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And Your Little Dog Too!
Thursday, May 29 2003 @ 06:32 AM EDT

Now SCO says if no more companies sign up for licenses, they may sue Linus Torvalds for patent infringement. Of course you have to actually *have* a patent to do that successfully. Heh Heh. Threatening Linus is like threatening Toto: the whole world hates you now for kicking a puppy.

Meanwhile, it turns out that their attorney David Boies has a contingency arrangement with them, so he collects depending on what he wins for them. To say I am amazed is putting it mildly. He must really believe in what he is doing. Forbes interviewed him and he says he is committed to diversity in the software market and that this lawsuit is in pursuit of that noble goal:

"You don't want proprietary software to kill Linux or vice versa. I want to make sure the playing field doesn't get tipped."
um...*tipped*?! What can he be thinking?

You can read SCO's annual report filed this month here. And you can follow CFO Robert Bench's selling his stock here and here on Edgar. Edgar also reveals that Darl C. McBride has 600,000 stock options granted and a salary of only $80,525; Chris Sontag has 110,000 stock options granted and a salary of $6,231 a year. Anything seem unusual about that to you?

I would advise Boies to get a flat fee quick, payable immediately up front, if Hoover's ValuEngine's projections are reliable. These projections were before Novell's announcement that all the IP SCO has been claiming actually belongs to them. You can follow SCO's management as they buy and sell SCO stock here. SCO's stock message board on Yahoo ishere.

Bruce Perens posted this on Slashdot Wednesday:

Karsten Self revealed this interesting tidbit from SCO's 10K report: []
The Company has an arrangement with Novell, Inc. ("Novell") in which it acts as an administrative agent in the collection of royalties for customers who deploy SVRx technology. Under the agency agreement, the Company collects all customer payments and remits 95 percent of the collected funds to Novell and retains 5 percent as an administrative fee. The Company records the 5 percent administrative fee as revenue in its consolidated statements of operations. The accompanying October 31, 2002 and 2001 consolidated balance sheets reflect the amounts collected related to this agency agreement but not yet remitted to Novell of $1,428,000 and $1,894,000, respectively, as restricted cash and royalty payable to Novell. The October 31, 2001 balances were reclassified from cash and equivalents and other royalties payable to conform to the current year presentation.

This is SCO's admission that Novell owns Unix System V, all revisions - that's what they mean by "SVRx", and pays Novell 95% of the royalties. SCO gets to keep 5% as administrative agent.

That proves the Novell allegation.

Well, it seems to support it, anyway, if what they are paying for is V. The Salt Lake Tribune meanwhile reports that SCO showed a profit, thanks to Microsoft and a mystery company buying licenses:
The SCO Group Inc. generated $8.8 million in cash licensing its Unix operating system during the quarter ended April 30, revenue that helped the Lindon-based company report a positive net income for the first time in its history. For the second quarter of its 2003 fiscal year, the company formerly known as Caldera International reported net income of $4.5 million, or 33 cents per share, from revenue of $21.4 million.
In other words, without the license fees, they would have been in the red again.

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