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."

Comments

CA's Response (URL changed)

[AlabamaMike]

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

Lawsuits dig a deeper financial hole for SCO?

[Pelerin]

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.

Re:Lawsuits dig a deeper financial hole for SCO?

[Anonymous Coward]

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.

SCOsores hall-of-shame inductees

[glassesmonkey]

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

SCO: Leaked e-mail a 'misunderstanding'

[Anonymous Coward]

This article is more interesting:
http://news.com.com/2100-7344_3-5170181.html?tag=n efd_top

Re:SCO: Leaked e-mail a 'misunderstanding'

[Anonymous Coward]

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.

Techworld article on Leggett & Platt & CA

[glassesmonkey]

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.

Re:Blake inserts foot into mouth

[Wyzard]

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.

Re:More interested in what MS has to say

[3Suns]

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.

Re:More interested in what MS has to say

[ces]

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.