Slashdot Mirror

Kurt Wall writes "According to Yahoo! Finance, BayStar, the company that funded SCO to the tune of $50,000,000, and then later changed the terms of the deal, has requested that SCO redeem the 20,000 shares of preferred stock issued in return for the funding. The reason? BayStar states that 'SCO has allegedly breached Sections 2(b)(v), 2(b)(viii) and 3(g) of the Exchange Agreement.' Naturally, SCO thinks it has done nothing of the sort."

theodp writes "On Tuesday, the USPTO granted Amazon.com a patent for the Use of browser cookies to store structured data, which covers the storing of data structures and non-character data within browser cookies. In a February SEC filing (pdf), Amazon reiterated that they expect that they may license certain patents to third parties in the future."

theodp writes "Amazon's 10-K SEC filing discloses that the e-tailer has been sued for infringing on Soverain Software patents for Network Sales Systems (5,715,314 & 5,909,492) and Internet Server Access Control and Monitoring Systems (5,708,780), aka the Open Market patents, aka the Divine cashectomy patents, which Soverain obtained in the wake of Divine's bankruptcy sale."

Jsf72672 asks: "With the recently-passed Sarbanes-Oxley legislation, and the looming HIPAA compliance requirements a constant thorn in the side of IT staff, Enterprise Instant Messaging seems to be overlooked. Most users are using AIM or MSN. Microsoft and Yahoo! both have products tailored to the Enterprise, but no one wants to rely their technology to keep them out of jail, or from paying huge fines. Jabber looks attractive but our already overtaxed IT staff does not have the time to compile, secure and test homegrown solutions. What are Slashdot-reading IT Managers doing? I found these guys and their InterIM line of products, and they look pretty good. Is anyone using them? Are there other low-cost solutions you have employed?"

Kurt Wall writes "According to this story, recent SCO investor Royal Bank of Canada appears to be changing its tune. RBC, along with BayStar Capital, invested $50 million in SCO, but now has changed the deal to give it veto power over the payment of the 20% contingency fees SCO's IP lawyers will get. As to the wisdom of the investment itself, an RBC spokesman would only say that the 'investment in SCO is passive, made to hedge an economic exposure resulting from client transactions.' Such as the SCO case collapsing, perhaps?"

Verteiron writes: "As if things weren't weird enough already, SCO is now planning to pay companies to migrate away from Linux.. even if it's not toward UNIX. According to the summary over at Groklaw, SCO will provide 'financial incentives and discounts' to users that switch to 'other operating systems that have a stronger IP basis than Linux.' This doubly amusing when considered together with the following statements straight from SCO's 8-K form filed with the SEC: '...plans to expand SCO's intellectual property licensing program to allow for migration alternatives to end users... and continued efforts to protect SCO's UNIX intellectual property rights and SCO's belief that the private investment will enhance SCO's ability to pursue currently pending legal actions... SCO has a history of unprofitability and has only realized revenue from its SCOsource licensing initiative during the last two quarters...'"

byteCoder writes "Today's Wall Street Journal has an article (subscription required) which highlights the arrangement disclosed by this freely available SEC filing made between SCO and its law firm (run by lawyer David Boies) giving the law firm of Boies, Schiller & Flexner LLP 20% of the proceeds from the settlement or of "a sale of SCO during the pendancy of litigation." (Search down for "Arrangement with Counsel".) Apparently, if SCO is taken over while litigation is pending, Mr. Boies' law firm could stand to earn 20% of yesterday's market cap of $247M = $49.4M plus the premium associated with the increase in stock price due to the takeover. Of course, if SCO is successful in getting any part of their requested $3Bn in damages from IBM, the payday to the lawyers would be much greater."

inc_x writes "GROKLAW has a compelling analysis that shows that SCO's claims that it owns the UNIX operating system are not very truthful. The Open Group confirms this position: "Statements that SCO "owns the UNIX operating system" or has "licensed UNIX to XYZ", are clearly inaccurate and misleading." It seems that SCO finds it increasingly difficult to distinguish facts from fiction. Last week SCO claimed 'This IP battle is only one part of SCO's business and is an add-on component. The core of SCO's business is profitable,' not bothered by the fact that they had claimed the opposite in their SEC filing: 'If we do not receive SCOsource licensing revenue in future quarters and our revenue from the sale of our operating system platform products and services continues to decline, we will need to further reduce operating expenses in order to maintain profitability or generate positive cash flow.'"

Besides the recent action in Australia, lots of others are choosing to make affirmative statements denying SCO's claims to own the name and code of all things *nix. Read below for a wrap-up of some recent public reactions to the SCO claims from a wide range of potential litigants (if the SCO case gets that far): Japanese conglomerates, American department stores, Bruce Perens, kernel developer Richard Gooch via Mozillaquest, and Joe ("Citizen") Barr.

IpsissimusMarr writes "The Inquirer reports that 'The biggest computer manufacturers in Japan that build systems running Linux will hold out against blustering by SCO to extract license fees based upon unsubstantiated infringement claims, it has emerged.' Its nice to see more support from the business world denouncing SCO's tactics."

janda writes "ComputerWorld is reporting that several companies, including Coastal Transportation, Burlington Coat Factory, and Boscov's Department Store are taking a wait-and-see attitude towards SCO and their new 'Linux license' arrangement.

Best quote from the article:

'I don't remember signing anything with SCO saying I owe them any kind of licensing fees.' (Tom Pratt, Coastal Transportation)

I find it refreshing that companies are starting to stand up to SCO's blackmail attempts."

An anonymous reader points to this story at Mozillaquest according to which IBM says that SCO does not have a viable claim to JFS, NUMA, RCU, etc., writing "IBM says it owns the AIX code it contributed to the Linux kernel despite SCO claims that it has registered its Unix System V copyrights. A big problem for IBM and the GNU/Linux community might be the inclusion of JFS, NUMA software, RCU, etc into the Linux kernel. SCO claims it owns them. However, IBM, SuSE, and kernel.org's Richard Gooch reject SCO-Caldera and Darl McBride's claims that GNU/Linux contains SCO-owned or SCO-copyrighted code. ... The Linux kernel code is copyrighted under the GNU GPL. IBM owns its AIX additions and copyrights to Unix System V code and its development of JFS, RCU, and NUMA software code."

arilian writes "According to this article from ARNnet, SCO's new license may leave them open to litigation by other contributers to the Linux kernel." Bruce Perens and intellectual property lawyer Jim LaBarre are quoted in this one.

Finally, Joe Barr writes "I just filed a complaint against The SCO Group with the Securities and Exchange Commission. It was easy. I used their online complaint form at:

www.sec.gov/complaint/cf942sec9570.htm.

The basis for my complaint is that SCO is using false and unsubstantiated claims of IP rights to UNIX and Linux in order to manipulate its stock price and force consumers to purchase SCO licenses.

Maybe someone else would like to do the same."

An anonymous submitter writes "The Register is reporting in this article striking new evidence of what in my opinion can only be described as abuse of their monopoly position. A recent SEC filing shows that they lose money in every business area except Windows (86% profit) and Office (79% profit)." Another notes that the Financial Times has a story on the same subject - Dr. No writes "According to the Financial Times, Microsoft's Windows division has a profit margin of 85%. This is the first time this figure has been made public." The full version of Windows XP costs about $300.00. Microsoft could sell it for $45 and still make a profit. The difference between the $45 price and the $300 price is what economists call "monopoly rents".

Albanach writes "The BBC News are reporting in this story that Microsoft's Home Entertainment Division has filed a submission to the Securities and Exchange Commission reporting a loss of $177 million for the three months to 30 September 2002. The loss comes on revenues of $505m for the division that manufactures the Xbox games console. Microsoft are said to be prepared to spend $2 billion funding Xbox live over the next five years, suggesting it will be some time before the home entertainment division break into the black."

Hayzeus writes: "The SEC has instituted administrative proceedings against Super Spammer Rodona Garst. For those of you who don't know already, Ms. Garst was allegedly hacked by someone furious that she had forged his domain name on repeated spam mailings. Lots of pretty embarrassing stuff (including photos!) were subsequently posted to the net. The original site is down, but the link above should work."

Slashback tonight with an mini-avalanche of updates and corrections on Pioneer 10 (it's not a Star Trek series), Canadian copyright hearings, Intel's stance on SSSCA and similar laws, and -- Oh Yes, whether 640K really is enough for anyone. Read on for the details. Update: 03/05 00:19 GMT by T : "Pioneer," not "Voyager." Asleep at the keyboard.

Kudos to the guys behind Pioneer 10! Soft writes: "As a follow-up to yesterday's story, Pioneer 10 was successfully contacted for its 30th birthday, as announced in sci.space.news. The commands that were sent yesterday have been executed by the spacecraft, and more data has been collected by the Geiger Tube Telescope." lostchicken adds a link to Associated Press wire story on Yahoo!', writing "Not bad for a 30 year-old spacecraft. Perhaps those making time capsules could learn something from this?" Several readers also pointed out the SpaceDaily version of the goings on.

What, in the middle of Canadian winter?! schon writes: "An update to this /. story - The Canadian Copyright Board has announced the details of the public hearings on Canadian Digital Copyrights, at http://strategis.ic.gc.ca/SSG/rp00838e.html. Interested parties should register before attending (details available on the page.)"

Sent to you in compliance with the current Federal legislation An Anonymous Coward writes: "Back in June of 2000 Slashdot.org reported a story called ' Taking On A Spammer' about a spammer being hacked by a pissed sys-admin. The Behind Enemy Lines web page talked about a pump-and-dump spam done by Premier Services and Mark Rice."

(See this page for more information on that scam.)

"Well on February 25, 2002 the SEC filed charges against Mark Rice!"

Death of a legend? Jean-Luc writes "The New York Review of Books has published an article that contains an e-mail from Bill Gates denying he ever said the infamous "640K should be enough for anyone" quote. He foists the blame on IBM and claims he tried to convince them to include more address space from the get go. Very technical and fairly convincing, showing that for all his might Bill is still basically a geek's geek."

They hadn't even gotten to the bowlderizing chip yet ... Dan Gilmor pointed out Intel's strong statement Thursday on copy protection front, "much stronger than the letter sent yesterday. Surprising given their history..." Maybe Intel believes they can do a better job of what deciding what goes into Silicon than a committee of bureaucrats steered by the entertainment moguls can.

Michael MacPhail, SEC Division of Enforcement writes: "SEC today filed an action against Mark E. Rice for carrying out a "pump-and-dump" stock manipulation involving the use of email spam. The SEC alleges spam emails contained misleading statements such as false claims that one of Rice's companies, Portalzone, had developed an advanced Internet search engine. The SEC contends that Rice violated the federal securities laws and seeks an injunction, disgorgement, prejudgment interest, and third-tier penalties against him. The full litigation release should be available at www.sec.gov shortly."

Well VA Linux Systems has been popping up all over the news, from a story in MSNBC to a commentary from news.com. The latest word is that they have repriced their offering, putting the shares' range at $21-23 per share. As soon as the SEC approves this, the people on the friends and family list should expect to be contacted to confirm their position. Update: 12/07 05:40 by H :Thanks to readers for the latest update on pricing - it is $21-23.

A person known as "Barry the Suit" wrote in to tell us that he has seen the Red Hat Road Show (eg, the time when the top dogs go try to convince guys with mega bucks to buy lots of their stock when the IPO happens). He wrote a summary of the event which is actually quite interesting- tends towards the financial side, but since Red Hat is the first Linux company to make this lonely journey, its really interesting to follow it. Hit the link to read the report.

The following was written by "Barry the Suit"

Just got back from the Red Hat road show, Thursday, July 29th, 7:30AM at the Minneapolis Radisson. Was very interesting from an investment perspective. I'm up-to-date on Open Source, distros, etc., and was probably the only financial-type in the audience who knew who "Alan Cox" was when Bob Young mentioned him in passing. As for the rest (about 25 portfolio managers and analysts) I believe their collective reaction was "Huh?"

At least two other IPO road shows orignially scheduled for 7:30 a.m. moved to other time slots when they realized that Red Hat was the must-see road show of the day. Thus, while the Red Hat crowd was unusually large (most road shows in the Twin Cities host about 8-12 guests) it was full of people ready to see the next-big-thing, including some PMs who only come out for something special.

Bob Young, Matt Szulik, and Manoj George each made part of the presentation. Bob explained open source in general and Linux in particular. I thought he made a nice, newbie-level effort. He did, however, manage to confuse the crowd by explaining that the existence of "a Linux operating system" was a myth; there is only a Linux kernel, and then various distributions. Needless to say, the crowd did NOT go wild over that one.

Matt was more business-y, with descriptions of just where the revenue is going to come from, including the service offerings and the redhat.com portal, which according to the prospectus, now accounts for 17% of the company's total revenues. Finally, Manoj finished up, explaining that although RHAT operates at break-even right now, it plans to start losing money ("investing for growth") in the immediate future.

As if on cue, the first question in the Q&A was ... (drum roll), "you mean, one of your competitors could simply take your distribution's source code and repackage it as theirs and sell it?" Bob Young: "Yes." There were only a couple more questions (surprisingly few for such a large crowd attending such a hot deal road show) and then we were done at 8:35.

Takeaway: Bob Young couldn't have done a better job in presenting his case in an investor-friendly way, including an important description of the value-add of the Linux community, and what was in it for members who didn't get "the letter." But I couldn't help feeling, looking around the room, that people were wondering what the buzz was all about. Final tidbit: Goldman Sachs is the lead manager of the underwriting syndicate, and the research analysts covering Red Hat will be none other than Rick Sherlund, the research "axe" for Microsoft, and Michael Parekh, GS's lead Internet analyst. Pretty unusual, when you consider how much ink has been spilled and breath lost convincing people that Red Hat will make its money "in services."

Disclosure: I am an equity analyst for an investment company based in the Twin Cities. I have no opinion at this time about the value of Red Hat stock. The purpose of this post was simply to relay my view of the meeting. All the facts in my post related to Red Hat's performance are in the prospectus, which can be found at this page

Wil Mahan writes "Salon has a short article with some interesting details about the upcoming Red Hat IPO. It gives a brief overview of the S-1 filing, including potential "risk factors", such as the threat of being squashed by Microsoft. The full text of the filing is also available (warning: 1.5 MB of legalese). "