03.03.11

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Microsoft is Still Fueling Anti-Linux ‘IP’ Wars Using Other Companies (SCO, Novell, Maybe Nokia)

Posted in GNU/Linux, Microsoft, Novell, Patents, SCO at 2:36 am by Dr. Roy Schestowitz

“[Microsoft's] Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would ‘backstop,’ or guarantee in some way, BayStar’s investment…. Microsoft assured me that it would in some way guarantee BayStar’s investment in SCO.”

Larry Goldfarb, BayStar, key investor in SCO

Summary: News about Novell and SCO suggests that even federal regulators are beginning to wake up and acknowledge that Microsoft engages in rogue games

NOVELL is a dead duck. If it gets sold, it’s all over. If it doesn’t get sold, it will go down the drain because customers already escape in droves (we have given many examples). Except a few minor projects (not Mono and Moonlight), the only project of value for FOSS inside Novell is OpenSUSE, which sort of continues the tradition of S.u.S.E. in Germany. There is not much news about OpenSUSE anymore (many members left), but the little that exists (e.g. [1, 2]) is from SUSE sites. As for SLE*, it’s about serving proprietary software from the likes of IBM. That’s what they advertise anyway.

The point to get across here is that the FOSS community need not shed a tear for Novell. The main ‘contribution’ of Novell to GNU/Linux has been Microsoft patent tax and FUD. Together with Microsoft, Novell has ‘innovated’ the notion of paying Microsoft for patents that do not exist or were never named (so that they can be averted). Fortunately, Microsoft booster Eric Savitz says that Microsoft may not be permitted to get Novell’s patents (after formal complaints from the FSF and OSI):

Some of the patents apparently relate to Novell’s Linux business, which would be of interest to all of the participants in the deal. Microsoft, which leads the group, has refused to discuss why it formed a coalition to acquire the patents, rather than simply buying them outright on its own. (It certainly isn’t about having enough cash.)

For some background on this, see [1, 2]. Here is a leading report whose headline says “Justice eyes Microsoft-Novell patent deal” and body says:

Microsoft’s attempt to gain a stronger position in the Linux market might be coming to an end, The Post has learned.

The Justice Department is giving a Microsoft-led group’s $450 million purchase of 882 patents from Novell a “pretty serious review,” a source close to the situation who is not working for or against the deal said yesterday.

“They could possibly nix the sale,” the source added.

Novell in November reached simultaneous deals to sell the patents to a group including Microsoft, Apple, EMC and Oracle and the rest of Novell to Attachmate in a deal totaling $2.2 billion. The Attachmate deal is contingent on the patent sale.

The US DOJ should see what a Microsoft mole has done to Nokia [1, 2, 3, 4]. As gnufreex points out in IRC, “not even microfans can defend Elop” and he links to this new audiocast from Mary-Jo Foley and Gavin Clarke. It says:

Stephen Elop’s decision to make Windows Phone the Nokia smartphone operating system of choice could be rationalized, even defended, right up until the point where Microsoft’s new phone platform bricked Samsung Omina 7 phones.

Suddenly, and without any real explanation, Windows Phone 7 couldn’t be updated on 10 per cent of phones. Imagine if a Windows Update wouldn’t update 10 per cent of the Windows PCs out there.

Nokia was killed by intrusion. It could probably find a far better way to carry on, without serving Microsoft. The same goes for SCO, which according to court documentation was given money by Microsoft and also given money by an entity approached by Microsoft. In essence, just like in Nokia’s case, money was paid by Microsoft for a company to turn hostile towards Linux (it remains to be seen if Elop will ‘pull a SCO’ using Nokia patents) and Groklaw has some new details in an article which starts innocently by stating: “A consultant hired by SCO in 2004 to compare UNIX and Linux, with the thought he could be used as an expert at trial, says that, after days and days, his comparison tool found “very little correlation”. When he told that to SCO, it paid him and he never heard from SCO again.”

So it was fabricated, eh? “This new information,” explains Pamela Jones, “appears in a new book to be published in April and now available as a “Rough Cuts” version on the Safari online book service. The book is titled “Software IP Detective,” by Bob Zeidman, and in Chapter 26, he tells us this anecdote.””

But more curious was the update from Jones, who links to this news report and puts that in context:

Do you remember Baystar? It invested in SCO briefly, because Microsoft would be happy if they did, as Larry Goldfarb testified was his motivation. Here’s the latest on Larry Goldfarb from the San Francisco Chronicle:

The Securities and Exchange Commission has charged Marin County hedge fund manager and philanthropist Lawrence “Larry” Goldfarb with secretly diverting $12 million in investor money to other uses including an investment in a San Francisco record company and charitable contributions.

Goldfarb runs Baystar Capital Management, a Larkspur firm that manages private investment funds including Baystar Capital II. The SEC alleges that since at least 2006, he and his firm have been misusing the proceeds from that fund’s highly profitable “side pocket” investments….

He and Baystar Capital Management settled the SEC charges without admitting or denying guilt. They agreed to pay about $14 million in disgorgement and interest to investors. Goldfarb also agreed to pay a $130,000 penalty and not associate with an investment advisor or broker for five years.

An update to the article says that he and his company “have entered into a deferred prosecution agreement with the U.S. Attorney” whereby Goldfarb admitted to one count of wire fraud and that $12 million in investor funds were transferred to two entities he owns which invested in — among other things — Marin real estate and OM Records. “The U.S. Attorney’s office in San Francisco will not charge him if he complies with the terms of the agreement, which include paying $12.1 million in restitution to BayStar investors and a three-year ban from the investment industry.”

One has to watch those pure financial animals, y’all.

Maybe it is just a vehicle of money to drive other people’s interest via unknown shells, a bit like Elliot. As a reminder, Elliott and AttachMSFT got in touch before Elliott's bid for Novell. That’s just fishy.

“…Microsoft wished to promote SCO and its pending lawsuit against IBM and the Linux operating system. But Microsoft did not want to be seen as attacking IBM or Linux.”

Larry Goldfarb, BayStar, key investor in SCO approached by Microsoft

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A Single Comment

  1. twitter said,

    March 11, 2011 at 4:29 pm

    Gravatar

    Confirmation of Nokia’s role comes from PJ’s examination of Nokia’s SEC filing. She quotes the relevant parts in her news picks.

    - Definitive agreements with Microsoft for the proposed partnership may not be entered into in a timely manner, or at all, or on terms beneficial to us.
    - New sources of revenue expected to be generated from the Microsoft partnership, such as increased monetization opportunities for us in services and intellectual property rights, may not materialize as expected, or at all.
    [PJ: So, they haven't signed on the dotted line yet, this is saying. And I gather they hope to sue people or threaten to do so to get royalties on patents. Blech. Can't Microsoft ever do anything *not* evil?] – Nokia’s Form 20F, SEC

    I think she hit the nail on the head. We can conclude that all of the damage to Nokia is real but Microsoft’s promises are vapor. Perhaps there is resistance in the company beyond the thousands of engineers who walked off the job in protest.

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