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| More Changes in the New SEC Filing |
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Saturday, January 17 2004 @ 07:06 AM EST
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In addition to the new risk factors already pointed out, here are some other changes in Amendment 1 to SCO's November S3, which it just filed. On the left, you find the new version, with red text representing new or altered material. On the right, you find the November filing, with blue text representing deleted or altered material. As a general rule, lawyers don't change a legal document unless it has some significance. To a lawyer, words are weapons. They aim for precision, not beauty, or at least if they aim for beauty, it's definitely second. This isn't a criticism. Precision in your words in a document can make the difference between a solid contract that doesn't need to be decided by a judge because there is no dispute about what it means and one that ends up a lawsuit because nobody is sure what it is saying. I won't characterize the changes here, because you can do that for yourself. The purpose of the chart is to help you note what is new. Enjoy the fine points. If you see anything I missed, which is certainly possible, or any mistakes, do let me know, so I can perfect the chart. The numbers on the left have no significance, except to keep me from going blind in a thick forest of HTML.
| # | SCO's January Amendment 1 to S3 | SCO's November S3 |
| 1 | In addition to SCOx, we implemented our first SCOsource
initiative in January 2003 to review and establish our intellectual
property rights in the UNIX operating system. In March 2003, we filed a
lawsuit against IBM as part of this and other SCOsource
initiatives. | In addition to SCOx, we implemented our first
SCOsource initiative in January 2003 to review and enforce our
intellectual property rights in the UNIX operating system. In March
2003, we filed a lawsuit against IBM as part of this initiative. |
| 2 | In our results of operations, we recognize
revenue from agreements for support and maintenance contracts and other
long-term contracts that have been previously invoiced and are included
in deferred revenue. Our deferred revenue balance has declined from
$10.1 million as of October 31, 2002 to $5.5 million as of October 31,
2003, and this decline in deferred revenue may continue into future
quarters, which may have a negative impact on our operating system
platform products revenue. | In our quarterly results of
operations, we recognize revenue from agreements for support and
maintenance contracts and other long-term contracts that have been
previously invoiced and are included in deferred revenue. Our deferred
revenue balance has declined from $10.1 million as of October 31, 2002
to $6.8 million as of July 31, 2003. | | 3 |
Additionally, as explained in more detail below in the section
entitled "Recent Developments," we must account for the issuance of
shares of our Series A Convertible Preferred Stock from our October 2003
private placement by bifurcating the value of the Series A Convertible
Preferred Stock into a preferred stock component and a derivative
component. As of October 31, 2003, we recorded a liability of $15.2
million as the fair value of the derivative component. To account for
the derivative component in subsequent periods, we will mark-to-market
its value at each balance sheet date and will include in our
consolidated statement of operations any changes in value as a component
of other income or expense. Changes in the value of the derivative
component may be significant because the value of our common stock at
each balance sheet date will have a significant impact on the
derivative's value. For example, an increase in the value of our common
stock by $1.00 may require us to record an expense of approximately
$1,000,000, and, conversely, a decrease in our common stock by $1.00 may
require us to record income of approximately $1,000,000. If this
accounting treatment requires us to record significant expenses in
future periods, our profitability in those periods may be adversely
impacted. | [Nothing equivalent.] |
| 4 |
We initiated the SCOsource licensing effort in January 2003 to
review the status of UNIX licensing and sublicensing agreements and to
identify those in the industry that may be currently using our
intellectual property without obtaining the necessary licenses. This
effort resulted in the execution of two significant license agreements
during fiscal year 2003 and generated $25.8 million in revenue. |
We initiated the SCOsource licensing effort in January 2003 to
review the status of UNIX licensing and sublicensing agreements and to
identify others in the industry that may be currently using our
intellectual property without obtaining the necessary licenses. This
effort resulted in the execution of two license agreements during the
quarter ended April 30, 2003, and the receipt of additional license fees
from these two contracts during the July 31, 2003 and October 31, 2003
quarters. |
| 5 | Our SCOsource initiative is
unlikely to produce a stable or predictable revenue stream for the
foreseeable future. Additionally, the success of this initiative may
depend on the perceived strength of our intellectual property rights and
contractual claims regarding UNIX, including, the strength of our claim
that unauthorized UNIX System V source code and derivatives are
prevalent in Linux. | Given the unauthorized use of our UNIX code
and derivatives and the resultant litigation, it is difficult to predict
if our SCOsource initiative will produce stable, predictable revenue for
the foreseeable future, and to what degree. The success of this
initiative in part may depend on the strength of our intellectual
property rights and contractual claims regarding UNIX including, the
strength of our claim that unauthorized UNIX System V source code and
derivatives are prevalent in Linux. |
| 6 | IBM has filed a response and counterclaim to
the complaint, including a demand for jury trial. We have filed an
answer to the IBM counterclaim denying the claims and asserting
affirmative defenses. | IBM has filed a response and counter
claim to the complaint, including a demand for jury trial. The discovery
process of the action has commenced. The action has been removed from
Utah Third District State Court and is currently pending in the Federal
District Court for the District of Utah. We have filed an answer to the
IBM counterclaim. | | 7 | If we do not prevail in
our action against IBM, or if IBM is successful in its counterclaim
against us, our business and results of operations could be materially
harmed. The litigation with IBM and potentially others could be costly,
and our costs for legal fees may be substantial and in excess of amounts
for which we have budgeted. Additionally, the market price of our common
stock may be negatively affected as a result of developments in our
legal action against IBM that may be, or may be perceived to be, adverse
to us. | If we do not prevail in our action against IBM, or if
IBM is successful in its counter claim against us, our business and
results of operations could be materially harmed. The litigation with
IBM and others could be costly, and our costs for legal fees may be
substantial and in excess of amounts for which we have budgeted. In
addition, we may experience a decrease in revenue as a result of the
loss of sales of Linux products and initiatives previously undertaken
jointly with IBM and others affiliated with IBM or sympathetic to the
Linux movement. We are informed that participants in the Linux industry
have attempted to influence participants in the markets in which we sell
our products to reduce or eliminate the amount of our products and
services that they purchase. They have been somewhat successful in those
efforts and similar efforts and success will likely continue. There is
also a risk that the assertion of our intellectual property rights will
be negatively viewed by participants in our marketplace and we may lose
support from such participants. Any of the foregoing could adversely
affect our position in the marketplace and our results of
operations. | | 8 | We also have begun delivering
written notice to a large number of licensees under our System V UNIX
contracts requiring them to, among other things, provide written
certification that they are in full compliance with their agreements,
including certification that they are not using our proprietary UNIX
code in Linux, have not allowed unauthorized use of licensed UNIX code
by their employees or contractors and have not breached confidentiality
provisions relating licensed UNIX code. Additionally, we have begun
notifying selected Linux end users in writing of violations we allege
under the Digital Millennium Copyright Act related to SCO's copyrights
contained in Linux. | [Nothing equivalent.] |
| 9 | As a result of our action against IBM and our SCOsource
initiatives to protect our intellectual property rights, several
participants in the Linux industry and others affiliated with IBM or
sympathetic to the Linux movement have taken actions attempting to
negatively affect our business and our SCOsource efforts. Linux
proponents have taken a broad range of actions against us, including,
for example, attempting to influence participants in the markets in
which we sell our products to reduce or eliminate the amount of our
products and services they purchase from us. These actions have been
somewhat successful in negatively impacting our business, and we expect
that similar efforts likely will continue. There is a risk that
participants in our marketplace will negatively view our legal action
against IBM and our SCOsource initiatives, and we may lose support from
such participants. Any of the foregoing could adversely affect our
position in the marketplace, our results of operations and our stock
price.
Another recent Linux proponent action has been to initiate several
denial of service attacks on our website, which have prevented web users
from accessing our website and doing business with us for a period of
time. If such attacks continue or if our customers and strategic
partners are also subjected to similar attacks, our business and results
of operations could be materially harmed.
Also, some of the more significant participants in the Linux industry
have made efforts to ease Linux end users' concerns that their use of
Linux may subject them to potential copyright infringement claims from
us. For example, Hewlett-Packard and Novell have each established
indemnification programs for qualified customers purchasing Linux-based
products and services that may potentially become subject to a copyright
infringement claims from us. Additionally, Open Source Development Labs,
a non-profit organization (OSDL), has established a legal defense fund
that will be used to defend Linux users against copyright infringement
lawsuits brought by us. It has been reported that OSDL so far has
attracted at least $3 million in pledges from contributors including IBM
and Intel, among others. Similarly, Red Hat, Inc. has announced it has
committed $1 million for a separate fund it created to cover the legal
expenses of other companies developing Linux.
As a further response to our SCOsource initiatives and claim that our
UNIX source code has inappropriately been included in Linux, Novell has
publicly asserted its belief that it owns certain copyrights in our UNIX
System V source code, and it has filed 15 copyright applications with
the United States Copyright Office related to UNIX System V. Novell also
claims that it has a license to UNIX from us and the right to authorize
its customers to use UNIX technology in their internal business
operations. Specifically, Novell has also claimed to have retained
rights related to legacy UNIX SVRX licenses, including the license with
IBM. Novell asserts it has the right to take action on behalf of SCO in
connection with such licenses, including termination rights. We have
repeatedly asserted that we obtained the UNIX business, source code,
claims and copyrights when we acquired the operations of Tarantella
(formerly, The Santa Cruz Operation, Inc.) in May 2001, which had
previously acquired all such assets and rights from Novell in September
1995 pursuant to an asset purchase agreement, as amended.
Notwithstanding our assertions of full ownership of UNIX-related
intellectual property rights, as set forth above, including copyrights,
the efforts of Novell and the other Linux proponents described above may
cause Linux end users to be less willing to purchase from us our SCO
Intellectual Property Licenses authorizing their use of our intellectual
property contained in the Linux operating system, which may adversely
affect our revenue from our SCOsource initiatives. In addition, these
efforts may increase the negative view some participants in our market
place have regarding our legal action against IBM and our SCOsource
initiatives and may contribute to creating confusion in the marketplace
about the validity of our claim that the unauthorized use of our UNIX
System V source code and derivatives in Linux infringes on our
copyrights. Increased negative perception and potential confusion about
our claims in our marketplace could impede our continued pursuit of our
SCOsource initiatives and negatively impact our business. | As a
result of our assertion of our intellectual property rights, we have
been subjected to several denial of service attacks on our website which
prevented web users from accessing our website and doing business with
us for a period of time. If such attacks continue or if our customers
and strategic partners are also subjected to similar attacks, our
business and results of operations could be materially harmed. |
| 10 | We have filed a motion to dismiss the Red Hat
complaint, asserting that Red Hat lacks standing and that no case or
controversy exists on which to base a declaratory judgment. If Red Hat
is successful in its claim against us, our business and results of
operations could be materially harmed. Red Hat has filed an opposition
to the Company's motion to dismiss, but the court has not ruled on the
motion. | Red Hat also announced it was contributing $1 million
to establish the Open Source Now fund to help pay the costs of Linux
companies involved in legal action with us, and encouraged other
participants in the Linux community to make contributions. We have filed
a motion to dismiss the Red Hat complaint, asserting that Red Hat lacks
standing and that no case or controversy exists on which to base a
declaratory judgment. If Red Hat is successful in its claim against us,
our business and results of operations could be materially harmed. |
| 11 | We have not heard from the ACCC since that
time. It is unknown if any future action will be taken. [re Australia] | [Nothing
equivalent] |
| 12 | [Deleted] |
We are negotiating with the various claimants in Germany over the
temporary restraining orders. | | 13 |
[Deleted] | If our SCO branding effort is not accepted or
causes market confusion, our business may be adversely affected.
We recently launched a rebranding effort for our products and services
as well as our corporate image. On May 16, 2003, our stockholders
approved the change of our corporate name to The SCO Group, Inc. Prior
to our name change, we renamed our UNIX products and services using the
SCO trademark to draw on this strong brand recognition. We acquired the
rights to use this trademark in May 2001 from Tarantella in connection
with our acquisition of certain Tarantella assets and operations. If the
rebranding effort is not accepted by our resellers or customers of our
products and services, if the rebranding efforts cause confusion, or if
there are negative connotations associated with the trademark that we
cannot successfully address, our business may be adversely affected.
If our recently launched products and services are not accepted in
the marketplace, our business may be adversely affected.
In January 2003, we announced SCOsource, our intellectual property
licensing initiative, and in April 2003, we announced SCOx, our web
services strategy. In addition, we have recently released new versions
of our SCO OpenServer and SCO UnixWare operating systems. If our
resellers or customers do not accept these initiatives or product
enhancements, if the products fail to perform as expected, or if revenue
from these initiatives is below our expectations, our business will be
adversely affected. | | 14 | --the contingency fees we may pay to the law firms
representing us in our efforts to establish our intellectual property
rights [in list of "Factors that may affect our results".] | [Nothing equivalent] |
| 15 | Deleted |
-- the unauthorized use of our
UNIX code and derivatives by others to compete with us [dropped from list of Factors that may affect our results".] | | 16 | changes in business attitudes
toward UNIX as a viable operating system compared to other competing
systems, especially Linux | changes in business attitudes toward UNIX as a viable
operating system compared to other competing systems | | 17 | Our revenue from the sale of
UNIX-based products has declined over the last several quarters. This
decrease in revenue has been attributable to the worldwide economic
slowdown, lower information technology spending, and increased
competitive pressures from alternative operating systems. If the demand
for UNIX-based products continues to decline, and we are unable to
develop new products and services that successfully address a market
demand, our business will be adversely affected. | Our revenue
from the sale of UNIX-based products has declined over the last eight
quarters. This decrease in revenue has been attributable to the
worldwide economic slowdown, lower information technology spending, and
increased competitive pressures from alternative operating systems. As
explained elsewhere in this filing, we claim that much of this
competition is in violation of our contractual and intellectual property
rights. If the demand for UNIX-based products continues to decline, and
we are unable to develop new products and services that successfully
address a market demand, our business will be adversely affected. |
| 18 | Many of these competitors have access to
greater resources than we do. The major competitive alternatives to our
UNIX products are Microsoft's NT and Linux. The expansion of Microsoft's
and our other competitors' offerings may restrict the overall market
available for our server products, including some markets where we have
been successful in the past. | While we believe that our server
products retain a competitive advantage in a number of targeted
application areas, the expansion of Microsoft's and our other
competitors' offerings may restrict the overall market available for our
server products, including some markets where we have been successful in
the past. |
| 19 | Our compensation arrangement
with the law firms representing us in our efforts to establish our
intellectual property rights may harm our ability to raise additional
financing.
Our compensation arrangement with the law firms representing us in our
efforts to establish our intellectual property rights could harm our
ability to raise additional funding if needed. We may be obligated to
pay our law firms, subject to certain limitations, contingency fees of
up to 20 percent of the proceeds we receive from litigation,
settlements, certain licenses and other transactions related to our
intellectual property and from a sale of our company, and this
arrangement may be construed to include contingency fee payments in
connection with issuances of our equity securities. Our law firms' right
to receive such contingent payments could cause prospective investors to
choose not to invest in our company or limit the price at which new
investors would be willing to provide additional funds to our
company. | [Nothing equivalent] |
| 20 |
[Deleted] | Our competitive position could decline
if we are unable to obtain additional financing.
We recently completed the private placement of $50 million of our Series
A Convertible Preferred Stock, for which we received approximately $47.8
million in net proceeds. However, if this additional capital is not
sufficient to fund the expansion of our business, support operations,
fund litigation expenses, respond to competitive pressures, acquire
complementary businesses or technologies or respond to unanticipated
requirements, we may need to raise additional capital. We cannot assure
you that additional funding will be available to us in amounts or on
terms acceptable to us. | | 21 | When we generate
profits in foreign countries, our effective income tax rate is
increased. | When we generate profits in foreign countries, our
effective income tax rate is increased, even though we generate
consolidated net losses. | | 22 | If the current
slowdown continues, our revenue and results of operations may continue
to be lower than expected. | If the economic slowdown and the
unauthorized use of our UNIX code continue |
| 23 | The trading price for our common stock has been
volatile, ranging from a sales price of $1.09 in mid-February 2003, to a
sales price of over $22.00 per share in October 2003, to a sales price
of $15.65 in January 2004. | The trading price for our common
stock has been volatile, ranging from a sales price of $1.09 in
mid-February 2003, to a sales price of over $22.00 per share in October
2003, to a sales price of $14.73 in November 2003. |
| 24 | The shares subject to this prospectus represent
approximately 27 percent of our issued and outstanding common stock as
of January 16, 2004, although, as described more fully below, no selling
stockholder and its affiliates may beneficially own more than 4.99
percent of our common stock at any time. | The shares subject to
this prospectus represent approximately 28 percent of our issued and
outstanding common stock as of October 31, 2003. |
| 25 | As of December 31, 2003, we have issued and outstanding
options to purchase up to 3,620,168 shares of common stock with exercise
prices ranging from $0.66 to $28.00 per share. | As of October
31, 2003, we have issued and outstanding options to purchase up to
3,629,568 shares of common stock with exercise prices ranging from $0.66
to $28.00 per share. | | 26 | If the selling
stockholders choose not to convert shares of Series A Convertible
Preferred Stock, then, as holders of shares of Series A Convertible
Preferred Stock, among other rights, they will be entitled to require us
to repurchase for cash all the shares of Series A Convertible Preferred
Stock held by them at a premium price if any of several redemption
trigger events occurs. Our redemption obligation may be triggered by
events that are beyond our control. These redemption provisions, if
triggered, would require us to redeem the then-issued and outstanding
shares of our Series A Convertible Preferred Stock for cash. If we were
required to pay cash to the holders of shares of our Series A
Convertible Preferred Stock, it could have a material impact on our
liquidity, which may require us to obtain additional sources of cash to
sustain operations and may negatively impact the holders of our common
stock. Additionally, the holders of shares of our Series A
Convertible Preferred Stock will be entitled to receive a preferential
distribution of our assets prior to any distribution to our holders of
common stock upon a liquidation, dissolution, winding up or other change
in control transaction in which we sell all or substantially all our
assets or merge or consolidate or otherwise combine with another company
or entity. | If the selling stockholders choose not to convert
shares of Series A Convertible Preferred Stock, then, as holders of
shares of Series A Convertible Preferred Stock, among other rights, they
will be entitled to receive a preferential distribution of our assets
prior to any distribution to our holders of common stock upon a
liquidation, dissolution, winding up or other change in control
transaction in which we sell all or substantially all our assets or
merge or consolidate or otherwise combine with another company or
entity. |
| 27 | Depending on the amount of
assets we have available for distribution to stockholders upon a
liquidation event when shares of Series A Convertible Preferred Stock
remain outstanding, we may be required to distribute all such assets or
a portion of such assets that exceeds the preferred stockholders' pro
rata ownership of our common stock assuming full conversion of their
preferred shares into common stock, which could eliminate or limit the
assets available for distribution to our common stockholders. Our
potential obligation to pay to the law firms representing us in our
efforts to establish our intellectual property rights a contingent fee
of 20 percent of the proceeds we receive from a sale of our company,
subject to certain limitations, could also contribute to eliminating or
limiting the assets available for distribution to our common
stockholders. | Depending on the amount of assets we have
available for distribution to stockholders upon a liquidation event when
shares of Series A Convertible Preferred Stock remain outstanding, we
may be required to distribute all such assets or a portion of such
assets that exceeds the preferred stockholders' pro rata ownership of
our common stock assuming full conversion of their preferred shares into
common stock, which could eliminate or limit the assets available for
distribution to our common stockholders. | | 28 |
The Certificate of Designation also provides that the holders of our
Series A Convertible Preferred Stock have a participation right
entitling them to purchase their pro rata share of any future equity
securities, or debt that is convertible into equity, on the same terms
offered by us to other purchasers of such securities. Additionally, we
have agreed with the holders of our Series A Convertible Preferred Stock
that we will not complete a transaction or take any action that could
result in a claim for a contingency payment by the law firms
representing us in our efforts to establish our intellectual property
rights, other than contingency payments related to certain license
transactions, without first obtaining the consent of the investors
holding at least two thirds of the shares of our Series A Convertible
Preferred Stock. This right of consent, and the participation right and
other approval rights described above, may make it more difficult for
management, our board of directors or our stockholders to reach a
settlement in our litigation with IBM, raise capital in the future in
either equity or debt financing transactions or to take other
significant company actions. These provisions could also limit the price
that some investors might be willing to pay for shares of our common
stock in the future. | Additionally, the Certificate of
Designation provides that the holders of our Series A Convertible
Preferred Stock have a participation right entitling them to purchase
their pro rata share of any future equity securities, or debt that is
convertible into equity, on the same terms offered by us to other
purchasers of such securities. This participation right, and the right
to approve the company actions described above, may make it more
difficult for management, our board of directors or our stockholders to
raise capital in the future in either equity or debt financing
transactions or to take other significant company actions. These
provisions could also limit the price that some investors might be
willing to pay for shares of our common stock in the future. |
| 29 | These measures, combined with aggregate revenue of
$25.8 million from our SCOsource intellectual property rights licensing
initiatives, resulted in fiscal 2003 being the first profitable year in
our operating history. | These measures, combined with aggregate
revenue of $15.53 million from our intellectual property rights
licensing initiative, SCOsource, resulted in the first two profitable
quarters in our history during the six months ended July 31, 2003. In
addition, subsequent to July 31, 2003, Microsoft exercised an option it
held to acquire a broader license to our UNIX source code resulting in a
payment to us of $8 million. |
| 30 |
[Deleted] | Additionally, the dividends on the Series A
Convertible Preferred Stock will be accrued for the difference in the
stated dividend rate and 12% per annum. These additional dividends will
reduce earnings available to common stockholders as incurred from
this: | | 31 | On October 16, 2003, we completed
a $50 million private placement of 50,000 shares of our nonvoting Series
A Convertible Preferred Stock and received net proceeds of approximately
$47.7 million. The Series A Convertible Preferred Stock is convertible
into shares of our common stock at an initial conversion price of $16.93
per common share. Additionally, among other rights and preferences, the
Series A Convertible Preferred Stock will accrue cumulative dividends
after the first anniversary of the closing of the private placement. The
dividends, which must be paid quarterly, will accrue at a rate of 8
percent per annum, with annual increases of 2 percent per annum not to
exceed a maximum annual rate of 12 percent. We have the flexibility to
pay the dividends in cash or additional shares of Series A Convertible
Preferred Stock, subject to certain limitations. We have filed this
registration statement as part of our agreement to register the resale
of the approximately 3,850,000 shares of common stock issuable on
conversion of the Series A Convertible Preferred Stock issued in the
private placement and that may be issued in paying accrued dividends.
| On October 16, 2003, we completed a $50 million private
placement of 50,000 shares of our nonvoting Series A Convertible
Preferred Stock and received net proceeds of approximately $47.8
million. The Series A Convertible Preferred Stock is convertible into
shares of our common stock at an initial conversion price of $16.93 per
common share. Additionally, among other rights and preferences, the
Series A Convertible Preferred Stock will accrue cumulative dividends
after the first anniversary of the closing of the private placement. The
dividends, which must be paid quarterly, will accrue at a rate of 8
percent per annum, with annual increases of 2 percent per annum not to
exceed a maximum annual rate of 12 percent. We have the flexibility to
pay the dividends in cash or additional shares of Series A Convertible
Preferred Stock, subject to certain limitations. Additionally, the
dividends on the Series A Convertible Preferred Stock will be accrued
for the difference in the stated dividend rate and 12% per annum. These
additional dividends will reduce earnings available to common
stockholders as incurred. We have filed this registration statement as
part of our agreement to register the resale of the approximately
3,850,000 shares of common stock issuable on conversion of the Series A
Convertible Preferred Stock issued in the private placement or that may
be issued in paying accrued dividends. | | 32 |
[Deleted] | We anticipate recording a beneficial conversion
feature related to the issuance of the Series A Convertible Preferred
Stock in our private placement of approximately $8,741,000. The
beneficial conversion feature represents the intrinsic value of the
difference in the Series A conversion price and the closing market price
of our common stock on October 16, 2003. | | 33 |
We anticipate using the funds available to us from our private
placement to target vertical markets for our existing UNIX-based
offerings, to expand our UNIX licensing program and provide migration
options for Linux end users, to roll-out major upgrades for our
UNIX-based operating systems and to further establish our intellectual
property rights. | We anticipate using the funds available to us
from the foregoing transactions for our internet-based offerings under
our SCOx initiative, to target vertical markets for our existing
UNIX-based offerings, to expand our UNIX licensing program and provide
migration options for Linux end users, to roll-out major upgrades for
our UNIX-based operating systems and to protect our intellectual
property rights. | | 34 | To properly account
for our private placement, we have bifurcated the value of the Series A
Convertible Preferred Stock issued in the transaction into two
components, the preferred stock instrument and a derivative instrument.
The conversion and redemption features of the Series A Convertible
Preferred Stock require the bifurcation of the instruments. We assigned
$29.7 million of the value of the Series A Convertible Preferred Stock
to the preferred stock instrument. In valuing the derivative component,
we engaged an independent appraisal firm to assist us. As of October 31,
2003, we recorded a liability of $15.2 million as the fair value of the
derivative component. Also, for our fourth quarter and fiscal year ended
October 31, 2003, we recorded $2.8 million as other income representing
the decrease in the fair value of the derivative component from October
16, 2003, the closing date of our private placement, to October 31,
2003. The accounting for the derivative component will require us to
mark-to-market its value at the end of each quarter, and we will include
in our statement of operations other income or expense for any change in
the fair value of the derivative. | [Nothing equivalent] |
| 35 | In March 2003, we filed a complaint against
IBM alleging breach of contract, misappropriation of trade secrets,
tortuous interference, and unfair competition. The matter is currently
pending in the United States District Court for the District of Utah.
The complaint centers on IBM's activities regarding the UNIX operating
system that underlies our UNIX-based operating systems and IBM's AIX
UNIX-based operating system. The complaint alleges that IBM obtained
information concerning the UNIX source code from us and inappropriately
used and distributed that information in connection with its efforts to
promote the Linux operating system. Based on these claims, we delivered
to IBM a notice of termination of the license agreement we have with IBM
that permitted the use of our UNIX source code in the development of
IBM's AIX operating systems.
On or about June 16, 2003, we filed an amended complaint in the IBM
case. The amended complaint essentially restates and realleges the
allegations of the original complaint and expands on those claims in
several ways. Most importantly, the amended complaint raises new
allegations regarding IBM's actions and breaches through the products
and services of Sequent, which IBM acquired. We allege that IBM breached
the Sequent agreement in several ways similar to those set forth above
and we are seeking damages flowing from those breaches. We are also
seeking injunctive relief on several of our claims.
IBM has filed a response and counterclaim to the complaint, including a
demand for a jury trial. The discovery process of the action has
commenced. We filed an answer to IBM's counterclaim denying the claims
and asserting affirmative defenses.
In its counterclaim, as amended on September 25, 2003, IBM asserts that
we do not have the right to terminate its UNIX license or assert claims
based on our ownership of UNIX intellectual property against them or
others in the Linux community. In addition, they assert that we have
breached the GNU General Public License and have infringed on certain
patents held by IBM. Their counterclaims include claims for breach of
contract, violation of the Lanham Act, unfair competition, intentional
interference with prospective economic relations, unfair and deceptive
trade practices, promissory estoppel, copyright infringement, and patent
infringement and seeks a declaratory judgment against us. Discovery is
ongoing in the case. We intend to vigorously defend against these
counterclaims. In August 2003, we delivered notice of termination of
the UNIX license agreement we had with Sequent Computer Systems, Inc.,
which was previously acquired by IBM, based on similar breaches we had
claimed against IBM. This license was the basis for Sequent's UNIX-based
offering, the DYNIX/Ptx operating system. | In March 2003, we
filed a complaint against IBM alleging, in part, that it had breached
its license agreement with us by, among other things, inappropriately
contributing UNIX source code and derivative works to the open source
community and seeking to use its knowledge and methods with respect to
UNIX source code and derivative works and modifications licensed to it
to destroy the value of the UNIX operating system in favor of promoting
the adoption by businesses of the Linux operating system, of which it
has been a major backer. Based on these breaches, we terminated the
license agreement we have with IBM that permitted the use of our UNIX
source code in the development of IBM's AIX operating system. In May
2003, we sent letters to approximately 1,500 large corporations
notifying them that the use of the Linux operating system may be a
violation of our intellectual property rights.
IBM has filed a response and counter claim to the complaint, including a
demand for a jury trial. The discovery process of the action has
commenced. The action has been removed from Utah Third District State
Court and is currently pending in the Federal District Court for the
District of Utah. We filed an answer to IBM's counterclaim.
In its counter claim, as amended September 25, 2003, IBM asserts that we
do not have the right to terminate its UNIX license or assert claims
based on our ownership of UNIX intellectual property against them or
others in the Linux community. In addition, they assert that we have
breached the GNU General Public License and have infringed on certain
patents held by IBM. Their counter claims include claims for breach of
contract, violation of the Lanham Act, unfair competition, intentional
interference with prospective economic relations, unfair and deceptive
trade practices, promissory estoppel, copyright infringement, and patent
infringement and seeks a declaratory judgment against us. We intend to
vigorously defend against these counter claims.
Subsequent to July 31, 2003, we terminated the UNIX license agreement we
had with Sequent Computer Systems, Inc. ("Sequent") (which was
previously acquired by IBM) based on similar breaches we had claimed
against IBM. This license was the basis for Sequent's UNIX-based
offering, the DYNIX/Ptx operating system.
| | 36 | In May 2003, we sent letters to
approximately 1,500 large corporations notifying them that the use of
the Linux operating system may violate our asserted intellectual
property rights. In December 2003, we also began delivering written
notice to a large number of licensees under our System V UNIX contracts
requiring them to, among other things, provide written certification
that they are in full compliance with their agreements, including
certification that they are not using our proprietary UNIX code in
Linux, have not allowed unauthorized use of licensed UNIX code by their
employees or contractors and have not breached confidentiality
provisions relating licensed UNIX code. Additionally, we began notifying
selected Linux end users in writing of violations under the Digital
Millennium Copyright Act related to SCO's copyrights contained in Linux.
As another SCOsource initiative, in August 2003, we first offered to
Linux end users the SCO Intellectual Property License for Linux in the
United States. We recently announced that we will begin offering the
license worldwide by February 1, 2004. The license permits the use of
our intellectual property, in binary form only, as contained in Linux
distributions. By purchasing the license, customers are properly
compensating us for our UNIX source code, derivative UNIX code and other
UNIX-related intellectual property and copyrights owned by us as we
allege they are currently found in Linux. We additionally have announced
that we expect to commence by mid-February 2004 our first legal action
against a Linux end user for copyright infringement claims.
| [Nothing equivalent] |
| 37 | The
success of our licensing and other SCOsource initiatives will depend to
a great extent on the perceived strength of our intellectual property
and contractual claims and our ability to establish our rights. Many,
particularly those in the open source community, dispute the allegations
of infringement that we have made. Our SCOsource initiatives resulted in
revenue of $25.8 million in fiscal 2003 from two license agreements
obtained from Sun Microsystems and Microsoft. We continue negotiations
with other industry participants that we believe may lead to additional
SCOsource license agreements, but we are currently unable to predict the
amount or timing of future revenue from this source, if any. |
The success of our SCOsource licensing initiative, at least
initially, will depend to a great extent on the perceived strength of
our intellectual property and contractual claims and our willingness to
enforce our rights. Many, particularly those in the open source
community, dispute the allegations of infringement that we have made.
While this SCOsource initiative has resulted in revenue of $15.53
million through July 31, 2003, and we continue negotiations with other
industry participants that we believe may lead to additional SCOsource
license agreements, we are currently unable to predict the amount or
timing of future revenue from this source, if any.
| | 38 | In connection with our $50 million
private placement, we have agreed to pay to Boies, Schiller & Flexner
LLP and other firms representing us in establishing our intellectual
property rights $1 million and register the issuance of 400,000 shares
of our common stock by March 1, 2004. Subject to the registration
statement covering such shares being declared effective by the
Securities and Exchange Commission, we would issue such shares under our
current equity incentive plans. As a result of the issuance of this
consideration to Boies, Schiller & Flexner LLP and other firms, we
recorded an additional charge to earnings of approximately $9.0 million
in our fourth quarter that ended October 31, 2003. This $9.0 million
charge to earnings is comprised of non-cash expense of $8.0 million
related to the issuance of the 400,000 shares of common stock and $1.0
million in cash expense. Our agreement with the law firms provides
that the law firms will receive a contingency fee of 20 percent of the
proceeds from specified events related to establishing our intellectual
property rights. These events include settlements, judgments, licensing
fees, subject to certain exceptions, or a sale of our company during the
pendency of litigation or through settlement, subject to agreed upon
credits for amounts received as discounted hourly fees and unused
retainer fees and may be construed to include issuances of our equity
securities.
We also have agreed with the investors in our private placement that we
will not complete a transaction or take any action that could result in
a claim for a contingency payment by our law firms, other than
contingency payments related to licenses other than licenses entered
into as part of any settlement of litigation or sale of our company,
without first obtaining the consent of the investors holding at least
two thirds of the shares of our Series A Convertible Preferred Stock
issued in our private placement. Our obligation to obtain the consent of
our private placement investors will terminate automatically if and when
the aggregate number of shares of our common stock issuable upon
conversion of all outstanding shares of Series A Convertible Preferred
Stock held by the investors fails to equal or exceed five percent of our
outstanding shares of common stock as of December 8, 2003. |
We
have agreed to pay to Boies, Schiller & Flexner LLP and other firms
representing us in the protection of our intellectual property rights $1
million and register the issuance, pursuant to an effective registration
statement, to Boies, Schiller & Flexner by March 1, 2004 of 400,000
shares of our common stock. Subject to the registration statement
covering such shares being declared effective by the Securities and
Exchange Commission, we would issue such shares under our current equity
incentive plans. As a result of the issuance of this consideration to
Boies, Schiller & Flexner LLP and other firms, SCO anticipates recording
an additional charge to earnings of approximately $8,956,000 in its
fourth quarter that ended October 31, 2003. This $8,956,000 charge to
earnings is comprised of non-cash expense of $7,956,000 related to the
issuance of the 400,000 shares of common stock and $1,000,000 in cash
expense. | | 39 | New footnote 5: BayStar
Capital Management, LLC, a Delaware limited liability company, is the
general partner of BayStar Capital II, LP. Steven Derby, a managing
member of BayStar Capital Management, LLC, has voting and dispositive
power over the shares of our common stock held by BayStar Capital II,
LP. Neither BayStar Capital Management, LLC nor BayStar Capital II, LP
is an affiliate of a registered broker-dealer.
| [Nothing equivalent] | | 40 | In the UNIX operating system market, our competitors include IBM, Hewlett-Packard and Sun. These and other competitors are aggressively pursuing the current UNIX operating system market. Many of these competitors have access to greater resources than we do. The major competitive alternatives to our UNIX products are Microsoft's NT and Linux. The expansion of Microsoft's and our other competitors' offerings may restrict the overall market available for our server products, including some markets where we have been successful in the past. | In the UNIX operating system market, our competitors include IBM, Microsoft, Hewlett Packard and Sun. These and other competitors are aggressively pursuing the current UNIX operating system market. These competitors have access to greater resources than we do. The major competitive alternatives to our UNIX products are Microsoft's NT and Linux. While we believe that our server products retain a competitive advantage in a number of targeted application areas, the expansion of Microsoft's and our other competitors' offerings may restrict the overall market available for our server products, including some markets where we have been successful in the past. |
|
|
|
|
| Authored by: Anonymous on Saturday, January 17 2004 @ 03:22 AM EST |
What provision of the DMCA are they citing in their claims against Linux
end-users?
[ Reply to This | # ]
|
- DMCA? - Authored by: jricher on Saturday, January 17 2004 @ 03:32 AM EST
- Applicable... - Authored by: Anonymous on Saturday, January 17 2004 @ 08:30 AM EST
- DMCA? - Authored by: Anonymous on Saturday, January 17 2004 @ 05:05 PM EST
- DMCA? - Authored by: k12linux on Saturday, January 17 2004 @ 06:49 PM EST
- DMCA? - Authored by: stevem on Sunday, January 18 2004 @ 12:15 AM EST
- DMCA? - Authored by: Anonymous on Sunday, January 18 2004 @ 03:13 PM EST
- DMCA? - Authored by: the_flatlander on Saturday, January 17 2004 @ 09:43 AM EST
- DMCA? - Authored by: Anonymous on Saturday, January 17 2004 @ 12:52 PM EST
- Grim Reaper - Authored by: dmomara on Saturday, January 17 2004 @ 04:23 PM EST
| |
| Authored by: Maserati on Saturday, January 17 2004 @ 03:44 AM EST |
12, 13. Note that they aren't talking about Germany any more, probably because
they've discontinued talks over the restraining orders. I guess nobody signed
the NDA.
35. They say "misappropriation of trade secrets" is part of their
suit against IBM. They also allege that IBM broke the Sequent license. I'm not
at all sure how that theory is supposed to work.[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 03:47 AM EST |
Hmmm, seems very strange...
Why have they changed the wording and what could the significance of this be?
I am glad to see ACCC (Australia) has been in contact with SCO. I am in the
process of writing a letter to the head of the ACCC enquiring on their position
regarding SCO and whether or not Australians can expect to be protected by the
ACCC in regard to SCO's fishing expedition down under!
- SCO = Swindling Corporate Ogres
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 03:55 AM EST |
I very much like this form of presentation.
Thank you very much for the considerable effort.
Starting at #5 I've noticed hi-lighting that needs correction.
#6 is the esiest to correct of what I've seen so far
I'll reply to this entry for it to see if this format of notification works for
you.
(and won't also be duplicated by others).
[ Reply to This | # ]
|
- #6 - Authored by: Anonymous on Saturday, January 17 2004 @ 03:59 AM EST
- #5 - Authored by: Anonymous on Saturday, January 17 2004 @ 04:09 AM EST
- how best to communicate corrections? - Authored by: PJ on Saturday, January 17 2004 @ 04:13 AM EST
- diff? - Authored by: Anonymous on Sunday, January 18 2004 @ 05:18 AM EST
- FANTASTIC JOB - Authored by: Anonymous on Saturday, January 17 2004 @ 04:16 AM EST
- #38 - Authored by: Anonymous on Saturday, January 17 2004 @ 04:25 AM EST
- #35 - Authored by: Anonymous on Saturday, January 17 2004 @ 04:32 AM EST
- correction - Authored by: Anonymous on Saturday, January 17 2004 @ 04:41 AM EST
- #37 - Authored by: Anonymous on Saturday, January 17 2004 @ 04:37 AM EST
- #4 - Authored by: nealywilly on Saturday, January 17 2004 @ 08:40 AM EST
- #28 - Authored by: crythias on Saturday, January 17 2004 @ 10:06 AM EST
- #28 - Authored by: crythias on Saturday, January 17 2004 @ 10:08 AM EST
- #7 and #9 - Authored by: Anonymous on Saturday, January 17 2004 @ 03:29 PM EST
- #13 and #20 all italic missing blue - Authored by: Anonymous on Saturday, January 17 2004 @ 03:47 PM EST
- Summary of unimplemented suggestions in this thread - Authored by: Anonymous on Sunday, January 18 2004 @ 01:44 AM EST
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 03:56 AM EST |
| Simply beautiful. I summarized these changes in the previous topic, but not
nearly as completely or intuitively. Nice job.
You missed the bit where
they list their competitors as IBM, Hewlett-Packard and Sun. They used to be
IBM, Hewlett-Packard, Microsoft and Sun.
Thad [ Reply to This | # ]
|
- More Changes in the New SEC Filing - Authored by: PJ on Saturday, January 17 2004 @ 04:24 AM EST
- Good catch - Authored by: atul on Saturday, January 17 2004 @ 04:48 AM EST
- own worst enemy (no competing with this) - Authored by: Anonymous on Saturday, January 17 2004 @ 05:06 AM EST
- Good catch - Authored by: Captain on Saturday, January 17 2004 @ 06:29 AM EST
- Good catch - Authored by: tyche on Saturday, January 17 2004 @ 07:41 AM EST
- Good catch - Authored by: Anonymous on Saturday, January 17 2004 @ 10:40 AM EST
- Good catch - Authored by: Anonymous on Saturday, January 17 2004 @ 03:43 PM EST
- Contributed or just a member? - Authored by: Anonymous on Saturday, January 17 2004 @ 03:50 PM EST
- Good catch - Authored by: Alex on Saturday, January 17 2004 @ 05:31 PM EST
- Good catch - Authored by: Sri Lumpa on Monday, January 19 2004 @ 10:12 AM EST
- Good catch - Authored by: Sesostris III on Saturday, January 17 2004 @ 06:38 AM EST
- non-tinfoil hat reasons - Authored by: Anonymous on Saturday, January 17 2004 @ 01:05 PM EST
- More Changes in the New SEC Filing - Authored by: DrStupid on Saturday, January 17 2004 @ 02:23 PM EST
| |
| Authored by: jkondis on Saturday, January 17 2004 @ 04:00 AM EST |
| The filings repeatedly changed "protect our intellectual property rights"
to "establish...". ([1,14,19,27,28,33,37,38]) That's interesting. So
now they have the goal of establishing their rights, which presumably must be
done before they can protect them. Sounds like backpedaling.
Novell's
disagreement w.r.t. The SCO Group's rights over all of Unix, and Novell's
copyright registrations are mentioned in [9]. Maybe they really do read
Groklaw!
The overall theme seems to have gone decidedly downhill. They now
list quite a few more risks, and tend to describe them in more dire language.
This probably represents a very dedicated effort to shield the management from
liability when, I mean if, the stock tanks big time. Hmm. Wonder if it will
work...
"If the current slowdown continues,..."[22] Huh? I suppose they
haven't heard about the recent pick-up in tech spending, as announced by the
likes of IBM and Intel.
And please tell me that the awfully strange
accounting described in [3] isn't a way to ensure a big stock option payday for
Darl McBride when the stock bites the bullet!
Boy. If investors read
this and then plonk their money down for SCOX stock, then they surely must be
smoking some of that good Canadian green stuff...
...J [ Reply to This | # ]
|
| |
| Authored by: RedBarchetta on Saturday, January 17 2004 @ 04:03 AM EST |
Can you say... BACK-PEDDLING???
:-P [ Reply to This | # ]
|
| |
| Authored by: atul on Saturday, January 17 2004 @ 04:05 AM EST |
It's interesting how they've changed a word here and there so that, for
instance, in one spot they now they say they're trying to
"establish" their claims vs. the previous use of
"enforce".
Seems to me they wouldn't be doing this unless they felt they had to. Seems to
me they wouldn't feel they had to unless there were clear signs of legal
trouble if they didn't change the wording.
All in all, the new wording seems somewhat less unprofessional. It still whines
about the awful Linux people and implies the same people who are (allegedly)
convincing their customers to switch to non-SCO platforms are also DOSing their
website. Is that you, Kevin? Someone's *started* to realize that an SEC
filing is no place to take a smug, self-righteous tone, much less a psychotic
one.
Did someone in Lindon finally realize you don't get to be a big-time crook by
acting like a small-time crook? Or did RBC and Baystar lean on them a bit?
Either way, they could have saved themselves a lot of trouble by just admitting
they're absolutely doomed.[ Reply to This | # ]
|
| |
| Authored by: Captain on Saturday, January 17 2004 @ 04:20 AM EST |
I've glanced over this and it would seem that they are a lot less optimistic
about their future now. A lot of new risk factors added, and they significantly
reduced their description of the strength and broadness of their case. I wonder
what this will do to their stock-price.
Also, it seems only 2 licences
have been sold so far (to Microsoft and Sun). They've been unable to extort any
other companies. I suspected this but it's nice to see it in
writing.
It's the first SCO document I've ever read that I found actually
believable. Note to future self: When investigating companies, look at their SEC
filings. There seems to be a "don't lie or you will go to jail" thing about
them.
I still think they'll attempt to sue an end-user, combined with
attempting to generate a short-squeeze, but SCO seems to be on very shakey
ground now.
This also seems bad for SCO: "If the selling stockholders
choose not to convert shares of Series A Convertible Preferred Stock, then, as
holders of shares of Series A Convertible Preferred Stock, among other rights,
they will be entitled to require us to repurchase for cash all the shares of
Series A Convertible Preferred Stock held by them at a premium price if any of
several redemption trigger events occurs. Our redemption obligation may be
triggered by events that are beyond our control. These redemption provisions, if
triggered, would require us to redeem the then-issued and outstanding shares of
our Series A Convertible Preferred Stock for cash. If we were required to pay
cash to the holders of shares of our Series A Convertible Preferred Stock, it
could have a material impact on our liquidity, which may require us to obtain
additional sources of cash to sustain operations and may negatively impact the
holders of our common stock."
Can anyone find out what 'These
redemption provisions' are, and when they are triggered? For instance, could a
deflated stock-price be a provision? If that is true, I would guess that would
impact their liquidity (which would be a significant risk to their expensive
litigation business). [ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 04:30 AM EST |
Well I've been reading Groklaw for a few weeks and continue to be impressed by
the impact on the whole SCO scam. Here is my first contribution.
This
one part really stood out for me and may be a key to cutting ol SCO off at the
knees really quickly:
If the selling stockholders choose not to
convert shares of Series A Convertible Preferred Stock, then, as holders of
shares of Series A Convertible Preferred Stock, among other rights, they will be
entitled to require us to repurchase for cash all the shares of Series A
Convertible Preferred Stock held by them at a premium price if any of several
redemption trigger events occurs. Our redemption obligation may be triggered by
events that are beyond our control. These redemption provisions, if triggered,
would require us to redeem the then-issued and outstanding shares of our Series
A Convertible Preferred Stock for cash. If we were required to pay cash to the
holders of shares of our Series A Convertible Preferred Stock, it could have a
material impact on our liquidity, which may require us to obtain additional
sources of cash to sustain operations and may negatively impact the holders of
our common stock.
Sounds to me like Baystar has an out for when
the house of cards starts to crumble. By now they realize that this longshot
investment is now an impossible shot and after learning about the whole Novell
correspondence, lack of a single line of SysV code in Linux and the Bois
agreements, they have to be wanting their money back. Does this statement
indicate that they can cash in their preferred stocks if the "triggering events"
occur? If so, now we just need to know how to trigger it so that the implosion
can commence. Of course the usual ....IANAL.
Chris[ Reply to This | # ]
|
| |
| Authored by: error27 on Saturday, January 17 2004 @ 04:34 AM EST |
SCO is probably going to try do something during LinuxWorld next week. My guess
is that they will sue google. I think Novell will sue SCO next week as well.
What do you think SCO will do during LinuxWorld?
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 05:07 AM EST |
This excellent list should be sufficient for SEC to have a closer look into the
real internals at SCO. If I would have made my investment decisions based on the
former entry I would be really surprised about the shift in argumentation. Just
to give you one example: What happened to approx. $10 Million dollars revenue
($25.8 million against $15.53 million) mentioned as item #37 in your list.
I am pretty sure that our authorities in Germany would give any of those SCO
officers a warm welcome (perhaps including bed and breakfast) should they ever
try to visit any European country. SCO is listed in Frankfurt and some other
European countries as well. And our SEC does not like bubble works at all.
Why does the SEC seemingly keeps quite about those filings? Doesn't an US
investor has the right to be protected from potential misleading informations?[ Reply to This | # ]
|
| |
| Authored by: Kristoffer on Saturday, January 17 2004 @ 05:11 AM EST |
The original lyrics of Bohemian Rhapsody by Queen reminded me of the whole SCO
story, so I just modified them a bit. Although the phrasing might be a bit
quirky here and there it is singable (in the shower at least!).
The following is of course purely fictional! :) Have fun.
---
SCO Rhapsody
[mel. Bohemian Rhapsody, Queen]
Is this SysV code-
Is this just fantasy-
Caught in discovery-
No escape from reality
Hand us your source
It must contain our IP-
I'm just a poor boy, I need no sympathy-
Because I’m pumping stock, with nil to show,
A little high, little low,
Whatever the facts show, doesn’t really matter to me,
To me
Grokkers, I've sued Big Blue
Followed voices in my head,
Filed a case, and now I'm dead,
Grokkers, hoped they'd buy me out,
But now I’ve gone and thrown it all away-
Grokkers ooo,
Don't mean to make you sad-
If there's no press release this time tomorrow-
Carry on, carry on, as if all this didn't matter-
No case!, the judge has ruled,
Sends shivers down my spine-
Stock is dropping all the time,
Goodbye dear Grokkers-I’ve got to go-
Gotta leave you all behind and face the truth-
Grokkers ooo- (whatever the facts show)
I don’t want to lose,
I sometimes wish I’d never spead FUD at all-
I see a growing silhouetto of a penguin,
Microsoft, Microsoft will you fund my ligitation-
Source code and Linuxing-very very frightening me-
GPL, GPL,
GPL, GPL,
GPL is hard to spell-for SCO-
But I’m just a poor boy and nobody loves me-
He’s just a poor boy from a poor company-
Spare him his stock from this monstrosity-
Easy come easy go-, will you let me go-
Darl McBride! no-, we will not let you go-let him go-
Darl McBride! we will not let you go-let him go
Darl McBride! we will not let you go-let me go
Will not let you go-let me go
Will not let you go let me go
No, no, no, no, no, no, no-
Mama mia, mama mia, mama mia let me go-
The community has a devil put aside for me, for me, for me-
Do you think you can stop us with FUD dressed up in ties-
Take the code that you like and then spit in our eyes-
Oh McBride-can’t do this to us Darl-
Just gotta get out-just gotta get right outta here-
Only money matters,
Anyone can see,
Only money matters-, only money matters to me,
Whatever the facts show ...
[This work is licensed under a Creative Commons License.]
./ Kristoffer[ Reply to This | # ]
|
- OT: SCO Rhapsody - Authored by: interruach on Saturday, January 17 2004 @ 06:37 AM EST
- OT: SCO Rhapsody - Authored by: Anonymous on Saturday, January 17 2004 @ 06:39 AM EST
- OT: SCO Rhapsody - Authored by: turbopro on Saturday, January 17 2004 @ 07:47 AM EST
- OT: SCO Rhapsody - Authored by: Philip Stephens on Saturday, January 17 2004 @ 04:21 PM EST
- OT: SCO Rhapsody - Authored by: Anonymous on Saturday, January 17 2004 @ 04:29 PM EST
- Very funny and to the point - Authored by: Anonymous on Saturday, January 17 2004 @ 05:07 PM EST
- This could become a hit ! - Authored by: Anonymous on Saturday, January 17 2004 @ 05:14 PM EST
- OT: SCO Rhapsody - Authored by: Anonymous on Saturday, January 17 2004 @ 05:57 PM EST
- For style PJ's book should come out with a CD - Authored by: Anonymous on Saturday, January 17 2004 @ 08:18 PM EST
- OT: SCO Rhapsody - a tiny change to the lyrics? - Authored by: Anonymous on Sunday, January 18 2004 @ 06:01 PM EST
- OT: SCO In Da FUD, by 50 Cent Stock - Authored by: Anonymous on Sunday, January 18 2004 @ 07:36 PM EST
| |
| Authored by: seeks2know on Saturday, January 17 2004 @ 05:27 AM EST |
Here is something new and significant!
For months SCO has been
claiming that Linux was a derivative of
Unix. But look at how they classify
their competitors:
"In the UNIX operating system market, our
competitors
include IBM, Hewlett-Packard and Sun...
...The major
competitive alternatives to our UNIX products are
Microsoft's NT and
Linux."
Here they group Linux with NT in a classification
completely apart
from UNIX operating systems. ---
"Convictions are more
dangerous enemies of truth than lies." - Friedrich Nietzsche [ Reply to This | # ]
|
| |
| Authored by: dentonj on Saturday, January 17 2004 @ 05:39 AM EST |
SCO removed this:
In addition, subsequent to July 31, 2003,
Microsoft exercised an option it held to acquire a broader license to our UNIX
source code resulting in a payment to us of $8
million.
Since Novell gets 95% of all existing and modified
UNIX licences, is SCO trying to hide the evidence?.
In several place when
talking about intellectual property, SCO changes it's actions for "protecting"
them to "establishing" them. They must realize that noone will listen to their
copyright claims without a court case to prove it. Since the are in a dispute
over copyright with Novell, claiming to own something that they do not would
come back to haunt them. So where do they get off making DMCA claims against
Linux users?
[ Reply to This | # ]
|
| |
| Authored by: RK on Saturday, January 17 2004 @ 05:44 AM EST |
At the begining of [35], did they really say "tortuous" interference
or is that our typo? [ Reply to This | # ]
|
- Typo? - Authored by: PJ on Saturday, January 17 2004 @ 06:04 AM EST
| |
| Authored by: geoff lane on Saturday, January 17 2004 @ 06:08 AM EST |
| I've recently read a couple of messages (here and on /.) that say the deals done
with RBC and BayStar result in a book profit to SCO and Darl when the share
value falls.
If this is true, Darl has no incentive to maintain the
SCOX value at all as should the value fall, SCO shows a profit and Darl gets his
bonus.
Can it be proper for a director of a company to arrange finances in a
manner that can harm the ordinary shareholders?
If SCOX value does
collapse, can a shareholder class action be far behind?
[ Reply to This | # ]
|
| |
| Authored by: Steve Martin on Saturday, January 17 2004 @ 06:48 AM EST |
For example, an increase in the value of our common stock by
$1.00 may require us to record an expense of approximately $1,000,000,
and, conversely, a decrease in our common stock by $1.00 may require us to
record income of approximately $1,000,000.
Now,
I'm just a dumb ol' country boy, and definitely not an accountant, so someone
please explain this to me:
-
How in the world can a fluctuation in the
company's stock price be booked as income? This feels a bit bogus to
me.
-
If a $1 change in stock price causes a change of $1M in
income, it would seem to follow that they're making that calculation based on 1M
shares of common stock outstanding. I though there were more than that. Or am I
missing something?
---
"When I say something, I put my
name next to it." -- Isaac Jaffee, "Sports Night" [ Reply to This | # ]
|
| |
| Authored by: rcorg on Saturday, January 17 2004 @ 07:02 AM EST |
PJ, re your comment about precise legal writing in a
contract,
"Precision in your words in a document can make the
difference between a solid contract that doesn't need to be decided by a judge
because there is no dispute about what it means and one that ends up a lawsuit
because nobody is sure what it is saying."
How would you
characterize the 1995 APA, in terms of contractual clarity? Perhaps this is a
rhetorical question.
My own take on this, outlined elsewhere on Groklaw
(BTW, Thanks - superb effort), is that the lack of clarity of the APA,
particularly with respect to SVRX ownership rights, was possibly
intentional. Why? The attorneys' job was, of course, to make the deal,
protecting the best interests of their respective clients. I'm guessing that a
clear statement of SVRX ownership rights in the APA may have been a deal
breaker. The need for a workaround may have been the reason for the APA's vague
wording about SVRX rights.
The trajectory from the APA's vague language
to a courtroom seems almost complete. The problem seems to have been
acknowledged by both parties early on, as demonstrated by the Amendment
history. [ Reply to This | # ]
|
| |
| Authored by: seeks2know on Saturday, January 17 2004 @ 07:05 AM EST |
PJ, great job!
There is some of the original text in section 7 that
appears in the
new section 9. It's been editted substantially. I've emphasized
the
shared text in bold.
Here is the original text (section
7):
In addition, we may experience a decrease in revenue as
a
result of the loss of sales of Linux products and initiatives
previously
undertaken jointly with IBM and others affiliated with
IBM or sympathetic to
the Linux movement. We are informed that
participants in the Linux industry
have attempted to influence
participants in the markets in which we sell our
products to reduce or
eliminate the amount of our products and services that
they purchase.
They have been somewhat successful in those efforts
and similar
efforts and success will likely continue. There is also
a
risk that the assertion of our intellectual property rights will be
negatively
viewed by participants in our marketplace and we may
lose
support from such participants. Any of the foregoing could
adversely
affect our position in the marketplace and our results
of
operations.
Here is the new text (section
9)
As a result of our action against IBM and our
SCOsource
initiatives to protect our intellectual property rights,
several
participants in the Linux industry and others affiliated with IBM
or
sympathetic to the Linux movement have taken actions attempting
to
negatively affect our business and our SCOsource efforts. Linux
proponents have
taken a broad range of actions against us, including,
for example, attempting
to influence participants in the markets in
which we sell our products to reduce
or eliminate the amount of our
products and services they purchase from us.
These actions have
been somewhat successful in negatively impacting our
business, and we
expect that similar efforts likely will continue. There is a
risk
that participants in our marketplace will negatively view our
legal
action against IBM and our SCOsource initiatives, and we may
lose
support from such participants. Any of the foregoing could
adversely
affect our position in the marketplace, our results
of operations and
our stock price.
I think if you move this block of original
text from section 7 to
section 9 it would align more logically.
Hope this
helps.
OK. Time for bed... ---
"Convictions are more dangerous
enemies of truth than lies." - Friedrich Nietzsche [ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 07:11 AM EST |
| ...the efforts of Novell and the other Linux proponents described above may
cause Linux end users to be less willing to purchase from us our SCO
Intellectual Property Licenses... Increased negative perception and potential
confusion about our claims in our marketplace could impede our continued pursuit
of our SCOsource initiatives and negatively impact our business.
No
shit, sherlock.
Interesting backpeddling about the s/protect/establish/g
changes. Novell must smile a tight smile about that. Its a serious reduction
in the stock's proposition to investors, instead of being a solid gold
'protection' racket the game has moved back a step, now its a speculative 'if we
can establish that we have thse rights we might have a revenue stream' play.
Will the stock price slide back to reflect this? [ Reply to This | # ]
|
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| Authored by: tyche on Saturday, January 17 2004 @ 07:17 AM EST |
While I am not an analyst or accountant, what I see of the ammendments and
deletions would indicate an extremely negative position compared to their
previous submission. The tone of the previous one appeared to be that of
"We're the greatest and everybody will fall in line with us. Oh, by the
way, there are a couple of problems." The tone of the current one appears
to be more of "Everybody's picking on us and not giving us the money.
And now we've got these vultures sitting on our shoulders." I get the
feeling that they are running scared, and they are actually beginning to see
that their empire may crumble.
Craig
(Tyche)
---
"The greatest enemy of knowledge is not ignorance, it is the illusion of
knowledge."
Stephen Hawking[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 07:58 AM EST |
Well, if having one tiger (IBM) by the tail wasnt bad enough, now SCO has
another! According to the s3 amendment,
"Our compensation arrangement with the law firms representing us in our
efforts to establish our intellectual property rights may harm our ability to
raise additional financing."
Looks like Boies is the second tiger SCO has by the tail. It is unlikely any
investor will put funds to SCO, when 20% of that goes out the window to Boies
immediately. (ROI anyone?). Neither can SCO let go of Boies, because with that,
bye bye stock price!
And we thought having IBM tiger by the tail was bad enough![ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 08:07 AM EST |
Thanks PJ for highlighting the word perceived !
(item 5)
"Our SCOsource initiative is unlikely to produce a stable or predictable
revenue stream for the foreseeable future. Additionally, the success of this
initiative may depend on the perceived strength of our intellectual property
rights and contractual claims regarding UNIX, including, the strength of our
claim that unauthorized UNIX System V source code and derivatives are prevalent
in Linux."
Perceived ? - This says it all !
If nobody takes them seriously then they admit they have no chance.
SCO have just woken up, or admitted that they were awake all along.
Obviously a successful sco legal case (eg pixar or google) will strengthen their
'perceived' rights though, and this is what they are relying on. Thus by
implication they accept that they cannot apply their licencing program until
their claims have been proven in court. Didnt we say that months ago?
[ Reply to This | # ]
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| Authored by: Jude on Saturday, January 17 2004 @ 08:15 AM EST |
41) Are you an investor looking for a return on your investment? If so, why
did you continue reading all the way down to this paragraph?
[ Reply to This | # ]
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| Authored by: blacklight on Saturday, January 17 2004 @ 08:26 AM EST |
The SCO Group's SEC filings always were closer to reality as we all know it
than its press releases and other pronouncements. I view the SEC filings as the
end result of a translation process that starts with the raw PR histrionics.
Either that, it's telling different versions of the story to different sets of
people - Now, why in the world would I be so petty as to suspect that?[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 08:27 AM EST |
It snot establishing IP rights intheri description of the arrangement with their
law firsm ..not if they really bleive that they have a set of IP{ rights..
the wording in this case woudl be ..
while enforcing IP rights :)
Freudlin slip!
[ Reply to This | # ]
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| Authored by: snorpus on Saturday, January 17 2004 @ 09:05 AM EST |
| Did they fill that position for an accountant to handle SEC filings?
If so,
the new, more negative, tone may be reflective of that. In my (limited)
experience, a prospectus tends to be somewhat negative, identifying all risks,
no matter how small. The previous version was much too positive.
What I'm
finding really interesting is how SCOG seems to be getting hemmed in on two
fronts:
- Financially, with the various restrictions imposed by the
agreements with Boies and Baystar, coupled with declining revenues from their
core Unix business.
- Legally, with a frontal counter-offensive by IBM, with
RedHat engaged on one flank and Novell waiting in
reserve.
---
73/88 de KQ3T [ Reply to This | # ]
|
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| Authored by: danb35 on Saturday, January 17 2004 @ 09:43 AM EST |
Others have noted this already, but I think it's the most significant change in
the new document vs. the old--SCO is as much as admitting they don't have the
rights yet (or at least, that it isn't clear that they own them). Big, big
reversal from their prior statements.
They still seem to be suffering from multiple-personality disorder regarding the
nature of their claims, though. In court, in the 10 months or so this case has
been pending, there's been no claim of copyright infringement, but they're
still beating the drum about SysV code in Linux and copyright issues here.
[ Reply to This | # ]
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| Authored by: smtnet1 on Saturday, January 17 2004 @ 09:48 AM EST |
| The whole Linux License scheme falls apart for one important reason. SCO
distributed Linux under the GPL license, as the GPL License is the only license
that gives them the right to distribute Linux.
In their Linux License FAQ
They state that this is not a problem because they were were unaware that
someone else had put their code in Linux without their knowlege or consent, and
because they stopped distributing Linux they did not license the use the code in
Linux under GPL. Their talk about copyrights is irrelevent, users only need a
license to use and/or distribute code not a copyright.
During the
period that SCO distributed Linux, SCO was unaware of the copyright violations.
Copyrights cannot be given up by unintentional or illegal inclusion in a GPL
product. The owner of the copyrights must transfer the copyrights in writing,
which SCO has never done.
Section 0. of the GPL states the
following:
0. This License applies to any program or other work which
contains a notice placed by the copyright holder saying it may be distributed
under the terms of this General Public License.
SCO has obviously never
placed a notice indicating that our UNIX source code can be distributed under
the terms of the GPL license. Distributing the code is very different from
contributing the code. SCO has never accidentally contributed the
code.
They did include a notice saying that the code could
be distributed under the GPL License.... The GPL License text itself.
SCOs
argument is totally ridiculous if you look at it in the context of any other
software.
For example surpose that a Microsoft contractor working on the
free Wordpad utility in Windows put full Microsoft Word compatibility into it,
and Microsoft included this in Windows.
If Microsoft then sold this version
of Windows and found that sales of Office were down because the modified Wordpad
did all that most users needed, would Microsoft have a case to sue end
users?
Of course not they should have checked what they were selling !!.
They may of course have a case against the contractor
But SCO are saying
that IBM or others included SCO IP in the code they contrinuted to Linux, and
then SCO took that code without checking it and sold it to their customers with
the GPL as the end user license. Now they are saying that they did not know it
was there and did not mean to license it under GPL.
Well they should have
checked what they were selling and licensing under GPL.
If this isn't a risk
factor for them what is?
[ Reply to This | # ]
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| Authored by: kberrien on Saturday, January 17 2004 @ 09:59 AM EST |
Ok, its clear that SCO is backpeddling, and in relation to its SEC filings.
This brings up the question.
Why now?
Is this as simple as someone called them on the sparcity of risks in their
filings? Groklaw, RBC, etc..
Have they attracted some preliminary attention from the SEC, and this is a
scramble?
Is the Novell audit complete, and SCO will soon have to fork over money from the
MS, Sun deals? They want to hide it until the next quarter, but are covering
themselves by amending the prior quarter so it's not such a surprise in turns
of the paper trail?
Or is this part of a larger action.
Has SCO finally realized the offensive era has come to an end, and they are
digging their trenches - covering their backs for the impending fall? Perhaps
the bubble hasn't blown in the market, but it just popped in Utah?[ Reply to This | # ]
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| Authored by: webster on Saturday, January 17 2004 @ 10:00 AM EST |
I only had enought time to read the red parts. I would like to think the
amendment of the S3 was inspired by Groklaw. They were probably drafted by
their security legal specialists. It is one thing to discuss such things here
on Groklaw, quite another for SCO to acknowledge them in writing. No Doubt the
investors are also seeing red.
The redemption provisions of the preferred stock are impractical considering
SCO's meager income from operations and legal expenditures. Unless they get
more sugardaddy licensure deals or jackpot investment, they can't redeem
anything. Their raid on Linux now finds them under a litigious seige. Do they
have enough heart, evidence, legal resources to carry on for a few years without
additional windfall contingencies?
---
webster
Recent Windows refugee[ Reply to This | # ]
|
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| Authored by: Anonymous on Saturday, January 17 2004 @ 10:06 AM EST |
What is microsoft doing aquiring unix source?
What's the kickback that the SCO execs are getting from selling MS the source?
Heh, yeah microsoft is likely funding most of the legal battle in the end.
Oh and to those of you who thought that SCO employees would have troubles with
the SCO burn mark on their resume afterwards, I wouldn't worry. They're
probably all guaranteed jobs at MS when they're done.
UP WITH RUKUS[ Reply to This | # ]
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| Authored by: trevmar on Saturday, January 17 2004 @ 10:17 AM EST |
You know, PJ, putting on my "ex-public-CEO's" cap here, it would be
usual for any contract having such potentially devastating "redemption
triggers" to have been filed with the SEC, using an 8K or as an attachment
to the S3
I would note that SCO's stock price is already below the $16.93 conversion
price, and in a worst case scenario, a potential 30 day (or 90) provision in the
mandatory redemption may have already been triggered.
It is encumbent upon SCO to have declared such redemption trigger points. I
understand your concern about Groklaw being seen as not having an axe to grind,
but it would be remiss to not notice the potentially devastating importance of
such triggers, and note that they have been withheld from the public, presumably
to prevent competitors (and stock manipulators) from being able to profit from
them.
I would remind you that 25% of SCO's common stock (in which I hold no position)
is sold short. That is a huge amount of money betting on the failure of the
company. Clearly, those who are in the know, who have access to the exact
trigger points, have an advantage in the market.
And that is precisely what the SEC disclosure rules are designed to prevent. I
believe SCO still has not 'fessed up enough descriptive material regarding the
RBC and Baystar events.
Trevor[ Reply to This | # ]
|
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| Authored by: Anonymous on Saturday, January 17 2004 @ 10:33 AM EST |
While thinking about SCO's high-priced legal team (we haven't heard from them
in some time), I wondered if SCO gave them up and is using Groklaw instead?
This thought lead me to one one other: We can see the system at work here.
Imagine SCO giving up high-priced, name-brand legal council for (I mean no
disrespect) a para legal with a website. While IBM can benefit from what goes
on here, so can SCO. Kevin is freed from doing his own research - and the
conclusion he seems to have drawn is enlightening. Now extend this example to
the GPL. SCO (MS$) vs GPL (Linux). While not as conclusive as I'd hoped this
post to be, I think it is also enlightening.[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 10:43 AM EST |
For those who wonder how Yarrow's group fits into this: did you notice where
certain holders of Preferred Series A stock will have "preferred"
access to assets when SCO fails?
In other words: this will happen again, because items will go to Canopy, not the
lawyers (their shutdown treatment is shown later). Check out DR-DOS, Caldera,
and Lineo in the "courthouse" sale. Canopy uses this mechanism to
dish it to other investors while they lose little or nothing.
Other interesting points: compare dollar amounts in several places. They are
(slightly) inconsistent, and refutes their public statements about wide interest
in SCOsource. Rather SCOsource seems to be killing Unix. Their income appears
to have come from just 2: Sun and Microsoft, and they probably don't need to
ever send another penny.
Next, the attorney is still listed as a "contingency". PJ, you
didn't quite get your point through to them, eh?
The revised filing doesn't make note of potential liability for multi-million
dollar payments to Novell under the APA terms. Another slipup?
Finally, Microsoft is out of the list of direct competitors, but NT is a
potential competitor to Unix? Is that the same NT for which Microsoft announced
they are ending support?
Who is responsible for filing the changes? Tibbits? Bench? Should these guys
get in touch with Martha to find out how best to decorate cells?
[ Reply to This | # ]
|
- SCAmopy? - Authored by: Anonymous on Saturday, January 17 2004 @ 11:02 AM EST
- NT competes with them despite no longer being sold. - Authored by: Anonymous on Saturday, January 17 2004 @ 02:37 PM EST
- SCAmopy? - Authored by: Anonymous on Saturday, January 17 2004 @ 10:07 PM EST
- NT - Authored by: Anonymous on Sunday, January 18 2004 @ 04:42 PM EST
- SCAmopy? - Authored by: PolR on Sunday, January 18 2004 @ 05:10 PM EST
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 11:03 AM EST |
#26 in pipe funding looks like a classic death spiral
in this type of funding a hedge fund will buy, lets say, 5% of a company at $20
per share. the event that triggers redemption might be a decline in price to $10
per share. the hedge fund may short the stock (or abandon a long position) until
the stock declines to $10 and demand a cash redemption. since the target
company has no money, the company must agree to convert to a new pipe,
representing 10% of the company with a new trigger at say $8 per share. the
process starts all over again, until the hedge fund owns the company.
shorting in this environment is generally illegal, but difficult to enforce,
particulary with overseas funds.
read about a death spiral here.
http://www.forbes.com/best/2001/0910/012.html[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 11:18 AM EST |
the is another page on pipe funding.
http://www.panix.com/~mgutham/arttoxic.htm[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 11:23 AM EST |
A point has occurred to me reading the comments here
again.
If the new deal with MS really was one of the things that
had to be cleared by Novell prior to signing, then Novell
could invalidate it easily (and bearing in mind the past
history of relations between the two that's pretty
likely).
In that case Novell would not get the money - it would
have to go back to MS. Also if, as has been postulated,
the MS new 'services for unix package' is dependednt on
that they would have to withdraw it.
Which would lead MS to be highly pissed off with Darl & co
- yet another legal battle to fight perhaps. [ Reply to This | # ]
|
| |
| Authored by: sward on Saturday, January 17 2004 @ 11:53 AM EST |
One interesting thing is the way risks to the OLD business (selling software)
have disappeared, while risks to the NEW business (barratry and stock scams)
take center stage. See, for example, the changes in #7 and #13. Just in case
any "investor" with half a clue was unaware of the fact that the old
business is dead.
This is also the main reason why SCOX is not worried about the likelihood that
the copyright laws will prevent them from further distribution of GPL'ed
software - the old business is simply no longer relevant.[ Reply to This | # ]
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| Authored by: Jude on Saturday, January 17 2004 @ 11:54 AM EST |
In addition to SCOx, we implemented our first SCOsource initiative in January
2003 to review and establish our intellectual property rights in the UNIX
operating system. In March 2003, we filed a lawsuit against IBM as part of this
and other SCOsource initiatives.
Every Linux user should download
and print a copy of SCO's latest S3 amendment.
If SCO come a-calling looking
to "sell" a "Linux license", just show them their own SEC
filing and tell
them to get back to you when they're done "establishing their
rights".
If they don't take the hint, just show the same SEC filing to
the judge when you get to court.
[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 11:55 AM EST |
Is it more clear now?
Now that Canopy has taken enough cash out of this, it is
time to scuttle the ship. With this filing, they have pulled the breech plug,
and the ship is flooding. By the end of the hearing next Friday, the stock will
start it's fall (triggering huge profit for (you guessed it) Canopy). By the
time Novell, IBM, and RedHat get them on their cases, the company will be gone.
I now tip my hat to Darl, for a well done manipulation. I can see him actually
getting away with it now. Canopy goes free, and gets to move on to the next
Venture. Paul Allen, free. RBC, free. Darl, free (with lots of spare change).
Boies, free (and also plenty of pocket change). Wow. This was well executed.
They had this plan from the start. As all the Linux faithful cheer at the ship
sinking, all the captains who caused it sail off into the sunset in their
private ships.
Before you jump on me as a troll, just look at this
escape, and tell me truthfully that you are not impressed that a company can
manipulate us all so well[ Reply to This | # ]
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| |
| Authored by: jrc on Saturday, January 17 2004 @ 12:29 PM EST |
It's going to be very interesting to compare the amended s3's with last
year's 10-K Annual Report and the upcoming 10K (due about a week after the 23
Jan court date). A quick glance indicates just how far SCO has deviated from the
Linux/Unix strategy it outlined last January, and puts into stark terms the risk
that they have assumed by entering to a litigation revenue model, thereby
damaging the brands & sales of their key product lines.
One avenue of research that I just noticed centers on the previous declarations
of how SCO was saving costs on development by consolidating the engineering on
Linux and Unix. If that was true, it would be interesting to find out which
engineers were sharing ideas between SCO/Caldera Linux Unixware, and what
policies the company instituted to keep the valuable trade secrets it touts in
its 2002-10K out of GPL'd Linux code. I would surmise that there was not an
IBM-like firewall between Unix and Linux coding if SCO was trying to cut costs
and consolidate engineering. SCO's internal IP policies (or lack thereof) might
make an interesting exhibit at trial when juxtaposed with IBM's robust and
mature engineering practices....
---
[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 12:34 PM EST |
Ya think?
How about 1 forward gear and 18 reverse gears...
The
"risk factors" are essentially CYA statements. This is looking like they are
devoting a lot of resources to trying to protect themselves from shareholder
lawsuits and an SEC investigation. Perhaps they do indeed read
Groklaw.
"Your Honor, we couldn't respond fully to discovery because our
legal team was too busy trying to cover our executive asses from
liability."
Hey - I have an idea for them: Sell individual stock
certificates as mementos. A lot of people would like to have one as a souvenir
after they are dead and gone. They could probably make more money selling those
than anything else.[ Reply to This | # ]
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| Authored by: PeteS on Saturday, January 17 2004 @ 12:58 PM EST |
| This was in a
previous thread, but I consider it to be important enough to post
directly.
From the parent to my post:
In the contract between
Caldera and (old)SCO - go read it, its plain as day.
The claiming the
revenue from this expanded contract rather than 5% of it is thewhole issue
here.
My post
I agree it is in the contract, but it is a
major risk factor if Novell claims and prevails for effectively 95% of the
licensing fees.
In fact, by requiring an audit of
the Sun and Microsoft licenses (letter of Nov 21, 2003) Novell could be said
to have already started the claim process. This should be
prominent
somewhere in the filing.
Such a major risk factor is supposed to
be listed
in SEC filings, even if only by incorporation; in that case, attention
must be prominently drawn to the appropriate part.
SCOG would then have to
restate two quarters of earnings with a significant downshift in income; this
could
trigger an SEC response.
Note also that with the new wording, it
appears they are either worried the SEC will come knocking on their door
or SEC regulators have already called them and asked politely why all the
risk factors they are being told about do not appear in their
filings.
---
Artificial Intelligence is no match for natural
stupidity [ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 01:02 PM EST |
Somewhat off topic thought.
If Novell knew it is owed 95% of all income from SCO's licenses, perhaps the
idea was to obtain very strong evidence that SCO is withholding royalties? That
they were never given 95% of their payment back would probably be enough to take
SCO to court where they would be able to get details on Microsoft's
investment.
I doubt this theory, but I can't think of a good reason why it is implausible.
[ Reply to This | # ]
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| Authored by: whoever57 on Saturday, January 17 2004 @ 01:08 PM EST |
As another SCOsource initiative, in August 2003, we first offered to
Linux end users the SCO Intellectual Property License for Linux in the United
States.
It's been documented that it is not possible to actually
buy a license from SCO -- so how did SCO "offer" a license? ---
-----
For a few laughs, see "Simon's Comic Online Source" at
http://scosource.com/index.html [ Reply to This | # ]
|
- Outright lie? - Authored by: Anonymous on Monday, January 19 2004 @ 06:15 AM EST
| |
| Authored by: Utah on Saturday, January 17 2004 @ 01:40 PM EST |
I find myself becoming obsessed with the SCO lawsuit, and my mood becoming
increasingly adversarial. I regret the critical tone of many of my posts,
especially those directed toward Darl McBride personally. So I'm going to
withdraw from the battle and hope that this is all resolved as soon as possible.
Best wishes to all of my friends on this board, especially PJ.[ Reply to This | # ]
|
- OT: Bye all - Authored by: Anonymous on Saturday, January 17 2004 @ 05:21 PM EST
- OT: Bye all - Authored by: Anonymous on Saturday, January 17 2004 @ 05:51 PM EST
- OT: Bye all - Authored by: blacklight on Saturday, January 17 2004 @ 07:20 PM EST
- OT: Bye all - Authored by: Anonymous on Sunday, January 18 2004 @ 12:52 AM EST
| |
| Authored by: webster on Saturday, January 17 2004 @ 01:40 PM EST |
Dyno-mite! The clarity of the format, the risks in red, the expert replies
pointing out the need for further disclosure. What a day! Their own lawyers are
making them say this! What battles within!
You are really punishing them! It is amazing what you keep coming up with every
day. The interest level is fantastic. They can't hide behind complexity with
you around.
Every day you shake the faith of the True Believers in SCO. When doubt that
they will ever prevail, by trial or settlement, reaches critical mass, the
house of cards will fall. SCO will implode.
With such scrutiny IBM will think twice before they consider any sweetheart
settlements with golden parachutes. The blood is in the water. Thanks for the
view.
---
webster
Recent Windows refugee[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 01:41 PM EST |
Based on this revised filing and a separate attribution, it appears that
Micro$oft has funded SCO to the tune of over $18,000,000.00 in the
guise of licensing fees. I wonder whether Justice deems this appropriate
in light of their anti-trust decree.
After all Micro$oft has painted bull's eyes on all Linux users, vendors,
and developers. Their amazing marketing organization is covering the
nature of their bold initiatives with arguments over GPL, etc. However,
ignore the noise and follow the money. Micro$oft cannot innovate so
they eliminate competition. Remember, Micro$oft has been successfully
sued many times for infringement over decades, so infringement is a
part of Micro$oft's tactics in spite of their rhetoric.
The SCOx strategy was originally hatched at a time when Enron, MCI, and
other proven frauds were in their heyday. SCOx is another shell
corporation betting everything on a big killing instead of solid products
and services. SCOx cannot compete on technology any more than
Micro$oft. Wall Street and journalists are very savy about how business
people have gotten rich through schemes.
The nature of marketing and law is similar to warfare. Expect lies, fakes,
lost battles, attrition, and major expenses. The software community
should focus on the outcome. Justice and SEC should look into just why
foreign companies and Micro$oft are driving the software industry to the
brink, and whether Wall Street should be permitted to bet on such sport.
We are commenting on companies that are serious. They intend to bring
down Linux and forever prevent free commerce in software. When I read
people laughing at SCOx executives and lawyers, I wonder whether
people really understand the damage that has been and will continue to
be inflicted on the industry. The customers will not disappear, they will
go offshore. We only have the legal system to protect our rights. These
people do not care if they end up looking silly as long as they win.
[ Reply to This | # ]
|
| |
| Authored by: whoever57 on Saturday, January 17 2004 @ 01:51 PM EST |
....or sympathetic to the Linux movement have taken actions
attempting to negatively affect our business and our SCOsource efforts. Linux
proponents have taken a broad range of actions against us, including, for
example, attempting to influence participants in the markets in which we sell
our products to reduce or eliminate the amount of our products and services they
purchase from us. These actions have been somewhat successful in negatively
impacting our business,
OK, so they did not list Groklaw by
name, but perhaps the S3 should explicitly state that Groklaw poses a risk to
SCO! ---
-----
For a few laughs, see "Simon's Comic Online
Source" at http://scosource.com/index.html [ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 02:03 PM EST |
NEW:
In August 2003, we delivered notice of termination of the UNIX license
agreement we had with Sequent Computer Systems, Inc.
OLD:
Subsequent to July 31, 2003, we terminated the UNIX license agreement
we had with Sequent Computer Systems, Inc. ("Sequent")
SCO seems to be not so confident about Novell not having any rights any
more, he?[ Reply to This | # ]
|
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| Authored by: pooky on Saturday, January 17 2004 @ 02:06 PM EST |
Yeah SCOG/Caldera might troll Groklaw but I'd venture a guess to say more than
a few people (me included) have been complaining to the SEC about their November
S3 risks section. I'd also venture a guess that the SEC looked in to it and
re-explained exactly what constitutes a business risk that has to be reported.
-pooky
---
Veni, vidi, velcro.
"I came, I saw, I stuck around."
[ Reply to This | # ]
|
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| Authored by: cej3dxa on Saturday, January 17 2004 @ 02:07 PM EST |
Long time listener first time caller.
Great job to everybody in the groklaw community. I can´t
let 2 hours pass by without checking this site for
updates. I hope this community continues to grow even long
after SCO passes from the scene.
Sincerely
Danny A. [ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 02:47 PM EST |
To me, both Tibbit's declaration and this revised SEC filing show what happens
when the SCO execs attempt to get others involved into pressing their
"business model".
In all cases they have said "excuse me you haven't really done
what?" and presented their best "Ummmmm, okay then, I guess I might
away with saying this...."
It definately shines a brighter light on what the SCO execs, Canopy, and Didio
are glossing over. Like actual facts.
"FUD" is as weak a word for this as "murder" is when
reading a cheesy mystery novel as opposed to having it happen to someone close
to you.
FUD means sowing FEAR, UNCERTAINTY, and DOUBT to DESTROY the intended target.
Please underline the word DESTROY.
In the normal course of believing people do not have other motives, it does
exactly that.
This suit simply shows that "CAVEAT EMPTOR" should be printed across
all software in bold red, then we can remove it, say " Hell, I bought
it", and piss on it. Perhaps "have you urinated on the warning
label" can be part of the installation process. :)
Can you tell I am disgusted by this show.
I know for a fact I am not the only one.
And I know for a fact it is not because we are all anti capitolist commies.[ Reply to This | # ]
|
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| Authored by: Anonymous on Saturday, January 17 2004 @ 03:13 PM EST |
Applause, PJ! Most important thing you ever wrote, because
it hits them at their very most sensible point: If share
holders will change their mood, they are simply lost.
Jochen Wiedmann
[ Reply to This | # ]
|
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| Authored by: Anonymous on Saturday, January 17 2004 @ 03:15 PM EST |
If the entire text was deleted, shouldn't the other column be entirely blue?
If not I do not understand the format of the table.[ Reply to This | # ]
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| Authored by: toolboxnz on Saturday, January 17 2004 @ 03:18 PM EST |
"The trading price for our common stock has been volatile,
ranging from a sales price of $1.09 in mid-February 2003,
to a sales price of over $22.00 per share in October 2003,
to a sales price of $15.65 in January 2004."
OK so I understand why they changed this from the original
November share price as the January one is higher. But in
this (and several other) points they refer to things that
happened after November. Surely given that this is a
*November* filing they can't refer to things in the future
of the date it was supposed to be filed, can they? [ Reply to This | # ]
|
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| Authored by: Anonymous on Saturday, January 17 2004 @ 03:52 PM EST |
I can't help noticing SCO is looking for a guy that knows how to file that kind
of paperwork since December
8.
If whoever doing this job left prior to the November filing, it would
be possible that someone like Kevin McBride tried to help as best as he could to
get things filed on time.
That wouldn't be the first time the guy goes
totally out of his depth to help his bro out.
[ Reply to This | # ]
|
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| Authored by: Anonymous on Saturday, January 17 2004 @ 04:42 PM EST |
OK, that's a semi-rhetorical question. I'm pretty certain it was about a year
ago.
Wouldn't you have thought that an SEC filing way back then would have
noted that SCOSource either had already established their ownership of the
disputed copyrights or that they were close to establishing that? But, no! SCO
didn't get around to filing their claims with the Copyright Office until when?
June/July wasn't it?
I hope ol' Darl and company don't plan on taking up
bungie jumping. They'd probably forget to secure the cord to their ankles until
after they'd leaped from the bridge and were halfway to the ground. [ Reply to This | # ]
|
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| Authored by: Anonymous on Saturday, January 17 2004 @ 05:31 PM EST |
Christ - what a load of crap.
Basically, they're trying to cry out of it. Oh boo hoo! The naughty linux
community are driving us out of business. Read through it again - it's mainly a
profits warning down to them not being able to make a profit through menace
money.
Any one with a smattering of business sense will read through the amendments and
laugh. The whole lot can be whittled down to "if we don't win, we're
screwed and if we win, no one will pay us anything, so we're screwed - please,
someone, shoot us while our stock is worth something and we get bought
out"
Idiots[ Reply to This | # ]
|
| |
| Authored by: PJP on Saturday, January 17 2004 @ 06:02 PM EST |
| In SCO's latest
amended SEC filing one of the interesting topics is the
reference to the Series A Convertible Preferred
Stock and the effects
that this could have on the company.
The details of this stock are spelled
out in a
previous
SEC filing.
The interesting facts seem to
be:
- The conversion price is fixed at $16.93. The conversion
price is used to calculate the number of ordinary shares, or the value in cash
if the series A stock is converted to either one.
- The total number of series
A shares issued is 80,000, at $1000 each, which totals $80M.
- The
dividend payment on this stock is fixed and defined as
(Rate)x(N/365)x(Face
Amount), where the Rate shall initially be equal to .08.
This is a pretty
good rate of interest already, but from Oct. 16 2005 "rate" in the above formula
begins to
increase by 0.02 per year, maxing out at 0.12.
- Conversion to stock
is calculated as face amount/conversion price, so with the conversion
price being
at $16.93, a conversion to common stock would seem unattractive
at the current stock price.
- Conversion to cash is calculated as Face
amount/Conversion price, which essentially gets the
investor his original
investment back - this isn't an investment in the ordinary sense - more like a
loan
secured by both cash and/or ordinary shares.
There have been some
questions about the mention of Redemption due to certain events. The
ones
primarily of interest here are those where the holder of the shares (the
"investor"), can trigger
some event.
These are:
- The stock being
delisted or not traded for 15 or more trading days
on at least one of, the
NYSE, the AMEX, the NNM or the SmallCap exchanges.
- SCO announcing its
intention not to issue common stock to holders of the series A stock.
- SCO or
any subsidiary giving control to any organization (receiver or trustee) for the
benefit of
creditors. Essentially , this seems to mean chapter 11 in US
terms.
- Bankruptcy, insolvency or actions which may lead to these which have
not been dismissed within 75 days.
- Change of control.
- SCO failing to pay
a debt of more than $1M to any creditor.
There are other
provisions in this section, but they don't seem likely to affect anything
now.
Read through the original issue filing. Its a hard slog if you ANAL
like me, but worth reading.
There are afew other interesting provisions, but its
easier to read them in the filing than for me to copy them
here and try to give
my interpretation.
[ Reply to This | # ]
|
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| Authored by: Alex on Saturday, January 17 2004 @ 06:04 PM EST |
I find it interesting that they haven't listed RedHat, Mandrake, Novell (SuSE)
or any other Linux company as their competitors. What's up with that.
Also, I wonder whether Old SCO gave Caldera incorrect information about the
rights they were selling? That would make some of SCO's actions a bit easier to
understand.
Alex
---
Hey Darl!! Did Ross Perot draw your chart?"[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 06:14 PM EST |
| Given this does indeed look like the self destruct button what is likely to
happen to Unix licensing if SCO dies? They may just have their stock reduced to
junk and enter chapter 11 i guess - but presumably the potential counter suits
lined up by IBM, Novel etc. could be so huge that they'll have to give
everything away?
Will Novell just get things back? Will there be another
"shell" company?
I can imagine that regular SCO customers are absolutely
mortified - this SEC filing basically says that the old business doesn't exist
any more. If the lawsuit fails we are toast...
[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, January 17 2004 @ 06:53 PM EST |
Gee PJ,
Looks like you saved Darl & Co. from a few securities felony charges, and
shaved a couple years off the Federal Prison terms they deserve.[ Reply to This | # ]
|
| |
| Authored by: technomom on Saturday, January 17 2004 @ 08:51 PM EST |
As a result of our action against IBM and our SCOsource initiatives to
protect our intellectual property rights, several participants in the Linux
industry and others affiliated with IBM or sympathetic to the Linux movement
have taken actions attempting to negatively affect our business and our
SCOsource efforts. Linux proponents have taken a broad range of actions against
us, including, for example, attempting to influence participants in the markets
in which we sell our products to reduce or eliminate the amount of our products
and services they purchase from us. These actions have been somewhat successful
in negatively impacting our business, and we expect that similar efforts likely
will continue. There is a risk that participants in our marketplace will
negatively view our legal action against IBM and our SCOsource initiatives, and
we may lose support from such participants. Any of the foregoing could adversely
affect our position in the marketplace, our results of operations and our stock
price.
The first words out of my mouth after reading the bold portion
was, "Gee, d'ya think?"
This was the most heartening paragraph out of all of
them. It is the closest thing to an admission from them that they are not
fooling anyone. To paraphrase, "We think that maybe suing our customers is
negatively impacting the view our customers and others in the marketplace have
about us. Imagine that."
JoAnn [ Reply to This | # ]
|
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| Authored by: Anonymous on Saturday, January 17 2004 @ 09:45 PM EST |
January 2003 - SCO source presentation - Linux ABI is "open specification,
the Linux community was able to freely copy this and rename it Linux ABI or
Linux Application Binary Interface."
http://66.102.11.104/search?q=cache:9gSGYfUvjOwJ:www.caldera.com/scosource/SCOso
urce_Presentation.ppt+Linux+ABI+site:caldera.com&hl=en&ie=UTF-8
How UNIX Applications run on UNIX using SCO Shared Libraries
In the late 1980s, SCO created an open specification called ibcs2 (Intel Binary
Compatibility Standard) to allow UNIX applications to run on Intel standard
hardware using SCO’s shared libraries.
These shared libraries include SVR3.x - SVR5.
Because ibcs2 is an open specification, the Linux community was able to freely
copy this and rename it Linux ABI or Linux Application Binary Interface.
In order to run UNIX apps on Linux, customers must have Linux ABI and
SCO’s shared libraries.
SCO’s shared libraries could never be licensed outside of the SCO
operating systems until today.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
5 February 2003: http://www.mozillaquest.com/Linux03/ScoSource-01_Story01.html
MozillaQuest Magazine: Regarding binfmt_coff, abi-util, lcall7, abi-svr4,
abi-sco; are any of these modules SCO IP?
Blake Stowell [SCO]: No, none of the code in the Linux ABI modules contains SCO
IP. This code is under the GPL and it re-implements publicly documented
interfaces. We do not have an issue with the Linux ABI modules. The IP that we
are licensing is all in the shared libraries - these libraries are needed by
many OpenServer applications *in addition* to the Linux ABI.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
2003 SCO Regional Newsletter - Issue 6 - 2003
http://www.wimal.com.pl/sco/SCO_New_6_2003.htm
In short, the ABI belongs to an Intel specification, to quote:
SCO System V for Linux Release 1.0: SCO UNIX Runtime Libraries licenses binary
SCO OpenServer shared libraries for use on Linux systems. Many Linux
distributions include the Linux ABI facility. Linux ABI implements iBCS2: the
Intel386 Family Binary Compatibility Specification 2". (Copyright 1991,
1990, 1989 by Intel). iBCS2 support enables the Linux kernel to run binary
applications that were compiled for SCO UNIX platforms. The SCO System V for
Linux product gives customers a way to license and install the SCO OpenServer
libraries for use by SCO UNIX binaries running on a Linux system.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
2003 December 2003 -
http://66.102.11.104/search?q=cache:E6h1WTQLkp0J:www.caldera.com/scosource/unix_
licensee_letter_20031218.pdf+Linux+ABI+site:caldera.com&hl=en&ie=UTF-8
Not a quote - read the letter yourself - Linux ABI infringes SCO's rights, SCO
(not Intel) owns the ABI specification.[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Saturday, January 17 2004 @ 11:30 PM EST |
| This is a very thorough piece of work! [ Reply to This | # ]
|
| |
| Authored by: Anonymous on Sunday, January 18 2004 @ 12:28 AM EST |
(I've posted part of this in response to a much earlier discussion which I just
spotted).
I've been browsing some old threads. There are several discussions that begin
with the assumption that AIX is a derivative of System V, but then go on to
discuss whether SCO's rights are constrained to Sys V elements (which I believe
they are in any case), or extend to IBM's own code (so-called derivative).
I believe the fundamental premise is incorrect. Most everybody who has posted on
Groklaw (including me until recently) has got it wrong.
**** AIX is NOT a derivative of System V ****
IBM's lawyers have of course, got it right, from their very first response to
SCO.
Now I have figured out why:
SCO alleges AIX is a derivative of System V (amended complaint)
IBM denies AIX is a derivative in their response to the amended complaint.
Yet we also know that IBM is aware and acknowledges that certain (small) parts
of AIX do include System V code.
So how can AIX not be a derivative?
Simple - because AIX is a compilation of copyrighted works.
- Some of the works are System V or derivatives thereof
- Some of the works are IBM copyrighted code
- Some of the works are copyrighted code licensed from third parties.
AIX as a whole is NOT a derivative of System V, even if some of the individual
works might be.
To give comparison:
"S(co)" writes a short story in English
"I(bm)" publishes a book (in French) of several short stories and
calls it "A(ix)".
- "A" might include a French translation of S's story (derivative
work)
- "A" might include I's own short stories. The copyright for them,
belongs to I, exclusively. They are not derivatives.
- "A" might also include licensed short stories from B(sd),
V(eritas), etc.
"A" as a whole is NOT a derivative of "S"
For those, who want a point of comparison, think GPL.
Linux Kernel = GPL
However a distribution containing Linux Kernel and additional programs under
different licenses is 100% legal. The GPL does not extend to those other
elements -- because they are NOT derivative works [they are simply "mere
aggregration" in GPL terms].
The overall distribution is a COMPILATION
IANAL, Shoot me down if you can find a real hole in this argument[ Reply to This | # ]
|
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| Authored by: Anonymous on Sunday, January 18 2004 @ 12:37 AM EST |
Great work! Grocklow!
erratum .. I think the "enforce" should be blue too..
wilignes -> ability
enforce -> establish
Paragraph 37
old - "our willingness to enforce our rights"
new - "our ability to establish our rights."
SCO bluff balun is loosing air ..
Many people purchase SCOX stock because they have been
duped to think that actually SCO has this rights and they are going to enforce
them, but now it looks like they did not state the true, now they are telling to
stockholders, sorry we need to establish first our rights and perhaps we will
not have enough money to do so.. Does SEC know about this..?
Paragraph 5
"the success of this initiative may depend on the perceived strength of
our intellectual property rights."
What property rights? The SCO rights to IP has not been established as yet, and
perhaps they will not have the ability to to so.. So, it looks like they
deliberately lied about this rights and about the enforcement just to make
people to perceive that they are strong and they have this rights, which they
don't have. Why? Is it just to make people to purchase the company stock, as
well to get on false pretenses license fees from Linux users?
[ Reply to This | # ]
|
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| Authored by: cadfael on Sunday, January 18 2004 @ 01:50 AM EST |
Wondering how we got here with financing coming from elsewhere? Take a trip in
the wayback machine....
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=19452297
Many things that are discussed here have turned up in recent times. Interesting
read.
th3_m0nk[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Sunday, January 18 2004 @ 04:57 AM EST |
I think they are preparing for some kind of court loss in the near future.
Someone probably realized their case could end much sooner than they thought.
Now, I think they are trying not to get slapped with fraud. [ Reply to This | # ]
|
| |
| Authored by: Anonymous on Sunday, January 18 2004 @ 07:33 AM EST |
| http://news.bbc.co.uk/1/hi/technology/3402801.stm [ Reply to This | # ]
|
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| Authored by: Anonymous on Sunday, January 18 2004 @ 12:29 PM EST |
Here's a thought (sorry if someone has already posted this question and I
haven't noticed it). Caldera released the ancient Unixes under a BSD-like
license a while back. Only the copyright owner has the authority to re-license
code under a new license, right? If Novell really still owns the copyrights on
these old Unixes, did Caldera have the legal ability to release them under a new
license? Could Novell sue them for doing that?
This is assuming all that old code wasn't already either: 1. public domain
because of AT&T's failure to add copyright notices before copyright law was
changed -or- 2. freely distributable because it was also in BSD Lite.
[ Reply to This | # ]
|
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| Authored by: Anonymous on Sunday, January 18 2004 @ 01:44 PM EST |
I find *this* bit... very very interesting.....
Our agreement with the law firms provides that the law firms will receive a
contingency fee of 20 percent of the proceeds from specified events related to
establishing our intellectual property rights. These events include settlements,
judgments, licensing fees, subject to certain exceptions,
**********or a sale of our company during the pendency of litigation or through
settlement,********
subject to agreed upon credits for amounts received as discounted hourly fees
and unused retainer fees and may be construed to include issuances of our equity
securities.
possible sale of the company listed? It'd been mentioned that they'd probably
wanted that originally... could this be their admission finally that that's
kinda what they were hoping for? Otherwise... why was it Darl's brother at the
other IBM court appearance.. and not the folks from the law firm? Could the law
firm folks only really be there to do damage control during the settlement sale
of SCO?
Just mulling aloud....
::chuckle::
-JH
[ Reply to This | # ]
|
| |
| Authored by: _Arthur on Sunday, January 18 2004 @ 02:14 PM EST |
If I was the chairman of SCO audit committee, I would resign at once!
[ Reply to This | # ]
|
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| Authored by: _Arthur on Sunday, January 18 2004 @ 03:22 PM EST |
This week and the next will be extremely trying for Darl, Sontag, Noorda
& Co.
-Expect an early upbeat press release, announcing irrelevant projects,
like
"Embeded Open UnixWare 9.0 with WindowsCE Compatibility" or some
such tripe
-SCO share price will fluctuate wildly. Maybe the press will notice the
import of SCOG new SEC filings....
-at mid-week, another meaningless SCO diktat: "We will sue
Uzbekistan!"
-Friday is Audience day. Boies will be a no-show.
Kevin Fasttalker will have to explain to Her Honor:
-SCO's strange notion of Compliance
-What they do not understand in the two words "with
Specificity"
-How come they first asked for Time Extensions, then fought IBM's
Motion to Compel with tooth and nail, then found lame excuses not to
provide what they should have had in hand the day they launched the
lawsuit.
-Where are the promised/threatened Copyright Infrigements counts ?
Please don't use This Court to make wild statements. 3 days in
comfy Utah gaols might cure you of this bad habit.
IBM lawyers will just have to stand back, and enjoy the show.
They have plenty of options:
-File or immediate dismissal. (The CounterSuit stay on, of course)
-Since these 60 pages are SCO's cross-my-heart-and-hope-to-die
Final Proof of IBM's wrongdoings, shorten the discovery phase, and let
SCO go to court with their worthless material.
-Show the judge a comparison between the timelines of the proffered
evidence compared with SCO public announcements, ask for the MIT
mathematicians analysis, who prepared the Las Vegas show, the names
and the memos of their software engineers, etc... etc... All information
still missing from the 60 pages. All fodder for the Countersuit.
-Etc... (if any of you with legal training feel mean, please suggest
more)
Then SCOX share price will drop like a dead duck,
both the derivatives and the triggers will allow BayStar PIPE to siphon all
remaining SCO cash in a textbook Death Spiral.
The Analysts (Financials, Software and Didio) will declare themselves
"Shocked".
Angry clueless investors will launch a belated shareholder lawsuit!
SCO will declare bankrupcy, Canopy will step in, trying to salvage some
assets. And be savaged itself.
The SEC will even launch an investigation !
and GrokLaw will throw a wild party!
I hope the sight of SCO hide nailed to the Linux barn door serves as a
warning to all others submarine-patents would-be extortionists.
_Arthur[ Reply to This | # ]
|
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| Authored by: Anonymous on Sunday, January 18 2004 @ 04:30 PM EST |
Novell is still the owner of the UnixWare copyrights. Can they simply GPL
the whole thing and end this crap? Naturally, SCO could then sue them
for ... $26m ... which is exactly what they originally paid for the
exclusive rights. $26m is not too bad to make this all go away. SCO
would basically die instantly, because they have no product any more
and lots of debt but no assets.[ Reply to This | # ]
|
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| Authored by: Anonymous on Sunday, January 18 2004 @ 04:55 PM EST |
Am I the first to notice this? (prob. not..)
The SCO category on Google lists the following 'Related categories':
Business > Management > Ethics (45)
Computers > Software > Operating Systems > POSIX (90)
Society > Activism > Anti-Corporation (112)
Society > Issues > Business > Allegedly Unethical Firms (612)
Yeah.. that must look great PR-wise.
[ Reply to This | # ]
|
- OT: Google! - Authored by: Anonymous on Sunday, January 18 2004 @ 10:43 PM EST
| |
| Authored by: Anonymous on Sunday, January 18 2004 @ 06:14 PM EST |
I posted parent, sorry to reply to myself, but I just had a quick look at IBM's
AIX page.
AIX 5.2L includes Java
Java is copyright Sun AFAIK.
It is used under license by IBM. And I do not believe is a derivative of System
V.
Therefore AIX 5.2L = "various stuff" + Java
Even if all the
"various stuff" element is derivative, the Java element is not a derivative, and
the proper analysis of the entire AIX 5.2L package, is a compilation of 2
copyrighted works, i.e. (1) "various stuff" and (2) Java.
Of course,
"various stuff" probably needs to be broken down further too, as it's likely not
one single work, but several, each of which may have a different copyright
basis.
[ Reply to This | # ]
|
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| Authored by: rjamestaylor on Sunday, January 18 2004 @ 06:15 PM EST |
I noted with interest that they no longer include "direct copying" of code into
Linux by IBM, but rather a vaguer, more ambiguous use and "distribut[ion of]
information" obtained from UNIX operating system source code. Leaping chasm
between "millions of lines of code" directly copied to "information" sharing is
quite a feat... In March 2003, we filed a complaint against IBM
alleging breach of contract, misappropriation of trade secrets, tortuous
interference, and unfair competition. The matter is currently pending in the
United States District Court for the District of Utah. The complaint centers on
IBM's activities regarding the UNIX operating system that underlies our
UNIX-based operating systems and IBM's AIX UNIX-based operating system. The
complaint alleges that IBM obtained information concerning the UNIX source code
from us and inappropriately used and distributed that information in connection
with its efforts to promote the Linux operating
system. ---
SCO delenda est! Salt their fields! [ Reply to This | # ]
|
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| Authored by: Anonymous on Sunday, January 18 2004 @ 06:22 PM EST |
A little humour before the end of the day. Would this be classed as a Derivative
Work?
http://www.bmgen.com/sco_mug
It would look nice in your book PJ. Put at the rear of the book "The
End"
morven24
[ Reply to This | # ]
|
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| Authored by: Anonymous on Sunday, January 18 2004 @ 06:25 PM EST |
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c
=StoryFT&cid=1073281114455[ Reply to This | # ]
|
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| Authored by: Anonymous on Sunday, January 18 2004 @ 07:07 PM EST |
Section 8(.5?) states, in part:
"Another recent Linux
proponent action has been to initiate several denial of service attacks on our
website, which have prevented web users from accessing our website and doing
business with us for a period of time."
Isn't this a little
much? Sure, they were DOS-ed, but does the proof lead back to 'Linux
proponent'-s? If not, why not add a defamation suit to the mix?
Just
my $0.02[ Reply to This | # ]
|
- Actionable? - Authored by: Anonymous on Sunday, January 18 2004 @ 07:30 PM EST
| |
| Authored by: Anonymous on Sunday, January 18 2004 @ 07:33 PM EST |
I'm no financial genius and for sure IANAL but I was just
over
at
NASDAQ
looking at SCO's balance
sheet. Some info was missing,
but I did the following
calculation:
Total Current Assets: 26.4m
- Account's Receivable: 7.4m
- Accounts Payable: 8m
=
11m US dollars of actual cash that they can hope to keep
over the short
term.
But aren't they under the cosh for something
like 20m from
Novell, based on the Letters?
If
it comes to it they could go very quickly into the red, and
according
to
SEC Filings (analysed elsewhere, but not by me) this
is a
trigger event for the forced buy back of the 50m stock.
Is this moonshine or are SCO about to get fried?
SJG
BTW Thanks for all
the really great analysis all round.
[ Reply to This | # ]
|
- Reading it wrong - Authored by: Anonymous on Sunday, January 18 2004 @ 08:45 PM EST
- Reading it wrong - Authored by: Anonymous on Monday, January 19 2004 @ 03:50 AM EST
- Cash Position - Authored by: Anonymous on Sunday, January 18 2004 @ 09:26 PM EST
- Cash Position - Authored by: Anonymous on Sunday, January 18 2004 @ 10:42 PM EST
- Cash Position - Authored by: Anonymous on Monday, January 19 2004 @ 07:06 AM EST
- Cash Position - Authored by: Anonymous on Monday, January 19 2004 @ 09:59 AM EST
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| Authored by: Anonymous on Monday, January 19 2004 @ 12:09 AM EST |
Will be interesting to hear what, if anything, the pro-SCO sell side analysts
will say regarding the amended document. Or if they say nothing, that should
also speak volumes. DiDio/Yankee Group, among others, can certainly continue
pumping the stock, but at this point to their peril of their own firm--as much
as SCO is looking like the next Enron, Laura DiDio is looking more and more like
Henry Blodgett and Frank Quattrone. How 90s! I believe IBM did subpoena the
firm, yes? Would *love* to read the emails and correspondence there...[ Reply to This | # ]
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| Authored by: Anonymous on Monday, January 19 2004 @ 03:04 AM EST |
A possible answer.
SCO is making amendment to the SEC Filing because Baystar Capital Managment,LLC
and others are demanding the (forced) repurchasing for cash of all shares of the
Series A Convertible Preferred Stock.
SCO is very unwilling to make this revelation. However, Baystar is demanding
the repurchasing for cash of all shares of the Series A Convertible Preferred
Stock and SCO' executives know they are in trouble because they did not mention
about Baystar and the forced repurchasing in their last SEC fillings.
[ Reply to This | # ]
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| Authored by: Anonymous on Tuesday, January 20 2004 @ 03:07 PM EST |
SCOG is supposed to be giving Novel 95% of something, and keeping the rest.
Jan 2003,SCOG promised to give Boies 20% of something.
May 2003, Microsoft gave SCOG something that Novel thinks may belong to them.
Whose something did Boies get paid from?[ Reply to This | # ]
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| Authored by: clacour on Tuesday, January 20 2004 @ 06:31 PM EST |
| Another recent Linux proponent action has been to initiate several denial of
service attacks on our website, which have prevented web users from accessing
our website and doing business with us for a period of time.
I am a
Linux proponent. I have never participated (in even so much as fantasizing) in a
denial-of-service attack on SCO. Furthermore, unless they have caught a specific
individual and that individual identified themselves as "a Linux proponent", SCO
has no way of knowing whether these attacks were caused by Linux proponents or
rabid gerbils.
I'm thinking that I should file a defamation-of-character
lawsuit in small claims court.
If in fact there is some basis for this, if I
and a few tens of thousands of other Linux proponents all file similar claims, I
suspect SCO would cry "Uncle!" pretty quickly. (Especially if we refused to
settle for a retraction, but instead said, "See us in court."
I see two
potential roadblocks to this. One "Linux proponents" and "A Linux proponent" may
be too vague for me to claim that I have suffered any harm from it, and it's
also possible that an immediate, public, retraction would satisfy the law and
render my lawsuit spurious.
I understand that YANAL (the "You" in question
being whoever answers), but your average lawyer wants $10 for his time if
you ask "What time is it?", so I'd like some idea of whether I'd be wasting my
time and money.
(Realistically, this is mostly a pleasant fantasy, but if
there IS something to it, I'd be quite willing to plop down a couple of hundred
bucks to help make SCO as irritated as I am, AND teach them not to make
disparaging remarks that have no basis in fact.) [ Reply to This | # ]
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| Authored by: Anonymous on Thursday, January 22 2004 @ 04:23 PM EST |
Mark Hamblett writes in an
article from the
New York Law
Journal (Thu, 22 Jan 2004):
A heightened pleading
standard applies for securities fraud claims brought because of false
information or omissions in registration statements or prospectuses, the 2nd
U.S. Circuit Court of Appeals has ruled.
Deciding a case of first
impression in the circuit, the appeals court has extended the requirement of
pleading fraud with particularity to sections of the Securities Act of 1933 that
do not require the plaintiff to show the defendant had fraudulent intent.
This means that claims under securities laws for false filing statements or
prospectuses must now show what statements were made, when, by whom, and why
they were fraudulent.
[...]
The issue in Rombach v. Chang,
02-7907, centered on a requirement of Federal Rule of Civil Procedure 9(b) that
a plaintiff plead with sufficient "particularity."
[...]
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| Authored by: tanstaafl on Sunday, March 07 2004 @ 03:42 AM EST |
I notice in PJ's section 9 that TSG actually said Linux proponents were behind
the DDoS attacks on their website. How do they know this? As a Linux user, I
have been insulted, and so have U if U use Linux. As this is a
publicly-available document, could this perhaps be grounds for a class-action
libel suit (if there is such a beast)?[ Reply to This | # ]
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