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SCO Tells Media AZ Copied "Thousands" of Programs
Monday, August 15 2005 @ 05:41 PM EDT

The SCO story has been pretty much the same from day one. First, SCO executives, mainly Darl McBride, make strong but unverifiable accusations against a company to the media, after filing something with the court that puts the assertions into legalese. Then analysts say SCO may have a legitimate claim, that they were privy to a peek behind the curtain, and they are now true believers. Then the stock shoots up.

Lawsuits take a long time, so in the meantime, the allegations linger in the air, and the stock is affected by the perception that there may be something to the allegations. Some people make buckets of money.

Then SCO either drops the claim (remember the mountains of literally copied code SCO claimed to have in hand? or their now dropped trade secret claim?) or it gets whittled down to nothing by the court process (Judge Kimball's statement that he was astonished by their lack of credible evidence of copyright infringement, for example). But meanwhile some folks make money as the stock goes up. It's going up today, post all the publicity at SCOforum.

McBride, who has been quiet as a mouse for some time, suddenly was giving interviews. There is an article in Linux Planet on the recent SCOforum which follows the same pattern. In it, McBride is quoted as follows:

During the legal discovery process, SCO recently found out that AutoZone--one of its courtroom foes--has "copied thousands of programs," he charged.

Yet by now, he admitted, SCO is spending "98 percent of our resources" on new product development, and merely two percent on the three current court cases versus AutoZone, IBM, and Novell.

First off, if SCO had found anything of substance, why, pray tell, didn't they ask for a preliminary injunction, when the judge allowed them to ask for one? Instead, they are only spending 2% of their resources on the three court cases listed. Red Hat is still alive too, by the way, and SCO claims they may resurrect DaimlerChrysler some happy day, post IBM. Would a company that really believed it had a case, and SCO most particularly, hold back from getting a preliminary injunction if they thought they could win one? If they really had anything like thousands of programs of infringing code, they probably could get one, you know. Yet, they decided not to try for one.

I'm sure AutoZone attorneys will be interested to know that McBride said that. Regulars here will recall that when SCO said such things to the court, AutoZone called them on what they characterized as "material misstatements." For those who are new, and for journalists who don't have time to dig out such stuff on their own, here is what really happened.

On AutoZone, as you'll recall, the judge gave SCO a period of limited discovery, to see if they wished to bring a preliminary injunction against AutoZone, if they felt they could demonstrate the irreparable harm they claimed. They decided not to try for a preliminary injunction. That is the bottom line. Here's the SCO Report of Plaintiff The SCO Group, Inc. Regarding Discovery Pursuant to the Order of the Court Dated August 6, 2004 ", in which they made the allegations about thousands of copied programs but then said they wouldn't seek a preliminary injunction anyway. As just one example of what they found, they say they found AutoZone copied two COFF files, Compx and Decompx, "which were programs that it had licensed from a third party which contained SCO code onto all 3500 of its machines located in the United States and Mexico and has been using those files since at least January 2000."

AutoZone immediately issued a statement that the filing included "material misstatements," and they answered the filing with a Response to Plaintiff's Discovery Report, in which they tell the court that SCO was attempting to impugn AutoZone's reputation to the Court by materially overstating the nature of the alleged unauthorized copying:

SCO contends that AutoZone has copied tens of thousands "of what SCO believes to be programs containing SCO proprietary code." (SCO Report at 2.) The implication of this and similar representations in the SCO Report is that AutoZone has copied tens of thousands of SCO programs or files. In reality, the expedited discovery process revealed the existence of only a handful of unique SCO files on AutoZone's servers, and AutoZone has licenses to use virtually every one of these files.
On the Compx and Decompx programs, AutoZone licensed some code from somebody else, binaries for which AutoZone did not have the source code. They had no reason to think they were infringing in any way. AutoZone used the programs in the past, but thought it had not used either Compx or Decompx since 2003. In discovery, it found out some servers still had the two files on them after 2003, completely forgotten, but just there. Some of the programs they found when they went looking in discovery don't even run in Linux, so they couldn't use them. Some were pre-Y2K. In short, stuff nobody even knew was still there and didn't need or want to have there. You can find more examples here.

Yet, here is Mr. McBride, repeating the same story to reporters about "thousands" of copied programs. You can say pretty much anything in a court filing, without being sued for slander. It's a trick I think SCO's imitators are following too, like the idiotic Daniel Wallace pro se performance. You say any old loathsome thing, and who cares if it doesn't fly or isn't true? By the time the truth is out, months or years later, your victim is already so tarred by your allegations, they are never completely whole again. At least, that seems to be the plan, so far as I can make it out. I call it Safe Slander by Litigation.

It's not absolute safety, actually. And when you say the same thing to a journalist, or on a web site, that isn't similarly protected speech, so I wonder if this little incident will have consequences.

One other thing we learn from the article. An analyst stood up and spoke for SCO at SCOforum:

Not too long ago, "a lot of people had never even heard of SCO," observed Al Gillen, an IDC analyst.

During his own keynote at SCO Forum, Gillen predicted a future business computing environment that will revolve around PC-based virtual servers from a handful of vendors. Each virtual server will be able to manage servers and clusters based on multiple OS, according to the analyst.

A few years down the road, Linux and SCO Unix each stand a good chance of landing among "the survivors," Gillen said.

What depth of wisdom. Linux stands a good chance of surviving. As for SCO's odds of surviving, I suggest you factor in the counterclaims from IBM and Novell and then Red Hat's claims as well. It isn't just that SCO might lose their litigation against IBM and others and then they go on their merry way. There are counterclaims on the table, including patent infringement claims by IBM which target SCO's business directly.

Anyway, I thought you'd enjoy knowing that we have a new analyst for our SCO Cast of Characters. I guess Enderle couldn't make it, or wasn't asked, although likely he was there in spirit.

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