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The Microsoft/SCO Connection

rocketjam writes "CNET is running a long question-and-answer format article which takes an in-depth look at the relationship between Microsoft and SCO and the financial support SCO has received both directly and indirectly from Microsoft in their ongoing litigation alleging that Linux violates the intellectual property rights they claim to hold on UNIX. The article details the money Microsoft has paid to SCO to "license" UNIX as well as the role they played in BayStar's $50 million investment in SCO in late 2003. Microsoft paid SCO $16.6 million for a UNIX license. The only other company that has come close to paying SCO that much money for a license is Sun, who paid $9.3 million to license UNIX for their Solaris operating system."

26 of 285 comments (clear)

  1. Antitrust by Arbin · · Score: 4, Interesting

    You'll note in the article he states that this isn't quite an anti-trust violation, but rather an act of a competitor suing a competitor. That's not the case, it's more like a competitor trying to get the little company to step up to the behemoth. Looking at how this is setup, I'm confused... How is this NOT an anti-trust violation? They're attempting to 'destroy' the competition in unethical manners.

    1. Re:Antitrust by Atzanteol · · Score: 3, Interesting

      I agree. As far as I'm concerned the money was *laundered* thought the Unix license.

      It's not blood money, it was for a Unix license!

      --
      "Ignorance more frequently begets confidence than does knowledge"

      - Charles Darwin
    2. Re:Antitrust by 4of12 · · Score: 2, Interesting

      How is this NOT an anti-trust violation? They're attempting to 'destroy' the competition in unethical manners.

      Microsoft's actions may be unsavory, but I don't think they're illegal.

      Why not an anti-trust action? Probably the question would be whether MS is unfairly using its dominant market position to quash a competitor. It's trying to quash a competitor through sleazy tactics, but those tactics in this instance do not include abuse of its dominant market position.

      Arguably, all of its actions, investment in SCO etc were equally open to anyone, such as Apple, for example.

      Even the stinky 800lb gorilla deserves fair consideration and treatment.

      --
      "Provided by the management for your protection."
    3. Re:Antitrust by killjoe · · Score: 3, Interesting

      Theoretically SCO owes 75% (I think) of the license fee to Novell. Wouldn't it be funny if Novell demanded that cash now? SCO does not have much cash left. Last I checked it was less then 50 mil and of that over 30 is slated to go to the lawyers.

      --
      evil is as evil does
  2. Sun paid 9.3 million for what? by lildogie · · Score: 4, Interesting

    It will be interesting if (when?) Novell and Microsoft succeed in demonstrating that SCO has no clear title to "Unix." Depositions in the trial, by people who negotiated the contract between AT&T and SCO, seem to indicate that the Unix copyrights didn't change ownership. SCO just got right to copy, modify, and sell.

    Perhaps this was not beyond Sun, and perhaps Sun was just trying to weaken Linux in the marketplace. After all, Linux competes with Solaris. The 9.3 million could have been intended to support the company that was trying to throttle Linux.

    Still, if (when?) it comes out that SCO did not have a Unix copyright to license, then there will be some 'splainin for Sun to do, having paid SCO for a license to something SCO doesn't own.

    1. Re:Sun paid 9.3 million for what? by _Sprocket_ · · Score: 3, Interesting


      Depositions in the trial, by people who negotiated the contract between AT&T and SCO, seem to indicate that the Unix copyrights didn't change ownership. SCO just got right to copy, modify, and sell.


      One interesting point from Novell was that SCO's role was to further expand on existing Unix business. They were to seek out additional licensees, license, and then pay a considerable amount of that license back to AT&T (now Novell). The cute bit was the "ahem - where's our cut of these license fees that you claim to be collecting?"

      What didn't seem to get a lot of attention was the fact that this agreement did not involve existing business. In fact, existing clients were still AT&T's realm. Sun was one of those "old business" licensees. This further adds to the question of just what Sun was licensing and why.
  3. Love the article, but.... by _Pinky_ · · Score: 4, Interesting

    I wish there was some more references to the fragile legality many of SCO's claims are riding on.

    Getting C-Net exposure is great, and the article paints an obvious picture of the Microsoft contirbution to the SCO effort...

    But I just wamted the article to mention that all of SCOs claims are false, or at least unfounded...

  4. Novell? by jav1231 · · Score: 2, Interesting

    I wonder how much of that licensing money ever made it to Novell? See as how SCO only go the rights to license UNIX and was supposed to be a caretaker of the licensing. I'm thinking....uh...none. :) That's a lot of money to bank with giving that Novell now has documentation showing that they own the UNIX copyrights after all.

  5. No Conspiracies Here by Doesn't_Comment_Code · · Score: 5, Interesting

    It's pretty obvious that Microsoft doesn't like Linux. Linux is giving away what Microsoft sells. Microsoft sees an opportunity to help an enemy of an enemy ... and acts on it.

    I don't see any sneaky or suspicious stuff going on here. I think Microsofts actions are underhanded and not above-the-board. But I don't think there are any smoke and mirrors/conspiracies to be uncovered.

    --

    Slashdot Syndrome: the sudden, extreme urge to correct someone in order to validate one's self.
    1. Re:No Conspiracies Here by Kismet · · Score: 5, Interesting

      Ok, I remember when the first rumors were floated that MS was behind the BayStar deal. Someone leaked a memo and it got into ESR's hands.

      Do you remember what the FOSS people were saying then? This is huge, they said. If this is substantiated, then MS is in major trouble, they said. People were skeptical because it was such a big deal. It was hard to believe. It was a bigger deal than MS v. Netscape - remember, the one that nearly saw MS broken up by the government?

      Was it ever substantiated? You bet. But no one seems concerned anymore.

      What? The convicted monopolist puts "licensing" money into SCO's hands for a product that it will never need. Shady, but legal. Now, the same convicted monopolist has been shown to have quietly and indirectly supported SCO's bogus anti-Linux litigation using funds from an organization that has major ties to MS.

      How is that not a conspiracy? How is it, when "Microsoft sees an opportunity to help an enemy of an enemy ... and acts on it;" how is that not a conspiracy? Isn't that the textbook definition of conspiracy? Just because everyone knows about it doesn't mean it isn't a conspiracy.

      What I understand is that a convicted monopolist is still doing "business as usual," and nobody has called to re-convene the court. Why?

      It's not illegal to have a monopoly. It is illegal to maintain the monopoly by conspiracy. Microsoft has done this.

    2. Re:No Conspiracies Here by Camel+Pilot · · Score: 2, Interesting

      It's not illegal to have a monopoly. It is illegal to maintain the monopoly by conspiracy. Microsoft has done this

      Mod the fellow up! Am I missing something here?

      If SCO was litigating a commercial MS competitor (say Corel) would this not be something that could initiate another anti-trust case or review of their compliance to the current remedies set forth?

  6. But doesn't by mcc · · Score: 3, Interesting

    Doesn't Sun's UNIX licensing agreement predate SCO's switch to a screw-with-Linux-and-live-off-the-tips business model? I mean, unlike MSFT, it would seem Sun has the excuse they're actually selling a SysV derivative.

    1. Re:But doesn't by HiThere · · Score: 2, Interesting

      No.

      More completely, they had announced the suit, and the lawyers. The exact date of the Sun buy-in was, if I remember properly, last December, which would have been about 6 months. Now that would be when I heard of it, but I believe that this was because they HAD to reveal it in the SEC report, which was made on a quarterly basis.

      --

      I think we've pushed this "anyone can grow up to be president" thing too far.
  7. Re:Not Supprised by ajayvb · · Score: 4, Interesting

    I can't help feeling that M$ is a company that can't decide whether they want to cater to the server market or the home market when it comes to Windows.
    Honestly, they are interested in world domination (no, I'm serious about this).
    I know a guy who interned with them, and eventually accepted a full-time position as a program manager with them. Apparently, the most distinguishing (frightening to some) thing about Microsoft's vision is how big it is. They aren't interested in just getting into a market, but owning it or monopolizing it. They have the resources to take losses for years on end till they eliminate the small fry and own the market.

  8. Sun SCO connection by jonasmit · · Score: 3, Interesting

    if Sun paid 9.3 million why is there no discussion of their relationship with SCO? maybe I just missed it...

  9. Re:A surprise? by KarmaMB84 · · Score: 1, Interesting

    I believe the IE one is for IE's search side bar.

  10. I find this quote interesting by jd · · Score: 5, Interesting
    Without naming names, Goldfarb explained that BayStar received a call from a "senior" Microsoft employee, but not Chairman Bill Gates or Chief Executive Steve Ballmer. "When they started telling me what it was, I wasn't shocked (that) this was something they'd like to see prevail."


    It seems Microsoft did more than just act as a reference. It's not stated what was actually said, but for it to be "shocking" in an environment where competition is normally aggressive to hostile, we can assume that it was something highly out of the ordinary and probably very unethical.


    Although Microsoft seems to have been careful to not be "too" active in this lawsuit, it seems evident that they are far from innocent bystanders. If the SEC could find some guts, they really aught to be investigating this matter. If the objective is to intimidate potential Linux customers, or drain pro-Linux corporations of cash, provided the lawsuit really is without merit, and SCO & Microsoft knew this then I feel sure that there are provisions under racketeeing laws (esp. with regards to "protection rackets") that cover this situation.


    This, I think, is the point that the law enforcement agencies and SEC need to remember. (This is why John Mohammed could be found guilty for murders commited by Lee Malvo. The so-called "trigger-man" hypothesis. It doesn't matter if you feel this is right or wrong, what matters is that this is the viewpoint the law in the US currently takes.)


    If SCO is shown to be guilty of trying to extort money through the willful pursuit of lawsuits they knew to be without merit, then the Federal authorities have the legal right (and legal obligation) to take SCO out of business. You can't go around saying that racketeering is bad - unless it's by someone in Silicon Valley and/or a contributor to Government political funds.


    If, as I think increasingly likely, Microsoft is shown to have (from the background) put SCO in a position where SCO was going to shoot, then the "triger-man" hypothesis applies, which means Microsoft would also be guilty, even if their role was totally passive. It would be no different, in the eyes of the law, than the DC shootings, insofar as distribution of responsibility was concerned.


    If there's even the slightest suspicion of such a scenario, the FBI and the SEC should be all over this case, to determine who knew what, when, and how culpable that makes them.


    Of course, that's not happening. The SEC can't even be pressured into enforcing the whistleblower protection laws, in relatively minor cases.


    The ability of the SEC to stand back and ignore numerous laws, across the board, in spite of pressure from law enforcement, does not bode well. It does not bode well for industry, where upper management are now essentially being told they are at liberty to ignore any rules or laws they feel like. Good working practices produce good work, in good quantities. Poor working practices make things profitable in the short-term but kill the business in the long-run.


    It does not bode well for law enforcement, where we can expect those pushing for enforcement to be replaced by "pro-business" opportunists.


    It definitely does not bode well for Linux and *BSD. The outcome of this trial is almost irrelevent, as all Microsoft has to do is "lean" on someone else to start a new one. From Microsoft's standpoint, it makes more in a day from interest earned than it spends on propping up such lawsuits, and even if the lawsuit fails, it pretty much kills off whoever they used (and therefore a competitor). Microsoft might even pick up a little IP on the way. Linux and *BSD have to be "lucky" in every lawsuit thrown at them. Microsoft only has to be lucky once.

    --
    It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
  11. Re:Don't you get it? by DigitalRaptor · · Score: 3, Interesting

    SoundForge has nothing to do with Linux, but Microsoft does (or at least did) use Unix for the storage servers for Hotmail email.

    In fact, their best engineers spent 2 months trying to move Hotmail over to NT and finally gave up.

    I'm not sure what OS is behind the scense there now.

    --
    Lose Weight and Feel Great with Isagenix
  12. Re:Eliminate UNIX, More WinServer Sales by Eraser_ · · Score: 3, Interesting

    Right. Like Microsoft couldn't just buy back whatever rights they signed away, or ignore them like they do the DOJ. Look at Apple Computer vs. Apple Records. Apple computer keeps buying back their non-compete agreement one clause at a time, valid or otherwise.

  13. Old News... at least old suspicion by HiredMan · · Score: 4, Interesting

    When I first suggested that M$ was behind/involved in the SCO lawsuits in April based on the one of the later "Halloween" documents people seemed to suggest I was reaching and/or my medictaion dosage was wrong.

    You gotta say one thing for M$ - they are predictable. And they're not subtle either but I guess they don't feel they need to be.

    =tkk

  14. Re:words of wisdom by demonbug · · Score: 3, Interesting
    The enemy of my enemy is my friend

    This is a horrible fallacy. . .just look at US foreign policy failures over the last 50 years to understand in depth why these are NOT words of wisdom.


    Not a fallacy - it just depends on the scale (time scale, in this instance). The enemy of my enemy is my friend, at least as long as our mutual enemy is more of a threat than we are. As long as the SU was percieved by the Afghans, etc. as more of a threat than the US, they were our friends.


    He who can destroy a thing, can control a thing.

    This is also not often true... unless you define control as "determining how limited or non-functional something becomes". A few examples:
    1) Computer Software
    2) Love
    3) the environment



    Computer software: definitely true. The key is having the power to destroy, though. If I can threaten Microsoft with the complete and utter desruction of Windows, then I have control of it - either they do what I want, or they no longer have it. The trouble is that it is basically impossible to actually get that kind of control - there is no real way to completely destroy software. But the truism still holds.

    Love: This is not a "thing", so it really isn't an exception; also, one party alone cannot destroy love, as it is shared between two or more people - both of them have to stop loving for it to be destroyed, so no one has complete control over it

    Environment: If one and only one group had the power to destroy the environment, then that group would have power over it - they would decide exactly what controls there were, etc. The trouble is, multiple groups hold this power over the environment - there are innumerable groups that can damage or destroy the environment, so no one group has control over it.

    Completely off topic, but hey.

  15. Re:not surprised by HiThere · · Score: 5, Interesting

    I deny the presumption that MS is not evil. It's true that many monopolists have been worse, but this does not exonerate them.

    They have repeatedly used force, fraud, and intimidation to put competing businesses out of business. Often these techniques were used to allow them to buy the business for pennies on the dollar. Occasionally they would end up in court. Sometimes despite the immense advantage that having more money gives in that arena they would lose. But what they were legally determined to be guilty of is a small fraction of what they have, in fact, been guilty of.

    That "this is to be expected" may be true, but it's no excuse. The sole reason that it's to be expected is the sneaky, unlawful, and underhanded method of doing business that Microsoft has engaged in for decades. That they are rarely convicted of their real crimes say more about the way the laws are written and enforced than about any legality of their actions. The laws that they break are designed to be difficult to prove the transgression of. And only an district attorney or attorney general could bring charges for many of their actions, not the wronged party.

    --

    I think we've pushed this "anyone can grow up to be president" thing too far.
  16. RE: Anonymous Idiot by jcole · · Score: 2, Interesting

    "You are the Gibberish Master. Let me guess, you work for Microsoft."

    If you are too stupid to understand my point, and wonder why you are modded as Flamebait, let me sum it up in 2 sentences:

    Open Source is a phenomenon that is not fully understood. Companies need to work with Linux, not against it, in order to survive.

    And, for the record, I don't work for Microsoft or use any of their softwares. I strictly use Linux for all my computing wants and needs.

    -Joe

  17. Get the Facts ?? by PacketScan · · Score: 1, Interesting

    They are at it again..
    I don't care that it's "someone" in the microsoft organization that told Baystar that Sco would be ripe for the pickings.
    The Fact that this person works for Microsoft makes me want to go back to school and become a lawyer. When will the FUD from this organization end?

  18. This costs Microsoft money by Anonymous Coward · · Score: 1, Interesting

    I'd like to see some numbers on how much Redmond spends on fighting Linux and Open Source. What is also interesting is that MS would do this indirectly, which indicates that there is a belief in Redmond that fighting Open Source and Linux publicly is dangerous. Sweet.

  19. Solaris - open source by Wannabe+Code+Monkey · · Score: 2, Interesting

    Can anyone explain to me how Sun can open source Solaris which was licensed from SCO while SCO is suing IBM for supposedly putting AIX code (under license from SCO) into Linux? I understand that the licenses to IBM and Sun could very well have different clauses and the open source license Sun is planning to release Solaris under probably won't be GPL-compatible... but still, how is this possible?

    --
    We always knew Comcast was corrupt, here's the proof: http://tech.slashdot.org/comments.pl?sid=1909890&cid=34545432