Stay Lifted, Novell Vs. SCO Can Go Forward

A number of readers suggest we check out Groklaw, where PJ is reporting that a bankruptcy judge has granted Novell's request to lift the stay so that its trial against SCO can proceed in Utah. The judge concluded that Judge Kimball is the best one to decide how much SCO owes Novell, and that SCO cannot make any "reorganization" plans — including any "fire sale" of assets — until it knows this figure.

So...

The system works..... it works slowly, it costs huge amounts of money, but it does work......

Re:

IMHO it took way too long and cost way too much, considering SCO never presented any evidence. It's the "Duke Lacrosse Rape Case" of the intellectual property world.

Re:So...

"The wheels of the gods grind slowly, but they grind exceeding fine" (Sextus Empiricus) I think that when this started, certain people wanted to make absolutely certain that SCO could not wriggle out of it. Every "i" dotted, every 't' crossed. Their fate was sealed some time ago. Now they face destruction. Certain, total and prolonged destruction. I suspect that SCO will be held up as a lesson of what not to do for a very long time.

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Why would they be a lesson in what not to do? sure the shareholders got screwed but afaict the bosses and the lawyers (who IIRC have family connections to darl) have done pretty well out of this whole fiasco.

This is IMO a perfect example of how to make lot

Patience, Mr. Plugwash

... but afaict the bosses and the lawyers (who IIRC have family connections to darl) have done pretty well out of this whole fiasco.

The matter of disbarment and other "lying through your teeth when there was no evidence at all" sort of lawsuits is yet t

Re:So...

Had SCO chosen an opponent with shallower pockets, the system would probably have failed. Having said that, it's still good news :-)

Re:So...

"Had SCO chosen an opponent with shallower pockets, the system would probably have failed."

The system HAS failed.

Pump-and-dump for McBride and his cronies, FUD-fest for Microsoft, and Novells' money being illegally converted to fund all this. Justice? Only when McBride is in an orange jump-suit, and rats on those behind the "corporate veil".

Re:So...

corporation - noun
1. an ingenious device for creating personal profit without personal responsibility

Re:So...

About the huge amounts of money part... I honestly wonder what the *real* economic impact of SCO's saga of scare tactics has been to the open source community at large, specifically employees and customers of leading Linux vendors. How many purchases of Linux-based products were shelved or cancelled based on SCO's claims of infringement?

How many businesses were on the verge of trying out a Linux distro at their office, but became became convinced that open source software was some kind of "poison?" How many might still think that way due to a lack of education or a residual feeling of unease? On the plus side, the old saying is "there's no such thing as bad advertising", right? :(

Re:So...

On the plus side, the old saying is "there's no such thing as bad advertising", right?

In this case, the connections to Redmond are there for anyone to see. The advertising comes from the desperation efforts of MS continuing from all angles, regardless of how it reflects on them. We have the SCO funding, the "Get the FUD" campaign, the efforts to subvert the standards organizations, the patent suits from Acacia, licensing "deals" with Linux vendors, and now the patent suit in Nigeria against OLPC [marketwire.com].

Those are the things that scream loudly that MS believes in FOSS enough that everybody ought to take a look at it.

Re:So...

To the best of my knowledge, Telstra (the enormous half govt telco here in Australia) were about to start the process of choosing between Linux and Windows for umpteen-thousand desktops right when the SCO saga hit.

Needless to say, Telstra are still predominantly Windows based, and many Telstra employees blame the SCO scaremongering.

The system is b0rked!

"The system works..... it works slowly, it costs huge amounts of money, but it does work......"

Three simple reasons to say "the system" does NOT work:

1. justice delayed is justice denied - and it was obvious a LONG time ago that this was a frivolous case
2. justice might be blind, but its even MORE blind if you don't have $$$$
3. justice's slow wheels allowed Darl and Co to pocket a LOT of money over the last 5 years, enabling their dump-and-pump scheme.

Justice my arse! If the software industry worked as slowly as justice, and as expensively, we'd be using a $5,000 abacus instead of a computer.

Think of it - there's still all the BS appeals. Justice isn't looking all that appealing now, is it, unless you, like justice, are blind AND slow.

Re:The system is b0rked!

justice delayed is justice denied - and it was obvious a LONG time ago that this was a frivolous case

It stopped being about SCO's case a long time ago. The Judge Kimball ruled on almost the entirety of SCO's case in August. Read Judge Gross's (part of) order:

... allow Novell to proceed with the Lawsuit at the convenience of the District Court [...] on the following issues: (1) the amount of the royalties to which Novell is entitled from certain SCOSource licenses that the District Court determined to be SVRX Licenses and any additional licenses that are determined to be SVRX Licenses; and (2) whether SCO had the authority to enter into licensing agreements with Microsoft Corporation and Sun Microsystems.

The judge ruled that this can go to trial so the court can figure out how much money SCO stole from Novell. I'm not saying the system is working here, but it's important to remember that Novell's goal is to strangle SCO to death. It's working.

Re:So...

The system works..... it works slowly, it costs huge amounts of money, but it does work......

Keep in mind that although the system works slowly, this case has been exceptionally slow. SCO has been able to drag this one out far more than is normally possible.

The reason SCO was able to do that is that while the system is designed to thwart foot-dragging by defendants, it doesn't do as much to prevent foot-dragging plaintiffs. The theory is that the guy who files the suit is motivated to push the issue -- or else why would he have file the suit? So, the system largely puts the plaintiff in the driver's seat, and SCO has taken every opportunity to stand on the brakes.

In bankruptcy, that's reversed.

The reason SCO was able to do that is that while the system is designed to thwart foot-dragging by defendants, it doesn't do as much to prevent foot-dragging plaintiffs.

Right. But in bankruptcy court, that's reversed. The debtor isn't in charge. The court, the U.S. Trustee, and the creditor's committee are. Notice how, since SCO declared bankruptcy, their wierd legal moves have been shot down fast. SCO's "emergency motion" for a quick sale - deferred by judge without even asking SCO. Quick asset sale to York under wierd conditions - withdrawn once the creditors objected. Novell lawsuit - unstayed.

Judge Kimball's calendar has an open day on December 11.

Re:

If by "works" you mean "drags the thing out endlessly and brings lots of many into the lawyers' pockets" then I have to agree.

Re:there is no PJ

PJ is an amalgam of IBM lawyers and pr hacks. If no one... absolutely no one can say they met her in person, she does not exist. I haven't seen anyone saying even "yes I talked to her in person but no I won't tell you her real name or where". Biggest snow job in history. But the people here are dying to believe that she exists. Sure, and she's blowing Santa.

Look you mentally insufficient SCO hack, your company lost because it had a business plan that was nothing more than extorting ill-conceived licensing fees.

It must be tough to be a dim-witted SCO astroturfer when the company barely exists and is about to be delivered lock, stock and barrel to Novell.

What a pathetic rube you are, you twisted piece of rotting monkey flesh.

don't lose your head over it

a bankruptcy judge has granted Novell's request to lift the stay

Yes, he's lifting the stay, much like one would lift the active portion of a guillotine.

Re:

Yes, he's lifting the stay, much like one would lift the active portion of a guillotine.

Now if only you could actually get Daryl into a guillotine...

Re:don't lose your head over it

Why does Darl even need a head? I think his business model tells he has clearly forgone its use.

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since he fears the truth he probably lacks the other head too

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What business model? Let your product line atrophy and then blame everyone else?

Re:

Now if only you could actually get Daryl into a guillotine...

Who's Daryl? The CEO of SCO is Darl [sco.com] McBride.

Exactly!

I remember a quote where one of SCO's own lawyers said they were under a "death sentence" in Utah, so that's very appropriate. In fact, I was about to submit this exact story under the title "SCO's Stay of Execution Lifted" but I was obviously too late.

Now it will get REALLY interesting when we see how Darl's comments about the Utah judge come back to haunt him when they all have to go back there...

SCO has been a dead man walking for a long time now. It's just that we're finally about to watch their cremation. Anyone remember to bring marshmallows?

but ....

doesn't Utah still use firing squads? the whole 'footbullet' thing makes more sense

SCO's next step?

Trying to derail the main case by running to bankruptcy court failed. So what's next?

• Try to sidetrack the case in traffic court by claiming IBM jaywalked in front of the bankruptcy court?
• File a motion to move everything to small claims court since by the end of this all they'll likely have less than $2,000 in their pocket?
• Risk moving the whole thing in front of Judge Judy [judgejudy.com] and hope to confuse her?

Re:Judge Judy... Re:SCO's next step????

if "Judge Judy" who is as much a Judge as Judge Reinhold, were to act that way in a court room she would be rightly disbarred (i.e. Benched).

WTF are you talking about? "Judge Judy" was very much a "real" judge up until her retirement in 1996, albeit a small claims judge. She got her television show thanks to a large amount of press about her outspoken nature in real courtrooms. While the "court" in her show is merely an agreed-upon arbitration session, she is demonstrating much of the same behavior that she became famous for when in public service.

More to the point, Judith is not the only judge known for rather outlandish behavior. Judge Samuel B. Kent [wikipedia.org] is also well-known in the legal community for his humorous and razor-sharp wit, especially in his written orders. One of his more famous incidents was when he dismissed a case for being "asinine tripe".

Last but not least, you do not "disbar" a judge to remove him/her from office. Judges are either elected or appointed officials. Disbarring means they can't practice as a lawyer anymore. (Annoying, but not a huge problem for someone not appointed by the Bar.) Judges must be impeached or dismissed from office like most other government officials. Disbarment usually follows impeachment or dismissal to prevent the Judge from continuing to practicing law after being dismissed.

Well good.

Almost restores my belief that the US Justice System is worth salvaging. Would fewer lawyers mean justice was served? This whole fandango has taken way too long.

Re:Well good.

And that's exactly where I think this has indeed been a fiasco. SCO never, not for one moment, in court or out of it, actually justified its claims. There's something desparately wrong with a legal system that takes four years to work its way through absolutely nothing at all. It's repugnant that discovery can take this long. The minimum threshhold for any litigation ought to be showing some evidence for your claims immediately after filing, not using discovery and countless motions and countermotions to keep it going for years and years.

People call all of this a victory. It's not, it's a goddamned shame that crooks like McBride can use the court system like this. I'm not saying you should have all the evidence for your claims, but SCO did claim to have all these lines of code, which they never actually produced, and so far as I'm concerned day one before the judge should have gone something like this:

SCO Lawyers: We have all these lines of code demonstrating that our intellectual property was stolen.

Judge: Please provide the code.

SCO Lawyers: Well, we don't actually have it, so to speak. You know, it's code, and it's a lot of pages, and we want IBM to release their code so we can compare it to our code to show what we claim.

IBM Lawyers: Your honor, here's the complete Linux source code, as well as a complete revision history. We downloaded it off the Net just like SCO can.

Judge: So, provide the infringing code.

SCO Lawyers: Well, we can't at this moment...

Judge: Case dismissed.

Re:Well good.

You don't need any evidence to file a lawsuit. There's a lot of reasons for that, but one of the most important ones is that often it's the defendant who has got the evidence. That's particularly true in employment discrimination cases for example. If the courts required evidence just to file, a lot of people wouldn't get their day in court and the justice system wouldn't function as intended.

I'm not going to defend SCO by any measure, but they would probably say that they didn't have any evidence because Novell was hiding it all. And that they need discovery to get the incriminating emails, meeting agendas, testimony from employees, etc. So there's a lot of discovery for you.

The whole process sounds very odd and wasteful from the outside, but there is a legit reason for the way things work. A cheaper alternative is arbitration, which we all agree to whenever we click "I accept." So maybe that will change soon, but I don't necessarily think that will be to consumers' benefit.

The REAL question...

Of course the real question is how Maureen O'Gara spins this to favor SCO.

Re:

Of course the real question is how Maureen O'Gara spins this to favor SCO.

"We're happy that we'll be able to demonstrate that we owe nothing to Novell, put this speculation to rest, and get on with the daily tasks of maintaining 'business-as-usual' here

She'll talk about the constructive trust.

From the court decision:

However, while the stay will be lifted in order to enable the District Court to determine the License Issues, this Court will determine whether a constructive trust is appropriate because it is the very essence of a bankruptcy court's jurisdiction to decide what is property of the estate.

The constructive trust is a big deal because it would immediately remove a chunk of money from SCO's hands, handicapping SCO's ability to pursue the lawsuits. However, in practical terms, it probably doesn't make a difference. If Kimball sets the dollar amount SCO owes Novell anywhere near the amount expected, it means Novell becomes SCO's chief creditor and head of the creditor committee [usdoj.gov]. From there, Novell largely calls the shots in any "reconstruction" plans SCO proposes. One of Novell's options would be to request to convert the bankruptcy from Chapter 11 to Chapter 7 based on the fact that SCO has never been able to make money, aside from what they "converted" (a.k.a., "stole") from Novell.

In any case, just because Judge Gross is reserving the right to order a constructive trust for himself doesn't mean he won't decide to order one once Kimball rules anyway.

Horrible things?

PJ ended the article with:

So it's back to Utah they go. I'm sure SCO's lawyers can't wait to see Judge Kimball again, after all the horrible things SCO's CEO Darl McBride said about Judge Kimball to the press.

I'm interested to read just what Darl McBride said. I just Google searched for it and didn't find anything.

Could someone please post links to some of the "horrible things"?

Re:

At a minimum, they told the bankruptcy court that they thought Kimball's decision against them was wrong...

Re:Horrible things?

He said that Kimball was overruled on appeal two thirds of the time. It is, of course, not exactly true [investorvillage.com].

Re:

"So it's back to Utah they go. I'm sure SCO's lawyers can't wait to see Judge Kimball again, after all the horrible things SCO's CEO Darl McBride said about Judge Kimball to the press."

More like lyin' lyons - the fake steve jobs [arstechnica.com], or pretenderle (Ron End

Here's a link

I'm interested to read just what [horrible things] Darl McBride said. I just Google searched for it and didn't find anything.

Here is a link to Computer World Malaysia [computerworld.com.my]:

Behind the scenes, though, McBride said SCO's legal team has unearthed some details about Kimball's rulings that may provide a glimmer of hope for his company's ongoing fight.

"There's one little tidbit that we came across just a few days ago," he said. "Whereas the popular press has said, O.K., this thing is now over, there is an appeal process, and the other fact is that if you look inside that appeals process and you take a microscope and look at the record of Kimball's summary judgement rulings that have gone to appeals, he gets overturned the vast majority of the time. It's nearly two-thirds of the time. That was something I was a little curious about myself.

"This apparently is a [judge] who very regularly, the majority of the time, gets [overturned] when it goes to the replay booth. That's the one sort of a news fact that's not out there today that [could] maybe temper some of this enthusiasm out there" about SCO's troubles. "He certainly has a dismal record on appeals."

Like most other things coming out of Darl McBride's mouth, these words would have been less "horrible" had they been true. I swear, if that man says it is a clear day you'd best bring your umbrella. He seems incapable of telling the truth.

Beyond bankruptcy?

So, it seems fairly clear to this non-economist that SCOX is royally screwed. However, are there fates worse than bankruptcy? There have been a lot of (mostly wishful thinking) suggestions that SCO's board was doing all this as a big pump-and-dump and th

Re:

...are any of those likely to translate into criminal charges?

You betcha. The SEC is going to have a field day with the pump-n-dump aspect of this, at some point - unless Darl and friends are politically connected, and get protection from prosecution - whi

Microsoft vs. Microsoft?

Didn't Microsoft pay for SCO to do sue IBM? And didn't Microsoft make a deal with Novell? So in some sense, Microsoft is battling itself! And only one will prevail... Microsoft!

Microsoft will buy SCO

I've said it for months now, and I'll wildly guess again:
1. SCO will owe Novell a bunch of money (money that it doesn't have)
2. Microsoft will purchase the remaining 'assets' from SCO. It doesn't really matter if they pay $1 or $1Million
3. Microsoft will do so to get closer to the following goals:
3a. MS now has a hand in the Linux game (possible bump in their stock)
3b. MS can now renegotiate/strengthen their position with Novell
3c. MS can now possibly resurrect the lawsuit or dredge up other scary FUD-alicious items out of what they get (remember it's the appearance of a problem, not an actual problem that makes corporate lawyers CIOs think twice about going open source)
3d. MS pisses off some open source zealots that already hated them (meh)
4. ???
5. Profit!

Re:

but certain Unix rights revert back to Novell since SCO broke contract. it'll continue to be a grand mess, that's for sure

Ain't gonna happen.

Microsoft wouldn't touch SCO with a pole, regardless of length. First of all, it's SCO's creditor committee -- soon to be headed by Novell -- which gets to determine what happens with SCO's assets. Secondly, SCO doesn't have any assets worth buying. Kimball's decision made it perfectly clear that SCO's rights could not be used the way SCO was attempting to use them. Finally, Microsoft tries to leave the impression that any FUD is not coming from them, preferring to fund a cat's paw like SCO to do their dirty work. It would be far more likely for Microsoft to fund a patent troll to attempt to pull off an "emergency" purchase of assets from the bankruptcy.

Oh, wait . . .

Re:Microsoft will buy SCO

No one will buy SCO, because there will be nothing left to buy. SCO will end up owing Novell more than they are worth, and since it's Novells money that was supposed to be a pass-thru, i.e., never SCO's to begin with, they cannot bring it into the bankruptcy to pay other creditors.

Novell will end up taking the remains of SCO in payment, including getting Unix back (the rights to sell it, since they already own the IP). They may even end up open-sourcing Unix just to forever lay such claims to rest. After all, Unix now has no real value, as recent (lack of) sales indicate.

Since this is in Bankruptcy Court, the Bankruptcy Judge will determine if SCO has enough cause to justify spending someone else's (Novell's) money (which, when put in a Trust pending appeals, would kill SCO by itself) to spend on lawyers for an appeal. Since by this time SCO will have no operating capital, and no future, the Judge will say no, hand the remaining assets to Novell and tell everyone else, "Sorry, there's nothing left for you!"

Re:

No, the reason for the Constructive Trust is so that SCO won't "convert", or use for their own purposes, the money owed to Novell. Although the Bankruptcy Judge doesn't allow Kimball to impose one, and reserves that right to himself, the law requires that

Employment at SCO

Oddly enough, they are looking for .NET programmers here [sco.com]. Also note that their development is in New Delhi. Perhaps the Indians don't realize the type of company they are working for?

Re:

I'm not sure if it materially makes SCO's investors' situation any worse. It delays everything else, to be sure, but when Novell wins, what exactly are they going to get? Any given percentage of 0 is still 0. I guess Novell could walk away with some or

Re:

"This means that SCO (and its investors) will actually have to atone for their ridiculous claims and the resources they have caused supporters of Unix and OSS to squander. Finally, they can pay back the world what they owe"

Do you really believe that? Th

Re:

Are you kidding? There's always a lot of big corporations that want someone who can lie with a straight face! Too bad Enron is already under, they would have LOVED him!