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IBM Subpoenas Houlihan - Updated
Thursday, February 23 2006 @ 02:13 PM EST

Another subpoena from IBM. This one is to Houlihan Valuation Advisers, which did a secret evaluation of Caldera in 2001, shortly after it bought the two Unix divisions of Santa Cruz. Here is the complete filing:

It's looking very bad for SCO. Business Review Online asks, "What Was Caldera Thinking?"

UPDATE: The parties filed a Stipulation and Joint Motion to Seal Confidential Materials [PDF] asking the court to seal these materials, filed with the court on March 9, so I have removed the materials they would like sealed. If by any chance the court does not sign the order, which is conceivable but unlikely, I will restore them. So only the top link will work in the meantime as of March 9, 2005. If you have republished this particular article, kindly update your website also. Thank you.

Update 2: As of March 10, 2006, there is a court order [PDF] sealing the Houlihan materials


IBM Subpoenas Houlihan - Updated | 434 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Authored by: Anonymous on Thursday, February 23 2006 @ 03:53 PM EST
It just gets better and better...

Larry N.

[ Reply to This | # ]

Off Topic here please
Authored by: John_Doe#1 on Thursday, February 23 2006 @ 03:53 PM EST
Check your clickys in preview

[ Reply to This | # ]

Corrections Posts here
Authored by: chrisdj on Thursday, February 23 2006 @ 03:54 PM EST
As we need it...

[ Reply to This | # ]

directions for solaris?
Authored by: Anonymous on Thursday, February 23 2006 @ 04:08 PM EST
Never heard of Houlihan but the way Jonathan Schwartz re-invents Sun proves
their point.

[ Reply to This | # ]

IBM Subpoenas Houlihan
Authored by: Yossarian on Thursday, February 23 2006 @ 04:12 PM EST
>a secret evaluation of Caldera in 2001

Actually, this information explains why SCO goes after the
open group for what it did in 2001. IBM, using Houlihan's
subpoena, tries to establish that Caldera's business'
future was not all that great in 2001. (And SCO's current
UNIX business state follows the prediction.)

SCO, using a future Open Group subpoena, will try to
establish that the business future was (is?) so bad
because the OG "stole" so much from what we call now
SCO's UNIX that it lost a lot of value.

SCO's argument is pretty weak, but it may create a
"disputed fact." IBM takes no chances and it will fight
the Open Group subpoena as hard as it can.

[ Reply to This | # ]

This is playing out like
Authored by: robobright on Thursday, February 23 2006 @ 04:14 PM EST
a bad movie. No matter how well the dialog is written you know by all the
foreshadowing how the movie will end. You merely stick around just to see
exactly what happens in the final courtroom scene.

[ Reply to This | # ]

whos secret, anyway?
Authored by: Anonymous on Thursday, February 23 2006 @ 04:45 PM EST
If the 'secret evaluation' is commissioned by IBM, newCaldera is not supposed to
know about it and can not be accountable for any of the findings.

If it is commissionned by newCaldera then how does IBM know about it?

If the report is legally known to both, then it is no secret and why the
subpoena - a plain exhibit might do.

[ Reply to This | # ]

IBM Subpoenas Houlihan
Authored by: Anonymous on Thursday, February 23 2006 @ 04:56 PM EST

Although this report will help IBM, none of this is really news. Caldera knew all this in 2001 - it was the main theme of the Caldera Forum 2001 (I was there). The main theme was that the Linux ABI was going to be the de-facto standard, and that for Unix to survive it would need to run Linux binaries - a future they fully embraced. This was where they debuted LKP, and IBM was also there (with Caldera's blessing) pushing AIX5L (the 'L' remember is for the Linux compatability).

However, they still viewed Linux as a low-end product - they didn't fell the kernal was scalable enough for big iron. Their vision was that in "enterprize" situations, Linux apps would be running on top of the more robust Unix kernels (UnixWare or AIX5L) which would provide Linux-compatable environments. The idea was that you'd have Linux on your desktop and in your smaller servers, and as your company grew you could move up to Unix while keeping your Linux apps.

Therein lies the source of their beef with IBM. With NUMA and IBMs other contribitions, Linux could scale to big iron, long before they expected it - undercutting their plan to keep Unix in the server room.

[ Reply to This | # ]

Where is the UNIX License?
Authored by: rsteinmetz70112 on Thursday, February 23 2006 @ 05:05 PM EST
I skimmed through this stuff but I did not see a single reference to the UNIX
license agreement with Novell.

I see OpenServer, I see several UnixWare versions and I see some other products.

Where is the UNIX license revenue in this report?

Did I miss it?

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 | # ]

Friday 24 Feb 06
Authored by: Anonymous on Thursday, February 23 2006 @ 05:25 PM EST
Least we forget there are 2 big cases that will have court
appearances on Friday 24 Feb 06

1. SCO / IBM

2. NTP / RMI
Bye-bye, BlackBerry?,
A federal court hearing scheduled for Friday that could
lead to the shutdown of BlackBerry devices throughout the
United States is forcing longtime BlackBerry users to
think about life without their mobile gadgets.

[ Reply to This | # ]

What it all means.......
Authored by: Woad_Warrior on Thursday, February 23 2006 @ 05:26 PM EST
to me at least. :-)

When all this started, I was outraged at SCO's accusations concerning linux and read Groklaw with some trepidation. Now I read it with something akin to morbid curiousity. Kind of like when you watch the news when they report on something like a train wreck or some other sort of disaster. Although this is more like the dumb drunk who passes out in his car, sitting in the middle of the train tracks, and IBM is the umpteen thousand ton train barreling down on them.

The other reason for reading this site is how much you can learn about a wide variety of things from the law and the way our court system works, (at least in this type of case) to the history of computing. I wouldn't be surprised if this were the most well documented case of any sort ever. The wealth of knowledge contained on this site is incredible. PJ, you and your assistants have done an incredible job with all of this. And then there are the members of this site who have contributed so much of their own personal knowledge of things that happened even in Unix's early history, their willingness to ocr massive quantities of documents, going to hearings and providing first hand reports on what occured, which can provide information that wouldn't show in most publicly available documents, and the list goes on. Congratulations and fantastic work to all.

I look forward to seeing new articles up when I visit here. (usually at least twice a day.) Is anyone going to tomorrow's hearing? This will probably be a great one. I could almost wish this were taking place in my state instead of Utah, just so I could go see it. Hmmmmm....... Maybe I should chill one of those dusty bottles of mead to enjoy while reading about what occured. (Assuming that the info is available of course.)

[ Reply to This | # ]

Why did IBM attach all those "secret" documents?
Authored by: Anonymous on Thursday, February 23 2006 @ 06:08 PM EST
I don't see why thats necessary per se. They probably just wanted everyone to be
able to see it. Nice :-)

[ Reply to This | # ]

Authored by: Anonymous on Thursday, February 23 2006 @ 06:15 PM EST
I visited New York in the first days of July 2001.

Two blocks from Times Square I saw an IBM Ad for Linux.

It was the Linux Pinguin's head with these big Donald-Duck
like eyes painted on the wall of a house. It was some 20m

[ Reply to This | # ]

IBM Subpoenas Houlihan - Interesting Quote
Authored by: rsteinmetz70112 on Thursday, February 23 2006 @ 06:22 PM EST
Gary Barnett, research director at Ovumin article from VNUNet.

"IBM has been extremely precise in every move than its taken; it's been
incredibly instructive in showing how these things should be done. Many of SCO's
requests have been vague fishing nets compared to IBM's precision."

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 | # ]

Comparison with the SEC filings
Authored by: IMANAL on Thursday, February 23 2006 @ 06:38 PM EST
It would be nice to see a comparison between SCO's SEC filings before and after
the Houlihan evaluation. What if they don't match up? Who do we trust?

IM Absolutely Not A Lawyer

[ Reply to This | # ]

So SCO paid $100 Million in Cash and Stock to Novell
Authored by: kawabago on Thursday, February 23 2006 @ 07:47 PM EST
To purchase the UNIX business which months later is valued at 13 million? Isn't
that what SCO claimed it paid for UNIX and what this valuation says?

[ Reply to This | # ]

Authored by: rsteinmetz70112 on Thursday, February 23 2006 @ 07:49 PM EST
This may limit the damages SCO can collect, if by some miracle they would win.

I don't see how it limits IBM's damage award against SCOG. IBM's damages don't
depend on SCOG's value or the value of their legitimate business.

Anyway by the time the case is decided SCOG will be pretty much judgment proof.

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 | # ]

A Question
Authored by: Tufty on Thursday, February 23 2006 @ 08:03 PM EST
I am curious about why a company would ask for this report, in its normal course
of business. Can some of the financially experienced of us give a list of
reasons why?

There has to be a rabbit down this rabbit hole somewhere!
Now I want its hide.

[ Reply to This | # ]

Will Linux be an official version of Unix?
Authored by: rharvey46 on Thursday, February 23 2006 @ 08:19 PM EST
Reading this, I was wondering if, perhaps, SCO will actually do more good to
Linux than harm.
By the end of this case, it seems likely that Linux will (or could) be a
full-fledged member of the Unix community. Whether this is desirable, I am not
sure. In many companies, upper management would prefer (certain versions of)
Unix over Linux, even though TCO would be less for Linux.
Arguably, this may be because Linux is a developer's operating system.
For most firms distributing (products for) Unix, much of the code that they own
(closed or open-sourced) can run with very minimal changes in Linux - at least
at the source code level. For example, IBM develops software (Tivolli, Rational,
WebSphere, DB2 and more) that runs on both OSes without major code changes. HP
sells both Unix and Linux PCs (including workstations now), and distributes code
under Open Source licenses. Since SUN has now open-sourced Solaris, they also
distribute code (and perhaps workstations) that runs on Linux as well as
Solaris. Sun even demonstrated their latest chip running Linux briefly.

I suspect that a Unix certification of Linux (or Suse or Redhat for example)
would create even more clout for the Linux operating systems. Since most vendors
support(ed) both operating systems at one point, they would have a vested
interest in this. They may sell less Operating Systems perhaps, but more of
their product set.
SCO (in at least some incarnations) was a friend to both Unix and Linux at one
time. It would be interesting to see if the past comes back to haunt them.

[ Reply to This | # ]

No disbarrment yet?
Authored by: GLJason on Thursday, February 23 2006 @ 08:56 PM EST
How have SCO's attorneys not gotten in trouble yet for lieing to the court?
  1. The Red Hat suit is just about whether Linux infringes on SCO's copyrights. They claimed in Delaware that the IBM case was about the same thing, that's why the Red Hat case was stayed sua sponte.
  2. They sue Autozone for copyright infringement for using Linux, claiming that Linux infringes their copyrights.
  3. When IBM seeks summary judgement on their 10th counterclaim which mirrors Red Hat's suit, SCO tells the court that the IBM case isn't about copyright, and that the Autozone case is about Linux infringing SCO's copyrights and it was filed prior to the 10th counterclaim so the 10th counterclaim should be stayed or separated.
  4. SCO then has to tell the Autozone court what in Linux infringes their copyright and we find out that case was only about files from UNIX, not about Linux at all.
Clearly (1) and (3) cannot be true. If (3) is true then (1) is a lie. Also, if (4) is true (their current position) then their claims in (3) are a lie. Can someone explain to me how SCO cannot get into trouble for these outright lies to the court? Do lawyers have immunity from Perjury because court filings aren't really sworn statements? Is there no law or rule against lieing to the judge's face in a court filing? Could SCO have told the judge in the Autozone case that IBM had admitted to dumping code into Linux and that RedHat admitted that Linux infringes their copyrights if they thought AZ wouldn't check? Is the only prohibition against lieing in court documents that you may get found out?

[ Reply to This | # ]

Or was that just a ruse
Authored by: Anonymous on Thursday, February 23 2006 @ 09:42 PM EST
The idea that IBM might somehow be able to prove that the whole thing was
premeditated to that extent takes my breath away. My head swims with the

On the other hand, I am an incurable optimist.

[ Reply to This | # ]

Dumb Question
Authored by: Anonymous on Thursday, February 23 2006 @ 11:10 PM EST
Sun basically paid SCO loads of money to be able to open source drivers as well
as a bunch of unix code that it supposedly did not own. Assume that Novell wins
the lawsuit that says that Novell owns unix. What happens to Solaris if it is
shown that Sun was fraudialant in its actions WRT to the "licence"?
Can Novell sue the pants off Sun for damages related to OSSing solaris? Also,
Sun was surely aware that there was question as to who owned unix's IP. So could
IBM persue civil damages against Sun (and the other companies) for knowingly
participating in an obvious fraud?

[ Reply to This | # ]

It's the Money Stupid!
Authored by: Anonymous on Friday, February 24 2006 @ 12:32 AM EST
No where in this report can I find any mention whatsoever of:

1) The "Huge" value the Unix patents.

2) The "stratospheric" value of the Unix trade mark.

3) The "Enormous" value of the Unix copyrighted source code.

What we see is an underperforming company trying to peddle outdated closed
source products to an open source world.

[ Reply to This | # ]

IBM Subpoenas Houlihan
Authored by: Anonymous on Friday, February 24 2006 @ 02:27 AM EST
I don't know the technical term for it, if there is any, but I seem to remember
reading somewhere that there are specific rules to prevent a litigant from
teling contradicting stories to different courts.

But I imagine the way SCO has litigated since day one, that would be their least
worry. The problem for Redhat is that if the Delaware court is waiting for the
Utah court's resolution on the copyright issues (There are multiple issues: Who
owns it, and was there in fact any copyright violation), it will be too late to
retrieve any damages from SCO. As soon as Kimball rules on the PSJ, SCO will
become an ex-company

[ Reply to This | # ]

Expecting Linux to grow; no copyrights?
Authored by: darkonc on Friday, February 24 2006 @ 11:26 AM EST
On Page 22 of : IBM-631A.pdf
SCO expects the UnixWare line of products to gradually replace the openserver line of products. The company also expects the Linux line of products to capture an increasing share of total revenues in the future.

As far as I can tell they don't seem to have any valuation for SCO's currently-claimed copyrights on Unix. If SCO had believed that they had purchased copyrights, wouldn't they be listed in this valuation?

It's pretty clear that IBM is expecting to find some evidence with respect to whether SCO believed that they owned the copyright at that time... and, if I'm reading things correctly, I'm going to guess that the absense of a reference indicates that there's likely to be proof of lack in the documents that they're hoping to get from Houlihan.

Sometimes absence of proof can be taken as proof of absense :-)

Powerful, committed communication. Touching the jewel within each person and bringing it to life..

[ Reply to This | # ]

OT ----RIM cleared?
Authored by: Anonymous on Friday, February 24 2006 @ 12:52 PM EST
preliminary reports that RIM does NOT have to shutdown service in the US.

[ Reply to This | # ]

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