Trial Set To Determine What SCO Owes Novell

BobB-nw writes with word that this April will be the trial date for SCO's financial reckoning. Novell will discover via the courts how much (if anything) SCO is going to be compelled to pay in compensation for the lengthy trial over Unix code rights. The NetworkWorld piece also offers an overview of the case. "In September, The Wall Street Journal described the ruling against SCO as 'a boon to the open source software movement.' But experts say Unix is filled with technology that carries copyrights tied to many different companies and that it would be a nightmare to open source the Unix code collectively. Instead, Novell would have to pick and choose pieces to open-source, a process that could begin once the trial has ended."

And???..

[by Anonymous Coward]

SCO is going to pay Novell How?..

Re:And???..

[techpawn (969834)]

Well, the courts have this neat way of getting blood from stones... Just ask anyone who has been through a divorce...

Re:And???..

[multisync (218450)]

SCO is going to pay Novell How?..

Maybe Microsoft could purchase some more licenses

SOX? Go after execs personally?

[walterbyrd (182728)]

I thought that was the idea of Sarbanes-Oxely, execs are not supposed to able to commit crimes and hide behind the company. Exec can be help personally liable.

Besides, scox paying novell is not the point. The point is to legally prove that Linux does not use proprietary UNIX technology, and to thereby stop the msft FUD.

The trial is significant because this trial has to be completed before the real trial can be held.

Re:

[techpawn (969834)]

I thought that was the idea of Sarbanes-Oxely

From my SOX experience it was just to create undue bureaucracy in IT department's of publicly traded companies and some other accounting nonsense to make sure the bean counters are actually counting beans that really exist and not saying the kidney beans are jelly beans. SOX wasn't to hold anyone reasonable in a corp when things went bad, it was a knee-jerk law in response to Enron. Like the PATRIOT ACT was to 9/11

I agree with Lewis Black on this one. You don'

Re:SOX? Go after execs personally?

[Chris Burke (6130)]

Besides, scox paying novell is not the point. The point is to legally prove that Linux does not use proprietary UNIX technology, and to thereby stop the msft FUD.

Exactly! That's why I was rather confused by this quote from the summary.

"In September, The Wall Street Journal described the ruling against SCO as 'a boon to the open source software movement.' But experts say Unix is filled with technology that carries copyrights tied to many different companies and that it would be a nightmare to open source the Unix code collectively."

Uh, who cares? We don't want their shitty Unix source! We want it to be known far and wide that Linux doesn't contain any of that shitty code! That's the "boon" to open source -- preventing proprietary vendors from being able to say "OooooOOOooh possible IP violaaaaations oooOOOOooh unkown liability ooowaaaah!" in an eerie voice to scare people off from open source! And this, a relatively high profile attempt to turn the vague scary threat of copyright violation into legal fact that fell flat on its face, should help do that.

Hey Darl!

[spun (1352)]

Don't forget to pay your $6,990,000 Novell court fees, you cock smoking teabagger.

Make the law firm pay Novell.

[R2.0 (532027)]

No, really. The Boies law firm representing SCO is being compensated by effectively taking part ownership in SCO. Having done that, should they not be liable for SCO's debts?

My contention for a while has been that, in taking compensation from SCO in terms of stock and shares, Boies has abdicated it's duty as an officer of the court. In a contingency compensation arrangement, the law firm gets paid when they win the case. But in this situation, they only get paid if SCO stock stays high, so their litigation goals are different than just winning.

I think they should be made to experience the full consequences of their agreement.

Re:Make the law firm pay Novell.

[Ngarrang (1023425)]

In a 'corporation', though, the company is an entity unto itself. The stock holders are not liable for legal damages assessed, right? The personal assets of the employees, chiefs and boards would also safe, unless they were gained through illegal means.

Re:

[R2.0 (532027)]

True, but the law firm is a *partnership*, where the partners ARE liable - witness the Anderson/Enron debacle.

I'll admit that I'm not sure what the actual arrangement of Boies's ownership is, but would not that be grounds for discovery?

Re:Make the law firm pay Novell.

[qbwiz (87077)]

The law firm is a partnership, but SCO is not: SCO is probably a limited liability corporation, which would limit any investors' liability.

Re:

[by Anonymous Coward]

Also, there are such things as Limited Liability Partnerships in many jurisdictions. Even IF Novell's lawyers could pierce the corporate veil to the owners (assuming Boies had enough stock to be considered an owner) - which is a big if and extraordinarily unlikely - the Boies partners might be shielded from liability.

Most likely, Novell may become a creditor in bankruptcy. It wouldn't surprise me if part of the settlement ends up being a junior security interest in major assets and a first-in-line security

Re:

[claytonjr (1142215)]

It depends on what state the company is incorporated in. Some states have better laws that limit personally liability (read: Nevada).

Re:

[by Anonymous Coward]

The stock holders are not liable for legal damages assessed, right?

Depends on the circumstances. With bankrupt companies, the trustee has a lot of leeway to recover funds that were paid inappropriately. I believe the phrase is "knew or should have known".

BS&F *knew or should have known* that their legal position was untenable. They also *knew or should have known* what the contracts said. The bottom line is that they got paid with money that they *knew or should have known* belonged to Novell.

Re:

[ACMENEWSLLC (940904)]

Wow, that's one quick way to kill a company - put the lawyers in charge of the business. Amazing.

Re:Make the law firm pay Novell.

[RobertLTux (260313)]

point of interest Boies has redone that agreement to drop the stock part out. The Big Money in this is targetting various payments that TSCOG has done to various folks (including Darl and the rest of the CxO group)

Judge Gross does have the power to require a ROLLBACK of some of this money.

Oh and Novell would not be A Creditor since the funds have been ruled to be "converted" (humans would say STOLEN)
so Taxes and Novell get paid first then the creditors list rolls down.

Re:

[CodeBuster (516420)]

Having done that, should they not be liable for SCO's debts?

Not unless the law firm made a separate personal guarantee (i.e. contract) to stand behind those debts and why would they have given that to SCOs creditors? There are no more responsible for the debts of the corporation than any of the other owners. That is the whole point of corporation, to prevent direct exposure to liability of the owners whether they be other corporations, private individuals, or shareholders (public traded company). Novel can suck whatever assets remain out of the dried husk of SCO un

The key to the front door

[Ngarrang (1023425)]

...and the deed to everything in the building.

I thought we figured this out

[techpawn (969834)]

When SCO was pulled from the market, Novell gets their old furniture cuz there's nothing else to really take...
I guess source code is just as good.

Re:

[mikael (484)]

Back in the mid-80's, there was a guy in my home town who started his own high-street company selling home computer products. Unfortunately, he didn't understand the concept of market saturation, so whatever sold well one month, he would buy twice as much the next month. After the sales figures came in, the company was immediately liquidated. Everything was still there - half stacked shelves with the stuff still in delivery boxes. Even the managers notepad had half written accounting notes with a large nega

I'll let my lawyer, Johnny, speak for me...

[monkeyboythom (796957)]

I want my two dollars!

Re:

[SharpFang (651121)]

And I want my $699 back!

Re:

[rbanffy (584143)]

On the bright side, you still got what you paid for: SCO will never come after you.

I hated SCO first

[MosesJones (55544)]

One thing that annoys me in these posts is all these Johnny Come Lately people who have just started to hate SCO as a result of their actions against Linux. I've been actively hating SCO ever since I had to use their piece of crap OS in 1993 on a 286 PC. All the bugger had to do was keep the modem connection open so we could send email but would it stay up? Would it buggery. It was falling over all the time and in the end we had to go 3 months without email to the outside world, a contributory factor in the company going bust.

So you think you have come to loathe SCO over these last few years? Let me tell you that real hatred takes 15 years to mature :)

Re:

[Mr. Underbridge (666784)]

One thing that annoys me in these posts is all these Johnny Come Lately people who have just started to hate SCO as a result of their actions against Linux. I've been actively hating SCO ever since I had to use their piece of crap OS in 1993 on a 286 PC.

Then as you surely know, they aren't really the same SCO as that one.

Re:I hated SCO first

[ashridah (72567)]

That would mean you probably hate Tarantella [wikipedia.org]. Hate to tell you, but they still exist.

Shake your fist in impotent rage!

Re:

[dintech (998802)]

Oh! Oh! Oh! Me! I hate tarantella, it's a pain.

Re:

[mu51c10rd (187182)]

I admit I was a Caldera employee back when they purchased SCO and left Tarantella alone. The first thing that happened was most of the Utah-based employees were replaced by employees from CA. The company that was once Caldera was gutted after the acquisition and replaced by SCO. I left shortly thereafter and my department was laid off 6 months after I left, and was replaced by SCO's equivalent. It is unfortunate to see my former employer slammed all over the news, but the reality is that those who worked ha

Re:

[Scarblac (122480)]

That's a different company. The SCO that this is about used to be a Linux business named Caldera; then they bought software and trademark rights from SCO, and later on changed their own name to SCO and starting suing.

That said, it is the same Unix...

Re:

[Otter (3800)]

One thing that annoys me in these posts is all these Johnny Come Lately people who have just started to hate SCO as a result of their actions against Linux.

Dude, get with the times. The Slashbots have all forgotten SCO and moved on to feverishly hating Novell instead!

It was falling over all the time and in the end we had to go 3 months without email to the outside world, a contributory factor in the company going bust.

I'm thinking that a company making decisions like that didn't stand much of a chance, S

Re:

[jedidiah (1196)]

It's not so much "hate" as it is pity.

These are guys that have been around the block a few times. They
have seen Microsoft screw their business partners. They have seen
Microsoft attack their 3rd party vendors. They have been directly
on the receiving end of Microsoft treachery.

Just how many houses have to fall on these guys before they get
the hint.

Re:

[mr_mischief (456295)]

That crap is why Linux and the open-source BSDs exist. Tarantella is still around, as others have pointed out. This "SCO" is actually Caldera, the old Linux vendor.

WTF would you let one OS bankrupt your business? Surely a MicroVax, a desktop Sun box or a couple of AOL accounts would have let you send email. Or hell, you could have had a 56k leased line and hooked the SCO box up via Ethernet, which I'm pretty sure it didn't have problems with in 1993 as long as you used a good card.

Quick question

[MC Negro (780194)]

Okay, could someone (more knowledgeable than I) explain how this whole trademark vs. IP thing works? From what I understand, it sounds like Novell owns the underlying IP of Unix, but I also thought The Open Group was in charge of the "UNIX" trademark/certification. So speaking purely hypothetically, say Novell were to get back into the Unix market, would they have to have certification by the Open Group to call it "UNIX"?

I guess my question is bit more far-reaching - what is the relationship between the IP holder v. the trademark holder in these circumstances, and are there any other examples where someone owns the IP of something, but doesn't necessarily own the trademark?

Re:Quick question

[RichMan (8097)]

There are many types of IP.

Trademark - to brand a product in a particular category
Copyright - particular text experssion
Patent - invention

Novell used to own the UNIX trademark. They passed it to the OpenGroup when the sold the UNIX business to Santa Cruz Operating Systems. OpenGroup certifies systems as meeting the UNIX standard.

SCO has 2 versions of UNIX, I believe one is UNIX95(tm) compliant, the other UNIX98(tm) compliant.
IBM AIX UNIX is UNIX2003(tm) compliant.

http://en.wikipedia.org/wiki/Single_UNIX_Specification [wikipedia.org]

http://en.wikipedia.org/wiki/Intellectual_Property [wikipedia.org]

Re:Quick question

[Simon Brooke (45012)]

There are many types of IP.

Errr... that's another way of saying 'there is no such thing as intellectual property'. Lawyers and other weasels who speak of 'intellectual property' are playing a classic quickness of the hand deceiveth the eye trick. Precisely, they're doing two things:

• They're deliberately conflating the limited and short term contingent protections which Western states have found it pragmatic to offer creators or new ideas and products with the unlimited and long term protections which Western states have traditionally offered to property in land;
• They're making a hegemonistic claim about the status of new ideas and expressions.

Whether property in land ought to be given the sorts of protections which Western society gives it is another question entirely. But that's beside the point. New ideas and expressions are not property, do not have the status of property, and do not have nearly the same degree of protection that property has. And it's in everyone's interest - that includes the 'content creators' - that it remains that way. Where would Walt Disney be now if all the classic fairy tales had been someone else's 'intellectual property'?

Admit it ...

[by Anonymous Coward]

You might just as well admit now: Nobody will be satisfied before the day comes when Darl is in jail and his wife is doing two dollar blow jobs in the parking outside WalMart to pay the bills ...

heh.

[apodyopsis (1048476)]

heh. well i had nothing better to do today then to listen to a fat lady singing.

now all we need is the right tune, "ride of the Valkyrie" or "madam butterfly" don't seem appropriate, and my other suggestions are just undignified and unsuitable for the high class audience provided by /.

I'm sure Tom Lehrer could of penned a suitable tune or two.

Just how much does SCO have?

[Jason Levine (196982)]

Their last financial report (July '07, they apparently didn't file one for October '07) said that they had $15.79 million in total assets. This isn't taking into account any other debts. That was down $4 million from the previous quarter. Let's suppose that that drop repeated itself the next two quarters (since we're almost out of the current quarter). That means that SCO would have just under $8 million in total assets. So even if Novell took everything SCO had into possession and all other debtors got nothing, Novell wouldn't come close to recouping the money they were owed from Microsoft's $16.6 million Unix license payment. (To say nothing of Sun's $9.3 million license payment or any other payments.)

Another way to look at how much SCO is worth is to look at their market cap. Back in July, SCOX closed at $1.48 per share. Over 21.25 million shares, that's $31.45 million. Today, they're at $0.09 per share for a market cap of $1,912,500. Novell could easily buy up the remaining pieces of SCOX if they wanted to. Any way you slice it, SCO is toast and won't be able to pay Novell back even a fraction of what they owe them.

Not one cent in tribute...

[rkhalloran (136467)]

>> Novell could easily buy up the remaining pieces of SCOX if they wanted to.

Most of us that have been following this assume this was SCOX' intent all along; threaten a lawsuit and get a payoff from either IBM and/or Novell to quietly go away.

Then IBM called the bluff and asked for some actual EVIDENCE; at that point the dodge-the-bullet game began and has dragged on until now.

But back to point, what does SCOX have to buy? Novell ALREADY owns the UNIX codebase, SCOX has succeeded in destroying

Re:

[KokorHekkus (986906)]

I belive you are correct with the exception of using their market capitalisation as a benchmark since SCOX has a "stockholder rights plan" (a.k.a "poison pill") that basically allows the directors to set their price should anyone actually want to take over the whole company. From SCOX last years 10-K (under "Risk Factors):

We have adopted a stockholder rights plan. The power given to the Board of Directors by the stockholder rights plan may make it more difficult for a change of control of our company to occ

Re:Just how much does SCO have?

[bhtooefr (649901)]

Sounds like stockholder rights management. ;)

This is taking too long

[erroneus (253617)]

I was enjoying this drama for the first couple of years... especially when it became very apparent that SCO was playing some sort of game at the request of Microsoft... and especially when it became obvious that SCO would lose. And it's true that technically, this is "another case" involving SCO, but this is really a part of the whole drama that is the downfall and failure of SCO. Mentally I imagined SCO people squirming around wondering what they must have been thinking when they brought all this upon th

No Trial Necessary

[RWarrior(fobw) (448405)]

"Everything, asshole and up."

it's not compensation for the trial

[lophophore (4087)]

The description here is incorrect.

SCO does not owe Novell any compensation for the trial or lawsuit.

They owe them something like 95% of the Unix license fees they collected from Sun and Microsoft, as well as some others.

not SCO's money in the first place

[Nick Barnes (11927)]

This isn't money which "SCO owes Novell". This is Novell's money which SCO has retained (in breach of contract). The distinction seems trivial but should be important. In theory, it should give Novell priority over all other creditors (including the lawyers, accountants, and landlords with whom SCO has been merrily spending money since entering Chapter 11). The word "disgorgement" looms large in the future of this case. A pair of loose analogies should make the distinction clear: if I rob a bank, and then use the stolen money to hire expensive lawyers in a futile attempt to escape justice, the bank is entitled to recover that money from the lawyers. But if instead I borrow money from a bank and then spend it all on expensive lawyers on my way out of business, the bank is out of luck. The current situation is more like the former analogy than the latter. In selling Sys V licenses to Microsoft and Sun, TSCOG was acting as Novell's agent: the money was Novell's all along.

Summary misleading

[UnknowingFool (672806)]

But experts say Unix is filled with technology that carries copyrights tied to many different companies and that it would be a nightmare to open source the Unix code collectively. Instead, Novell would have to pick and choose pieces to open-source, a process that could begin once the trial has ended.

First of all, the journalist is confusing Unix as a family with the UNIX IP that Novell owns. As a family, Unix is confusing because it contains contributions from many companies and organizations like components like RCU (IBM), filesystems (JFS, XFS, ZFS, etc), libraries (BSD, GNU,etc) and the like. Novell, however, knows exactly what it owns in terms of copyrights.

The main issue that needs to worked out is what amount Novell owed from the Microsoft and Sun licenses. When Novell sold SCO the Unix business (and not the IP), SCO agreed to pay Novell 100% of any UNIX licenses which Novell would remit 5% back to SCO for their trouble. SCO argued that the licenses to Microsoft and Sun were not UNIX licenses at all. The judge didn't buy their argument for although SCO may have called it differently, certainly the licenses they sold contained UNIX IP and thus Novell was entitled to a share. The reason why the judge did not summarily order SCO to pay Novell the full amount was there is a question of how much of the technology was Novell's UNIX and how much was SCO's IP (i.e. UnixWare, OpenServer). That question is being addressed by the court now. I highly doubt that SCO sold much of their IP to the likes of Sun whose Unix offering is much more advanced or Microsoft who isn't even in the Unix business.

i might consider it...

[someone1234 (830754)]

how much you want to pay?

Not according to scox or msft

[walterbyrd (182728)]

Msft is sponsoring scox, and acacia to claim that proprietary technology was illegally put into linux. Of course, these are just more msft FUD PR stunt. But, sponsering companies like acacia and scox to abuse the US legal system, and file bogus lawsuits has a chilling effect on those who might want to use, or contribute to, linux. Msft is, very successfully IMO, putting a legal cloud over linux.

Re:

[rkhalloran (136467)]

Caldera/SCO Group was reselling the legacy AT&T System V for x86, with some of their own enhancements. THAT code is still for the most part (c) Novell, who bought out AT&T's interest back in '92. There was also the input from Sun that produced Sys V.4, and drivers developed by numerous vendors, so opening the whole thing may be more trouble than it's worth at this point, given the dwindling interest.

SCOX(Q) DELENDA EST!!

That would not end it

[walterbyrd (182728)]

It is not as simple as that. The trials would go on, even if scox files chapter 7, and even if scox is no longer in business.