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IBM 182, SCO 0

Posted by dcparris on · 56 comments
Tectonic.co.za; By Richard Frank
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Linux enthusiasts breathed a huge sigh of relief last week as almost two-thirds of the SCO group's case against IBM was booted out of court because of lack of specific evidence.

[Sigh of relief? Try something more along the lines of "In your face, SCO!" Possibly some un-informed CIO's were relieved. However, the rest of us fully expected as much. - dcparris]

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Comments (56)

tell it!

35 earlier comments in the full thread.

Steve -

I think you've got it -- almost.

Add in that we are loathe to deprive any injured party of their right to redress. That is why litigants are allowed to amend pleadings, etc.

The same things that protect the rights of pro-se litigants trying to fight a landlord are available to the SCOs of this world.

In fact, compared to IBM, you could argue that SCO is on the same footing as a poor tenant suing a rich landlord. Technically, SCO is the landlord claimin property rights, but IBM's the one with deep pockets.

Then, of course, complex things are, well, complex. SCO has made a lot of claims and sought a lot of discovery. This stuff has to be worked out.

Finally, the very nature of our civil litigation system tends to stretch things out. We do not use inquisitorial judges. Our judges act as referees, and, in non-jury trials, finders of fact. It is the job of the advocates to challenge pleadings, ask questions, etc. When needed, judges can and do exercise their discretionary power, but, generally speaking, they're there to keep things fair.
Indeed. That which can be justly used can also be unjustly abused.

One other thing. A request for clarification:

> Either SCO thinks they've got a case or they're dumber than they look

By that, do you mean that you believe that SCO is, in fact, dumb enough to believe they have a case, but that the requisite level of dumbness is of a lower magnitude than the level of dumbness required to pursue the case further if they didn't really think they had a case?

Steve -

I think that's about right.

Why would you ever seek to sue a savvy and rich company like IBM if you didn't think you had a case? That's just ludicrous. The vast majority of cases that actually go to trial are cases where each side thinks it's in the right and a neutral party is required to declare the winner.

To pursue a case you don't believe in against someone like IBM is absurd. It is ruinously expensive and is nearly certain to fail.
> Why would you ever seek to sue a savvy and rich company like IBM if you didn't think you had a case?

Well, you have to understand that they never expected IBM to allow the case to go to court. They expected them to either settle out of court or buy out SCO. That IBM might fight the case never really crossed their minds.

> To pursue a case you don't believe in against someone like IBM is absurd. It is ruinously expensive and is nearly certain to fail.

Yes, but if:

a) you have no real business to start with, b) don't care whether what little business you do have survives or not, and c) are using the free publicity to pump and dump the stock to your advantage,

you don't really care, do you?
jdixon: That IBM might fight the case never really crossed their minds.

SCO lawyers didn't do their historical research then. As I understand it, IBM doesn't back down from "nuisance suits" because, if they did, it would be an open invitation to other nuisance suits.

Don K.
>They expected them to either settle out of court or buy out SCO. That IBM might fight the case never really crossed their minds.

Remember what I said -- If they didn't think they had a case, it would be absurd to sue IBM. And note, I said a case, not a winning case. Having a case means that you have arguments that you can support and might win.

Now, to the gaping hole in your logic: If SCO has no case, there is no incentive for IBM to settle or to buy SCO. SCO's action is not some $5,000 nuisance case. It would take real money to settle or to buy them out. Worse, it wouldn't do IBM much good.

If they settle, they implicitly agree that SCO has a case and do untold damage to the very lucrative market they've built in Linux consulting and Linux solutions. They seriously hurt their position vis-a-vis Microsoft.

Same is true if they buy SCO.

They also have another little problem: Their developers attested to Linus & co. that IBM owned the copyright to all code it submitted for inclusion to the Linux kernel. That sets up some pretty interesting legal liability scenarios if certain people were to come under attack.

And, of course, developers would simply remove IBM donations -- including, I presume, all mainframe support, and code replacements as quickly as possible.

So, IBM would have dealt its consulting business a major blow, paid a fortune for the privilege, and gotten nothing much in return.

If you're SCO, you know all of that before you go to trial.

As to manipulating stock prices, that's always a possibility in today's world. But that strategy is a bit hare-brained, too -- not that it stops the current generation of "Masters of the Universe."

However -- with so many people to threaten with letters, so many people to sue, IBM is a pretty strange choice, at least without a case. Not only that, insiders have to comply with SEC regulations. They can't just jump in and out of the market on a whim. It's hard to pump those prices long enough for insiders to profit with a baseless case. Investers will pay very close attention. They know that IBM is a tough opponent who doesn't roll over. It's hard to imagine a window lasting long enough to make real money for insiders if SCO has nothing at all.
dek -

Oh, they might settle an occasional slip'n fall, but you are correct. Many companies work very hard to avoid becoming litigation magnets.

I once worked in the EEO department of a Fortune 500 company that was fighting a Commisioner's suit by the EEOC.

Our policy was to investigate every complaint as quickly and as thoroughly as possible. If our guys did something wrong, we would try to make it right with the complainant before the complaint could be rolled up into the big suit. It was a matter of common sense: if it goes into the Commissioner's action, it strengthens the EEOC case and, at the same time, becomes far more expensive because it will drag on indefinitely.

Conversely, if our investigation shows not wrongdoing, we held firm, even if it meant adding to the Commissioner's case.

Part of it was tactical: The Commission would have to waste time and resources to investigate a losing case.

Part of it was self-defense: The Commisioner's suit was not exactly a secret. If we rolled over every time someone filed a complaint, we'd have been up to our eyeballs in no time.
At the risk of walking into conspiracy theorist territory, the discussion has focused on possible motivations for The SCO Group. What is really relevant is the possible motivations of those who make the decisions at The SCO Group. Those motivations may coincide with those of the Corporation itself. Or they may not. I've lost track of who is who as far as SCO's board and principle owners. I think Canopy is out of it now. But although it is publically traded, most shares are held by insiders. Thus there is a great deal of opacity when it comes to SCO and its possible motivations.

> And note, I said a case, not a winning case.

Well, I obviously don't think the SCO management team is as smart as they think they are. That said, I think they thought they had a case that would cost more to fight than it would to settle. I do think it's clear they were hoping for a settlement before the case started. Once they case started, they've been doing their best to stall as much as possible, all the while exclaiming to the public about how strong their case is. Thus my conclusions as to the stock manipulations.

> But that strategy is a bit hare-brained, too

Agreed, but then not much that SCO has done has actually made any sense. They had the Linux source code, and they had already done evaluations on the code. They KNEW they didn't have a case that would hold up. Given that, if you assume any rationality at all on their part, you're left with them trying to shake down IBM and pump and dump their own stock.

That may not be the correct analysis, but it's the only rational one I can see. I think everyone here can agree that I usually try to give people the benefit of a doubt, at least in public :), but I can't see any other reasonable explaination for SCO's actions. Of course, it's always possible their actions aren't rational, but that doesn't explain Boies and company taking the case. Tis a puzzlement.
>They KNEW they didn't have a case that would hold up.

I don't believe that.

I believe they found enough code similarities to at least raise a question. I think that would be the case no matter how the code got into linux.

Some things are so basic that there aren't many different ways to code them. Some code may indeed be the same, by a variety of non-infringing routes. Some code may be taken from SCO, but fall in the first category to such an extend that it is not protectable. All kinds of things can happen that make it look like you have a case, but, when all of the threads are followed, peter out into a pile of nothing.

I'm sure that all of the claims that were recently thrown out constituted things SCO thought they might find, but never did.

If SCO really entered into this whole affair with nothing, SCO has to answer for it and, in all likelihood, their lawyers.

That last is the one that makes me believe there is something there, even if it's a loser. Law firms don't mind if their clients have to pay big judgments, but they damned well don't want to pay out themselves.
dinotrac: >"What you want is to have the results of a trial without having the trial itself."

No, but you keep misunderstanding me in that same manner. I apologize for not being more clear.

SCOG's complaints deal with contracts and copyright, supposedly. These require the full process of litigation to decide, absent a settlement between disputing parties.

It is SCOG's standing to bring most of these complaints, especially the ones that have required the tremendous document production by IBM in discovery, that is highly questionable. SCOG claimed ownership of property that they do not, in fact, own. They then based their suits on that claimed property.

This is where I think the U.S. legal system must eventually make an adjustment: At some financial threshold, a plaintiff should be required to show the court a credible basis for bringing a complaint, before being allowed to impose litigation expenses on the defendant. This is a completely separate and distinct matter from deciding the merits of the complaints.

Go back to my hypothetical suit against you for borrowing my Winnebago for Saturday night interstate commerce. Before allowing me to file suit and therefore imposing a burden of defense on you, the court should require, at least, that I show ownership of a Winnebago, beyond merely declaring it to be so in my complaint. This is not a matter of the merits of my complaint, nor is it a matter of allowing me latitude in developing my case.
grouch -

SCO has stated their basis for standing:

They possess certain rights purchased from Novell, and became the successors to Novell's contracts granting those rights to others, including IBM. SCO has claimed that IBM's actions infringe it's rights in the Unixware code, and that IBM has violated the terms of its contract, causing harm.

That's quite sufficient to establish standing: a claim that the other party has caused you to suffer a legally redressable harm.

As to your hypothetical, I would bet dollars to donuts that SCO attached documentation to the complaint supporting their ownership of Unixware, as well as their contractual arrangement with IBM. If not, that stuff certainly has been made available by now, or the case would have been dismissed outright.

You, however, are being disingenuous. You know full well that there is no "deed" in IP. Nothing gets recorded with the county clerk or registered at the Secretary of State's office. The contracts contain the proof of ownership, and they vary with every case.

For that matter, even attaching title to the Winnebago is neither sufficient nor necessary to establish your claim. You could post a bill of sale instead of title, or I could dispute your ownership by producing a bill of sale that I had purchased the thing from you. Of course, the title would shift the burden of proof to me and mean I probably can't challenge your standing because, even if I produced a bill of sale, it would require a finding of fact to determine that it is valid.

Nothing is ever as simple as we would like it to be when it comes to legal matters.









> Nothing is ever as simple as we would like it to be when it comes to legal matters.

A perfect summation of this case to date.
dinotrac: >"SCO has stated their basis for standing"

There is the problem, in a nutshell. That's all it takes to begin causing major harassment and expense.

>"They possess certain rights purchased from Novell, and became the successors to Novell's contracts granting those rights to others, including IBM. SCO has claimed that IBM's actions infringe it's rights in the Unixware code, and that IBM has violated the terms of its contract, causing harm."

They claimed far more possessions than they have, but that cannot yet be contested, even after 3+ years of expensive litigation.

>"That's quite sufficient to establish standing: a claim that the other party has caused you to suffer a legally redressable harm."

There's the problem again. SCOG claims possessions which they do not have, in order to claim legally redressable harms by others.

>"As to your hypothetical, I would bet dollars to donuts that SCO attached documentation to the complaint supporting their ownership of Unixware, as well as their contractual arrangement with IBM. If not, that stuff certainly has been made available by now, or the case would have been dismissed outright."

You'd lose your dollars. It is not their claim to own Unixware which is relevant. It is their claim to own "all right, title and interest in and to UNIX and UnixWare operating system source code, software and sublicensing agreements, together with copyrights, additional licensing rights in and to UNIX and UnixWare, and claims against all parties breaching such agreements. Through agreements with UNIX vendors, SCO controls the right of all UNIX vendors to use and distribute UNIX." The Asset Purchase Agreement and its amendments show this is not so.

>"You, however, are being disingenuous. You know full well that there is no "deed" in IP. Nothing gets recorded with the county clerk or registered at the Secretary of State's office. The contracts contain the proof of ownership, and they vary with every case."

No, sir, I am not being disingenuous.

Absent a written transfer of copyright, there is no transfer of copyright. In spite of this, SCOG claims ownership of copyright-protected code in SVRX and that IBM "transferr[ed] [...] System V source code" to Linux.

SCOG also claims to be successor-in-interest to the contracts between AT&T and IBM, conveniently ignoring IBM's "perpetual" and "irrevocable" license from AT&T, and yet have not shown a paper trail from AT&T to SCOG.

At no time was SCOG required to show that their claims of ownership were credible before being allowed to drag any victim into litigation. These matters are left to be decided in countersuits. This is the flaw that also allows extortion by threat of lawsuit.

>"You could post a bill of sale instead of title, or I could dispute your ownership by producing a bill of sale that I had purchased the thing from you."

That still leaves it up to you to dispute my basis for bringing suit and would not prevent my imposition of harassment and expense. The court itself should ask of me, "Who are you to bring this suit? Are you a party to the contract being disputed? Do you own the property you claim is misused?"

These are, of course, as hypothetical as the Winnebago and would not fit every civil suit. I don't claim to have answers to the complex problems; only that recent history shows there are cases filed to extort defendants using property the plaintiff does not truly own.

Establishing that a plaintiff has a credible foundation on which to base a claim of redressable harm should not involve anyone but the plaintiff and the court. In SCO v. IBM, this would mean SCOG would have to show a written transfer of UNIX System V copyrights and a trail of contracts leading from AT&T, through USL, through Novell, through oldSCO, through Caldera, through the spin-off of portions of Caldera into what became The SCO Group. If this could be established, then SCOG should have the right to a trial to determine if their complaints are valid.

Absent that trail of ownership, it's just me and my fictitious Winnebago, trying to get money for nothing.
Grouch:

It seems to me that opportunity awaits you.

When you come up with a way to establish facts without first having to establish them -- ie determine the true intent of contracting parties without having investigate and decide on facts -- you will need to go to Congress and the Supreme Court (they do the rules of civil procedure) and get all Constitutional, legal, and procedural things out of the way.

It sounds to me, however, like you want the legal equivalent to that old programmer's joke, the one where the guy is going through a flow chart and reaches a box that says "magic happens".
dino, you make it sound like it's impossible to present evidence that demonstrates that you just might have a case. If I'm reading all this correctly, and my head is spinning trying to follow it all, you're saying that all finding of fact should happen at trial. Grouch is saying you should have to present a basis for your complaint, other than "because I say so." I agree with grouch. This isn't an impossibility, it's common sense. Especially since discovery rules apparently permit the plaintiff to legally steal whatever they want.

Civil litigation is a farce. It's broken. The rules should say you can't change your story a zillion times like SCO did, and that you have to show the judge a basis to proceed. There is no reason that a plaintiff like SCO should be allowed to get away with 3+ years of fishing without having to cut bait. What they did is just plain harassment, not to mention incredibly stupid.

Darl is just a puppet. Don't know who's pulling the strings, but it all stinks to high heaven, and we don't need a trial jury to tell us that.
tc -

It's not at all impossible. The thing is, grouch is asking for more than that. He wants the findings of fact to be made before going to trial, which is problematic as that is what the trial's all about.

You do have to present a stronger basis than "I say so." Every kind of case has specific elements that define it, and you must provide the facts that show your harm is redressable under the legal theory you are pursuing.

You also certify that the facts you assert in your pleadings are true. Your lawyer does the same. If you like, you are subject to sanctions. Beyond that, it is more than "I say so." SCO has provided the agreements that form the basis of its case, or IBM and SCO have stipulated to non-disputed facts.

But have you seen what grouch keeps doing? He keeps going back to the contract and trying to tell me what it says. That's all well and good, but that is what the trial does. What he's doing is rather like having the prosecution in a murder case peruse the evidence and find the defendant guilty before the trial. The trial, of course, serves no point as the facts have already been found.
For my part, I'm perfectly happy to let it take as long as it needs to. The hard part is over. Remember back in the old days when the press reported every word out of Darl McBrides mouth as gospel truth? Remember when the world believed that SCO might be right? Remember when the world cared?

Darl and the gang have quieted down. When they do say something it is met with skepticism. And if there was any doubt as to SCO's level of credibility with the press, this latest ruling should nail that down.

As to costs, IBM has more money than God, and a passel of lawyers on retainer. It's hard to get too upset there.

So, as I say. I'm patient on this one. I hope the judges continue to give SCO every reasonable opportunity. Because when all this is over, I sure don't want to have to go through the whole thing again because SCO got an unfair shake the first time. And when it's over, I don't want there to be *any* question about the result.

And besides, it's better than the Jerry Springer Show. :-)
>As to costs, IBM has more money than God, and a passel of lawyers on retainer.

Steve -

I think you make an important point here.

It's easy to snipe at SCO as being the source of all delay, but, well, IBM is huge, IBM is active, IBM is loaded for bear. I strongly suspect that part of their strategy is simply to litigate SCO into the ground. Kind of like a trainmen's strike I once endured in the Netherlands. Oh sure, nobody walked off the job, but, darned if they didn't make REALLY REALLY sure that we were safe. If something on a train could be inspected, it was. Carefully. I doubt that things would be going quite so slowly if somebody other than IBM were on the other side of the action.

And, frankly, I think that's a good thing. IBM has drawn a line in the sand. By the time they're done, nobody is going to want to pull this kind of crap again, at least not if it points in IBM's direction.
dinotrac: >"When you come up with a way to establish facts without first having to establish them -- ie determine the true intent of contracting parties without having investigate and decide on facts -- you will need to go to Congress and the Supreme Court (they do the rules of civil procedure) and get all Constitutional, legal, and procedural things out of the way."

No, no, no.

Establishing SCOG's possession of property on which it bases its complaints does not involve any other party, except, possibly, Novell, in those complaints based on the Asset Purchase Agreement.

There is no logical reason to force IBM, Red Hat, AutoZone or Daimler-Chrysler to prove that SCOG does not own what they say they own. Determining whether or not SCOG owns what is necessary for it to own in order to bring the complaints it has filed is a matter that only requires SCOG and the court.

It is completely illogical to force a defendant to spend millions of dollars answering a complaint for which there has been no establishment of standing beyond a the plaintiff's claim of standing. The belief that the consequences of making false claims to that effect in the complaint is sufficient deterrent has been proven false.

The only case in the whole SCOG mess which deals with the foundational ownership claims of SCOG is the Novell case. The courts should not have allowed any suits to proceed without establishing the ownership of the property that SCOG claims has been misused.

The burden of proving ownership should have rested solely on SCOG. The burden should not rest on anyone accused of misusing that property. The accused should only have the burden of defending against accusations of misusing the property *after it is established that the accuser owns the property*.

sbergman27: >"As to costs, IBM has more money than God, and a passel of lawyers on retainer. It's hard to get too upset there."

The ability of a defendant to pay for litigation should not determine the ability of a plaintiff to sue. This breakage in the system is what leads to intimidation by threat of litigation. It encourages extortion. It encourages Danegeld.

Should be SCOX -182...

...and SCOX shares should now be made available in sectioned (tearoff) easy-wipe rolls.

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