Another Blow for SCO

The Motley Fool ^ | April 22, 2004 | Seth Jayson

[Anti-Bubba182]

SCO Group's (Nasdaq: SCOX) share price has been riding a sick-looking roller coaster since last week's announcement that one of the company's primary financiers, BayStar Capital, wants to pull up stakes and skip town.

SCO Group has made headlines for the past year as the computer industry's bullyboy. The group owns rights to a version of Unix, and its growth strategy involves a wave of lawsuits on a variety of related complaints against deep-pocketed firms such as IBM (NYSE: IBM), DaimlerChrysler (NYSE: DCX), and AutoZone (NYSE: AZO).

BayStar Capital came onto the scene last October. The hedge fund sank $20 million into a convertible stock deal and arranged for another $30 million from the Royal Bank of Canada (NYSE: RY), giving SCO a life-saving infusion, since the firm is burning plenty of cash while its Unix business withers. The affair stirred plenty of conspiracy theories after it was revealed that BayStar's principals had gotten the investment idea from Linux-hating Microsoft (Nasdaq: MSFT)....."

[HAL9000]

SCO's stock had some sort of dead cat bounce today.

[Robert_Paulson2]

The affair stirred plenty of conspiracy theories after it was revealed that BayStar's principals had gotten the investment idea from Linux-hating Microsoft

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end of story.

[justlurking]

SCO's stock had some sort of dead cat bounce today.

Baystar backed off. Some interesting theories here:

http://www.freerepublic.com/focus/f-news/1122484/posts

[JRandomFreeper]

What exactly has SCO sold recently? Not OS's... Any maintenance contracts on OS's? Any hardware contracts? (cough)? Any consulting contracts on MS to linux conversions? Any receivables? Any outstanding debts?

It takes more than lawyers to run a company. Unless litigation is the aim.

/john

[Anti-Bubba182]

I don't know much about the technical end, but it seems to me
SCO's main activity is threats and litigation.

[flashbunny]

They've been selling a combination of harrasment and pump-and-dump schemes.

Waiting for the SCO perp walk...

[Boundless]

The definitive site for tracking SCOX developments is:
http://www.groklaw.net/

> The group owns rights to a version of Unix ...

Well, that's an improvement on the usual brain-stem
parroting of SCO's line that they own "Unix", but it's
still not true. They may own nothing of value at all.

They own the rights to sell specific types of Unix
licenses, as long as they give Novell all the money
(and get a 5% commission back), which they apparently
haven't been doing on some some "IP" deals of late.

They do not have the right to sue anyone over Unix without
Novell's consent, and Novell's instructions are to the
contrary.

SCO does not own the copyright(s) to Unix.

They may own the copyright(s) to some old Unix manuals,
if they can prove that they actually got those rights
from their predecessor, Tarantella, and if Tarantella
actually had the ability to transfer them without Novell's
approval (their are some Change of Control issues).

Even if SCO had all the copyrights to Unix, they may be
worthless, due to undisclosed aspects of the BSDI v. ATT
case.

And there are other defects with their present IP biz
plan. Other than that, SCOX is a great investment.

> It takes more than lawyers to run a company.
> Unless litigation is the aim.

Litigation is Stage 4.
1. Company run by the innovators.
2. Company run by the managers.
3. Company run by the accountants.
4. Company run by the lawyers.
There is no Stage 5.

[Anti-Bubba182]

Thanks.

[JRandomFreeper]

Damn, it's tough when someone actually figures it out...

/john

[JRandomFreeper]

if they can prove that they actually got those rights from their predecessor, Tarantella, and if Tarantella actually had the ability to transfer them without Novell's approval

Ummm. Wasn't there some dumpster diving that went on-record in the late 80's about the manuals?

/john

[Boundless]

> Wasn't there some dumpster diving that went
> on-record in the late 80's about the manuals?

Could be, I haven't seen any details on it.

What is clear is that AT&T failed to put copyright notices
on the code back when it was required, and there were many
instances of acts of ommission and commission that proved
that they had effectively surrendered much remaining rights.

Further, the only actual infringement claims that SCO has
discussed in public involve elements that probably can't
be copyrighted anyway (and weren't copied; the Linux code
ends up looking similar because there are only so many ways
you can do basic obvious things, especially when you're
coding to an open standard interface).

Suppose that Studebaker, in it's waning days, claimed to
have a retroactive patent on the wheel, and was trying to
sell licenses to all wheel users.