Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
×
The Courts Government Caldera IBM News Your Rights Online

IBM Subpoenas SCO Investors, Analysts 507

Bigfishbowl writes "Forbes has an interesting article about IBM sending subpoenas to large SCO investors in an effort to compel discovery. An IBM spokesman says IBM is frustrated by SCO's reluctance to produce proof of its allegations. '"It is time for SCO to produce something meaningful. They have been dragging their feet and it is not clear there is any incentive for SCO to try this in court," he says.'"
This discussion has been archived. No new comments can be posted.

IBM Subpoenas SCO Investors, Analysts

Comments Filter:
  • Well... (Score:4, Interesting)

    by __aavhli5779 ( 690619 ) * on Tuesday November 11, 2003 @11:19PM (#7450514) Journal
    I am by no means in hell a lawyer, but it seems like IBM is trying to determine whether something much of Slashdot suspects is verifiably true: that some sort of sinister third party (Microsoft comes to mind) is morally and financially behind SCO's actions.

    The question is whether a "Microsoft is behind this whole sham" argument will be as well-received in a court room as it has been on Slashdot.

    I am so not a lawyer that I don't even know whether it would be admissible.

    Or, for that matter, whether my analysis is entirely incorrect.
    • COUNTERSUE!!! (Score:4, Insightful)

      by aphor ( 99965 ) on Tuesday November 11, 2003 @11:24PM (#7450544) Journal

      It is illegal and damaging to use the civil court system to intimidate people if you have no good reason to believe the law is behind you (like if you LIED about the facts used to support your complaint). A countersuit is in order, but who to sue?

      • Re:COUNTERSUE!!! (Score:3, Insightful)

        > It is illegal and damaging to use the civil
        > court system to intimidate people

        I'll bet it is. I'll also wager, as well, that it is probably an infringement of securities law to use false statements to attract investors. Is an SEC investigation of SCO far behind the current litigation?
      • Re:COUNTERSUE!!! (Score:3, Informative)

        by red floyd ( 220712 )
        I think you're talking about barratry. It's come up several times in slashdot discussions about the case.
      • Re:COUNTERSUE!!! (Score:3, Insightful)

        by Frymaster ( 171343 )
        It is illegal and damaging to use the civil court system to intimidate people

        of course, the fear here is that subpeoning investors could be construed as "intimidating people" - ie, ibm intimidating current and potential investors in sco. really, who would want to invest serious coin in a company if they thought there was a good chance they'd get a subpeona from ibm?

        tread carefully here, big blue. you could be handing a legitimate complaint to santa cruz![1]

        1. sorry, "utah".

        • Re:COUNTERSUE!!! (Score:3, Interesting)

          by Glock27 ( 446276 )
          of course, the fear here is that subpeoning investors could be construed as "intimidating people" - ie, ibm intimidating current and potential investors in sco. really, who would want to invest serious coin in a company if they thought there was a good chance they'd get a subpeona from ibm?

          A $3 billion lawsuit is more materially damaging than a perfectly legal subpoena.

          The subpoenas were a direct result of SCO's actions. If SCO is found to be at fault, IBM will certainly have no liability whatever. IANA

    • I certainly hope they find documents that prove that Darl &Co. just went into this madness for quick money, using an illegal pump and dump scheme. It'll make the SEC's job much easier.
    • Is Microsoft a SCO Investor? I thought they just paid for licenses, that would make them a customer not an investor.
    • Re:Well... (Score:5, Insightful)

      by Gorobei ( 127755 ) on Tuesday November 11, 2003 @11:58PM (#7450733)
      Going after the analysts is a great idea. If they are forced to respond to the subpoenas, they can say:

      a) I just used public information and personal judgement to predict the stock will double in price. This would imply extreme naivety on the part of the analyst, and, given the current lawsuits against analysts pumping stocks, probably gets a Spitzer-style lawsuit against him and his firm.

      b) SCO told me X, Y, and Z, and that is the basis for my estimate. If public info, see above. Else: Woohoo, material information given to analysts yet not publically disclosed.

      c) SCO hinted privately at Microsoft (or other firms) involvement. Great evidence of dirty hands in the case, and maybe a bit of case b).

      In short, I'd hate to be an analyst forced to defend my "strong buy" rating on a stock while also claiming to be an expert in its market sector.

      Note also that the Forbes' article also used the phrase "pump and dump." It's never a good sign when the major media starts propagating such theories!
      • Re:Well... (Score:5, Interesting)

        by Anonymous Coward on Wednesday November 12, 2003 @01:44AM (#7451195)
        Well, SCOX was at .70 before this all started and was off everyone's radar. It's not totally crazy that the stock doubled after they announced a $3 billion dollar lawsuit against a large competitior.

        However, the people recommending Buy when the stock is at $20 are probably the same folks pumping money into SCO so they can keep the bubble from deflating. Even if it's an honest recommendation, it's based purely on high-risk speculation and not on any fundementals or facts.

        Contrary to the slashbots, I think it's highly unlikely that this market manipulation is SCO, Canopy, Microsoft, Sun or anyone else. It's probably just independant brokers who know a goldrush when they see one. Just like VA Linux, etc.
        • by siskbc ( 598067 ) on Wednesday November 12, 2003 @10:53AM (#7453009) Homepage
          Contrary to the slashbots, I think it's highly unlikely that this market manipulation is SCO, Canopy, Microsoft, Sun or anyone else. It's probably just independant brokers who know a goldrush when they see one. Just like VA Linux, etc.

          I definitely understand the tendency to ignore all the paranoid ravings you hear on /., because I do too. That said, there are some legit reasons to give this one consideration. First, Forbes is typically quite the conservative mag, and I doubt they'd even have printed that had it not passed the laugh test to outsiders. Second, this scheme is simliar to what canopy has done before [forbes.com] by Canopy. I'm generally skeptical, and I will bank on this being a pump-n-dump or similar scheme by SCO/Canopy. This is their MO.

          The Microsoft angle is more farfetched, but not completely implausible. MS paid a *lot* of money for SCO licenses that were somewhere between unnecessary and worthless to MS. Also, lately, SCO has been making strange offers about discounts to people who make the switch to any non-linux system, and saying it in a way that all but screams "Windows."

          Bottom line, I'd bet on Canopy running this scam. I'd wait for some more bookkeeping before I listened to the MS angle.


        • I think it's highly unlikely that this market manipulation is SCO, Canopy, Microsoft, Sun or anyone else. It's probably just independant brokers who know a goldrush when they see one.

          I don't know who/what it is, but it doesn't act independent. Watch the moment to momement bid/ask volume, etc. compared to a typical "goldrush." At the very least, whoever's keeping this turkey afloat has 1) quite a bit of money to thow away on the project, and 2) if there is more than one of them, they at least have each o

      • Re:Well... (Score:4, Insightful)

        by spitzak ( 4019 ) on Wednesday November 12, 2003 @04:43AM (#7451688) Homepage
        c) SCO hinted privately at Microsoft (or other firms) involvement.

        I'm starting to wonder. It is so obvious that they are doing Microsoft's bidding... is it possible it is not true? Why are investors buying the stock? Surely not for any possible payout from the lawsuit, or any plausable income from Linux. The investors must believe that buying the stock is a way to get some of the big bucks Microsoft is paying SCO! Much better way to get some of their profits than buying Microsoft stock itself!

        But some of SCO's recent announcements, where they more and more shrilly say Linux is dangerous and scary and it's problems could not possibly be solved by their lawsuit, and that they will pay you to use Windows, seem to be heavy-handed, exaggerated versions of Microsoft's assummed arguments. There purpose is obviously not to help their case, and lately don't seem really to be attacks on Linux itself (since their arguments cover virtually any software, open or closed, ever written by anybody who read another piece of software). They really seemed to be designed to prove (without saying so) that Microsoft is funding them. Maybe this funding is an entire scam.

        Now this will require some inside help at Microsoft, somebody fooled them into making the original purchase of some useless licenses. If such a plot is figured out Microsoft should fire that guy's ass, and perhaps get him thrown in jail. A public action like this is the only way they are going to convince people they did not fund SCO.

        So why doesn't Microsoft deny that they are funding it? Because SCO has never literally said they are getting money from Microsoft, so there is nothing to deny. If Microsoft makes a denial without a real accusasion from SCO, then everybody will then say "obviously they are funding it, since they felt they had to deny it".

        • What if there were an understanding that if by a certain date IBM hasn't either settled or acquired SCO, Microsoft will acquire SCO? That way the major SCO stockholders have a floor on the stock price, the SCO lawyers have a guaranteed payout based on their contract clause giving them a percent of any buyout price, and Microsoft has very little money upfront where it might embarass them, aside from the licensing fees they've already fronted.

          Companies negotiate possible acquisitions all the time, and much o
        • They can't deny that, because over 8 million of the funding (which purchased unspecified SCO "licensing" that they suddenly needed for some reason) is a matter of public record, in their own press releases and in SCO's SEC filings. The only thing the conspiracy theorists are speculating about is whether some of the BayStar or RBC money is laundered Microsoft cash as well.
    • by quinkin ( 601839 ) on Wednesday November 12, 2003 @01:09AM (#7451049)
      Excuse me, would you mind incriminating yourself?

      I guess you just have to ask politely enough...

      Q.

    • Re:Well... (Score:3, Interesting)

      Think about this, if SCO is being puppeted, and no one can tell who. If SCO gets countersued, and decides to just fold up shop (its CEO and other stock holders bailing out before the stock goes down) and then just dump the company. For whoever is behind SCO, and the people that run SCO, this whole thing is a win win situation.
  • Just like Poker (Score:5, Insightful)

    by Quasar1999 ( 520073 ) on Tuesday November 11, 2003 @11:20PM (#7450520) Journal
    This is just like poker... And IBM finally called... now SCO is gonna have to lay down the cards or fold... Either way... we all win! :)
  • I always wondered (Score:2, Interesting)

    by Joe Tie. ( 567096 )
    If people involved with the legalities of this case were getting as frustrated with SCO as I've been. Nice to see that this seems to be the case.
  • Follow the money (Score:4, Interesting)

    by jaymzter ( 452402 ) on Tuesday November 11, 2003 @11:22PM (#7450533) Homepage
    At this stage of the game, IBM is publicly stating they doubt TSG is serious about entering a court room. With that in mind they seem to be trying to hurt TSG where it hurts: the wallet. Have you seen SCOX performance lately? Beautifully mimicking a swan dive. Good riddance to bad trash

    BTW, 5th post?
  • SCO Gives Filenames (Score:5, Interesting)

    by emacnabber ( 682085 ) on Tuesday November 11, 2003 @11:23PM (#7450543)
    This is a little OT, but SCO told the names "offending" files in a court doc at groklaw [groklaw.net]. They don't say what parts of the files are "theirs", but they've narrowed it down to about a 1/5 of the kernel. :-)
    • by darnok ( 650458 ) on Wednesday November 12, 2003 @12:07AM (#7450784)
      Is there something in the US legal system that actively prevents SCO from claiming every single file in the kernel as their own? I mean, if they're claiming a huge chunk of the kernel anyway, why not claim it all and be done with it?

      Presumably the court would have to investigate every single file to establish the veracity of SCO's claims. Can you imagine weeding through every single .h file, many of which are going to look identical on any Unix system, and trying to establish the one true inventor of the file? I'd bet the original creator of a lot of those files is lost in time.

      SCO would claim ownership, nobody could dispute it, and SCO could conceivably table some obscure document saying they created blah.h on some vaguely appropriate date. It doesn't have to be truthful - it can be manufactured just like all their other claims. If someone eventually comes forward and says "No, I created blah.h and here's proof", SCO would say "Fine, now let's look at blah2.h...".

      Meanwhile, time would pass & SCO execs would be that much closer to their bonus payouts for keeping the stock price going upwards.

      Other than the cost of doing things in this very long drawn out fashion, and I suspect SCO could find external funding for their legal costs from one or two sources in order to keep the anti-Linux FUD alive, is there anything in the US legal system preventing them from doing this?

      I'm thinking all SCO's execs need to do is waste the court's time until they've got their 4th quarter of stock price rises, then bail out with big final paycheques and leave the remaining investors with whatever's left.
  • Good Thing! (Score:4, Insightful)

    by Delphinios ( 43483 ) on Tuesday November 11, 2003 @11:24PM (#7450548)
    Pretty cool, if you think about it.

    IBM, Big Blue, batting in Linux's court. This will likely be the case that stands as precedence for or against the GPL, and with such a giant behind Linux, I don't think SCO will win.

    If they had a chance, they would have pressed their fist into using the law to compel licensing, instead of sending "invoices" and pressuring companies to provide 'insurance' against their lawsuits.

    With the right leverage (such as the kind that IBM has) this could easially compel strong legal backing for the GPL, something it could definately use.
    • Re:Good Thing! (Score:5, Insightful)

      by sydlexic ( 563791 ) on Tuesday November 11, 2003 @11:59PM (#7450741)
      IBM, Big Blue, batting in Linux's court. This will likely be the case that stands as precedence for or against the GPL, and with such a giant behind Linux, I don't think SCO will win.

      You sound downright giddy at the prospect that a large company is going to prevail ... because it's large. As much as I hate SCO for the toilet licking scumbags they are, I want IBM to win on the MERITS of the case.
    • "IBM, Big Blue, batting in Linux's court. This will likely be the case that stands as precedence for or against the GPL, and with such a giant behind Linux, I don't think SCO will win."

      Not that it detracts from your point here, but IBM's battling for its own interests. They just happen to coincide with what a lot of people want.

  • by Rosco P. Coltrane ( 209368 ) on Tuesday November 11, 2003 @11:28PM (#7450561)
    about IBM sending subpoenas to large SCO investors in an effort to compel discovery.

    In the recent wake of subpoena frenzy, we at subpoenaforless.com are pleased to announce a 20% discount on all our printed subpoenas, and 25% discount on rose-smelling quadrichromic printed 320g paper models. Up to 40% off all our models of subpoenas can be had if you puchase in volume. We have many satisfied [riaa.com] customers [ibm.com] and you could be one too.

    We're also working hard on the upcoming opening of our new online Internet portal, oneclicksubpoena.com. Be assure that we at subpoenaforless.com are committed to high quality, trouble free legal hassles.
  • by overshoot ( 39700 ) on Tuesday November 11, 2003 @11:28PM (#7450563)
    GrokLaw [groklaw.net]'s posting of IBM's "Handy Guide to SCOX Legal Obfuscation," also known as "IBM Addendum to Memorandum in Support of IBM's 2nd Motion to Compel Discovery."

    Warning: put drinks and domestic animals safely out of danger first.

  • by Raul654 ( 453029 ) on Tuesday November 11, 2003 @11:29PM (#7450565) Homepage
    "I view this as an attempt to bully and intimidate..." says Christopher Sontag, executive vice president at SCO.

    Oh, the irony.
    • by mebon ( 634191 ) on Tuesday November 11, 2003 @11:48PM (#7450675)
      I also like this part:

      Sontag says SCO has provided 1 million pages of documents to IBM and that IBM in return has provided only 100,000 pages to SCO. "The foot-dragging is on the part of IBM," he says.

      100,000 pages is dragging your feet??? I'm glad this guy wasn't my literature professor. "Next week please turn in your 1,000 page paper on 'To Kill a Mockingbird'. And it must be single spaced".

      • by jjo ( 62046 ) on Wednesday November 12, 2003 @12:11AM (#7450803) Homepage
        What's worse is that a large part of the 'million' pages that SCO produced were scanned printouts of UNIX source code. Rather than burning a source code CD or DVD and mailing it to IBM, they went to enormous efforts to furnish the data in the least useful format possible. They did this even though they acknowledged that IBM would need to perform computer analysis of the code itself.

        Oh, and though they had time to send the million pages to IBM, they didn't have the chance to include the code that they have been showing for months to financial analysts, columnists, and anyone who will sign an NDA. It must have slipped their minds.
      • by JanneM ( 7445 ) on Wednesday November 12, 2003 @12:15AM (#7450827) Homepage
        Well, you do a typical fifteen page paper in formal legalese and you'll likely end up with 1k pages or so...

        "The claimant of the first party, hereafter identified as Mrs. Lee, has a prior, wilful relationship with the claimant of the second party, hereafter identified as The Book, in that the claimant of the first party establishes the status of authorship on the claimant of the second party, a status that the claimant of the second party has yet to file a motion to dismiss. Within The Book, the claimant of the third party, referenced alternativel but equally as Scout and Miss Finch is described by the claimant of the first party as ..."

  • by csoto ( 220540 ) on Tuesday November 11, 2003 @11:29PM (#7450569)
    SCO claims to have shown "the code" to investors and such. IBM says, "okay, SCO won't show us the code, so we'll make your investors do so." Both intimidates the investors and calls SCO's bluff. Brilliant!
    • Even better, the confidentiality agreement between the people who've seen the code and SCO can be breeched in court. I'm sure DiDio never envisioned being called to the stand when she went on her publicity tour.

      But this knife cuts both ways -- OSS trolls like ESR could receive subpeonas from SCO in retailation.
      • But (Score:5, Interesting)

        by Raul654 ( 453029 ) on Tuesday November 11, 2003 @11:47PM (#7450667) Homepage
        The idea here is to do to SCO what they are trying to do to the OS movement - make the public afraid to touch them. I mean, if buying SCO stock means you risk getting a subpeana, who is going to do it? So what if ESR gets one - I'm sure he'd be happy to give SCO a piece of his mind. The goal is to make your average wall streeter afraid to touch SCO with a 10 foot pole, and there's not a whole lot SCO can do that they haven't already done.
        • Re:But (Score:3, Interesting)

          by idiotnot ( 302133 )
          The thing is....the runup on the SCO stock is clearly because of hype and its scarcity in the market. As they mention in the article, Canopy is the biggest shareholder, and they're not doing alot of buying and selling. Their other big shareholders are Wall Street stars like the Whitney Holding Group (Russ Whitney....you've probably seen his "You can get rich buying and selling real estate!" infomercials late at night). Put another way, there are alot of people who'd love to sell the stock short, but ther

      • > But this knife cuts both ways -- OSS trolls like ESR could receive subpeonas from SCO in retailation.

        Who cares. He'll show up dressed like Darth Vader, everyone will giggle while the bouncers toss him out, and the trial will proceed as before.

      • Huh? (Score:4, Interesting)

        by Bruce Perens ( 3872 ) * <bruce@perens.com> on Wednesday November 12, 2003 @12:17AM (#7450843) Homepage Journal
        Cuts both ways? Is that just vapors or do you have a reason to say so?

        I don't see why Eric wouldn't want to testify. I'd like to. I sure don't have anything to hide with regard to this case, and I can't see how he would.

        Bruce

        • Re:Huh? (Score:4, Insightful)

          by dmaxwell ( 43234 ) on Wednesday November 12, 2003 @12:39AM (#7450934)
          They would take things you and ESR said out of context and make you answer yes-or-no questions in such a way that you come off like a file sharing pirate who says "arrrrrrr" all the time. They will basically assassinate your character any way they can....and sharp lawyering would likely stop you from doing anything about it. They are using the legal system to further a smear campaign.
    • by antiMStroll ( 664213 ) on Tuesday November 11, 2003 @11:46PM (#7450661)
      A better theory, IBM is cutting off SCO's funding by using SCO's tactics against them. SCO expended most of their energy so far badgering corporate Linux users with threats of IP transgression and 'offers' or ridiculously priced licenses. The obvious intent is to make corporate users think twice before adopting Linux.

      It's no coincidence that IBM's move came soon after the RBC and BayStar announcements. It's a warning to other potential investors, invest in SCO and endure the gaze of IBM's army of lawyers. With Worldcom and Enron still fresh in their memory, watch them blink first. Anyone care to bet on another anonymous mass purchase of SCO licenses?

  • by John Hasler ( 414242 ) on Tuesday November 11, 2003 @11:33PM (#7450599) Homepage
    Let's start referring to www.forbes.com as a "stock-market enthusiast Web site".
  • by Anonymous Coward on Tuesday November 11, 2003 @11:36PM (#7450613)
    For the stock [yahoo.com].
  • by Drishmung ( 458368 ) on Tuesday November 11, 2003 @11:40PM (#7450638)
    Sontag says SCO has provided 1 million pages of documents to IBM and that IBM in return has provided only 100,000 pages to SCO. "The foot-dragging is on the part of IBM," he says.

    The mind boggles! Sontag is asking IBM to deluge him in paper? He only has 100,000 pages, and he wants IBM to see his million and raise it!

    Groan, somewhere, a forest cries in pain as the log chippers are fired up.

    Do not start a land war in Asia, do not enter a paper war with IBM. Sheesh!

  • by theolein ( 316044 ) on Tuesday November 11, 2003 @11:58PM (#7450735) Journal
    I don't think that Microsoft is directly behind this action, but I sure as hell wouldn't put it past them to do so. They've done some pretty weird stuff in the past such as the famous dead people mailing initiative and their famous round of hideous anti-linux FUD in 2001 where Ballmer, Mundie and just about every honcho at MS were telling strange tales of viral cancer etc.

    Given that they discovered that such direct FUD backfired but are reportedly gearing up for the next round of FUD with respect to security would you be willing to state with 100% certainty that MS is not behind this action?

    I wouldn't.

    If it is discovered through IBM's process of subpoenas that MS is in fact behind this I wonder what will happen then. I assume that MS will be facing a court action for trying to willfully harm a competitor's business that will make the $3 billion SCO claim look tame, and I think that there will be a number of anti-trust questions raised.
  • Real knee-slapper (Score:3, Interesting)

    by overshoot ( 39700 ) on Wednesday November 12, 2003 @12:01AM (#7450757)
    Sontag says SCO has provided 1 million pages of documents to IBM and that IBM in return has provided only 100,000 pages to SCO. "The foot-dragging is on the part of IBM," he says.

    Where was the freaking C&C warning?

    Look, Chris baby, let's put this kindly: it was SCO who replied to a request for source code (requested for code comparison purposes) who printed it out, then scanned it, then PDFed the scanned image, then shipped the PDF. I'm sure that trick was the basis for endless merriment in Lindon, with backslapping and congratulations all around.

    You'll allow me, I hope, to quietly contemplate the prospect of the Court ordering SCO to pay for manual transcription and proofreading of all 150,000 pages?

    • Jesus...

      D:!

      I knew they were bastards, but this is just plain evil! Dealing with SCO is like dealing with the Wishmaster.

      IBM: Genie, show us the infringing source code!

      McBride: As you wish. (grins menacingly)

      --> Cut to scene where terrified IBM attorneys are locked in a room as tons of CDRs containing PDF files with millions of pages of worthless bitmaps of scanned source code fall from nowhere, and crush them.
  • by El ( 94934 ) on Wednesday November 12, 2003 @12:02AM (#7450761)
    "IBM needs to get answers from analysts about why they wrote positive reports and from Baystar about why they invested," Ferguson says.

    Why would IBM need that information, unless they intended to go after somebody for securities fraud?

  • by jimbolaya ( 526861 ) on Wednesday November 12, 2003 @12:07AM (#7450783) Homepage
    "I view this as an attempt to bully and intimidate analysts--to try to cow them into silence"

    Oh, Chris, you words always have been so moooooooving.

  • by DaveAtFraud ( 460127 ) on Wednesday November 12, 2003 @12:17AM (#7450845) Homepage Journal
    The author of this piece, Daniel Lyons, should use the by line, "SCO Mouthpiece." He is the same hack who wrote the "Linux's Hit Men" article about the FSF plus there was another recent piece of SCO FUD that I've managed to flush out of my memory.

    You will also note that quietly buried in the body of the article is that Forbes was also served with a subpoena. This is undoubtedly because of Mr. Lyons' articles.
    • The author of this piece, Daniel Lyons, should use the by line, "SCO Mouthpiece." He is the same hack who wrote the "Linux's Hit Men" article about the FSF plus there was another recent piece of SCO FUD that I've managed to flush out of my memory.

      He is actually a nice guy once you get to know him. He just has a problem being impartial when it comes to Linux because... well, you see, a penguin once seduced him and then broke his heart. It's a sad story really.

  • by swillden ( 191260 ) * <shawn-ds@willden.org> on Wednesday November 12, 2003 @12:40AM (#7450938) Journal

    From SCO's supplemental responses:

    IBM has unfairly competed with SCO by... entering a conspiracy... with others in the Linux development and distribution business... to artificially restrain prices below natural levels for the purposes of destroying competition in the operating systems market for UNIX software on Intel machines. ... By artificially restraining the price of Linux to zero, which price is very substantially below the actual development cost contributed by IBM and others, IBM induces customers to switch to Linux. This is, among other things, unfair competition.

    I've been wondering when someone was going to try this for quite a while. "Dumping", selling a product below cost in order to force your competitors out of business, is illegal for good reasons. It seems like a motivated attorney could pretty easily make a case that any company who is putting substantial investment into software that is distributed for free is dumping, and trying to kill a competitor.

    This doesn't just apply to IBM and Linux, it also applies to Sun and OpenOffice, and perhaps others as well. Now it looks like SCO is trying this argument out for real.

    I had hoped the argument wouldn't get brought up for a while, until a history of such corporate open source efforts was well established. And it seemed reasonable that it might not be brought up, since the "damaged" party in both the Linux and OpenOffice cases is Microsoft, and as a convicted anti-competitive monopolist with a massive market share they're not in a very good position to complain.

    It seems like Microsoft has found a way to get the idea in front of a judge after all...

    • by Raffaello ( 230287 ) on Wednesday November 12, 2003 @01:12AM (#7451061)
      There might be some companies out there that would want this idea to be scrutinized closely in court, but Microsoft would not be likely to be among them.

      Remember that Microsoft has a long history of what you refer to as "software dumping." Internet Explorer anyone? How much have MS users paid for that piece of software, which must have cost MS millions to develop. Clearly, MS have been dumping their web browser below cost! It was, for years, a separate, free download, in an era when MS was struggling mightily to catch up to then leader, Netscape.

      So, no, I don't think Microsoft really want the courts to rule that giving away software is de facto unfair competition. It would take a weapon from Microsoft's arsenal that they have used to excellent effect in the past.
    • Dumping is Good (Score:4, Interesting)

      by Bob9113 ( 14996 ) on Wednesday November 12, 2003 @04:43AM (#7451687) Homepage
      I've been wondering when someone was going to try this for quite a while. "Dumping", selling a product below cost in order to force your competitors out of business, is illegal for good reasons.

      I'm not sure whether it's illegal or not (as so many of our economics-related laws are irrational), but if it is, it is most definitely not illegal for good reason. Economists tend to get hot under the collar whenever their government engages in the economically self-destructive practice of protectionism under the spectre of dumping. Any first year economics student can explain precisely why dumping is good for the economy that is being dumped into in essentially every real world situation[1]. Any Linux enthusiast can as easily explain why the same is true of operating systems[2].

      Consider the example of Netscape - Microsoft has spent nearly ten years attempting to dump it out of existence. Microsoft's price for IE remains at zero (not to mention their correlary anti-competitive attacks), and still Netscape lives on (and a host of other browsers, including ones with non-zero prices have poppoed up). And that's just looking at the browser producers - the rest of the world, the browser consumers, like 99.99% of the population and a similar percentage of businesses, are ECSTATIC about the browser wars. How different would the world today be if Netscape, Opera, Mozilla, Konquerer, and IE all cost $99, and had never been free?

      [1] DUMPING [economist.com]

      Selling something for less than the cost of producing it. This may be used by a DOMINANT FIRM to attack rivals, a strategy known to ANTITRUST authorities as PREDATORY PRICING. Participants in international trade are often accused of dumping by domestic FIRMS charging more than rival IMPORTS. Countries can slap duties on cheap imports that they judge are being dumped in their markets. Often this amounts to thinly disguised PROTECTIONISM against more efficient foreign firms.

      In practice, genuine predatory pricing is rare - certainly much rarer than anti-dumping actions - because it relies on the unlikely ability of a single producer to dominate a world market. In any case, consumers gain from lower PRICES; so do companies that can buy their supplies more cheaply abroad.


      That is - unless IBM's Linux division has a maintainable monopoly on the OS market (it does not), and the ability to raise its price (it does not), and the ability to drive its competition out (OK, guilty), and there are significant barriers to reentry to the OS market (there are none), claiming dumping is specious at best.

      [2] Having the ability to run a variety of operating systems without having to pay for each license makes it easier for the user to satisfy his or her wants. On the business side, a vastly greater number of businesses are OS consumers than are OS producers - thus the business world as a whole *LOVES* OS dumping (if it can be called that).
  • by stephanruby ( 542433 ) on Wednesday November 12, 2003 @01:26AM (#7451118)
    "I view this as an attempt to bully and intimidate analysts--to try to cow them into silence," says Christopher Sontag, executive vice president at SCO, in Lindon, Utah.

    I wonder what his views are on sending threatening letters to thousands of companies demanding licensing fees without offering a shred of evidence supporting its claims.

  • by herrvinny ( 698679 ) on Wednesday November 12, 2003 @01:40AM (#7451181)
    You folks are going to have to help me, because I'm a Linux newbie, but just before SCO shut down the ftp site, I downloaded the SCO linux kernel files (at least, I'm guessing that's what they are; I downloaded all the files starting with kernel-source[stuff here].rpm, which was 10 files, roughly 123 MB.) Would SCO object if I posted the files for download? Is it illegal? I'm betting not, since they were still licensed under the GPL when I downloaded them. So, if these are the real kernel files, and SCO would be pissed at them being posted freely, and it's not illegal under the DMCA or something, yeah, I'm going to post all the files. Can anyone tell me if these files would be useful to anyone, most of all IBM?
  • Subpoenas for what? (Score:3, Interesting)

    by PMuse ( 320639 ) on Wednesday November 12, 2003 @01:44AM (#7451191)
    A subpoena usually asks for (a) some one to show up and testify or (b) a bunch of documents. These sound like the document kind.

    So, anybody know what documents IBM asked these investors/analysts for?
  • by Animats ( 122034 ) on Wednesday November 12, 2003 @01:48AM (#7451210) Homepage
    The Cravath machine is starting to roll.

    First, if SCO stalls much longer on discovery, Cravath will be in a good position to move for a dismissal. They might get it, too. Maybe even a dismissal with prejudice, so SCO can't refile, or summary judgement in IBM's favor.

    Independent of this, it looks like IBM is gearing up for a securities-fraud counterclaim. Cravath has pointed out in legal filings that SCO has made statements publicly that are inconsistent with the positions they take in court. Ordinarily, that's OK. But when the stock price spikes and insiders are cashing out, that's not OK.

    There's also the potential of a false-claim-of-copyright claim. That's rarely used, but here, it's clearly appropriate.

    This is going to crank for a while, but unless SCO comes up with something a lot better than what they've shown so far, they're not going to win.

  • by Artifakt ( 700173 ) on Wednesday November 12, 2003 @03:22AM (#7451507)
    This is just a hunch, mind you, the sort of thing you feel like you know without knowing how you know it, but reading this newest SCO thread, I got a strong premonition that this case has reached the stage where, by the time it is all over, some people connected are going to be dead, by what at least looks like suicide. If I'm right, you can call me psychic, or say it was a subconsious awareness of similarities between this case and Worldcon and other previous ones, but I'm willing to go on record with the prediction either way. (And If I AM right, I'm gonna claim first post to the thread that will doubtless result).
  • by salesgeek ( 263995 ) on Wednesday November 12, 2003 @09:30AM (#7452447) Homepage
    This case kills me. It comes down to three issues:

    * Does Linux infringe SCO's copyright?

    * Did IBM violate their Unix License?
    * If so, did IBM harm SCO by doing so?

    Frankly, if SCO had a case, they would show the code, show the infringement, then show the contract, show the proof IBM violated it, followed by showing the effect IBM's actions had on their business. Fact is SCO cannot proove any of it for these reasons:

    * Linux is not an infringement (less than 1% simmilar code)

    * IBM did NOT break their Unix agreement and even if they did:

    * SCO is responsible for their own situation. FreeBSD and Linux long ago eclipsed SCO Unix in the x86 marketplace because of price/function/value. There's little reason to buy SCO product other than fear they will sue you for not buying their own product.

    IBM's move is an endgame and I'm happy to see it.

  • by hqm ( 49964 ) on Wednesday November 12, 2003 @09:59AM (#7452615)
    When SCO was going around threatening end users, I sent a letter to my congressman, Barney Frank of Massachusetts. Here is his response:

    ====

    September 26, 2003

    Dear Mr. Minsky,

    I share your view that the suits being brought by the SCO Group
    against the users of the Linux system are an entirely inappropriate
    use of the legal systems for broader corporate purposes. While I have
    note been able, obviously, to examine these in detail, the suits do
    not appear to me, from what I have read, to have any merit, and in
    fact seem to be motivated, as I said, by an effort simply to prevent
    the use of Linux for competitive reasons.

    There is, unfortunately, a very limited role for Congress here. I
    agree with those who would like to see us "stop SCO from punishing
    innocent consumers to inflate its other legal claims." But under our
    separation of powers doctrine, Congress has no role whatsoever to play
    in the pursuit of particular cases. We can pass laws which prevent
    certain types of suits from being brought, but it is very, very
    difficult to pass those in a way that would be retroactive - that is,
    that would apply to existing suits. And the problem with this suit is
    not that it is of a sort of legal claim that is inappropriate to
    bring, but that it is totally unjustified on the merits. In other
    words, the remedy here is for these suits to be dismissed on their
    merits and Congress has no role, as I have said, in doing that.

    I am prepared to join in expressions of extreme disapproval of what
    SCO is doing, and I will be consulting with my colleagues to see if
    there is a movement to do that. I hope that will have some impact on
    them. All of these lawsuits brought against individuals will of course
    be dismissed but I realize that is of little consolation to people
    who have had to go through the trouble and expense of defending against
    them. It may be that at some point a judge will act decisively enough
    in this regard to prevent this proliferation of suits, and while, as I
    said, our Congressional role is very limited here, I will be
    encouraging anything we can do along these lines.

    Barney Frank
  • Haven't sold shares? (Score:3, Interesting)

    by j-turkey ( 187775 ) on Wednesday November 12, 2003 @11:13AM (#7453186) Homepage
    SCO says the "pump and dump" theories are nonsense and that Sontag, along with Darl McBride, CEO, have not sold a single share. Some executives have sold shares but only small amounts and mostly "to cover tax consequences on restricted stock," Sontag says.

    I wouldn't be too sure about these claims. Judging from this page [yahoo.com], there's been a few million in insider trading since June (unless I've been reading this wrong, which is entirely possible). Quite a bit for such a small company (2.4%). One executive [yahoo.com] has sold somewhere around $1,595,650 in stock since June...around 125,000 shares of his original 215,000. Sounds like a majority of his holdings to me. Now I don't know much about finance, but I think I can say this with authority: Small amounts to cover tax penalties my ass. That's a fortune, even after taxes.

    --Turkey

For God's sake, stop researching for a while and begin to think!

Working...