperably harmed, can they? The first question out of any judge's mouth would surely be "Then why didn't you file six months ago?"

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WHAT?!? NO WOOKIE???
Authored by: Anonymous on Thursday, June 02 2005 @ 02:53 PM EDT
I sorely disappointed!

Look again, there's gotta be a wookie in there somewhere!

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I am getting a feeling
Authored by: Tufty on Thursday, June 02 2005 @ 08:30 PM EDT
There has been a change of tone at SCO. Something's changed. Have they been
talking to someone new who has given different advice to the path they've been
on. A board member leaving. A new one to come on board. Not enough information
yet but I wonder if the more mellow trend will keep up. Launch on the 22nd, they
need buyer confidence. Let us keep an eye open.


---
There has to be a rabbit down this rabbit hole somewhere!
Now I want it's hide.

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Missing pages in "Autozone's responses" PDF
Authored by: arch_dude on Thursday, June 02 2005 @ 10:20 PM EDT
The "responses" PDF appears to be missing pages 7-10.

Where did this document come from? did a LawGrokker go to the courthouse? Do we
have this directly, or only as an appendix to the SCOG filing?

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SCo IP in COMPX/DECOMPX
Authored by: arch_dude on Friday, June 03 2005 @ 12:01 AM EDT
From what we can determine, AZ purchased these two programs from a third party.
Presumably, this third party (3V) had a license that permitted distribution of
binaries that would run on Openserver systems.

This leads to four questions:

1}Who is 3V?
2)What is the contract between 3V and oldSCO?
3)Does newSCO actually own the copyrights to the libraries that are contained in
the binaries provided in COMPX and DECOMPX?
4)What is the contract between oldSCO and AZ?

For SCOG to prevail in a copyright violation claim against AZ, SCOG must first
prove that they own the copyrights in the library code, and then show that AZ
has no license to use COMPX and DCOMPX on Linux.

Even if SCOG can show that they own the copyrights and that AZ has no license,
SCOG is probably equitably estopped from claiming infringement, based on laches.
SCOG offered to assist AZ in migrating to Linux, using Linux's ability to
"impersonate" oldSCO UNIX. In equity, such an offer implies that it is
acceptable to run programs that include statically-bound SCOG libraries on the
Linux target.

Leaving aside all of this, AZ probably had valid licenses to run SCOG binaries
on all of the AZ computers. These licenses probably do not refernece the OS. If
this is the case, then AZ can run SCOG binaries on a Linux OS, as long as the
Linux OS is running on a computer that AZ has licensed to run SCOG software.

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