Red Hat Cornering SCO in Delaware

LordNite writes "There is a great article over at Groklaw on the latest motion in the RedHat's Delaware suit. RedHat has filed for the start of discovery. Looking at the list of documents RH is requesting it looks like SCO will finally have to come clean. Naturally SCO is trying to stall. It looks like the beginning of the end of this whole mess." The faster this can get into court and be over, the better.

Comments

Only 1 +2 post...and....

[peterdaly]

The GrokLaw site has been slashdotted and is cooling off. Please check again in a few minutes or try the "old" site at Radio or the Google cache.

Our apologies for this interruption of service, the Webmaster.

Re:Linux Lottery?

[taviso]

Ahh, Found the answer in a court transcript, here.

In sum, SCO's campaign is designed both to slow the growth of
LINUX, and to reverse its failing fortunes by convincing LINUX users
that they need to pay SCO a license fee to use the lower-cost LINUX
operating system. As SCO's own representatives have proclaimed, if SCO
is successful at this effort, it can add "billions" of dollars in
undeserved revenues to its declining bottom line. Additionally, SCO's
campaign is designed to further what, upon information and belief, has
been referred to as the "LINUX Lottery" -- the ability to reap personal
profit by carefully timed purchases of SCO stock.

Re:Red Hat

[Xanthian]

Suse has already openly supported RH's direction. I'm sure one of the reasons they're not more active in the fight is that SCO has already been stopped in Germany.

SCO execs cash in on suit spotlight

[Solokron]

You got that right.

http://zdnet.com.com/2100-1104_2-5057033.html

Re:SCO execs cash in on suit spotlight

[Anonymous Coward]

I've been repeatedly pointing out the listing of SCOX insider transactions over on Yahoo Finance for the past couple of months. The actual number of shares held by the insiders at the time of their latest transactions can be found . Let me point out the highlights of the current data (since June 20th):

• The only purchases have been through the exercise of options. Other than that, the insiders are selling. That indicates that they think their own company's stock is overvalued. They are cutting their holdings.
• Reginald Broughton, Senior Vice President has sold 70,000 shares in that time. He had 95,000 left. That netted him $937,700. I have ignored planned sales.
• Michael Olson, listed both as Vice President and Controller, has exercised options to purchase 5,000 shares for $10,349. He has sold 20,000 shares for $256,000. He has 48,830.
• Jeff Hunsaker, Vice President, has exercised options on 5,000 shares for $5,600. He has sold 20,000 shares for $235,000. As of the last transaction, he held 20,494 shares.
• Robert Bench, Chief Financial Officer, has sold 14,000 shares for $153,000. He still has 221,043 shares.
• Michael Sean Wilson, Senior Vice President, has exercised 6,000 options for $3,960. He has sold 6,000 shares for $64,000.
• I am ignoring transactions on 6,000 options and the sale of 6,000 shares by Michael Wilson that may be duplicate reporting of the same transactions.

This gives us a grand total of options exercised on 16,000 shares by 5 insiders at a total cost of $19,909. They sold 130,000 shares for $1,646,000. Between them, they held 385,367 at the time of their last transactions. They've sold roughly a third of their shares in the past three months.

Interestingly, if you drop the CFO from the calculations, the numbers are 16,000 options exercised for $19,909. No change there. 116,000 shares sold for $1,492,700. Not much of a decrease there. But the four who are left were only holding 164,324 shares as of their last transactions. This looks like massive dumping by some of the insiders.

Re:Red Hat

[micaiah]

"Why should SuSE do the work for Red Hat when Red Hat's twice as big and much more dependant on the American market (also afaik =)" Because Suse would be defending Linux as a whole e.g. the kernel, which is under attack. It has nothing to do with Red Hat's distro.

Re:Red Hat

[MadMoses]

SUSE has already successfully filed a suit against SCO Germany a long time ago, with the result that SCO Germany is not allowed to say that Linux includes code that infringes on SCO's copyrights.

Here's Suse's press release (german).

Re:Can the judge tell if SCO is trying to stall?

[Entrope]

The court and representation for each side talk and negotiate deadlines for particular stages of the trial. I imagine that there are common standards for each stage. The judge and Red Hat have interests in seeing Red Hat's case executed in a timely manner, so it would be somewhat difficult for SCO to extend the deadlines greatly.

It is possible to file motions or amended actions later to delay or reset the clock. If the judge believes they have merit, it will go through[1]. If a party to a lawsuit submits many such motions and they are largely frivolous or unwarranted, it may count as vexatious litigation. If a judge considers something vexatious litigation, he or she will generally sanction the offending party. Sanctions can many forms[2].

IANAL, etc.

[1]- For example, SCO recently got a delay in its trial versus IBM so that it could perform due diligence and research in their counter-defense.
[2]- Monetary fines are common, but others are possible. The US prosecutors in the Zacarias Moussaoui were barred from seeking the death penalty or introducing broad classes of evidence when the government refused to comply with a court order to give him direct access to certain terrorist suspect-detainees.

Not true

[Tuckdogg]

Discovery is usually the most important part of a legal case, and it's especially important in this one. SCO, thus far, has offered tons of wild accusations about IP violations, misappropriation, drunken debauchery, etc. against IBM and the Linux community generally. They have offered almost nothing to back it up with, and what little has leaked out has proved to cut heavily against their court cases.

The fact that Red Hat and IBM are both filing motions to compel discovery is proof that SCO taking the same track in their legal battles. They are trying to stall because they don't want to show the code; they don't have anything to show. They're just praying that IBM will put them out of their misery and buy them out. And, by the way, one more indication for the non-legal world that, in case you didn't already know, SCO is full of shit and going to lose. Badly.

Article text

[Anonymous Coward]

There has been quite a lot of activity in the Red Hat case.

SCO filed a Motion to Dismiss the action in its entirety, as you know, and Red Hat filed its answering brief. But since we last reported on this case, Red Hat initiated discovery. They asked SCO for documents and for answers to some pointed questions. IBM is forcing SCO into a corner in Utah, and Red Hat is forcefully and aggressively trying to do the same in Delaware. You'll see, I think, that we haven't been wasting our time telling the world the details of this story. The big picture is that Red Hat is telling SCO to prove their allegations with specificity. They also want all their source code, and I'm sure you can figure out what they want to do with it, when I tell you that they asked for the complete Linux Kernel Personality source code, among the other products for which they have requested source code.

They also want to hear some details about the relationship between Canopy and SCO, including any stock or intellectual property transfers. They want SCO to "identify by title, version, module(s) and line(s)" what they think is misappropriated in any way or in violation of any of its rights. They ask for the details of Microsoft and Sun's licensing arrangement with SCO. They want to know who those 1500 companies were that got the letter, and what happened next. They want to know exactly what SCO has filed a copyright on. They want all the details of SCOsource, including all the folks who have seen the code SCO has been showing under the NDA and what they saw, and any other contact with any Linux users about supposed liability. They want to know how they compared the UNIX and Linux code to determine infringement. They want to know if they've done any comparisons of the two and what the results were. They want to know all the stock or industry analysts SCO has met with or talked to and what was said. In short, it's like the kind of fantasy a guy might have about a bully getting his at last, because they asked them everything we wanted somebody to finally ask SCO and make them answer.

SCO responded to Red Hat's discovery requests by filing a new motion, and it has told the judge, in a Motion to Stay Discovery Pending Resolution of Motion to Dismiss, it would like a delay until after the first motion, the Motion to Dismiss, is ruled on. They surely don't seem in any hurry to get this matter resolved. They argue that because they are simultaneously providing discovery to IBM (of course IBM says they aren't seeing anything, as I recall), they can't possibly do both, and anyway, if they win their motion, it'd be moot. In short, they would very much like not to have to do this, presumably so that if they win the Motion to Dismiss they can continue to refuse to give any particulars about their case. If the judge doesn't grant their Motion to Dismiss, they'd like the judge to give them 30 days to provide all the discovery items.

Both of Red Hat's discovery documents are attached to this SCO Motion to Stay Discovery, and they begin with definitions, like what is "intellectual property" within the context of the document, and instructions, like how to identify the writers of documents, etc.. The first document begins on page 7 of the pdf, but we find out what Red Hat is asking for on page 12, where the list begins.

Red Hat in its "First Request for the Production of Documents and Things" asks SCO to produce the following documents:

1. All documents concerning the subject matter of the Complaint.
2. All documents concerning any customer, or potential customer, of Red Hat.
3. All communications between SCO and Red Hat or any employee of Red Hat.
4. All communications between SCO and any user or potential user of a Linux product, including Red Hat LINUX product, concerning any rights to Linux, or UNIX that SCO claims to have or concerning any actions by Red Hat that SCO claims are w

Groklaw Article

[Mostly a lurker]

I found a backdoor to this (sorry about the formatting):

SCO Files 2nd Motion Asking the Red Hat Judge for a Delay on Discovery

Thursday, October 09 2003 @ 04:25 AM EDT

There has been quite a lot of activity in the Red Hat case.

SCO filed a Motion to Dismiss the action in its entirety, as you know, and Red Hat filed its answering brief. But since we last reported on this case, Red Hat initiated discovery. They asked SCO for documents and for answers to some pointed questions. IBM is forcing SCO into a corner in Utah, and Red Hat is forcefully and aggressively trying to do the same in Delaware. You'll see, I think, that we haven't been wasting our time telling the world the details of this story. The big picture is that Red Hat is telling SCO to prove their allegations with specificity. They also want all their source code, and I'm sure you can figure out what they want to do with it, when I tell you that they asked for the complete Linux Kernel Personality source code, among the other products for which they have requested source code.

They also want to hear some details about the relationship between Canopy and SCO, including any stock or intellectual property transfers. They want SCO to "identify by title, version, module(s) and line(s)" what they think is misappropriated in any way or in violation of any of its rights. They ask for the details of Microsoft and Sun's licensing arrangement with SCO. They want to know who those 1500 companies were that got the letter, and what happened next. They want to know exactly what SCO has filed a copyright on. They want all the details of SCOsource, including all the folks who have seen the code SCO has been showing under the NDA and what they saw, and any other contact with any Linux users about supposed liability. They want to know how they compared the UNIX and Linux code to determine infringement. They want to know if they've done any comparisons of the two and what the results were. They want to know all the stock or industry analysts SCO has met with or talked to and what was said. In short, it's like the kind of fantasy a guy might have about a bully getting his at last, because they asked them everything we wanted somebody to finally ask SCO and make them answer.

SCO responded to Red Hat's discovery requests by filing a new motion, and it has told the judge, in a Motion to Stay Discovery Pending Resolution of Motion to Dismiss, it would like a delay until after the first motion, the Motion to Dismiss, is ruled on. They surely don't seem in any hurry to get this matter resolved. They argue that because they are simultaneously providing discovery to IBM (of course IBM says they aren't seeing anything, as I recall), they can't possibly do both, and anyway, if they win their motion, it'd be moot. In short, they would very much like not to have to do this, presumably so that if they win the Motion to Dismiss they can continue to refuse to give any particulars about their case. If the judge doesn't grant their Motion to Dismiss, they'd like the judge to give them 30 days to provide all the discovery items.

Both of Red Hat's discovery documents are attached to this SCO Motion to Stay Discovery, and they begin with definitions, like what is "intellectual property" within the context of the document, and instructions, like how to identify the writers of documents, etc.. The first document begins on page 7 of the pdf, but we find out what Red Hat is asking for on page 12, where the list begins.

Red Hat in its "First Request for the Production of Documents and Things" asks SCO to produce the following documents:

1. All documents concerning the subject matter of the Complaint.
2. All documents concerning any customer, or potential customer, of Red Hat.
3. All communications between SCO and Red Hat or any employee of Red Hat.
4. All communications between SCO and any user or potential user of a Linux product, including Red Hat LINUX product, concerning any rights to Linux, or UNIX th

Legal Reason for Delay

[judmarc]

SCO has asked the judge to rule on their Motion to Dismiss first, which is fair, and is almost certainly what will happen. The Motion to Dismiss says that even if everything Red Hat says is true, it still doesn't amount to an infringement of Red Hat's legal rights. So the judge has to rule on whether Red Hat's case will amount to anything *even if they prove everything they say* before giving Red Hat a chance to get that proof through discovery.

You have it wrong

[Anonymous Coward]

In SCO v IBM:

IBM *have* filled a motion to compel discovery. They have requested oral argument on this motion. They have presented a memo, addendum to memo, and a whole bunch of exhibits supporting their motion.

IBM have in their discovery requests and interrogatories asked SCO to explain the basis of their complaint with *specifivity* regarding the trade secret, unfair practises, tortious interference etc. that SCO alledge. SCO have not done so - they simply say the evidence is somewhere in 900,000 pages of code, Sys V licenses, UNIX and Linux code - and their answers to the interrogatories are in some cases in more vague than those they alledge in the complaint.

One of IBM's exhibits is the SCO slide show. SCO did not provide this to IBM. The slide show has far more specifics, and implies the existence of more specifics in SCO's possession. Yet SCO presented none of this.

IBM is entitled to know the basis and specific details of SCO's complaint. Even SCO accepts that! Yet SCO refuse to provide it.

So IBM filed the motion to compel. I think the motion will be granted. SCO will then either have to respond with the specifics or drop the case against IBM (but IBM's countersuit will continue)

SCO will not get away with simply saying "You did some bad stuff, we can't tell you precisely what, but we think it's somewhere in these truckloads of documents". IBM cites numerous cases to support this, as well as federal rules of procedure. Even if SCO could, the documents/questions they have provided, can not possibly answer some of IBM's questions about the very basic elements of SCO's case against IBM.

Red Hat v SCO

I believe SCO's motion to dismiss (RH v SCO) will be denied, as it argues many facts about Red Hat's complaint (it should only argue law) and even introduces new facts, an unrelated case, and cites a case which actually undermines their argument. Furthermore, SCO's motion to dismiss, does not even really attempt to address any of Red Hat's state law claims! Red Hat's response to the motion to dismiss is quite compelling with lots of citations of relevant cases, and good legal arguments.

The Red Hat case is at a much earlier stage.

That said, I do think discovery in RH v SCO may be delayed. The discovery may be delayed until after the SCO motion is ruled on.

Assuming SCO's motion to dismiss is denied in this case, SCO will eventually have to provide the judge with how it contends that Red Hat infringes. If SCO merely tell the judge, it's somewhere in these 46 CDs and 900,000 pages of docs, but we can't tell you where, then Red Hat will win the declarative judgements.

Re:discovery is meaningless

[Anonymous Coward]

"PJ from Groklaw is showing his essential ignorance of the legal system by his breathless reporting of discovery requests; they are pretty worthless in and of themselves."

ROFL! Your ignorance of both the law and Groklaw is appalling. PJ (a she, not a he) is a paralegal. I'll take her word on the law over yours any day of the week. Legal research is what she does for a living. Besides, if you've been reading Groklaw, you'd understand the significance of discovery and why what Red Hat just did is so important.

Re:Red Hat

[Anonym0us Cow Herd]

and unlike Red Hat, SUSE didn't wait for a lawsuit to arrive before sucessfully going to court for their injunction.

Please clarify what you are saying? What lawsuit did Red Hat wait for to arrive before RH sued? RH is the plaintif in their suit.

Not relevant to my question above, but FYI, I buy and run SuSE, and don't particularly care for RH's distro -- in fact, I almost gave up on Linux after installing RH 5.2 having been a longtime Mac user, no KDE, etc. After trying SuSE 5.x in 1999 I was immediately able to use it. My Point: I'm not one to favor RH over SuSE. But in fairness, I think RH deserves real credit here for what they have done vs. SuSE. Maybe they've just done the same thing, and SuSE's is over sooner due to a saner legal system. But RH's fight will cost more, and is likely to accomplish more, given that RH is making other claims about their business being damaged, etc. not just the "put up or shut up" argument.