EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

03.31.10

Consequences of UNIX up for Sale

Posted in Courtroom, Finance, GNU/Linux, IBM, Java, Novell, Patents, SCO, UNIX at 1:01 pm by Dr. Roy Schestowitz

Novell suicide

Summary: How the outcome of the SCO case — as positive as it is — relates to the future

THE SCO case is almost over and just about everyone has already seen the news (so we won’t repeat it). As we shall show at the end, it’s not quite over because of the vulture fund that’s running after Novell (or circling Novell’s decaying body rather) and SCO wants to carry on with the case against IBM. We urge readers to remember what Groklaw said about the timing of the vulture fund’s arrival at the scene. It was only days before the SCO trial.

In this post we’ll try to contain as much coverage as possible and leave readers to explore the sources, which mostly comprise overlapping and obvious information.

Prior to the ruling we found quite a lot of anticipatory coverage such as:

SCO v World Bombshell

The malloc code is stuff that was released years ago by Caldera and certainly is not something SCOG defended in the SCOG v IBM case. Judge Kimball expressed astonishment at how little evidence SCOG presented after years of discovery and litigation.

If a corporation cannot be jailed for fraud, its officers should be.

No Verdict Today, the Final Day, in SCO v. Novell – Deliberations Begin Again Tuesday

SCO v Novell is unfair to Novell

Judge Stewart is obviously capable of great insight and has the legal knowledge. This case suggests strongly that he is not ruling based on law but on some hidden agenda to give every advantage possible to SCOG. Novell has taken the steps to document their motions very well should an appeal be necessary. I believe whichever way the case turns out, some peer review of Stewart’s conduct of this case is in order. Courts run this way are pointless. We can find bullies galore on the street. We do not need them in courts.

Just before the judgment we had:

Court Grants SCO’s Oral Motion for Judgment on Novell’s Slander of Title Claim

Jury deliberating UNIX ownership in ongoing SCO trial

SCO’s fate has been placed in the hands of 12 Utah jurors who will resume deliberations on Tuesday. They are tasked with deciding whether the UNIX SVRX copyrights were transferred from Novell to SCO in a 1995 asset purchase agreement.

SCO’s legal battle began in 2003 when the company claimed that Linux includes code that was misappropriated from UNIX. Novell claims that SCO does not have standing to pursue litigation relating to SVRX copyright infringement because it does not own the relevant copyrights. A bench trial that concluded in 2007 ruled in Novell’s favor but was later overturned. The case was put before a jury, which heard the closing arguments on Friday.

Ownership of Unix copyrights in hands of Utah jury

A Salt Lake City jury has started deliberations in a case pitting two software companies that each claim ownership of the Unix computer operating systems used by large corporations.

Jury rests for weekend in SCO Group-Novell trial (and it’s here also)

A federal jury began deliberations Friday in the trial pitting The SCO Group against Novell Inc. in their dispute over which owns the copyrights to the Unix computer operating systems used by many businesses.

Ownership of Unix Copyrights in Hands of Utah Jury

SCO UNIX Claims Could Be Decided This Week – Or Not.

SCO the company that has been claiming that it owns UNIX copyrights and that Linux infringes on those rights is still alive….barely.

SCO Novell Jury Decision Pending

Ownership of Unix copyrights in hands of Utah jury (AP coverage)

Is this the end for SCO?

I’ve given up on predicting when the zombie movie series staring the undead SCO monster is finally going to stay quietly in its grave Still, this week a jury is deciding whether SCO or Novell owns Unix’s intellectual property rights.

You may have thought that this was settled. Most of us who followed SCO certainly thought that was a done deal. After all, the matter of who owns Unix comes down to a fairly simple issue of contract law and not some esoteric IP (intellectual property) legal gymkhana. And, no matter how SCO sliced it, Judge Dale Kimball decided that Novell owned Unix’s copyrights. Alas, another judge decided last August that Kimball had had no right to make that call and that a jury should decide who Unix’s copyrights instead.

Here is an interesting one which is worth bearing in mind: “SCO Wants to Sell Java Patent and (Mostly) Pay the Professionals”

SCO Chapter 11 Trustee Edward Cahn has now reported to the bankruptcy court that he’s closed on the loan from Ralph Yarro and his friends, and now Cahn wants to pay most of the bills in the bankruptcy from SCO’s numerous professionals. And he wants to sell the Java patent, since SCO’s never used it and has no use for it going forward. He has a buyer, Liberty Lane, LLC, and so he asks the court to approve the sale to Liberty Lane “or another higher and better bidder.” That seems unlikely, in that they claim to have shopped the patent to around 40 potential purchasers. Liberty Lane is offering $100,000.

[...]

And who is Liberty Lane LLC? According to Exhibit B [PDF], they have an office in San Diego, CA but are a Delaware LLC. Exhibit D says Liberty Lane is a company affiliated with Allied Security Trust I, and if that is this patent-protection (from trolls) company, that might not be half bad. Google and HP are members of Allied. At least they’d keep it out of the hands of the litigation lizards. That’s Allied’s purpose, to dry up patent trolling as a “business” by buying up patents that might be used that way. And Exhibit E [PDF] indicates they are one and the same, in that the letter of intent shows the same name as CFO, Kerry Hopkin.

It is worth watching who gets such patents.

Anyway, the statement from Novell’s PR people was probably the first to announce the results of the trial. It’s a good outcome for Novell, which also issued a press release about it. Groklaw has already gotten over 1,500 comments and Brian Proffitt gives Groklaw credit.

Then came heaps of press coverage, such as:

Even a former Novell employee wrote about it (there was no disclosure).

The major news is included in many news digests too [1, 2, 3].

On Tuesday, a jury in Nevada sided with Novell in its long-running legal dispute with SCO. The jury in the U.S. District Court for the District of Nevada ruled that Novell owns Unix copyrights that SCO has tried to assert as its own. Pamela Jones, a paralegal who has closely followed the SCO v. Novell case since its beginning on her Groklaw blog, initially deemed this the end of the line. “It’s over,” she wrote on her site. However, SCO could appeal the ruling.

SCOTUS Blog had this to say:

Issue: Whether the “writing” referenced in 17 U.S.C. § 204(a) — requiring for a transfer of copyright ownership “an instrument of conveyance, or a note or memorandum of the transfer” that is “in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent” — must specify which copyrights were conveyed, or instead requires only that the written instrument could be construed to convey some copyrights.

It’s not so crucial. This is more or less a repetition of a 2007 decision. If Novell owns UNIX, there are greater troubles now than there were back then. Since Novell is up for sale, then UNIX may be up for sale, too.

Financially, here is what was happening around that time [1, 2]. Novell got downgraded.

Novell (NOVL) was downgraded today by analysts at Thomson Financial – Gradient and the stock is now at $5.77, up $0.02 (0.35%) on volume of 4,690,115 shares traded.

Now, to emphasise the important part, according to some sources, “SCO vows to press ahead with IBM lawsuit.”

But Cahn said SCO intends to continue its lawsuit against IBM, in which the computer giant is accused of using Unix code to make the Linux operating system a viable competitor, causing a decline in SCO’s revenues.

From Briefing.com (via Microsoft) we learn:

It was rumored that IBM (IBM 128.46 -0.13) could be interested in Novell (NOVL 5.80). NOVL shares did not react to the rumor. As mentioned before, while many rumors circulate during the day, and the validity of the source of these rumors can be questionable, the speculation may increase volatility in the near term.

At ZDNet, one GNU/Linux enthusiast asks, “Why doesn’t IBM just buy Novell already?” (we did an April prank about it one year ago)

I actually started pondering this a few days before the Novell-SCO ruling on Tuesday clearly put Novell in an important position as a “[defender of] Linux on the intellectual property front.” Why, you ask, would a Googley Edu blogger be thinking about major players in the enterprise Linux market? Because I can see an open source showdown in the making here, the beneficiaries of which will be consumers, SMBs, enterprises, and educational institutions. I don’t get the feeling the showdown will be any fun, though, if Novell is left to its own devices.

What we do know is that Novell may be looking for a buyer. As Tim puts it:

That is the question? It certainly seems like its a possibility in the case of Novell, with rumours abound on the Net that it may be up for grabs. Speaking personally, I wonder how much of an opportunity Novell missed when it signed a deal with Microsoft. Regardless of if there is a “master plan” in operation, I don’t think it can be argued that the “deal” did damage to the Novell image.

The eternal boss of JBoss (Marc Fleury), who met Ron Hovsepian, argues that Novell is likely to sell itself.

So let’s see if I can summarize the Novell thing as i understand it.

a/ The offer is from a hedge fund
b/ the offer is 50% above EV
c/ the offer was turned down

c/ can be written off as a mere negotiation step. The board is rejecting the first offer on the table. What else do you expect them to do? There is nothing to see here and I would still put the odds very high on Novell is a sell.

Novell has rejected the first bid (probably as expected from a negotiator) and here is a new video that covers that.

For more background on the subject, see the following older posts:

  1. Vulture Fund Still the Only Bidder for Novell
  2. Novell May be Going Private, Hedge Fund Has Cash
  3. Analyst Expects Microsoft Bid to Buy Novell
  4. Ron Hovsepian Receives Another Large Lump of Cash as Novell Sale Looms
  5. GNU/Linux-Savvy Writers View Elliot Associates as Bad Neighbourhood
  6. Firm Behind Novell Bid Has Shady Past, Could be Tied to Microsoft (Paul E. Singer’s ‘Vulture Fund’)
  7. Simon Phipps: “Seems Even With Microsoft’s Support Novell Couldn’t Cut It”

The bottom line is that SCO does not own UNIX. But we don’t really know who might be the owner of UNIX later this year.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

3 Comments

  1. Needs Sunlight said,

    March 31, 2010 at 1:16 pm

    Gravatar

    This long, drawn out case has produced no other verdict than what was expected almost 10 years ago. The duration of Novell’s contract with Microsoft will determine when SCO2 starts. Microsoft was lined up to be the new SCO, it might still be but it will try to throw Novell on the grenade first.

  2. Agent_Smith said,

    March 31, 2010 at 4:53 pm

    Gravatar

    What if UNIX falls in Micro$oft’s hands ??? Will they sue the entire Linux ecosystem ???

    Dr. Roy Schestowitz Reply:

    Probably not. They funded SCO to abuse GNU/Linux for 7 years, they don’t need to attack directly.

What Else is New


  1. Links 3/4/2020: Ubuntu Beta, GNOME 3.36.1, ExTiX LXQt Mini, NetBSD 8.2 Released

    Links for the day



  2. Digital Communication, Digitalisation and Videogaming Among the EPO's Latest Smokescreens for Illegal and Abstract Patents on Algorithms

    The EPO keeps liaising with the EU to promote patents which EU officials have themselves said were illegal; to make matters worse, the EPO's violations of its own laws inspire the United States to do the same



  3. Emotional Blackmail for Illegal Software Patents

    Semantic tactics the European Patent Office (EPO) uses to promote software patents in Europe and may theoretically use in the future (satire)



  4. Clear Linux is to GNU/Linux What Clearly Defined is to Open Source

    The idea that we need Intel to take GNU/Linux ‘mainstream’ is ludicrous; as OSDL co-founder (now succeeded in the flesh of the Corporate Linux Foundation), Intel is more about Linux (with DRM, “secure boot” and everything that lets it be remotely controlled) than about GNU and it’s not too keen on GPL (copyleft), either



  5. IRC Proceedings: Thursday, April 02, 2020

    IRC logs for Thursday, April 02, 2020



  6. Links 2/4/2020: Linux 5.6.2, Qt Creator 4.11.2, LineageOS ROM Based on Android 10

    Links for the day



  7. OIN in 2020 Resembles Linux Foundation in 2020 (Corporate Front Group Piggybacking the Linux Brand)

    We regret to say that the Open Invention Network seems not to care at all about Software Freedom; to make matters worse, it is a proponent of software patents and a voice for companies like IBM and Microsoft, not the "Community" it fancies misrepresenting



  8. Inside the Free Software Foundation (FSF) - Part IX: Semi-Happy Ending

    Richard Stallman is here to stay and the FSF will let him stay (as chief of GNU); we want to close the series on a positive note



  9. IRC Proceedings: Wednesday, April 01, 2020

    IRC logs for Wednesday, April 01, 2020



  10. Upcoming Articles and Research Areas

    Although we've failed to write as much as usual, we're still preparing some in-depth articles and maintaining Daily Links (in spite of unforeseen ordeals like a forced laptop migration)



  11. Links 2/4/2020: ProtonMail Bridge for Linux, GTK 3.98.2 and Red Hat DNF 4.2.21

    Links for the day



  12. Links 1/4/2020: Linux 5.7 Merges, Qt 5.14.2, GhostBSD 20.03, Linux Mint 20 Ulyana Plans, WordPress 5.4 “Adderley”

    Links for the day



  13. IRC Proceedings: Tuesday, March 31, 2020

    IRC logs for Tuesday, March 31, 2020



  14. Techrights to Delete Articles From All Past Years to Save Disk Space

    What if we deleted over 25,000 posts?



  15. IRC Proceedings: Monday, March 30, 2020

    IRC logs for Monday, March 30, 2020



  16. Links 30/3/2020: GNU Linux-libre 5.6, WireGuard 1.0.0

    Links for the day



  17. IRC Proceedings: Sunday, March 29, 2020

    IRC logs for Sunday, March 29, 2020



  18. Links 30/3/2020: Linux 5.6, Nitrux 1.2.7, Sparky 2020.03.1

    Links for the day



  19. The Fall of the UPC - Part IX: Campinos Opens His Mouth One Week Later (and It's That Hilarious Delusion Again)

    Team Campinos said nothing whatsoever about the decision of the FCC until one week later, whereupon Campinos leveraged some words from Christine Lambrecht to mislead everybody in the EPO's official "news" section



  20. Pretending EPO Corruption Stopped Under António Campinos When It is in Fact a Lot Worse in Several Respects/Aspects (Than It Was Under Benoît Battistelli)

    Germany's eagerness to keep Europe's central patent office in Munich (and to a lesser degree in Berlin) means that politicians in the capital and in Bavaria turn a blind eye to abuses, corruption and even serious crimes; this won't help Germany's image in the long run



  21. IRC Proceedings: Saturday, March 28, 2020

    IRC logs for Saturday, March 28, 2020



  22. Links 28/3/2020: Wine 5.5 Released, EasyPup 2.2.14, WordPress 5.4 RC5 and End of Truthdig

    Links for the day



  23. IRC Proceedings: Friday, March 27, 2020

    IRC logs for Friday, March 27, 2020



  24. The Fall of the UPC - Part VIII: Team UPC Celebrates Death, Not Life

    Team UPC plays psychological games now; it is trying to twist or spin its defeat as good news and something to be almost celebrated; it is really as illogical (and pathetic) as that sounds



  25. Links 27/3/2020: GNU/Linux Versus COVID-19 and Release of GNU Guile 3.0.2

    Links for the day



  26. When Your 'Business' is Just 'Patent Portfolio'

    Hoarding loads of patents may seem impressive, but eating them to survive is impossible if not impermissible



  27. LOT Network is a One-Man (Millionaire's) Operation and Why This Should Alarm You

    The ugly story of Open Invention Network (OIN) and LOT; today we take a closer look at LOT and highlight a pattern of 'cross-pollination' (people in both OIN and LOT, even at the same time)



  28. Faking Production With Fake Patents on Software

    The EPO with its illegal guidelines (in violation of the EPC) can carry on churning out millions of fake patents that European courts would only waste time on and small companies be blackmailed with (they cannot afford legal battles)



  29. With the Unified Patent Court (UPC) Out of the Way Focus Will Return to EPO Corruption

    Expect the European Patent Office (EPO) to receive more negative attention now that the ’cause’ of UPC is lost and there’s no point pretending things are rosy



  30. IRC Proceedings: Thursday, March 26, 2020

    IRC logs for Thursday, March 26, 2020


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts