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The Courts Government Software News Linux

Judge To SCO — Quit Whining 156

chiark writes, "Back in June, the magistrate judge presiding over SCO vs IBM gutted SCO's claims, as discussed on Slashdot. SCO cried 'foul,' appealed to the District Judge, and today that judge has ruled against SCO, succinctly and concisely affirming every point of the original damning judgement. Also included in this ruling is the news that the Novell vs. SCO trial will go first: 'After deciding the pending dispositive motions in this case, and after deciding the dispositive motions in Novell, which should be fully briefed in May 2007, the court will set a trial date for any remaining claims in this action.' It's notable that the judge conducted the review using a more exhaustive standard than required out of an 'abundance of caution,' and still found against SCO." As Groklaw asks and answers: "What does it mean? It means SCO is toast."
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Judge To SCO — Quit Whining

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  • by Artie_Effim ( 700781 ) on Thursday November 30, 2006 @12:04PM (#17051060)
    IBM stole our whine in 1992, we have documents to prove it too, right over here, near the othe IBM documents ..... BWHAAAAAAA
  • by bogaboga ( 793279 ) on Thursday November 30, 2006 @12:04PM (#17051062)
    I better act fast! This is the time to sell my remaining SCO stock before the tsunami strikes.
  • that's what he said? (Score:4, Interesting)

    by Anonymous Coward on Thursday November 30, 2006 @12:05PM (#17051074)
    I read the article and I didn't see "quit whining" anywhere.

    I realize that was a crude paraphrasing, but a more neutral/appropriate headline might make this a more reputable site.
  • What net for SCO? (Score:3, Insightful)

    by mudetroit ( 855132 ) on Thursday November 30, 2006 @12:06PM (#17051090) Journal
    The chief qestion here as the litigation begins to play ut is when do the investors in SCO begin ulling out of what appears ever more strongly to be a losing battle? Or do they continue to just throw good money after bad and accept the loss on what maybe no better then a lottery's chance of winning anything?
    • by plover ( 150551 ) * on Thursday November 30, 2006 @02:49PM (#17054166) Homepage Journal
      Wouldn't it be best for SCO to simply drop the suit and try to get back into the technology business? Or would that just firmly seat the hook for the expected counter-suit from IBM to reclaim damages from the frivolous lawsuit?

      I'm not understanding why SCO would continue to pump any of their few remaining pennies into a lawsuit, when the judge's actions are clearly saying "DROP THIS NOW, YOU DAMN IDIOTS."

      It seems to me that this entire suit is nothing now but a personal battle for Darl and his cohorts. Have they completely forgotten that they are supposed to be wisely using their shareholders' money to turn a profit? Why don't the shareholders vote him out in order to salvage whatever money they have left? Even ignoring the financial impact of the suit, he's managed to turn a once-profitable company into a penny stock as well as a laughing stock. If I were an investor, I'd be mad enough to want a change.

      • Counterclaims... (Score:3, Insightful)

        by mengel ( 13619 ) <mengel.users@sourceforge@net> on Thursday November 30, 2006 @03:15PM (#17054734) Homepage Journal
        The problem is, now that the case has been going on forever, IBM has numerous counterclaims in the suit. Even if SCO tries to back out now, IBM still has numerous counterclaims to settle at trial. Groklaw has lots of details if you want them, but basically IBM is claiming that SCO has:
        • lied publicly about IBM's behaviour
        • violated the GPL, including for IBM's GPL-ed code
        • violated the Lanham act
        etc.
      • by rm69990 ( 885744 ) on Thursday November 30, 2006 @06:58PM (#17058624)
        "Wouldn't it be best for SCO to simply drop the suit and try to get back into the technology business? Or would that just firmly seat the hook for the expected counter-suit from IBM to reclaim damages from the frivolous lawsuit?"

        IBM has already filed numerous counterclaims.

        "I'm not understanding why SCO would continue to pump any of their few remaining pennies into a lawsuit, when the judge's actions are clearly saying "DROP THIS NOW, YOU DAMN IDIOTS.""

        Due to IBM's counterclaims, SCO has no choice but to continue and try to win.

        "Even ignoring the financial impact of the suit, he's managed to turn a once-profitable company into a penny stock as well as a laughing stock. If I were an investor, I'd be mad enough to want a change."

        LOL, when the hell was Caldera/SCO EVER profitable, excluding the single quarter they turned a profit from Microsoft licensing money, money Novell is now suing SCO for anyways.
    • by Anonymous Coward on Thursday November 30, 2006 @03:10PM (#17054636)
      The chief qestion here as the litigation begins to play ut is when do the investors in SCO begin ulling out of what appears ever more strongly to be a losing battle? Or do they continue to just throw good money after bad and accept the loss on what maybe no better then a lottery's chance of winning anything?

      This lawsuit is nothing more than a proxy pr campaign on behalf of Microsoft [com.com] against Linux. For the bargain price of 16.6 million and another $50 million investment that Microsoft help arrange [com.com], Microsoft has allowed SCO to be a PR thorn in Linux's side for several years now.

      The investors have gotten exactly what they wanted in the first place, not by winning, not by securing SCO's corporate future as a legitamite business. Just by fighting the battle for this long and keeping IBM wrapped up in court and keeping Linux in the news with the allegation that is is a potential intellectual property infringer and a risk to business, SCO's real investor has gotten exactly what they wanted without exposing Microsoft directly.

      Now that SCO has nearly run out of steam, you hear rumblings from Microsoft itself about the Intellectual property allegations against Linux. It is clearly their strategy to sow fear uncertainty and doubt (FUD) as much as possible in advance of Windows Vista coming out.

      It is hardly a conspiracy theory when the money changing hands and the strategy have been made so clear. SCO is a shell of a company, being used in a shell game.

  • Groklaw rules (Score:5, Interesting)

    by robyannetta ( 820243 ) * on Thursday November 30, 2006 @12:07PM (#17051104) Homepage
    I like this line from the Groklaw article:

    What's worse for SCO is, Kimball did a de novo review, out of an "abundance of caution," so they can't even appeal that issue.

    Yep, SCO is toast. Please move on, nothing to see here.
    • Re:Groklaw rules (Score:5, Interesting)

      by TubeSteak ( 669689 ) on Thursday November 30, 2006 @12:18PM (#17051268) Journal
      I wish they had talked about Novell vs IBM going first

      IBM & Novell have both been saying: No, you go first.

      IIRC, IBM wants Novell to go first to settle the copyright issues, which would make large portions of SCO's case against IBM moot.

      And now that I think about it, I don't remember why Novell wanted IBM to go first. I know SCO wanted the IBM case to go first, just to delay things even more.
      • Re:Groklaw rules (Score:5, Informative)

        by Daniel_Staal ( 609844 ) <DStaal@usa.net> on Thursday November 30, 2006 @12:22PM (#17051344)
        The primary reason Novell wanted IBM to go first was probably because it meant that IBM's lawyers would have to be paid, and not Novell's.
        • by sunwukong ( 412560 ) on Thursday November 30, 2006 @02:06PM (#17053284)
          Just a bit of paranoia -- any chance that pressure from a certain new partner on Novell can upset IBMs case?
      • by Jaywalk ( 94910 ) on Thursday November 30, 2006 @03:41PM (#17055286) Homepage
        IBM & Novell have both been saying: No, you go first.
        Actually, Novell hasn't expressed an opinion on this. It's SCO who has been saying IBM should go first. Novell can't help them in the IBM case, but it could hurt them badly. If the judge finds that SCO owns all (or some) of the UNIX copyrights, it still doesn't prove IBM misused them. But if he finds that SCO doesn't even own the copyrights, even the most brain-dead jury on the planet couldn't be bamboozled into taking SCO's side. The last thing SCO wants to do is to walk into court against the Nazgul with a finding on record that SCO didn't even own what they claim was stolen. Unfortunately for them it looks like that's exactly what is going to happen.

        Meanwhile, Red Hat's lawyers haven't renewed their objections to letting IBM go first. It looks like they're perfectly happy to let the Nazgul do all the heavy lifting. By the time the smoke clears on IBM and Novell, Red Hat's team will have a slam dunk.
  • by s20451 ( 410424 ) on Thursday November 30, 2006 @12:08PM (#17051108) Journal
    What is this, 2003? I'm looking forward to the latest press release from the the Iraqi information minister.
  • by sjwest ( 948274 ) on Thursday November 30, 2006 @12:12PM (#17051166)
    Sco v Novell - I bet Steve Ballmers getting a phone call from Ron - 'what do i do Stevie ???'.
  • by cacepi ( 100373 ) on Thursday November 30, 2006 @12:13PM (#17051174)
    And the Downward Spiral begins; SCO stock down 10%; rated 'HOLD - Dangerous Risk/Reward Rating.' [yahoo.com]

    Your goose is downright cooked, SCO.
    • by tacokill ( 531275 ) on Thursday November 30, 2006 @12:39PM (#17051604)
      Check this long-term view of SCO's stock. [yahoo.com]

      Wanna guess when they first started pursuing this litigation?


      And why hasn't there been some kind of investigation as to whether SCO did this specifically to manipulate the price of it's shares? Sure seems interesting when you look at this chart. We all know and feel it. But I don't know if you could PROVE manipulation so nothing will probably come of it.
      • by SEE ( 7681 ) on Thursday November 30, 2006 @03:42PM (#17055298) Homepage
        The problem with a charge of manipulation is that you have to prove that SCO management knew that its lawsuit was baseless and that it filed it anyway to try to make a fraudulent profit off the increased share price. The mere fact that the lawsuit increased the stock price is not nearly sufficient. A lawsuit with plausible grounding would produce the same effect, and it would have been not merely legal but arguably the fiduciary duty of SCO's management to its shareholders to sue to recover lost revenue if they believed they had a reasonable chance of making a recovery. And as long as the case is still before the courts, that is probably sufficient evidence that they had a reasonable chance of recovery. Unless and until the judge in the SCO-IBM case says the case was not merely insufficient, but utterly without merit, it's unlikely SCO can be hit for manipulation.

        (I am not a lawyer, but I play one on the Internet!)
      • It's significantly more fun to look at when you view it as linear and not a log plot. It really makes it clear how far they've fallen.

        I mean -- they once traded at over $100 a share.
    • by Zontar_Thing_From_Ve ( 949321 ) on Thursday November 30, 2006 @12:40PM (#17051620)
      And the Downward Spiral begins; SCO stock down 10%; rated 'HOLD - Dangerous Risk/Reward Rating.'

      Your goose is downright cooked, SCO.


      I'd truly love to believe this about their goose being cooked (and props to cacepi for correctly using "your" and not "you're"), but experience tells me otherwise. Why? Neither investors nor stock brokers/analysts understand technology or the law. SCOX will most likely hang on until the September 2007 trial. I'd love to be wrong, but until SCOX starts trading at under a dollar a share and facing potential delisting action, I see the stock surviving through next year. You have to love broker talk where despite the "dangerous risk/reward rating" they are advising people to neither buy more of the stock nor to sell what they have. That's what "hold" means.

      SCOX has lost 25 cents at the time of writing. Unless it plummets today or tomorrow, I think unfortunately it's going to be around for a while. It's still trading at over $2 a share.
      • by jeschust ( 910560 ) * on Thursday November 30, 2006 @12:53PM (#17051858)
        Stock analysts traditionally never give "Sell" recommendations. Therefore, a rating of "Hold" is the lowest an analyst is willing to rate any given stock.
      • by cacepi ( 100373 ) on Thursday November 30, 2006 @01:24PM (#17052442)
        Neither investors nor stock brokers/analysts understand technology or the law.
        No, but they do know financials, and the numbers ain't good: a negative EBITDA, negative returns on investment and equity, negative cash flow and very little free cash - how are they going to pay for one trial, let alone two? - means a hell of a lot of bad writing on the wall for SCO.

        I honestly don't see what SCO can do to turn things around even if it didn't have these trials over their heads. Short of another infusion of quick cash - which ain't happening now that Microsoft has moved to different fronts (Novell) - SCO is pwned.

        Hard.
      • by cfulmer ( 3166 ) on Thursday November 30, 2006 @01:37PM (#17052676) Homepage Journal
        There is a theory in economics, the "Efficient Market Hypothesis" that effectively says that everything that's publicly known about a company is reflected in that company's market price. Suppose that you *knew for a fact* that SCO's stock would be shooting through the floor -- you would short that stock, which would, if you and several other equally smart people did the same, drive the price through the floor. But, there's a reason that you're not doing that -- you do not know for a fact. After all, there is some small chance that SCO may still win, or that everything will settle. The theory suggests that while a typical investor or analyst may not know that much about what SCO is up against, there are enough out there who do know that they have set the price appropriately.

        I'm guessing that few individual investors are invested in SCO any more -- they have long since sold their shares. It's probably mainly held by a small set of very sophisticated investors (hedge funds, for example) who are taking a gamble. And, these players certainly know what the risks are.
    • by statusbar ( 314703 ) <jeffk@statusbar.com> on Thursday November 30, 2006 @12:44PM (#17051690) Homepage Journal
      <conspiracy type="crazy">
      MAYBE this court case is why microsoft gave Novell the money...to subvert Novell's testimony, giving SCO a win...
      </onspiracy> --jeffk++
    • by WuphonsReach ( 684551 ) on Thursday November 30, 2006 @03:52PM (#17055526)
      Looking at the 2-year graph, the stock was around $4.00 to $4.50 for a *long* time. Then back in July 2006, it suddenly took a dive to $3.00 with a long, slow slide to $2.00.

      What was the big event back in July 2006 that pushed the stock down so fast?

      It's been holding around $2.50 the past few months, but is currently down to $2.00.

  • by Anonymous Coward on Thursday November 30, 2006 @12:15PM (#17051232)
    My favorite part of the judgement is: "After deciding the pending dispositive motions in this case, and after deciding the dispositive motions in Novell, which should be fully briefed in May 2007, the court will set a trial date for any remaining claims in this action."

    A trial date for any remaining claims ... I have a feeling that Judge K. thinks there may be no remaining claims after the dispositive motions. What are the dispositive motions you ask? Those are things that can be decided as a matter of law because the facts of the case are not in dispute. The judge can rule on those without going to a jury. There is a possibility that the judge's decisions will completely gut all of SCO's case. It is also possible that the judge will decide that all of SCO's money has to go into a constructive trust because SCO has basically stolen tens of millions of dollars from Novell. That would bankrupt SCO. All the remaining issues would then be settled by SCO's bankruptcy trustee. The bankruptcy trustee (completely independent from SCO's current management) will see no point in continuing the litigation and will settle on whatever terms the creditors (IBM and Novell mostly) dictate.

    There is also the distinct possibility that SCO and BSF (their lawyers) will be punished for bringing a case before the court that has zero merit. It is a frivolous case and lawyers can be debarred for that kind of conduct.
    • by $RANDOMLUSER ( 804576 ) on Thursday November 30, 2006 @12:27PM (#17051404)
      IBM wants this to go to trial. They've had many opportunities to make this case go away, and they haven't even tried. They don't want SCO to surrender, they want to crush SCO.
    • by Scarblac ( 122480 ) <slashdot@gerlich.nl> on Thursday November 30, 2006 @12:47PM (#17051756) Homepage
      Oh, I think there will be remaining claims, from reading Groklaw a lot. It's just that they'll all be counter-claims.
    • by mysticgoat ( 582871 ) * on Thursday November 30, 2006 @02:52PM (#17054222) Homepage Journal

      There is also the distinct possibility that SCO and BSF (their lawyers) will be punished for bringing a case before the court that has zero merit. It is a frivolous case and lawyers can be debarred for that kind of conduct.

      That is an outcome I would very much like to see (disbarrment of the lawyers). The lawyers involved should be disbarred and they should be charged and found guilty of felony conspiracy (as well as the corporate officers of SCO). They should never again be allowed to hold any position of public trust, not in the law, not as bank tellers, not even as a call center customer service representatives. The law firm should be broken up, its offices razed, and the rubble should be sown with salt.

      If lawyers in this country were required to live up to their responsibilities as Officers of the Court, we would all be better off. This case is proving to be such an egregious abuse of the legal system that action must be taken against the lawyers involved, since to allow them to walk away would shatter the foundation of the rule of law beyond this society's ability to repair it. That would mean it would become necessary for many of America's people to dissolve the political bands which have connected them with others and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them. Thank you Mr Jefferson. No one in two hundred thirty years has said that better than you did.

      The law was never intended to be a club that you can use in an attempt to extort money from IBM or any other company or person. The law is intended to be a set of rules that is supposed to provide some measure of fairness in the dealings we have with one another. Officers of the Court have a responsibility to uphold that concept of law; those that attempt to make a mockery of the law by participating in a sham like this one should never again be trusted in any measure. Let them earn a living as day laborers for the rest of their miserable years.

      </rant>

  • by LoyalOpposition ( 168041 ) on Thursday November 30, 2006 @12:16PM (#17051234)
    SCO isn't toast yet, quite. There are still ninety-some-odd items of evidence that IBM are trying to get dismissed as they don't implicate IBM in any wrongdoing, and seven-or-so expert testimonies IBM are trying to get trimmed as they include new evidence past the closing of discovery.

    -Loyal
  • by morgan_greywolf ( 835522 ) on Thursday November 30, 2006 @12:17PM (#17051246) Homepage Journal
    ...was basically that SCO has had 3+ years to show any evidence that they could come up with that IBM violated SCO's copyrights or patents by contributing code the Linux kernel. In that time, they haven't shown one single of code. They've whined and complained that IBM was being unfair and not giving them what they asked for, when in fact IBM did put up everything that was asked for. As Wells put it: "In the view of the court it is almost like SCO sought to hide its case until the ninth inning in hopes of gaining an unfair advantage despite being repeatedly told to put 'all evidence . . . on the table'"

    So Magistrate Wells threw out half the case. Then SCO whined to Kimball, the judge of record in the case saying "Magistrate Wells is being unfair and thew out most of our case! Wha!" This is Kimball coming back saying, "Sorry, Wells was right. You don't have a leg to stand on."

    After the Novell case, which seeks to prove, among other things, the disposition of the UNIX System V copyrights (which Novell claims to still own), there isn't likely to be hardly anything left of SCO v. IBM. Kimball was right to put Novell first the case might throw out SCO's intellectual property claims in regard to Unix altogether.

    In the end, I fully expect IBM to eat SCO for lunch on the counterclaims, even after they dropped most of them except for the Lanham Act violations.

  • by richg74 ( 650636 ) on Thursday November 30, 2006 @12:17PM (#17051248) Homepage
    "What does it mean? It means SCO is toast."

    The District Judge has now affirmed the order originally given by the Magistrate Judge, which tossed out most of SCO's claims, basically for a more or less complete lack of evidence. However, IBM's counter-claims, including tortious interference, violation of NY business law, and violation of the Lanham Act are still alive and well. As PJ at Groklaw points out, [groklaw.net] IBM seems determined to present these claims in front of a jury. If they do, the likely outcome is a large, smoking crater in Lindon, Utah. As PJ puts it: "In short, IBM intends to skin SCO alive at trial."

    From the judge's order:
    the court finds that, even under a de novo standard of review, the Magistrate Judge's June 28, 2006 Order is correct.

    The judge reviewed the material under appeal de novo, to be extra careful, even though he was not required to do so. This is consistent with a feeling I've had for some time: he's decided SCO's case is a complete crock, and is working on creating a trial record that will be bullet-proof on appeal.
    • by Todd Knarr ( 15451 ) * on Thursday November 30, 2006 @02:12PM (#17053396) Homepage

      Actually Magistrate Wells threw out none of SCO's claims. Every claim they made remains in the case, which is why her motion is non-dispositive. What she did was throw out the evidence SCO was trying to introduce to support their claims, on the grounds that they were ordered to produce it by a certain deadline, they had it in hand and could have easily produced it (according to their own statements), and they willfully refused to produce it. Having so failed to produce it in a timely manner, they're not allowed to use it now that it's too late for IBM to respond to it without prejudice. This leaves their claims with nothing to support them, which means they'll fall to a summary judgement motion by IBM (which is already in progress).

  • by Eggplant62 ( 120514 ) on Thursday November 30, 2006 @12:18PM (#17051272)
    Here's [linux-watch.com] his opinion on the whole sordid mess, but in brief, he says that SCO no longer matters, and that he probably won't report further on it until final resolution.

    I'm happy to see things finally start to kill off SCO's FUD machine. This, friends, is the beginning of the end for IBM v SCO.
  • by Software ( 179033 ) on Thursday November 30, 2006 @12:19PM (#17051296) Homepage Journal
    Now that Novell is all kissy-kissy with Microsoft, having Novell go first in the lawsuit vs. SCO might not be so good. As we all know, Microsoft basically funded SCO's Unix IP fishing expedition with a $50 million "licensing" deal. I'd much rather have IBM be the one to grind SCO to a pulp. Hopefully, Novell will not pull any punches, and IBM can continue the beating after Novell's had their fill.
  • by MECC ( 8478 ) * on Thursday November 30, 2006 @12:22PM (#17051338)
    Clouds above bench part...

    "Stop groveling! I hate it when people grovel!"

  • by gEvil (beta) ( 945888 ) on Thursday November 30, 2006 @12:38PM (#17051584)
    This is your last chance to take advantage of SCO's special licensing offer of only $699 per computer. Better get those orders in before it's too late!
  • The system works! (Score:3, Interesting)

    by straponego ( 521991 ) on Thursday November 30, 2006 @12:44PM (#17051682)
    All you need in order to beat a frivolous lawsuit is unlimited time and money, a few competent judges, and a little luck :)

    Seriously, this is great news and Groklaw, as usual, does a nice job of presenting it in human-readable form. One hopes that the impending THUD of SCO will act as a deterrent to shell corporations who might want to try the same tactics. And real corporations would have something to lose in countersuits, so... Hmm, I'm feeling awfully optimistic today. I'd better have that checked.

  • by adaminnj ( 712407 ) on Thursday November 30, 2006 @12:49PM (#17051770)
    "Also included in this ruling is the news that the Novell vs. SCO trial will go first"

    I wonder how the Novell-Microsoft deal will effect this case?

    or do you think that MS has come to turms with Linux as long as they can control it with FUD and money.
  • by mmell ( 832646 ) on Thursday November 30, 2006 @01:05PM (#17052068)
    Prologue: Microsoft pumped money into SCO for whatever reason, SCO used Microsoft's support to prolong this debacle in the courts. Now Microsoft is pumping money into Novell. Novell certainly used some of that money in their defense against SCO.

    Am I the only one who sees this as reminiscent the scene in Star Wars III where Anakin kills Dooku? Cast M$ as Palpatine, SCO as Dooku and Novell as Anakin.

    M$: "Good. Now . . . kill him"

    Novell: "I shouldn't do it. It's not our way. They're a LINUX distributor too."

    M$ "Do it!"

    (SCO's head flies off in appelate court)

    "Always two there are - a master and an apprentice." Too bad, I really like SuSE.

  • by faraway ( 174370 ) on Thursday November 30, 2006 @01:12PM (#17052186)
    Let's all email SCO and inquire about a license. "We heard you're going out of business and were wondering if you could spare us some licenses."
  • by MatrixCubed ( 583402 ) on Thursday November 30, 2006 @01:24PM (#17052428) Homepage
    I wonder if this foreshadows the time where SCO stock portfolios are worth more on eBay than on NYSE?
  • by UnknowingFool ( 672806 ) on Thursday November 30, 2006 @01:36PM (#17052660)

    The good news is that SCO has been limited in its claims. The bad news is that the IBM-SCO trial was set for February and now will wait until after SCO-Novell which is Sept. 2007. The good news of that is that Novell most likely will win which makes most of SCO's claims useless if they don't even own the IP. The bad news is that the GPL may be fully tested in court if that happens. Of course, IBM would win their counterclaims which includes claims based on the GPL.

    Confusing? Remember: Never go up against a Sicilian when death is on the line!

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