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No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

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No Licensing Suspension
Tuesday, August 12 2003 @ 01:27 PM EDT

I know you've seen the reports, and I have too. I haven't published the story up until now, because I couldn't confirm it. When I saw it in the Inquirer, I decided it was time to call SCO. I asked if they would confirm or deny the report that the Linux licensing program had been suspended. The woman said, "I haven't heard anything about it." She asked me where I'd heard or seen this. I told her. She then said she'd heard that someone told her it was on Slashdot, but she couldn't find the story.

What does it mean? Honestly, I don't know for sure, but I'm taking it as a denial. First she said something that could be interpreted a couple of ways, and then said something that indicates one interpretation is that she wasn't completely forthcoming. But what I think she actually meant is that she hadn't heard anything about the program being suspended. Perhaps if I'd tried to get a license, I'd have gotten more information or even different information, but I would have had to lie to do that, and I won't do that. Until there is more than a Slashdot comment to go on, I consider it unfounded, and I think it would be unfair to SCO to spread this story.

Obviously, if I hear more, I'll let you know.

By the way, an alert reader sent me the part of the Wall Street Journal article that the Salt Lake Tribune cut: "It's not hard to imagine a comparable denouement this time. Microsoft has long warned that Linux is a ticking copyright time bomb. Naturally, it's delighted with the lawsuit. But those warnings could have a kernel of truth. It wouldn't be shocking if, scattered in Linux's millions of lines, there were other examples like the one seen by Mr. Taylor: incidental and easily excised. In fact, few pieces of software this big could survive the same sort of review.

"What if, thanks to SCO, Linux could rid itself of any such questionable lines, and end up with a court-issued seal of copyright approval? Then what would Microsoft complain about? And what would SCO's new business plan be?"



  


No Licensing Suspension | 37 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:47 AM EDT
Thank you for being careful, honest, and fair-minded. I realize you use humor
and sarcasm to make a point, this being a blog and all it's expected that your
opinion gets expressed. But what you have repeatedly shown is that you are
anti-FUD, no matter where it comes from. That is what keeps this site from
degenerating into a one-side namecalling affair where anything for "our side" is
cheered and anything for the "other side" is booed. Slashdot can be like that,
but I'm glad to see you taking the high ground and standing up for the
principles of truth and accuracy even when a seemingly easy target comes
around.
Nick

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 11:34 AM EDT
My WAG is that the CSR that the /. caller talked to was confused and thought he wanted to buy new copies of the Caldera/SCO Linux product, which *has* been suspended. Some people on the Yahoo SCOX board also called and supposedly were told that there was a backlog, and that someone would get back to them in a week or so. SCO must be drowning in crank calls by now.

BTW, from http://finance.messages.yahoo.com/bbs?.mm=FN&act ion=m&board=1600684464&tid=cald&sid=1600684464&mid=26922

--


"However, Deutsche Bank Securities analyst Brian Skiba, who visited with SCO last week and took a look at its evidence of copying from the UnixWare kernel into Linux, pointed out that many of those calls likely did not come from companies interested in buying a license.

"'Some of those companies probably were leaving colorful messages that were not necessarily that they wanted to engage in a license,' Skiba told internetnews.com. '[SCO] even told me that probably a third of those customers were calling to basically complain...'"

--


The Yahoo poster didn't give a citation for this, and I couldn't find one using google -- anyone else seen this quote elsewere?


bob

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 11:50 AM EDT
http://www.inter netnews.com/dev-news/article.php/2245911
pj

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 11:55 AM EDT
PJ,

Drats, you beat me in posting a link to the quote in question...


D.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 12:02 PM EDT
PJ, that article only tells us that Brian Skiba may be added to the list of analists that could tell they saw two pieces of similar code... It doesn't provide the "customers ... complain" quote.
Considering that the telephone number has been on Slashdot, I wouldn't be surprised if there were 90% prank calls. I must admit that I made a phone call to get some information too (and wasn't very serious in paying money for a license that restricted my rights).
MathFox

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 12:28 PM EDT
Here is a link to the quote in question: http://silicon valley.internet.com/news/article.php/2247331

Paragraphs 9 & 10.

The article is titled "SCO Group Claims First Linux IP Licensee" and is dated August 11, 2003


D.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 12:37 PM EDT
http://www.bbspot.com/News/2003/08/sco.html?foo=SCO%20Group%20t o%20Shoot%20Babies%2008-12
Z

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 12:48 PM EDT
Z, And that tells us there are people with worse taste than McBride...

D. Nice find!


MathFox

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 03:19 PM EDT
Well, I was searching around the net last night trying to find if Canopy has issued any offical statement on the lawsuit for the local LUG, and happened upon Darl McBride's home telephone and address. Hehe, it was in the strangest place you could imagine... I have no intent to post it anywhere, so please don't ask. Although, I am curious enough that I plan to drive past his house (seeing how I live in Salt Lake and all).
nexex

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 03:54 PM EDT
Now even attorneys are speaking out in the press against SCO (and this one from a firm who include intellectual property as one of their specialist areas) http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2914464,00.html

One point that is of interest is that he doesn't mention the issue of the act of copying to run a program not needing a license suggesting that probably isn't a clear cut defence even in the US. Any end user who buys the SCO license is relying on that clause to avoid them infringing section 4 of the GPL (You may not copy, modify, sublicense, or distribute the Program except as expressly provided under this License. Any attempt otherwise to copy, modify, sublicense or distribute the Program is void, and will automatically terminate your rights under this License...). If IBM wanted to know who the licensee is they could probably put forward a case that SCO and AN Other were conspiring to violate IBMs copyright and hence require SCO to identify their co-defendant.


Adam Baker

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 05:15 PM EDT
I made a call to SCO to inquire about their license. The women I spoke with
assured me I would be transferred to a available sales person, as in talking to
someone, what I got was voicemail. I left a message with my email address and
received a short email. I replied with a couple of questions and wanted them to
send me a copy of the license, they have not replied. They don't seem very
interested in selling anything if they are not answering!
Chuck

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 05:26 PM EDT
Other SCO stories

http://ww w.theage.com.au/articles/2003/08/12/1060588381531.html http://www.th estreet.com/_yahoo/tech/software/10107725.html


quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 05:42 PM EDT
Adam,

Though his site is primarily focused on Microsoft, Lewis Mettler, Esq. has had some interesting commentary on the SCO Group in the last couple of days.

http://lamlaw.com/DOJvs Microsoft/WrapAndFlow.html


D.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 06:00 PM EDT
Check out this story. SCO is a "Linux software vendor giant." I think we'd
better all write them a letter... I sure did. Hopefully they'll post it soon. style="height: 2px; width: 20%; margin-left: 0px; margin-right: auto;">Alex
Roston

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 06:06 PM EDT
If you wish, you may file a complaint with the U.S. Federal Trade Commission (FTC) at: https://rn.ftc .gov/pls/dod/wsolcq$.startup?Z_ORG_CODE=PU01
Z

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 06:08 PM EDT
Oops!! Sorry to reply to myself. Here's the URL:

ht tp://www.harktheherald.com/article.php?sid=91854&mode=thread&order=0


Alex Roston

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 06:36 PM EDT
Lawyer speaks
href="http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2914464,00.htm
l">http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2914464,00.html a>
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 06:38 PM EDT
Lawyer speaks
href="http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2914464,00.htm
l">http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2914464,00.html a>
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 06:38 PM EDT
Lawyer speaks
href="http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2914464,00.htm
l">http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2914464,00.html a>
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:08 PM EDT
Canopy wins against CA! More $$$ to keep sco afloat

http://biz.yahoo.com/d jus/030812/2248001491_2.html


Mike

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:10 PM EDT
ht tp://www.zdnet.com.au/newstech/os/story/0,2000048630,20277173,00.htm

"Invoices will be dispatched in the next weeks or months," a company spokesperson told ComputerWire on Monday.

Recipients will include the 1,500 enterprises which were served warning letters by SCO in May.


quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 09:22 PM EDT
Relevant to the Center7 judgment against CA for $40 million, it looks like Canopy already arranged in Q2 for money to flow from C7 to SCO. Check out the SCO's 10Q.

Apparently SCO will act as Marketing agent for C7 software and collect sales minus a royalty passed on to C7. As part of the deal, C7 already gave SCO an IOU for half a million dollars, which was not realized last quarter, but will be booked as the money arrives.

<On April 30, 2003, the Company and Center 7, Inc., ("C7") entered into a Marketing and Distribution Master Agreement (the "Marketing Agreement") and an Assignment Agreement. C7 is majority owned by The Canopy Group, Inc. ("Canopy"), who is the Company's principal stockholder. Under the Marketing Agreement, the Company was appointed as a worldwide distributor for C7 products and will co-brand, market and distribute these products. The Company will pay C7 a royalty on all products sold. Under the Assignment Agreement, the Company assigned C7 the copyright applications, trademarks, patents and contracts related to Volution Manager, Volution Authentication, Volution Online and Volution Manager Update Service (collectively, the "Assigned Software"). As consideration for this assignment, C7 issued to the Company a $500,000 non-recourse promissory note, secured by the Assigned Software, due on April 30, 2005 with interest payable at a rate of one percent above the prime rate as reported in the Wall Street Journal.>

<During the time the Company was developing the Assigned Software, it had expensed all amounts for its research and development efforts. As a result, at the time the promissory note was executed, the Company had no recorded basis in the Assigned Software. Because the transfer of the Assigned Software was to a related party in exchange for a promissory note, no gain will be recognized by the Company until payments are received.>


Tossie

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:12 PM EDT
I'm wondering whether what we're seeing here - the oil deal, the C7 deal, the Vultus thing - isn't a form of damage control. From where I'm sitting, it looks like SCO REALLY screwed up when they went after IBM. It's very clear that when McBride & Co. started their lawsuit, they didn't have a clue. All they really knew was that their company had lots of UNIX IP, but they didn't know their own history, they didn't understand the history of UNIX and Linux, they didn't know what they owned and what Novell owned, and they clearly didn't understand the damage Caldera's release of the kernel under GPL could do their legal case. In fact they just plain didn't understand the GPL at all.

Now they're in deep water. If they go to court they'll get creamed. If they admit they're wrong, the stock price goes down and the shareholders will destroy them. If board members sell too much stock or engage in any funny business, the SEC will come calling. By now even people as dense as McBride and Stowell must know they're in serious trouble. So what to do?

The answer is simple. SCO has to look for for a new gig. They use their current "high" stock price and notoriaty to make some good deals and acquire some small companies that look like they might have potential. After a couple months of shopping, SCO will be a company that doesn't really need UNIX at all. I wouldn't be surprised to see hints of that in the next SEC filing, something that reads more or less as follows: "Rather than depend on revenues from Linux and the lawsuit against IBM, we're diversifying so we can continue to serve the computing community. We believe that this significently decreases the risks associated with owning our stock."

Six months from now we might find SCO limping along at five dollars a share with a herd of little web-service companies in tow, having settled their lawsuits by putting all the UNIX stuff (which they don't need anymore) under the GPL, and showing off a dozen more contracts like the ones we've been discussing recently.

Frankly, I doubt the current SCO board has the brains to pull something like this off, but if I were them and had just learned that my IP nuke was gonna fizzle... Well, I'd give it a try.

Does anyone else think that's what we're seeing?


Alex Roston

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:14 PM EDT
I think:

The plan is to take assets out of SCO

SCO gives C7 these Volution products

C7 gives SCO a $500,000 promisssory

SCO pays interest on the $500,000

SCO also sells C7 products (presumably including Volution, but this isn't clear), but doesn't keep all the revenue, some of it pays as royalties to C7.

I don't know if C7 has any other products that SCO might want to, and will be to, successfully sell, but as 2 of the main ones would likely be aimed at Linux shops http://www.center7.com/us/products/ I think it might be hard for SCO to.

In other words SCO sold off ownership to a bunch of their products for $500K promissory, and by having to pay some royalty on these products if they continue to sell them, they have cut their net profits (if there were any) on these items in future.

However, it may help SCO in one way, which is that they may be able to cut their staff, by no longer having to maintain these products.


quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:16 PM EDT
The reason they did this, but might to cut staff - or it might be because they
know it's a lemon and don't want to sell it any more - or it might be because
they desparately needed the $500K now, even if it cost them later in
royalties.
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:19 PM EDT
The reason they did this, but might to cut staff - or it might be because they
know it's a lemon and don't want to sell it any more - or it might be because
they desparately needed the $500K now, even if it cost them later in
royalties.
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:19 PM EDT
The reason they did this, but might to cut staff - or it might be because they
know it's a lemon and don't want to sell it any more - or it might be because
they desparately needed the $500K now, even if it cost them later in
royalties.
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:19 PM EDT
The reason they did this, but might to cut staff - or it might be because they
know it's a lemon and don't want to sell it any more - or it might be because
they desparately needed the $500K now, even if it cost them later in
royalties.
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:48 PM EDT
The Canopy Group (ie: SCO) gets $40 million from Computer Associates. This should ensure they have plenty of money to sue the living shit out of the Linux community for years to come.
Lins Zechesny

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:50 PM EDT
Sorry, missed the previous posters links. Please delete my last post and this
one!
Lins Zechesny

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 06:35 AM EDT
> The answer is simple. SCO has to look for for a new gig. They use their current "high" stock price and notoriaty to make some good deals and acquire some small companies that look like they might have potential

While I think Bench gave hints in the press before Vultus that they were looking at acquisitions...

I think they would know about any potential Vultus might or might not have had - as they were in the same building even before buying them, and both Vultus and SCO were largely Canopy controlled.

I won't post any skeptical remarks about the best possible acquisitions and partners, just happening to be other Canopy companies.

Would SCO buy more other companies with stock? That'd be fine for SCO, but it would be risky for the other company. Even if SCO were to win $3bn from IBM - they could still be bankrupted by IBM's counter claims, plus there's Red Hat.


anon

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 07:38 AM EDT
Sure, if IBM kept the suit going. Let SCO acquire a bunch of companies and GPL their UNIX code and their troubles with IBM and RedHat might evaporate, assuming that SCO is smart enough to negotiate things first. (Big Assumption.)

And do understand that I'm not totally married to this idea... It just seemed like an interesting thought that might explain some of their behavior.


Alex Roston

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 07:46 AM EDT
re: I think: The plan is to take assets out of SCO

What this makes me think of is the fact that Canopy is pulling all the strings. So maybe it realizes that SCO is going to get clobbered in the lawsuits and have to pay huge damages that SCO would have to sell off all its assets to pay for, and so Canopy decided to move all the assets possible out of SCO into other companies it owns and convert SCO into a hollow shell?


david l.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 09:07 AM EDT
Hey guys, SCO just pulled the plug at IBM's AIX.

http://biz.yahoo.com/prn ews/030813/law050_1.html

Read all about it, expect SCO shares to rise again(?)


Clint C.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 11:40 AM EDT
Here's a neat take on the legal theory of "avoidable damages" referring to a tort case (which of course includes the SCO lawsuit against IBM):

http://forums.zdnet.c om/group/zd.Tech.Update/it/itupdatetb.tpt/@thread@18292@forward@1@D-,D@ALL/@arti cle@18292?EXP=ALL&VWM=hr&ROS=1

IANAL, but this seems to pretty much roast SCO's chestnuts for refusing to identify the allegedly offending code.


Steve Martin

[ Reply to This | # ]

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