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SCO's Biggest Investor Admits It Loves IP Lawsuits

Posted by timothy on from the and-even-baystar-isn't-happy-with-sco dept.

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."

7 of 270 comments (clear)

  1. Behind every bad company... by ObjectiveGiant · · Score: 5, Insightful

    ... is a bad investor. =\

    --
    ::signature space for rent::
    1. Re:Behind every bad company... by monkeydo · · Score: 5, Insightful

      Don't fall for Roblimo's deception. He's deliberatly distorting the story. He says that Baystar thinks, "SCO's only viable asset is the potential proceeds of lawsuits." But then he quotes the Baystar spokesman as saying the focus should be on licensing. Duh. That's how companies make money from intellectual property. Of course this is only possible if you can make the threat of legal action.

      So really Baystar never said they love IP lawsuits. They said they want to make money off of IP. I'm sure that they would much rather just collect license fees than have to sue, contrary to what the title and Roblimo's description imply.

      --
      Si vis pacem, para bellum
      The only thing more annoying than a Libertarian is an (un|mis)informed Libertarian
  2. Unbelievable! by haxeh · · Score: 5, Insightful

    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!"

  3. Maybe if SCO owned something to enforce by tiny69 · · Score: 5, Insightful
    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.
    That might be true if SCO actually owned something in UNIX that they could enforce. But Novell owns the copyrights, The Open Group owns the trademark, and SCO doesn't hold any patents on UNIX. Not to mention that 95% of the profits from licensing enforcement that they currently do goes directly to Novell.
    --
    Go not unto/. for advice, for you will be told both yea and nay (but have nothing to do with the question)
  4. No shocker by A.T.+Hun · · Score: 5, Insightful

    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.

  5. This isn't such a strange idea... by RecoveredMarketroid · · Score: 5, Insightful
    Now, I'm ABSOLUTELY not a fan of SCO's. But the basic IDEA expressed here is not such a strange one. Essentially, a company has two choices:
    1. Try to make money off that which you own and which is already developed, or
    2. Try to develop new profitable products/technology.

    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:

    • That they are explicitly stating they believe SCO is incapable of surviving by option 2!
    • Many non-technical people don't understand what a crock SCO's case appears to be. While the investors may just be cynical/evil, it seems quite possible that the they BELIEVE that SCO's IP is legitimately being violated. (Perhaps, after the lawsuits fail, the investors may sue members of management for misrepresentation?)
  6. Deception? by SeinJunkie · · Score: 5, Insightful

    From McGrath:

    "We're looking for the best return we can, and we think the focus should be on IP licensing (and enforcement)."

    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.

    ... company executives were spending too much time and energy "in publicity and debate" with open source advocates about Linux, rather than focusing on legal strategy.

    According to those two statements, one could conclude that legal action is all Baystar is looking for.