Slashdot Mirror
SCO's Biggest Investor Admits It Loves IP Lawsuits
Roblimo writes "A Baystar Capital spokesperson has finally admitted, directly and on the record to NewsForge reporter Chris Preimesberger, that they believe SCO's only viable asset is the potential proceeds of lawsuits against Linux users and vendors. 'We're looking for the best return we can, and we think the focus should be on IP licensing (and enforcement),' said BayStar spokesman Bob McGrath."
... is a bad investor. =\
::signature space for rent::
No really....If that's their best Asset, They will go away that much faster.
Best plan evar!
My old sig was REALLY stoopid.
Let's face it, business is about money. If some companies believe in "doing no evil", it's simply because, in the opinion of the founders/managers, "doing no evil" is a good way to make money. On the long term, though, pissing everybody off is probably not a viable business strategy. Sometimes you work yourself into a corner (like SCO has) and you keep making the wrong decisions in the hope that everything will turn out fine in the end.
Investor softens stand on SCO
Interpretation: BayStar wants McDarling gone because his big mouth is sinking the ship.
Belief is the currency of delusion.
But not nearly as unbelievable as it sounds. Like any 'good' software company, they believe their value lies in their IP, which it does. SCO seems to feel that people have infringed on their IP significantly enough for them to make a business out of taking money back from those whole 'stole' from them.
This in itself isn't really that horrible, because they're just updating their business model to profit off of all the supposed stealing thats been going on. That is, if they could somehow get licensing fees from everyone running linux, that'd be a viable business.
Of course, because it's SCO, no one really stole anything (as far as we can tell). And that's what makes them evil: making false accusations about infringement to drive stock price up, not pursuing what is rightfully theirs under the law.
The reaction shouldn't be "omg! software company thinks their IP is valuable!" it should be "omg! software company is making outrageous claims about what they own!"
They are only thinking of one factor here, return on investment. Simple economic theory is to put your money where it will grow the fastest. I mean really, who would by SCO!!! BayStar is just looking to get as much money as it can from a bad investment before it goes under, nothing more.
The flip side to this coin is that SCO might actually think that they have one friend in this fight, when actually, they trying to cover their own ass[ets]
You only live once, so you might as well have fun before you die.
Go not unto/. for advice, for you will be told both yea and nay (but have nothing to do with the question)
Sounds like there is somebody in senior managment who is just not suing fast enough or well enough to suit Baystar Capital. It is an odd state of affairs when a company, other than a law firm's, most important product is law suits. That's messed up, dudes. :P
Harpo Tunnel Syndrome--my wrist feels funny.
...is the problem with capitalism. The theory behind it is that when everyone chooses an optimally greedy strategy, society as a whole benefits. But you have cases like this where society clearly does not benefit, and countless hours of everyone's time are wasted. If the legal system were perfect, perhaps, then everything would be fine. But in practice it never is. My point is that people should be eternally vigilant rather than have blind faith in the system, which I perceive many Americans to have. And oh, another observation, don't confuse capitalism with the free market; the latter is unconditionally good, but the former is a double edged sword and needs a lot of checks and balances.
The fact that Baystar wants to "bet" so much money on a case that is not just up in the air, but leaning strongly in favor of IBM and Linux users, makes me think Baystar would be just as far ahead to take their 20M to Vegas and roll the dice.
:-)
Now that they've placed their bet, they should lose it. Nobody places a bet on a horse and then asks for their money back halfway through the race just because the horse is lame and the jockey is, well, Daryl McBride
-EK
Disclaimer - I don't gamble, nor do I promote gambling
There is nothing else that SCO has that is even remotely valuable. Nobody is going to want their outdated Unix anymore, especially since they'd be sued if they even looked cross-eyed at Linux. Suing your customers tends to drop ye olde customer satisfaction rating down quite a bit. The only way BayStar will come close to recouping their $20 million is if SCO survives long enough to win its suits. Both of those prospects are dubious at best. I think the big thing that BayStar (and others) will be learning is not to take investment advice from Microsoft.
Option 2 is expensive and risky by comparison. Sure, you want to develop new products, but if you are not milking what you can out of the existing ones, then there is no point in developing new ones! Management is being (criminally) negligent if it doesn't pursue option 1. LOTS of companies make money this way by licensing technology. If SCO does have a basis (or management believes it has a basis) for these claims, then management has an obligation to pursue this course.
The really interesting points here, however, are:
You were convinced by MS ot invest in SCO despite them havign no IT Ligation exp in IP lawsuits on the basis of what as theri Unix business is dead?
While Darl and friends really *aren't* the most ept at IP litigation (view the numerous mistakes made), and both Darl and Baystar pretty well qualify as scum (trying to push a set of claims that everyone involved pretty clearly knows is bogus, and en route damaging a project that tens of thousands of very bright people have built with their volunteer time), I doubt that Baystar is *really* thinking that they have a chance if senior management is switched at SCO.
It's not that uncommon to throw the CEO to the wolves (by which I mean "let go with a golden parachute to seek employment elsewhere") when things go sour, whether it's his fault or not.
The claim "focus less on UNIX and more on litigation" is, from what I know, pretty silly. SCO has been doing jack for their UNIX properties already -- Baystar may just be putting up a front of "we knew the right thing to do, SCO was a good investment, but their management screwed it up".
Oh, and as for people who say "they're only in it for the money" WRT Darl and Baystar -- yeah, no kidding. We formed a social and legal system that made money the sole master, where corporate executives are responsible only to shareholders, and only to increasing stock value. There is no provision in our legal system for, say, gross unethical action. Darl and all the MBAs and lawyers involved are doing *exactly* what we've chosen to have society reward them for. It's hard to complain when they do exactly that. If we want them to do something else, we need to make provision for that in law.
May we never see th
Almost every legal analyst says SCO chances to win are slim to none, yet for some reason, people are still investing in this stock. They'd have equal risk but higher payoff potential if they'd sink their money into the Powerball lottery.
Given that this is SCO, I imagine they'll:
a) Drop the current charges against IBM.
b) Make some new and even more vague charges.
c) Raise lawsuit to 10 billion dollars.
While SCO may be able to scare away people from switching to Linux, with all the defense funds that have been popping up, I strongly doubt they'll be able to scare any current users into licencing their IP. Baystar will never see any money from it.
The only one laughing all the way to the bank is Microsoft. I'm sure they love this spin from Baystar "This Linux lawsuit is what has value! Screw the rest, this is the goldmine" when in fact, it's a bloody weak card against a giant in IP. The remaining business is simply even worse.
Kjella
Live today, because you never know what tomorrow brings
Nay, I don't like seeing complete and utter idiots in any position of power or authority... this is why, no matter what I'll be crying for a little over 4 years following the November election.
Help Brendan pay off his student loans
the copyrights to UNIX System V. Not as far as Linux is concerned, anyways.
I suppose there is a chance that IBM could be found liable for breaking some contract provision they had with SCO over UNIX code. Perhaps some of that code may have even found its way illegally into Linux (although absolutely zero proof has been presented as yet).
The bottom line is that SCO will never see Linux users pay licensing fees to them for their IP because the WHOLE POINT of free software that the code is free! If any code is found legally infringing, it will be gone and replaced with restriction-free code.
Persuing a business model of getting licensing fees from free software is a complete non-starter: it will never work! Baystar (and RBC) are either completely oblivious to this fact, or are acting on MS's behalf to slow Linux's adoption. Perhaps both.
Look at the tomato! Isn't it sad? He can't dance! Poor tomato!
"i would assume that a capital investment company, especially one that invests in IP would do a complete and comprehensive evaluation of what they are investing in"
Why would you expect this after seeing investors pour money into dot.coms without checking them out just a few years ago? Many investors will throw money at whwtever they think the latest "Hot Thing" (TM) is without a second thought, and IP lawsiuts seem to be the latest "Hot Thing" (TM).
Quemadmodum gladius neminem occidit, occidentis telum est
From VA Linux's most recent 10Q filing with the SEC:
We rely on a combination of copyright, trademark and trade-secret laws, employee and third-party nondisclosure agreements, and other arrangements to protect our proprietary rights.
Nope. If you have banned corporations, you can't have a free market, or free capitalism. Corporations are nothing other than voluntary organizations where people get together to further economic or other goals. Things aren't very free if you ban these.
Bloodbath McGrath is telling SCO: Dump all your products, because they're worthless, and concentrate on suing people.
Isnt it a bit strange to have a company litigating for a business (Laywers included)? What overall value does a litigation bring to society? I would much prefer fines and other punishments because todays system encurage people to sue not for justice but for money alone. There is something fundamentally wrong if you can make more money by litigating than by producing goods and services.
It can only hurt the overall economy so i dont understand how it has survived as a system.
HTTP/1.1 400
From McGrath:
I think that statement (esp. adding "enforcement" to it) as well as this summary of the NY Times article by the author caused the OP to make the allegations.
According to those two statements, one could conclude that legal action is all Baystar is looking for.
I'm beginning to think that Baystar and RBC are indulging in the best troll and waste of time of Open Source developers ever, so I think ways of returning the favour should be looked into.
Is there any way we as a group can hurt both Baystar and RBC for a lot more than their 50 mil investment? Can we find out and boycott companies where they have a major stake? What other actions can we legally take to make sure that the message of taking on the OSS community is a very expensive hobby?
At the end of the day, SCo may be a smoking hole in the ground, but it would be nice if the puppetmasters felt the pain too.
Donte Alistair Anderson Roberts - hi son!
Karma: Chameleon
todays system encurage people to sue not for justice but for money alone
With all due respect,WTF are you talking about? What does it mean to "sue for justice?" In modern society, we have two forms of litigation, criminal and civil. In criminal litigation, society sues through its government to seek remedies against those who commit a crime. Those remedies take the form of incarceration and fines. In civil litigation, individuals sue for remedies due to economic harms caused by the conduct of another. Remedies are either legal (that is, money damages), or equitable (that is, an injunction from further conduct). The later is much rarer, mostly because litigation is too expensive to justify the cost of seeking only an injunction.
In that sense, why are you whining about people suing for money? That is, in fact, the ONLY reason to sue -- it is the only remedy the court has to give at the end of the day. Nothing else would make any economic sense.
It can only hurt the overall economy so i dont understand how it has survived as a system.
You make the strongest argument against your hypothesis with this conclusion. As you have observed, civil litigation has survived as a practice in every modern society on Earth today. People continue to invest in litigation, both asserting and defending, because it serves an economic purpose to do so.
It does not hurt the overall economy therefore, which is why it has survived as a system.
The bottom line, really, is to compare the presence of civil litigation
but its more like this:
Dump your products, because you are no good at, and have no special expertise in selling them. Let others do that, while collecting license revenues for their use of the intellectual property that you acquired, albeit from others.
The article has a quote where Baystar "told NewsForge Thursday that it doesn't believe SCO's senior management is experienced enough in IT litigation to fully reap the financial benefits from the company's intellectual property." The problem is, SCO doesn't really own any IP from what I have seen thus far.
They do not own the copyrights to the Unix source code, as that was explicitly exempted in the agreement between Novel and old-SCO. They do not own the specifications for Unix, which is now a public standard known as Posix. They do not even own the Unix trademark, which is owned by the Open Group.
It seems to me that all they really own is the abililty to license the Unix code that belongs to Novell, which is why they have to pay Novell a portition of the licensing fees they collect. The fact that Novell has the ability to override licensing decisions made by SCO (such as trying to void IBM's license in regards to AIX) indicates to me who is really in charge.
Personally, I hope Baystar suffers a huge loss for their decision to back such a stupid lawsuit.