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CowboyNeal Looks Back at the SCO-Linux Trials
The Beginning, or, We Sure Do Miss Ransom Love Around Here
Back in January of 2003, SCO announced that Unix SYSV code had been misappropriated into Linux. They didn't say much more than this, saying that they would only reveal the code in question to the court, and that it was a secret. Given the nature of Linux, this set off the BS-meters of nearly anyone with a clue, including the Linux kernel developers, not the least of which being Linus himself. In March of that year, SCO announced that they owned the copyrights to Unix, and that they were suing IBM for a billion dollars, for leaking SCO trade secrets into Linux. When people who had a clue thought about the case for more than a few minutes, they remembered back to the USL v. BSDi case that had been settled a decade prior, and figured SCO was full of it. Unfortunately, instead of SCO's announcement being taken as the ramblings of a crazy CEO desperate to increase the value of his flagging company, it went ahead. The worst part, is that at least for the short term, it worked. SCO's stock price shot from under $2/share to over $20/share in six months.
Around this time, a new champion would arise. A new website, Groklaw, run by paralegal Pamela Jones began blogging daily coverage of SCO v. IBM. While Groklaw was originally intended as a way for PJ to practice blogging, it soon grew into the front lines of the PR war against SCO, a war which they were losing badly.
This is where the case should have been thrown out, and everyone gone out for beers and had a good laugh, but that didn't happen. However, a new challenger would appear. In August of 2003, Red Hat sued SCO to try and put an end to this mess. While this was a valiant effort on Red Hat's part, ultimately a judge would stay the case pending the outcome of SCO v. IBM. Those hard-earned beers would have to wait.
At this point, SCO's claims were sounding dubious at best, so they showed off two samples of alleged copied code at a reseller show later that month. However, the code in question was shown to be part of BSD, and previously released under the BSD license. In spite of this, SCO decided that to save face, they should waste everyone's time with continuing their warpath of litigation.
SCO v. Everyone
Since the suit against IBM was going so well, The SCO Group came up with the brilliant strategy of "sue all the things!" and proceeded to do just that. In lieu of having their own product that people actually liked and used, they figured they could just sue their way to profitability.
One of SCO's key claims was that they owned the copyrights to Unix, due to some purchases they'd made from Novell. Novell, however, didn't take this sitting down and respectfully disagreed. For butting in on SCO's new business model, Novell was served with a lawsuit in January of 2004. 2004 was the year that SCO decided to sue everyone they looked at. AutoZone, who had recently switched from using SCO OpenServer to Linux, got sued for doing so. DaimlerChrysler was just walking down the opposite side of the street and accidentally made eye contact with SCO, and they got sued as well.
While also suing everyone in sight, SCO also announced that they would not sue their own customers, so for the price of a SCO license, a company could exclude themselves from possible litigation. A few companies actually bought into the madness, but for the most part, the world collectively rolled its eyes at SCO, meaning that SCO would have to soldier on with their lawsuit-based business strategy, or face the wrath of their shareholders.
Novell Jams SCO's Gears
A few years went past while the SCO v. IBM case was still in the discovery phase, with SCO not wanting to reveal the code they were suing over, without seeing sources from IBM first, and IBM not wanting to give SCO any source without first being told what code was in question. This provided time for the Novell case to advance, albeit also slowly. By 2007, Novell was awarded several summary judgements, and several of SCO's claims were denied. By 2008, Novell had been awarded over $3 million as a result of the case. Just under half of that amount would be appealed by SCO, and temporarily reversed for a couple of more years. The main outcome here, however, was that Novell was ruled as the owner of the Unix copyrights.
The SCO legal juggernaut, however, would not, nay, could not be stopped. Despite not owning the Unix copyrights they contended they were the owners of "control rights" to derivatives of SYSV, and for the period during the appeals to SCO v. Novell, they were still able to claim potential ownership of the Unix copyrights in court as well. When they finally lost the appeals, they were forced to fall back to their claims of control rights, which is where they still stand today.
Being faced with having to pay out to Novell, SCO finally received its first nail in its coffin. Following the Novell ruling, SCO filed for Chapter 11 bankruptcy, and SCO v. IBM was stayed until SCO could emerge from Chapter 11 and continue the case. Shortly thereafter, SCO's stock price fell to under $0.50/share and they were de-listed from NASDAQ.
The End of SCO, but not of SCO v. IBM
So that's where we are today. Once the Chapter 7 filing is finalized by a judge, SCO will cease to be as a corporate entity, however they are proposing that SCO v. IBM be allowed to continue, not for sheer entertainment value, but rather so that they don't risk the wrath of their shareholders.
Nine years on, it's difficult to say who the real winners are. It's definitely not The SCO Group themselves, since they've gone under. It's also probably not SCO's lawyers, since their chances for being paid are greatly diminished since SCO's short-lived high times in 2003. IBM stands poised to win the case should it go forward, however their legal expenditures at this point are so large they could only be fielded by the likes of IBM. Novell, despite having already won, may not ever get paid all that it's owed. Linux users will most likely eventually emerge as not having to pay SCO a dime, which while is nice to have reaffirmed, is where they were back in 2003 to begin with. Another side effect of the courts rulings, was the reaffirmation of USL v. BSDi, which means that FreeBSD users are definitely safe from licensing fees and litigation.
While I've given an overview of the SCO-Linux litigations here, I've surely missed many of the bumps in the road. I only briefly touched on the PR war SCO fought against Groklaw, and many of the other insanities brought on by this case. With SCO v. IBM still possibly lunging ahead in a stupor, it may be too early to finally enjoy those aforementioned hard-earned beers, but it's still safe to chill them with the ice off SCO's corpse.
Seriously. 9 years of facepalming is enough. Let's forget the SCO morons and focus on the future, which is celebrating and embracing open source in all ways imaginable.
It is pitch black. You are likely to be eaten by a grue.
Secondly, I flat out object to the following reoccurring theme prevalent in this piece that alleviates any leaders (none of whom are named) of any responsibility, onus or wrongdoing:
A few companies actually bought into the madness, but for the most part, the world collectively rolled its eyes at SCO, meaning that SCO would have to soldier on with their lawsuit-based business strategy, or face the wrath of their shareholders.
Once the Chapter 7 filing is finalized by a judge, SCO will cease to be as a corporate entity, however they are proposing that SCO v. IBM be allowed to continue, not for sheer entertainment value, but rather so that they don't risk the wrath of their shareholders.
(emphasis mine) I don't understand how someone can be such a jerk and we can say "oh, yeah, well, they had to do it because of the shareholders." Yes, I know that shareholders can sue you when you commit a colossal screw up but you can't hand out free passes like this for every thing they do. What would the shareholders have done? Sued him out of his position? Well, at least he'd still have his ethics and dignity intact. The problem is that the people running SCO lacked any fragments of those things from the start! Let me remind you of McBride's open letter in 2003 that remains to this day at SCO's site. It contained such gems as:
Based on the views of the U.S. Congress and the U.S. Supreme Court, we believe that adoption and use of the GPL by significant parts of the software industry was a mistake. The positions of the Free Software Foundation and Red Hat against proprietary software are ill-founded and are contrary to our system of copyright and patent laws. We believe that responsible corporations throughout the IT industry have advocated use of the GPL without full analysis of its long-term detriment to our economy. We are confident that these corporations will ultimately reverse support for the GPL, and will pursue a more responsible direction.
And what? Was there a shareholder holding a loaded gun to his head when he penned this letter? No, there wasn't. I mean, looking back this comment is laughable.
And a side rant is that this is a perfect example of why corporations have more rights than citizens. SCO goes Chapter 11 then Chapter 7 and all the assholes that ran the show walk. And they're hired elsewhere and they have very minimal repercussions. What happens when an individual makes bad decisions with their personal finances? They get Chapter 13? They get liens slapped on all their income? Regardless of the chapter, their credit is screwed so they can't buy anything big for 10 years? You know what I'd like to see? I'd like to see the names of the people running this show published so we know who ran the show at this company. And I'd like to see bankruptcy laws barring them from assuming any position within a company where they have direct purview or control of any assets worth over $5,000. You know what? I'd bet then they'd be a little more rational, ethical and logical in their decisions just like the general populace is forced to do for fear of bankruptcy.
Seriously, where is the blame going to be placed? Who will learn their lesson here? I'll be damned if I allow you to just pass the buck to "the wrath of the shareholders." That black hole of capitalistic logic has lead to major problems in the governance and upper rankings of American companies.
My work here is dung.
In the middle of Scocades didn't it surface that they got a lot of money from Microsoft, which was in the midst of the Vista disaster and didn't want anyone thinking about migrating to Linux until Windows 7 was safely on the market.
They bought some Linux licenses from SCO to help fund the litigation, isn't that right? There was more than a little evidence the whole thing was really litigation by proxy.
Those were the days the Big B was making personal appearances in the corporate jet to talk a couple cities out of switching to Linux. One went ahead and one in the U.K. threw in the towel if memory serves.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
I'd rather be reminded of SCO and what they've done every now and then. If not then we might slip up and another SCO will come and we'll have to repeat this all over again, or worse someone like SCO might win because we're off guard.
At this point, SCO's claims were sounding dubious at best, so they showed off two samples of alleged copied code at a reseller show later that month. However, the code in question was shown to be part of BSD, and previously released under the BSD license. In spite of this, SCO decided that to save face, they should waste everyone's time with continuing their warpath of litigation.
Aided by Microsoft Corp and Sun Microsystems Inc. direct investment of $23,000,000 dollars to fund the lawsuit and an additional $50,000,000 dollars organized by Microsoft to funnel funds to SCO through Baystar Captial and RBC facilitated by one Mike Anderer IIRC.
Also the saga with Maureen O'Gara, Dan Lyons, Rob Enderle and others that were caught spreading misinformation in the IT media on behalf of Microsoft and SCO in this case.
From wikipedia:
On April 9, 2010 McBride purchased the SCO Mobility intellectual property from The SCO Group for $100,000. The company is now known as Me Inc. and as of June 10, 2011, McBride is President and CEO.
Just wanted to remind people that this farce was initiated by the company called Caldera when they bought SCO (The Santa Cruz Operation). They renamed themselves The SCO Group ("...SCO no longer means Santa Cruz Operation..."), but it was still the Caldera management calling the shots.
The Santa Cruz Operation was a good company to work for. I can't say the same for Caldera. When the take-over occurred, the lucky ones (IMHO) go to go to Tarantella (eventually subsumed into what was Sun). The red-headed step-children got to stay behind with the sinking ship. And boy, was I ^H ^H ^H ^H ^H were they glad top be let go before the Darl McBride hit the fan.
If at first you don't succeed, so much for skydiving.
Lets just hope those involved remember to double tap.
---Saying gnome 3 is better than windows 8 not so much a compliment as it is damning with light praise.
Well, it is in Linux...
armanox@w2164:/usr/src$ grep -R "int i" linux-3.5.2/* | wc -l
57894
Now can I see the SCO source to compare?
I'm starting to think GNU is the problem with "GNU/Linux" these days.
I don't understand how someone can be such a jerk and we can say "oh, yeah, well, they had to do it because of the shareholders."
Then you don't understand capitalism. Publicly held companies are driven by just one priority: increase shareholder value. If a CEO's conscience interferes with that goal, the shareholders soon appoint somebody else.
You're upset about McBride's pursuit of frivolous litigation? Corporations have been known to kill people in pursuit of profit. That's why socialism was such a popular doctrine through much of the 20th century. Of course socialism has its own evils (aside from its own share of mass murder, socialist economies are just not viable), so we're not going to dispense with capitalism any time soon. But we have to curb its evils and its stupidities, no matter how much Mitt tries to tell us otherwise.
I don't understand how someone can be such a jerk and we can say "oh, yeah, well, they had to do it because of the shareholders."
I still don't understand why the shareholders haven't called for an explanation of the mysterious investments that bankrolled this whole thing:
BayStar Capital and Royal Bank of Canada invested US$50 million in The SCO Group to support the legal cost of SCO's Linux campaign. Later it was shown that BayStar was referred to SCO by Microsoft
On March 4, 2004, a leaked SCO internal e-mail detailed how Microsoft had raised up to $106 million via the BayStar referral and other means.[60] Blake Stowell of SCO confirmed the memo was real.[61] BayStar claimed the deal was suggested by Microsoft
It's been pretty clear that Microsoft was involved in providing indirect financing for SCO - surely there are some investors who lost money and would want to expose these shady deals, and sue Microsoft for subverting SCO and turning it into a litigation vehicle, rather than the independent enterprise that the board claimed it to be?
It doesn't make any sense on the face of it, until you recall who the "shareholders" actually are. The shareholders aren't the Wall St riff-raff. Rather the shareholders were the guys on the board of directors, and also Darl McBride. They all stood to make huge $$$ off trashing the company, and they did. Microsoft effectively covered the legal fees paid to Boies Schiller thru a front company if you recall. So ultimately it didn't cost anyone anything - They all got what they wanted and probably made big $$$ too, even MS.
C|N>K
Actually, some fools do want worthless "penny stocks.". Lots of people speculate in them for much the same reason people play the lottery. That's what all the spam about "hot tip: United Fecal Matter is set to take off!" is about.
Those spams are pretty much 'pump & dump' scams. Somebody buys an email list from a list broker, then snarfs up a few hundred thousand shares of some penny stock, spams the planet, waits for the stock to move up, and dumps them for a couple quick bucks. Hardcore daytraders used to get taken by this all the time til they wised up.
I just keep in mind the old saw about "Know how to make a small fortune in the stock market? Start with a large fortune!"
Understanding the scope of the problem is the first step on the path to true panic.
One thing that didn't get mentioned was prior to groklaw a lot of the counterfactual information was being collected here. People who later had testimony related to this issue found out about it from /. I think some pats on the back to Taco ... are in order.
As for IBM they are certainly a winner. For a few tens of millions they got 4-5 years of fantastic PR which moved them from being a vendor exploiting Linux to the defender of Linux and warmly embraced by the Linux community. This has helped their consulting business to the tune of billions in revenue as techi-nerds/geeks didn't push against executive management's favorite vendor.
Sun was a huge loser. They had originally sided with SCO and they never lived down the alienation from the open source community. They remained mistrusted.
Microsoft was a loser. Microsoft tied themselves to this lawsuit early and many of their more legitimate arguments against open source were discredited along with the fantasies of Darl McBride.
The GPL was a huge winner. 2 major claims: was the GPL legal at all under the copyright clause was tested and the counter claims collapsed. More importantly the idea of a company issuing a GPL release and then revoking licenses was tested in court with the GPL holding up.
Web 2.0 was a winner. Sco v. IBM represents the first Web 2.0 trial were important witnesses found out about the trial and presented evidence (i.e. self deposed) based on online publicity.
Democracy was a winner. SCO made several claims that were detrimental to the rights of public participation in trials which were thrown out.
Tarantella was a loser. No one technical wanted anything to do with SCO. They ended up being bought by Sun and withering even there.
There are few wars with such clean cut good guys, bad guys.
Oh I forgot.
The reporters who originally sided with SCO were huge losers. SCO v. IBM was one of the few times (Judith Miller and Iraq being another) where reporters who engaged in unethical conduct were outed and their conduct has become part of their public profile.
And for the same reason as above, integrity in journalism was a winner.
So, Novell was awarded $3 million in 2008 but they have not to this day seen a dime of it. SCO declared bankruptcy and from that point on, various attorneys and advisers got paid, and the bankruptcy trustee, but not the creditors. This went on until no money was left, and now they're going into Chapter 7.
And the IBM case was stayed by the bankruptcy. IBM had a very good counter-suit against SCO for defamation and interfering with IBM's business by wrongfully claiming IBM had no right to sell their Unix product, AIX. This case can now technically be resumed now that SCO is out of Chapter 11, but IBM will never see any monetary compensation, even if they win, because of course SCO has no money.
The whole thing illustrates very well why companies incorporate in Delaware, because the bankruptcy process there practically guarantees that nobody with a claim against the company will get anything. At least if this case is any indication.
Let us not forget the other victim in all of this - Caldera OpenLinux.
I know, it's a long dead distribution, but it was well ahead of it's time when SCO killed it to focus on it's Litigation-for-Profit business model. I often wonder what would have happened if Caldera Linux had survived.
My biggest concern is that on the back of this there is Novell's takeover by Attachmate (funded in part by the sell off of patents). Who has them now...?