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SCO Owes Novell $2.5 Million
CrkHead writes "Groklaw has posted Judge Kimball's ruling on SCO v Novell. For those that have been following this saga, we finally get to watch the house of cards start to fall. For those new to this story, it started with SCO suing Novell and having all its motions decided in summary judgement and went to trial only on Novell's counter claims. Cheers to PJ for keeping us informed!"
The question is: Will Novell be able to collect?
Aren't they already bankrupt? So this money will come from where? Damn limited liability.Is there any way they can they go after the shareholders in any meaningful way once the company folds?
that they can't pay in SCO stock :) (or whatever moniker they go by now, pink slips or something to that effect).
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So Novell get $2.5m instead of $20m, does this mean SCO may survive this?
"Importantly, the court ruled that Novell has no right to any royalties from UnixWare or OpenServer sales by SCO, which is where the bulk of SCO's revenue is earned," SCO said in the statement. "This is also an important step forward in the capitalization and reorganization plan for SCO that will allow us to emerge from Chapter 11. We continue to disagree with the premise of this trial and believe that Novell is not owed anything, but that they have interfered with SCO's UNIX rights."
From their statement they seem relatively upbeat on what must of been a bad day for them.
It hints that Novell owns the SVRX code that SCO sold to MS - does this mean that MS will now sue?
Interesting times...
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we finally get to watch the house of cards start to fall
Sadly, I think not. More likely, SCO will just find another deck of cards and carry on playing for some time.
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The whole thing has been a farse from start to end. That SCO has been allowed to continue this long without any evidence to back their claims up are insane. At the very least they should have been compelled to show some tangible evidence before the whole fishing expedition begun. The real stink begun when they could go on even after the extremely deep discoveries couldnt show any evidence at all that any code whatsoever came from SCO, not even "their own" code.
Something is just fishy about how the court system has handled all this.
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They will obviously pay in Linux CPU licenses. I hear they're worth $699.
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For those new to this story
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The first series of lawsuits by SCO are the ones that are to answer the question of whether linux, BSD or contain code from the real UNIX code (i.e. code originally created by AT&T)
The second set of lawsuits (mostly being fought between SCO and Novell) is to answer the question of who owns the UNIX copyrights, who has what rights to them and which of the deals done over the code are valid and which aren't as well as who owes who how much money
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What the judgment does is to set the amount of money SCO owes to Novell. That information goes into the bankruptcy.
An important detail is that the money SCO owes Novell was never SCO's. SCO was handling the money as an agent. It was always Novell's money. Judge Kimball ruled that SCO had breached its fiduciary duty and had unjustly enriched itself. If I understand correctly, that means Novell gets its money and then the other creditors get to fight over what's left.
The other thing that many have pointed out is that Novell will probably be awarded their lawyer fees. That amount will far eclipse the money Kimball has ruled on so far.
The ruling that sent the SCOundrels into bankruptcy court last year confirmed that the deal Caldera inherited from Santa Cruz Operation did *NOT* transfer copyrights from Novell, just gave rights to develop new code from it (i.e. Unixware) and act as Novell's collection agent on existing licenses. The current management (using the term *VERY* loosely), seeing their x86-UNIX business sinking, sued their former development partner, IBM, assuming they'd get a quick payoff to shut up and go away. Big surprise when IBM unleashed their lawyers right back at them. The present fiaSCO has ensued, only getting better when they tried to sue Novell for actually claiming the copyrights SCO was trying to use, which led to today's ruling.
SCOX DELENDA EST!!
This is independent of any legal action that the SEC or the local AG may decide to take.
This is like out of Austin Power. Was the judge cryogentically frozen for the last 30 years?
2.5 million dollars sounds awfully low.
I think the judge may have been saysing well the rights belong to Novell and to make this contractually clear I'm going to charge you a deminimus fine.
Some drink at the fountain of knowledge. Others just gargle.
Maybe SCO can just give them 3,576 licenses for the Linux kernel.
SCO got off easy... this time. But the next shoe to drop will be if Novell sues Sun over OpenSolaris and Sun invokes the indemnity clause in its agreement with SCO. Then SCO will be on the hook.
The current judgment of $2.5M is practically nominal in the big picture. A large investor could cover that and SCO would escape a death sentence. SCO, or some version of it, is likely to survive for another day.
This is likely bad news for OpenSolaris and Sun. Novell now has Sun over a barrel. Sun was able to open source Solaris because it thought it bought a license from SCO to have free-and-clear rights to the SysV parts in Solaris. According to the decision, in 1994 Novell & Sun agreed for a 20-year non-disclosure on release of UNIX source code. That runs out in 2014. SUN then amended this with SCO to remove the non-disclosure. The last sentence on page 20 of the decisions says, "Absent the removal of the 1994 Sun Agreement's Confidentiality restrictions, Sun would not have been licensed to publically release the OpenSolaris source code". And on page 36k "In the 2003 Sun Agreement, SCO renegotiated a contract and expanded Sun's rights to technology still owned by Novell". Later on the same page "The court thus concludes and declares that SCO was without authority to enter into the 2003 Sun Agreement....".
Novell now has a HUGE stick to beat over Sun's head. OpenSolaris has basically been declared illegal.
If I remember correctly, Novell has declared that they are done suing over UNIX. So Sun might be off the hook. However, if Novell is not so gracious and sues Sun over OpenSolaris. Sun will loose and will seek for SCO to indemnify it. SCO won't have the money. Then SCO will finally die.
What I really want to know at this point is what the oh-so-knowledgeable and unbiased expert analyst Laura DiDio has to say about this. After all, she had seen code snippets that made her come away thinking SCO really had a strong case. Later she said that "you'd have to be really crazy to try and sue IBM if you didn't have something."
Since she has also claimed "these people" (people involved with Linux) are "living in an alternative reality," I'm curious about Ms. DiDio's views on reality today.
Of course, I have to admit that Ms. DiDio, renowned IT expert with no IT or computer science training, does know something about "living in an alternative reality" (Ms. DiDio's part comes at the top of the 2nd page).
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I believe they are required to deposit an appeal bond in the amount of the judgment before they are allowed to appeal. They may still be able to manage that, but it's most likely going to be a matter for the bankruptcy judge...
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(nod to George Carlin)
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Well, it still makes me wonder what were they thinking.
"seeing their x86-UNIX business sinking, sued their former development partner, IBM, assuming they'd get a quick payoff to shut up and go away. Big surprise when IBM unleashed their lawyers right back at them." is _weird_ plan, considering that IBM actually prided itself on not giving in to such claims. IBM's lawyers have been at various times compared to the Nazgul, or it was claimed that IBM could darken the skies with them. And it's shown before that it's not affraid to use it. In fact, that it makes a point to use them to maximum devastation effect, to discourage other parasites from trying to extort them. It's not even a matter of conjecture or correlation, it's IBM's policy.
So hoping that IBM would just fold down is... surrealistic. It's a bit like me taking my scrawny nerd ass to the heavyweight boxing champion and going, "hey, pretty boy, hand over the wallet or I'm punching you in the nose." And hanging around to insist on it, instead of scramming while he's laughing his ass off.
And if it were just Darl, I'd probably reach for good ol' Hanlon's Razor: "Never attribute to malice, that which is adequately explained by stupidity." But his legal council also seemed to have no problem with it, and at least two different investor groups paid good money to fund this farce. Even if it were just PHBs who got wooed by being shown "#include " lines as infringing code in Linux, they have legal departs they can go and ask first. It just doesn't add up.
Were those contracts _that_ ambiguously written, that _nobody_ knew who really owns Unix until a judge scratched his/her head and decided it? I doubt it.
So I'm wondering what was the _real_ game there. The whole legal farce was probably just means to the real end, or maybe just a diversion. So what was it? Who made a buck out of it, and/or who paid for this expensive distraction?
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It seemed that the judge made it quite clear that he was tilting the ruling in SCO's favor. He explained precisely why he was legally compelled to determine the dollar amount in a way that was favorable to Novell (agency, burden of proof, blah blah blah). But then he turned around and pulled out a dollar value that was generous to SCO. It was practically a roadmap to Novell showing how they could get millions more if they appealed (not that they are likely to receive a penny anyway). I read it that he was sending a message to SCO that if they appealed they would be most likely to lose significantly more money.
Given the money funneled in from Baystar on the recommendations of someone at MS, given the barely-disguised FUD money paid by Sun, who at the time were in one of their Linux-is-TEH-3V1L! phases, the idea of claiming Linux was encumbered and Not Suitable for Business was pretty obvious. Recall this was also the time of the attempt to show Linux was a ripoff of Minix by the opinion-for-hire deTocqueville Institute, whose funding also came in large part from MS. The money they threw SCOX to make Linux look bad was chump change. This provided them material to point their potential defectors-to-Linux at with arms-length deniability.
What they apparently didn't plan on was the strength of the grassroots response from the developer community to undo the PR spin. If anything, the result has been to strongly validate the Linux ecosystem as a safe bet.
SCOX DELENDA EST!!