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More SCO Fun in Discoveryland - 2 Filings
Monday, October 24 2005 @ 07:07 PM EDT

Here's SCO's Memorandum in Opposition to IBM's Motion to Compel Production of Documents on SCO's Privilege Log [PDF], in which they assert attorney-client privilege to justify holding back documents from IBM.

Now we get down to the nitty gritty, with both sides telling the history of Unix their way. IBM asserts that the privilege isn't SCO's to assert, that they bought only some assets, with the previous owners still in existence. SCO is saying they bought not just the assets but the business itself, which they say they have continued, so they are properly asserting the privilege. My favorite paragraph is on page 5, SCO's last bit in its version of history:

"In 2003 Caldera changed its name to The SCO Group, Inc. SCO is thus the successor to the UNIX business that was transferred from AT&T to Novell to Santa Cruz to Caldera."

And here us babes in the woods thought Caldera changed its name to SCO just for marketing purposes. As to SCO's privilege theory, it isn't so simple. For one thing, Novell's interests are opposed to SCO's, yet SCO is claiming privilege over documents prepared for Novell. That is a hurdle in SCO's path.

I'll need to read the cases each side cites to know who I think is right on the issue of attorney-client privilege, and I can't do that today, because I have to finish an article for someone under a deadline. But I will as soon as possible, together with IBM's Memorandum in Support of its Motion to Compel Production of Documents on SCO's Privilege Log [PDF]. If someone could find the cases SCO and IBM each cite and send them to me, it would help a lot. I have to tell you, this is one of the most interesting debates yet, to me, and I can't wait to dive in.

Also, here is SCO's New Renewed Motion to Compel Discovery [PDF]. At first I thought they were kidding around, maybe riffing off of my joke titles the other day about their renewed, rerenewed, renewed again, we're-coming-'round-the-mountain-once-again motions to compel discovery. They were supposed to file a motion, as per Judge Well's instructions in her Order. Judge Wells said that a lot of discovery had gone on since SCO originally filed its Renewed Motion to Compel Discovery (#366 on the docket), so because of the possibility that some items had been handed over in the meantime, SCO was to "withdraw the pending motion and file a new motion removing any items from the motion which may have been provided by IBM in the intervening time."

So, she asks them to withdraw the Renewed Motion to Compel Discovery and submit a new motion. So SCO files a motion titled "New Renewed Motion to Compel Discovery". Is that what Judge Wells asked for, a new *renewed* motion? I know. They are such cut-ups, these SCO lawyers. I guess they still want IBM to sound like the bad guys, to give the impression that poor SCO has to keep filing and refiling motions to compel discovery, a double irony on the day they filed a memorandum trying very, very hard not to give IBM what it says *it* is entitled to in discovery. They stubbornly state that with all due respect, they are just resubmitting the motion, since IBM didn't cough up anything new to make them drop a thing from their original renewed motion to compel. Sore losers, I'd say. Didn't you guys enjoy that hearing?

SCO's lawyers remind me of Winston Churchill's famous 1941 never-give-up speech to his old school at Harrow. If you go to Google, mostly you'll find the story told that he gave a speech that consisted in its entirety of this:

"Young men, never give up.
Never give up!
Never give up!
Never, never, never--never--never!"

My mother wrote that speech on a piece of paper and kept it in her important papers the rest of her life, and she lives that way too, now that I think of it. So, that is how I knew that story, enjoyable as it is, probably wasn't true. Here's what my mom wrote down:

Never give in. Never give in. Never, never, never, never -- in nothing, great or small, large or petty -- never give in, except to convictions of honor and good sense.

If you visit this site, you can find confirmation that what my mom wrote down is part of what he actually said that day. Never be satisfied, when doing research, with the first answer you come across, by the way. Nothing is ever as simple as it seems.

However, SCO also reminds me of another Churchill quotation:

"However beautiful the strategy, you should occasionally look at the results."

  


More SCO Fun in Discoveryland - 2 Filings | 202 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Off Topic here
Authored by: SpaceLifeForm on Monday, October 24 2005 @ 07:18 PM EDT
Please post links in HTML.

[ Reply to This | # ]

Any corrections, please?
Authored by: mehl on Monday, October 24 2005 @ 07:28 PM EDT
-

[ Reply to This | # ]

More SCO Fun in Discoveryland - 2 Filings
Authored by: Anonymous on Monday, October 24 2005 @ 07:29 PM EDT
Of course, as we all know, Novell sold to Santa Cruz not the whole business, but
basically the "accounts payable collection" end... wherein they get 5%
after paying Novell back 100% of the licensing revenues (with some exclusions
and exemptions).

So how is it that SCO can claim Novell sold SantaCruz the whole of the UNIX
business?

PJ You're right, this is going to be interesting to watch. Looking forward to
your analysis!

...D

[ Reply to This | # ]

Question for PJ and/or any lawyers
Authored by: tyche on Monday, October 24 2005 @ 07:35 PM EDT
RE: "SCO is saying they bought not just the assets but the business
itself, which they say they have continued, so they are properly asserting the
privilege."

Since Novel contends with TSCOG's "interesting" history of the sale of
Unix, wouldn't it be possible for Novel to submit the requested documents as a
"friend of the court"?

Craig
Tyche

---
"Under what circumstances is it moral for a group to do that which is not moral
for a member of that group to do alone?"
"The Moon Is A Harsh Mistress",R.A.H

[ Reply to This | # ]

How much did Caldera pay?
Authored by: sk43 on Monday, October 24 2005 @ 07:43 PM EDT
SCO is very willing to recite the $100 million dollar figure as being what Santa
Cruz payed to Novell (p. 3 of Memorandum in Opposition...), even though they
were not a party to the transaction, but is curiously unwilling to divulge the
amount Caldera payed to Santa Cruz for the same (in fact, even more) goods (p.
4). At least they acknowledge that the $100 million was in stock [i.e., funny
money].

[ Reply to This | # ]

More SCO Fun in Discoveryland - 2 Filings
Authored by: xtifr on Monday, October 24 2005 @ 07:43 PM EDT

On the bright side, this should mean that the arguments raised in IBM's motion to compel will be relevant and on-point. As I recall, there was some mild concern that SCO would come up with some other theory entirely why they shouldn't have to produce these documents, and IBM's efforts and research would be (at least partly) wasted.

---
Do not meddle in the affairs of Wizards, for it makes them soggy and hard to light.

[ Reply to This | # ]

Part of the Unix Business now with The Open Group
Authored by: mossc on Monday, October 24 2005 @ 07:50 PM EDT
seems like the unix business did not transfer completely since the Unix
trademarks are now with The Open Group

[ Reply to This | # ]

More SCO Fun in Discoveryland - 2 Filings
Authored by: red floyd on Monday, October 24 2005 @ 07:54 PM EDT
"In 2003 Caldera changed its name to The SCO Group, Inc. SCO is thus the successor to the UNIX business that was transferred from AT&T to Novell to Santa Cruz to Caldera."

So, if I change my name to "SCO" from "Scott", have I just become the successor to that business?

---
I am not merely a "consumer" or a "taxpayer". I am a *CITIZEN* of the United States of America.

[ Reply to This | # ]

Fascinating...
Authored by: The Mad Hatter r on Monday, October 24 2005 @ 07:59 PM EDT


The more I watch this case, the more I wish I'd gone to law school.

If 5 years ago you'd asked if I had any regrets, I would have said none. Now,
thanks to PJ's tuition, I do, and I'm kicking myself that I never considered law
as a profession.



---
Wayne

telnet hatter.twgs.org

[ Reply to This | # ]

SCO Discoveryland
Authored by: ThunderfistCor on Monday, October 24 2005 @ 08:00 PM EDT
That would be the freakiest theme-park ever!
lol...Soon to be celebrating it's 5 year anniversary!

Discovery Rides - guaranteed to make you dizzy!
Allegation Alley - Shocking to be sure
Bobbing for Evidence - You just get all wet...
IP ring toss - See if you can hit one of the Big Ones!

but the Procedural Pararade would be pretty boring...

Sorry...the title got me going...
--
ThunderfistCor

[ Reply to This | # ]

More SCO Fun in Discoveryland - 2 Filings
Authored by: lordshipmayhem on Monday, October 24 2005 @ 08:00 PM EDT
So as I understand SCOX's, ahem, "unique" legal theory, if I change my
name to Milton S. Hersey, I can become successor-in-interest to The Hershey
Company, and demand megabuck$ from everyone buying chocolate.

Sounds yummy, but I suspect there is a small (hah!) flaw in their theory.

[ Reply to This | # ]

Renewed New Motion
Authored by: The Mad Hatter r on Monday, October 24 2005 @ 08:10 PM EDT


When I posted my first reply I hadn't read SCO's motion. Now that I have, I have
a strong suspicion that they are playing with fire.

I cannot read the Magistrate Judge's mind, but considering the reports of the
hearing, and the ruling that came from it I don't think this is what she had in
mind. One thing that I have learned from this case, and from following the
Microsoft Anti-Trust case is that annoying a judge is not a good thing, unless
you can rattle the judge so badly he/she makes a major error. After what
happened to Judge Jackson in the Anti-Trust case, I suspect that Judges are a
lot more carefull about that sort of thing now.

And of course there's the opposing lawyers. This motion looks like the
equivalent of bothering a lioness's cubs, with the lioness watching. Your life
thereafter tends to be short, and painfull.

At least that's the way it looks to me now. But, hey, I'm not a lawyer, and I
could be wrong.


---
Wayne

telnet hatter.twgs.org

[ Reply to This | # ]

Caldera vs TSG
Authored by: cmc on Monday, October 24 2005 @ 08:18 PM EDT
It's been a long, crazy ride these past few years, so I'm hoping someone can
help me straighten this out. This is my understanding from everything I can
find right now:

AT&T (Bell Labs) developed UNIX
AT&T sold UNIX assets to Novell
Novell sold (some) UNIX assets to Santa Cruz Operation
Santa Cruz Operation sold UNIX assets to Caldera Systems
Caldera Systems changed name to Caldera International
Caldera International changed name to The SCO Group

I thought it has been said on here (and it seems like IBM is saying the same)
that Caldera sold some assets to TSG, they did not change names. But everything
I can find tonight by Googling says that it was a name change. Can anyone point
me in the right direction or shed a little light on this for me?

cmc

[ Reply to This | # ]

Wild Guess: The clue may be exhibit A
Authored by: Anonymous on Monday, October 24 2005 @ 08:18 PM EDT
I have no knowledge of the issues, I have done no research on the issues or
cases, and IANAL, but I think the clue may be exhibit A.

(I) IBM's position appears to be that privilege only transfers if the
corporation itself is sold.

(II) SCO's position appears to be that privilege also transfers if the new
business is in the same business as the old. (And of course they also argue they
are in the same business as Santa Cruz, Novell, USL and AT&T)

But let's look at exhibit A to SCO's opposition.

Exhibit A appears to be about a case where the asset transfers are similar to
(II). And from that SCO says the privilege must transfer.

But if you look at exhibit A, it appears to be about a different issue than
whether privilege transfers. Instead it appears to be about whether an attorney
should be disqualified from representing a client against the new business when
he previously served in a case involving the old business.

Now maybe this is just me, but except maybe tangentally, this doesn't seem
particularly on point.

I would have imagined (guessed?) logically (although I also know the law is not
always logical to a layman's eyes) the disqualification criteria would be more
stringent (or at least different) from the question of whether privilege for
documents transfers.

Quatermass
IANAL IMHO etc

[ Reply to This | # ]

Is it just me or do SCO have someone new drafting their memorandums?
Authored by: Anonymous on Monday, October 24 2005 @ 08:26 PM EDT

Can't comment on how well their argument will stand up.

But it strikes me that this "Memorandum in Opposition ..." is a whole
different flavor than their usual submissions.

Usually they're long rambling accusations and FUD, backed up (if at all) by
hazily quoted references, mostly irrelevant (or detrimental) to their case.

This one actually gives the impression that it's written by a professional. It's
short. It's businesslike. And it's even to the point!

Makes a refreshing change, regardless of its merits.

[ Reply to This | # ]

Ask...
Authored by: Anonymous on Monday, October 24 2005 @ 08:36 PM EDT
Doug Michaels, Ransom Love and Ralph Yarro.

Brian S.

[ Reply to This | # ]

IBM's response should be a simple.....
Authored by: Anonymous on Monday, October 24 2005 @ 08:46 PM EDT
Oh Pu-leeeeeeeeeeeeeeze!!

[ Reply to This | # ]

Hiding zumthing?
Authored by: RedBarchetta on Monday, October 24 2005 @ 08:51 PM EDT
I guess it's ok to start laying into SCOG, just like they did to IBM, about withholding discovery.

Is there something SCOG is trying to hide? Could it be documents that contain damaging information? Is it something that will doom their case even further? Such as language about what copyrights weren't transferred?


---
"I never have frustrations. The reason is to wit: Of at first I don't succeed, I quit!" ~ Fyodor Dostoevsky (1821-1881)

[ Reply to This | # ]

What were the 'Rule 30(b)(6) witnesses' and topics?
Authored by: Liquor A. on Monday, October 24 2005 @ 08:54 PM EDT
I suppose I'm not being duly diligent since I am sure that all the information
is already here somewhere, but I cannot remember what they are asking for in
their 'new renewed motion' when they specify "Rule 30(b)(6) topics on which
IBM refuses to produce a witness"

Was this something equivalent to "produce a witness who knows about your
illegal activities"?

---
Liquor A.

[ Reply to This | # ]

A matter of business
Authored by: philc on Monday, October 24 2005 @ 08:56 PM EDT
If a business changed hands two times there should be, available for public
review, a copy of the incorporation papers listing the name, board of directors,
and officers of the corporation for each of the companies. Anyone seen them?
This applies to all corporations both public and private.

In addition, there should be an IRS provided EIN and payroll and company
checking account. I would expect to see different corporate council as well.

It not a business because you say it is, its a business when it is properly
incorporated and run as a business.

[ Reply to This | # ]

The humour part ...
Authored by: dmarker on Monday, October 24 2005 @ 09:36 PM EDT
"In 2003 Caldera changed its name to The SCO Group, Inc. SCO is thus the
successor to the UNIX business that was transferred from AT&T to Novell to
Santa Cruz to Caldera."


The humour is in the use of the word 'thus'.

The legal gymnasitcs are is the interpretation of the meaning of 'business' as
used by tSCOg.

Trying to differentiate between the meaning of 'business' and the meaning of
'assets' in this context seems to be the battle.

IBM says - tSCOg bought some assets from a business
tSCOg says - we bought a self contained business and have maintained that
business

Doug Marker

[ Reply to This | # ]

Business: Asset versus Entity.
Authored by: Jaywalk on Monday, October 24 2005 @ 09:40 PM EDT
Just as they did when using the vague term "intellectual property" rather than the specific terms of copyright or patent, it looks to me like SCO is playing word games again. This time the word is "business". Business can refer either to an organizational entity, or the activity in which that entity is engaged. The former is a legal entity the latter is an asset.

But the UNIX business was clearly transferred as an asset. That's especially true in the transfer from Novell to Santa Cruz. In that case, a chunk of the business was clearly being cut from the rest. Check out this quote from SCO's own filing:

All of Novell's copyrights and trademarks "required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies."
Note that Novell doesn't just transfer "all copyrights and trademarks" but only some and then only under specific circumstances. Elsewhere it states that Novell continues to receive 95% of the proceeds of the business. And that Novell retained the right to override Santa Cruz if they chose. It certainly doesn't sound like control was transferred to me.

---
===== Murphy's Law is recursive. =====

[ Reply to This | # ]

I see IBM having a LOT of fun with this..
Authored by: Anonymous on Monday, October 24 2005 @ 09:43 PM EDT
this will likely come back to bite them in the sit-em-down place.. They have been denying 'knowing' facts that predecessors in interest knew.. Now it seems they claim to 'be' the predecessors in interest.. Hmm..

bobby

[ Reply to This | # ]

SCOX turned down at USPTO for failing to document ownership
Authored by: stats_for_all on Monday, October 24 2005 @ 10:12 PM EDT
(thanks to a pythonesque inquisitor at Y!)

SCOX recieved a final rejection in its attempt to register the trademark Unix Systems Laboratories on Sept 12, 2005. The USPTO refused the SCO application because SCO had been unable to certify that it was the successor in legal control to the originally registered Unix System Laboratories.

Applicant argues that all of the marks are now owned by the same entity, The SCO Group, Inc.; however, this information is not reflected in the records of the Office. While applicant has stated that an owner of the marks has now become part of the Applicant, the applicant, however, still needs to clarify the exact nature of this legal relationship with respect to applicants legal control. Once this is explained, applicant must then also clarify how the applicants legal relationship with the Registrants relates to unity of control over use of the respective marks as between these entities. TMEP section 1201.07(b).

SCO trademark request is found in US Serial Number file 78438912. The "Dear John" rejection letter found here

[ Reply to This | # ]

Hidey Things-The SCO Case
Authored by: Anonymous on Tuesday, October 25 2005 @ 12:04 AM EDT
So there's this scam to "boldly" accuse companies of
infringment.
There's some sort of software comparison tool that "proves" this
infringment to persons willing to sign an NDA.
The software comparison tool is a scam also and oddly the
"journalists" that were scammed seem not even to be angry about it.
When asked to show the studies SCO used for this they say it never happened.
When asked to explain exactally what code is infringing they do not answer.
And now when asked for documents that explain the relationships of the companies
involved in the rights transfers SCO hides them, though, once again, they have
no trouble explaining to everyone why they are right.
SCO's tactic is to misrepresent and conceal.
Any light shined on real sources proves their scam a lie.


---
Are you a bagel or a mous?

[ Reply to This | # ]

Congratulations SCOG
Authored by: rsteinmetz70112 on Tuesday, October 25 2005 @ 12:14 AM EDT
The filing in opposition to IBM's motion actually makes sense.

I don't pretend to know the law anywhere well enough to be sure but I think SCOG
has a chance to win this one.

Their case, on first reading, makes more sense to me than IBM's, but then I've
sort of been saying the same thing for a little while now.

In the end I don't think it will make much difference and IBM will still win
because there is not any evidence IBM did anything wrong.

In a sort of perverse way IBM may be better off losing this. If SCOG wins, they
will no doubt claim they need more time to assemble the massive number of
documents and attempt to delay showing the code. In fact I suspect if the Judges
see this as a marginal issue they may give it to SCOG if only to preserve the
appearance of impartiality.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

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

[ Reply to This | # ]

Do we now need a ruling on who 'owns' the Linux assets?
Authored by: WayneStPaul on Tuesday, October 25 2005 @ 12:20 AM EDT
IANAL

Lets say for a second that SCO is right, that if you continue the business centered around the assets purchased, then you have a right to claim attorney/client privilege. As much as I hate to ever agree with SCO, this does seem to make some sense. If this is the case then I think that this argument then directly raises the issues that have been framed in the SCO vs. Novell case.

To make this claim apply to the documents in question, SCO must be able to demonstrate that each transfer was a transfer of ALL of the assets needed to continue the Unix business. At this time lets only focus on the Novell to SCO transfer of assets, SCO is directly claiming here (again) that they purchased all of the assets from SCO including the famous Unix copyrights (which we know are in contention in SCO vs. Novell). If SCO is only a licensing agent, then clearly they are a third party and do not maintain an Attorney/Client Privilege to the documents created by Novell and and earlier owners. The judges so far have not ruled on any details of what assets were transferred from Novell's sale of assets to SCO, but I do not see how this decision can now be delayed if SCO's interpretation of the transfer of attorney client privilege is correct.

Now I could see one of four possible resolutions to this:

  1. A ruling that SCO is wrong, and Attorney/Client Privilege is linked to the corporation not the ongoing business.
  2. A ruling is made indicating that SCO did purchase all of the Unix business assets, thus is granted Attorney/client privilege (I don't see this happening)
  3. A ruling is made indicating that SCO did not purchase all of the Unix business assets, and is denied the privilege (thus resolving a significant part of the SCO vs. Novell case)
  4. The case is delayed pending this issues resolution from the SCO vs. Novell case. (I don't think that the judge wants this delay, but can the decision be made here without input from Novell?)
So what do you lawyers think? Is SCO's interpretation possibly correct? Are the above listed outcomes possible?

[ Reply to This | # ]

More SCO Fun in Discoveryland - 2 Filings
Authored by: Anonymous on Tuesday, October 25 2005 @ 04:23 AM EDT
It appears to me that new SCO is trying to extend it's purchase arrangements from Santa Cruz (now Tarentella) retrospectively back in time to cover the Asset Purchase Agreement from Novell and Novell's Purchase of USL from At&T.

Does anyone else read it like this?

It just seems to me they are taking the last statements they make (the purchase from Santa Cruz) and try to use this to paint the whole document the same colour. Somehow I don't think Wells will miss it.

I'm no lawyer but my 'feel' for this is that SCO may win in respect to it's priviledge logs for old Santa Cruz documents but not for Novell or AT&T. But then it's early and I need coffee!

Would anyone care to speculate on how Novell will react to this document?

=========

...still brain dead on the password....

[ Reply to This | # ]

Brain Hurl
Authored by: Ian Al on Tuesday, October 25 2005 @ 05:44 AM EDT
I had a look at the list of challenged documents in the SCO privilege log. One
notable feature is that there is much more than just the documents related to
the current motion including SCO communications with Investment Adviser S2,
Menzies Chartered Accountants and Schwartz PR. These seem to come under the rule
of communications with expert witnesses and PR consultants wrt privilege. Also,
there appear to be communications that were either not with lawyers or with
unnamed lawyers.

My amateur summary of SCO's main point is that they are last in line of a series
of transfers of a largely complete and self-contained Unix business. They quote
case law that says 'regardless of the legal niceties of the transfers, the
important thing in law is that a complete business activity transferred and not
just part of the assets of that activity. In that case, they inherit any
privileges that transferred with the business'. They even catch IBM out being
economical with a relevant case law quotation. We have to see whether the judge
considers the case law to be relevant in a federal court and also compelling. It
seems like a good argument to this amateur.

However, in previous articles, the following points have been made,

Work product and communications privilege is to protect the client in litigation
from any revelation of the lawyers communication with the client or work on his
behalf.

The privilege is not absolute. For instance, it must not be used to conceal a
crime and it must be used in relation to the litigation. In the Footshooter
case, it was not sufficient to wave evidence under a lawyers nose for it to
become privileged.

At this point, my brain hurled and all I can do is to point you at the
pavement.

Privilege must be asserted. Can SCO's lawyers assert on behalf of the lawyers of
their predecessors in interest?

If no assertion was made by the original lawyers, does any privilege exist?

If the documents were not relevant to and therefore part of the current
litigation, does the privilege in a previous unrelated litigation still
prevail?

If the communication was between SCO and another party who was not their lawyer
in the current litigation, is it not impossible to assert privilege? How can
this fulfil the purpose of protecting client-attorney communications.

If a document is not the product of the lawyer's work other than a heavy session
at the photocopier, can the lawyer assert work product privilege?

I would think that the current IBM salvo is to obtain documents that weaken
SCO's complaints. I suspect that, if SCO catches IBM on a bad day, IBM may
follow up with a compelling case for production of the rest of the documents.
They could be useful for IBM's complaints against SCO.





---
Regards
Ian Al

[ Reply to This | # ]

Flaw in SCO's argument?
Authored by: jmc on Tuesday, October 25 2005 @ 09:46 AM EDT
IANAL and other disclaimers but with reference to the privileged docs issue the
thought occurred to me.

If we ignore for a minute the arguments over what was transferred by the Novell
APA, the discussion in that memo is over whether as SCO say, SCO is the
fully-fledged successor to the "UNIX business".

But IBM aren't arguing that point (at the moment), only Novell are in a
different case.

So even if we assume that all SCO's arguments are valid as to privilege on the
question of the UNIX business, would the same privilege apply to the documents
when we address questions raised in the IBM case?

[ Reply to This | # ]

More SCO Fun in Discoveryland - 2 Filings
Authored by: blacklight on Tuesday, October 25 2005 @ 10:53 AM EDT
"Young men, never give up.
Never give up!
Never give up!
Never, never, never--never--never!

Winston Churchill"

I don't know about that: I give up all time. Should we make a point of fighting
battles that are not even worth winning? If we run into the wall, should we pick
ourselves up and launch ourselves at this inanimate object again or do we look
for an opening into the wall, a way around a wall, a way up to the wall - or a
bulldozer?

I am pretty single minded and determined in pursuing worthwhile goals, but I'd
like to think that I am infinitely flexible and opportunistic in the methods I
use to achieve them. I am like water, always going by the path of least
resistance, but even mighty rocks get pounded into sand by quietly flowing
water.

In fact, I am very fond of the water analogy: we in Open Source are as hard as
ice when the occasion demands it, as free flowing as water when thinking and
work need to be done, as invisible and ethereal as vapor when the situation
calls for stealth, flexibility and opportunism in the face of solid, insuperable
obstacles. And you, SCOG, you are dead corporate suits walking.

[ Reply to This | # ]

Two ways to buy a corporation
Authored by: turing_test on Tuesday, October 25 2005 @ 03:38 PM EDT
As PJ indicates, a proper analysis of SCO's argument will require a review of
the cases it cites, but I wanted to highlight one aspect of corporate
acquisitions: broadly speaking, there are two ways to buy a corporation: a stock
sale and an asset sale.

In a stock sale, the acquirer buys all of the stock of the corporation, and then
has complete control of it. In a stock sale, the corporation continues to exist
without interruption, and presumably the attorney-client privilege would pass
to the new management.

In an asset sale, the corporation sells all of its assets to a new corporation,
in exchange for cash or some other consideration. Usually, the old corporation
then liquidates itself and distributes the purchase price to its stockholders.
The new corporation does not have any continuity of existence with the old
corporation: it has merely bought the entire business of the old corporation.
(In some circumstances, this can be advantageous from a tax point of view.)

However, despite the change in corporate identity, for many purposes the new
company in an asset sale is viewed as being the same as the old. (Certainly its
customers and employees need not see a difference.) It appears that the court
in Techni-Plex may have ruled that attorney-client privilege passes in this
case.

Unfortunately for SCO, it does not appear that the transactions that brought it
the 'UNIX Business' are clean asset sales of this type, where the business of
the whole corporation is sold, but rather partial sales of only certain aspects
of the corporation's business. It's clever of them to suggest this line of
argument, and it certainly will require the case review I mentioned above, but
at first glance SCO's argument does seem to be a stretch.

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I can't get this one to track.
Authored by: Jaywalk on Tuesday, October 25 2005 @ 05:55 PM EDT
IANAL, so let me see if I understand the privilege issue. The privilege is that an attorney can work on a case with a client without the fear of it being used in court. The privilege extends even to other cases. If you haul me into court for another matter, my communication with an attorney on a previous case still can't be used. My communication with my attorney is privileged. Even if an opposing attorney somehow gets a copy of a privileged document, he still can't use it.

Okay, now SCOG is saying that the transfer of the UNIX business carries the privilege from AT&T to SCOG. This means that it carried from AT&T, to USL, to Novell, to Santa Cruz to Caldera (now SCOG). And now all the UNIX legal work done for those companies has been transferred to SCOG.

Here's my problem. This would mean that Novell can't use the work of their own lawyers against SCOG. Anything Novell's lawyers did preparing for the UNIX sale is part of the UNIX business and now belongs to SCOG as privileged documents. Even if Novell kept copies, any sale documents would be part of the UNIX business. And Novell's lawyers that worked on the sale can't work for Novell on the SCOG case. That would be a conflict of interest because they are privy to SCOG's priveleged documents. It would, however, be okay for SCOG to hire a Novell attorney and use him to sue Novell on UNIX issues. Remember, all UNIX legal work now belongs to SCOG, so there would be no conflict of interest.

Does anyone else see a problem with this?

---
===== Murphy's Law is recursive. =====

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Second depositions?
Authored by: uw_dwarf on Wednesday, October 26 2005 @ 11:13 AM EDT

I see that SCO wants to depose Mr. Wladawsky-Berger again. If IBM isn't allowed to depose anyone from SCO's side a second time, how does SCO think they can do this? Is there a ruling permitting them to do this?

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