SCO Weekly News [LWN.net]

Last week, we discussed BayStar's wish to reclaim its investment in the SCO Group. Some observers may have thought that this move was a sign that BayStar had figured out the true nature of the company it had invested in. That may, in fact, be true, but not quite in the way some people had imagined. BayStar's real problem, it would seem, is that SCO continues to maintain the pretense of having a Unix business; BayStar sees that as a distraction from the real "value" of the company: its lawsuits. To regain BayStar's good favor, SCO would need to dump the Unix business and replace its top management with people who know more about intellectual property litigation and, while they're at it, have better control over what they say in public. SCO seems unwilling to give in to those demands, but if BayStar looks like it will go to court, SCO's board may find itself in a more accommodating mood.

Groklaw has done some research into the background of Bert Young, SCO's new chief financial officer. Mr. Young, it seems, is not new to dishonest companies and legal action. He should, indeed, be a good fit for SCO.

In the IBM case, SCO has filed a new motion asking that IBM's copyright-oriented counterclaims be dismissed or, failing that, split into a separate trial. SCO claims that the copyright issue is "pending in litigation in Nevada" and need not be considered separately in Utah. The Nevada case is the AutoZone suit. Given that copyrights are an issue in the IBM case, the chances of it being put aside for the newly-filed AutoZone case seem pretty small.

...especially since AutoZone has filed a motion of its own stating that SCO's suit should be put on hold pending the outcomes of the IBM, Novell, and Red Hat cases. Since those cases touch on issues like the validity of SCO's claimed copyrights and whether Linux violates those copyrights, AutoZone seems to think that their outcome might have some relevance to the charges it is facing. It will also, no doubt, surprise readers to find out that AutoZone is having a little trouble figuring out exactly which copyrights it is being accused of violating:

There is no reason for SCO to have been so obtuse in its pleading, unless SCO is intentionally trying to avoid identifying the nature and basis of its purported claims. The Linux code is freely available to anyone to examine, and SCO has been in possession of the code for years. Indeed, SCO was a distributor and developer of Linux code until after it filed its lawsuit against IBM last year. SCO therefore has substantial familiarity with, and can readily identify, the lines, files, or organization of Linux code that it claims infringes UNIX, and SCO can likewise readily identify the corresponding lines, files, or organization of UNIX that SCO claims to be infringed....

In other circumstances, AutoZone might elect to respond to SCO's Complaint as best AutoZone could without clarification of SCO's claims in confidence that it could later ascertain this information from SCO in discovery. However, SCO's "hide-the-eight-ball" tactics in the IBM case leave AutoZone with little realistic belief that SCO will voluntarily identify the basis for its claims without this Court's intervention. SCO filed its Complaint against IBM more than a year ago; yet, at least as of April 18, 2004, SCO still had not provided IBM with any reasonable identification of its claims.

One might conclude, from all of this, that AutoZone has been paying attention to what has transpired thus far and is not in a mood to settle.

DaimlerChrysler has filed a response to SCO's complaint (which, remember, is all about DaimlerChrysler's failure to provide the "certification" demanded by SCO). The text of that response is not yet available, though Groklaw may well have it by the time you read this. DaimlerChrysler has, evidently, raised a long list of affirmative defenses, and is asking for a summary dismissal of the case with prejudice.

Worth a quick note: according to the NASDAQ, there were almost 4 million shares of SCO stock sold short as of the middle of April - an all-time high. Despite the fact that the company's stock is pushing toward its lowest levels in almost a year, many people seem to expect it to go lower. LWN is not in the business of giving investment advice, and you would be well advised to ignore us if we were. But it is worth noting that, at current volume levels, it would take almost three weeks of trading to cover all of those short positions. That is a recipe for a "short squeeze" and a stock price spike. Be careful out there.

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