Quick SCO update [LWN.net]

Many people have wondered how it could be that SCO's stock price continues to increase even as the company's claims are publicly torn to pieces. A partial answer to that question came to light this week, in the form of this SEC filing. It would seem that Royce & Associates, the manager of the "Royce Technology Value Fund," now owns over 1.4 million shares of SCO. That is, as it turns out, over 10% of all the outstanding shares in the company, and almost 20% of the shares in active circulation. For whatever reason, Royce has made a huge bet on SCO, and has managed to keep the price high in the process.

This fund is managed by Jonathan Cohen; some information about Mr. Cohen and SCO can be found on this page. Among other things, he has been talking up SCO stock in a number of forums; see, for example, this posting on MSN/CNBC. "Cohen said the company's stock has done well this year on the back of solid fundamentals. It has an enormous base of intellectual property rights, he added." Solid fundamentals indeed.

Meanwhile, more documents on the IBM case, and, in particular, the pre-trial discovery process have come to light; they can be found on the always useful Groklaw site. There's some fun stuff there. Consider the following from "Exhibit E," SCO's response to IBM's discovery demands:

Please identify, with specificity (by product, file, and line of code, where appropriate) all of the alleged trade secrets and any confidential or proprietary information that plaintiff alleges or contends IBM misappropriated or misused...

...SCO notes that discovery has just begin and it has not yet received responsive discovery from IBM that would allow it to fully answer this question because part of this information is peculiarly within the knowledge of IBM.

SCO responds to a number of questions in this way. One way of translating this response into English would be something like "we don't know, we were hoping IBM would tell us." It is hard to imagine a judge being impressed.

IBM also asked for information on "any person on whom plaintiff intends to rely as a witness, declarant, or affiant in this action." SCO's response was "None at this time." Could the company really have no witnesses at all?

IBM has filed a motion with the court attempting to compel SCO to back up its claims. The company has also asked for an oral argument before the judge on the issue.

Good cause for oral argument exists because of the nature of the discovery issued upon SCO and the significance of its refusal to respond. SCO has the burden to prove the existence of a trade secret or misappropriation by IBM of confidential or proprietary information, and there is no presumption in SCO's favor in this regard... As a result, SCO's apparent inability to respond to IBM's interrogatories as required under the Federal Rules of Civil Procedure has potentially outcome determinative consequences.

In other words, if SCO can't back up its charges, it's time to call the show over. Nobody ever thought IBM's lawyers would make it easy for SCO.

Finally, Drew Streib is still trying to buy an SCO "Linux license," but still has not succeeded. "I can't believe that a sales force is this incompetent, or instead of that possibility, that SCO could be so blatantly outright in their lying about license availability." SCO also continues to state that it will not be sending out invoices because the "response has been adequate." One might conclude that the company is having second thoughts about its licensing program.

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SCO to lose trade secret status on Unix?

Posted Oct 9, 2003 9:03 UTC (Thu) by james (subscriber, #1325) [Link]

It looks like IBM's lawyers are preparing to take up Eric Raymond's efforts to show that the Unix source code is no longer legally a trade secret.

Exhibit D, Interrogatory number 2 is a legal demand by IBM for SCO to produce evidence that SCO has and IBM doesn't. SCO has to produce the evidence, or convince a judge that it is unreasonable for IBM to ask it.

IBM asked for a list of

(a) all persons who have or have had rights to the alleged trade secret or confidential or proprietary information; (b) the nature and source of the rights; and (c) all efforts by any person to maintain the secrecy or confidentiality of the alleged trade secrets and any confidential or proprietary information.

On Unix.

SCO pointed out that they've licensed it to thousands of companies and educational establishments, and "the individual efforts of each of these companies and its personnel to maintain the secrecy and confidentiality" are not known to SCO.

We now have the fun of watching SCO's lawyers try to convince a judge that of course, it would be unreasonable for SCO to say how everyone with legitimate access to Unix has kept it a secret, but it's definitely still secret — honest.

James