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
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
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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