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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."
Or perhaps SCO hopes to take on Sun as well?
http://alternatives.rzero.com/
This will be quite a telling point in SCO's recent history.. whether they fail or succeed..
Let's just hope the judge looks at the merits of the case, and gets it thrown out. Precedent is a scary thing when it's involving IT cases.
The crux of this SCO case seems to not be "Autozone are using linux, and linux contains SCO code (millions of lines or just a few .h files) therefore they're infringing IP" as their press release propaganda infer, but that:
1. Autozone used to use SCO products, and their whole system relied on them
2. Autozone converted to Linux, and IBM made them do so
3. Autozone's custom software which used to run under SCO products now run under Linux
4. They still run well and changed over efficiently, therefore they MUST still be running SCO code/shared libraries/etc with linux to do so, which is a breach of their original contract with SCO.
SCO seem to be insinuating that this is about copyright SCO code in ALL of linux, and autozone are just one of millions of linux users who are infringing, but the details of the case show this is NOT true at all. That makes it FUD. The press have been told for MONTHS that SCO are taking issue with code in linux in general, but now legal action is underway, it's in a case that takes issue with existing SCO code used in linux by a client. No damage to linux in general despite the press releases.
As SCO say...
Upon information and belief, Autozone's new Linux based software implemented by IBM featured SCO's shared libraries which had been stripped out of SCO's UNIX based OpenServer by IBM and embedded inside Autozone's Linux implementation in order to continue to allow the continued operation of Autozone's legacy applications. The basis for SCO's belief is the precision and efficiency with which the migration to Linux occurred, which suggests the use of shared libraries to run legacy applications on Linux. Among other things, this was a breach of the Autozone OpenServer License Agreement for use of SCO software beyond the scope of the license.
They claim IBM made moves to shift Autozone away from Linux, when SCO originally attempted to move autozone to linux themselves
They also claim that SCO shared libraries MUST be being used, because of the efficiency with which this changeover occurred. They don't get it, that they're not indispensible, and Autozone's systems did not rely largely on SCO specific features according to the guy who converted autozone's systems, who posted as such on groklaw here. The relevant parts of his post are:
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.
I bet SCO keep insisting this is a generic copyright/linux issue, as they infer by claiming "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." and don't stress that it's a unique situation with regards to claims an existing customer switched to linux all too easily so must have both used linux and used SCO code in ways they weren't allowed to under their old contract
SCO is appearing like a jealous partner who just can't bear the thought that they're not the entire world to their clients, and are playing the stalking game, and running around town spreading rumours about infidelity. Nothing more, nothing less.
A case of oil, some new tools, anything else it looks like I might need in the forseable future.
Usually I hate paying for this stuff, but it will be a little sweeter knowing that at least some of it will go towards fighting off SCO.
Anyone out there setting up a legal defense fund so we can chip in to help these guys fight the good fight? If we don't help out SCO targets today, any of us could be next.
--G
From GROKLAW with Thanks
Here's what SCO said about AutoZone in its Interrogatory Number 8:
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 8:
IBM interfered with SCO's software licensing agreement with Autozone for the SCO OpenServer software operating system, Contract # 1V736, effective January 24, 2001 (the Autozone OpenServer License Agreement). Under the Autozone OpenServer License Agreement, Autozone utilized the SCO software as the foundation from which to conduct all store operations including inventory tracking, point of sale transactions, back office server activities, event monitoring and to enable corporate updates to be transmitted to all retail locations.
In mid-2000, upon information and belief, IBM approached Autozone in an effort to induce Autozone to breach its agreement with SCO. In the second quarter of 2001, IBM was actively advising Autozone's internal software group about converting to Linux. In the second quarter of 2001, despite the Autozone OpenServer License Agreement with SCO, upon information and belief, IBM finally successfully induced Autozone to cease using the SCO software and to use Linux with IBM's version of UNIX. Autozone ultimately decided not to pay SCO the annual fee to continue to maintain the SCO products and, upon information and belief, with the encouragement of IBM, began the efforts required for conversion to Linux.
Upon information and belief, Autozone's new Linux based software implemented by IBM featured SCO's shared libraries which had been stripped out of SCO's UNIX based OpenServer by IBM and embedded inside Autozone's Linux implementation in order to continue to allow the continued operation of Autozone's legacy applications. The basis for SCO's belief is the precision and efficiency with which the migration to Linux occurred, which suggests the use of shared libraries to run legacy applications on Linux. Among other things, this was a breach of the Autozone OpenServer License Agreement for use of SCO software beyond the scope of the license.
Upon information and belief, Autozone is currently in breach of the Autozone OpenServer License Agreement in that Autozone is improperly using "shared libraries" (short cuts and methods which allow programs to interface with one another and the services of the operating system) contained in the OpenServer (UNIX based) operating system to enable "legacy applications" to function on Linux. Legacy applications are those versions of software applications that have a lengthy and proven track record of high level function and reliability. The legacy applications utilized by Autozone were designed specifically to operate with OpenServer (UNIX based) shared libraries, but do not function with Linux shared libraries.
IBM was aware of the Autozone OpenServer License Agreement. IBM knew that the SCO OpenServer shared libraries were proprietary to SCO. Therefore, IBM knew, or should have known, that by assisting Autozone to implement Linux to support legacy applications by improperly incorporating the SCO OpenServer shared libraries, it was interfering with SCO's agreement with Autozone and otherwise inducing Autozone to act wrongfully towards SCO. Upon information and belief, IBM's inducing and assisting Autozone to breach its license agreement with SCO was an act that constitutes interference with contract. Upon information and belief, IBM profited by the interference by earning significant professional services fees in performing the switch from SCO OpenServer to Linux.
SCO does not presently know the specific dates on which the interference occurred, how it occurred or which IBM or Autozone employees were involved because SCO was not present when IBM sold Linux-related services to Autozone, when IBM assisted Autozone in the design of the new Linux system deploying legacy applications that depended on SCO OpenServer shared libraries in order to function, or when IBM performed the professional services to assist Autozone to improperly deploy OpenServer shared libraries inside its IBM-provided Linux implementation. More specific information, such as which IBM and Autozone employees were involved, is in the possession of IBM and/or Autozone and will require additional discovery from at least IBM and Autozone.
The Linux(R) Kernel Personality (LKP) for UnixWare 7.1.3 provides Linux environment hosted on the UnixWare kernel. This environment does not contain a Linux kernel, but does contain the RPMs needed to run most Linux applications. By invoking the UnixWare kernel to run the Linux application, the application gets all of the performance and scalability advantages that UnixWare delivers. Linux applications that are disk or database intensive, or require support for a large number of users, typically perform with greater stability, reliability, and scalability when deployed on the UnixWare LKP environment.
Access to the Linux and UNIX environments is provided for both applications and the user. Common system files, such as password files, are automatically updated between environments.
SCO understands that customers are looking for alternatives to Linux. But making changes always introduces risk. LKP is an easy and low risk tool to help the migration from Linux to UnixWare. The benefits of LKP are:
Yeah SCO... you /really/ understand alright!
In the second quarter of 2001, despite the Autozone OpenServer License Agreement with SCO, upon information and belief, IBM finally successfully induced Autozone to cease using the SCO software and to use Linux with IBM's version of UNIX. Autozone ultimately decided not to pay SCO the annual fee to continue to maintain the SCO products and, upon information and belief, with the encouragement of IBM, began the efforts required for conversion to Linux.
Sounds like SCO is whining because someone dropped their old, obsolescent Unix. So if I trade in a Chevy for a Ford, GM can sue me if I still have payments left on my loan?
And this:
The basis for SCO's belief is the precision and efficiency with which the migration to Linux occurred, which suggests the use of shared libraries to run legacy applications on Linux.
In other words, we at SCO are too dumb to make Linux work, so IBM had to steal our stuff to make their solution work.
Maybe this is me just being paranoid and/or conspiratorial, but what are the odds that some anonymous SCO investors might have considered "selling short" some of Autozone's public stock, just prior to this announcement?
Sure, that'd be considered insider trading, I would think. But with all the chaos going on right now with their lawsuit, would it even be noticed?
Apart from checking a publicly accessibly box (i.e. web server), How can you legally prove that company X is running linux - aside from entering the premises and logging in.
And unless the login prompt says "Welcome to company Y's Linux system" how do you prove that such system is running linux - a version of linux that has your "IP".
I don't think that X/Gnome/KDE login screens give the version of linux that you're running either.
I'm not sure if even the version will suffice. The version one admin is running mightn't even have the parts that SCO claim are theirs. Where does that leave you ?
[ Monday is a terrible way to spend one seventh of your life. ]
Being from Memphis, I am well aware how supportive AutoZone folks are of Linux, as many AutoZone techs are members of GOLUM.
I hope AutoZone countersues them into the ground in a most genteel, southernly manner.
Now off for my morning bowl of hot grits.
No, Vern. They just let him in.
They must believe that these guys will fold without taking this all the way to trial.
Even though the claims are crap, this has to hurt Autozone in the stock market, where perception is more important than reality.Is there not some kind of law against frivolous lawsuits soley for the purpose of slander?
It wouldn't surprise me if there was some kind of backdoor dealing going on to get a settelment out of this or another case that SCO can waive around to continue the FUD. It would be illegal, but since when has that stopped anyone. Ken Lay got away with it, why not Darl?Free Mac Mini Yeah, it's
1. Autozone used to use SCO products, and their whole system relied on them
Autozone used to be a totally SCO shop for all of their point of sale systems.
2. Autozone converted to Linux, and IBM made them do so
IBM had nothing to do with their switching to linux. It was solely based on the fact SCO did not support Autozon in the way and for the cost Autozone felt they should be handled. THus Autozone decided to go with a cheaper alternative as SCO's support was crap.
So, if you wish to tell a story as a member of The linux user group here in Memphis (Autozone's corporate Headquaters,) Learned a great deal and are supported by autozone and allow us to utilize their meeting rooms to benefit the Linux community. And in this has been a pretty big topic and was expectted.
Essentially, Sco had a choice a long time ago, start making more advanced products that can compete. When this did not occur they lost their market share. Now they are calling foul when they are not able to compete.
Need some computer parts?, perhaps a new headlight, some oil, washer fluid... Neon for you cpu case. Driving gloves for those long coding sessions?
You know where to go now...
In a positive way for a change. I'm going to go out and buy a new set of plugs, a filter and a case of oil right now.
It's nice to be able to add someone to the "support them" list instead of the Boycott list, like EV1.
Hang Tight, AZ. You've just gained a mess of geek support.
I'm assuming here that AutoZone is in fact not using SCOs shared libraries, based on the Groklaw post referenced in several other places. If they ARE, then thats also trivially provable, and AutoZone will either settle or claim that they're entitled to use the libraries this way. Either way, this case will not be about what SCO is pretending it's about.
As a symbolic gesture, I suggest people go to AutoZone and buy an air freshener.. Symbolically, it'll help clear out the stink that SCO's making. Total cost to you: $1-$3.
Put your money where your mouth is: AutoZone Reigonal Store Locator
Even if SCO succeeds, AutoZone will be able to pay them off via air freshener sales to thoughtful Linux users.
Cheers,
Bowie J. Poag
But here's a link to a yahoo news report filed this morning at 8:21am re: this law suit.
;)? (Still $20,000 too much if you ask me!).
An interesting part is a few paragraphs down;
"Total revenue fell to $11.4 million from $13.5 million, though the most recent period included $20,000 in licensing revenue from Linux users."
Does that settle the argument over how much EV1 paid for their licenses
I have to admit, choosing AutoZone was a good move on his part in order to spread his FUD about Linux...
...
The lawsuit, filed in U.S. District Court in Nevada, requests injunctive relief against AutoZone's further use or copying of
AutoZone uses Linux in their stores, if they were to get this injuction they would effectively shut AutoZone down, a huge chain of stores that effects millions of both geeks and computer illiterate alike. And they (M$ and SCO) would obviously spin it as "See, look what using Linux gets you...."
I've seen an AIX command prompt on their machines at the kitchen-remodel department. Looked like a 43p-ish type machine.
So, Mr CEO Marsh, do you feel *more* protected from scox now that you have a contract with scox?
Remember the words of scox's cfo, chriss sontag: "contracts are what you use against parties you have relationships with."
What you have bought, for your $1M+, Mr Marsh? Now your company is much more at risk of a lawsuit from scox. Plus, you've alienated the linux community. Last I read, about 28% of your linux users are threatening to take their business elsewhere. What does it take to get a job like yours, Mr Marsh? An IQ below 80?
I work for one of AutoZone's competitors (of sorts...we do more wholesale than retail business).
I'm largely a counterpart to Mr. Greer from AutoZone.
We use an ASP-type approach. All of our software is text-based, with our primary servers running in our datacenter, with a large frame-relay network for connectivity. Each and everyone of our stores has a Linux system sitting in it, handling the terminals, printers, desktop (Mozilla, OpenOffice, etc.), and back-office networking.
Our application servers in our datacenter still run on SCO, with Sybase running under W2K (at our vendor's request, at the time).
We're looking at doing the same thing as AutoZone sometime soon--a port to Linux server-side as well, moving to our app servers running Linux, and our database under Linux as well.
Here's one for hoping AutoZone pulls this one off right! The last thing I need is someone here getting into a panic over this crap!
SCO wants Linux users to buy licenses from them. So far, everyone SCO has sued has had a contract/license with them. SCO has said that contracts are tools to use AGAINST your business partners. Autozone was just one of the few companies that had a SCO Unix license (not a SCO Linux as far as I know). They will run out of SCO Unix customers to sue in short order. If you read the SCO Linux license you can see that it is very strict and easy to break (binary only, ie. can't compile your own kernel). Obviously they just want to sell Linux licenses so you can violate them. How many Linux users never compile the kernel from source? I bet not many. Looks to me that they just want to sell Linux licenses to get a bigger pool of companies to sue.
Here's the scheme:
- Darl McBride is a Mormon, and this fact has been commented on.
- He is engaged in clearly fraudulent behavior, and holding Mormonism up for scorn.
- The LDS has been known to kick people out for giving the church a bad rap (e.g. Alice Cooper was excommunicated.)
- So... Let's start petitioning to have Darl excommunicated!
Think about it - sending him to hell for eternal damnation is much better than sending him to some Federal love-feast prison for stock fraud. Believe me, Hell is a real pound-you-in-the-&*(*&# kind of place.(No, I'm not a Mormon, and am not seriously proposing this - but if I were a Mormon, I would consider raising the issue. There are any number of articles out there pointing out the Mormon influence in SCOgroup/Caldera. This kind of fraudulent and misleading nonsense does nothing to promote the Mormons' nice-to-little-old-ladies-and-family-values PR campaigns.)
"He who would learn astronomy, and other recondite arts, let him go elsewhere. " -- John Calvin, commenting on Genesis 1
So AutoZone broke the EUALA of UnixWare and put some binaray UnixWare .so files into some other OS (that happened to be Linux) without permission from SCO. If they had used a Linux only solution they would have bin fine.
Well, if this is the case, I hate to admit that I really think SCO should be compensated. After all if you have an agrement both parties are supposed to honer it. Just like SCO are supposed to honer GPL for their contributions to Linux.
This just shows that you should not under any circumstances do business with SCO.
God is REAL! Unless explicitly declared INTEGER
Unix is huge in the automotive software industry. Most part store cataloging systems use it not only on the backend servers, but the terminals as well. Autozone, Hi-Lo/O'Reilly's, NAPA, Pep Boys all at one point used this type of a setup. Firestone also used it during the 90's when I worked for them, but I don't know what they are running now.
If SCO filed this suit solely looking for a suitor to buy them out, they picked a good one here. Owning the rights to the system that literally every major parts house uses would give them a huge push over the top in the industry.
It gives them the impression of being more important than they really are. The issue moves from being an obscure geek-tech issue to involving a major company that does business with the average person.
Personally, I think a briliant move would be for IBM to cover AutoZone's legal fees. AZ doesn't need any help paying their fees; but I think it would be a HUGE public relations boost for IBM. It would be cool to see IBM step up and tell AutoZone that as a show of support, and to back up their assurances that they did nothing wrong during the Linux conversion, they will pay the legal fees.
Hot Damn! It's the Soggy Bottom Boys!
They obviously chose AutoZone because their terminals are clearly visible by customers. I wouldn't be a bit suprised if they go after Lowe's or Home Depot next. Those companies also run linux GUIs and customers can see the X terminals (and 5250 emulators) as they walk around the store.
Don't think that a small group of dedicated individuals can't change the world. It's the only thing that ever has.
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.
If there's a God in Heaven, and he's listening...please let Jim Greer find his documentation for this!
C'mon Slashdot - let's spend real karma for this! Bow your head and join me in a quick silent prayer to the Deity of your choice....
Weaselmancer
Weaselmancer
rediculous.
To implicate all of Mormonism into some sort of pro-SCO conspiracy is distasteful, but beyond that, rather unbelievable. SCO is fighting for exactly the opposite of the Mormon ideal.
They're a major chain, with a large number of real world employees. Jessie James does TV spot for them. Think Radio Shack, but for car stuff.
Having every Linux nerd in the world upset with you is one thing, but every car nerd, that's considerably more dangerous.
With luck, the lawyers (on both sides) will have SCO bled dry in short order and we can stop hearing about all this.
Since SCO licenses are reallly expensive, why not create a small--and relatively inexpensive--company that will assist you in your move off of SCO and/or help you install Linux in a way that doesn't violate any of SCO's IP?
Seems like there's a fortune to be made there.
My sister was an expert witness on an embezzlement case. The Judge prot em acting as binding arbiter admitted that he did not Know how to turn on a computer
The judge could not understand how she could retrieve data from a computer when the files were "deleted". My sister explained that information was kept in multiple files, and the just "deleting a file is like taking the tabs off the folder, but the files are still there".
The judge said "How do I know you're not just making that up?" and decided for the embezzler.
My company is looking at Mandrake and SuSe at the moment for that very reason. That and Redhat's support is horribly overpriced.
When I first read this, I wasn't familiar with who Auto Zone are. I assumed they were some low level parts company susceptible to being blackmailed by SCO. When I realised they were a major player/Fortune 500 company, I just shook my head. These guys keep picking on the biggest gorillas they can find, and you think they aren't stupid? Unless of course Billy Boy is funding them, in which case SCO is just acting as a front organization and it doesn't matter how dumb they are since it's M$'s nearly infinite resources at risk here. Someone really does need to do a RICO investigation here.
"Is this Winkhorst a nova criminal?" "No just a technical sergeant wanted for interrogation."
I'm baffled...
o fdesign/MA.CO URSE/09/LCH.htmlt lc-faq.htm#2.10
Is SCO still attempting to scare businesses into buying licenses? Even if they are I believe they are taking an egregious chance by attempting to fight on far too many fronts simultaneously. The gambit could be lucrative if (and only if I believe) Autozone and Chrylser settle out of court. Is this thinking completely incorrect? If the Chinese have a hell devoted to legal suberfuge, obfuscation, and litigation we're in it....
Other Chinese hells: (unrelated but intresting)
http://www.adh.brighton.ac.uk/school
http://www.wingkong.net/files/b
Will the German ownership (and subsequent court actions in Germany against SCO) of Chrysler play a part stateside?
I'm smart as a showbox, (empty one at that) so can someone please explain (and have relevant linkage to support said explainations)?
Well you should, if as you say you care "what the rest of the public thinks about Linux". If SCO wins, neither you nor very many people at all will be using Linux for awhile. Pull your head out of your ass and stop blathering. If SCO wins, they will, as you say, "destroy the public perception of free-software and Linux." Therefor, you should care if SCO wins or loses.
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
What's up with that? Doesn't the legal system kind of frown on shopping for the friendliest jurisdiction? Isn't the first move going to be to transfer jurisdiction to someplace sane? (Not a comment on Nevada's sanity, just that as a jurisdiction for this trial, Nevada makes no sense).
So, doesn't filing this in Nevada just serve to stall? Is this another SCO "we want the publicity from having done something, but we don't ever want anything to get resolved" move? Or have I missed something, and Nevada actually makes sense for some reason?
I'm somewhat amazed that nobody sees the apparent transparency here by the SCO (Sue Corporations Optimistically) legal team. I had expected them to sue some poor little corporation into non-existence, and then trumpet their 'success'. But they went after larger corporations with (theoretically) bigger legal guns. The goal with Autozone is to get a cheapo settlement from someone with only licensing fees at stake, then use that in their PR machine. The Damiler goal is something else- get embedded software licensing fees ($699 per car, bitte), and then using that on everyone (Yo NASA- fork over for each of those rovers !). I see Autozone folding. I see Damiler fighting them like IBM will.
Why couldnt have SCO sue'd a regular linux user? Wouldnt there point havent got across better? This is just more blantant greed and its completely obvious. This is do or die for SCO, if they lose these lawsuits they are essientially not a major player anymore. They already arent, they have dug themselfs in a trench. Some buisness practices you just gotta bitch about.
Speaking of which... The thing I find most fascinating is that SCOX is actually down right now. Could it be that people are beginning to see through the FUD?
Naaahhhh.. Must be just part of this bizarre stock manipulation scheme.
Sheesh...SCO is not just burning their bridges, they are nuking them and spreading radioactive cobalt behind them. Who in their right mind would now EVER contemplate doing ANY business with SCO? I mean, even Microsoft tries to hold on to customers, but SCO is just light years beyond idiocy in their most recent moves of litigating against CUSTOMERS.
That's what I was thinking too. Plus, can they *actually* expect to just shut down a multi-billion dollar national chain store just like that, especially when their own statements make it clear that hey have no concrete evidence? And we all know how quick SCO is to find offending code...
do not read this line twice.
I think this shows SCO's future intentions of not having a company. Sueing your own damn customers? What kind of bullshit is that. Even if by some miracle they win, no one is going to buy SCO licenses. They soon rather migrate to bsd or even windows than buy licenses from a company that punishes it's customers. I wouldn't be suprised if EV1 bought the licenses because SCO was going to sue them and they decided they didn't want to be involved in a long drawn out suit.
If Novell sent permissions to the defendants here on behalf of SCO, pursuant to Novell's ownership of the copyrights, maybe too a judge could be convinced to just throw the suits out.
Isn't that a recipe for some serious stuff coming back at them from the other side of the Atlantic?
SCO has to know that DC won't just keel over (they have lawyers too, better ones then SCO does) and buy licences, or SCO itself. DC is one of the largest corperations on earth. SCO is an insignificant mosqueto in comparison. Why does SCO believe that that it won't be slapped?
Hmm, DC is big enought that they could try for a private prosicution of SCO for fraud charges. That would be intresting to watch.
In the call (at about 16 minutes), Darl directly compares SCO suing end users to the RIAA suing p2p users. Gee, I thought only slashdotters made this connection :)
Poor taste aside, whenever I put on my Aluminum Foil Deflector Beanie, I find myself wondering if SCO's executives haven't got some sort of backroom deal with certain large anti-linux companies to commit a metaphorical corporate "suicide 'bombing'(litigation)"...
Is the intended end result that SCO goes completely bankrupt in a flashy manner trying to sue as many large alleged 'infringers', such that they hope to leave a cloud of 'legal uncertainty' over Linux due to the lawsuits being left unfinished when SCO ceases to exist?
("There was so much infringement that we went broke before we could have those Linux miscreants punished! Oh, woe is us! Thankfully, due to my job experience dealing with the horrible illegalities that we allege in Linux, Microsoft has gladly offered me a new job on the newly-created Linux Legal Issues department, where I can continue to spread my warnings...")
Hacker Public Radio is our Friend
According to ZDNET, "The Nevada court where SCO has filed a lawsuit against AutoZone over its use of Linux is itself a user of the open-source software." Apparently the court has its own web site running on Linux. If SCO loses they can appeal based on a conflict of interest.
Insert Generic Sig Here:
(Anon post for whore-avoidance)
OUR TAKE
SCO Digs a Deeper Hole
By Seth Jayson
March 3, 2004
Hey, if you're not making money the old-fashioned way, you might as well see what you can get through lawsuits. That seems to be the primary strategy these days at UNIX software provider SCO Group (Nasdaq: SCOX).
The trouble is, the company's litigious attempts at jump starting revenue cost a lot more than they bring back. This morning's first-quarter earnings provide a revealing glimpse at this poorly executed strategy.
For those who need a brief recap, SCO appears to own a version of UNIX that it claims has been duplicated, at least in part, in the open-source operating system Linux. For months now, the company has been threatening to sue anyone who uses Linux without paying SCO a license fee. Verified targets have so far have included IBM (NYSE: IBM) and Novell (Nasdaq: NOVL), which build and support Linux enterprise software.
In response to these shakedowns, a band of technology companies including other heavy-hitters like Intel (Nasdaq: INTC), Dell (Nasdaq: Dell), Red Hat (Nasdaq: RHAT) and Hewlett-Packard (NYSE: HPQ) formed a legal defense fund.
For the first quarter of fiscal 2004, revenues dropped 16% to $11.4 million. Losses totaled $2.3 million, or $0.16 per share, more than twice the $0.06 per-share loss from the period before.
But it gets worse. The red ink was tempered by a one-time benefit of $3.8 million related to a "change in fair value" of the derivative associated with its series A convertible preferred stock. Without this credit, the loss on operations would have amounted to over $0.37 per share. (Now we know why the maxim, "Earnings are an opinion." makes sense.)
It's my opinion that SCO is doing everything wrong. In addition to the horrific, self-inflicted damage to its reputation, the licensing-lawsuit strategy is delivering a one-two punch to SCO's bottom line. Efforts to license Linux cost SCO $3.4 million in Q1. That's right, one-third of total revenue was wiped out. The payback? $20,000. That's not a typo. I know guys who make that much mowing lawns for a summer. Moreover, the balance sheet already currently lists $8 million in liabilities to legal firms. That number is likely to increase with the firm's new lawsuit against AutoZone (NYSE: AZO).
With declining revenues, increasing losses, plus an expensive and damaging litigation policy, SCO looks like one of the best short candidates I've seen in a while.
Got Linux questions? Consult the experts in the Fool's Linux User's Group.
Fool contributor Seth Jayson wonders how much SCO would charge him for a Linux license on his home-built PCs. He has no stake in any of the companies mentioned here.
Please judge for yourself. .
Truly a classic interview on news.com. McBride compares his situation to OJ simpson, implying if the people they are sueing win and get off. Another interesting point was when Farber asks "what about the secure specialized versions of linux that people like the FBI and CIA use, will you be suing them to?" McBride: "No, we dont plan on having them named in the lawsuit tomarrow". McBrides interviews always seem to go in circles. http://news.com.com/2100-1014-5168921.html?tag=nl
It's especially amusing that that (R) after UNIX, because while they may or may not own the source code for unix, the UNIX name and trademark is something they certainly, 100% do NOT own.
Autozone has been relatively high-profile in their support of linux. Not only do they use(and pay RedHat for) linux, they host the meetings of the Memphis, Tennessee user's group(GOLUM) at their corporate headquarters in downtown Memphis! I believe Jim Greer, the guy that's being quoted a lot in this thread, is the former secretary of Golum.
So I HIGHLY suspect that this lawsuit has more to do with "punishing" a customer for their vocal support of linux instead of any real damages done to SCO.
If you live in the Memphis, TN area, please think about going to Golum to show your support! Their next meeting is tommorow, March 4th on 7:30pm at AutoZone HQ. Directions and map here. Parking is free, you just pull into their driveway in front of their HQ and park in the garage.
Fortunately for some of us, we have management that will actually listen to us. My boss trusts me that we have nothing to fear. Of course, we are a public school district, so we wouldn't exactly be first on their list. Companies suing school districts leaves a bad taste in the public's mouth. Microsoft is big enough to do it. SCO is not.
Hey SCO! I use Linux at work! Sue me! Children are exposed to Linux here! Sue me!
Qualitas edurus commercium, nullus penitus net rimor, nullus deus beneficium
Not only have you angered open source people, then IBM (general computer people), but now you have angered people in the automotive industry.
This means that you have also angered people from some of the most powerful political lobbyists and poeple who now see you as possible problems to their job security (UNIONS).....
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Time is on my side