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 25/5/2016: Nginx 1.11, F1 2015 Coming to GNU/Linux Tomorrow

    Links for the day



  2. The Media Starts Informing the European Public About the Downsides of UPC While EPO Accelerates Its Lobbying for Ratification

    The EPO's shameless UPC promotion takes another step forward as the European press outlets (even television channels) begin to explore the secret deal that's negotiated by patent lawyers (with corporate clients) and patent offices, not the public or any public interest groups



  3. Some Details About How the EPO's President is Rumoured to be 'Buying' Votes and Why It's Grounds/Basis for “Immediate Dismissal”

    Some background information and a detailed explanation of the systemic financial dependency, created by Battistelli at the cost of €13 million or more, which prevents effective oversight of Battistelli



  4. How the Patent Lawyers' Microcosm Continues to Boost Software Patents Filth by Misdirecting Readers, Relying on Highly Selective Coverage

    Under the guise of reporting/analysis/advice the community of patent lawyers is effectively lobbying to make software patents popular and widely-accepted again, based on one single case which they wish to make 'the' precedent



  5. Documents Show Zagreb Police Department in Investigation of Vice-President of the European Patent Office

    Željko Topić's troubles in Croatia, where he faces many criminal charges, may soon become an extraordinary burden for the EPO, which distances itself from it all mostly by attacking staff that 'dares' to bring up the subject



  6. [ES] Interrumpiendo la Propagánda Distractante de Battistelli: los Empleados de la EPO Protestará de Nuevo en una Quincena

    La exágerada extravagancia (desperdicio de dinero) en la Ceremonia de Premiación al Inventor Europeo de la EPO tendrá que competir por atención de los medios con miles de empleados de la EPO (en todaslas sedes de la EPO) marchándo en las calles para protestar por los abusos de la EPO



  7. Windows and Microsoft's Other 'Burning Platforms'

    It's not just Windows for phones that's reaching minuscule market share levels but also Windows, but Microsoft is skilled at hiding this (cannibalising Windows using something people do not even want, then counting that cannibal, Vista 10)



  8. Links 24/5/2016: CRYENGINE Source Code is Out on GitHub, Jono Bacon Leaves GitHub

    Links for the day



  9. Links 23/5/2016: GNOME 3.22, Calculate Linux 15.17

    Links for the day



  10. 'Celebrity' Patent Trolls and the Elusive Battle Against Patent Trolls (or Eastern District of Texas Courts) Rather Than Software Patents

    Some of last week's more important reports, which serve to demonstrate how the system is attempting to tackle a side-effect of software patents rather than the patents themselves (their irrational scope)



  11. The Circus of Patent 'Reporting' (by Omission) on the Subject of Software Patents in the US and USPTO Bias

    look at some of the latest oddities in the US patent system and much of the reporting about software patenting (more or less monopolised by those who profit from it, not harmed by it)



  12. IP3 Demonstrates That Today's Patent Systems Devolve Into a Conglomerates' Game, Won't Protect the Mythical Small Inventor

    Multinational corporations bring together their shared interests and steer the increasingly-inseparable patent systems according to their needs and goals, but has anyone even noticed?



  13. Disrupting Battistelli's Distracting Propaganda: EPO Staff to Protest Again in About a Fortnight

    The overly extravagant (waste of money) EPO European Inventor Award will have to compete for media attention with thousands of EPO staff (in all EPO sites) marching in the streets to protest against the EPO's abuses



  14. Corrupting Democracy? Growing Frequency of Rumours That the EPO's President Battistelli is 'Buying' Votes of Small Member States

    Several sources suggest that rather than appease the Administrative Council by taking corrective action Battistelli and his notorious 'circle' now work hard to remove opposition from the Administrative Council, especially where this is easier a task to accomplish (politically or economically)



  15. [ES] Los Mitos de la EPO ‘Calidad’ de Patentes y de ‘Creación’ de Patentes: Basados en Ventas de Cafe y Trauma

    La carrera hacia el fondo, o la ridícula asumpción de Battistelli de que otorgar más y más patentenes más rápidamente (e.g. usando PACE) sería beneficióso a largo término, puede guíar al final colapse del valor de la EPO y la pérdida de su lárgamente ganada reputación a nivel mundial



  16. Links 22/5/2016: Systemd 230, Debian Installer Alpha 6

    Links for the day



  17. EPO Patent 'Quality' and 'Patent Creation' Myth: Capsule-Based Coffee Sales and Trauma

    The race to the bottom, or Battistelli's ludicrous assumption that granting more and more patents faster (e.g. using PACE) would be beneficial in the long run, may lead to the ultimate collapse of the EPO's value and demise of its long-earned reputation worldwide



  18. Guest Post: How Vista 10 Imposes Itself on Users of Windows

    A reader's experience being nagged by Microsoft, as documented and explained by this reader



  19. [ES] El Notorio Tirano de la EPO, Benoît Battistelli, Se Reune Con Otros Tiranos, Reportes de Que ‘Limpia’ el Consejo Administrativo

    El régimen de Battistelli, talvez la fuente de verguénza más grande, alegadamente está “cortejándo países pequeños/corruptos para asegurárse de que los delegados que votarón contra él serán remplazados”



  20. [ES] Comentadores Anónimos Debaten Si la EPO de Battistelli Puede Revocar las Pensiones de Empleados Que Se Atreveen — GASP — a Buscar Empleo Alternativo

    Una mirada a las causas de desesperación e imensa presión en la EPO, donde las pensiónes pueden ser cortadas como medio de represália y la gente puede ser negada empleo aún después de dejar la Oficina Europea de Patentes (EPO)



  21. [ES] Otra Casi Vacía Presentación de la EPO en La Hague

    El propagandístico “estudio social” de Battistelli (básicamente un montón de engañosas afirmacionesdisfrazadas como ‘investigación’) ayuda a demostrar que los empleados de la EPO no tiene absolutamente fe en la gerencia



  22. Links 21/5/2016: Manjaro Linux RC, Flock 2016 Schedule

    Links for the day



  23. USPTO Ignores a Lot of Cases Against Software Patents to Justify Resumption of More Software Patenting

    The US patent system (USPTO) is so obsessed with granting as many patents as possible -- even bogus patents in areas that are no longer patent-eligible -- that its guidelines are further perturbed and whose appeals board is massively overwhelmed/overworked/understaffed



  24. Notorious EPO Tyrant, Benoît Battistelli, Meets Other Tyrants, Reportedly 'Cleanses' the Administrative Council

    The Battistelli regime, perhaps the biggest embarrassment of Europe right now, is allegedly "courting smaller countries to make sure the delegates who voted against him will be replaced"



  25. Links 20/5/2016: Purism Tablet, ChromeOS PCs Outsell 'Mac'-Branded PCs

    Links for the day



  26. CAFC Rules Against Software Patents But Witness With Horror the Silence From Patent Lawyers (Bias by Omission)

    In an effort to protect software patents in the United States, where these patents came from in the first place (and continue to spread from), patent lawyers pretend not to see cases where software patents get invalidated and instead focus on the rare exception



  27. It's All Just Artificial Distractions From EPO Management, 'Yellow' Union Comes Under Scrutiny Again

    What's happening inside the EPO these days and what meaningless rubbish the management of the EPO would rather have the media obsessed with



  28. Anonymous Commenters Debate Whether Battistelli's EPO Can Revoke Pensions of Dismissed Employees Who Dare -- GASP -- Find Alternative Employment

    A look at causes for desperation and immense pressure at the EPO, where pensions can be cut as means of reprisal and people can be denied employment even after they leave the European Patent Office (EPO)



  29. Australian Productivity Commission's Research Calls for Ban on Software Patents, Davies Collison Cave Calls for Complaints Against This Finding

    As the push against software patents grows in Australia, much to the chagrin of Australian software developers, Davies Collison Cave (patent law firm) publicly calls for opposition, calling its side "the truth" and pretending it represents "Australian innovators."



  30. Links 19/5/2016: Wine-Staging 1.9.10, Android N

    Links for the day


CoPilotCo

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

CoPilotCo

Recent Posts