SCO's Lawyers Analyzed

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."

Comments

Ew, gross

[Anonymous Coward]

For a minute there I thought it said "SCO's lawyers anal-ized"

Re:Ew, gross

[nearlygod]

As in they are going to a federal pound me in the... nevermind.

Re:Ew, gross

[shotfeel]

That's OK. I thought they'd finally been carted off to see a psychiatrist.

Re:Ew, gross

[rifter]

For a minute there I thought it said "SCO's lawyers anal-ized"

Well, I was hoping someone had psychoanalyzed them. Of course you have to pay money to read this article so it is even less likely the three slashdotters who read articles will read it. :P

Contingency

[incompetent_bitch]

This is simply known as working on a contingency basis, and there is nothing unusual about it. It essentially means that the lawyer fronts the money during the trial and collects a percentage at the end. This can be very expensive for a law firm, since there is a lot of discovery (depositions are insanely expensive due to transcription costs), they pay for expert testimony which is also very expensive, and have to deplete their own working capital during the trial, in the *hopes* that they win. If they don't, the firm is out a fair chunk of change.
A lot of civil trials do work like this, and I'm not quite sure why this is frontpage worthy.

Re:Contingency

[stevesliva]

But it is extremely interesting that the lawyers get 20% of an acquisition cost. That speaks a lot towards motives in bringing the lawsuit.

Re:Contingency

[John Courtland]

A lot of civil trials do work like this, and I'm not quite sure why this is frontpage worthy.

Probably because SCO isn't going to win. It seems crazy that anyone would front the cash to perpetuate such an obviously losing battle...

Re:Contingency

[killmenow]

Note also that they get 20% of any equity financing. They've already gotten 10 million from the $50 million Baystar deal. Hardly working on contingency. I mean, yeah, it's a contingency basis, but with a $10 mill downpayment.

Re:Contingency

[leuk_he]

Not the 20 % of sale part.
This would be the normal contingary bases
$3 billion case against IBM, Boies, Schiller & Flexner stand to gain 20% of the fee... or 20% of the etttlement.

This only proves that one of the tactics of sco was to be bought by some 3 letter company to solve their cash problems.

Re:Contingency

[warmcat]

The reason its newsworthy is that contingency is usually had from any winnings in the court, the lawyers recokon up their chances, knowing their skillz, and decide its worth a try seeing as how good they think they are.

The SCOmbags have had to effectively pawn part of their company to the lawyers for several months to get them to do the work.

And if the company is bought out, the lawyers see their money regardless of the half-assed job they have done (see Groklaw).

Re:Contingency

[Ath]

Sorry, but this is not a standard contingency arrangement. If it was only a percentage of any settlement with IBM, that would be a standard contingency fee arrangement.

The inclusion of a payment based on the value of any sale of the company is definitely interesting and goes directly to the heart of at least one of SCO's strategies.

Re:Contingency

[TrombaMarina]

That's exactly the issue here: SCO's stock price made a number of surprising upward jumps apparently as a result of this litigation. Their products have not been competitive for years, and the company appears to be failing otherwise.

Some people feel that SCO began this case as a way to bring "revenue" to the company directly (not to sell more products), or that they began it to line the pockets of their executives who plan to bail out when it's over. Some people see this as another Enron in the making and this arrangement is just fuel for their fire.

IANAL - are you? Your statement is convincing and I'm not sure how much to weigh it into my own view of SCO's case. Is this impolite to ask?

Re:Contingency

[fshalor]

Add to this the fact that most /. readers think the're full of crap, IBM thinks the're full of crap and everyone who's looked at the IP thinks there full of crap.

There're banking on a buyout allright. But will IBM come to the rescue? I'm putting my centavos on MS. They would get to come in, be a hero to the Linux community and then have a player on the inside. (Possibly two, now with redhat's repsotioning.)

Re:Contingency

[cdrudge]

Regulators would never allow MS to come in and outright buy them. They have already proven that MS has a monoploy. Letting them buy the rights to Unix would only further their monoploy.

Re:Contingency

[Anonymous Coward]

What law firm would spend $$ on a case if they knew that the potential outcome could be the buyout of their client by the opposition and not have a condition for remuneration set for this in the representation agreement?

Ok , my client agreed to be bought by IBM so they make out well. The case gets dropped. I'm left with nothing when it was my effort in bringing forth the case that caused the buyout.

Its a logical consideration to have this clause in the contract.

Its not a logical representation contract otherwise.

Re:Contingency

[pavon]

And if the company is bought out, the lawyers see their money regardless of the half-assed job they have done.

Except why on earth would IBM buy SCO unless they thought they were going to loose the case? IBM has deeper pockets than SCO, and a vested interest in proving that their new business ventures are sound. Buying SCO because it is cheaper than defeating them would make it look like IBM has something to hide.

So this clause is only a reasurance that if the lawyers are doing a good job, with much invested into the discovery, they will not be shafted because SCO decides to sell.

Re:Contingency

[ThisIsFred]

Yeah, isn't that an ethics something-or-other? It basically admits that the legal team is out to harass a company until it gets money. Can any of these guys be disbarred for this? Or are there no ethics issues with lawyers harassing a company until they give you lots of money? I mean, aside from harassing companies when you actually have a legal case that would work in court.

Re:Contingency

[tomhudson]

Poster wrote:

Letting them buy the rights to Unix would only further their monoploy.

Let's try again. Despite what SCO says, SCO does not own the rights to UNIX. The term UNIX is trademark The Open Group. UNIX OS certification is available to any vendor who can make a UNIX variant and pays the bucks to get it certified UNIX-compliant.

Hell, even SCO's variant is not certifiable as a modern UNIX.

So, let's confuse the issue even more by saying we're running Linux - the first and only post-UNIX operating system (it's all about positioning and branding. We make it quite clear that Linux is not a modified version of UNIX, but was written from the ground up, AND we make it equally clear that a POS like SCO is ancient history).

Re:Contingency

[babyrat]

Hardly working on contingency.

And what were they doing between March and September of this year? Working on the time machine to get their $10 million from the future into the past so they wouldn't be working on contingency?

Re:Contingency

[ultrabot]

That speaks a lot towards motives in bringing the lawsuit.

Yes, and what motivates them to flail around, trying to appear as dangerous and destructive as possible.

"We don't want to destroy Linux, but if it happens, tough luck".

I sure hope their lawyers would end up in the same PMITA prison, but what are the odds of that happening?

Re:Contingency

[-brazil-]

Except why on earth would IBM buy SCO unless they thought they were going to loose the case?

Because the loss of faith in their product during a long trial would cost them more? Not an uncommon case at all.

Re:Contingency

[jd]

Probably because, with the bosses of SCO selling stock as fast as legally possible, a takeover is extremely likely - thus making the contingency the most interesting part of the entire case.

If you think you're going to win and receive a few billion in damage, you BUY BACK stock as fast as you can. It'll be worth a fortune. The company and the execs would be rolling in money.

If you think you're very very likely to lose, the converse is true. You don't want to be near the stock, once the price crashes through the floor.

Now, since any takeover is likely once the price has crashed through the floor (nobody with any sense is going to buy an overpriced product), it follows that the lawyers are not going to make much on this deal. They're not fools, and so will likely have anticipated that possibility.

If that's true, don't expect them to work too hard on the case, unles they're really really sure they've got something good. They're only going to put in the effort they think they'll get paid for, and if SCO gets revalued, that could be next to nothing.

Now, if the contingency was 20% of the market value now, that would be different. Not much, though, as there's no guarantee SCO will have that money by the end of the trial.

(Especially if they keep getting fined for libel.)

Re:Contingency

[DunbarTheInept]

Normally, MS cannot get into the unix business due to an agreement they signed when they spun off Xenix to a different company (They agreed that they would not compete against the product line they were selling off to someone else, and thus they would not get involved in the unix market again.) But - here's the interesting thing - what's the company they signed this agreement with? SCO. (Not the current people at SCO, mind you, but I would imagine the company still owns that contract even though none of its members are the same people as back then.) So, the ONLY way Microsoft could get into the Unix business legally would be if SCO ceased to exist (or became a part of Microsoft so that MS would be in charge of both sides of the agreement and thus could nullify it.)

I've sometimes suspected that this is the reason some aspects of Windows that are copies of some unix idea get greatly mutated. They can't just use all of the same technology directly the same way without being in danger of producing a unixy enough system that it might violate that previous agreement. So they make stupid changes perhaps just to cover their ass legally.

Re:Contingency

[DunbarTheInept]

Since when does the clause mention that IBM has to be the one doing the buyout for the lawyers to get the 20% share?

Re:Contingency

[jjo]

We don't know, do we? They could easily have been getting cash payments from SCO for their ongoing work, and also have an agreement for additional fees contingent on winning the case.

This would allow SCO to claim that the Boies firm was working on 'contingency', and not be actually lying. If people assumed that the lawyers were going to get nothing at all if they lost (and therefore that they must have considered the case exceptionally strong), it's not SCO's fault if they jumped to conclusions. :-)

Re:Contingency

[tyler_larson]

But it is extremely interesting that the lawyers get 20% of an acquisition cost. That speaks a lot towards motives in bringing the lawsuit.

That's the crux of it right there. The lawyer's job is usually to win the court case, and payment is contingent upon that happening. However, in this case SCO doesn't really have a legal prayer. Apparently that fact was discussed right up front--If we're only getting paid if we win, then we're not taking the case, says Boies, because we won't win.

On the other hand, there seemed a strong enough possibility that if they make enough noise and get big blue mad enough, maybe they'll get bought out just to settle things down.

So instead of fighting the court hopeless battle, Boies's primary objective is to inflate the company's stock price. That means getting a lot of attention (hence the invoices to the fortune 1000 companies--that gets them noticed (more so than just the law suit) in places like Fortune and the WSJ. Then, they use their extensive media attention to spread a hell of a lot of FUD. Waves of it, loads of it. They don't hve to prove anything--that a losing battle anyway. They just have to look all important.

And suddenly their stock goes from just pennies to $18/share. As stated by another poster here, Boies has already reaped part of his reward by getting $10M from SCOs recent stock offering.

This is the biggest Wall Street con job since Enron, if not bigger.

Re:Contingency

[diersing]

Is it impossible to think MS would buy SCO just to dismantle it? They wouldn't be competeing against UNIX, just eliminating it. Offering current customers a migration strategy to Windows 2000/3 in the process? For a company the size and wealth of MS, a quarter billion can prolly be found in Bill's couch and car ashtray.

Re:Contingency

[killmenow]

And what were they doing between March and September of this year?

Either:
1. Getting paid
--OR--
2. Not working on the case

All evidence leans towards #2. It was after the Baystar deal when SCO's filings started at least approaching the work of professional lawyers.

Re:Contingency

[Krow10]

Hardly working on contingency.

And what were they doing between March and September of this year? Working on the time machine to get their $10 million from the future into the past so they wouldn't be working on contingency?

From March to September, they may have been working on contingency. Then they renegotiated. Now it's quite possible they working on contingency plus $11mm in hand.

Cheers,
Craig

Re:Contingency

[plalonde2]

It's a tech company - the reality is that there are only two sources of value in a tech company: intellectual property and people. I'll refrain from commenting on SCO's employees; their IP is what's at stake.

Dismantling really doesn't mean much in that context.

Re:Contingency

[SillySlashdotName]

Let's try again.

Good idea.

Despite what SCO says, SCO does not own the rights to UNIX.

Their case is based on HAVING THE RIGHT TO LICENSE the code. That has not been determined to apply to Linux in a court of law. Personally I don't think it does, but I am not a lawyer or a judge, so my opinion is not germaine.

The term UNIX is trademark The Open Group.

TRADEMARK. The Open Group could sell the rights to the trademark to Microsoft if they wanted, but that wuld not give them (microsoft) the rights to THE CODE - just to the use of the name Unix.

Linux - the first and only post-UNIX operating system

Here is another possibility - call it LINUX (all upper case) for (in the grand old tradition of self referential acronyms) Linux Is Not UniX.

Re:Contingency

[steveg]

I'm putting my centavos on MS. They would get to come in, be a hero to the Linux community and then have a player on the inside.

Umm... Hero?

If MS bought SCO, they wouldn't be trying to be a hero to the Linux community. Continue the attack, now that I'd believe.

And that might be a lot more dangerous -- instead of a opponent with 50 million to burn on a lawsuit, we'd have a opponent with resources on the same order of magnitude as IBM. No, not as big, but in practical terms for the sake of something like this we're talking unlimited resources. And it would be a *motivated* opponent, with a lot more at stake than pumping up the stock price.

I don't think this is likely -- if MS were to pursue this strategy they'd have done it when they could have picked up SCO (and its IP) for a song.

But if MS were to buy SCO I'd start to worry.

Re:Contingency

[blair1q]

It's front page worthy because /. readers, submitters, and editors are legal-illiterates, so any misunderstanding becomes the fuel for distrust and conflict, and distrust and conflict are the stuff that expose's are made of.

Re:Contingency

[shis-ka-bob]

some aspects of Windows that are copies of some unix idea get greatly mutated

And sometimes they are not even mutated that much. Open C:\Windows\System32\ftp.exe in Notepad and search for 'copyright'. You will find Universty of California, not Microsoft. It looks like somebody has been using BSD code & I don't recall that fact being mentioned in my EULA for Windows (C:\Windows\System32\eula.txt). After looking at the BSD license, I'm wondering if the second condition was violated.

Re:Contingency

[BrokenHalo]

Can any of these guys be disbarred for this?

No. It's perfectly common for legal firms to engage in fishing trips like this.

Without wishing to appear xenophobic, this litigous behaviour is an aspect of American culture that I find unattractive, but unfortunately most of the "western" world seems to be following in the US's footsteps with an unhealthy alacrity.

Re:Contingency

[barfomar]

If it drags out in the legal arena for a long time (say 5+ years), which is likely, there's a good chance the value of the stock could wither back to nothing.

To protect the value of the stock, they'd probably have to buy a sufficient number of put options from someone as insurance against that contingency.

That someone, would probably sell a similar number of shares "short" so they don't have their ass hanging out in the cold, while they make the "vig" on the difference between what they bought and simultaneously sold.

SCOX has has been looking "toppy" lately - perhaps that's why.

Maybe the run's over. Keep an eye on the door...

Re:Contingency

[tomhudson]

No, their case is NOT based on having the right to license the code. Their case is a simple contract dispute between themselves and IBM.

The counter-suits, on the other hand, ARE based upon the fact that SCO does NOT control UNIX, does NOT have the right to issue licenses for linux (which is what they had threatened to do), and that, if there was in fact any SCO code in linux (an assertion that they have failed miserably at every time they tried to "prove" it), it's already covered under their gpl-ed release of Linux.

As for the so-called code, code is not patentable, just copyrightable. Since SCO waited too long between the initial writing of the code and filing for a copyright, their maximum damages are set by statute at $150,000.00. But the suit isn't about that. It's a contract dispute with IBM over terminating Project Monterey.

The GPL specifically forbids SCO or anyone else from encumbering gpl-ed software with additional licenses, so SCO does not have the right to issue licenses for the kernel. As for the GPL's validity in court, the courts have decided in its' favor. see bottom of text: MySQL vs NuSphere

Re:Contingency

[eric76]

One of my old consulting customers in the 80s was a company that provided services for lawyers.

They would do depositions, private detective work, pick up and deliver evidence, ..., and bill the legal firm.

Many of the lawyers and legal firms were of the opinion that they didn't have to pay any of the bills for this until the cases were settled.

So that company got into a serious cash flow problem at one point. They had hundreds of thousands of receivables, but not enough cash coming in on them.

At some point, they couldn't make their quarterly tax payments because of the problem. They were audited and the IRS found several thousand more in taxes they owed.

But the company just didn't have the money.

The president/owner of the company told the IRS that he wished he could turn over that much of his receivables to the IRS. The IRS agent replied that they could.

So he spent the weekend pouring over the receivables and identified enough to cover the tax debt of the oldest, most difficult to collect receivables that they never thought they had much of a chance to collect.

The following Monday, he gave the list to the IRS.

The IRS agent started calling the lawyers and law firms.

"Hello. I'd like to confirm that you own XYZ company (some dollar amount). Can you confirm this?"

Lawyers know that if you admit the debt and say you are going to pay it later, you can often put off paying it for years, but if you deny the debt, it becomes a legal matter and they can drag you into court real fast and get a judgement against you. I saw one lawyer who was very wealthy but got ticked off at someone over very late delivery of a $50,000 computer take years to pay the debt just to teach them a lesson.

So they all admitted that they owed the debt.

The IRS agent then said, "I'm Agent (insert name) of the IRS and we've been assigned this debt. I expect you to have the check in the mail by tomorrow morning."

He collected every single penny of every one of those ancient receivables.

Re:Contingency

[screenrc]

This assumes, of course, that the main aim
of SCO is to profit from a sale or from the
lawsuit itself. What if SCO is just a puppet
for Microsoft, for the benefit of Microsoft
in its anti-Linux & anti-GPL campaign in
exchange for anual payments to SCO? In this
case, the lawfirm has been duped to work for
free for income that was never planned to arrive.

Somehow, most announcements are designed to
mislead us toforget that SCO is not working
for Microsoft, when we all know that they do!

Re:Contingency

[symbolic]

professional lawyers.

Interesting oxymoron.

Re:Contingency

[ucblockhead]

Big in the balls displayed perhaps, but not in size. SCO is still a very tiny company, only worth a very small fraction of what Enron was going for even at its currently overinflated price.

Re:Contingency

[tommck]

I never seen so many variations of "they're" in a single posting without getting it correct at least once!

Re:Contingency

[duffbeer703]

Personal injury lawyers get between 25 and 40% of settlements...

Ever wonder why so many lawyers drive $100,000 cars?

Re:Contingency

[jhylkema]

There's a little more to it. First off, what of this:

. . . subject to certain agreed upon credits for amounts received as discounted hourly fees or prior contingency payments. In addition, this modification may result in the payment to such law firm of up to $1,000,000 and the issuance of up to 400,000 shares of SCO's common stock.

Sounds like Boies, et al, made SCOX pony up a pile of cash before taking it on. This is unusual - a small expense retainer is not uncommon, but generally, firms don't require any money up front when taking a case on contingency. Previous posters could be right - Boies and co. want some insurance when (if) they get their butts waxed.

Re:Contingency

[BenEnglishAtHome]

Close, but that's not the way it works.

First, the most important thing to remember is that the person who decides not to pay employment taxes is a thief. Period. In order to kep their company going, they stole money from their own employees. Say that you owe me USD$100 and I ask you "Hey, look, I owe my neighbor $10. Can you just give me $90 right now and then let him have the $10 when he drops by this afternoon?" You agree to do so, but when the neighbor shows up you refuse to give him the $10. What have you just done? You've stolen $10 from me, that's what. Employment taxes are the same thing. When your employees earn $1000 and you withhold $100 of that to pay employment taxes, that's no longer your money. (It's called the "trust fund" portion of the taxes.) You are obligated to pay that money over to the government on behalf of your employees. If you don't you're stealing from them. Period. Even if you can't make up your matching portion, failure to pay over the trust fund portion is theft, pure and simple.

If you ever hear that your employer is in trouble for nonpayment of employment taxes, find another employer and do it quickly. You work for an untrustworthy thief and cheat.

Second, it's not an agent but an Officer who collects money for the IRS. Agents, the people who conduct audits, will ask for and accept payment at the end of an examination but they don't go to such lengths as you describe to collect that money. In fact, they don't have the legal authority to do as you describe. So insert a few months into your story and turn the case over to a Revenue Officer before you start talking about the collection of taxes.

Third, Officers don't get receivables assigned to the government except in the (incredibly rare) case of a collateralized installment payment agreement and no delinquent A/Rs would be considered as acceptable collateral by any Officer I've ever known. What probably happened was that the Officer offered to collect the delinquent A/Rs. That happens all the time via the service of a Notice of Levy. That part of the job is actually pretty fun; it helps resolve the delinquency and teaches a lesson to another deadbeat at the same time. It's a win-win all around.

Good story, btw, but you should be a tad more careful with your facts.

Re:Contingency

[X]

It is not unusual for contigency deals to have clauses that deal with.... contingencies like the company being acquired. Usually, the idea is if the case is won in court, there is a huge payoff, and if they lose in court, ther eis a huge loss, and anything in between should at least cover their expenses. $50 million would probably leave them with a tidy profit, but depending on how long this case drags on for, perhaps not much.

All in all it really isn't that unusual, including the notion of a contingency lawyer taking on a seemingly hopless case.

Re:Contingency

[JInterest]

It essentially means that the lawyer fronts the money during the trial and collects a percentage at the end.

This isn't quite correct.

Generally speaking, a contingent fee cannot be a vehicle for an attorney or law firm to "bankroll" litigation. While it isn't considered unethical to advance costs in most cases, it would be unethical for a firm to make a "gift" of costs to the client.

Moreover, the ethical rules governing the legal profession prohibit charging an excessive fee. Whether a fee is excessive or not is generally viewed in hindsight.

I don't think we have enough information to determine whether the fee arrangement is ethical or not. Tying compensation to the sale of the client seems rather odd, but I don't know that it is necessarily unethical.

There is a movement to ban contingent fees altogether, the argument being that they promote barratry and don't really serve the interests of the disadvantaged as much as the trial bar would suggest.

Re:Contingency

[Zeriel]

Yes, the GP is correct about statutory limits on damages due to non-registration. Yes, the parent is correct that copyrights don't need to be registered as per the Berne Convention.

How can this be, you ask?

Simple. The US Code specifies one set of copyright laws for all works under the Berne Convention, and one can gain additional protections by registering ones copyright. Two-tier system, baby.

Re:Contingency

[tomhudson]

The limitation is a US statute, and any suit filed in the US has to respect it.

The actual situation is even worse for SCO, as there is a 3-year limitation beyond which civil damages cannot be awarded Title 17, Chapter 5, Section 507:

(b) Civil Actions. -
No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued.

Remember, SCO has yet to file a lawsuit against ANYONE for copyright infringement. They're SOL against the linux 2.0, 2.2 kernels, because they are more than 3 years old. 2.4.1 was January 29th, 2001, which puts it within the 3-year reach of the law, as long as SCO files a lawsuit before January 29th, 2004, which doesn't seem likely.

then there's the whole issue of Title 17, Chapter 4, Section 412:

Sec. 412. - Registration as prerequisite to certain remedies for infringement
In any action under this title, other than an action brought for a violation of the rights of the author under section 106A(a) or an action instituted under section 411(b), no award of statutory damages or of attorney's fees, as provided by sections 504 and 505, shall be made for -

1. any infringement of copyright in an unpublished work commenced before the effective date of its registration; or
2. any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work

They only registered their copyright to certain code this summer, so prior claims are barred. Fucked again :-) They can only claim, at most, actual damages, with a statutory limitation of $150,000.00 Here's the actual law: Title 17, Chapter 5, Section 504

In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000.
In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.

So, willful == $150,000.00 max, accidental == >= $200.00

Their case w. IBM has nothing to do with any of this, of course, but SCO doesn't want people realising that ... it would make their stock drop to pennies.

Re:Contingency

[HiThere]

Actually, there's still quite a bit of Caldera (now SCO) code in Linux. But it was properly licensed by the authors under the GPL. Caldera was, once, a legitimate Linux company, and a reasonable member of the community (if a bit over to the "proprietary" edge). But that was two or three management changes ago.

Re:Contingency

[eric76]

I didn't know about the audit until they said they needed the A/R report. So it might easily have been a few months between the audit and the collection.

I only averaged about 4 hours a month there with sometimes as much as 3 or 4 months between visits. So, I'd hear everything for a month or more the same day and so things usually seemed as if they happened in a much shorter timeframe.

Re:Contingency

[Vlad_the_Inhaler]

Inflating SCO's stock price is only an option if IBM could be coerced into buying the company. Once IBM publicly rejected that option, the chances of anyone else buying them at an inflated price dropped to near zero.

• Novell wanted a Linux company, but they went for one with some serious market share who were also cheaper.
• It would be a bad option for Microsoft - then everyone would take it as read that they were behind the whole thing from the word go, something that may well be true anyway.

Unless SCO's price drops through the floor (and once it starts falling, it will probably go all the way) then no-one sane will bite.

Re:Contingency

[X]

Actually, it looks like it's even worse for the lawyers than I thought, as the CAP is $1 million plus 400,000 SCO shares.

Re:Contingency

[tomhudson]

Sure, but one of the things I mention is that SCO has yet to file any lawsuits for copyright infringement. their only lawsuit is against IBM, for breach of contract.

Besides, after January 29th, 2004, they won't be able to collect even the statutory maximum of $150,000.00 for the 2.4 series of kernels, even if there was intentional copying, so maybe the lawyers need to be psychoanalysed - after all, their cut of 20% of (best case) $150,000.00 == $30,000.00

Of course, if they can get people to do an equity transfusion, then they're home free. It's not about adding shareholder value - it's about playing the system. But you already knew that :-) Don't you just hate those cock-suckers?

Poll suggestion:

Vote to change the slashdot SCO story icon to

1. the goatse.cx man[+1 insightful]
2. tubgirl [-1 disgusting]
3. a pile of stinking feces [-1 redundant]
4. Micro$oft's beeatch sock-puppet [+5 flamebait]
5. Darl McBride** in a Depends (the NEW goatse.cx man^H^H^Hcrybaby) [+1 doubly unfunny]
6. CowboyNeal using SCO stock as ass-wipe [-10 itchy-scratchy]

** (since he's full of shit anyway)

Re:Contingency

[SillySlashdotName]

Their case is a simple contract dispute between themselves and IBM.

Yes. SCO is contending IBM breached their contract relating to who owns the code and who is able to release it to others. SCO contends that SCO owns the code and IBM was wrong to release it.

No, their case is NOT based on having the right to license the code.

Yes, it is. SCO is maintaining they are the owners of the code based on the contract, so they have the rights to license it (along with all other Unix code, evidently) and IBM can not give it away to the Open Source people.

The counter-suits, on the other hand, ARE based upon the fact that SCO does NOT control UNIX

Again not correct. The counter suits don't address SCOs licensing rights TO UNIX, they ARE addressing their rights to re-license code that has been already released under the GPL - as you stated.

But the suit isn't about that. It's a contract dispute with IBM over terminating Project Monterey. (my emphasis added to your posting)

Yes it is a contract dispute, and it may have been initiated in a fit of pique of the termination of Project Monterey, but it is disputing IBMs right to release code that SCO claims rights ownership over.

As for the GPL's validity in court, the courts have decided in its' favor.

Thanks for the link, but here they specifically state that that case was about 1) trademark infringment and 2) GPL issues. "The judge ruled that NuSphere can't market products under the MySQL trademark. Saris declined to get into the complexities of the GPL."

Hardly "decided in its' favor", at least in my opinion.

Re:Contingency

[tomhudson]

We'll start with the last. The judge urged both parties to settle, and NuSphere rolled over handed over all the code. This is what you do when the judge urges you to settle, because otherwise you'll get your ass reamed by the court.

The contract dispute was brought on by terminating Project Monterey, and they admit that in their filing. They then go on to make claims about code IBM is alleged to have contributed to the kernel, and to other linux-related projects. However, there has been absolutely no code that's been shown to be proprietary to SCO. Not from IBM. Not from SGI.

SCO's own contract w. IBM admits that IBM owns its' own code, and can do whatever they like with it. That's why this whole thing is crazy, and why everyone at SCO should be required to see a shrink, because their tin-foil helmets are on too tight.

SCO does not own the UNIX code base. That was decided way back between AT&T and BSD. Most of the UNIX codebase is either in the public domain, or is non-proprietary in nature, or is copyable under fair-use. SCO owns a teeny little bit of code (their filing was 20 pages total) of proprietary crap, that they made a big noise about, and that was filed too late to give them rights to anything in the 2.2 kernel series. Also, unless they file suit agains linus before January 29th, 2004, the 2.4 series is also off-limits by statute.

Anyway, I suspect that we actually agree on most of the points that underlie this whole discussion - that SCO has no claims, because they have no proprietary code that has "found its' way into the wild"., and their licensing scheme is bogus, etc. :-)

Re:Contingency

[El]

This can be very expensive for a law firm, since there is a lot of discovery

Especially when IBM shows up at your front door with 20 semitrailers chock full of paper and says "Here is the documentation you requested... where do you want it?"

Re:Contingency

[Christian Smith]

That agreement went the way of the dodo in 1997, I think.

The agreement was that SCO would maintain XENIX compatibility in UNIX in return for M$ not to enter the UNIX market.

In the mid/late 90's that agreement was dissolved at the behest of SCO, as noone wanted XENIX compatibility anymore.

Re:Contingency

[SillySlashdotName]

Anyway, I suspect that we actually agree on most of the points that underlie this whole discussion - that SCO has no claims, because they have no proprietary code that has "found its' way into the wild"., and their licensing scheme is bogus, etc

Yeah, but I was enjoying having someone intelligent to spar with! :)

Re:Contingency

[rifter]

"Normally, MS cannot get into the unix business due to an agreement they signed when they spun off Xenix to a different company"

This is an internet urban legend. No proof. So spare your genius conclusions.

BTW, Microsoft sells a Unix-compatible product right now called SFU/Interix.

Interix is not a UNIX. It is a set of tools (mostly gnu tools) that run under windows. There is a big difference here.

Re:Contingency

[BenEnglishAtHome]

Excellent point. The original poster said "quarterly tax payments." I was thinking "quarterly tax returns," (which most likely would have been 941s, aka employment taxes) but it could have been some other liability.

Thanks for keeping me straight. My points 2 and 3 still apply, though, no matter what type of return was involved.

Re:Contingency

[Phantom_newbie]

DunbarTheInept quoted, "So they make stupid changes perhaps just to cover their ass legally."

Who wouldn't agree the fact that ms have been trying to cover their ass over many things? Many things of the fact that they were woeful for, they try and hinder from the public for their shames.

When they forsee something is going to turn out good and/or they have done something good (which I have not seen anything good from them, apart from focusing on security when they were 'blamed') They have spokesperson or two to speak out about something that they can do.

Re:Contingency

[tomhudson]

quote: "Yeah, but I was enjoying having someone intelligent to spar with! :)"

On slashdot??? :-)

Seriously, IBM's response today is interesting.

First, SCO complains that IBM mischaracterizes SCO's lawsuit by characterizing it as a case about the alleged misappropriation of trade secrets. (See Plaintiff's Memorandum of law in Opposition to IBM's Motion to Compel Discovery ("Opposition Br.") at 2-3.) That is so, SCO says, because SCO asserts six causes of action, only one of which is for the alleged misappropriation of trade secrets. It is true that SCO asserts five additional causes of action. But three of the five allege that IBM breached its contractual obligations to SCO by disclosing trade secrets or confidential information, and the other two, in SCO's own words, "flow from" IBM's alleged breaches of contract based upon the disclosure of SCO's trade secrets or confidential information. To the extent it matters, there is no question that the gravamen of SCO's case concerns the alleged misuse of trade secrets or confidential information.

Here's where it gets interesting. If IBM's position is upheld as to the nature of the case, then, if SCO can't show a breach of contract, SCO's case dies there. The trade secrets or confidential information don't have to take the form of source code (and IBM makes it clear that it probably isn't - because SCO's proprietary stuff is UNIX code, not Linux code - an interesting point). In other words, if SCO can't show breach of contract, everything else is off the table :-)

Re:Contingency

[rifter]

Inflating SCO's stock price is only an option if IBM could be coerced into buying the company. Once IBM publicly rejected that option, the chances of anyone else buying them at an inflated price dropped to near zero.
* Novell wanted a Linux company, but they went for one with some serious market share who were also cheaper.
* It would be a bad option for Microsoft - then everyone would take it as read that they were behind the whole thing from the word go, something that may well be true anyway.
Unless SCO's price drops through the floor (and once it starts falling, it will probably go all the way) then no-one sane will bite.

If Microsoft wants to get back into the unix game this is the perfect time for them to buy SCO. They can give the thinly veiled excuse that they were being blackmailed like everyone else and had to buy the company. The Republicans will not do a thing to Microsoft even if they simply announced that they are behind this and that they want to destroy Linux and all choice. And if Senator Orrin Hatch has his way we may be dealing with President Ahnold after Bush, which means more leeway for Microsoft.

Honestly I think they probably couldn't get into trouble under this administration if they started kidnapping kids to stuff their XP boxes.

Re:Contingency

[DunbarTheInept]

I don't remember where I heard it, but I'd heard that the BSD license changed at some point to drop the requirement that you acknowlege that you took code from them in your own license.

Re:Contingency

[DunbarTheInept]

Interix is not a unix-compatable product, except in the same sense that a telnet client is a unix-compatable product. It's just a tool to run on top of windows, nothing more. Spare me your idiocic conclusions, anonymous coward.

Re:Contingency

[blair1q]

I apologizé. I havé no Frénch on my kéyboard.

Re:Contingency

[MrLint]

Does anyone recall about how SCo said it was not their goal to get bought by IBM?

My thoughts

[ajakk]

"You want fries with that?" Darl: "Bwahahahaha. Mom, mom, it isn't fair! That big bully, GPL is cheating." SCO reminds me of my brother and I fighting over something. Hey SCO, how do you feel about paying IBM's (and anyone else you were thinking of suing) legal costs?

Equity

[milo_Gwalthny]

It's always interesting to me that arrangements like this, that are essentially equity, are not considered conflicts of interest--how would a court respond to an attorney owning 20% of one of its clients?

Re:Equity

[Spazmania]

How is this a conflict of interest? It would only be a conflict of interest if the lawyers were working for the other side of the argument.

Re:Equity

[telbij]

There's no conflict of interest, it's merely greater interest. Conflict of interest would be if SCO's lawyers owned IBM stock. Even so, it would probably be up to SCO to fire them.

Re:Equity

[ajakk]

It doesn't matter. You only have a conflict if you have an interest in a party you are against. Why would a court matter if a law firm has an interest in their own client? The only thing that means is that the law firm might work harder to win the case. Do you think it would be OK for a company to have its in-house attorneys represent it in court? What makes that attorney's conflicts any less than an attorney who works for a firm?

Re:Equity

[milo_Gwalthny]

Let me expand by quoting the NY Bar Associations ethics code (Code of Professional Responsibility)--note to Bar: I claim fair use!

"EC 5-7: The possibility of an adverse effect upon the exercise of free judgement by the lawyer on behalf of the client during litigation generally makes it undesirable for the lawyer to acquire a proprietary interest in the cause of the client of otherwise to become financially interested in the outcome of the litigation... a reasonable contingent fee is permissible in civil cases because it may be the only means by which a non-lawyer can obtain the services of a lawyer of his or her choice..."

So, in your opinion, is this the case? Can SCO not afford an attorney? I suppose, if you were a lawyer, you would argue that they can't afford the attorney of their choice because that particular attorney is demanding a contingency, but this defense is so broad it would make this clause worthless, so it is probably not what the Bar Association meant.

The conflict of interest arises because the attorneys are supposed to represent SCO's best interests. Now, what if SCO's best interests were to drop the litigation and continue as an independent entity? Wouldn't that present an ethical conundrum for Boies et al? To wit: best interests or get paid? I am not saying that the lawyers wouldn't do what is right, only that the conflict exists.

Re:Equity

[vidarh]

The lawyers are given incentives for keeping the lawsuit going until they win or the company gets sold, regardless of whether or not keeping the lawsuit is in the best interest of their client. For SCO shareholders this should be a big issue, since Boies and his partnerse will only lose their time and work if SCO is bankrupted in the process, and will score massively if they succeed.

Lawyers are meant to take into account their clients best interests, not just blindly do whatever is asked of them.

Note that I don't think anyone will do anything about this, or get anywhere if they tried, but I do find it a bit fishy that a company's management enter into an agreement with a lawfirm that gives the lawyers a strong incentive to go for a specific goal regardless of the risk of significant loss for the shareholders.

Re:Equity

[fishbonez]

I think a corollary would be: Does the agreement giving ownership in the event of sale open the law firm and lawyers to direct liability if it is proven that this lawsuit is tied to a pump and dump stock scheme as some have alleged? Does the fact that the law firm only gets ownership in the event of a sale protect it from this? Or is it such an unusual arrangement that it eliminates the usual protections afforded attorneys from clients' wrongdoing? Basically, is there any chance David Boies could go to jail for his role in this fiasco if it does turn out to be a fraud of some sort?

Re:Equity

[DunbarTheInept]

Uhm, a lawyer being biased in favor of a client is not a problem. They are SUPPOSED to be on the client's side. That's the deal.

Re:Equity

[milo_Gwalthny]

Damn man. If you are NAL, then you should be one.

I don't think the timing of the payment makes any difference as to whether this should be considered equity... even Common shareholders do not get paid for a sale until the sale is made. The question is, then: if Boies et al were a de facto 20% owner of the company and is involved in day-to-day management decisions, is he accountable for them and to whom?

(1) I would think that their criminal accountability as a member of management for a fraud is no less than their accountability as a outside counsel.

(2) Their accountability to the shareholders of SCO is probably less in their capacity as manager than in their capacity as outside counsel (because it is harder to sue management for fraud than to sue outside counsel for malpractice) but the lawsuit for malpractice would probably have to be brought by the company while the lawsuit for management fraud could be brought by the shareholders.

(3) Their accountability to those being sued, however, is probably greater if they are management than if they were a outside counsel. This would be an interesting tactic for IBM to take if they lose. Actually, IBM should be asking to disqualify Boies right now because of the conflict of interest. If the US Government could disqualify Gotti's attorney (Cutler), then it would seem that this would be a slam dunk, and extremely damaging to SCO's ability to litigate.

Re:Equity

[alexq]

There's nothing wrong with an attorney owning part of its client, is there? A client can even defend _itself_, so why can't an attorney have more than a professional interest in the client?

If it were the judge that owned 20%, then well...

Re:Equity

[SillySlashdotName]

Yes.

And no.

What you describe is indeed a conflict of interest - the interests of the law firm and the partners in that firm.

The current situation is also a conflict of interest, between these lawyers' PROFESSIONAL DUTIES and their greed. (apostrophy nazis, did I do that correctly?)

Re:Equity

[SillySlashdotName]

Again, almost correct.

Lawyres are officers of the court representing their clients interests.

They are not supposed to be "biased in favor", they are supposed to find and employ loopholes, inaccuracies, and ambiguities in the law in their clients favor or defence, but they must remain officers of the court first.

If they (lawyers in general, Boies et al in specific) put their monitary gain ahead of their professional DUTIES, that is when a problem exists.

Re:Equity

[dilute]

Bah - SCO knows what they're getting into. Sure it makes Boies want to blow a lot of hot air - but that is the same thing his client wants to do. Unsavory, yes, unethical, probably not.

Re:Equity

[DunbarTheInept]

I fail to see how "I will pay my lawyer with this big wad of cash" is any less of a biasing factor than "I will pay my lawyer with these stock certificates." Both are cases of monetary interest that make the lawyer biased in favor of his client. It is only a lawyer's duty to find those loopholes, innaccuracies, and ambiguities that HELP his client. He is under no obligation to find the ones that hinder his client's cause. That's the opposing lawyer's job. I fail to see any relevant difference. The stock is just another form of paying the lawyer. If it causes a conflict of interest, then so too would paying your lawyer with cash.

"LLP"?

[Zocalo]

Let me guess... "Libelous Legal Practice"??? ;)

Re:"LLP"?

[Patrick Lewis]

Limited Liability Partnership. Not that it matters.

Thank god for IBM

[theparanoidcynic]

With such um, motivated oposition I'm glad that we have IBM's ninja attack lawers on our side.

Re:Thank god for IBM

[MooCows]

Pictures of the IBM Dojo

.....SCO SCHMO

[tolan's my name]

The only motivation I can see for SCO doing this at all is to get some sort of temporary blip in share price so the execs can sell there shares.

OR creating sufficent legal costs for IBM that it's cheaper to buy them than fight it out in the courts.

They might also be trying to cripple linux with uncertainty in much the same way as AT&Ts courtcase did with *BSD years ago, but linux' critical mass is far larger.

Unless of course some guy at SCO what's to buy a heap of IBM stock at a slightly discounted price?

Seriously, there HAS to be a conspiracy theory in here somewhere.

Re:.....SCO SCHMO

[SillySlashdotName]

Seriously, there HAS to be a conspiracy theory in here somewhere.

With all the horse sh*t flying from SCO, personally I am expecting a pony...

Re:.....SCO SCHMO

[tolan's my name]

it's a fair point, I haven't read /. in a long time till recently and I started wrting my comment when there weren't many replies, so badda boom badda bing.

I got some karma for less yesterday, and since I'm at the cap anyway who really cares.

Sorry I offended you.

Re:.....SCO SCHMO

[pknoll]

OR creating sufficent legal costs for IBM that it's cheaper to buy them than fight it out in the courts.

What's interesting is that IBM almost never decides this. They are a rare company in that they take a long view of such litigation, and tend to include the value of precedent against their upcoming interests in that "cost" you speak of.

I'll bet they'd be perfectly willing to spend many times SCO's market cap on this lawsuit, because their financial interests lie in the future of Linux, not in the short-term loss the court fees would bring.

Remaining cases ?

[Anonymous Coward]

But what if there's no take over, and SCO doesn't win the trial ?

Re:Remaining cases ?

[doug]

Then Mr Boies comes out looking as good as he did when Al Gore lost in Florida, but a little bit poorer. I'm pretty sure that either the DNC or Gore's Campaign Committee paid Boies for the post-election Florida lawsuits.

Re:Remaining cases ?

[Koos Baster]

> But what if there's no take over, and SCO doesn't win the trial?

SCO will sue the shit out of their lawyers!

Re:Remaining cases ?

[dipipanone]

Then Mr Boies comes out looking as good as he did when Al Gore lost in Florida, but a little bit poorer.

This probably explains why he's allocated his most retarded and junior staff to work on the case.

Although the odds of winning are probably akin to playing the lottery, he's clearly only investing the lawyerly equivalent of a dollar in paying for his ticket.

Re:Remaining cases ?

[Spam.B.gone]

It seems that the firm can not let this happen. So if they can't win the case, they have to stretch it. Strech and stretch, until SCO gets taken over...

Re:Remaining cases ?

[Oddly_Drac]

They go the same way as Accrington Stanley.

That is actually a fair thing

[alexhmit01]

Look, the lawyers are taking 20% plus cash. That's okay for a company whose sole asset depends upon this case. You want your lawyers incentivized on a life-or-death (for the company) case.

Also, one of the "likely" ways to settle the lawsuit would be to buy SCO and get control of the Unix assets. If IBM concludes that they are likely to lose, then they NEED to buy SCO, rather than letting SCO run around destorying Linux. Remember, Linux is worth more to IBM that SCO's current marketcap.

So, if the lawyers are entitled to part of the settlement, should they get part of the sale? Absolutely. The most likely scenario for IBM to "settle" would be to purchase SCO and/or SCO's assets for some sum of money, and then terminate the lawsuit. How could the lawyers NOT be compensated for that when they are entitled to a percentage of a cash settlement?

Alex

Re:That is actually a fair thing

[Smiling_Jack]

Yeah, but this runs contrary to current /. thinking: that SCO is full of hot air, and once the source code is made available to knowledgable scrutiny, it'll be shown that they have nothing. Assuming this is true, SCO has to know this, and I can't imagine a lawfirm agreeing to this unless they had a VERY strong belief that either a) SCO will win, or b) SCO will get bought. Unless they plan on dragging this out ad infinatum, and hope that IBM will buy them to stop the annoyance, which IBM does not seem inclined to do. So.... what do they know that we don't?

Re:That is actually a fair thing

[Simon Brooke]

So, if the lawyers are entitled to part of the settlement, should they get part of the sale?

This case is just one of those things which are so unbelievably sleazy that they're not illegal because no-one ever imagined anyone would stoop that low. Create a nuisance lawsuit on extremely tenuous grounds in the hope someone would buy you out in order to shut you up. I've been thinking up to now that it would be nice if IBM crushed this quickly and put us all out of our misery, but now it's apparent that it would be better for IBM to draw this out as long as possible to make sure they bankrupt the scumbag lawyers.

If they're allowed to win this one we're going to see a spate of similar cases - not necessarily anything to do with software or open source, but small companies with just the minutest possibility of an extremely complicated case against larger companies going to law to, essentially, blackmail money out of them. They need to lose, and lose very badly, pour encourage les autres.

Re:That is actually a fair thing

[Poisonous Drool]

Welcome to /. Mr. Boise!

Re:That is actually a fair thing

[Ping the Penguin]

But the debacle surrounding the greek font on the powerpoint slides proved that SCO have absolutely no idea where their code came from.

I think that the lawyers got involved believing that the case was a lot stronger than it has since been shown to be.

Mr Boies is probably mighty pissed off with little Darl right now...

Re:That is actually a fair thing

[nbvb]

Uhm, David BOIES has been mentioned here before ....... :)

http://slashdot.org/article.pl?sid=99/02/19/1642 20 4&mode=nested&tid=109

http://slashdot.org/article.pl?sid=00/06/17/2372 29 &mode=nested&tid=141

http://slashdot.org/article.pl?sid=00/07/04/0041 25 6&mode=nested&tid=141

Will any of the anal-ysts...

[eddy]

.. and other asorted folks who danced in the media and declared SCO's case as "strong" based on the continguency, revise their view and update their articles?

No?

Thought not.

Actually, this has been known for a while, so I know that they haven't.

Re:20% of Zero

[Koos Baster]

They'll probably get sued by SCO for loosing their case ;-)

--
If you can, help others. If you can't, at least don't hurt others -- the Dalai Lama

Re:Lawyers greedy shock

[SpaceLifeForm]

Sure it's news. In this case, you see, the Lawyers were analyzed.

Under doctor-patient confidentiality I'm not supposed to inform you that they are nuts, but I can tell you they are greedy.

Re:Mr. Boies's /. Journal

[Anonymous Coward]

Don't click, it will log you out. Just look at the URL..

All that and a cool mill

[Resaurtus]

From the SEC filing

> In addition, this modification may result in the payment to such law firm of up to $1,000,000 and
> the issuance of up to 400,000 shares of SCO's common stock.

Okay.. So, they are paying thier lawyers either 1) 20% of the settlement for what they beleive is their most valuble asset (The Unix IP), 2) 20% of the company value, *and* up to $1M + up to 400K stock shares.

Wouldn't it have been cheaper to buy a few law firms? That is a friggin ton of compensation. And for that (plus the small price of their reputations and soul) they get some really bad legal service.

With management making decisions like that it's no wonder the only asset the company really has anymore is stupid. But at least they have plenty.

Re:All that and a cool mill

[TopShelf]

While it looks like "a friggin ton of compensation," it really amounts to little going out of SCO's door in terms of cash. As many other tech firms have done over the last decade, they're only committing other people's money (lawsuit settlement or company buyout), but the potential is enough to make it worth the law firm's while. Not only are they betting the company on winning this lawsuit, but they're getting 3rd parties to pile on as well.

Frankly, in this deal, I think the law firm's management is the stupid one...

Re:All that and a cool mill

[Fiver-rah]

Law firms are pretty expensive, you know. Your standard garden variety law student fresh out of one of the top national schools, with no experience under her belt, gets 125K a year. A couple tens of millions makes a bonus that a partner yawns at.

Doing one search on the most limited database in Lexis costs $10. One search on something pretty complex--like searching all federal cases--costs around a hundred bucks. And you need to do a lot of searches to do a case like this....

Even bad lawyers cost a shitload of money.

Re:All that and a cool mill

[pavera]

Don't forget they get 20% of any equity investment in SCO as well (which would include the recently announced 50 million investment by baystar/royal bank of canada) so boies and company have already been paid 10 million.

Re:All that and a cool mill

[dipipanone]

Don't forget they get 20% of any equity investment in SCO as well

Not to mention 20% of the proceeds from the sale of all those SCO/Linux licenses.

I can't see Boies eating too many lawyerly dinners on the proceeds of *that* though.

Re:All that and a cool mill

[timeOday]

Doing one search on the most limited database in Lexis costs $10. One search on something pretty complex--like searching all federal cases--costs around a hundred bucks. And you need to do a lot of searches to do a case like this....

And beyond costs, well, there's always gouging. Like billing an hour for taking a short phone call and charging $1 (or more) each for photocopies.

Re:All that and a cool mill

[JosefK]

Doing one search on the most limited database in Lexis costs $10. One search on something pretty complex--like searching all federal cases--costs around a hundred bucks. And you need to do a lot of searches to do a case like this....

Yeah, but if you read SCO's filings, and notice the paucity of case citations, they don't seem to be doing many Lexis searches.

Re:All that and a cool mill

[trixillion]

Wouldn't it have been cheaper to buy a few law firms?

The short answer is that SCO cannot legally buy a law firm. In the US, law firms are regulated and a special class of partnerships. They generally cannot be bought by a corporation. This is to prevent conflict of interests between the parent corporation and the law firm's clients. It is also to protect the lawyer-client confidentiality rules. This is a very good thing.

I have not found any good links to back this up but is has been a topic of conversation that I have had with friends who are lawyers on multiple occasions. I assume they knew what they were talking about, and any error in what I have said is due to my lack of listening skills.

Re:All that and a cool mill

[odin53]

Your standard garden variety law student fresh out of one of the top national schools, with no experience under her belt, gets 125K a year. A couple tens of millions makes a bonus that a partner yawns at.

I had to laugh when I read this. Is this really what people think? There are many lawyers out there, but only so many 125K-starting pay jobs. The median salary for lawyers is around $89,000 -- and this is for all lawyers in this country, not just the fresh out of law school ones. Really, only the top students out of the top national schools get the opportunity to earn 125K with no experience. Also, there are very, very few firms at which partners even average profits per partner near or above a million dollars (sorry, only 2000 PPP figures). The rest of the thousands upon thousands of law firms and lawyers earn pretty normal salaries.

Re:All that and a cool mill

[Fiver-rah]

Really, only the top students out of the top national schools get the opportunity to earn 125K with no experience.

No--the average students out of the top national schools get the opportunity to earn 125 K. Don't take me out of context. I didn't say all lawyers. I said "standard garden variety law student fresh out of one of the top national schools." I'm not talking about people who go to their local law school and get a job with their local firm or the DA's office. But $125K is both the 25th and 75th percentile salary for just about every "top 10" law school. If you want to go work for a large law firm in NYC or Chicago, and you're in the middle of the grade curve at a top national school, you're golden unless you have serious personality defects. Even in this market.

I don't know what "people" really think, but as a student at a top national school, I know the numbers. See for instance Michigan. Same entry level salary in six large legal markets.

The top students at the top national schools often end up making less than the average students--because it's the top students that have the opportunity to get the few meaningful, prestigious paid jobs there are.

Re:All that and a cool mill

[odin53]

No--the average students out of the top national schools get the opportunity to earn 125 K. Don't take me out of context. I didn't say all lawyers. I said "standard garden variety law student fresh out of one of the top national schools." I'm not talking about people who go to their local law school and get a job with their local firm or the DA's office. But $125K is both the 25th and 75th percentile salary for just about every "top 10" law school. If you want to go work for a large law firm in NYC or Chicago, and you're in the middle of the grade curve at a top national school, you're golden unless you have serious personality defects. Even in this market.

Fair enough (although it seems I was being a bit more inclusive in my understanding of "top national schools"; middle of the pack at Duke, e.g., doesn't make you "golden" in BIGLAW). But your original post started out with the broad statement "Law firms are pretty expensive, you know" and then went on to explain why by talking about first years' salaries and partners' bonuses. It just sounded like you recently overheard some 2Ls talking about the law firms they're interested in, and inferred that every law firm is the same. The fact remains that there are very few firms on the tier that you talk about, relative to the overall legal market, as well as very few lawyers.

As I read it, Boies & Co. already got $10M

[Thagg]

As I read the SEC filing, Boies's law firm gets 20% of any new stock offering. This would seem to include the $50 Million recently received from the private investment from BayStar and Royal Bank of Canada.

Thus, the lawyers are no longer working strictly on contingency, they have received a lot of money up front (or, in the middle, anyway.)

thad

Re:As I read it, Boies & Co. already got $10M

[antiMStroll]

I wonder how BayStar and Royal Bank of Canada feel about that?

Big Surprise

[Inexile2002]

Qui bono.

Just typical really. At the end of the day when we're analysing this - when SCO is loooooong gone and Linux is still alive and kicking - although probably hurt by this - we're not going to have to wonder who benefited from all this. The SCO execs are going to be chuckling into their martinis, the people who bought SCO stock and were smart enough to sell it high are going to feel smug and the lawyers are going to walk away rich.

The Linux community is hurt by this, the shareholders who hold on too long are hurt by this, the employees at SCO are hurt by this, Linux customers (and possibly IBM customers are hurt by this) and the people who are slinging the FUD get to walk away with guaranteed millions.

Is it legal to sue lawyers I wonder? Show that they had a vested material interest in damaging businesses by dragging this out as long as possible? Show that they used deliberately deceitful tactics and were complicit in outright lies, obfuscations and unfair practices and maybe tack on a suit for encouraging their customers to pursue illegal activities (violating the GPL and anything else SCO has done that turns out to be against the law).

Basically, is there a way to mire these guys in court for the rest of their lives to that their guaranteed millions dry up? IBM's got billions to throw at this... is there a business case to be made for making an example of the lawyers themselves? Maybe discourage other unethical lawyers from taking up similar cases and causes? Anyway, just my morning rant. Going to go get more coffee and I'm sure the day will be all smiles and sunshine afterwards.

Re:Big Surprise

[twoslice]

Is it legal to sue lawyers I wonder?

I'm with my buddy Shakespear on this one!

Re:Big Surprise

[yog]

You can sue anybody for any reason. Of course someone can sue Boies and his law firm. It's a tactic that is sometimes used to *discourage* lawsuits; if someone sues you, countersue them and also sue their attorney, who then will need to hire his/her own representation. The good ol' American legal system, gotta love it!

Re:Big Surprise

[Anonymous Coward]

It's cui bono... qui is a French word.

Re:Big Surprise

[w42w42]

Shareholder lawsuit? I wouldn't be suprised to see one at the end of this. The problem there being that they tend to beat the proverbial dead horse, while those responsible (SCO's execs) are long gone. At any rate, it would seem that this compensation package could support a "preponderance of evidence" that SCO had alterior motives for filing a frivolous lawsuit.

That, I'm sure, would be too much to hope for.

Re:Big Surprise

[llywrch]

Just remember: the lawyers in this case are nothing more than mercenaries. They are equally happy fighting for either side, as long as they keep getting paid, & have a guarranteed safe route home after the fighting is over.

But I figure the execs over at TSG will not be enjoying the good life after this. The climate is turning less hospitable towards hijinks like pump-n-dump. (For example, look at the current investigations into mismanagement in the Mutual Funds industry.) I expect that when this lawsuit at last blows up, there will be lawyers eager to earn their stripes from the SEC or the states who will indicting MacBride & the rest. Between the Internet & the results of IBM's discovery, all of the hard work of proving their case will be done for them.

Geoff

Re:Big Surprise

[El]

But isn't suing a law firm a lot like wrestling with a pig... "you both get dirty, but the pig enjoys it!"

Why not?

[lgeezer]

A sale would jeopardise that litigation -- this arrangment seems reasonable to me.

Much of the work happens at the beginning, before payday; if the directors want to bail out midway, that's got to say something about their expectation of success. No one wants that, especially not the beagles, so a clause like this helps ensure they stay on board.

Capatalist...

[BubbaTheBarbarian]

Everyone is going to hate me for this. Just note that I have been scathing at SCo and what they are trying to do with OSS.

In this case, I cannot say I blame the lawyers. If they did not take that kind of an offer, another firm would, and if you get 3B out of IBM (snowballs chance in hell I know) and you get the typical 40% out of it...damn...

then again, the paranoid in me sees this as being a nice payback to Dave from MS. Make a little dosh, take a crack at being set for life, and oh, if you start to lose we will buy the company at an inflated price, meld all of the IP claims into our own, let the memory of this fade away and try again in a another couple of years. Thanks for the surrender Dave! We love you!

(this post not spell checked)

MCR UAF MOD user /PASS=IMALOSERFORFORGETTINGMYPASSWORD /NOPWEXP /PWDMIN=40 /PWDLIFETIME=1 /FLAG=GENPWD

Re:Capatalist...

[Simon Brooke]

In this case, I cannot say I blame the lawyers. If they did not take that kind of an offer, another firm would.

If I offered you millions of dollars to supply torture equipment to (e.g.) North Korea, or explosives to Al Quaeda, would you do it? If I offered you millions of dollars to supply contaminated food to famine victims, would you do it? If, ten years ago, I had offered you millions of dollars to supply anthrax to Saddam Hussein, would you have done it?

No-one is obliged to do unethical things. Just because there are unethical people who will is no excuse. People who agree to do unethical things are unethical. They can be blamed and they should be blamed.

Re:Capatalist...

[BubbaTheBarbarian]

There is a far cry, at least to those that set the standard of such things, between torture equipment, WMD's and taking dosh for a lawsuit. Accordingly, the items mentioned in you poor example above have been of an illicit nature and have always been so in the eyes of both US and international law. While what is going on with SCO is disturbing, it is legal in the eyes of the law, and therefore, if your business and livelihoods are in that area, and your company is one that depends on this type of business to succeed, then it becomes a matter of fiscal responsibility to do accept such a ludicrous offer. Dave is smart enough to know he cannot win this, but is also smart enough to negotiate a position that he make sure that he gets something for efforts.

And here come the cries from those that say "What about ?!" Well, this is not a pretty thing to say the least. The SCO grunts are screwed, that much is for certain. Hopefully stories like this on Slashdot and other news sources will filter out to investors looking at SCO. As long as they do their homework, they will come out fine (wait till it hits 20 then short the bitch).

And then there is Linux. And since you are SO into international dealings I will give you a final thought for the day. Hope you can handle this one...

What is the potentially more dangerous scenarios for Linux, a SCO law suit that ends in IBM kicking their ass...or a nice little country on the other side of the world that goes by the name of CHINA who announced yesterday that they are going to use Linux as the official operating system of the state. They are doing this to "guard state secrets and protect state networks" which sounds just fine until that thought crosses your mind that any network in China is a "state network" and anything you say could be a "state secret." So now, the one project that has always represented freedom and choice is going to be used for oppression and censorship. Oh, and what happens if they violate the GPL, and does the OSS community have to support patches that come from a country that is knowing developing cyber attack squads.

Well, I have things to do and write...

WAR TUX!!!

Re:Capatalist...

[dipipanone]

If I offered you millions of dollars to supply torture equipment to (e.g.) North Korea, or explosives to Al Quaeda, would you do it?

Is this a serious offer, or just another of those goddamned rhetorical questions?

Re:Capatalist...

[Simon Brooke]

There is a far cry, at least to those that set the standard of such things, between torture equipment, WMD's and taking dosh for a lawsuit. Accordingly, the items mentioned in you poor example above have been of an illicit nature and have always been so in the eyes of both US and international law.

On the contrary, all the things I described are legal, have happened, and are still happening. Torture equipment was sold to Pinochet's Chile and to Apartheid South Africa both by UK and be US firms; WMD including Anthrax were sold to Saddam Hussein by US firms with the knowledge and approval of the US government. A number of western firms have been and are in the practice of selling unfit foodstuffs and time-expired medicines to famine areas.

It's all legal and it all happens.

What it isn't is ethical. Similarly, what Boyes and co are doing in this case is legal but not ethical. It's not as unethical, I grant you; but the point I was making is that money is not an excuse for doing unethical things, and neither is the tired old excuse trotted out by the arms trade over and over again, 'but if we didn't someone else would'.

Re:Capatalist...

[BubbaTheBarbarian]

The ethics of selling such equipment and supplies to such governments is not in doubt by any means. That is not a point that I am going to argue. Neither can I argue the point of the ethics of the SCO case based upon the claims of the company. However, I would like to bring up some points, as I feel they are valid and , while I may not feel for them, that does not release me from consideration of such.

At this point I might bring up the fact that even murders rapists and the like are represented in court by the lawyers. While we might feel that those representing them are doing a disservice to society, it must be realized that under the laws of the land these folk have the right to representation in their case. That representation places the onus of proof upon those making the charges, and ensures that the proper procedures and methods are followed in the pursuit of prosecution.

From Dave's perspective, this is a an open and shut deal. SCO will get someone to rep them under the law. In most cases that he would take like this he would see no money unless the client wins. This provision is set there to ensure that a lawyer does not throw a case a to try to win a judge/prosecutor/potential client over. In this case though, Dave and his firm are going to have all up front costs covered, he gets a little piece of the action in what might be the most high profile IP law case of the century (certainly one that will decide matters on many fronts for the next 5 to 10 years) and even better, free pub.

Now on to the next question....is this ethical. Let us compare an contrast. Is murder ethical. No. Is defending a murderer ethical? Good question, and one that could spark quite the debate. Is what SCO is doing ethical? Hell no. Is representing SCO ethical? Once again, that is up for debate? Is the working grunt who works for SCO and been there since '97 supposed to just up and quite his job in protest and fling himself on the mercy of the current job market? If he does not, does that not put the label of "unethical" on this person also?

Love the debate BTW...good for musing.

Re:Capatalist...

[Simon Brooke]

From Dave's perspective, this is a an open and shut deal. SCO will get someone to rep them under the law. In most cases that he would take like this he would see no money unless the client wins. This provision is set there to ensure that a lawyer does not throw a case a to try to win a judge/prosecutor/potential client over. In this case though, Dave and his firm are going to have all up front costs covered, he gets a little piece of the action in what might be the most high profile IP law case of the century (certainly one that will decide matters on many fronts for the next 5 to 10 years) and even better, free pub.

Now on to the next question....is this ethical. Let us compare an contrast. Is murder ethical. No. Is defending a murderer ethical? Good question, and one that could spark quite the debate. Is what SCO is doing ethical? Hell no. Is representing SCO ethical? Once again, that is up for debate?

That kind of turns on whether the lawyer is, in fact, a principal in the case. If the lawyer stands to gain by the outcome of the case, then the lawyer is partly a principal, but will only gain if the case proves successful. The lawyer has no motivation to take on a mischievous or mailcious case because he knows he won't win and he knows he won't get paid.

However, this one's different. The lawyer gets paid if he can make the case sufficiently a nuisance to get his client bought out. He doesn't need to have a valid case. He doesn't need to set out his arguments clearly. He doesn't need to bring his case expeditiously. In fact it's to his advantage to obfuscate and delay.

This isn't about - and it clearly isn't about - protecting some poor trembling individual from the power of the state. It's about abusing the legal system to obtain monetary gain by seeking to twist the limits of relatively new legal theory on intellectual property, in favour of people who clearly have done nothing of utility to merit that monetary gain. In other words, it's a stinking, dishonest gambit advanced by a bunch of crooked charlatans.

Now, I grant you, under the legal system as it exists, crooked charlatans have a right to be represented in court, and in many places advocates are obliged to take on any case for anyone who can pay. But there's a difference between taking on a case for pay and taking on a case for a speculative cut of the proceeds of intellectual dishonesty, and it's in that difference that ethics come into play.

Re:Capatalist...

[Cyno]

Awesome! :)

Close

[TheConfusedOne]

Lack of Lawyerly Principles

What a great way of life....

[overbyj]

To think Boise and his fellows have been involved in some of the biggest bungles in legal history and they are none the poorer for it. Think about this guys "big" cases and his results.

MS anti-trust......he "won" (and I use won very loosely)

2000 pres election.....enuff said

SCO....talk about hitching your wagon to a broken down pony

But even though his legal genius is not serving him, he will still be stinky rich. Much richer than the vast majority of people who pour their heart and soul into Linux and the Linux community while he and his incompetent lackeys try to rape the Linux community on behalf of the SCO assholes.

There is truly little justice in the world. It is unfortunate that he will not be able to join McBride and his crew in Federal-pound-them-in-the-ass prison. That would be justice.

Re:Lawyers greedy shock

[pdc]

As I understand it, what is interesting is that the lawyers renegociated their payment arrangements to improve their position in the event the litigation fails -- which implies they think this is a more likely outcome.

Also, there has been a lot of speculation that the real aim of the lawsuit was to get IBM to buy SCO just to shut them up. This arrangement adds weight to this suggestion because the lawyers have been given a big incentive to try to make it come to pass.

The Perfect Slashdot Article

[Schlemphfer]

Today's Wall Street Journal has an article (subscription required)

This article's a dream come true all of us who post on Slashdot without first reading the article. Finally, we've got a good comeback for all those pests who tell us to go RTFA (read the fucking article.)

I hope this begins a trend, and I look forward to many more Slashdot stories centered around articles I don't have subscription privileges to read. You can count on me and hundreds of others to post responses to these stories, confident in the knowledge that we have no clue as to what the article says, and knowing nobody else does either.

Again, fantastic work!

Re:The Perfect Slashdot Article

[mr_z_beeblebrox]

This article's a dream come true all of us who post on Slashdot without first reading the article.

Sorry to mess up your plan. But here is a nice result on a google search for username / password /wall street journal.

http://academics.smcvt.edu/sburks/BU331.htm

Slashdot their account so they learn security discipline.

Re:The Perfect Slashdot Article

[alasmi]

The story is also available on Reuters The Wall Street Journal story is reported on briefing.com (at 7:33am).

David Boies

[4of12]

It's a shame that such a talented legal mind, one who did such a nice job in the U.S. government's prosecution of Microsoft on anti-trust charges, has sold out to the dark side.

Nothing has changed hands (yet)

[sczimme]

so it is not an issue.

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.

The law firm won't receive anything until/unless a) the suit is settled, or b) SCO is sold in the meantime. In the first case the law firm will be collecting its fee from the settlement; they are working on contingency* (as described elsewhere in this thread). In the second, SCO will have a new owner, and the law firm's fee will come out of the money used to buy SCO.

Nutshell version: the law firm will receive $$$, not ownership or equity.

* Insert Lionel Hutz quote here.

PS Of course, IANAL. I didn't RTFA either. D'oh.

Re:Nothing has changed hands (yet)

[milo_Gwalthny]

Being entitled to a piece of the value of a business is equity. Ask Enron, they 'learned' this the hard way.

I call this 'essentially' equity because there are circumstances where the attorneys are not entitled to a piece of the value of the business, although it is hard to envision these: (1) the lawyers lose the case, (2) the company is not sold and (3) the company continues to be worth something. I think it is number three that will be difficult to achieve without either one or two.

Re:Nothing has changed hands (yet)

[antiMStroll]

This doesn't make any sense. If SCO were sold it's then former owners would have enough money to pay legal fees on a normal per-service basis. Giving them a percentage of the sale cost puts it in Bois best interest to help pump the stock price up as high as possible by manipulating public perceptions and see this trial, assuming they believe as everyone but (possibly) Darl does it's unwinnable, never makes it to court. All of which has nothing to do with the justice system.

Read the article without subscribing

[Randar the Lava Liza]

For any WSJ article, just add _print after the /article to read it without subscribing. In this case try http://online.wsj.com/article_print/0,,SB106807618 578400800,00.html?mod=technology_main_whats_news

Re:Read the article without subscribing

[DunbarTheInept]

Thanks for the tip (although if enough people do this, they'll eventually notice and fix that hole.)

Re:Read the article without subscribing

[sir_cello]

Will that open me to the possibility of a civil suit for the circumvention of rights management information? Effectively I would be working around the DRM on the WSJ (i.e. the agreement to the T&C of the site), and the web site logs would make it clear that it was a request from my DSL static IP ?

Under the DMCA (which is just an interpretation of the WIPO WCT and so has equivalent coverage in other worldwide jurisdictions) that's an infringement of the WSJ's copyright in the article.

Aren't you also now in a precarious position because you have provided means to work around the DRM ? Is it possible that the WSJ could serve a DMCA take-down notice against slashdot to have your information removed ?

You're probably thinking that I'm joking about this, but I'm quite serious!

RBC

[Stone316]

Dammit, thats my bank.. Where did you find this information? I'd like to reference it in an email.

Re:Lawyers greedy shock

[fshalor]

It is just one more disturbing piece. I'm almost starting to lose sleep over this whole SCO debalacle. From the begining, I actually thought that SCO was put up to this whole thing by an outside source. (MS perhapse) as a way of severly harming the linux/FSF/GPL movement.

Now we see:
1. Novell bought out SuSE. (one down)
2. Redhat won't be messing with the desktop anymore. (twp down.)
3. Sun Microsystems has all but said "Linux is for the birds". The'll ship boxes with it if you want, but don't reccomend it. (Three down.)

And now this thing about the laywers getting a cut if SCO sells out.

Now we must ask, who is right now looking around and buying stuff up: Novell's out, since they just got SuSE. MS's looking for searchengines and feeling the market... So if the "deal" was, if SCO could take out three Linux companies, or at least shift their focus, they'd get bought out.

I just hope it isn't six. If MS buys them out this month, I'll sleep a lot better.

The only Gem in this whole mess is that IBM is staying true and HP is continuing with its Pro linux initiative. I haven't had a driver issue in either windows or linux/Mac OSX since. :)
Best,

whois Brent Christensen?

[frobber]

I'm wondering if the article that I couldn't read because it is password protected mentioned this guy: Brent Christensen?

He it Canopy's lead legal guy, and Canopy is a group that helps companies develop underperforming assets, and provides in-house legal counsel to their properties. Is this SCO strategy largely his idea?

I wondered if anyone knew more about him. I'm just curious out of a desire to at least identify who are the evil selfish greedy bastards of the world. But maybe he's not. Googling for him with keyword Utah returns a couple of addresses and phone numbers, but not much else...

Re:whois Brent Christensen?

[dougnaka]

Watchout with the addresses in Utah. I live here, and know several Brent Christensens, including my CEO, who does not look like that guy.

If they lose

[techstar25]

Of course if they lose, 20% of zero is still zero.

Re:If they lose

[Belegothmog]

Of course if they lose, they still get the $1 million plus up to 400,000 shares of stock.

Re:If they lose

[Adelvillar]

Not realy. They have already 20% of the Baystar investment in their pockets. That would make it 10,000,000 so it more like a one and seven zeros

Stock price

[Fnagaton]

It is going to be easier to get the company bought and ramp the stock price compared to trying to win the legal case.

**** BREAKING NEWS ****

[drpatt]

Lawyers get all the money!

Film at 11:00.

Re:Lawyers greedy shock

[diersing]

Sounds reasonable since they're suing for 12times their own worth.

I beleive in no limit Texas hold em Poker, that's called going all in

Re:20% of Zero

[Tuqui]

They'll probably get sued by SCO for loosing their case ;-)
Then they will fall in an Infinite loop.

{
Sue the looser lawyer;
}
Repeat until win;

Mainstream press picked up on this...

[pegr]

Not to say WSJ isn't mainstream...

CNN's article...

IBM's lawyers, I hear, are very expensive ones

[decaf_dude]

What'll be the arrangement between SCO and Boies with regards to paying IBM's legal fees (which is inevitable when they lose this case, which is inevitable (no, this is not a redundancy))? No doubt the tab will run into millions... Will Boies pick up 20% of that?

Has anyone noticed...

[jd]

The further SCO progresses with litigation, the stronger the solar flares are getting?

Can we countersue SCO for environmental damage?

Re:Has anyone noticed...

[HiThere]

You can sue anyone for anything. BUT if you loose you could be liable for their legal expenses and court costs as well as your own legal expenses. And if the case is deemed frivolous, the judge could slap down your attorney (I forget the exact term).

I doubt you could find a lawyer to take the case.

Re:Lawyers greedy shock

[dostalgic]

You are beeing a bit too gloomy. Here's my take:

• The Novell transaction is a good thing. This will provide another strong pro-Linux entity
• RedHat has not completely abandoned the community. The Fedora Project is analogous to the Mozilla.org spin-off. That's a good thing.
• Sun is a perpetual fence-sitter. That's why they are perpetually mediocre.

Open Source will survive. I believe we have a 90% chance of getting SCO slapped down. If so, the community and GNU/Linux will thrive.

Long live Tux!

WHERE IS BOIES?

[Chordonblue]

You know, the hotshot lawyer who was there on the first day? He's never showed up for any press release since. I guess I wouldn't show either, given their chances at actually winning this lawsuit. No need to drag the rep of their firm into it, right?

Re:20% of Zero

[Phrogz]

hey'll probably get sued by SCO for loosing their case ;-)

I hope they find a way to sue SCO if they lose, something like misrepresenting the facts of the case in order to get the law firm to take them on.

(IANAAL, I have no idea if this sort of thing would be allowed, but in this case it should :)

MS ?

[Dragoon]

Microsoft License Agreement

During the quarter ended April 30, 2003, SCO entered into a licensing agreement with Microsoft Corporation ("Microsoft"). The initial licensing agreement allowed Microsoft, at its election, to exercise two options to allow Microsoft to acquire expanded licensing rights with respect to SCO's UNIX source code. During the quarter ended July 31, 2003, Microsoft exercised and paid for the first of these options. During SCO's current quarter, ending October 31, 2003, Microsoft exercised and paid $8,000,000 for the second option.


Wow, nice to see that on paper.

Re:MS ?

[wtrmute]

Yes, I read that in the filing, and I was wondering about that. I don't speak legalese, so can anybody clear for me exactly what rights are those MS is trying to buy?

Re:MS ?

[Mryll]

The right not to get sued for incorporating BSD code in Windows that SCO pretends to own?

Re:20% of Zero

[Maserati]

Leave Apple out of this.

Inadequately cynical

[MarkusQ]

Yeah, but this runs contrary to current /. thinking: that SCO is full of hot air, and once the source code is made available to knowledgable scrutiny, it'll be shown that they have nothing. Assuming this is true, SCO has to know this, and I can't imagine a lawfirm agreeing to this unless they had a VERY strong belief that either a) SCO will win, or b) SCO will get bought. Unless they plan on dragging this out ad infinatum, and hope that IBM will buy them to stop the annoyance, which IBM does not seem inclined to do. So.... what do they know that we don't?

You obviously aren't a scumbag. Why should they care about the merits of the case, it the only goal is to make noise and rattle bucks loose from whomever they can. As others have noted here, they already got US$10,000,000 (their share of the US$50M "from" BayStar). And they may well get more before it's over.

Look at it this way (and try to think like a scumbag): if you are attempting extortion, do you really care if the threat you use is factual? Of course not. You only care that it be sufficiently annoying to your target that they will pay rather than endure it. Moreover, if you are being paid to harrass someone (as they clearly are, from the public record), do you care that your claims are true, or meerly that they are sufficently harrassing to satisfy your patron(s) that you are doing your job?

-- MarkusQ

Oh please

[kiwimate]

He's a lawyer. You think he gives a flying stuff about the politics and ideologies behind any of this? He wants more money, and the way to get more money is to be known, and the way to be known is to try and pick high-profile or contentious cases. Failing that, at least go for one which has plenty of opportunity for personal enrichment.

Soul for sale

[dasspunk]

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."

Yeah, but they'd still just be Satan's fluffers... they could really only brag about it to other lawyers.

Re:Lawyers greedy shock

[vidarh]

Talk about Paranoia. Novell bought SuSE to strengthen their Linux offering. SuSE went from being an independent software company with a market cap in the $210 million range, to being part of a company with a market cap well above $2 billion.

Redhat is focusing on selling products that will make it money. So Redhat won't make boxed sets of their cheapest product anymore, but who were buying them anyway? You've always been able to get it in tons of books, magazines, on the net etc., and Fedora is taking over the mantle. So what you have is a situation where companies still get support if they pay for it, just as before, and consumers get a ditro, just as before, but the name will be different, and they'll have to go to some cheap CD packager to get CD's of it much like most people have been doing anyway.

Sun? Who cares about Sun except Sun itself?

All in all I see the Novell and Redhat events as good - it will likely help both companies, which will only mean better business penetration for Linux, and that will filter down to consumers eventually.

C= scumbags...Only IBM...

[Chordonblue]

...Could possibly pull that off. I'd sure love to see it though it would be a first. A lot of these exec scumbags and lawyers got off during the dom-com era too.

I'm always reminded of the incompetance/greed of Commodore and their ruling class. Those guys made off big. In their last years, the CEO was making more than IBM's CEO even then the company was losing millions upon millions (he did give some of it back in the last year though - how kind).

Here was a company with great products (well, the Amiga-based stuff anyway) run by people whose only possible thoughts ran to corporate meetings in Bermuda and grabbing all the cash they could before it all went down.

After the liquidation (which was a sad affair I happened to attend in West Chester, PA), a bunch of shareholders got together and decided to sue the former execs for malfeasance. It never went anywhere. Basically, they were outspent before they began. But in the case of SCO, it would indeed be interesting to see if a corporate entity like IBM would get involved in pursuing these guys after it all goes down.

wow!!!

[bpland]

Did anyone notice this?

"SCO has also sent letters to many large companies suggesting that their use of Linux might leave them infringing on SCO's copyrights. It has offered to free them of legal risk in return for hefty license fees. If any company decides to pay such licenses, Boies Schiller would be entitled to 20%, according to the filing."

20% from each license....

SCO's motives?

[couch_warrior]

Everyone is missing hte REAL point here. As the cartoon "user friendly" ( http://www.userfriendly.org/ ) has implied, SCO is just a sock-puppet for Microsoft. After all, didn't MS take a $39M equity position in SCO *just before* the suit got filed. BUT here's the gag. What if this isn't just an end-around-run by MS trying to gore Linux without looking like a predatory monopoly? What if the rumors are true, and MS has been lowering software development costs by incorporating open-source drivers into Windoze? Aha, suddenly the mists clear and we see what could REALLY be at stake. If SCO is NOT successful at destroying the GPL, Ms might have to OPEN-SOURCE Windows because of the code that they have appropriated. And following that thread, developers which have incorporated MS-supplied class libraries and APIs might also have to open source THEIR code. So the REAL story that newspapers should be covering is not *How will Linux users be indemnified against IP claims* but instead *How will MS indemnify users of Windoze against having to open source their code* when the GPL is UPHELD by the courts.

Re:SCO's motives?

[hankaholic]

In a word, no.

Consider first the fact that many, many more devices are supported under Windows than under a Linux-based operating system. Consider further that most of the time, hardware which is supported under Linux was supported under Windows first.

What if the rumors are true, and MS has been lowering software development costs by incorporating open-source drivers into Windoze?

What rumors? Other than your post, I've never heard of anyone accusing MS of stealing driver code from Linux. MS' networking code is quite likely derived from BSD code, but that's 100% legal.

MS has been working for years on Windows. Linux has matured rapidly in recent years, but so have Microsoft's operating systems.

Many MS APIs look nothing like their OSS counterparts. Like SCO accusing Linux contributors of theft without offering proof, you seem to be pointing fingers without much justification.

But hey, it's cool to bash MS and misspell product names. How clever of you!

Re:SCO's motives?

[couch_warrior]

OK Hankaholic, let's look at the features that Windoze had "first". Remember Linux dates back to the days of Win 3 or even a might earlier... 1)There's pre-emptive multitasking - oops, no Linux had that first, Windoze started with multi-threading tasks, and wouldn't scale past 3 CPUs in an MPU system until they *emulated* the Linux tasking scheme 2) Clustering support - oops, no Linux had that first, WIndoze atarted with "warm-spare" failover clustering that couldn't share tasks - till they *emulated* Linux clustering 3) Multi-user File security - oops, no Linux had that first. WIndoze started as a single user system that didn't have file ownership, till they *emulated* Linux security 4) LDAP authentication for single sign-on - oops,no Linux had that first. Windoze didn't have networking support at all, let alone network based authentication until they *emulated* Linux in AD 5) Network File Sharing - oops, no, Linux had that first. Windoze didn't have the ability to share much of anything over a network until they *Emulated* NFS with SMB. 5) The CLI for the new "Foghorn: Windoze" - oops, no Linux had that first. Windoze won't have the complex scripting ability of Linux until they *emulate* it in 2005. And the list goes on and on and on... Yeah every once in a while M$ works a deal with a hardware maker, and gets them to write a windoze driver for a USB camera or some similar gadget that few people use before they give the specs to the open-source community, but hey, even a blind pig finds an acorn every once in a while... Y'know Hankster, if I knew as little about operating systems as you seem to , I wouldn't venture opinions in public so much...

Re:SCO's motives?

[hankaholic]

You suggested that Microsoft stole code. Not ideas, code.

Remember Linux dates back to the days of Win 3 or even a might earlier... 1)There's pre-emptive multitasking - oops, no Linux had that first,

...and many operating systems had preemptive multitasking before Linux. This is similar to asserting that any car with four wheels is emulating Honda, simply because Honda happens to produce four-wheeled vehicles.

Windoze started with multi-threading tasks, and wouldn't scale past 3 CPUs in an MPU system until they *emulated* the Linux tasking scheme

Until the very recent past, Linux scaling wasn't much to write home about either. Systems such as Solaris were much more scalable. Microsoft wasn't trying to beat Linux -- in fact, for years they've been promising a scalable, preemptive operating environment.

2) Clustering support - oops, no Linux had that first, WIndoze atarted with "warm-spare" failover clustering that couldn't share tasks - till they *emulated* Linux clustering

Again, clustering existed before Linux. Clustering is not unique to Linux.

3) Multi-user File security - oops, no Linux had that first. WIndoze started as a single user system that didn't have file ownership, till they *emulated* Linux security

No, MS didn't emulate the UNIX security model, which you somehow attribute to Linux despite the fact that it existed years before even Linux v0.01. Microsoft's security model is much finer-grained. In fact, NTFS has supported ACLs for years.

Does the version of ext3 included in modern kernels support ACLs yet?

4) LDAP authentication for single sign-on - oops,no Linux had that first. Windoze didn't have networking support at all, let alone network based authentication until they *emulated* Linux in AD ...except that NT supported remote authentication years ago, and certainly before Active Directory...

5) Network File Sharing - oops, no, Linux had that first. Windoze didn't have the ability to share much of anything over a network until they *Emulated* NFS with SMB.

Let's check Microsoft's own Windows Server Products History page, shall we?

The public caught the first glimpse of a new type of Microsoft Windows(R) operating system in August 1991, when Windows Advanced Server for LAN Manager was demonstrated at a developers conference. By the time it launched two years later, the product had been renamed Microsoft Windows NT(R) and marked the first appearance of the Windows Server operating system. It quickly became known for its support of high-performance servers, advanced workstations, and client/server computing.

I downloaded a copy of the Linux 0.96c source code. Source files are stamped as late as April 24, 1992 (files mentioning that date are all SCSI-related, btw -- aha1542.c, aha1542.h, hosts.c, hosts.h, scsi.c, scsi.h, sd.h, seagate.c, st.c, and st.h, all in kernel/blk_drv/scsi/), and the only mention of NFS is in lib/malloc.c ("We will probably need this functionality when networking code, particularily things like NFS, is added to Linux.").

In other words, MS had aspirations to develop a networked operating system before Linux supported NFS at all.

5) The CLI for the new "Foghorn: Windoze" - oops, no Linux had that first. Windoze won't have the complex scripting ability of Linux until they *emulate* it in 2005.

Actually, you're wrong again on that one. Microsoft products are scriptable to a fault -- in fact, a friend of mine wrote a tool to parse Makefiles and direct MS DevStudio to perform the appropriate actions years ago.

MS Office products are scriptable to a level that Linux GUI products only dream of.

And the list goes on and on and on... Yeah every once in a while M$ works a deal with a hardware maker, and gets them to write a windoze driver for a USB camera or some similar gadget that

Re:SCO's motives?

[couch_warrior]

Well, I could mention dozens of additional Open Source features - demand paging, NUMA, 64 bit addressing, The original IE's resemblance to the UIUC freeware browser, the original IIS's resemblance to the UIUC web server code, etc, etc, etc BUT... you've got the perfect lawyers conundrum A) If I can't produce the pirated code(being that MS doesn't open source theirs) then that is in a warped view of the world *proof* that they didn't pirate anything B) And if I did produce the code, they can just claim they copied it from a proprietary source (those ACLs in NT that you mention DO bear a strange resemblance to DEC's VMS) and rely on their vast armada of lawyers to litigate the competition into submission the way they did when Apple sued them for stealing windoze in the first place... So I suppose its hoeples, M$ could pretty much appropriate anything they want without fear of repercussions

Re:SCO's motives?

[hankaholic]

You accused MS of stealing code from Linux. I asked you to justify that. Now you're accusing them of stealing code from VMS, et. al.

You're pulling SCO tactics. SCO accused IBM of misappropriation of trade secrets. IBM asked SCO for evidence, and they pulled out something from SGI.

You accused MS of stealing Linux code. I'm not even asking for actual evidence, I'm asking for something which might lead to reasonable suspicion. Going on about lawyers won't get you around the fact that you have yet to provide information which even causes Microsoft to look suspect.

Re:SCO's motives?

[couch_warrior]

Actually, you are completely wrong, this is exactly the OPPOSITE of the SCO situation. SCO has the Linux source code, and claimed to have proof from that source code that proprietary code had been pirated. When challenged, SCO has been unable to produce their claimed *proof*. I on the other hand, freely admit that I have no source code, and claim only to have suspicions of M$ piracy. I have offered abundant and compelling reasons for holding those suspicions. You, on the other hand, are misrepresenting my claims with a false straw-man argument, and are then attacking that straw-man with the assertion that since I don't have the source code in question, I am therefore somehow like SCO, even though that argument is absurd on the face of it. I must congratulate you, you are a master of deceit. You must have been trained under the great Mr. Bill himself. And I just gotts ask, how much does M$ pay trolls to lurk in discussion groups and attack their critics?

Re:SCO's motives?

[hankaholic]

I have offered abundant and compelling reasons for holding those suspicions.

Unless you consider listing similar features to be "compelling", then no you haven't.

You have yet to explain which features are implemented similarly enough to cause suspicion of code theft.

I never said that since you don't have the source code in question that you're like SCO. I said that you're making claims which don't seem to be supported by available evidence, and suggesting that MS should have to disclose information to prove their innocence.

Showing similar feature lists is not compelling evidence -- many operating systems tout the features which you've mentioned, and share lineage with neither Linux nor Windows.

Re:SCO's motives?

[couch_warrior]

Sorry Hank, this is just getting to the *pounding sand* stage. You don't find my arguments persuasive, but I do. I will continue to advocate Linux, you can advocate windows. We'll have to rely on history to judge. But... when we get to heaven, and we find out M$ really did appropriate open source code - you owe me a nickle

Re:SCO's motives?

[hankaholic]

I never said that Microsoft didn't steal code -- I just said that you haven't provided anything to suggest that they had.

I use and enjoy Linux, but that doesn't mean that I'm going to accuse every other OS vendor of every possible wrongdoing.

I do encourage you to either find compelling evidence to suggest that code might have been stolen, or to stop making accusations which make Linux users look fanatical.

Keep in mind, showing lists of features which existed before Linux does not support your claims well.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Lawyers greedy shock

[Sj0]

Because SCOs lawyers have so much to be proud of...

Dilution of shareholder equity

[Anonymous Coward]

The really interesting aspect of this story is the fact that SCO has effectively diluted shareholder equity by 20%. If you're ever looking at financial statements from now on, you have to reduce the numbers by 20% because that's already given away to Boies.

Re:They actually lubed up and bent over?

[Trolling4Dollars]

Laugh... it's funny people. >:|

Re:Lawyers greedy shock

[bersl2]

If MS buys them out this month, I'll sleep a lot better.

Do you really want MS owning whatever rights to SysV that SCO says it does? I think that if Microsoft explicitly takes over any part of this fallacious crusade, the movement gains much more credibility and, even more frightneningly, a virtually bottomless war chest. Then we'd have real ju$tice, wouldn't we.

Disney should sue SCO.

[pclminion]

The Caldera logo clearly infringes upon Disney's trademarks. Hasn't anyone else noticed that it's just a big red globe with a blue Mickey Mouse logo on it that just happens to be rotated 45 degrees counterclockwise?

I'm sort of joking, but in all honesty that's actually how I've always interpretted that logo. It wasn't until this morning that I realized the red part of the logo is actually a big letter C. If I can make the mistake, so can others.

So:

[BrokenHalo]

Analyse with anal eyes, and all you'll get is hindsight...

The problem with a buyout is:

[djh101010]

If IBM buys SCO to shut them up, then all of the FUD about linux in general and the GPL specifically, stays out there without being ruled on. This way, those who want to believe (or exploit) the FUD can put whatever spin they want on it.

If IBM buys them out (or someone else), and the court cases just go away, then the people who want Linux and the GPL to be discredited have won anyway.

I'm not sure how this can be resolved in a good way. We wait for the legal system to rule, it takes years. If IBM buys them out, it's basically paying extortion, sets a _very_ bad precedent, and allows the FUD to remain.

Am I seeing this wrong? Does someone have a realistic positive outcome, and a path to get there?

Re:The problem with a buyout is:

[TheCarp]

Exactly. I think IBMs people understand this, and thats probably why they havn't done it. Frankly, I think the issue here is that SCO shot its load way too early. Had they been more discrete, they may have gotten Big Blue to buy them out as a pre-emptive strike against all this.

Since they didn't, now Big Blue isn't going to do it. It woul dlook very bad, it would set bad precident, and it would leave the field open for the next money grubbers who can make some vacuous claims. No, now they are committed.

The best part here is that, if they lose, they have a good chance of validating the GPL, and closing off one more avenue of FUD, like a junky collapsing an overshot vein. Thats a nice win.

Now it may take a while, but victory will be worth the wait. Besides, Big Blue has pockets deeper than some governments - my prediction is that by the time this is finished SCO will be little more than 3 letters on court filings.

-Steve

Re:The problem with a buyout is:

[(void*)]

Don't get your hopes up about the GPL being validated. If SCO runs out of money, then the case will not be proven and again, as you said, the unclarified FUD can be spun anyway you want.

Re:The problem with a buyout is:

[fwarren]

This is only a problem if IBM drops their countersuit. Heck if SCO drops their suit, their stock drops, they file bankruptcy, IBM may still pursue them, both to make a point (don't try to blackmail IBM) and to shutdown the FUD with a soild ruling on the GPL.

Re:The problem with a buyout is:

[djh101010]

I think you've got it right, but think about their motivation. Why would they do it this way? If the goal is FUD rather than money, then they're accomplishing their goals this way. They're evil, but not stupid...I think that they know exactly how to get to their goal, which is spreading a bunch of FUD around while making it *look* like pure greed. People can relate to greed, it's easy for anyone to understand - to understand the technical and legalities involved requires motivation and understanding.

I think the whole money thing is a diversion from the real tactic. Now, who, oh who, could possibly want to freely bash the open-source software movement?

Re:The problem with a buyout is:

[chmilar]

One of the problems with the legal system is: the party suing (SCO) can drop its case at any time.

The sad thing about this is: the party getting sued (IBM) does not have the option to say, "I want to continue this lawsuit, so I can win and a legal precedent can be set."

I am reminded of the time when the Parent's Music Resource Center (ie. Tipper Gore) sued The Dead Kennedys (ie. Jello Biafra) and Alternative Tentacles for obscenity because of album gatefold art. When what was supposed to be the crushing defeat of a small band and record label turned into certain defeat for the PMRC, they simply dropped the suit, shortly before the trial would have gone to a verdict. Although the PMRC's ability to bully bands and labels evaporated, no actual legal precendent regarding obscenity was set. The DK's did not have the resources to launch a counter-suit, because they had been brought to ruin fighting the suit.

The same thing could happen in SCO's suit against IBM. Fortunately IBM has the resources to make the counter-suit, so precendent could still be set.

In these cases, it should be required that both parties have to agree to drop the case. It would eliminate the extra time and expense of a counter-suit. Just finish the first suit, set the precendent, award damages to the winner (ie. the party being sued), and move on.

Once you are committed to launching a suit against another party, you should have to finish it.

To anyone actually working at SCO

[Onan The Librarian]

This is a serious post, so please take it seriously. What, in truth, does anyone do at your company ? I mean , besides Darl & Co. making pronouncement after pronouncement, what do the rank and file employees really do ? Do you write code ? Do you debug existing code ? Are you selling stuff ? What stuff are you selling ? Do you write documentation ? About what ? Are you working support lines ? Seriously, I'm wondering about this because it seems like a crappy job to work for people like Darl. I mean, it's pretty obvious that he doesn't care about SCO's product line (which to us out here seems to consist only of lawsuits). Do you stand to personally make out well financially from an outcome favorable to SCO ? Do you like working at SCO ? Do you feel that you're doing creative and/or useful work there ? Really, does anyone actually work at SCO ?

Re:To anyone actually working at SCO

[Anonymous Coward]

We eat babies and torture puppies.

Conspiracy! Conspiracy!

[ca1v1n]

Quiet down people! This is not a particularly astonishing thing to have in such a contract. Boies's firm would frankly be nuts to take a case of this magnitude without some guarantee that if they are successful, but there is no judgement, that they will still get a payoff. This doesn't mean that the firm is motivated to encourage SCO getting bought out, since in fact that could quite possibly hurt them. What this really means is that the firm knows, like the rest of us, that SCO would jump at any buyout offer, and they're making sure they don't get completely screwed out of their contingency fee if it happens.

Don't take this as a sign that SCO has lots of friends in low places. Really all this means is that people who ought to know aren't confident that they'll be around much longer.

open source buy-out

[tomdarch]

So, if the market cap of SCO is about us$250 million, it would require about us$150 million or so to obtain a majority stake in the company. Could the global opensource community put that together? With a solid majority stake in the company, a consortium could replace the CEO/board, terminate the litigation, sell off the assets and, finally, release UNIX under an open license! (The best part of all of this would, of course, be the fact that we would all stop having to call things '*nix' or 'UNIX-like'!)

Re:open source buy-out

[dougnaka]

It would solve lots of problems, but in a supply/demand free market like the stock market, once you have more buyers than sellers you raise the price. So your buyout would look like $150Million, but really would cost $1.5Billion, and would make the SCOsters rich.

OTOH, you could probably raise the money privately, or get people to commit to the investment, then offer SCO a full buyout for cash. This, of course, would have to get past their boards logic meters, and probably hasn't happened for a reason. If IBM thought this was possible for a reasonable nuissance price, they probably would have done it by now.

Re:open source buy-out

[WhiteWolf666]

A major stake?

Or a controlling stake?

A major stake is generally considered around 10% of the company.

If you are planning to purchase that much, you can generally leverage your capital in order to get some of that loaned to you---

One could possibly by 10% of SCO with 2-3 million.

A controlling stake, however, would be impossible. Over 50% of the company is held by either executives or the Canopus group---most of the company's stock is not public issue.

Re:open source buy-out

[tolan's my name]

This isn't actually absurd, except that there might still be issues with releasing the source code, though the name could be released, which is enough.

Ain't gonna happen though

Re:open source buy-out

[fishbowl]

>Could the global opensource community put that
>together?

Maybe, but what they couldn't manage would be a unified consensus on the disposition of the money, or what to do afterwards. I know my contribution would be contingent on a literal tarring and feathering of the execs. (And I mean, 1700's style tarring and feathering which causes 2nd degree burns...)

Re:open source buy-out

[iggymanz]

that would be a very foolish thing to do, as things are already starting to go very badly for SCO in the courts...the price could plummet to a much more realistic under-$5 a share very soon. Let the legal system tenderize them a little first....

Re:open source buy-out

[SillySlashdotName]

Three things:

1) Supply and demand. When there are a lot of shares and few people buying them, the price goes down, when there are few shares and lots of people wanting them, the price goes up. So as more and more are bought up by this mythical entity, the price would rise and there would be fewer and fewer to go around to the people wanting them.

2) If you could buy EVERY SINGLE SHARE (including the holdings of the officers of the company) that was available to the public at whatever the cost, you would STILL have less than a majority of the outstanding shares - and may trigger 'poison pill' provisions for current institutional shareholders.

3) If anyone DID buy the outstanding shares and was able to gain a majority holding, they would have had to pay McBride&Co for their stock - so they would have already gotten their share of the pie AND WOULDN'T CARE WHAT YOU DID WITH THE COMPANY - just like they are not caring about what they are doing to the comapny right now.

Re:open source buy-out

[hankaholic]

The best part of all of this would, of course, be the fact that we would all stop having to call things '*nix' or 'UNIX-like'!

Especially since UNIX isn't even SCO's trademark!

Er, wait...

Re:open source buy-out

[DES]

The best part of all of this would, of course, be the fact that we would all stop having to call things '*nix' or 'UNIX-like'!

The Unix trademark belongs to The Open Group, which is not affiliated with SCO.

Re:open source buy-out...its getting cheaper

[physick]

It's dropped by 4% this morning; now only 238e+06.

The beginning of the end....? Probably not. Pity there is no /. effect on stock prices: if we all want it, really, REALLY hard will Tinkerbell drive the price down?

Won't work

[Teahouse]

As a publically (partially) traded company, you couldn't just shut down the company without explaining to the other investors why you are doing this. The SEC would probably have something to say, which is ironic considering they haven't investigated the FUD, or stock dumping currently happening within SCO's current board.

Re:Lawyers greedy shock

[Oddly_Drac]

"Novell bought out SuSE. (one down)"

IBM also invested $50 million in Novell.

"Redhat won't be messing with the desktop anymore."

Scroll down the front page to 'Fedora'.

"Sun Microsystems has all but said "Linux is for the birds". The'll ship boxes with it if you want, but don't reccomend it."

They have a competing product called 'Solaris' you might like to take a look at.

"Novell's out, since they just got SuSE."

I've heard they have around $600 million in the bank. That's what we call here 'a big pile of wonger'.

Looks like SCO has cash flow problems...

[linuxjack55]

Everyone assumes the original deal between SCO and Boies was a straight contingency agreement. Given the size and resources of the defendant, the amount of time and money required to prosecute the claim, and the likelihood of an unfavorable outcome, I can't believe it was. Even if there was a contingency agreement, though, it may well have been conditioned upon IBM settling the case within a certain period of time. Now that settlement is a remote possibility, Boies may have demanded money to continue with the case, and SCO couldn't come up with the cash. The company's 8-K talks about "credits for amounts received as discounted hourly fees". If they had actually retained Boies on a contingency, there wouldn't be any hourly fees.

The language of the SEC filing ("...in the process of finalizing...", "...subject to a definitive agreement...") clearly indicates that this is a deal SCO has pitched to Boies (or vice versa). It's also clear that part of the money ("...certain licensing fees...") is coming directly from Microsoft. Since no lawyer in his right mind would negotiate a fee agreement downward, Boies' firm undoubtedly stands to make more money under the deal, but on the back end.

In a nutshell, this is the scenario: SCO brought Boies in to force a quick settlement. When that didn't happen, Boies' fee agreement reverted from contingency to hourly. In fact, it appears that Boies may have been paid something for not settling the case, since the 8-K also talks about a credit for "prior contingency payments." In any event, Boies and his firm are now working on an hourly basis, which SCO can't afford. To keep him on board, they've offered him (or he's offered them) the deal stated in the 8-K.

Given SCO's well-documented compliance problems with IBM's discovery requests, one can only wonder whether Boies' firm has cut back its work on the case until the compenstion issues are resolved.

=fear to be treated the same

[foobsr]

sic!

Re:Equity & Tainted Goods

[whittrash]

SCO is tainted by its violation of the GPL and the IBM countersuit. Anyone can sue them who has copyrighted material in Linux, and they are potentially infringing on thousands of different peoples and companies IP by violating the GPL. In addition, they are potentially involved in criminal activity if this turns out to be a pump and dump scheme, and no Wall Street company is going to want to be a part of that. This outstanding liability could make SCO worthless for any potential buyer. Who is going to buy a company with open ended legal issues with possible judgements against them greater than the value of the company? Unless SCO settles the legal issues with Linux and IBM, and is free and clear so to speak, no one, not even IBM, will buy them out. The only thing they can do is sell their IP, and close the doors.

Re:Lawyers greedy shock

[tolan's my name]

Sun is a perpetual fence-sitter. That's why they are perpetually mediocre

Nah, only recently, when they first released SPARC as an open standard they where very much 'with' the then nascent open-source community.

Also they were great evangelists for "the network is the computer" back when everyone else was still doing the stand alone thing.

Re:20% of Zero

[mwood]

'It's "losing", not "loosing"...'

"loosing" is quite grammatically correct, as that word is also a gerund in this setting. I don't see why SCO would sue their lawyers for setting their case in motion (setting loose, setting free, commencing) but it's law so why should I expect it to make sense? :-)

SCO's crack legal team

[adric]

My wife put together a picture of SCO's crack legal team (by which, I of course mean "legal team on crack"), which pretty much explains their entire strategy. Feel free to share! ;-)

Re:Lawyers greedy shock

[motorsabbath]

Aren't about 99% of RH's updates simply repackaging of upstream patches anyway?

Yes, they are. People paying for these "updates" instead of keeping their eyes open and grabbing them for free are either 1) idiots or 2) have a lot of money to disseminate. The same people that are watching for Red Hat updates could be watching for the upstream patches. As I've said before, corporate IT is it's own worst enemy. Talk about "a self-supporting infrastructure"... Without an IT department there would be no need for an IT department ... ;-)

alternate article

[moojin]

here is a link to an alternate article on the subject:

http://biz.yahoo.com/rc/031106/tech_sco_1.html

Lawyers: up to $1 million + 20%. Clients: jail

[Thomas Frayne]

SCO's lawyers get up to $1,000,000 plus 20% of essentially everything else SCO owns: stock, sale, settlement, winnings in court, license fees. The clients get a bankrupt company and jail terms. SCOX is currently worth $17 per share, so the lawyer would get $49 million, if they could sell it quickly enough. No one would buy the company, except as a gift to SCO (Microsoft?), and then they would get a can of worms with a 20% surcharge. IBM won't settle, and won't buy. Winnings in court? Don't make me laugh. License fees: SCO has already collected almost all the license fees it is going to get. How quickly would the lawyers have to collect in order for the 20% to exceed the up front payment? Well, let's consider some recent history and scheduled events. SCO's press releases have become few and far between; each is quickly answered by someone from SlashDot or Groklaw, sometimes in a Talkback forum on the same medium. IBM's motion to compel discovery will be heard in court on December 5, and I expect the judge to rule in favor of IBM. SCO's motion to dismiss the Redhat suit will come up soon, and I expect the judge to rule in favor of Redhat. Novell bought SuSe, greatly enhancing its multi-platform services strategy, and making it a major Linux player, both for services and for desktop. The Linux community now has two very strong competitors, Redhat and Novell, with giant IBM backing both. Novell and its customers are effectively immune from suit by SCO, because of the rights Novell retained when it sold assets to SCO. NOTE: No indemnification or license from SCO is needed by any Novell customer. IBM invested exactly $50 million in Novell, matching Microsoft's gift to SCO. This has to be a hint to Novell to file a suit or criminal complaint against SCO. I filed a criminal complaint with the SEC, against SCO's officers and directors, in September, accusing them of stock market manipulation. HAVE YOU? How quickly would the lawyers have to collect in order for the 20% to exceed the up front payment? My guess is six weeks maximum. I don't know when the criminal complaints will become public knowledge, but I expect that to be the last straw for SCO.

Piercing the corporate shield

[bstadil]

There may be a caveat to your assessment. That is if IBM manages to pierce the corporate shiled of SCO and hit Canopy. This is why the are requesting documents from Canaopy, Deutche Bank etc during discovery.

Re:Piercing the corporate shield

[stripe]

Hmmm, I would not be too surprised if the Canopy group started hiding assets. They already milked some of the SCO FUD with that issuance of stock. I would expect them to funnel it into some other holdings if there is a possibility that SCO going down hard resulting in costs to them.

Works on Contingency?

[Swanktastic]

No, Money Down!

Photo of SCOs main lawyer!

[Perlguy]

I found a photo of SCOs lawyer!

Re:Lawyers greedy shock

[saden1]

MS would love to get its hands on SCO but anti-trust prevents it from doing so. You can't exactly take out your competitor by proxy when everyone knows you own the company that is doing it for you. The states would be all over them and it will certainly become a public relations nightmare.

SCO logo

[sunaj]

Anyone else notice that SCO's logo looks like a certain mouse looking at a globe. I mean the blue section looks like the back of the mouse's head, looking at a red globe. Is it just me, or does anyone else see this?

Re:Lawyers greedy shock

[scons]

...and consumers get a ditro, just as before, but the name will be different,

No, not just as before: Fedora does not have Red Hat QA behind it (check the comparison chart). How stable Fedora remains will depend on how quickly they can put together good community QA (a la Debian).

Just in case you were wondering...

[linuxjack55]

A lawyer can acquire an ownership interest in a client while he is representing them. Further the ABA sayeth not:

Formal Opinion 00-418
Acquiring Ownership in a Client in Connection with Performing Legal Services

The Model Rules of Professional Conduct do not prohibit a lawyer from acquiring an ownership interest in a client, either in lieu of a cash fee for providing legal services or as an investment opportunity in connection with such services, as long as the lawyer complies with Rule 1.8(a) governing business transactions with clients, and, when applicable, with Rule 1.5 requiring that a fee for legal services be reasonable. To comply with Rule 1.8(a), the transaction by which the lawyer acquires the interest and its terms must be fair and reasonable to the client, and fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client. The client also must be given a reasonable opportunity to seek the advice of independent counsel in the transaction and must consent to the transaction in writing. In providing legal services to the client's business while owning its stock, the lawyer must take care to avoid conflicts between the client's interests and the lawyer's personal economic interests as an owner, as required by Rule 1.7(b), and must exercise independent professional judgment in advising the client concerning legal matters as required by Rule 2.1. (emphasis added)

Lawyers...

[meatpopcicle]

Negotiate a good payment strategy where they always win something and they will always fight for their cut.

They dont really need to care about the outcome as they will get some payoff. Although if they win then they get a percentage so they do have some incentive to win.

If this was all about a buyout, then they will fight harder now as they are being backed into a corner.

SCO's trying to keep them from bolting...

[Kazoo the Clown]

It seems likely as not, SCO's having a hard time keeping the lawyers motivated, as they aren't so stupid they can't see the writing on the wall. SCO has to make sure there's something in it for the lawyers or they'll just throw in the towel and cut their losses.

Pour decourager les autres

[Merk]

What you said "pour encourage[r] les autres" translates as "to encourage others". I think you mean you want to discourage other people from doing the same thing, right?

Re:Pour decourager les autres

[Simon Brooke]

What you said "pour encourage[r] les autres" translates as "to encourage others". I think you mean you want to discourage other people from doing the same thing, right?

It's a quote from Voltaire, and it is meant to be ironic. Voltaire was referring to the British habit at that time of hanging admirals who lost battles. He said that we did it pour encourager les autres...

The full text of the passage is:

En causant ainsi ils aborderent a Portsmouth; une multitude de peuple couvrait le rivage, et regardait attentivement un assez gros homme qui etait a genoux, les yeux bandes, sur le tillac d'un des vaisseaux de la flotte; quatre soldats, postes vis-a-vis de cet homme, lui tirerent chacun trois balles dans le crane, le plus paisiblement du monde; et toute l'assemblee s'en retourna extremement satisfaite[2]. Qu'est-ce donc que tout ceci? dit Candide; et quel demon exerce partout son empire? Il demanda qui etait ce gros homme qu'on venait de tuer en ceremonie. C'est un amiral, lui repondit-on. Et pourquoi tuer cet amiral? C'est, lui dit-on, parcequ'il n'a pas fait tuer assez de monde; il a livre un combat a un amiral francais, et on a trouve qu'il n'etait pas assez pres de lui. Mais, dit Candide, l'amiral francais etait aussi loin de l'amiral anglais que celui-ci l'etait de l'autre! Cela est incontestable, lui repliqua-t-on; mais dans ce pays-ci il est bon de tuer de temps en temps un amiral pour encourager les autres.

Jokes are never funny when you have to explain them.

Re:Pour decourager les autres

[SouthendPier]

Umm, it was Admiral Byng and he was
shot on the quarterdeck of his own flagship.

A Modest Proposal... Re:Lawyers greedy shock

[swschrad]

so, let me see, now... if everybody just refuses to do any business at all with SCO, and they disappear under the mists, does that also mean 20% of the lawyers at Boies, Schiller also disappear?

it's a start... ;)

misleading title...

[hankaholic]

Did anyone else think that "SCO's Lawyers Analyzed" meant that they were finally seeing psychiatrists?

lol

[Sivaram_Velauthapill]

lol That's a funny story :)

Sivaram Velauthapillai

Re:It's obvious...

[shibashaba]

I know your trolling anyways but what do you mean there's no more LDP?

Not Exactly

[Bilbo]

> then all of the FUD about linux in general and the GPL specifically, stays out there without being ruled on.

I agree with you that IBM buying SCO would be a lousy solution to the problem, but I don't think it would be as bad as you make it out to be. If IBM buys SCO, it gets the rights to all that nifty UNIX code that SCO now owns. What would happen if IBM simply turned around and released all that SCO code under the GPL? For one thing, everyone and his brother could do their own code analysis to see if SCO was telling the truth. Also, any useful code that was in the ancient UNIX source would now be available for anyone to use (under the usual GPL restrictions). True, it wouldn't be as tidy a vindication as we'd all like to see, but it could certainly put a lot of interesting code out there in GPL land.

(Of course, there may be other complications, such as proprietary third party code that even SCO/IBM couldn't release because it belongs to OTHER people, but whatever got out there would make for some interesting reading.)

Re:20% of Zero

[Koos Baster]

...But if they loose there probably won't be anything left to sue

Re:your sig

[DunbarTheInept]

That's not really fear. If someone shows love for someone else, and your empathy makes you go, "ohh, that's so sweet!", that does NOT mean you are feeling that love. If someone else whacks their thumb with a hammer, and you empathize with their pain, that doesn't mean you are feeling pain yourself. And similarly, empathising with someone who is in a fearful position does not mean you are experiencing fear yourself.

Re:Lawyers greedy shock

[fshalor]

Some people thought SCO+ Caldera was good too...Now look what's going on. I wasn't questioning the moves of Novell and Redhat. I'm just pointing out a fear about the possibilities. And the timeing.

As to Sun, I agree with you. They have means of obfuscating text files that are just plain wrong.

My whole "paranoia" thing is this: I've managed to convince the powers that be to go towards linux. I spent months talking with them about the benifits. We had many discussions about the money involved. They were dubious about getting something for free, about how it could actually work. Now, we've migrated the Alphas and one of the two Sun Ultra10's to linux (it flies now, by the way) and have about 6 other x86 based linux boxes. If I had to go back to solaris on everything and still get my job done I wouldn't be able to. And if we ended up having to pay SCO's slap-in-the-rump license fee per box, I'd probably lose my job. Or at lease it would be a possibility. Then again, I'd probably just leave If I had to deal with only Solaris.