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SCO/Novell File Joint Status Report - PDF and text
Friday, August 17 2007 @ 11:21 PM EDT

SCO and Novell have jointly filed their Status Report [PDF], in which they answer the judge's question as to what they believe is the effect of his August 10th Memorandum Decision and Order. What's left for the trial? They've talked it over, and they don't agree.

You didn't think SCO would just accept the judge's Order as meaning what you thought it meant, did you? So, motion practice ahoy!

But interestingly, the issue is more about how much SCO owes and whether it needed prior Novell approval to enter into the Sun and Microsoft agreements. I gather from this report that SCO has given up on the issue of ownership of UNIX and UnixWare copyrights, at least at this level, and SCO's lawyers understand that the judge's decision means that they didn't transfer under the APA, Darl McBride's letter to partners and customers notwithstanding. SCO isn't arguing that issue here.

I expect we may eventually see some motion practice on the subject of any subsequent copyrights on derivative works, but only after the arbitration in Switzerland is over. All of that and all copyright issues pending, they agree, are stayed. The trial, the parties agree, won't last three weeks now, and in fact they are talking about whether a jury trial is even needed, and they'll tell the judge what they decide about that on August 24.

SCO has a theory regarding whether it really and truly has to pay so much money to Novell as the Order seems to indicate. SCO wants to argue by motion that "to the extent SCO licensed SVRX only incidentally to a UnixWare license in the Sun and Microsoft licenses (or any other licenses), SCO did not breach the APA and Novell isn't entitled to any part of the royalties." It offers the same argument for whether it had to seek Novell's prior approval. No doubt Sun and Microsoft hope that SCO's interpretation is correct, since otherwise SCO had no authority to enter into either agreement. Novell's position is that the judge's Order decided all this already.

Here's what the judge wrote, by the way:

Finally, the court concludes, as a matter of law, that the only reasonable interpretation of all SVRX Licenses includes no temporal restriction of SVRX Licenses existing at the time of the APA. The court further concludes that because a portion of SCO's 2003 Sun and Microsoft Agreements indisputably licenses SVRX products listed under Item VI of Schedule 1.1(a) to the APA, even if only incidental to a license for UnixWare, SCO is obligated under the APA to account for and pass through to Novell the appropriate portion relating to the license of SVRX products. Because SCO failed to do so, it breached its fiduciary duty to Novell under the APA and is liable for conversion.

See any match up with SCO's theory? I don't either, and apparently neither does Novell. But SCO would like to give it a shot, and if you were SCO, you might too.

The other big issue is one that the judge introduced regarding SCO likely having some copyright ownership on derivative works after the APA:

The parties, however, have not specifically addressed whether any of SCO's copyright infringement claims are based on copyrights SCO may have obtained in derivatives of the technology included in the Assets. In the copyright ownership discussion, Novell recognized that SCO would have the copyright to the new merged product. Novell also recognized that joint copyright notices are used that demonstrate a copyright ownership by SCO as of 1996. SCO's non-compete and copyright infringement claims also relate to SUSE Linux. The SUSE Linux claims have been stayed pending arbitration. Although those claims are stayed, Novell asserts in its motion that it should not be precluded from raising a motion relating to the meaning and interpretation of the TLA. Assuming that SCO has a basis for asserting a copyright infringement action other than based on ownership in the UNIX and UnixWare copyrights, the court will address the merits of Novell's motion.

Well, SCO definitely wants to go into this issue, so you can expect that, for sure. You'll see in footnote one, SCO says that it reserves the right to bring a motion for clarification/modification of the Order. Novell says it will oppose. I discern from this footnote that SCO will now try to find some infringement that ties to any such copyrights, and then the parties will argue whether it is too late to do that in this litigation, since it was never pled by SCO that way, according to Novell:

The parties agree that the Court did not dismiss any alleged portion of the claim concerning technology other than the UNIX and UnixWare copyrights the Court has held were retained by Novell. The parties disagree as to whether SCO has pled or can pursue such a claim, but agree that any such portion is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration. No aspect of this claim will be tried during the September 2007 trial.

That makes sense, since the arbitration is to decide if SCO has any right to complain about any copyrights at all regarding SUSE, due to the UnitedLinux agreements.

So, let me now give you the more detailed listing of what the parties say remain to go to trial of SCO's and Novell's claims. For those of you planning to attend, note that if SCO follows through with its intent to bring motions, as seems to be planned, that September 17 date could conceivably change.

What's Left of SCO's Claims?

As to SCO's claims, the parties agree that the slander of title claim is dismissed in its entirety, breach of APA and TLA is dismissed to the extent the claims are regarding UNIX and UnixWare copyrights and all claims that concern Novell's waiver of claims against IBM and Sequent. The parties don't agree that SCO has pled or can pursue any such claim, however, but what they do agree about is that any such matters are stayed pending arbitration of the SUSE stuff in Switzerland. "No aspect of this claim will be tried during the September 2007 trial." The copyright infringement claim is also stayed by the arbitration.

As for SCO's specific performance claim, they agree it's gone from the case completely.

SCO's unfair competition claim is dismissed to the extent it concerns the UNIX or UnixWare copyrights retained by Novell under the APA and to the extent it concerns Novell's waiver re IBM, including Sequent.

So that's what remains of SCO's claims. Not much. SCO reserves the right to bring a motion asking for clarification/modification of the Order.

What's Left of Novell's Claims?

Novell is saying it will dismiss the slander of title claim "without prejudice to renewing it should there be any subsequent adjudication or trial of copyright-related issues." You get very little out of a slander of title claim in the way of money, by the way, so I guess Novell decided it's not worth the bother. Also not worth bothering with, according to footnote 3, are SCO's failure over the years:

...to remit certain miscellaneous SVRX Royalties over the history of SCO's administration of SVRX licenses. As these royalties constitute only a small portion of the recovery sought and as seeking these royalties would add considerably to the complexity of the trial, Novell does not intend to pursue, under any claim, the royalties reflected on Exhibits 6, 7, and 8 of Terry Musika's Supplemental Expert Report on Damages or the associated prejudgment interest.

It will go forward on Novell's two breach of contract claims. On the accounting requirement related to the breach of contract claim on 1.2(b) and 1.2(f) of the Asset Purchase Agreement, Novell presently says it intends to pursue this claim at trial. SCO "reserves the right to argue this Count is resolved by the Court's ruling".

On the other breach of contract claim regarding 1.2(b) and 4.16(a) of the APA, the parties agree that the order found that SCO is liable for conversion regarding the Sun and Microsoft licenses. SCO claims it can argue by motion that "to the extent SCO licensed SVRX only incidentally to a UnixWare license in the Sun and Microsoft licenses (or any other licenses), SCO did not breach the APA and Novell isn't entitled to any part of the royalties." Novell's position is that the judge's Order forecloses any such argument. Also going to trial in connection with those Novell claims will be whether SCO breached the APA by failing to remit SVRX Royalties from SCO's remaining SCOsource licenses and the amount that should go to Novell.

As for Novell's request for declaratory relief regarding its right to waive, the parties agree that's been decided by the Order, that Novell is entitled to direct SCO to waive claims against IBM, Sequent, and other SVRX licensees. Novell will seek a declaration at trial that SCO was also obligated to seek Novell's approval prior to entering into the Sun, Microsoft and SCOsource licenses, and that SCO had no authority to do so. SCO reserves the right to argue by motion that to the extent SCO licensed SVRX only incidentally to UnixWare, it didn't have to seek prior approval. Novell again thinks this question was settled by the Order. This is no doubt of deep interest to both Sun and Microsoft -- if SCO lacked authority to enter into those licenses, now what? EV1 might be perking up its ears too.

As for Novell's request for a declaration of rights and obligations under the APA's covenant of good faith and fair dealing, SCO thinks that Novell claim is now moot, and Novell disagrees, intending to pursue the claim at trial.

On the constructive trust/restitution/unjust enrichment claim, Novell says the Order settled all that, and what's left for trial is how much SCO should pay. SCO wants to reserve the right to argue by motion that "to the extent SCO licensed SVRX only incidentally" blah blah. The trial will also address whether SCO unjustly enriched itself by retaining SVRX Royalties from the rest of SCO's SCOsource licensees and how much it owes there.

On the breach of fiduciary duty claim, Novell takes the position that the judge's Order has resolved the question as to SCO's liability regarding the Sun and Microsoft licenses, and all that remains is how much it owes. SCO wants to bring a motion about its "incidental to Unixware" position here too. As for other SCOsource licensees, Novell says the trial will address whether SCO unjustly enriched itself by retaining royalties from the rest of the SCOsource licensees and how much it owes Novell; also whether SCO breached by failing to comply with the audit provisions of the APA and "whether that breach is a further reason why any questions as to royalty apportionment should be decided against SCO". SCO threatens to bring a motion asserting that such issues were mooted by the Order and that the only issues to be tried should be apportionment of royalties between SVRX and non-SVRX royalties, "including whether the SVRX aspect of licenses are incidental to SCO's licensing of UnixWare such that no royalties are due at all".

On Novell's conversion claim, Novell says the Order decided that SCO was declared liable by the Order, and all that's left to decide is how much it should pay. It also intends to address at trial whether SCO is also liable for conversion of other SCOsource royalties. SCO wants to argue by motion its "incidental to UnixWare" theory.

The parties agree that the accounting claim is mooted, so that won't be tried.

Finally, the parties have agreed that Novell won't seek punitive damages "under any claim, without prejudice to seeking such relief should there be any subsequent adjudication or trial in this action or any enlargement of the issues for this trial beyond that contemplated by this report." I hope they have something in writing between themselves on what this means, or I expect future discussions about it. Subsequent adjudication or trial in this action? Beyond this report? Does that mean that if there is a trial or adjudication of the derivative copyrights that Novell can seek punitives? Or only if there is something else beyond that issue? I can't tell from the wording itself, although I assume it's about the copyright stuff, if it survives arbitration. So hopefully, Novell has drafts of this report showing intent. Otherwise, we could see SCO rounding up paralegals and ex-execs to swear on a Bible that it means the opposite of what Novell says it means. (Joke. But you do realize that all of that testimony about SCO getting the copyrights under the APA in the summary judgment phase was for nothing? The judge didn't buy it at all.) Or it could just be me, that I'm missing something obvious about this wording. The decision not to go for punitives unless it decides to later is likely mainly because SCO has no money, and it's perhaps like a carrot to keep SCO from "enlarging" this litigation should it get any more bright ideas. Or, most probably, it just means Novell doesn't want to bother, unless it has to. In time, I'm sure it will all get clarified for us.

The two parties agree that the trial now won't take three weeks. They are even discussing whether a jury is even going to be needed. Novell thinks not, at least not for everything; SCO wants one, but they are still going around about that, and they say they'll let the court know their decision on August 24.

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

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, pro hac vice
David E. Melaugh, pro hac vice
[address]
[phone]
[fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
[address]
[phone]
[fax]

Attorneys for Defendant & Counterclaim-Plaintiff Novell, Inc.

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

THE SCO GROUP, INC., a Delaware
corporation,
Plaintiff and Counterclaim- Defendant,

v.

NOVELL, INC., a Delaware corporation,
Defendant and Counterclaim- Plaintiff.
JOINT STATEMENT


Case No. 2:04CV00139

Judge Dale A. Kimball

1

Defendant and Counterclaim-Plaintiff Novell, Inc. ("Novell"), by and through its counsel, and Plaintiff and Counterclaim-Defendant The SCO Group, Inc. ("SCO"), by and through its counsel, hereby submit the following statement in response to the Court's August 10, 2007 Memorandum Decision and Order, Docket No. 378, directing the parties "to submit a joint statement identifying the remaining claims in the case that are proceeding to trial and the anticipated length of trial."

The parties propose that the Court's August 10, 2007 Memorandum Decision and Order, Docket No. 377, has had the following effect on trial:

SCO Claims for Relief1

1 - Slander of Title: The parties agree this claim is dismissed in its entirety.

2 - Breach of the APA and TLA: The parties agree this claim is dismissed to the extent it concerns the UNIX and UnixWare copyrights the Court has held were retained by Novell, and to the extent it concerns Novell's waiver of claims asserted against IBM and Sequent. The parties agree that the Court did not dismiss any alleged portion of the claim concerning technology other than the UNIX and UnixWare copyrights the Court has held were retained by Novell. The parties disagree as to whether SCO has pled or can pursue such a claim, but agree that any such portion is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration. No aspect of this claim will be tried during the September 2007 trial.

3 - Alternative Breach-of-Contract Claim Seeking Specific Performance: The parties agree this claim is dismissed in its entirety.

4 - Copyright Infringement: The parties agree that this claim is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration.

5 - Unfair Competition: The parties agree this claim is dismissed to the extent it concerns the UNIX and UnixWare copyrights the Court has held were retained by Novell, and to

2

the extent it concerns Novell's waiver of claims asserted against IBM (including Sequent). The parties agree that the Court did not dismiss any alleged portion of the claim concerning technology other than the UNIX and UnixWare copyrights the Court has held were retained by Novell. The parties disagree as to whether SCO has pled or can pursue such a claim, but agree that any such portion is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration. No aspect of this claim will be tried during the September 2007 trial.

Novell Claims for Relief2

1 - Slander of Title: The parties agree that Novell shall dismiss this claim without prejudice to renewing it should there be any subsequent adjudication or trial of copyright ownership-related issues. The parties will incorporate this agreement into the proposed final judgment.

2 - Breach of Contract - 1.2(b) and 1.2(f) of the Asset Purchase Agreement: Novell presently intends to pursue this claim at trial. SCO reserves the right to argue this Count is resolved by the Court's ruling.

3 - Breach of Contract - 1.2(b) and 4.16(a) of the Asset Purchase Agreement: The parties agree that the Court's Order finds SCO liable for breach of the APA as to the Sun and Microsoft licenses, leaving only the proper apportionment of the Sun and Microsoft royalties for trial. SCO reserves the right to argue by motion that to the extent SCO licensed SVRX only incidentally to a UnixWare license in the Sun and Microsoft licenses (or any other licenses), SCO did not breach the APA and Novell is not entitled to any apportionment of the Sun and Microsoft royalties (or royalties from other licenses). Novell believes that such an argument is foreclosed by the Court's Order. The trial will also address whether SCO breached the APA by

3

failing to remit SVRX Royalties from SCO's remaining SCOsource licenses and the amount of those royalties that should be apportioned to Novell.3

4 - Declaratory Relief - Rights and Duties Under 4.16(b) of the Asset Purchase Agreement, B of Amendment No. 2: The parties agree that the Court's Order establishes that Novell is entitled to direct SCO to waive claims against IBM, Sequent, and other SVRX licensees; that Novell is entitled to waive such claims on SCO's behalf; and that SCO is obligated to recognize such a waiver. At trial, Novell will seek a declaration that SCO was also obligated to seek Novell's approval prior to entering into new SVRX licenses or amendments to SVRX licenses and that SCO therefore had no authority to enter into the Microsoft, Sun, and other SCOsource licenses. SCO reserves the right to argue by motion that to the extent SCO licensed SVRX only incidentally to UnixWare in the Sun and Microsoft licenses (or any other licenses), SCO was not obligated to seek Novell's approval prior to entering into any such licenses. Novell believes that such an argument is foreclosed by the Court's Order.

5 - Declaratory Relief - Rights and Obligations Under APA's Covenant of Good Faith and Fair Dealing: Novell intends to pursue this claim at trial. SCO reserves the right to argue this Count is moot in light of the Court's ruling.

6 - Constructive Trust/Restitution/Unjust Enrichment: Novell contends that the Court's Order resolves any question as to SCO's liability for unjust enrichment as to the Sun and Microsoft licenses, leaving only the proper apportionment of the Sun and Microsoft royalties for trial. SCO reserves the right to argue by motion that to the extent SCO licensed SVRX only incidentally to UnixWare in the Sun and Microsoft licenses (or any other licenses), SCO did not breach the APA and Novell is not entitled to any apportionment of the Sun and Microsoft

4

royalties (or royalties for any other licenses). Novell believes that such an argument is foreclosed by the Court's Order. The trial will also address whether SCO unjustly enriched itself by retaining SVRX Royalties from SCO's remaining SCOsource licenses and the amount of those royalties that should be apportioned to Novell.

7 - Breach of Fiduciary Duty: Novell contends that the Court's Order resolves any question as to SCO's liability for its breach of fiduciary duties as to the Sun and Microsoft licenses, leaving only the proper apportionment of the Sun and Microsoft royalties for trial. SCO reserves the right to argue by motion that to the extent SCO licensed SVRX only incidentally to UnixWare in the Sun and Microsoft licenses (or any other licenses), SCO did not breach the APA and Novell is not entitled to any apportionment of the Sun and Microsoft royalties (or royalties from any other licenses). Novell believes that such an argument is foreclosed by the Court's Order. The trial will also address: whether SCO breached its fiduciary duties by retaining SVRX Royalties from SCO's remaining SCOsource licenses; the amount of those royalties that should be apportioned to Novell; whether SCO breached its fiduciary duty by failing to comply with the audit provisions of the APA; and whether that breach is a further reason why any questions as to royalty apportionment should be decided against SCO. SCO reserves the right to argue that these issues are moot by the Court's ruling, that the only issues to be tried should be the apportionment of royalties between SVRX royalties and non-SVRX royalties, including whether the SVRX aspect of licenses are incidental to SCO's licensing of UnixWare such that no royalties are due at all.

8 - Conversion: Novell contends that the Court's Order resolves any question as to SCO's liability for its conversion of Sun and Microsoft license royalties, leaving only the proper apportionment of the Sun and Microsoft royalties for trial. SCO reserves the right to argue by motion that to the extent SCO licensed SVRX only incidentally to Novell in the Sun and Microsoft licenses (or any other licenses), SCO did not breach the APA and Novell is not

5

entitled to any apportionment of the Sun and Microsoft royalties (or royalties for any other licenses). Novell believes that such an argument is foreclosed by the Court's Order. The trial will also address whether SCO converted SVRX Royalties from SCO's remaining SCOsource licenses and the amount of those royalties that should be apportioned to Novell.

9 - Accounting: The parties agree that the Court's Order moots this claim. No aspect of this claim will be tried during the parties' September 2007 trial.

Further, the parties have agreed that Novell will not pursue punitive damages under any claim, without prejudice to seeking such relief should there be any subsequent adjudication or trial in this action or any enlargement of the issues for this trial beyond that contemplated by this report. The parties will incorporate this agreement into the proposed final judgment.

Trial Length

The parties agree that the trial will be considerably shorter than the three weeks presently reserved. The parties continue to meet and confer as to whether the trial will proceed before the bench, a jury, or both. As a general matter, Novell believes that the disputes remaining for trial would be appropriate to try to the Court, while SCO requested a jury trial and contends that a jury trial is appropriate. The parties will report the results of this meet and confer, along with a more precise estimated trial length, by August 24, 2007.

DATED: August 17, 2007

ANDERSON & KARRENBERG
/s/ Heather M. Sneddon
Thomas P. Karrenberg
John P. Mullen
Heather M. Sneddon
Attorneys for Novell, Inc.

6

DATED: August 17, 2007

BOIES, SCHILLER & FLEXNER LLP
/s/ Edward J. Normand
(Signed by filing attorney with permission from
Edward J. Normand)

Edward J. Normand
Attorneys for The SCO Group, Inc.

7

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 17th day of August, 2007, I caused a true and correct copy of the foregoing JOINT STATEMENT to the served to the following:

Via CM/ECF:

Brent O. Hatch
Mark F. James
HATCH JAMES & DODGE, P.C.
[address]

Stuart H. Singer
William T. Dzurilla
Sashi Bach Boruchow
BOIES, SCHILLER & FLEXNER LLP
[address]

David Boies
Edward J. Normand
BOIES, SCHILLER & FLEXNER LLP
[address]

Devan V. Padmanabhan
John J. Brogan
DORSEY & WHITNEY, LLP
[address]

Via U.S. Mail, postage prepaid:

Stephen Neal Zack
BOIES, SCHILLER & FLEXNER LLP
[address]

/s/ Heather M. Sneddon

8

1Second Amended Complaint, Docket No. 96. SCO reserves the right to file a motion for clarification and/or reconsideration of the Order. Novell reserves the right to oppose any such motions.
2Amended Counterclaims, Docket No. 142. SCO also reserves the right to challenge by in limine and other affirmative motions Novell's intent to litigate certain of its counterclaims (as noted below). Novell reserves the right to oppose any such motion and to bring in limine and other affirmative motions with respect to its claims.
3Novell also contended that SCO breached the APA by failing to remit certain miscellaneous SVRX Royalties over the history of SCO's administration of SVRX licenses. As these royalties constitute only a small portion of the recovery sought and as seeking these royalties would add considerably to the complexity of the trial, Novell does not intend to pursue, under any claim, the royalties reflected on Exhibits 6, 7, and 8 of Terry Musika's Supplemental Expert Report on Damages or the associated prejudgment interest.

  


SCO/Novell File Joint Status Report - PDF and text | 363 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCO/Novell File Joint Status Report - PDF and text
Authored by: mossc on Friday, August 17 2007 @ 11:39 PM EDT
The way I read the status of TSG/SCOs claims,
All are either dismissed or stayed pending arbitration.

Does this mean there is no way for anything negative to happen to Novell in
court? (other than if they don't get all their claims/money)

Basically TSG is going into a jury trial without A SINGLE CLAIM against Novell.

Chuck

[ Reply to This | # ]

Corrections
Authored by: Anonymous on Friday, August 17 2007 @ 11:41 PM EDT
As needed

---
--Bill P, not a lawyer. Question the answers, especially if I give some.

[ Reply to This | # ]

Off Topic
Authored by: Anonymous on Friday, August 17 2007 @ 11:42 PM EDT
As appropriate

---
--Bill P, not a lawyer. Question the answers, especially if I give some.

[ Reply to This | # ]

NewsPicks commentary
Authored by: Anonymous on Friday, August 17 2007 @ 11:43 PM EDT


---
--Bill P, not a lawyer. Question the answers, especially if I give some.

[ Reply to This | # ]

SCO/Novell File Joint Status Report - PDF and text
Authored by: mossc on Friday, August 17 2007 @ 11:48 PM EDT
Reading the status of Novell's claims it looks like TSG/SCO's main arguement
will be to try and convince the jury that:
"SCO licensed SVRX only incidentally to UnixWare in the Sun and Microsoft
licenses"

Seems like we need representatives from Sun and MS on the witness list. That
would be fun. Lets chase this back to the funders of this sham. Someone from
MS and Jonathan Swartz from Sun on the stand, under oath, under penalty of
perjury.

That might help IBM pierce the corporate veil as well.

It should be even harder to present believable evidence that the SCOSource
licenses to EV1 etc were Unixware and SVR was incidental.

Remember Darl's binder of news clippings, let see if any of the announcements
about SCOSource and funding from MS/Sun mention Unixware.

Chuck

Chuck

[ Reply to This | # ]

WOW - That was Quick.
Authored by: rsteinmetz70112 on Saturday, August 18 2007 @ 12:17 AM EDT
I am more amazed by the extent of agreement than the extent of disagreement.

It seems to me, on first reading, that this document significantly limits SCO's
ability to appeal.

---
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 | # ]

Footnote 1 question
Authored by: Wardo on Saturday, August 18 2007 @ 12:27 AM EDT
The first time I saw that footnote in the PDF, my immediate thought was that SCO
was going to try to ammend their complaints.

After reading the comments and the article, it looks like they are going to file
another motion to reconsider...

Any bets on how soon that gets filed? I will take 5 cents on the day before
trial, overlength, with a request to postpone trial until the new motion is
decided.

Wardo

---
caveat lector...
Wardo = new user(lawyer = FALSE,badTypist = TRUE,badSpeller = TRUE);

[ Reply to This | # ]

"incidental to UnixWare"`
Authored by: Anonymous on Saturday, August 18 2007 @ 12:44 AM EDT
Is that like "methods and concepts"?
Ya know nice and fuzzy and movable with the wind.

[ Reply to This | # ]

What about the FACT that Caldera distributed LINUX under the GPL, period? Does Novell love GPL?
Authored by: Anonymous on Saturday, August 18 2007 @ 01:38 AM EDT
What about the FACT that Caldera distributed LINUX under the GPL, period?

Hey Novell? If you use the GPL excuse against Caldera/SCOx, it will show that
you LOVE the GPL. If you don't use the GPL defense, then does it then show that
you don't love the GPL?

The fact is that Caldera/SCO is covered with GPL pudding, no matter what they
say about non-compete, etc... because once they distributed under the GPL...
then, that frees everyone to do the same (because the GPL says they can).

Hmmm? Novell? What are you waiting for?
Use the GPL, Luke!

[ Reply to This | # ]

What happens when SCO runs out of money?
Authored by: Anonymous on Saturday, August 18 2007 @ 01:46 AM EDT
as the MOST likely outcome,

what happens when SCO runs out of money, BEFORE this stuff gets to trial or is
decided in court?

yes, I expect the SCO Utah offices to be cleaned out in the middle of the night,
say some friday or weekend.

what happens then?

[ Reply to This | # ]

SCO tweaks reality quite well
Authored by: Anonymous on Saturday, August 18 2007 @ 02:11 AM EDT
Those licenses were about Unix code (done by IBM) allegedly present in Linux.
Up until now, they said they don't sell Linux licenses, but they sell Unix
licenses (the stuff they supposedly own due to the APA).
This is why they requested the ownership transfer from Novell.
Their argument will be shot on sight.

[ Reply to This | # ]

The "punitive damages" part
Authored by: tknarr on Saturday, August 18 2007 @ 02:31 AM EDT

I think what Novell's saying when they say they won't pursue punitive damages is that it's subject to things being as they are now. If the judge rules that anything beyond the scope of their current semi-agreement should be brought into this trial, or if anything requires another trial (eg. something out of the SuSE arbitration), Novell wants to reserve the right to decide on punitive damages for those additional things until they actually come up.

[ Reply to This | # ]

When and where is the arbitration?
Authored by: uchuha on Saturday, August 18 2007 @ 03:39 AM EDT
And is it open to the public? I'm assuming that it's
going to be somewhere in Geneva, where I work. I could
take the afternoon off and go to wherever it is, assuming
it's a public hearing.

[ Reply to This | # ]

What else needs deciding before IBM can proceed
Authored by: thorpie on Saturday, August 18 2007 @ 04:49 AM EDT

Do any of the items outstanding affect the IBM case? If not can the IBM case now go forward without waiting for Novell to complete?

If IBM goes forward it may get to pick over the goodie pile before Novell

---
The memories of a man in his old age are the deeds of a man in his prime - Floyd, Pink

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Hey, wait a minute!
Authored by: Ian Al on Saturday, August 18 2007 @ 05:01 AM EDT
Don't think me ungrateful or even that I don't think this document was necessary, but I've been all through the Memorandum and Decision Order in SCO v. Novell and nowhere is there a request from the judge for a joint statement about remaining claims going forward to trial. There is Document 1077 in IBM v SCO, but that is not due until 31st August and says nothing about a trial. Still, I am very happy to see this document except...

I am furious, just furious, with SCOG for making me own up and admit that I don't understand what this case is all about. Let me try to explain with extracts from the APA.

RECITALS

A. Seller is engaged in the business of developing a line of software products currently known as Unix and UnixWare, the sale of binary and source code licenses to various versions of Unix and UnixWare, the support of such products and the sale of other products which are directly related to Unix and UnixWare (collectively, the "Business").

INDEX OF SCHEDULES

Schedule 1.1(a) Assets

Schedule 1.1(b) Excluded Assets

Schedule 1.1(c) Assumed Liabilities

Schedule 1.2(b) Royalties relating to UnixWare product

Schedule 6.3(a) Change of Control Parties

From the combined version of the APA
1.2(b) Royalties.

Except as otherwise provided in paragraph (e) of this Section 1.2, Buyer agrees to collect and pass through to Seller one hundred percent (100%) of the SVRX Royalties as defined and described in Section 4.16 hereof. Seller agrees to pay Buyer an administrative fee of five percent (5%) of the SVRX Royalties.

1.2(e) Revenues to be Retained by Buyer. Subject to the last sentence of paragraph (a) of Section 4.16 hereof, Buyer shall be entitled to retain 100% of the following categories of SVRX Royalties collected by Buyer: fees attributable to stand-alone contracts for maintenance and support of SVRX products listed under Item VI of Schedule 1.1(a) hereof; source code right to use fees under existing SVRX Licenses from the licensing of additional CPU's and from the distribution by Buyer of additional source code copies; source code right to use fees attributable to new SVRX licenses approved by Seller pursuant to Section 4.16(b) hereof; and royalties attributable to the distribution by Buyer and its distributors of binary copes of SVRX products, to the extent such copies are made by or for Buyer pursuant to Buyer's own licenses from Seller acquired before the Closing Date through Software Agreement No. SOFT-000302 and Sublicensing Agreement No. SUB-000302A.

I have heard it said that SVRX is the source code for AT&T UNIX and that UnixWare is the Novell implementation of that for computers based on the IBM, X86-processor, personal computer.

From the extracts above one can deduce that the 95% + 5% royalty deal is for the UnixWare product. From the Shedule 1.2(b), Royalties relating to UnixWare product, we find that the product to which these royalties apply are interchangeably called either UnixWare or SVRX.

Now we find that

SCO reserves the right to argue by motion that to the extent SCO licensed SVRX only incidentally to UnixWare in the Sun and Microsoft licenses (or any other licenses)
This leaves me with two questions,

If UnixWare and SVRX are not synonymous (perhaps because SVRX is processor and computer agnostic and Netware is X86) why would Microsoft and Sun want UnixWare licences rather than SVRX. Sun, in particular, want cover for more than one processor.

According to the APA the two are, for SCOG's purposes (being an X86 company only (Monterey? Don't go there!)) synonymous. How can SCOG say that the contracts were Netware (for which full royalties are due to Novell) and only incidentally SVRX (for which full royalties are due to Novell) and therefore they did not have to agree the contracts with Novell nor hand over the royalties?

I have harboured this terrible lack of understanding for five years and now SCOG have forced me to own up. It's outrageous, just outrageous. I'm...

I'm...

I'm outraged!

---
Regards
Ian Al

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Lawyer Mettler guessing again
Authored by: Anonymous on Saturday, August 18 2007 @ 05:05 AM EDT
Lawyer Mettler is asking whether SCO could/should return to business as usual.
After dozens of "I guess" and "I think", he suggests that
continuing litigation would only serve Microsoft. The BSF lawyers would be
repaying the favour done to them when Microsoft dished out some $15m to SCO
allowing the shares payment to BSF to convert to cash and BSF to be paid
upfront.

Responding to a reader's objection, Mettler then denies his own arguments and
agrees that a settlement would be both in interest of SCO and Microsoft. Indeed,
he was expecting an immediate settlement a few days back.

(1) SCO has still a business left, i.e. distributors and licensees. This
business is worth something to competitors but it cannot be continued under the
label SCO. Not even if SCO would try themselves to migrate their customers to
Caldera Linux. There is no way to remedy SCO's bad will, the company must
disappear.

(2) All we know is that SCO's lawyers have been paid. Their future SCO
activities would be effectively for nothing. Are they going to enjoy thousands
of lawyer and paralegal hours put in for nothing? And they would be motivated by
their warm feelings to Microsoft? Please....

(3) The indications are that SCO wants to proceed with litigation despite all
the external analysis that it would be pointless or harmful. Does it make sense?
Yes, they want to muddy the waters and serve to the jury as much confusion as
possible. When the IBM trial starts, the confusion will bring a surge in the
(possibly delisted) SCO shares. The extortionists can cash in.

(4) As long as SCO does not have to effect the transfer of millions to Novell,
they can survive with their current cash reserves. All they need to do is reach
the trial and bombard the jury. Delaying and fudding would also help, of
course.

Note that the hard core of the extortionists face now the threat of being sued
and charged as individuals. A lengthy litigation may be used to smooth out some
issues and weaken the case against individuals and open chances for a
bargaining.

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Children
Authored by: eggplant37 on Saturday, August 18 2007 @ 06:16 AM EDT
Once again I'm reminded of my son, who is now 3 months shy of his 18th birthday
and who used to give us a hard time about going to bed when he was much younger.
He'd cajole and plead, then he'd toss a temper tantrum about having to get his
jammies on and brush his teeth.

SCO is acting just like this. They don't realize that all the BS they tossed up
in the air is now raining down upon their heads, and they're definitely not
smart enough to put up an umbrella.

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Still Impressed with What Kimball Did
Authored by: DaveJakeman on Saturday, August 18 2007 @ 06:39 AM EDT
I'm still impressed with what Kimball did with his latest ruling - and not just
the massive ruling itself, its clarity, his great analysis and understanding of
the horrible mess SCO created.

When you buy a new bag of cat litter, the kind that comes in a tough paper sack
with the top stitched up with string, you can get out the scissors, cut the
string and fiddle with it for ages trying to get it open. But if you find just
the right thread and pull it carefully, the whole shebang comes undone just like
that! Simple.

This case and the others were rather more complicated than opening a bag of cat
litter, but Kimball pulled just the right thread.

---
Only two things are infinite: the universe and human stupidity and I'm not
sure about the former. -- Einstein

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The Shear Hypocrisy of SCO
Authored by: Anonymous on Saturday, August 18 2007 @ 07:18 AM EDT
My favorite part is how when SCO said they owned Unix, that if there was any
part of Unix whatsoever in Linux, they were entitled to billions in royalties,
but now the SRVX contained in the Sun/MS licenses for UnixWare is completely
incidental and worthless. Amazing...

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Fast Forward to the IBM Trial
Authored by: sproggit on Saturday, August 18 2007 @ 07:22 AM EDT
If I have correctly understoof the various comments from SCO since Judge
Kimball's latest ruling, including this joint motion with Novell, SCO are saying
that they own the copyright to all code developed *after* they signed the deal
with Novell.

Fine.

But let's think about that from IBM's perspective for a moment. Much of what SCO
are litigating about refers to such wonderful things as "non-literal
copying" and "methods and concepts".

Now, SCO has lost all opportunities to introduce new evidence into the IBM
Trial. So, in other words, if they have not introduced *their own code*, i.e.
that code which they have developed *after* the Novell deal was signed, then as
such their evidence is mooted, purely on the basis that Judge Kimball's findings
show that the code belongs to Novell and that Novell has already 'waived' any
potential or alleged wrong-doing on the part of IBM.

OK, so far so good.

Now let's suppose, for a moment, that SCO *did* introduce some post-Novell-deal
code as evidence. IBM have never seen that code (as far as we know). SCO's
entire beef with IBM related to the code that IBM obtained via the Sequent
acquisition, via the original deal struck with AT&T and later made perpetual
with the amendments. So to my muddled way of thinking, even if SCO had the
evidence there and even if it was very similar to some IBM contributions to
Linux, how are they ever going to prove their ladder theory?

They just can't.

So that leaves them what? The negative know-how claims. They are going to try
and argue that IBM contributed an idea to Linux on the basis that they saw the
same problem solved by SCO, didn't like SCO's solution, so came up with a better
one? (No laughing at the back, puhlease!)

I'm curious.

Just where do SCO think they are going to be able to take their case against
IBM?


I may be entirely wrong here, but this is no longer about trying to prove IBM
wrong-doing. This has everything to do with trying to ensure that SCO's
directors avoid jail time for what must be a potential spectrum of offences,
including mail fraid, racketeering, and judging by those early investor
conference call transcripts, misleading investors.

Ah well, time will tell.

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PJ, I think that you have missed something
Authored by: elderlycynic on Saturday, August 18 2007 @ 07:46 AM EDT
With regard to the agency and SVR4 licences, my reading of what
Kimball said is that he did NOT rule on whether SCO was entitled
to enter into new licences without Novell's approval, but
discussed the matter only to prove that SCO's attempt to
wriggle out of the payment was without merit. Here is what
he said (VERY snipped):

Although this amendment allows SCO to enter into new SVRX Licenses
and amendments of SVRX Licenses incidental to its license of
UnixWare, ...

Now, you are the paralegal, but I read that as saying that whether
SCO required Novell's approval or not depends on whether the SVRX
licence was incidental to the UnixWare licence - i.e. it is a
question of fact, not law, and hence one for the jury.

He then went on to say that, whether SCO needed approval or not,
it was unquestionably liable to pay the royalties to Novell.
So I think that SCO has a case for not needing approval, even if
it doesn't have an earthly of getting out of the payment (except
by going bankrupt, of course).

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clarification/modification of the Order
Authored by: Anonymous on Saturday, August 18 2007 @ 08:29 AM EDT
"SCO reserves the right to bring a motion asking for
clarification/modification of the Order."

That's an appeal by any other name, yes?

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Anyone Own SCO Stock - Complain To S.E.C. ?
Authored by: Anonymous on Saturday, August 18 2007 @ 09:54 AM EDT
I wonder if anyone here owns SCO stock. Can any SCO stock holder now (with
Judge's ruling on copyrights) make an "official" complaint
about SCO's Prospectus?

Or what is the "magic" needed for the S.E.C. to either investigate SCO
and/or bring "charges".

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New Monty Python Theme
Authored by: Anonymous on Saturday, August 18 2007 @ 11:16 AM EDT

SCO is free of all charges if they weigh the same as a duck.

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What about the IBM status?
Authored by: Anonymous on Saturday, August 18 2007 @ 11:50 AM EDT
Wasn't that due yesterday also? Do we get to see it?

MSS2

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Mail fraud?
Authored by: Anonymous on Saturday, August 18 2007 @ 11:51 AM EDT
Since Judge Kimball has decided that SCO does not have the copyrights and that
they _knew_ that they didn't have them, would they be liable for mail fraud for
sending letters, invoices to Unix end-users asking for money due to copyright
infringement?

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Non-Compete...with who?
Authored by: Anonymous on Saturday, August 18 2007 @ 01:01 PM EDT
I'm confused about the relationship of two of Judge Kimball's decisions.

1) Judge Kimball decided that there was NOT a change of control in the business
(oldSCO) but just a transfer of business assets.

2) Judge Kimball decided that the "non-compete" provision might still
be valid because there wasn't a change in control.

My question is, if there was NOT a change of control, then wouldn't the
"non-compete" only apply to oldSCO and not newSCO? Would newSCO have
any standing to pursue this? Could a "non-compete" be transferred as
part of a business asset?

If Company A creates a "non-compete" agreement with Company B, then
can Company B unilaterally assign that "non-compete" to Company C so
that Company A cannot compete with Company C?

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SCO/Novell File Joint Status Report - PDF and text
Authored by: Anonymous on Saturday, August 18 2007 @ 05:25 PM EDT
SCO is Clue Proof. The judge hit them with an industrial strength clue stick,
and they are pretending it didn't happen.

Because they ***KNOW*** that if they have to cough up the money, they're done
for. It might have to come out of someone's personal pocket.

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Jury Trial for both claims and counterclaims?
Authored by: Anonymous on Saturday, August 18 2007 @ 08:03 PM EDT
If I understand the law correctly, the defendant can request (demand?) a jury
trial.
What if there are both claims and counterclaims? Maybe Novell would rather have
Kimball decide on SCO's claims..
and SCO would like to have a jury decide on Novell's counterclaims.

(I am assuming SCO wants a jury since they are more likely to confuse and sway a
jury than a sharp judge who has seen the SCO shenanigans for years.)

Can a suit be split into half-and-half jury trial like this?

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Pure Speculation: SCO Share Price
Authored by: sproggit on Sunday, August 19 2007 @ 09:14 AM EDT
As the title suggests, what follows is pure speculation. I have no evidence to
suggest that this may or may not be happening. I'm just curious and wanted to
ask...


We've all noticed - and many have commented upon - the apparent invulnerability
of SCOs share price regardless of the arrival of bad news. Indeed, in some cases
we've seen the price creep upwards in the face of otherwise damaging judgements
from the various trials that are underway here.


So I'm curious as to how something like that could come to pass. But here's a
theory.

We know that Ralph Yarro III, as part of the separation "settlement"
secured from the Noordas, took the remaining SCO stock out of the Canopy Group.
I am not sure, but I think that Canopy was one of the largest individual
shareholders.

We also know that Darl and other directors of SCO have awarded themselves both
cash and stock as "performance incentive compensation" over these last
few years.

Though we've seen both purchase and sale of stock, we know that investors such
as Baystar Capital also once owned SCO stock.


Now suppose, just for a moment, that after the law suits started to go bad, that
members of the Board of directors purchased more stock on the open market,
funded out of their own money. Or their performance bonuses. Whatever. Suppose
that perhaps there were family members or other acquaintances that might also
have been persuaded to buy.

Now, what this would leave you with would be a [smallish] collection of
"investors", each holding a block of SCO shares. Each time a court
ruling or announcement came along, those investors may elect to buy and sell a
certain number of shares in response.

There's a catch, of course. Insider trading. If anyone within the company were
discussing business strategy with "external" private investors, that
would be a breach of SEC rules and the parties would be liable for [potentially]
criminal prosecution if discovered. But it does not follow - in any way - that
they would need to be advised in the way I have just suggested.

You see, I think the SEC rules are clear about inappropriate communication from
"inside" a company to "outside" a company. But I don't think
they preclude two or more "outside" investors from discussing a
company's stock, and the sale or purchase thereof. So what might happen.

Suppose we had two "investors" holding some stock. Or one with stock
and another with cash. These two investors meet up one weekend and discuss the
fact that a ruling is due in one of the SCO cases. First investor says,

"You know, I think this might be good news. The moment that ruling comes
out, I think I might try and sell some stock."

Second investor says, "That's interesting. I'd buy some if you had stock
for sale."

They agree a price and await for an announcement or ruling to happen, then
execute the trade as they had agreed.


Now I wanted to post this as a theory, to ask the more experienced in the
community to respond to this and perhaps let us know if this is legal. My theory
hinges on the idea that providing no communication is made with the company or
it's employees, such discussions and share trades would be entirely legal.

If so, would this be one potential way to shore up the stock price in the
company?

Of course, the plan as describes would require these two individuals to have
sufficient funds to pay for the shares, unless of course they were willing to
accept "promissory notes" [IOUs] or other commitments to pay. Which of
course could be written off as a tax liability if the shares didn't stay up or
if the payment was never forthcoming.


I think that the scenario as described is getting perilously close to the
"circular" financing that Enron engaged in just before their
spectacularly public demise, but I am not sure if the laws written for
corporations also apply to private individuals. If not, then I wonder if it is
theoretically possible for the above situation to happen.


Anyway, I was curious. Can anyone else offer explanations or theories as to how
SCO have managed to maintain their share price in defiance of prevailing logic?

Is there any way that we can find out from their SEC filings who their principal
shareholders might be?

Any other ideas?

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Judge has read the contracts - SCO/Novell File Joint Status Report - PDF and text
Authored by: Anonymous on Sunday, August 19 2007 @ 09:46 AM EDT
"The court further concludes that because a portion of SCO's 2003 Sun and
Microsoft Agreements indisputably licenses SVRX products listed under Item VI of
Schedule 1.1(a) to the APA, even if only incidental to a license for
UnixWare,..."

The Judge, unlike us, has had access to the Sun and Microsoft contracts. Unless
the judge mis-read the contracts, and SVRX producsts were not in the licenses,
then SCO is stuck for the fees.

As it stands now, the Judge has spoken!

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SCO/Novell File Joint Status Report - PDF and text
Authored by: Anonymous on Sunday, August 19 2007 @ 09:58 AM EDT
"EV1 might be perking up its ears too."

I suspect that EV1 might be out in the cold. The license probably reads that
they are paying for not being sued by SCO for use of Unix IP in Linux, and he
fee is not refundable.

So far, EV1 has not been sued, so they've received the "value" they
payed for.

The thing that bothers me is this sounds an awful lot like paying the mob for
not trashing my store.

It was in the neighborhood of a hundred thousand dollars, and I don't have that
kind of money laying around to burn. But after all is said and done, I suspect
that even if EV1 won the case they wouldn't be able to get blood from a turnip.

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OSI discussion - Honesty
Authored by: artp on Sunday, August 19 2007 @ 01:08 PM EDT
The Newspick on the OSI discussio of the Microsoft Permissive License is
riveting reading. I highly recommend it.

I especially noted the lack of honesty in the discussion. Some examples follow.

-----------
1. From Chuck Swiger:
"> I'm surprised if people consider the MPL a "permissive"

> license...I'd consider that an unfortunate overgeneralization of
> the idea that all licenses are either permissive or copyleft.

I don't recall anyone saying that the MPL is a permissive license. Most
people reserve that term for the handful of licenses which do not impose
restrictions which might conflict with other licenses."
-----------


MPL = Microsoft Permissive License. So is this an honest stattement ?

-----------
2. Also from Chuck Swiger:
">> Also, isn't the name "Permissive" rather misleading?
While you are free to
>> release binaries however you choose, the license is viral and the
source
>> code cannot be used by the vast majority (ie, any) of the existing
>> open-source projects. I would hardly call that permissive...the word
>> carries a lot more meaning than "non-copyleft".
>
> A "viral" license is one which requires that a combination of
code under that
> license and other software, to only be distributed under the terms of the
> viral license. The MSPL isn't viral in that sense; instead, it is
reasonably
> close to the "new" or "modified" BSDL, which is
considered a canonical
> example of a permissive license.

Well, it replicates in the sense that all derivative works are partially
released under it, but I see your point. My point was that it permanently taints
the source code in a way that makes it incompatible with nearly every popular
open-source license, requiring that developers put big orange tape around the
MSPL-licensed code to indicate it is forever under the MSPL.
-----------


The Microsoft Permissive License goes out of its way to prevent any association
with GPL. See the comments under Jon Rosenberg's message at the top of the list.
It is headed "Section II: Compatibilities and incompatibilities with other
OSI licenses".


---
Every time I have seen a business move enterprise (business-critical) software
to Windows, the company has gone broke if small, or lost lots of money if large.

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SCO/Novell File Joint Status Report - PDF and text
Authored by: Anonymous on Sunday, August 19 2007 @ 03:46 PM EDT
>I discern from this footnote that SCO will now try to find
>some infringement that ties to any such copyrights, and
>then the parties will argue whether it is too late to do
>that in this litigation, since it was never pled by
>SCO that way, according to Novell:

I agree with Novell and I don't see why the court should
allow any new pleading after the end of discovery. Why
can't the judge tell SCO something like: "this is a new
issue, and it is too late to raise it in this case, but
you have the legal right to file it as a new case"?

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SCO/Novell File Joint Status Report - PDF and text
Authored by: Anonymous on Monday, August 20 2007 @ 09:55 AM EDT
Interesting Quote from:
Linux is Not Red Hat, and Other Sun-isms Debunked
Written by Jem Matzan
Dec 09, 2004

"Arguably the most important question I asked Scott McNealy was, "What
proprietary code had to be taken out of Solaris in preparation for open sourcing
it?" McNealy responded by saying that the process of open sourcing Solaris
actually started five years ago. "There were hundreds of encumbrances to
open sourcing Solaris. Some of them we had to buy out, others we had to
eliminate. We had to pay SCO more money so we could open the code -- I couldn't
say anything about that at the time, but now I can tell you that we paid them
that license fee to expand our rights to the code," he said, referring to
the February 2003 multi-million-dollar purchase of expanded Unix SVR4 license
rights from the SCO Group. That was at the beginning of SCO's war on Linux, and
the timing of Sun's license purchase was suspicious. At the time it was widely
theorized in the online press that Sun had purchased the expanded Unix licenses
to help fund SCO's lawsuit against Sun's lifelong nemesis IBM and public attacks
on Sun's part-time rival, GNU/Linux; if what McNealy says is true, a lot of
pundits owe him an apology."

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