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More on Recent SCOings On

An anonymous reader writes "Blake Stowell, SCO's director of communications, acknowledged that the leaked memo is real." However, Stowell went on to say that the memo was misunderstood, and that Microsoft has not been funding SCO, as was previously alleged. In addition, Computer Associates is now vehemently denying they ever licensed Linux from SCO. AlabamaMike writes "Being employed by Computer Associates myself, I had to admit I was terribly dismayed by the news that the company I work for had licensed SCO's dubious Linux IP. I sent some mail around to those I thought would have some info about what was going on with this very odd move, and the response that came back truly should be posted for the /. community. Basically this is a very creative spin on a settlement CA did with Canopy Group regarding a breach of contract settlement totally unrelated to Linux. Associated with that settlement was a set of UnixWare licenses to which SCO has taken the liberty of attaching these 'Linux IP' licenses."

27 of 569 comments (clear)

  1. CA's Response (URL changed) by AlabamaMike · · Score: 5, Informative
    CA Says It Didn't Pay SCO No Stinking Linux Tax

    The Linux faithful have been hammering Computer Associates as a heretic since the British publication Computer Weekly quoting the SCO Group's CFO Bob Bench identified CA Thursday as one of SCO's rare Linux licensees.

    CA senior VP of product development Mark Barrenechea says that Bench's claim is nonsense. CA has not paid SCO any Linux taxes, he said.

    Drawing up short of calling SCO a liar, Barrenechea claims that SCO has twisted a $40 million breach-of-contract settlement that CA paid last summer to the Canopy Group, SCO's biggest stockholder, and Center 7, another Canopy company, and has turned it into a purported Linux license.

    As a "small part" of that settlement, Barrenechea said, CA got a bunch of UnixWare licenses that it needed to support its UnixWare customers. SCO, he said, had just attached a transparent Linux indemnification to all UnixWare licenses and that is how SCO comes off calling CA a Linux licensee.

    But when CA agreed to that settlement, Barrenechea said, "It was not CA's intention to become a Linux licensee. It has nothing to do with CA's product direction or strategic direction," he said.

    CA has absolutely no sympathy for what SCO is doing, Barrenechea said, and in fact, he said, reading from a formal statement, it stands in "stark disagreement with SCO's tactics and threats."

    Barrenechea and CA's Linux chief Sam Greenblatt are worried that CA will be tarred with the SCO brush and that CA's considerable Linux ambitions will be damaged by a disaffected, if not hostile, open source community when in reality CA has "nothing to do with SCO's strategy and tactics," they said.

    CA was the mystery company SCO was thinking of when it announced last August that an unidentified Fortune 500 company had supposedly become a Linux license. SCO privately described the deal as "significant."

    CA couldn't disassociate itself from the rumors that identified it as that licensee because of an NDA that the Canopy side had insisted on hedging in the $40 million settlement with, Barrenechea and Greenblatt said.

    Barrenechea said that SCO now regards that NDA as being off because of the legal discovery that's been going on in SCO's $5 billion suit against IBM.

    See, SCO lawyer Mark Heisse in a letter dated February 4 to IBM lawyer David Marriott at Cravath Swain identified CA, Questar and Leggett & Platt as Linux taxpayers.

    According to that letter, which is up on the Groklaw site, Heisse owed IBM a copy of the CA agreement on CD.

    Barrenechea said that SCO was dropping CA's name to associate itself with the "third-largest software company in the world" and build support for its "lost cause."

    But according to Barrenechea, not only are SCO's IP ambitions doomed, but its Unix interests are a "trailing negative" on the road to dropping from 10% of the market to 3%-5% in a few years and then "SCO will be irrelevant," he said.

    By the way, CA doesn't have enough UnixWare licenses to cover all its Linux servers, Greenblatt said.

    In answer to CA's contentions, SCO said its lawyers think that CA has a Linux license.

    Meanwhile, Bench also told Computer Weekly, whose story was picked up by sister paper InfoWorld and maybe other properties in the IDG stable, that SCO had signed between 10 and 50 Linux licenses.

    The new URL is: http://blogs.cocoondev.org/dims/archives/001770.ht ml
    --
    Pimpin' all the Karma Hoes!
  2. Lawsuits dig a deeper financial hole for SCO? by Pelerin · · Score: 5, Informative
    The Motley Fool thinks so. Money quote:
    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 the first quarter. That's right, one-third of total revenue was wiped out. The payback? Twenty thousand dollars. 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 company's new lawsuit against AutoZone

    Translation: every new lawsuit that SCO initiates costs SCO money in legal fees (and you know Boies doesn't work cheap) and other costs.

    The whole article is here.

    1. Re:Lawsuits dig a deeper financial hole for SCO? by Anonymous Coward · · Score: 4, Informative

      It's a bit weirder than that. Roughly $9 million of their last year's income was Microsoft doing UNIX licensing. This was money they would not have gotten without the licensing, and basically adds up to Microsoft funding the lawyers.

      Add the $86 million from other Microsoft deals recently revealed on slashdot, and it amounts to Microsoft funding the lawsuits at a 10-1 profit ratio for SCO. As horrid as that is, so far it's an effective business plan for them.

      Anti-competitive and illegal, but not the first time a corporate entity has attacked deadly enemies through funding lawsuits vicariously. Look at the destruction of Cult Awareness Network by the Church of Scientology funding fraudulent lawsuits for a more successful example of the approach.

  3. SCOsores hall-of-shame inductees by glassesmonkey · · Score: 5, Informative

    No. 1 is EV1Servers.net who announced SCO lied about how much they were paid (Microsoft is a fan of EV1)
    (little did the CEO know when he made the deal that SCO planned to 'worth' him out of seven figures)

    No. 2 is CompterAssociates who announced SCO lied about "linux licenses" which are really from an unrelated settlement

    No. 3 is Leggett and Platt say SCO lies and they don't have a license and "would not have an interest in doing so"

    No. 4 is Questar Gas said they just wanted to get things over with and also runs Apache/1.3.26 (Unix) on Windows 2000


    Make sure *you* are Legally Unencumbered(tm) by getting a SCOsores license
    and don't forget to head over and sign your Clean Slate contract with the RIAA

  4. SCO: Leaked e-mail a 'misunderstanding' by Anonymous Coward · · Score: 5, Informative
    1. Re:SCO: Leaked e-mail a 'misunderstanding' by Anonymous Coward · · Score: 4, Informative

      Late Thursday, a Microsoft representative told CNET News.com that the company is not financially involved in the SCO-BayStar deal, saying its only financial relationship is its license of SCO's intellectual property.

      "The details of this agreement have been widely reported and this is the only financial relationship Microsoft has with SCO," the representative said in an e-mail interview. Microsoft "has no financial involvement in the SCO and BayStar agreement, and (Microsoft) has no financial relationship with BayStar."

      When Microsoft was asked specifically whether it or any of its employees played a role in connecting SCO to BayStar, the company declined to comment.

  5. Techworld article on Leggett & Platt & CA by glassesmonkey · · Score: 5, Informative

    Since the site is horribly slow and I haven't seen the news about Leggett & Platt anywhere else, here's the text:

    05 March 2004
    Two of four SCO licensees deny their purchase Linux licence? What Linux licence?
    By Robert McMillan, IDG News Service and Kieren McCarthy, Techworld

    Two of the four companies that SCO has publicly named as having bought a licence from it to use Linux, have denied doing anything of the sort.

    Both Computer Associates and Leggett & Platt have been held up by SCO as purchasing a $699 (384) licence to cover the alleged SCO copyrights in the open-source operating system. But both have publicly stated that they have done no such thing.

    The chief architect of CA's Linux Technology Group, Sam Greenblatt, admitted the company had struck a deal with an investor in SCO over UnixWare licences and said that for each UnixWare licence bought, it was indemnified against a Linux box but he denied outright that the company had bought a licence specifically dealing with Linux.

    Leggett & Platt was even clearer. "I have now talked to our people who handle our Linux systems and, at least at a corporate level, we have not bought such a licence from SCO Group," said the company's VP of human resources, John Hale. "To their knowledge they would not have an interest in doing so."

    The denials come the same day that SCO was forced to admit an email appearing to demonstrate that Microsoft had helped fund the group to the tune of $86 million was real. But, the company claims, the email does not show what people claim it does.

    This same misunderstanding approach was used by SCO to explain CA's statement. SCO spokesman Blake Stowell said that CA had indeed obtained an IP licence for Linux in an email. "UnixWare licences allow SCO customers to run UnixWare and the SCO Intellectual Property Licence allows Linux end users to run our Unix intellectual property in binary form in Linux. Today, CA has a licence in place to run our Unix IP in binary form in Linux without fear that they may be infringing on our intellectual property."

    This hazy distinction angered CA's Greenblatt, who strongly objected to the portrayal of CA as a IP licensee for Linux. "To represent us as having supported the SCO thing is totally wrong," he said, before accusing the company's tactics as "intended to intimidate and threaten customers". "We totally disagree with [Darl McBride's, SCO CEO] approach, his tactics and the way he's going about this," Greenblatt added.

    SCO claims to have copyrighted material within the Linux open-source operating system and has embarked on a dramatic legal battle to enforce them. Earlier this week, it expanded its lawsuits to include one of its own customers and a company using the Linux software and warned that it "will take and continue to take" legal action against Linux end users. The company sees itself as educating people about its rights in the same way that the RIAA - the US music industry body - has sued individuals in an attempt to prevent the free trade in copyrighted music.

    However, one financial analyst said that the conditions surrounding the CA licence did not cast a favorable light on SCO. "I think it just speaks to the weakness of their case. Why could CA have not been convinced to take a licence without legal action," said Dion Cornett, managing director with Decatur Jones Equity Partners.

    The other two companies that have been named as IP Licence for Linux customers are EV1 Servers.Net and Salt Questar. Both have confirmed that they did purchase SCO's licence.

  6. doesn't seem illegal, but it's underhanded by Anonymous Coward · · Score: 2, Informative

    read the memo and the article. If I interpret it correctly, MS has been helpful referring SCO to potential investors. Since MS knows these firms, they do have some influence on them. It doesn't appear MS is directly funding it, but I'm sure they are indirectly funding/influencing companies like Baystar. Is this illegal? Nope! It is underhanded and sneaky. But did anyone really expect MS not to try? Grow up people, it's called business.

  7. Re:If Linux goes ... by Anonymous Coward · · Score: 1, Informative

    Yes, but as far as I'm concerned the usability stats go roughly like this:

    (i) chance of arbitrary user successfully installing linux on an arbitrary x86 box? (Including getting X server up and running, etc.) About %90.

    (ii) chance of arbitrary user successfully installing FreeBSD on an arbitrary x86 box? (Including getting X server up and running, etc.) About %10.

  8. Re:Blake inserts foot into mouth by Wyzard · · Score: 4, Informative

    Because the AutoZone suit isn't over AutoZone's use of Linux. It's over AutoZone's (alleged) use of proprietary SCO libraries on a platform other than UnixWare (presumably in violation of a license agreement)

    The fact that the "platform other than UnixWare" happens to be Linux is irrelevant -- as someone else around here put it, AutoZone could be using Commodore 64s and SCO would still sue them for using UnixWare libraries there. SCO wants you to think the suit is over Linux, but it's nothing of the sort, and if AutoZone had never done business with SCO in the first place, and just used Linux from the start, this lawsuit wouldn't have occurred.

  9. Re:More interested in what MS has to say by jonathan_ingram · · Score: 3, Informative

    owns a significant chunk of TrollTech

    Employees 64.7%
    Borland 8.3%
    Trolltech Foundation 5.2%
    Orkla ASA 4.3%
    Northzone Ventures 4.3%
    Teknoinvest 4.3%
    Canopy Group 4.1%
    Previous employees 3.4%
    SCO Group 1.6%

  10. Re:Why is this so hard to understand? by mcx101 · · Score: 2, Informative

    If they get Linux they'll use that as precedent for *BSD, OS-X and anything else they can get a hold of.

    Successfully suing IBM or others re Linux is not a precedent for suing any 4.4BSD derivative. However, a successful lawsuit against a company using a 4.4BSD derivative might be a precedent for a successful Linux lawsuit where BSD code has been used in Linux.

    Of course that's not really what the issue is at all. SCO is unlikely to sue a BSD user or a company selling a BSD derivative. They may try and claim that some of the proprietary code in BSD which was removed in the AT&T settlement made its way into Linux, or that copyright notices on BSD code were removed. You should have a look at this article which cleared the matter up for me.

    --
    My operat~1 system unders~1 long filena~1 , does yours?
  11. Re:More interested in what MS has to say by 3Suns · · Score: 4, Informative

    IANAL, but if you ask me, secretly funding another company to baselessly sue your competitors is pretty close to vexatious litigation and abuse of process. Paying another company to defame your competitors is pretty close to libel.

    --

    -3Suns

    ~~~~
    The Revolution will be Slashdotted
  12. Refresh an old-timer's memory please by Anonymous Coward · · Score: 2, Informative

    When I worked for Tandy back in the good old days, Microsoft supplied us with the Xenix OS for the 68000-based systems (Model 16s & 6000s). At some point in the early 80's, Microsoft sold off the Xenix system (then based on Unix v7, if I recall) to Santa Cruz Operation. My understanding was that M$ owned 25% or so of SCO as part of that deal.

    Did this change or am I senile?

    1. Re:Refresh an old-timer's memory please by zhenlin · · Score: 2, Informative

      The SCO that bought Xenix from Microsoft is not the SCO that currently owns Xenix.

      That is to say, the SCO that bought Xenix is now Tarantella and the SCO that currently owns Xenix was Caldera.

  13. Re:We all knew. by saigon_from_europe · · Score: 2, Informative
    Most industry analyists knew that Microsoft was concerned about Linux. But I for one never quite realized that Microsoft was in a panic.

    Well, it still does not have to mean they are in panic. Probably they are, but let us consider the situation even if they are not:

    Linux (better said Open Source) is only obvious threat for them at this moment. With their huge pile of cash, they can afford to spend 100 millions on one target - Linux, in this case. Destroying commpetitors is allways worth of money. And having in mind their attitude toward competitors - it is allways worth of a lot of money.

    One more interesting thing in whole this story - (if I understoof correctly) SCO is suing their own costumers over some SCO Unix librarires. IIRC, that was the story before the legal process related Linux kernel was announced. Also, most parts of their case against IBM are abandoned by SCO, reducing it basically to contract infrigment.

    So the situation is like this: we are speaking in public about millions of lines of code. But we are sueing IBM about some other things. We are speaking about sueing top 500 companies about Linux, but actually we are sueing only those who used to be our customers over some libraries issues. Problem with this is that in public this seems like they are sueing Linus over stealing code and sueing everyone because of use of Linux.

    If this is not misuse of legal system, if this is not ilegal, then I really don't know what the justice is.
    --
    No sig today.
  14. The Constitution by rjh · · Score: 3, Informative

    They'd just be a potential witness.

    The United States Constitution guarantees that litigants will "have compulsory process for obtaining witnesses in his favor" (Amendment VI). While Amendment VI is construed strictly towards criminal trials, the right to have a compulsory process to obtain witnesses has been construed to also apply to criminal trials.

    A subpoena is the classic tool used to compel witnesses to testify. MS has no protection from subpoena just because it isn't a direct party to the lawsuit(s).

  15. Entire Text of LA Times story by sik0fewl · · Score: 3, Informative

    You got all the good stuff but here's the whole thing.


    SCO Confronting Its Creation Company's CEO is taking precautions as the head of the 'most despised' tech firm.

    From Bloomberg News

    Darl McBride, chief executive of SCO Group Inc., says he sometimes carries a gun because his enemies are out to kill him. He checks into hotels under assumed names. An armed bodyguard protected him when he gave a speech last month at Harvard Law School.

    Linus Torvalds, creator of the Linux operating system, calls SCO "the most despised company in technology."

    The reason: SCO Group is claiming rights to the Linux open source software code that thousands of users and supporters say should have no owner. SCO filed a $50-billion suit against IBM Corp. last year and on Wednesday turned on Linux users DaimlerChrysler and AutoZone Inc., seeking an injunction and unspecified damages.

    "We are fighting the big battle," McBride said in a telephone interview from his office at SCO headquarters in Lindon, Utah, 40 miles south of Salt Lake City.

    McBride, 44, is pitting SCO against an industry it once helped develop. Less than two years ago SCO, formerly Caldera International Inc., was helping to form a standard version of Linux to compete with Microsoft Corp.'s Windows. Once McBride took the helm in June 2002, SCO changed tack, hired attorney David Boies -- who won the government's antitrust suit against Microsoft -- and began claiming that Linux users infringed SCO's intellectual property.

    Linux has attracted thousands of individuals and firms, some of whom see it as the only credible threat to Windows. Others use it because it's cheaper.

    The software is now being used by companies ranging from DaimlerChrysler, the world's largest maker of luxury cars, to Lehman Bros. Inc., the fourth-largest U.S. securities firm by capital, to Google Inc., the world's most widely used Internet search engine. Lockheed Martin Corp., the world's largest defense contractor, also has servers that run on Linux as part of its computer network.

    IBM pushes computers that run on the Linux operating system. Shipments of Linux-powered server computers, fast machines used to run websites, rose 53% in the fourth quarter, more than double the rate of Windows servers, according to market researcher IDC.

    McBride and SCO are more hated than Microsoft, the world's largest software maker, and its Chairman Bill Gates, according to some Linux backers. That's because SCO, once a backer of Linux, has turned around and attacked the essence of the system: its free source code.

    "SCO are just complete hypocrites," said Jeremy Allison, co-author of Samba, an open source software that runs a file and print service that SCO sells.

    SCO says it owns the copyright to the Unix system and that parts of the Unix code have been copied into Linux. SCO is demanding payment from each user of Linux. Novell Inc. separately is disputing SCO's claim to Unix.

    SCO claims IBM is distributing the Linux software containing its copyrighted Unix code. It claims companies such as Red Hat Inc. are building products using the same code.

    DaimlerChrysler spokesman Han Tjan said he had no comment on SCO's lawsuit. AutoZone CEO Steve Odland declined to comment on the claims. IBM spokeswoman Trink Guarino said the lawsuit is groundless and the company will contest it.

    "The real reason why people don't like SCO, and Darl McBride in particular, is that he is so dishonest," Torvalds, 34, said in an e-mail.

    --
    I remember when legal used to mean lawful, now it means some kind of loophole. - Leo Kessler
  16. Re:More interested in what MS has to say by jdgeorge · · Score: 2, Informative

    IANAL, but understand enough about law to know when you have to qualify arguments with "pretty close," you would be better off not showing up in court to try and prove your point.

    Well, Blake (or is it Darl?), I think what this guy really means by "pretty close" is "spot on". Among the literate, this is known as litotes.

  17. Re:More interested in what MS has to say by ces · · Score: 4, Informative

    Not quite right the sequence of events is more like the following:

    UNIX developed at AT&T Bell Labs
    AT&T begins licensing UNIX commercially.
    AT&T sells all intrest in UNIX to Novell.
    Novell sells it's Unixware product and certain rights related to UNIX licensing to old-SCO. They also donate the UNIX trademark to The Open Group.
    Old-SCO sells the rights it bought from Novell, Unixware, OpenServer, its reseller network, rights to the SCO name, and its Unix consulting business to Caldera.
    Old-SCO changes its name to Tarantella.
    Caldera changes its name to The SCO Group.

    --
    Happy Fun Ball is for external use only.
  18. Re:SCO going bankrupt won't help by the_flatlander · · Score: 2, Informative
    Because part of going bankrupt is to divest all assets, including Intellectual Property. Someone (like Microsoft) would probably leverage their power to buy all Intellectual Property interests left by the demise of SCO and continue these lawsuits on their own.
    And that is what IBM's counter suit is for. There will be no remaining "Intellectual", (or any other, for that matter), property left when IBM's patent infringment and Lanham Act violations damages are awarded. This disease dies with the SCOundrels!

    The Flatlander

    Hey Darl? Is that a subpoena in your pocket? Or are you just happy to sue us?

  19. Re:More interested in what MS has to say by rixstep · · Score: 2, Informative

    It is interesting, and spine-tingling even, and definitely relevant, but you have to go farther back in history to see the relation.

    In the early 80's, Gates was still intent on getting out from under the skirts of IBM. He'd succeeded in getting the MS out of DOS to sell it himself. And in one fell swoop, he bought a source code license to Unix and the Lattice C compiler.

    The C compiler was not Unix compatible. That's what his own engineers changed for the first release.

    At the same time, he handed over the Unix source to SCO. Their contract was to produce XENIX for Bill. At that time, people were still entertaining getting Unix onto PCs of the day. AT&T even tried.

    In 1989, David Cutler had been under a Microsoft roof about one year. He had come cross town with his entire Prism team, including the hardware engineers he forced Bill to salary, even though they couldn't be used. And Microsoft were still 'helping' IBM write OS/2. And the only viable memory extension on the PC was the first LIM (Lotus Intel Microsoft) standard, which was not much to have.

    When LIM came out with their new improved standard, the waters broke through the dam and MS concentrated on Windows 3.0, released in 1990 - a year after their supposed investment in SCO, and a couple of years before Linus got his idea.

  20. Re:More interested in what MS has to say by CodeBuster · · Score: 2, Informative

    Congress can also impeach judges after they have been appointed, but in 228 years of American history the number of times that power has been exercised can be counted on one hand.

  21. Re:More interested in what MS has to say by Anonymous Coward · · Score: 3, Informative

    No, writs of mandamus are only used for when the petitioner has a claim of a legal right to compel the action. However, prosecutorial authority is absolute, that is, prosecutors have complete discretion in deciding cases to pursue, by common law and written law in some jurisdictions. Therefore there cannot exist a legal right of anyone to compel action of a prosecutor.

  22. Re:SCO by tiger99 · · Score: 2, Informative
    Yes, their Linux was a better overall package that their Unix. They shot themselves in the foot on that one, by not putting enough development into Unix to keep ahead. Better still, they themselves could have legally merged the code, and made Unix free, earning real money from support etc, as the more commercially oriented Linux distros do very nicely. "If you can't beat them, join them."

    I have SCO (Caldera) Unix and SCO (Caldera) Linux at home, somewhere.....

    They don't licence Unix freely for personal use any more, because allegedly people were cheating and using it commercially. That is of course criminal, and should not be condoned. But I doubt that it happened on a large scale, there never was much sign that AT&T Unix for example was being copied illegally. Business users usually know that the penalties for being causght are too great, and if your servers are visible on the Internet, you will be caught, sooner or later.... I think the withdrawal of new licences for personal use was simply one of the first McBrideisms, trying to show how poor little SCO was being ripped off by unscrupulous FOSS people (who would of course not bother, because Linux or BSD offers more facilities, as I discovered).

  23. Re:More interested in what MS has to say by El · · Score: 2, Informative

    The old SCO sold their properties to Caldera and went bye-bye. Not quite correct. The old SCO realized pushing Unix was a doomed proposition, sold part of their properties to Caldera, and changed it's name to Tarantella (the dance, not the spider), which was the name of the old SCO's middleware product.

    --

    "Freedom means freedom for everybody" -- Dick Cheney

  24. Re:More interested in what MS has to say by krlynch · · Score: 3, Informative

    and whatever other courts that the supreme court shall deem useful.

    It's whatever other courts that the CONGRESS shall deem useful:

    Article III, Section 1: The judicial power of the United States, shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish. The judges, both of the supreme and inferior courts, shall hold their offices during good behaviour, and shall, at stated times, receive for their services, a compensation, which shall not be diminished during their continuance in office.