Lawyers in charge

[Posted November 24, 2003 by corbet]

Anybody following the SCO Group story is aware that, in the last couple of weeks, the company has issued a new set of threats. Among other things, SCO claims that it will, soon, file suit against at least one Linux user. It is tempting to disregard these threats as just more bluster coming out of the company. Threats against other Unix vendors have failed to come to pass, the deadline for the company's "half-price Linux License" promotion continues to recede, the flood of invoices they promised us never appeared, etc. Why should things be different this time? When the weakness of SCO's case and the fact that a copyright suit would require a rather more straightforward unveiling of the company's evidence is considered, more lawsuits may seem unlikely.

There is, however, a recent Gartner Group pronouncement which is relevant here:

SCO has declared in filings with the U.S. Securities and Exchange Commission that its competitive position could decline if the company can't obtain additional financing. The latest share issue will dilute shareholders' investments about 3.5 percent. It comes on top of a previously announced arrangement giving Boies, Schiller & Flexner a 20-percent share in SCO if the company were sold. SCO also received an investment of $50 million from BayStar Capital in return for 17.5 percent of outstanding shares. We believe that these moves compromise SCO's mission as a software company. Increasingly, the legal and financial aspects of the intellectual property infringement cases will absorb the company's attention, and a law firm will be in an increasingly powerful position to set the overall agenda for its compensation. Therefore, SCO will likely pursue claims against Linux users quickly.

Of course, one could rephrase the above more succinctly: the company has no revenue stream and the lawyers are running the show. SCO has no real alternatives to income from litigation at this point, and its lawyers have nothing to lose from filing more lawsuits. Gartner could be right: SCO might indeed try to open up more legal fronts in the near future. If the company chooses its targets carefully, it might just succeed in finding one that will decide to settle rather than get involved in a long intellectual property case.

Or so SCO management must hope. At this point, however, there is enough information about the company's claims out there that any SCO target which takes the time to research the situation may well turn out to be less of a pushover than SCO might wish. In fact, as SCO carries out its search for the softest targets, chances are good it will pass over any company which makes it clear that it will fight back. Potential recipients of SCO licensing claims would do well to bear that in mind.

File suit against a Linux user?

Posted Nov 26, 2003 3:21 UTC (Wed) by bryn (guest, #1482) [Link] (4 responses)

Is it possible for SCO to start a case against a Linux user before the IBM/SCO case resolves things one way or another? I can't see how a case can be successfully completed against anyone using Linux until it is clear that they have done anything wrong in doing so.

File suit against a Linux user?

Posted Nov 26, 2003 11:50 UTC (Wed) by ekj (guest, #1524) [Link] (1 responses)

Sure it's possible for them to *start* a case. After all anyone can start a case against anyone at any time for any reason at all.

I could start a case against you for posting that question. The case would likely not get very far, that's true. But sure as hell I can *start* it. (yes it'd get thrown out at the first opportunity)

They could not win a copyrigth-case without showing evidence that there is indeed something to which they hold copyrigth in Linux. But they don't nessecarily need to. In the USA, even *winning* a court-case can cost big bucks for the defendant. They don't expect to win any case without showing evidence. They are hoping to find a target soft enough that it'll settle instead of letting the matter get to court.

My bet is that such targets are harder to find than SCO think. It takes 5 minutes with Google to find out that SCOs claims are pretty shaky. Most companies would do atleast that much if faced with legal threats.

File suit against a Linux user?

Posted Nov 26, 2003 16:08 UTC (Wed) by jre (guest, #2807) [Link]

Depending on how, exactly, SCO goes about the attempted money extraction, they may risk more than being told to take a hike. They seem to be aware of this; after Groklaw pointed them to the statutes on mail fraud, the promised invoice mailing was conspicuous by its absence.

File suit against a Linux user?

Posted Nov 28, 2003 14:23 UTC (Fri) by rankincj (guest, #4865) [Link]

The first suit is about contracts: IBM put JFS, NUMA and RCU into Linux, and SCO's list of "discovery" files strongly implies that SCO are not going to claim anything else here. IBM owns all the relevant copyrights and patents for these so SCO can only sue IBM for "breach of contract". Specifically, the AT&T contract says that IBM must keep derivative works of UNIX secret, and so SCO must be classifying RCU, NUMA and JFS as derivative works. IBM does not.

SCO's new threats are about copyrights, and so they *must* claiming to have found ancient System V code within Linux. This is not related to the RCU, JFS and NUMA code. However, I seriously doubt that there's any significant amount System V code to be found. It's been 9 months since the original claim and I'm sure that people have been searching diligently for any signs. And the silence has been deafening.

File suit against a Linux user?

Posted Nov 28, 2003 17:42 UTC (Fri) by giraffedata (guest, #1954) [Link]

I can't see how a case can be successfully completed against anyone using Linux until it is clear that they have done anything wrong in doing so.

Note that there is no allegation by SCO that the Linux user did anything wrong. A copyright infringement suit is not about punishing wrongdoing -- it's about collecting royalties to which copyright law says one is entitled (when the alleged infringer disagrees).

Lawyers in charge

Posted Nov 26, 2003 18:39 UTC (Wed) by mongre26 (guest, #4224) [Link] (1 responses)

SCO has stepped in it big. The original article is incorrect in assuming that one weak adversary that caves to SCO would save them, it will not.

Why? There is the little matter of Redhat and IBM with pending lawsuits against SCO including Major copyright infringement cases which could result in substantial liabilities for SCO when the most likely outcome of these cases occurs. Even if SCO settles they are going to be left with some hefty bills.

The best the current SCO gang can hope for is that some sucker will come along and bail them out and the open source community has to put up with these new fools until SCO is finally ground into the dust of the utah desert.

What is most ammusing is people throwing money at SCO. That is like buying a ticket on the titanic while watching it sink.

Lawyers in charge

Posted Nov 26, 2003 19:15 UTC (Wed) by corbet (editor, #1) [Link]

Actually, it doesn't say that a settlement with one company would "save" SCO. That is clearly not the case. Any settlements would, however, provide the company with a bit of money to make more mischief and a great deal of PR fodder. It would not be a good thing.