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::
Hmmm, I should contact them. Maybe they are interested in my bridge selling business too ...
No really....If that's their best Asset, They will go away that much faster.
Best plan evar!
My old sig was REALLY stoopid.
It's like watching Darth Vader turn evil and become the dark side as it reveals its true intentions. Soon they will become another geek household name to focus angst and hate against like MS and SCO.
CNN is carrying a story about one of the new investors in SCO, BayStar Capital Management, which wants SCO to "shake up its management and sharpen its focus on the potentially lucrative legal fight" and "spend less money on its Unix products." One has to wonder what BayStar is expecting as a reaction to their being so... blunt.
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.
Isn't RBE in for 30 million. thats more than Baystar.
How can Baystar be the "biggest investor" ?
April 21, 2004: SCO hires BertYoung as chief financial officer to replace RobertBench. Young's previous experience includes stints as CFO and COO of dot-bomb archetype marchFIRST. Obviously need a financial officer who will get them out of the trouble they have got themselves into Read more - http://sco.iwethey.org/
Business Voyeur
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!"
may be against Baystar. 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. which leads me to this: SCO painted a picture with *so* much recovery (lawsuit/licensing revenue) that it blinded them to the reality of situation.
one hopes that when the countersuits start flying that baystar is named as a defendant right under sco.
eric
My God! SCO's Biggest Investor Admits It Loves IP Lawsuits?! I am shocked! Shocked, I say!
Sincerely,
Pan Tarhei Hosé, PhD.
"Homo sum et cogito ergo odi profanum vulgus et libido."
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.
I think they should move from SCO to the Red Cross. The Red Cross could use someone who could miraculously get blood out of a turnip.
<sig>no sig</sig>
...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.
...no one is going to sell my bridge!!! I've spent a good deal of time making a nice home under here. Grrr... ;P
Un-news
Baystar chipped in $20 Million and RBC chipped in $30 million.
PS. As for the pan handler a good location can make them $30+ an hour on a good day here in Montreal And that's tax free. Don't feel sorry for his/her lack of income.. feel sorry about whatever addiction it's all blown on.
Any public mistake a hedge fund makes, usally means the end to the hedge fund. Their multimillion dollar investors won't stand for this and will start moving their money to one of the many other hedge funds.
Hedge funds are in the business of making money, and I would bet the Baystar has same amount of money invested in Open Source companies.
Hedge Fund don't lose money, they just make less.
Chris Southern
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:
>When the slashdot crowd are actually starting to like Darl for sinking the ship, THEN its a good idea to get rid of him.
Not only is McBride our top pick for steering SCO into the ground (taking the investors with him) by using his large mouth to talk about "millions of lines of literal copying" that they have again failed to identify -- thereby again failing to comply to the court order to be specific (the next hearing will be very interesting. Will IBM finally ask for sanctions, or are they just too nice for that? :-) -- but he's also raiding the SCO coffers all by himself, lifting $968,000 out of the company last year! Almost a million dollars in salary+bonus from a business that's a COMPLETE FAILURE! Well, I guess it's not a complete failure if you count the core business as being 'stock scams', but let's just pretend they're a litigation company instead.
McBride, we're on your side! Don't step down now -- You've got to ride this out (...and into that orange jumpsuit...).
Belief is the currency of delusion.
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
Did you know that America has far far more lawyers per 100,000 of the population than any other country in the world with something around 300 per 100,000. That number is increasing.
I think Britain is second with somewhere around 90 per 100,000.
Government of the people, by corporate executives, for corporate profits.
What are the social and legal effects of this kind of business going to create? In the unlikely event that SCO were to win big money for BayStar, other groups will begin to seek similar "investments." I see a progression here:
1. Mutual funds and VC groups begin to seek out luctrative litigation opportunities.
2. People begin to invest in these groups, because of the high rate of return. Skilled lawyers scour the land for untapped "violations" or negligence.
3. The well begins to dry up. Investors need to keep the cash flowing in. but the only targets left don't carry enough cash to make them good targets. So they lobby the Federal Government to mandate the remaining targets to carry insurance.
4. The risk is spread out, and we all pay more to keep BayStar's numbers in the black... with no social benefit whatsoever.
5. Repeat, industry by industry.
Trying to use sarcasm in text-based forums does not work.
But if you buy a linux licence like EV1 did, you get a subpoena by IBM, and end up in a lawsuit.
MORAL: Stay away from the Litigous Bastards
The use of collective nouns as singular or plural depends on the country, just like spelling. In British english collective nouns are often considered plural, referring to the plurality of employees represented by BayStar.
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
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!
It seems like anyone's not liking of criminal mismanagement and Pump-And-Dump rules would trump their like of IP lawsuits...
I wonder if they'll let Darl share cells with Martha Stewart?
I can count to 1023 on my hands. Ask me about #132.
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.
Something tells me that if they oust Darl he'll.......
Sue.
I personally find it relieving to see truth start to poke its head into play. This is why IBMs game plan is so strong, patience is a virtue, and they are execizing their power in a calm and controlled fashion. The key to a good lie is being able to use the lie and then put it behind you; SCOs lies and fabrications can't stand up to the light of this kind of media attention forever and now we see the curtain coming down. I dont think they realized how difficult continued deception can really be.
I was crazy back when being crazy really meant something. (Charles Manson)
It is my bridge and I am its troll you cannot live here without paying the toll.
[burn karma burn]
Pixels keep you awake!
I wonder why they want to be anonymous? The recommendation.
Does everything include nothing?
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.
Someone should spend the time to develop an RFC for a desperatly needed protocol: Lawsuit-over-IP
Baumi
They can't lose. If SCO prevails and Linux users have to pay, then they share in that income. If SCO is defeated, then they can sue Darl and company and share in the proceeds from that. Anyone would take that sort of deal. Anyone without a soul, that is.
Darl McBride is the best thing to happen to Open Source.
Only problem is that it will still be a year or so before we realize just how great of a service he is/was to us.
Companies to include your in boycott list
Open Standards Portal
Maybe that's why BayStar now wants their money back from SCO?
Not quite. My assessment is that they never expected Darl to go hog wild on the PR front, nor did they expect him to be "bright" enough (in his own parasitic, pathetic way) to realize he was being set up to drive SCO into the ground.
Looking at BayStar's backers, the initial move against OSS was tremendously clever and dangerous. By funding small battles in minor lands, the goal was to poison OSS. Apply a stigma to it, make it look shady, risky and dangerous and corporate America will stick with the institutions of Microsoft, Solaris, Oracle, SCO, etc. (this theory helps explain why Oracle and Sun have appearances of being on the "wrong" side of OSS and may be receiving subpoenas in the matter - Oracle already has).
Many of Groklaw's commentators have difficulty understanding why SCO, BayStar, Boies & crew, Sontag, and many other intelligent (ethics aside) people bet on such a ludicrous case. Sontag's recent copyright to patent morphing attempts, for instance, is terribly weak and Sontag clearly must be aware of it. But this case wasn't initially propped up to be the primary battleground between the proprietary software world and OSS. It was intended to be a lengthly skirmish between a pump & dump effort from a long-dead UNIX vendor and OSS.
What went wrong? They hired the right white-shoe legal firm for the job (Boies), greased the pols (Hatch) and got the right court. What they didn't expect is an effective, organized opposition (e.g. Groklaw) and more so, did not count on losing the traderag spin (you can bet there's been some money spent to protect that message, but you can't stop them from dropping the paid spin once the issue goes mainstream, although there still is the occasional hack for hire out there). Oddly enough, though, the greatest mistake was trusting Darl and Chris to remain stupid and unaware that they were being set up to fail. Darl in particular believed the lies and the thought that he could actually own the empire that controlled what is presently OSS got him. Imagine the power and wealth from being the CEO to own Linux? They shouldn't have underestimated Darl's ability to self-delude, let alone his greed and power drive. The created their own monster and can't control him (though BayStar is now trying to put the proverbial genie back in the bottle). BayStar has a slight problem in this move, though, as it won't immediately kill Darl and instead, may make him feel even more attacked. Having dealt with pump & dump schemers like Darl before, the last thing you want to do is corner him. BayStar should have moved to redirect (e.g. offer another $20 mil or so and slow things down and move the matter off of the front pages of the tech press. Either that, or promote Darl to some "critical" to allow him to focus on building the future super Linux company and "not be distracted from the day to day of nasty legal stuff" - anything to get him out of SCOg).
This truly is terrible news for the anti-OSS coalition. Fighting the main battle on this issue is a historic error. Should Linux be permitted to be decreed "legitimate and safe" through this process, you can expect Microsoft to lose its OS business within 5-10 years (being perhaps relegated to an office suite vendor), Sun left to push high-end AMD or Intel boxes, and Oracle simply to perish (hey Larry, can you say "Post-gres-ql?" I didn't think you could!).
IBM's motivation is tremendously historical. They got screwed by the OS play with Gates the first time around and are salivating at a royalty-free OS that frees them from bundling leverage and other annoyances, let alone the license expense. Although they derive their own benefit, kudos to IBM for escalating the skirmish into an all-out war.
*scoove*
what matters to 'outsiders' is whether they have a *chance* of winning a court case, not whether they have any real ip.
The day-to-day investors in this scheme are of little relevance. BayStar understands this case is a dog and it won't win. It had hoped, however, to fire off a plethora of anti-OSS IP cases to poison OSS for BayStar's real clients.
If you're trading on SCOG or any other BayStar venture, you'll eventually get hurt. Understand there are ways BayStar can make money while their investment tanks (I learned firsthand from one).
Should BayStar be working for anti-OSS clients (which it is), SCOG's litigation failure and demise is of no concern. It's a cost of doing business in the effort to make OSS untouchable to corporate America. That's the expected outcome. The grand-slam is getting Sen. Hatch and friends to push anti-OSS legislation, under piracy, homeland defense, etc. guises.
Die In A Fire
And so should each of their executives separately or all together.
People who just want to rub strangers together in the hopes that money will fall out are the kinds of parasties on humantiy that really need to exit the gene-pool.
Those who are proud of their position and goals in this respect need to willfully, and of their own violation, seek and recover the clearly present and valuable "gold like substance that marketers insist will be good for the economy" from within the heart of any really nice hot flame. They do, after all, seem to so enjoy the heat and entropy they try to extract from anything useful that comes near them.
They should do this dressed only in a festive goat skin, or perhaps the flesh of their offspring, equipped with only a cheap aluminium spoon.
First one out with a full jar of plasma gets an executive bonus, a writeup in CIO magazine, and a seat on a board of directors...
Innocent people shouldn't be forced to pay for inferior software development.
--"Code Complete" Microsoft Press