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SCO Names 1st Lawsuit Target: AutoZone [Updated]
An anonymous reader writes "News.com
reports that SCO has filed the first (of two) soon to be infamous lawsuits. This one is aimed against car part retailer AutoZone, a multi-billion, Fortune 500 company according to the site. Who's next?" Another reader excerpts from SCO's posted claim: 'AutoZone violated SCO's UNIX copyrights by running versions of the Linux operating system that contain code, structure, sequence and/or organization from SCO's proprietary UNIX System V code in violation of SCO's copyrights.'
Update: 03/03 16:28 GMT by T : njan writes with the news that SCO just announced during their ongoing conference call another lawsuit, this one "to be filed against Daimler-Chrysler, alleging that they are infringing SCO's copyright by using code relating to 'core operating system functionality' of SCO System 5."
Here is an interesting GrokLaw post from the man at AutoZone who helped them transition from UnixWare to Linux, blowing apart most of these claims.
Bearing in mind that this post is over 2 weeks old, you'd think someone at SCO would have noticed that their claims are basically debunked.
PS : SCO quarterly losses up to $2.25 million for fiscal Q1. Ouch.
Athletic Scholarships to universities make as much sense as academic scholarships to sports teams.
LINDON, Utah, Mar 3, 2004 /PRNewswire-FirstCall via COMTEX/ -- The SCO Group, Inc. (SCOX, Trade), owner of the UNIX operating system and a leading provider of UNIX-based solutions, today reported revenue of $11,392,000 for the quarter ended January 31, 2004. In the comparable quarter of the prior year, the Company generated revenue of $13,540,000. Revenue for the first quarter of fiscal 2004 was in line with the Company's expectations, and was comprised of $11,372,000 from UNIX products and services and $20,000 from SCOsource initiatives.
For the first quarter of fiscal year 2004, the Company reported a net loss applicable to common stockholders of $2,253,000, or $0.16 per diluted common share. The Company reported a net loss applicable to common stockholders of $724,000, or $0.06 per diluted common share, in the comparable quarter of the prior year. The net loss applicable to common stockholders for the first quarter of fiscal year 2004 was reduced by $3,624,000 of income resulting from the change in fair value of the derivative associated with the Company's previously issued Series A Convertible Preferred Stock. The loss from operations for the first quarter of fiscal year 2004 was $5,169,000 compared to a loss of $738,000 for the comparable quarter in the prior year. The loss from operations for the first quarter of fiscal year 2004 includes costs of $3,440,000 related to the Company's SCOsource licensing initiatives. These initiatives had not yet commenced in the comparable quarter of the prior year.
"Our revenue and results of operations for the first quarter were consistent with our expectations," said Darl McBride, President and CEO. "In coming quarters, we will continue to expand our SCOsource initiatives, with an ongoing campaign to defend and protect SCO's intellectual property assets, which will include continued end-user lawsuits and negotiations regarding intellectual property licenses. At the same time, we are committed to supporting our extensive UNIX customer base and leveraging our UNIX business for future growth opportunities. Over time, these two efforts are expected to yield positive long-term results for our stockholders."
Financial Outlook
The following financial outlook reflects expected contributions from the Company's two business lines, SCOsource and UNIX products and services. These statements are forward looking and actual results may differ materially. See the discussion of certain risks and uncertainties related to this financial outlook at the end of this release under "Forward-Looking Statements."
For its second fiscal quarter ending April 30, 2004, the Company currently expects total revenue to be in the range of $10,000,000 to $14,000,000. Revenue from the Company's SCOsource initiatives remains difficult to predict in the short-term due to the nature of these licensing transactions and the variability of the timing of revenue recognition. However, the Company anticipates revenue from its SCOsource initiatives will increase in future periods.
Operating expenses relating to the Company's UNIX business for the next three quarters are anticipated to decrease from the first quarter of fiscal year 2004 and comparable quarters of the prior year as the Company's worldwide operations continue to become more efficient. Expenses associated with SCOsource initiatives for the next three quarters are expected to remain consistent with expenses incurred in the first quarter of fiscal year 2004 as the Company continues its legal strategy to enforce and protect its UNIX intellectual property.
Conference Call
As previously announced, the Company will host a conference call at 11:00 a.m. EST today, March 3, 2004, to discuss its first quarter 2004 results. To participate in the teleconference, please call (800) 818-5264 or (913) 981-4910, confirmation code 141144, approximately five minutes prior to the time stated abo
For those of you that have been in an autozone, you notice they have the dumb terminals at the parts counter. If you notice this dumb terminal runs a text based interface where you pu tin the year, car make, model, engine size, etc to look up parts. I was in an Autozone once and the server for the dumb terminals happened to lock up. This was 2 or 3 years ago when it happened. I watched the dumb terminal display as it rebooted and came up with some version of redhat (or another distro, I don't really remember too well) and had kernel 2.3 on it.
Responding to the other replies of this article, just because a company doesn't run Linux on their web server to the world, doesn't mean they don't use Linux for other things.
Does the name Pavlov ring a bell?
If their web site doesn't run Linux, I wonder how SCO determined that Autozone is a Linux user
That is very easy. It is not about their internet site, but rather their intranet. Check this redhat announcement.
(i got this link from www.groklaw.net)
It's mentioned in the IBM lawsuit:
Autozone switched from SCO to Linux. Is well known. The core of this issue is that SCO claims that they were using SCO shared libraries even after switching to Linux.
They had to do something to keep their stock from tanking on the financial results, I guess. Now IBM and RedHat lawyers will have more to work on.
I'm in a Unix state of mind.
The AutoZone case, at least from what we've seen so far, doesn't have anything to do with the IBM case. They aren't claiming the use of Linux infringes, they're claiming that AutoZone (with the help of IBM) ported it's inventory/kiosk applications from OpenServer (or was it UnixWare?) to Linux, and that they did so in part by using SCO shared libraries that AutoZone didn't have the rights to move off of the OpenServer systems.
--From a GrokLaw.net post--
I know Mr. Greer, although not well, as I was hired at the time of his leaving.
Everything he said is verifiably true.
I am still employed by said company, and there is very little truth in SCOs
statement at all. I am one of the ones who helped engineer the method by which
we moved store systems over to Linux, and *I* was almost solely responsible for
it happening as quickly as it did.
We did not, and do not, employ IBM for assisstance with Linux. We do not use a
distribution from IBM, nor have we in the past. The only company who has given
us Linux "services" is RedHat, and that was a support agreement which
did us no good, since they were unable to help us with the migration (they
basically told us that what we wanted to do was impossible). The speed and
efficiency with which Linux was deployed was a direct result of J.Greers work,
followed by the work that myself and a few others did.
By the way, I have patented the method of walking whereby you place one foot in
front of the other.
Anyone walking from now on, is using a derivative work of mine, and you owe me
money by not properly licensing my system of locomotion from me. Also, you
cannot teach anyone else to walk, either by example or description.
Kiss my a$$ SCO.
They wanted someone: (a) large enough to have $, (b) large enough to get noticed, (c) with a documented relationship with IBM, (d) AND a documented relationship with SCO but (e) non-technical enough so that they are more easily intimidated.
(c) is important so that they can have something concrete to tie it in to IBM. (d) is important so that they can always try the breach of contract claim if the IP dispute is dismissed. Keeping the breach claim around gives them extra time to try to keep the case around.
With (e) I think their effort here is to pick a technologically weak company with shareholders who have less of a technical education. This allows them to file, the AutoZone shareholders see the suit, panic (because they have less of a technical background than, say, RedHat) and hope tha AZ will settle quickly to make the suit go away.
I don't think it will work, but I can see the logic for picking this particular target for their thug-like tactics.
I would expect something to distinguish the second target so that they couldn't consolidate the two cases.
Lowe's runs CDE on their terminals. They have them locked down pretty tight too - my wife works in their main corporate office, and we got to play with one at one of their retail stores recently.
In fact, the funny thing is that the CEO of my company is an E&Y alumni - he said that he knows a lot of the people over at Lowes and we'll just say they aren't the brightest of the bunch. From what I have seen of a lot of their internal ops, I would have to agree.
And I think I'll just check this post anonymously button...
More proof this is just FUD!
Take a look at the headlines in the news articles about this case on google news
All along the lines of "SCO Sues AutoZone Over Use of Linux"
The case IS NOT ABOUT LINUX. It is about using SCO claiming that autozone are using SCO SHARED LIBRARIES IN A WAY THEY'RE NOT LICENSED TO.
As has already been shown by Jim Geer's comments, they aren't doing so, but even if they were... it wouldn't matter WHICH os they were now using SCO shared libraries under. It could be using them on a Commodore 64 and it would be an identical case!
But, the press being what they are have soaked up the meme of "SCO is against linux" and repeated it back in the essence of their headlines, making the world at a casual glimpse think this case is about SCO code in Linux in general.
That makes me sad.
This comment on GrokLaw speaks for itself:
Supplemental No. 8: AutoZone claims are false
Authored by: jbgreer on Wednesday, February 18 2004 @ 10:00 AM EST
I don't know whether to be pleased or angry at SCO's assertion that IBM must have assisted AutoZone's transition to Linux due to the "precision and efficiency with which the migration occurred". You see, I was a Sr. Technical Advisor at AutoZone, where I was an employee for over 10 years. During my tenure, I participated and led in the design, development and maintenance of many of AutoZone's store systems. More importantly, I initiated AutoZone's transition to Linux and I directed the port of their existing store software base to Linux. I personally ported all of AutoZone's internal software libraries for use under Linux. I personally developed the rules by which other AutoZone developers should make changes to their code to support both Linux and SCO's OpenServer product. I believe at one point I had as many as 35 AutoZone developers performing porting work for me, much of which was trivial, given that our code did not generally rely on SCO specific features and that the more technologically sophisticated portions of our code tended to reside in our libraries. The developers were also responsible for testing their individual applications under both SCO and Linux; I supplemented this activity by performing builds of the entire AutoZone store software base on my desktop, which I had converted to Linux.
As to the claim that SCO's shared libraries were a necessary part of the port: false. No SCO libraries were involved in the porting activity.
As to the claim that IBM induced us to transition to Linux: false. It was, in fact, SCO's activities that 'greased the skids' and allowed the business case for using Linux to be made more easily. That is a story long in the telling; perhaps I'll share it another day.
One should remember the Linux business environment that existed at the time the AutoZone transition began. Several vendors - the original Caldera Linux distribution company, Red Hat, and Linuxcare - were offering support for enterprise installations of Linux. In fact, Bryan Sparks, then CEO of Caldera, flew to Memphis and met with me during my evaluation of the various distribution and support offerings. I also met and talked briefly with Dave Sifry of Linuxcare during the 1999 Linux Expo. AutoZone settled on Red Hat chiefly because of my familiarity with their distribution and the ease with which AutoZone could negotiate a support agreement with them.
I must add that SCO was eventually made aware of AutoZone's transition to Linux. They responded by offering to assist AutoZone in the porting activity. By the time of their offer, AutoZone had already completed the initial porting activity and had already installed a Linux-based version of their store system in several stores.
Finally, I'll add that I was for a time a member of SCO's Customer Advisory Board. As such, I believe I have some useful insights as to why SCO lost AutoZone's and several other large accounts' business.
Regards, Jim Greer
Dude, they're not claiming parts of LINUX were stolen from them. They're claiming that the shared libraries that come with SCO's UNIX weren copied onto LINUX machines contrary to the license in order to provide a binary environment for their third party applications to continue running. Imagine if the Wine folks were distributing Microsoft copyrighted DLLS from the Windows distribution. That's the kind of situation we have here.
According to Netcraft, Jessie James' company, West Coast Choppers, does, in fact, use Linux.
It's all fun and games until someone loses the key to the handcuffs.
I used to work for AZ, and they've got a LOT more technology than just a webserver. They spent a number of years on the Top 400 list of supercomputers because of their data warehouse (running on AIX), they had SCO servers in the retail stores (I believe these have switched to linux, but that happened well after my departure), etc. They used to spend a LOT of money on sco licenses, so they will have damages to show, even if the rest of their case is fragile.
There are several important doctrines in Mormonism that make such wielding of "IP" distasteful as well, such as the idea that all truth and knowledge comes from one source: the Savior Jesus Christ. By extension, it is somewhat blasphemous to claim exclusive ownership of ideas. Darl's land-grab for all of Unix is in direct conflict with this doctrine (that alone is not grounds for discipline, but his actions certainly could be).
I'd also like to note that excommunication in the Mormon Church does not condemn a person to hell for all of eternity. Excommunication is a means of 1) helping the excommunicated repent by dealing with the consequences of their misdeeds and 2) making sure the name of the Church of Jesus Christ is not sullied by those misdeeds, especially when carried out under the guise of faith (as I think Darl keeps alluding to in his self-righteous crusade to "save" capitalism from Linux).
What that means is that once Darl gets excommunicated, he could be readmitted back into the Church through baptism, if he repents, which in Mormonism entails changing his ways and abandoning his sins (not just confessing them). So his readmittance might be contingent on making amends to the Linux community, reimbursing those businesses he hurt through his deception and lies, etc.
[Posted anonymously to avoid karma whoring]
Supplemental No. 8: AutoZone claims are false
Authored by: jbgreer on Wednesday, February 18 2004 @ 10:00 AM EST
I don't know whether to be pleased or angry at SCO's assertion that IBM must have assisted AutoZone's transition to Linux due to the "precision and efficiency with which the migration occurred". You see, I was a Sr. Technical Advisor at AutoZone, where I was an employee for over 10 years. During my tenure, I participated and led in the design, development and maintenance of many of AutoZone's store systems. More importantly, I initiated AutoZone's transition to Linux and I directed the port of their existing store software base to Linux. I personally ported all of AutoZone's internal software libraries for use under Linux. I personally developed the rules by which other AutoZone developers should make changes to their code to support both Linux and SCO's OpenServer product. I believe at one point I had as many as 35 AutoZone developers performing porting work for me, much of which was trivial, given that our code did not generally rely on SCO specific features and that the more technologically sophisticated portions of our code tended to reside in our libraries. The developers were also responsible for testing their individual applications under both SCO and Linux; I supplemented this activity by performing builds of the entire AutoZone store software base on my desktop, which I had converted to Linux.
As to the claim that SCO's shared libraries were a necessary part of the port: false. No SCO libraries were involved in the porting activity.
As to the claim that IBM induced us to transition to Linux: false. It was, in fact, SCO's activities that 'greased the skids' and allowed the business case for using Linux to be made more easily. That is a story long in the telling; perhaps I'll share it another day.
One should remember the Linux business environment that existed at the time the AutoZone transition began. Several vendors - the original Caldera Linux distribution company, Red Hat, and Linuxcare - were offering support for enterprise installations of Linux. In fact, Bryan Sparks, then CEO of Caldera, flew to Memphis and met with me during my evaluation of the various distribution and support offerings. I also met and talked briefly with Dave Sifry of Linuxcare during the 1999 Linux Expo. AutoZone settled on Red Hat chiefly because of my familiarity with their distribution and the ease with which AutoZone could negotiate a support agreement with them.
I must add that SCO was eventually made aware of AutoZone's transition to Linux. They responded by offering to assist AutoZone in the porting activity. By the time of their offer, AutoZone had already completed the initial porting activity and had already installed a Linux-based version of their store system in several stores.
Finally, I'll add that I was for a time a member of SCO's Customer Advisory Board. As such, I believe I have some useful insights as to why SCO lost AutoZone's and several other large accounts' business.
Regards, Jim Greer
Frylock: That's not a toy!
Master Shake: You say that about everything you own. You should own toys. They're fun.
...as posted on the Yahoo SCOX board by stdsoft0... (link below)
.16.
.27 per share.
t io n=m&board=1600684464&tid=cald&sid=1600684464&mid=1 01762
Announced results are simply lies. SCO has ALWAYS announced Pro Forma results to the public in the past. Today, they conveniently elected to announce GAAP results.
-
Make no mistake, on a Pro Forma basis SCO lost 0.43 per share, not
-
Anybody else notice that SCO is conveniently parading the GAAP numbers? They are saying nothing about Pro Forma results. Why? Because Pro Forma EPS results are much worse than the (0.16) GAAP numbers. The GAAP results take into account the one-time addition of $3.76MM in income due to derivative accounting on the PIPE deal. The deal was restructured to eliminate this from the Income Statement. As it should be, SCO will not record any future benefit from a falling stock price.
Meanwhile, Pro Forma results cannot include this income, which means that SCO actually lost another
Just another thing for the SEC to look at.
-
http://finance.messages.yahoo.com/bbs?.mm=FN&ac
BWAHHH! The call was freakin' BRUTAL on SCO. Let me see if I can recap the Q&A
Q1: So, what's the basis for the AutoZone suit? I read the guy who did the conversion says IBM wasn't involved, nor did they use any of your code. [This was on Groklaw]
A: Third party sites are really just shills for IBM. But sorry, Wells [judge in the IBM case] told us not to get into specifics. This is about our IP though blah blah protectrightscakes. We'll leave it for the courtroom.
Q2 [Skiba]: Is the $3.4 mil you spent on legal expenses expected to cover the new suits too?
A: Yes
Q3 [Boston Globe]: So what does the Daimler suit have to do with Linux?
A: It's actually about them not answering the letter we sent them ordering them to state they're not illegally running any of our stuff, as they should of done, since we had a contract.
Follow Up Q: So, this doesn't have anything to do with Linux per se?
A: Well, we don't have any proof, but they haven't said that they're NOT infringing, so we'll sue and see what happens.
Q4: Why AutoZone and Daimler?
A: AZ's using our IP and DC hasn't answered our letter.
Q5 [E-Week]: Clarify on AutoZone... is it about the conversion libraries?
A: It's an issue, but it's not the core of the copyright claim.
Q6 [Computerworld]: So what happens if companies continue to not pay?
A: We'll sue them too.
FUQ: Will you return the money if you lose the relevant cases, and it's found that you have no IP rights in Linux?
A: We revealed some code last summer and Linux people admitted our code was erroneously in Linux. We're very confident that infringement is occuring. [Totally ducks the question]
Q7: So you're not actually claiming any infringement on Daimler?
A: No.
Q8: Don't these two new suits hinge on you winning vs. Novell to show who actually owns the IP?
A: No, because we own the IP. We have a filed copyright for it.
Q9: Are you planning to take this litigation strategy abroad?
A: Yes, we're looking into Asia and Europe right now.
Q10 [Investors Business Daily]: Aren't you afraid of sending the message you're going after your own customers first? When are you going to sue Linux users who AREN'T your customers?
A: AutoZone and Daimler aren't CURRENT SCO customers, they haven't paid us for a while. But they're still bound by our licenses and contracts, so we're suing them.
Q11: How's this timeline for the new cases going to be affected by the IBM and Novell cases?
A: It's impossible to predict the future, neither of these are relevant to the IBM case, and the Daimler suit is s astate case, so it will proceed more quickly.
Q12: Any upcoming suits in the UK, say in the next few months?
A: Not going to discuss that today. We're working on IP enforcement in Europe and Japan, but they're a bit behind.
FUQ: Can you comment on the Australian case? [A group called CyberKnights have filed complaints with the Australian CCC (like the FTC in the US) that's similar to the RedHat v. SCO suit].
A: Nobody's suing us in Australia.
FUQ: You're not familiar with CyberKnights?
A: No.
Q13: So we've seen SCOsource have one customer [EV1]. How do you count that revenue?
A: As we receive the money. Some are one time, some are over time. EV1 is paying over time, but we can't go into specifics.
Q14: You said before the Novell suit has no bearing on these cases, but it seems like it has a lot of bearing on any copyright suit.
A: Well, they said they had it, then backed off, then came back. We've always said the copyright is ours.
FUQ: But both of you have registered the copyright. Don't you have to prove you own it?
A: That's for the court to decide.
FUQ: Why's you file in Nevada for AutoZone?
A: That's where they are.
FUQ: Back to the bit about suing ex-/customers, don't you think that'll scare off potential customers?
A: Our current customers love us, they're cheering us on for protecting their rights.
FUQ: I mean FUTURE customers.
A:
Here is a bittorrent of a mp3 of the call today from SCO at http://sco.penguinman.com