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Small World Dept.-- SCO and MS
Friday, August 29 2003 @ 04:00 PM EDT

There's more than one way to fund a company, it seems. An alert reader noticed that Integral Capital Management companies just filed a 13G with the SEC regarding its shares in SCO. Here's their SEC filing. Here's the SEC Search page for Integral. Here's a list of institutional owners of SCO, and you can see that as of June, Integral was already number one on the list with 4.0%. Now it's presumably 5% or more, hence the 13G.

Who are these people? I thought I'd just check and see who thinks SCO is worth buying right along about now. I was particularly interested because last Friday I noticed a surge in buying, and all week there was a spike of institutional sell messages, and then this Friday, it suddenly stopped. No sell or buy messages, as you can see on this chart. If you switch the chart to the entire month, you can easily see that after this huge and atypical increase, suddenly nothing. So I went digging.

At first, there didn't seem much to find. Yahoo lists Integral as one of the "Top Institutional Holders" of Drugstore.com, the top holder, as a matter of fact. And you can read the stock purchase agreement the parties signed on Findlaw. Here's how they describe themselves in the SEC filing:
This statement is being filed by Integral Capital Management V, LLC, a Delaware limited liability company ("ICM5"), ICP Management V, LLC, a Delaware limited liability company ("ICP Management 5") and Integral Capital Management VI, LLC, a Delaware limited liability company ("ICM6"). The principal business address of ICM5, ICP Management 5 and ICM6 is 3000 Sand Hill Road, Building 3, Suite 240, Menlo Park, California 94025.

ICM5 is the general partner of Integral Capital Partners V, L.P., a Delaware limited partnership ("ICP5"). ICP Management 5 is the general partner of Integral Capital Partners V Side Fund, L.P. ("Side Fund") and the Manager of Integral Capital Partners V SLP Side Fund, LLC ("SLP Side Fund"). ICM6 is the general partner of Integral Capital Partners VI, L.P., a Delaware limited partnership ("ICP6"). With respect to ICM5, ICP Management 5 and ICM6, this statement relates only to ICM5's, ICP Management 5's and ICM6's indirect, beneficial ownership of shares of Common Stock of the Issuer (the "Shares"). The Shares have been purchased by ICP5, Side Fund, SLP Side Fund and ICP6, and none of ICM5, ICP Management 5 or ICM6 directly or otherwise hold any Shares. Management of the business affairs of ICM5, ICP Management 5 and ICM6, including decisions respecting disposition and/or voting of the Shares, resides in a majority of the managers of ICM5, ICP Management 5 and ICM6, respectively, such that no single manager of ICM5, ICP Management 5, or ICM6 has voting and/or dispositive power of the Shares.

Intricate, no?

Why, I asked myself, would they be buying now? Google didn't have much to show. Just when I thought I'd hit a dead end, I started to read Drugstore.com's 10Q, their most recent one, just filed this month. Because this is another company Integral has invested in heavily, maybe I'd find something there, I thought.

And lo and behold, guess who was just elected a director of Drugstore.com? Melinda French Gates. Yes, that Mrs. Gates. Well, that got my attention. I switched to some other search engines and really started digging, and I went to the SEC to see what I could find.

As of last December, Integral Capital Management V didn't own any SCO stock, according to this SEC filing. They did own Microsoft stock back in November. But they didn't the previous May of 2002. So the chain of investment timeline appears to go like this: First, they invested in Drugstore.com, then Microsoft, and then in SCO.

Small world, isn't it? But why? A venture capital firm is investing in Microsoft? Doesn't it seem like it should be the other way around?

Here's a description of Integral on VC Directory:

20 portfolio companies brought to successful IPO 1997 - 99. This venture capitalist was incubated within Kleiner Perkins Caufield & Byers in 1991. Integral's partnerships are five years in duration. Integral IV began in March of 1998 with over $300 million of capital and the company currently has over $1.2 billion in capital. In 1999, Integral Capital Partners co-founded and now operates as a managing principal of Silver Lake Partners, a $2.2 billion buyout fund focused on technology and related growth businesses.

Focus: Integral invests in technology businesses at all stages of company development beyond the start-up phase. . . .

Integral typically invests between 20% and 50% of the original capital of each fund in private companies and buyout opportunities. Integral is an active investor, both in the venture and public stages. Their greatest contribution typically relates to corporate strategy, business development opportunities, and maximizing market value (either through an IPO or merger). Integral does not take board seats. Integral Capital Partners 2750 Sand Hill Rd., Menlo Park, CA 94025 . . .

Here's their home page.

Think this is just a coincidence? Could be, but take a look at this article from June 6, 2003, entitled "Best friends -- VC buddies do many of their deals with pals", which explains that in a tough economic market, VC capitalist firms like Integral do business primarily with their friends, as its Roger McNamee explains:

"People's time is limited," said McNamee. Quoting a favorite saying in the VC biz, he added: "When you have a choice, always do business with your friends. When you don't have a choice, your friends are the only ones who will do business with you."
There goes the coincidence theory. Well, they appear to know each other, according to this Fast Company article linked to on Integral's web site:
As early as 1997, he says, "I realized that we had escaped the earth's gravitational pull -- that we were in the midst of a true mania. The next question was, What do you do after you crash and burn? You need a strategy for investing in a long-term bear market." So, along with a set of superstar partners, McNamee assembled the first large-scale private-equity fund focused on tech. Silver Lake Partners, which launched in May 1999, raised $2.3 billion in a matter of months, attracting a who's who of Silicon Valley and Wall Street, including Bill Gates, Michael Dell, Larry Ellison, major investment banks, and big institutions such as CalPERS and the World Bank. In the four years since its launch, Silver Lake has invested approximately $1.6 billion of the fund in nine megatransactions -- which included involvement in a landmark $20 billion leveraged buyout of legendary disk-drive maker Seagate in late 2000 and that company's IPO two years later.
So there you have it, folks. And what's the plan? Here's their investment strategy page:
The Internet drives all three of Integral's major information technology investment themes. Cheaper computing power, more bandwidth at lower prices, and server-centric software are leading to a world of information-rich Internet services that empower decision-makers with accurate, real-time information. By utilizing the exponential forces of Moore's law and Metcalfe's law, the Internet encourages rapid development of low-cost business relationships. The Internet also liberates emerging competitors by allowing them to undermine traditional information control, price discrimination, customer relationships, and distribution channels. The Internet is delivering both buyers and suppliers better information and lower cost transactions.
This seems to dovetail with SCO's new web services model, and it also ties in with my long-held belief that the plan was to dump the GPL off a cliff, write a new kernel for UNIX, which will also do Windows, and then steal all the open source software applications they can find and let you run them as binaries on top of their kernel. In a word, yuck. Brand X Linux, for which you will pay a pretty penny, my friend. It seems there is a plan, and it looks to me now like Microsoft may really be part of it.

  


Small World Dept.-- SCO and MS | 85 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 01:23 AM EDT
If Microsoft is behind SCO and pulling strings they are playing a _very_ dangerous game.

MS is legally a monopoly. In itself thats not a problem, but it does limit what they are allowed to do in the computer market. If they really are using a 3rd party to damage the GPL and Linux and a connection is discovered, every company with a financial interest in Linux (of which there are now a huge number) will have a possible anti-trust case against MS.

Could Darl and friends act as agents for MS? Would they keep quiet about it should they end up in court?


geoff lane

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 01:45 AM EDT
http://newsf orge.com/newsforge/03/08/25/1117203.shtml?tid=11
pj

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 01:58 AM EDT
geoff: to me, it's _obvious_ that MS is behind this and pulling the strings. But I think the MS people are smart enough not to get caught with their pants down. They're probably scared shitless, though, that their sock puppets will do something stupid and blow their cover.

The absolute best thing that could come of this debacle is for all this shady dealing to come to light much earlier than it would have otherwise. Imagine how much better things would be now if someone like pj had dug through all the Enron muck in the months and years before that blew up.


Raph Levien

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 02:22 AM EDT
wow, nice articel from newsforge, i didn't expect that...

thanks pj!


andre

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 02:31 AM EDT
i don't know if already mentioned in other comments..

-> http://news.bbc.co.uk/1 /hi/technology/3191281.stm

Quote: "The Linux community needs to accept that this could be a real problem, and put processes in place to make sure it cannot happen instead of simply dismissing all criticism as unfounded."

I think he's right..


andre

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 03:22 AM EDT
Andre, I replied to Bill's BBC article yesterday, but no sign of it has appeared on the BBC webpage. A copy of my reply can be found on his blog...

htt p://bill.verity-networks.com/billslog/stuff/00000053.html#comments


David Mohring

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 03:25 AM EDT
PJ, checkout this on pump and dump at drugstorecom.pdf

http://www.iposec uritieslitigation.com/DRUGSTORECOM.PDF


David Mohring

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:34 AM EDT
if this tracks back to microsoft the justice department needs to get a better
lawyer this time around
maybe and break microsoft up totally this time.
brenda banks

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 05:13 AM EDT
Interesting. Interesting indeed. Thanks, pj!

Based on its beliefs, the current administration has no apparent interest in the "old" Microsoft case, and so MS may believe it reasonably safe to take certain actions if those actions do not seem to lead back to MS. The connection with Sun and (probably) HP becomes cl;earer also. As long as the press can be kept busy with the very loud distractions in front of the screen, what happens behind the screen would regularly go unnoticed.

The apparent twist here is that the valuable property would seem to be the linux kernel, and not the old UNIX one. I think we are beginning to see the motive, and from that we can further deduce the rest of the cast of suspects. No? There is the distinct smell of more than civil issues, but criminal ones as well.


Marty

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 06:27 AM EDT
I just submitted the following to the BBC site in response to their article. I'm posting a copy here too in case anyone's interested.

1) Nothing short of black magic (or perhaps keeping programmers locked up for their entire working lives) could protect against all risk of copyright violations by individual programmers. Even closely supervised programmers could memorize someone else's code at home and recreate it at work, and the level of supervision required to make violations even that difficult would be prohibitively expensive. Further, developers of proprietary code face temptations quite similar to those faced by Open Source developers. Consider the fact Unix System V, the very Unix that SCO accuses Linux of stealing from, itself contains code copied from BSD Unix in a manner that violates the BSD license. (In fairness to SCO, those violations occurred before SCO took over ownership.)

2) Open Source does, however, make it far easier to discover violations when they occur. The nature of Open Source makes it child's play for proprietary software developers to obtain copies so they can check for copyright violations. In contrast, Linux developers have no way of investigating whether commercial companies have stolen their code for use in proprietary, closed-source products. Unless and until SCO opens their proprietary code to the same level of scrutiny that Linux has been subjected to, and especially with SCO unwilling or unable to present any concrete evidence, why should anyone assume that the Linux community is any less careful regarding copyright violations than SCO is?

3) From the beginning, the attitude of the Linux community leaders has been, "If you can show us any genuine violations, we'll fix them." But as long as SCO refuses to (or is unable to) provide any valid evidence of violations, how has SCO earned anything but dismissal and derision for its claims? If SCO wants anyone to take its claims seriously, are they not obligated to back up those claims with solid evidence?

4) An even more important reason for the Linux community's dismissive attitude is that SCO themselves distributed the code in question under the GPL. When SCO first discovered the problem, they could have stopped distributing Linux (at least until they removed the code they intended to challenge). They could then have argued that they released Linux versions containing their proprietary code only by accident, and only because they were tricked into doing so as a result of deliberate deception. But once SCO recognized the problem, their choice to continue distributing Linux was a deliberate choice to distribute their allegedly proprietary code under the GPL. Thus, whatever laws might have been broken initially, SCO has since released the code under a license that makes it legal.

5) Note both the irony and the generosity of the Linux community’s expressed willingness to replace code claimed by SCO in spite of the fact that SCO is flagrantly violating the copyrights of Linux developers by distributing Linux versions that they claim contain proprietary code. That contrast makes the images of SCO as a valiant knight charging to the defense of intellectual property, and of the Linux community as greedy people with no respect for intellectual property, particularly absurd.


Nathan Barclay

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 07:16 AM EDT
PJ, you are beautiful!

Thanks for connecting the dots...

Perhaps M$ believes they can keep the SCO bubble from bursting so the investors in SCO do not complain, but I think the SEC will be very interested in what looks to me to be stock manipulation. I could not, until now, understand why SCO kept rising in the midst of such negative news. Many investors must know about the suits and SCO's weak position but may be swayed by SCO's propaganda when they see the price of a share rising like that. The only reason SCO has not gone way down in share price seems to be that PJ's discovered investors were buying. Volume was low on Friday, so they did not have to do much to leave it pegged high.


Robert Pogson

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 07:18 AM EDT
Nathan,

One of the major causes of copyright infringement by programmers their education. Programmers are told that it is good to reuse algorithms and code; and it is from an engineering point of view. Programmers are (in general) not educated in the juridical aspects of their work, so they see copying as "an easy way to get functionality". There are noticable differences in the amount of attribution amoung individual programmers; some are very consistent in removing attribution and copyright notices from others.

When there's education and peer pressure the programmers can prevent a lot of the copyright issues. Nowadays the problem is unknown to the persons that can prevent and solve it; I hope the SCO case causes some general awareness of copyrights and software.


MathFox

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 07:48 AM EDT
Thanks, everyone, and David, the Drugstore pdf was powerfully interesting.
Thanks for finding it.
pj

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 07:51 AM EDT
Don't know if anyone has ever linked this artile at ZDnet, but here goes - just for the record.

This is a July 24 article:

SCO's claims have absolutely no credibility


MajorLeePissed

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 08:06 AM EDT
pj,
Great dig.
I have another idea that your reseach triggered in my imagination, maybe one
other option is this. Microsoft cannot own UNIX (because of the obvious
anti-trust problems). So - maybe they are trying to own it, or part of it, by
proxy, thru an investment this group. Maybe the real reason why this group is
buying the stock now is to actually to make a play at owning SCO (and UNIX or a
forked non-GNU GPL version of LINUX). SCO must seem to be now a wild card that
would be a major key to this groups mutual desires (to attempt to kill off the
GNU GPL). If they can force LINUX to fork away from the GNU GPL version of
LINUX (and then create all kinds of cute tools to attract all software
development to the non-GNU GPL fork vs the GNU GPL LINUX version..., then it
would be a great coup for all of the partners (as the long term threat of the
GNU GPL is a thought that feeds their nightmares). Whereas IBM, if they are
focused mainly on hardware, experiences no such feeling of being threatened by
LINUX and/or the GNU GPL (unless Hmmm, if IBM has desires to become a great
software powerhouse... then, they too are secretly threatened by the GNU GPL and
cannot be trusted)! Hmmm - great research!
annon

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 08:17 AM EDT
I don't buy it, at least not MS wants to own Linux/UNIX version. I know/knew some MS people, and they really think Windows is better. It's their culture.

All the article has shown is that "it's a small world". The same folks are making money on all this crap.

News link:

http://linu x-universe.com/modules/tinycontent/index.php?id=13


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 08:37 AM EDT
quatermass,
True, MS does not want to own... however, if you can lead the herd of wild
beasts - you can also control the pace of the running herd and/or lead them off
the cliff.
Hmmm, great news link!
annon

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 08:50 AM EDT
If you want to look for a stock angle for an outside "sponsor", look in the obvious place, it's right there in the open.

As part of their deal, Sun got option to buy about 330K shares at about $1.83.

They can exercise the option, and then sell at the current market rate.

If they sell for say $14.83, they make about $4.3m profit immediately.

I don't know if they have exercised the option or sold yet.

The point is

1. The deal aligned Sun's financial interest with SCOX stock price. Sun might therefore want SCO shares to rise as high as possible.

2. If the sale price is high enough, Sun can break even, or even make a profit from, their license purchase from SCO.

3. The Sun stock element only came to light in an SEC filing some time after it took place. If you remember it was an undisclosed 2nd licensee, in SCOsource, until MS appeared.

4. Sun undoubtedly will say that Sun's prior statements about SCO etc., are them acting in Sun's business interests, and were not related to any consideration of SCO's stock price.

5. Did Sun disclose they had an interest in SCO stock (prior to it coming to light) when talking about SCO-related issues? Like that ad-campaign about AIX?

6. Finally, even if you buy some Sun interest in SCO stock theory, doesn't actually mean Sun need to believe SCO's case.


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 09:42 AM EDT
I'm afraid I don't think much of this. What do we have?

1. A fund that owns a bit of SCO also owns a bit of another company of which Mrs. Gates is a director.

2. That fund has pitched to big-money IT individuals, and is backed by Gates and several of his closest enemies.

7-8% doesn't buy you the right to tell a company to do a 180 degree turn, dump its main product and start threatening to sue its partners' customers. The only shareholder that could do that is the Canopy Group.

Silicon Valley is a relatively small world. If you're going to follow a few connections, I'm sure everyone knows everyone.


amcguinn

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 09:58 AM EDT
IBM seems to have learned from their gloriously bad mistakes in the past and now
understand the trend towards commodites in technology, but Microsoft and Sun
still seem to think people will always be willing to pay a lot more for the
"name brand" stuff. PJ, if your theory turns out to be true, I think we are
witnessing one of the first sure signs that Microsoft is getting scared. They
would never take such a drastic risk if it weren't for the fact that Linux is
quickly becoming a de-facto standard in the embedded device market. I suspect
Microsoft is beginning to realize that the desktop will always be theirs, but
the desktop is not always going to be such a profitable monopoly. style="height: 2px; width: 20%; margin-left: 0px; margin-right: auto;">Lins
Zechesny

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 10:04 AM EDT
Just heading out the door, but I had done my own investigaton of Integral Capital Partners.

I didn't find what you found here, but I did find some Gartner connections, which makes all of this even more interesting:

http://www.threenorth.com/ICP.html


Tim Rushing

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 10:16 AM EDT
"Maybe the real reason why this group is buying the stock now is to actually to make a play at owning SCO (and UNIX or a forked non-GNU GPL version of LINUX)."

I have been under the impression that a non GPL fork of Linux is not possible, at least without the explicit consent of each and every copyleft holder/contributer to the Linux codebase. The BSD license can be forked under a different license. A totaly new or a previously proprietary code base can be released with a dual license, one GPL and another commercial one. But a previously existing GPL'ed base can not be converted to anything else.

Can anyone confirm this one way or the other?


Tom Cranbrook

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 10:40 AM EDT
tcranbrook, I believe that is correct, unless the GPL is invalid and also is invalid in some way that somehow means public domain or something. I've never seen a serious argument for that type of invalidity.

BSD license is not relicensed. It just says, more or less, use the source code for anything and in any way that you like provided you leave the license in the source code - and if it goes wrong, it's your fault (plus advertising clause in old BSD license). Hence you can comply with that license in part of many different ways - however the original code remains copyrighted under the BSD license.

Repeating: I don't buy it, at least not MS wants to own Linux/UNIX version. I know/knew some MS people, and they really think Windows is better. It's their culture.

What I'm trying to say here, is

(a) everybody is looking for a MS puppet theory support - and the "evidence" is basically all speculation, without any solid facts.

(b) a much stronger Sun connection (not necessarily puppet theory) is right out there in the open. I didn't see MS running full page ads in the Wall Street Journal indirectly drawing attention to SCO. I didn't see MS having a direct financial stake in SCO's stock price rising. I didn't see MS's CEO shooting his mouth off all over the press about SCO.

(c) A lot of open source people, think their software is great (which is a fair view point) - and therefore MS some envies this (which IMHO is ascribing totally the wrong mental model to MS people). MS people really do think their stuff is better.


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 10:54 AM EDT
Is the 80 line slideshow the best they got? McBride is still using that debunked slideshow as his argument that SCO has proof.

http://www.wired. com/wired/archive/11.09/view.html?pg=3

So where's the proof? We've stepped up with 80 direct lines of code and derivative works that amount to thousands of lines - and we're saving the rest for the courtroom. How many clothes does Winona Ryder have to steal before it's not OK? You get to a certain point where property rights are either valuable or they're not.


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 11:11 AM EDT
quatermass: I agree that the evidence for an MS connection is circumstantial. However, I think it adds up to a pretty compelling case:

1. Microsoft gave SCOX a lot of cash for a "license" that has no real technical or business justification. This money is basically what's funding the lawsuit.

2. Spreading Linux FUD is very much in Microsoft's interests, as it no doubt causes conservative fence-sitting customers to come down on the MS side. They've probably come close to recovering their investment already.

3. SCOX's attack on the GPL eerily echoes Microsoft's, including the relative praising of other free licenses. MS would definitely be the biggest winner from an outcome that destroyed the GPL but left BSD-like licenses standing.

4. Sun's position is schizophrenic to an extreme. One arm openly embraces the GPL, promoting OpenOffice, Linux, and now the "Mad Hatter" desktop. Another arm competes fairly with Linux in the high-end enterprise market with the superior scalability and robustness of Solaris. Then you've got the whole Java thing (which is actually several arms), and finally whatever dim-bulb thought it was a good idea to give SCOX money.

Of course, it _is_ true that Sun would stand to benefit in the short run from Linux losing its credibility, as Sun would be the first choice of many customers for a vendor Unix. However, it would very much be shooting itself in the foot, due to the damage to the broader Unix infrastructure. This would be far from the first time Sun has done so. In fact, this time their aim might be a little higher.

5. I agree that MS doesn't want to own Linux or do their own Linux distro. However, I do believe it would be very much in their best interest to be able to _control_ it. For Linux to become neutered and controlled by SCOX is very much the best-case scenario for MS.

6. My guess is that MS is managing their relationship with SCOX very carefully. They realize that any hard evidence linking them to SCOX could damage them seriously. Thus, I think it's _great_ that pj and others are doing the digging to turn up such evidence if it exists.

Of course, I could be wrong about all this, but I don't think so. It matches the flow of money so far, and an educated guess about who stands to benefit most from an SCOX win.


Raph Levien

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 11:47 AM EDT
In point 4, you missed SUNW profits if SCOX shares go up.

There is as much or more evidence that SCO beat up MS to pay, as that MS paid up willingly. MS enjoy the FUD - certainly? MS behind it - all you have is some fund which is connected to dozens or hundreds of companies - is linked to one of many companies - which MS is linked to. Frankly it would be surprising if you couldn't find that kind of connection - it's not exactly a firm one.

You also didn't mention that MS have a history with Yarro/Canopy - and it's hardly best of friends. Gates never forgets this kind of stuff, and I'm sure would love to kick Yarro/Canopy when they're down, hard, repeatedly, rather than lift them up. IMHO, wait and see, they will, (kick em), when the opportunity arises.


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 11:51 AM EDT
"Comments on the case by the judge gave MS the legal ammunition to challenge the penalties set by the judge and have the penalties phase moved to a new judge."

Microsoft was a convicted criminal when the comments were made. As such, it wasn't bias, it was honest outrage at the actions of a convicted criminal. Had it been a murder or rape case, the judge would have been applauded for his statements. It was clear that Microsoft paid off the appelate level to mitigate their offense. Microsoft is the current mob in the US. Billy boy is the Teflon-Don.

This latest link is just the latest in a long string of seeming coincidences. It all adds up in the larger pattern: Microsoft is still using its monopolistic powers to control the computer industry. What stake could Microsoft have in Linux? It's pretty obvious to us Mac users. Mac had an old, clumsy, highly criticized OS that it was having trouble fixing. So they threw it out and put a Mac layer on top of BSD. Brand new, highly lauded, modern, stable OS. All hail the new Mac. Now, Microsoft has an old, clumsy, bug-ridden, highly criticized OS that they seem incapable of fixing. If somehow the GPL managed to be invalidated, how much do you want to bet that next year, a new version of Windows would be released that was just a Windows layer on top of Linux? They could be working on it right now, only waiting for some change in the status of Linux and the GPL to proceed. All hail the new stable Windows! Isn't Microsoft the best?

It isn't far-fetched. Mac people would have laughed if you told them a couple years ago that Apple would replace the venerable MacOS Classic with BSD. How many Windows people would laugh now if you told them Microsoft would replace Windows with Linux? Actually, I'd probably cheer. A windows layer on Linux would be just the thing to cure many ills. Why do you think Wine is so popular on Linux? What about Lindows? Microsoft knows a good thing when they see it, they just prefer to either steal it or destroy it.

BTW, Sun would have to make a WHOLE LOTTA MONEY on their SCO stock to get back their license fee. They paid $100 Million for their license, not $10 Million like IBM did.


J.F.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 12:16 PM EDT
JF:

Well, Microsoft could always put windows on top of BSD even cheaper.

Just like they could have used BSD code to make whatever compatibility they paid $6 million for.

When we have a direct $6 million payment for an unnecessary service that they officially admit was "partly" to "send a statement" and an option to pay more next year, I don't think we need to look much further than that to see that MS is paying SCO to discredit Linux.

The main issue is making sure it doesn't work.

Also PJ: Please put a donations link on the website. I know you are doing this as a labor of love but those of us who are very thankful for your site would like (at least speaking for myself) to give you a monetary token of our appreciation. Also as a labor of love. When the good guys can't take money, the bad guys have a big advantage.


r.a.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 12:26 PM EDT
Other topic: SCO is sending out invoices to companies that use Linux. So that means it would send one to IBM? After all, I bet it has a great many internal servers runing Linux. And if IBM got such an invoice, would it ignore it or file a lawsuit?

Related question: has anybody actually received an invoice? Maybe this is a threat they are not going to carry through. Also, it seems to me that SCO is running out of maneuvers. Once it sends out invoices, and few if any people pay up, what is left but suing, and that would likely provoke a massive class-action counter-suit, something I imagine SCO wants to avoid.

Another thought: IANAL (though I do play one in the video game "First We'll Kill All The Lawyers"), but it seems to me the Red Hat lawsuit puts SCO in a difficult position. They only way SCO can defend itself against it is to prove that they do own code in Linux by submitting it to inspection, which is the thing they don't want to do. And if it then gets shown some of their code actually is in Linux, then it will just get removed and replaced, and so SCO won't be able anymore to get money by threatening users with lawsuits.

On the other hand, if SCO does not defend itself, then it loses the case by default and the judge orders it to stop making claims. So either way it loses. Remember, SCO has avoided a direct confrontation with the distributers because it knew such a confrontation would end counter to its own interests, but the RedHat lawsuit means SCO can't avoid it anymore.

Maybe you legal experts out there can tell me if I have this right or not.


david l.

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 12:32 PM EDT
amcguinn,

> 7-8% doesn't buy you the right to tell a company to do a 180 degree turn, dump its main product and start threatening to sue its partners' customers. The only shareholder that could do that is the Canopy Group.

It's not the stockholders that direct the company, it's the Board of Directors. Stockholders' only influence is in approving board members at an annual stockholders meeting.


Dick Gingras - SCO caro mortuum erit!

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 12:35 PM EDT
david1:

I doubt they sent invoices. When SCO makes claims that are uncheckable, it's best just to assume they are lying. To send an invoice that is unnecessary is an act of fraud. To say you have sent invoices but can't say to whom is just good ol' lying. SCO has been very careful to stay on the good ol' lying side.

As far as the Red Hat case, they seem to be hoping to stretch it out for two years before their lack of evidence becomes officially public.

As far as evidence, in the Wired interview, McBride confirms that the 80 lines of code that seemed so impressive to some NDA viewers is the same code Perens debunked here.

So the game is pretty much over. This is annoying in the press but noone who cares enough to follow the story closely believes SCO any more.


r.a.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 12:38 PM EDT
david l. Yep, IBM's brand new plant in downstate NY runs 100% on LINUX. Here is an interesting article about that!

http://www.pc.ibm.com/ww/eserver/xseries/linux_update/2002/08/analyst_vie w.html titled: CIN: When IBM eats its own dog food, the flavor is Linux By Dan Orzech


annon

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 12:42 PM EDT
But IS SCO sending out invoices to companies that use Linux? They say they are, they say they have three teams (apparently one to fold the letters, one to stuff the envelopes, and one to lick the stamps), then they say they are not ... depends on which way the wind blows. Actually sending one opens a whole ball of worms, legally speaking. If you do not have a legal right to bill for whatever you are sending the invoice for, it's mail fraud, pure and simple, on a par with the phony office supply invoicing.

"the Red Hat lawsuit puts SCO in a difficult position. They only way SCO can defend itself against it is to prove that they do own code in Linux by submitting it to inspection, which is the thing they don't want to do." Exactly. The only defense against a libel action is to show that what you printed was the truth, so they have to show code or lose.

"if SCO does not defend itself, then it loses the case by default and the judge orders it to stop making claims" ... WORSE :) Much worse. RedHat is asking for a judicial declaration that everything in its Linux distro is free, FOREVERMORE, from any accusations it is tainted by SystemV, and wants damages as well . They cited some heavy-duty federal business laws that were written to punish companies who deliberately lie about a competitor.


Tsu Dho Nimh

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 12:43 PM EDT
Correcting Tim Rushings's link:

http://www.threenorth.com/sco/ICP. html


Tsu Dho Nimh

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 01:26 PM EDT
Let's remember that MS statement about respecting IP, was

(a) so vague as to be meaningless - of course SCO construe it in a different specific way, when it suits them,

(b) occurred before SCO opened up their general Linux "case",

(c) it's not even impossible to believe SCO deliberately got a vague statement from Microsoft, that was ambiguous enough to be used to later in their PR

(d) the stories which say Microsoft's payment to SCO for some UNIX-stuff, somehow support SCO's Linux "case", tend to be the ones repeating SCO's claims verbatim, and full of McBride-isms.

(e) DiDio is one of those who frequently hints to MS behind the scenes SCO. How much do you believe DiDio's other analyses? Do you think she's concluded that on the basis of her own independent research, or because that great "pragmatic" smart guy, McBride, gave her the idea.

It's quite simple. SCO wants you to believe MS and Sun are behind them, and believe in their case.

Remember that's quite different from MS or Sun actually being behind them, and believing their case.

Finally read the interview with that MS Australia guy, and there is also an interview with some other MS guys. It doesn't say it, but I don't think it's too much of stretch to think that SCO might have beat up on them. i.e. SCO indicated "Do you really want to face Boies in court again, and a whole load of bad PR? Pay us a few million, spread over a few quarters, to make Darl's options vests, and we'll leave you alone."

If you believe this "beat up" theory, it reasonable to expect MS would want to be a position where SCO *never* beats up on them again. If I was MS, I would demand it as a condition of any settlement. Guess what else Caldera/SCO did not so long ago - shred the DR-DOS case files.


quatermass - SCO delenda est

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 01:35 PM EDT
Re: Tsu's comment, above. "The only defense against a libel action is to show that what you printed was the truth."

IANAL, but as I understand, there are lots of defense against libel suits: show that what you printed was true is one, but so is showing that it the statement had no material affect on the party (no suffering = no reason for them to get damages), showing that you, in good faith, *thought* it was true, etc.

Certainly not trying to be on SCO's side -- they're going down. But just wanted to jump in with some alternate strategies SCO might take if/when they ever get to court with RedHat.

- j.


Joel Burton

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 01:44 PM EDT
QM:

I don't have conclusive proof for or against the "beat up" theory but I am leaning against it.

a) A vague statement that you're paying to show you respect IP, when code that does the same thing is available free, in full compliance with the rights and wishes of the copyright holder seems to me to be somewhat deceptive. If MS has something to be deceptive about, given that it's identified Linux as one of its biggest strategic threats, I'm just guessing its funding an attack on Linux.

b) It occurred before the court papers were filed. Do you believe McBride didn't expect to attack Linux in January? He says he realized Linux was communistic as soon as he came to SCO.

e) If Didio says the world is round, I believe her. I don't base my opinions on hers and I never introduced her as an argument but that doesn't mean it's wrong because she says it.

1) I haven't said MS believes in SCO's case. I said MS is paying to hurt Linux. Two different things. I don't think anyone believes in SCO's case any more, including people at SCO. They sure aren't acting like they do.

2) I don't think MS has to be beaten up to fund an attack on their biggest threat. If SCO loses and Linux gets $6 million worth of bad PR, MS got their money's worth.

3) MS doesn't seem like a company a penny stock like SCO at the time could scare with threats of a lawsuit. Even with Bois.


r.a.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 01:58 PM EDT
Another thing: The MS and Sun licenses add up to about $10 million.

Darl says he has $10 million budgeted for the lawsuit.

Any questions?


r.a.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 02:00 PM EDT
OT, Infoword is running a generally fud free and accurate
arti cle on the costs and benefits on an enterprise deploying GNU/Linux.
D.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 02:03 PM EDT
Given SCO's recent relative silence, I think it may be fruitful to "follow the money".

The SCO holdings of ICP and Royce seem suspicious to me. Why would they continue to increase their SCO stock holdings in light of the mounting evidence against SCO's claims?

The next thing to do would be to find some linkage between ICP/Royce and the principals of Canopy/SCO and maybe Ray Noorda.


Dick Gingras - SCO caro mortuum erit!

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 02:35 PM EDT
Is sending an "unnecessary invoice" a fraud?

Not here in Switzerland: there are no laws against selling unnecessary services or useless products (and I imagine it must be about the same elsewhere). So from time to time we receive invoices (on official looking papers!) to get listed on a dummy register or another, and there's nothing we can do except ignore them: if you pay you probably get listed somewhere. What's illegal however, is to send a reminder invoice to reclaim payment if the first one was ignored. SCO could send an invoice and an offer for whatever they want to every company and person in Switzerland and risk nothing if it is not threatening, or so I understand, but IANAL.


Ph(i)Nk 0

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 03:07 PM EDT
Ph(i)Nk, it's not that SCO might be selling unnecessary services:
it's that, in sending invoices for intellectual property rights that
they claim to hold to Linux, they're billing for a property that is not theirs
to sell. There's a difference.
Steve Martin

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 03:10 PM EDT
was there any press releases from sco last week that were news worthy?
dont you find it rather strange for them to be quiet this long? style="height: 2px; width: 20%; margin-left: 0px; margin-right: auto;">brenda
banks

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 03:20 PM EDT
I'm also a believer in the "SCO beat up MS case." In fact, the hiring of Bois lines up with that - if I recall correctly, Bois isn't an IP lawyer, he specializes in anti-trust law. But if there's one name MS doesn't want to hear...

Also, on the subject of people buying SCO stock, has everyone seen this? http://www.threenorth.com/sco/co hen.html

Where ICP is concerned, they also own parts of Linuxcare and Transmeta. Is it possible that their investments in SCO are essentially a matter of hedging their bets? That aside, I'm beginning to wonder how many players there are, and what their plans are? It looks like a huge number of people are trying to have some influence over Linux/UNIX via the ownership of SCO, but this brings up some interesting questions.

First, are all the players we've seen on the same team. That is, are they all taking cues from Microsoft/Sun/whoever, or are there multiple agendas at work?

Second, given the uselessness of SCO's arguments and their very poor chances in court, I'd wonder if there isn't some as yet unknown exterior factor which will come into play soon, perhaps a pending change in copyright law or a case which is working its way up through the courts which will somehow change things in SCO's favor?

Any ideas?


Alex Roston

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 03:25 PM EDT
alex with that question my mind immediately leaps to RIAA and MPAA especially
since mcbribe has talked about them so much lately
and they are definitely working in the court system
how it would compare to sco vs ibm/linux tho is beyond my thinking skills style="height: 2px; width: 20%; margin-left: 0px; margin-right: auto;">brenda
banks

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 03:49 PM EDT
RIAA and MPAA. One wonders what Orrin is hatching these days. And what about Waxman?

Hmmm....

Can someone check this out?

Alex


Alex Roston

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 03:52 PM EDT
Ooops. SCO is down again. I wonder whether they've figured out that a great deal of volunteer brain power is working against them and shut down their server during non-business hours in order to make life harder for us?

Alex


Alex Roston

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:01 PM EDT
I looked for the interview where someone asked SCO if they had the resources for a long court fight and SCO (Darl or Stowell or Sontag) said they have $10 million budgeted. I haven't been able to find it so I have to retract that statement and apologize. Memory may not have served.

Early this year SCO was a company that had lost money every quarter, had no profitable products and was a few quarters away from bankruptcy. I find the idea that they hired Bois and MS caved because of that to be absurd.

If MS doesn't cave when Attorneys General in several states hire Bois, why would it cave when a penny stock hires him?

I have no idea why anyone would believe MS was afraid of SCO and paid $6 million of extortion money (and took an option to pay more money next year if they choose to). Ridiculous is not strong enough a word.


r.a.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:04 PM EDT
brena and alex, Good point(s)! The potential issues with RIAA and MPAA, maybe dovetails, in SCO's minds, with all their talk about the "indemnification" word. They think that they have the inside track. BUT - SCO is a self-declared IP principles and SCO has let actual, apparent or ostensible agents distribute their "claimed" IP under GNU GPL terms and conditions that SCO now has to accept (including the perpetual right to use LINUX as governed by the GNU GPL). I can't see how any jury would allow SCO to charge innocent 3rd party users of LINUX any additional fees. This LINUX IP case ain't related to napster at all! SCO has known every inch of LINUX for over 8 years, SCO has a long history of just standing idle as they watched and allowed all of LINUX to be acquired by innocent 3rd party customers without SCO making any legal move to challenge these transactions and agreements, or SCO making any move to attempt to void the same transactions. pj on Tuesday had a lawyer that said that a state's attorney general's office would not put up with SCO going after the innocent LINUX users who have acted in good faith. With napster, there was really no one that was acting in good faith - and in the back of everyone's minds, including the downloaders, everyone knew that it was not legal and was too good to be true and would come to an end. All the while napster was happening the music companies were screaming bloody murder about it happening. In LINUX's case the opposite is happening, SCO appears joyful that folks are still buying and downloading LINUX. Even this past week a McBride quote here http://www.wired. com/wired/archive/11.09/view.html?pg=3 states this:

"Are you afraid of being remembered as the man who killed open source?

People ask why we haven't sued Red Hat. We haven't sued Red Hat because then the GPL [general public license] grinds to a screeching halt, and all shipping distributions of Linux must stop. This whole process is going to make Linux and open source stronger with respect to intellectual property. Today, there's no vetting process to make sure the code that goes into open source is clear. We're trying to work through issues in such a way that we get justice without putting a hole in the head of the penguin".

They don't want to put a hole in the head of the penguin - but they do want to steal all the eggs! SCO wants to have their cake and eat it too... I am willing to bet that more than one state attorney general is waiting for SCO to send their 1st invoice to a LINUX user, as when this happens, I think some AGs will want to be invited to the party too (only on the customers behalf)!


annon

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:06 PM EDT
Just posted a pretty humorous SCO story comment generator. Just something to play with on a slow day when you're in need of a laugh.
StickMan

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:17 PM EDT
Alex,

The only action that I am aware of that is similar to the SCOG IP License is the activities of DirectTV.

Basically DTV has been going after "pirate" websites that sell discount programmable smart-card readers, getting a list of customers who bought a device, then sending the purchaser a demanding $3,500 or threat of a law suit charging them with "pirating" DirectTV services. Some people have paid, some have been taken to court and have lost their case and some have been taken to court and won their case. There is, or has been, a class action in Southern California from recipients of the letters. But, I don't know what the stuation of that case is.


D.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:22 PM EDT
I've notified PJ and she's going to modify the story if she can do it without breaking radio again but Tim Rushing's link suggests that the figure of 1.36M shares may be wrong. As I think I was the first person to post the 1.36M figure I'll admit my mistake and say that looking at pages 17-19 of the filing I know think 680,000 is correct. This of course means that if you take the number of shares including the 3M new ones issued in exchange for Vultus into account ICP haven't exceeded 5%. I think we can draw 2 conclusions from this i) The number of shares acquired by ICP is no longer so high that they had to be acquired outside of the NASDAQ (remebering that ICP already had some shares) ii) They haven't researched the stock well enough to know that there are really 16M shares in issue which suggests they don't have good contacts inside SCO . (I suspect the SEC didn't notice this either because SCO haven't yet filed their 10Q stating the higher number of shares in issue but they did use the higher figure when calculating their earnings statement.)

I totally agree with the thought that MS paid up because they thought they could get $6M worth of bad publicity for Linux. They may think their products are better but they know Linux is hurting their bottom line - they don't want to own Linux they want to kill it. I don't think they are behind this latest purchase as it doesn't give them any control over Linux and it doesn't help SCO attack Linux, it just helps the insiders sell their shares for a tidy profit.

Anyone looked at netcraft lately, looks like the web site was only up for 6 hours on Friday and not at all on Saturday.

I do think the concern about what happens if SCO go bankrupt is an important one as I can't see a scenario where that doesn't happen at some point. Is there any way IBM can obtain some sort of control over any agreements SCO enter into to transfer assets between themselves and Canopy to ensure they get a fair price for their assets to avoid leaking money out of the company? I think the directors would be guilty of negligence if it could be proved they did this, and maybe a good case for such could be made with Vultus (if we believed the shares were worth their price), but it would be preferable to stop them before they do it.


Adam Baker

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:22 PM EDT
it has to be in the money flow
maybe connected to movie or entertainment industry some way?
i know MPAA is still fighting about Decss?
and sine the guy was acquitted they may have a hard time keeping the court case
here going so i cant see the link from that
money has to be the answer we just have to keep digging
br3n
brenda banks

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:27 PM EDT
Well, I'm kind of with quatermass on the advocatus diaboli front. My reason for this is rooted in Darl hinting that that he believed that SCO owned the BSD code as well. In the (IMHO naught but theoretical) chance that they could establish this, MS could be very seriously hurt. Bill could easily have taken a look at the heaping carloads of stuff that ol' Darl was about to pour into the fan and decided that it was worth tossing SCO a bit of walking-around money in exchange for a promise that the fan would be aimed eastward out of Utah rather than, say, to the northwest.
bob

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:30 PM EDT
for M$ to do that wouldnt there be paperwork
M$ is not stupid enough to trust mcbribe?
brenda banks

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:34 PM EDT
ra - I think the figure of 10 M was stated in the earnings call - I've only read draft transcripts of it though, if you want to check you'll have to get real player out once SCO's site comes back on line.

I really don't get how SCO think Linux could continue with this IP license hanging over it. For a lot of people the reason they wan't Linux not Solaris x86 (which was available for media cost only for non commercial use at one time, not sure if that is still true) is because they get source code. The people who want the source code are the ones who fix the problems with all the obscure platforms which is what leads to Linux being so portable. A binary only license would kill the whole development model.


Adam Baker

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:35 PM EDT
I was under the impression that the MS money came after the suit against IBM, but when McBride was still saying it wasn't about Linux in general.

My point about DiDio, is not a personal attack - more the point is that she seems to be echoing what McBride says. McBride implies that Sun and MS and MPAA and RIAA are behind him - and says the majority of IT is too - and says that lots of unnamed IT companies are - and yet has presented no evidence to support this thesis.

Microsoft would not cave into SCO? They did before back in 1996 - for about $150million dollars. If you remember Caldera bought DR-DOS for $400K, then immediately sued MS for anti-trust issues.

Yes MS did some nasty stuff to DR-DOS, and IANAL, but it seems doubtful that Caldera hand standing to pursue those issues. Furthermore, some press reports say MS settled, when the judge said it was allowable for Caldera to view Windows source code with minimal restrictions...

Is it impossible to imagine that SCO (Caldera) would pursue some alleged copyright infringement by MS in Windows or MS-DOS, using the same methodology?


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:41 PM EDT
> I really don't get how SCO think Linux could continue with this IP license hanging over it

How about these possible opinions:

1. They haven't thought it thru

and/or

2. They don't care, because they think everybody will happily switch to Unixware

and/or

3. They don't care, and never intend to collect license fees anyway, because it's all about the stock price in the short-term.


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:47 PM EDT
QM:

From what I've read about DR-DOS, Caldera had a real case. IANAL but if a judge allowed Caldera to view source code I can only guess any standing questions had already been answered.

Obviously any case against MS would be weaker than the current case against IBM. Darl said so himself because there are actual contracts with IBM.

If you think MS would settle a weaker case than the case against IBM then we just have different mental images of what MS is about. No harm in that, just an honest disagreement.

MS can also pay SCO more money next year at its option. What do you make of that?


r.a.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:49 PM EDT
brenda,

Microsoft insists that they only paid the money to cover their use of SCO's IP, saying that they were only interested in Unix interoperability stuff. Most analysts pointed at the Services for Unix product, which even includes GPL'd code. But I think it is just as likely that they were concerned that SCO could start making noises about MS's use of BSD code in the core of Windows itself, much of which is also used for purposes of interoperability (TCP/IP networking and printing services e.g.). The "paperwork" you refer to need only have been a broad licensing agreement, bought and paid for.


bob

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 04:59 PM EDT
maybe i should have worded this differently
what guarantee do they have that sco is not going to still come after them at
another point in time?
brenda banks

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 05:27 PM EDT
With people like Darl, are they ever any guarantees?

AIX license is revoked according to SCO. Despite wording suggest it can't be.

How long after MS paying a license, did it take for SCO to pop up in Byte saying there might be unresolved SCO IP issues against MS? Allow some extra time for publishing delay for Byte, and it's likely SCO told Byte that fairly soon after MS paying up. I can't believe MS was best pleased about that.

I think SCO have played both angles. Namely, SCO in bed with MS, and, SCO after everybody including MS. The SCO in bed with MS, plays better in the press, so they've tended to go with that more and more.


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 05:28 PM EDT
Interesting link drifted in on Yahoo. Apparently Cohen has loudly pimped for at least one other stock his funds had invested in:

http://ww w.smallcapnetwork.net/archive/listserv/20020923-1.html

"Individuals that helped finance the company include Sir Richard Branson the founder of Virgin International (Virgin Airlines and Records), Jack Rivkin- Executive VP at Citigroup Investments and former head of research at Smith Barney, Jonathan Cohen- JHC Capital Management - Formerly at Merrill Lynch and Smith Barney, and Robert Lessin- Chairman of Wit SoundView Group."


Tsu Dho Nimh

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 05:34 PM EDT
brenda,

The only guarantee I think is likly is a broad license agreement that leaves SCO no basis upon which to sue them. I suppose that could leave open the possiblity that SCO could somehow acquire someone like Burst.com (see Cringley's article) and threaten Microsoft again. But SCO could do that anyway (it seems to be their business model), but then again Microsoft might prefer a foe such as SCO, who can easily be paid off, to someone like Eolas, who refuses even to settle for money, prefering instead to cause Microsoft genuine pain.


bob

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 05:40 PM EDT
I think on the question of MS caving because Bois' name was attached that you've got to consider the amount SCO asked for. It's really easy to imagine to a conversation that went something like this:

SONTAG: It would be wonderful to get some money from Microsoft. Suppose we hire Bois?

MCBRIDE: Aww, c'mon, they didn't cave when it was Bois, the Justice Dept, and a dozen state's attorney generals.

SONTAG: But that was because their whole company was on the line. We'd only be asking for a few million dollars...

MCBRIDE: Hmmm...

SONTAG: You know, they claim that Windows is POSIX compliant. Wasn't POSIX originally a UNIX standard? And didn't they use the BSD TCP-IP stack? We own that you know...

MCBRIDE: (sits upright) That's a half decent pitch. But we need a tag line. How 'bout this: ...and for just ten million dollars you don't have to see a headline that reads, "Bois Goes After MS Again, Claims Stolen UNIX IP."

SONTAG (throws back his heads and laughs appreciatively) That's beautiful boss.


Alex Roston

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 06:22 PM EDT
Alex:

I find your scenario pretty much impossible to imagine because SCO doesn't have any non-laughable basis to sue Microsoft. Bois or no Bois. You make it sound like any company can hire Bois and get a few million dollars from MS. That is crazy.

Here is a more reasonable scenario:

Lindon: You know your study that showed the only argument that works against Linux is legal risk?

Redmond: Yeah.

Lindon: Well, we don't like Linux either. We want to sue a big target like IBM just for the publicity but we don't have the money. If you help us it will really play up the legal risk stuff and hopefully scare people away from Linux.

Redmond: OK. Here's $6 million for now. We'll give you more next year if you're doing a good job, otherwise we cut our ties and deny everything. We'll have the apps people make something up as a reason. Good Luck.

Your scenario still involves fear of SCO in the part of MS when in fact MS doesn't even show fear of companies that have valid claims.

QM: I never said MS is "in bed" with SCO, just that MS is paying to discredit Linux. SCO may sue MS tomorrow but for now what MS got for $6M has more to do with damage to Linux than with fear of being sued for being POSIX compliant or fear that SCO would overturn the BSD settlement and sue MS for that.

I'm not saying that the entire IT industry is on SCO's side. But Sun and MS's payments to SCO were made more for the publicity than for IP.

And Microsoft, at Microsofts' option, may decide to give SCO another payment next year. Read SCO's 10Q. That's not something you do out of fear of being sued.

If Alex or QM or anyone believes MS had a valid reason to worry about a lawsuit from SCO, please tell what that reason is. Without a claim with more than a snowball's chance to win, it is impossible to imagine MS just forking over $6m.


r.a.

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 06:53 PM EDT
Adam, I have been trying and trying to modify the first paragraph. It looks like the software finally took. Thanks for the correction. It doesn't modify my point at all, but I do care a great deal about accuracy.

I haven't had a chance to read the comments yet, because I've been working on the new site. We're almost ready. So I don't know if we lost any comments with the edit. If so, somebody let me know, and I'll try to retrieve them.


pj

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 07:26 PM EDT
Tsu, according to information on DIOMED web site, they appeared in the NY Times and Good Morning America.

According to another article http://ww w.smallcapnetwork.net/archive/listserv/20020313-1.html

"Diomed moved to the American Stock Exchange on February 22nd was and opened for trading at $7.03 per share. Since opening on the American Stock Exchange, Diomed has traded as low as $6.00 and as high as $9.00." (I think these are dates in 2002)

I found a chart of DIO's stock price - Friday August 29 closing price - was $0.35. Stock chart is quite spectacular http ://finance.yahoo.com/q?s=DIO&d=c&k=c1&a=v&p=s&t=2y&l=off&z=m&q=l

Going on this article http://ww w.smallcapnetwork.net/archive/listserv/20020313-1.html - around the week of 13 March 2002 (exact date unknown), an article by Christopher Byron appeared in the NY Post.

The smallcapnetwork article says Byron's article "came just a bit short of deeming the company a fraud" - and looks like a response/rebuttal.

There are some quotes from the Byron article. I can't currently verify them as correct, as the Byron article doesn't appear to still be online.


quatermass - SCO delenda est

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 08:18 PM EDT
quatermass,

You remember correctly: SCO's suit against IBM was filed March 7th; the Microsoft licensing announcement came on May 18th.

That doesn't mean the deal didn't happen before the suit, just that it was admitted to.


Dick Gingras - SCO caro mortuum erit!

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 08:32 PM EDT
> From what I've read about DR-DOS, Caldera had a real case. IANAL but if a judge allowed Caldera to view source code I can only guess any standing questions had already been answered

I didn't say that they didn't have a case. Just that some press reports say they won a settlement in an interest way.

IANAL, so I don't know about the standing issue, or when that would get answered. One of IBM's defenses relates to standing - has that been considered yet? The case has started, but I don't know if standing has been answered in SCO v IBM.


quatermass - SCO delenda est

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 10:14 PM EDT
IIRC, Novell, under Ray Noorda, bought DR-DOS from Digital Research (Gary Kildall) in 1991, probably because Kildall got tired of fighting Microsoft's dirty tricks.

When Novell sent Noorda packing in 1995 (I think), he started up Noorda Family Trust, Canopy and Caldera. His hatred of Microsoft was at a peak and he wanted to go after them, but in order to sue, he needed a legal reason (standing). So he had Caldera buy out DR-DOS from Novell; in 1996, Caldera initiated their antitrust suit against Microsoft, which was eventually settled for about $100M in 2000.

The case revolved around Microsoft's actions throughout the late '80s and early '90s to prevent MS-DOS and Windows programs from interoperating with DR-DOS. As in the government's antitrust case, there were many incriminating emails from Brad Silverberg, Jim Allchin and other well known Microsofties.

Microsoft got their just deserts, but Kildall never got satisfaction - he died in 1994. Rumor has it that he was shot to death in a barroom brawl.


Dick Gingras - SCO caro mortuum erit!

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 11:00 PM EDT
And how does that address the question of standing?

There is plenty of evidence MS fought DR-DOS in ugly ways. I won't dispute that.

DRI suffered because of this. I won't dispute that either.

Caldera got DR-DOS cheap it was already damaged. IANAL, but it seems like buying a wrecked car at the scrapyard for a bargain price, and then using ownership of that to get money from the guy who wrecked it, "I would have got a mint Ferrari for $50 from the scrapyard, if you hadn't wrecked it when it belonged to the previous owner."

Caldera bought DR-DOS, for, if I remember correctly, $400K, and got $150m settlement. Then they dumped it.


quatermass - SCO delenda est

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 11:43 PM EDT
DR-DOS was the acknowledged superior product, even at the time Noorda bought it. Novell just didn't improve it enough to get any leverage on Microsoft. By the time Noorda left, Windows 95 was out and all flavors of DOS were left in the dust.

The point about "standing" is that in legal terms, not just anybody can sue for, in this case, antitrust. The party that brings suit has to have been harmed.

After Noorda left Novell, he needed something to sue MS with; DR-DOS provided that because the buyer would inherit the legal standing to bring suit, exactly as SCO is now doing with old Unix.

The difference between the two cases is that with DR-DOS, there was a leg to stand on.

BTW, DR-DOS survives today, tuned up and resold by DeviceLogics mainly in embedded systems.


Dick Gingras - SCO caro mortuum erit!

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radiocomment
Authored by: Anonymous on Saturday, August 30 2003 @ 11:55 PM EDT
QM:

About the car and the scrapyard, one difference is that a car cannot be owed money while a corporation can. If you buy a corporation that is owed money you can still collect. That is not true for a car.

MS has/had really good lawyers so I'm skeptical that they would settle for $150m in a case against an opponent who really lacked standing. I think they settled because they expected that they had a good chance of losing more.

How does this tie in with any threats SCO might have made to MS? If you think the DR-Dos case is proof MS often settles cases where they think they would win I think that's wrong.

IANAL, but I'm close to 100% sure the DR-Dos case was settled because Caldera had a good chance of getting a judgement.

If SCO was to sue MS for being POSIX compliant or for having BSD code, SCO would have even less chance of getting a judgement than it does against IBM in this case. And a lot of people think SCO has a very poor chance of getting a judgement against IBM in this case. SCO also wouldn't have money for a long court case against MS and its inevitable counterclaims unless for some reason IBM decided to pay them for licenses it doesn't need.

So if by mentioning standing you're trying to say Caldera would have lost if it went to the judge, I disagree. If you're trying to say anything else, I don't see how it relates to the MS license purchase.

As far as I can see, the idea of MS being shaken down by a company with no case but a lawyer named Bois is just not tenable.

MS also has an option, if MS chooses, to pay more money later. I feel like is very strong evidence against a shakedown.


r.a.

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radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 04:24 AM EDT
http://www.theinquirer.net/?art icle=11273 SCO says it may sue Linux customers, not Linux companies

Interesting. "Pick on someone your own size, you bully!" "But I am, that's exactly what I'm doing!"

Wish I knew what the H*&^ they meant by "Linux customers"?

I figure they're smoked out on crack anyway, so this (above) may be intended for use as a plea for mitigation on account of insanity.


Wesley Parish

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radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 05:52 AM EDT
RE: DR-DOS. IIRC, when the lawsuit against Microsoft was first filed, a major point of contention was Windows 3.1 compatibility; Caldera claimed that Microsoft went out of their way to make that version of Windows not work on DR-DOS, when in fact DR-DOS supported all the necessary APIs, and with some hacking it could be made to work. During the course of the lawsuit, Microsoft released Windows 95, which was the first "standalone", consumer version of Windows. It was pretty clear to any serious computer user at the time, however, that all they did was copackage Windows and DOS, together with a hacked bootloader that autoloaded the windows portion. In fact, in Win95, you could boot to DOS, and later use the "WIN" command to load the Windows 95 GUI. Oddly enough, the price of Windows 95 was just about exactly the same as the price of DOS and Windows 3.1 together. Caldera argued to the court that Microsoft had perpetrated this charade precisely to eliminate competition at the DOS level once and for all. In fact, with a bit of hacking, Caldera programmers were able to get the Windows 95 GUI to load on DR-DOS. The judge in that case agreed that Caldera's argument had merit, and allowed the suit to be ammended to include continued damages related to Windows 95, and further agreed that Caldera should be granted access to the Windows 95 source code in discovery. It wasn't long after that ruling that Microsoft settled. Again, IIRC -- I wrote this from memory but there are undoubtedly articles about this on the Web somewhere.
bob

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 08:35 AM EDT
> So if by mentioning standing you're trying to say Caldera would have lost if it went to the judge, I disagree.

Actually I'm not saying that. IANAL, so am not qualified to judge the legal issues (as opposed to ethical ones) in any case.

I'm *only* saying the question has been raised, and I'm not sure ever resolved. If it was I'd love to see where.

bob's comment however is +1 insightful

It seems to me that there are two separate issues, at least, in DR-DOS

1. Windows 3.1 stuff which would have been about 1992 or so. i.e. pre-Caldera.

2. Windows 95 stuff which would have been post Caldera.

It would seem to me, if there was a standing issue, then it would presumably pertain to issue #1 only.


quatermass - SCO delenda est

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radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 11:53 AM EDT
Bob:

"My reason for this is rooted in Darl hinting that that he believed that SCO owned the BSD code as well.
In the (IMHO naught but theoretical) chance that they could establish this, MS could be very seriously hurt."

I seem to remember somewhere reading that M$ based their WIndows TCP/IP stack on the BSD code... if
so, then yes, M$ might have a mess on their hands as well.


Steve Martin

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radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 11:57 AM EDT
"Most analysts pointed at the Services for Unix product, which even includes GPL'd code."

Um, am I missing yet something else here? Microsoft has been proven to be using GPL'd code in one of their products?
Was this M$ product put out under the GPL? If not, why isn't someone screaming down the roof over this??


Steve Martin

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radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 12:14 PM EDT
r.a.:

"If SCO was to sue MS for being POSIX compliant "

SCO cannot sue MS (or anyone else) for being POSIX compliant; they do not own the POSIX IP. POSIX is an
IEEE standard (IEEE 1003.1™-2001, "Standard for Information Technology-
Portable Operating System Interface (POSIX)"), and is now merged with the Open Group's Single UNIX Specification.
The term "POSIX" is also a registered trademark of the IEEE.


Steve Martin

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radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 04:40 PM EDT
I hope it hasn't escaped your notice that willows.com,
which is not the same subnet as the Noorda Family Trust
and more generally SCO, was a project to build a
windows-compatible API. At the time it was open source.
Are those still the plans?
John Goodwin

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radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 05:57 PM EDT
> Was this M$ product put out under the GPL? If not, why isn't someone screaming down the roof over this??

How about because they do put it under the GPL! There's nothing to scream about.

t's right there on the CD. Sources, License, Blah, Blah.

I think it (GPL) might even be displayed during the install process.


quatermass - SCO delenda est

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 06:21 PM EDT
"How about because they do put it under the GPL! There's nothing to scream about."

OK, sorry, didn't know that. I guess it's just one of those "does not compute"
concepts, M$ releasing something under GPL.

(pant, pant)

OK, feeling much better now. Sorry.


Steve Martin

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radiocomment
Authored by: Anonymous on Sunday, August 31 2003 @ 06:26 PM EDT
Yep it's amazing ain't it

And Microsoft shipping under the GPL, must mean they think it's a valid license (and their use of BSD stuff must mean they think that too).


quatermass - SCO delenda est

[ Reply to This | # ]

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