SCO News Roundup

So this blog sort of tapered off last July, and I honestly haven't been following the endless SCO saga on a daily basis for quite some time now. A great deal has happened since last July, and I'm not even going to attempt a recap. Because there's rather big news today, perhaps you've heard it already.

The jury's spoken -- unanimously -- and they've determined that SCO never owned any Unix copyrights. Which I don't think comes as a surprise to anyone but SCO, and even they ought to have known. There are still a few issues to be resolved in front of the judge sans jury, so this baby isn't quite over yet. And Mr. Cahn (who you would've heard a great deal about if I'd been posting all this time) says he still wants to go after IBM over contracts, for some reason. And it isn't clear yet (to me) whether SCO has any remaining appeal options, however ludicrous they might be, to drag this out even further.

Have I mentioned that the SCO v. Universe charade has been going on for over seven years now? Just think how long that is in tech industry years, I mean, when SCO first sued IBM there was no such thing as YouTube, or Flickr, or Facebook, or Twitter. Wild Pentium 4's stalked the earth. You could still buy boxes running IRIX or Tru64. The 2.6 Linux kernel wasn't out yet, and gcc was on version 3.2.3. Windows XP was on Service Pack 1. If you were stuck on Windows, you were probably also stuck with IE 6, since there was no such thing as Firefox. Well, there was crufty old Mozilla, but almost nobody used it, that I can recall. Google had only just acquired Blogger (home to this humble blog here), and there was still no such thing as Gmail, or Google Maps, and they hadn't even gone IPO yet.

SCO, meanwhile, repackaged a minor UnixWare update as a major OpenServer release, and dabbled in a bit of Me Inc. on the side. And that's about it for the last 7 years. I can't help but wonder, if you interviewed SCO's employees a few decades from now and asked them whether it was all worth it, blowing seven years of their (relative) youth, seven prime years of their careers, working for a small and unsuccessful parasite on the hind end of the tech industry, toiling away halfheartedly on dead-end 1980's technology, embarrassed to tell anyone who they worked for.... what would they say?

I'd want a do-over, personally.

So tomorrow there'll be a big hearing on whether to convert SCO's interminable Chapter 11 bankruptcy into Chapter 7 liquidation. The US bankruptcy trustee has requested this, as have Novell and IBM. SCO opposes the motions, for a variety of spurious, irrelevant, and ludicrous reasons. SCO's argument, in essence, is that they're just weeks away from a glorious victory on their appeal of the Novell case. (Ok, yeah, I neglected to cover the appeal here. I didn't see it as that big of a story, quite honestly, merely the latest way for SCO to drag things out a bit longer.) Anyway, they're supposedly this close to crushing Novell on appeal, and as soon as that inevitably happens they'll have countless gazillions at their disposal, so the court should grant them an extra stretch of delay, no matter what BK law technically requires. And if they get that, no doubt they'll need more delay when the case goes back to Kimball for basically a complete do-over. And for any appeals that results in, plus any appeals to the Supreme Court, plus any do-overs from there, plus delay due to any other court cases -- IBM, Red Hat, AutoZone, whoever.

I'm reluctant to make any predictions. I think I said I wasn't going to make any more predictions about what the BK court was going to do, since I don't have any insight into that particular universe. On one hand, I can't see how the court could possibly rule in SCO's favor. The BK trustee has asked for Chapter 7 conversion, and under the law these days -- as I understand it -- the judge has to either grant that or dismiss the BK case entirely. That seems about as clear-cut as federal law ever gets. On the other hand, given SCO's track record it's hard to bet against them when they're angling for further delay. It doesn't always work, but it's worked enough, such that it's mid-2009 and we've still got friggin' SCO to kick around.

One amusing aspect to SCO's opposition is the nano-deluge of letters and motions in support they've drummed up. Their filing includes a letters from a few of their remaining Unix customers, explaining that they might be inconvenienced, in theory, if SCO went away, assuming nobody buys the Unix business from the Ch. 7 BK trustee. The court also got a separate letter from Herb Jackson of Renaissance Ventures (or was it Renaissance Capital, or Renaissance Partners, I can't recall at the moment). He was a SCO true believer way back in the beginning, and apparently he's spent the last few years quietly watching his investment evaporate, but still never wavering as a SCO True Believer. Which is really sad, if you ask me. And on top of that, it seems that tomorrow we'll see an appearance, or attempted appearance, by lawyers for the latest Norris shell company, something called "Gulf Capital Partners", or something along those lines. Which, according to info on IV, employs one of the same DC frontmen as our old friends at the Alexis de Tocqueville Institute, of "Samizdat" fame. It's almost like SCO's already rolling the credits, and everyone who ever worked on their behalf gets to be in on it. I suppose next we'll hear from that analyst whose name I forget (Skiba?), still standing by his $45 per share prediction for SCO, due just as soon as they get that elusive courtroom victory. Maybe we'll see new FUD from DiDio or Enderle or even Lyons again, or possibly MOG / G2 will try to "intervene" in the case. If the current trend continues, maybe we'll even hear from Baystar, begging the court to let events play out so maybe they'll get some of their money back. Who knows?

I do suspect there will ultimately be a ruling against SCO, but it may not be tomorrow. And whenever that happens, it's still not The End. First, as you might imagine, there's an appeals process in BK court, just like there is in regular federal court. My understanding is that cases go next to a BK appeals panel of three judges, and from there to the regular US Court of Appeals, and from there to the Supremes. And (if SCO wins at the Supremes), all the way back down, and in semi-parallel the Novell case also gets appealed to the Supremes if SCO doesn't win in Denver, and in another 5-7 years it all ends up back in Kimball's lap, unless he retires before then. And if, on the other hand, the case proceeds to Chapter 7 and current SCO management is quickly kicked to the curb, we're still not out of the woods. One would assume that a rational BK trustee, like any rational person, would realize that the SCO v. Universe cases are without merit and settle them ASAP. But we don't actually have any guarantee of that. We may get a non-tech-savvy one who doesn't get it but just sees big dollar signs, and SCO v. Universe then proceeds under new management. I'd hate to see that, but I can't rule it out.

I'll try to do a post-hearing post if anything dramatic happens. It would be a shame not to, even though I'm not as wound up about the SCO saga as I once was (in case you hadn't noticed).

So, finally, we have a final judgment in the SCO v. Novell case. No big surprises here: SCO owes money it doesn't have, a bunch of their claims are gone for good, with prejudice, etcetera. The one thing that surprised me was how long it took to get to this point. The trial, after all, was early this year, and Kimball ruled back in July, and then the case entered into a sort of post-trial limbo, with Novell holding off on the final judgment until SCO caved and dismissed much of what remained of their case. That seems to have been a clever move on Novell's part, and one that nobody anticipated, least of all SCO. All this time they've been promising the world that they've got a sure-fire guaranteed victory on appeal, just as soon as the chance to appeal arises, but they just burned through another quarter of dwindling cash that they couldn't have planned on. And with all the dismissed claims, the odds of the big payday they keep promising have gotten even more remote, if such a thing is possible.

Speaking of appeals, I'm having trouble referring to this as a final judgment. Every time I try typing it, my fingers leave the keyboard and start making little air quotes. It's final in a legal sense, technically, in that the proceedings in front of Kimball are done, but I don't see how SCO can not appeal, after pinning all their hopes on it for the last few years. I don't see what their grounds for an appeal would be, but that's never stopped them before. So, in short, it's not over yet. Then there's that little matter of the bankruptcy case, and nonzero odds of the IBM and Autozone cases coming back to life at some point, sooner or later.

So the question is, what does "final" really look like, as far as SCO's concerned? At what point can PJ break out the red dress, and the rest of us can break out a nice single malt, or Bordeaux, or whatever? I'm increasingly unsure there'll be one big event signifying "The End", unfortunately. I do see a few probable semi-milestones ahead, although I'm not going to guess dates or even an order for them. The one I'm really looking forward to is when they finally run out of cash, and have to lay off their remaining employees and cease operations. That won't stop the lawsuits, unfortunately -- SCO could, in theory, continue on for years to come as a legal entity, with nothing but a P.O. box to its name. BS&F, as you may recall, is obligated to keep fighting for SCO in the various SCO v. Universe suits without getting a cent more for their trouble. If whoever's in charge of SCO wants to keep this going for another 25 years, BS&F has to keep plugging along at it, to the bitter end and beyond.

Also on the financial side of things, there's converting from Chapter 11 to Chapter 7 bankruptcy, where the goal changes from reorganization to liquidation. In other words, shutting everything down and selling off the company's remaining assets, using the proceeds to pay off creditors. This would be quite a milestone, but it's not the end either. Far from it, actually. To liquidate a company's assets, you first need to know exactly what the company does and doesn't own. That's been the core issue in the SCO saga since it began, and before that in the old AT&T vs BSD conflict. The Novell case sorted much of that out, but I doubt that all possible questions of title are now resolved. Really, I think Chapter 11 would be a much faster process for SCO than Chapter 7, if they had any realistic chance of reorganizing and becoming viable again. Which they don't.

Another possible milestone is the BK trustee booting out current SCO management, or what's left of it. This may or may not happen, but it'd certainly be party-worthy if it did. Just imagine, no more Darl or Ralphie to kick around. It's a nice thought, isn't it?

On the legal side, it's harder to see a rapid end to the shenanigans. They'll go to Denver and appeal and beg for a do-over, for starters. The court isn't obligated to hear their appeal, and they won't if there aren't convincing grounds for them to do so. There's no automatic second bite at the apple here. If that happens, I don't see how SCO goes forward from there. But I'm not going to bet on that. Let's assume that when they go to Denver and show up in front of a fresh set of judges, they sound just credible enough that the court agrees to hear the appeal. From that point, it could take years. Probably not another 5-and-change years, but years, almost certainly.

And as I mentioned, there are still a few court cases out there in suspended animation that may yet get revived. There was some action in the AutoZone case recently that I still don't understand. I think is that the court's stay expires around the end of this year, so it could conceivably go forward after that, although that would likely require the BK court's OK too. The IBM case is technically "closed" at this point but could still be reopened. And let's not forget the Red Hat case in Delaware. The key thing with all of these cases is that there's no upside for SCO in any of them going forward. Their remaining claims against IBM and AutoZone are waived, per the Novell judgment, so there are only counterclaims to resolve (I don't recall whether AutoZone filed any counterclaims, but I suppose they still could if the case proceeds.) And I don't think they'd have grounds for non-laughable counterclaims in the Red Hat case. So if any of these cases go forward, they will at the behest of the other companies involved, with SCO kicking and screaming and begging for delay the whole time. That, again, could take years.

I don't want to sound like I'm just throwing a big wet blanket over the latest events, and really I'm not trying to do that. I just think a note of caution is in order. Believe me, I'd love it if this was really over -- perhaps you've noticed I haven't posted here since July. I'm rather tired and bored of the whole thing, I have to admit. And none of the semi-milestones I see ahead seem to offer much chance to become unbored, barring a highly unexpected reversal in court, a sudden huge influx of cash, or some other surprising twist. Barring the improbable, the future means chronicling the ongoing asymptotic decline of SCO. It's not anywhere near as exciting as it once was, but I feel like I really shouldn't give up on it entirely. So, although I can't promise daily, or even weekly posts here, I'll try to see what I can do.

So we finally have a ruling from Judge Kimball. SCO owes Novell precisely $2,547,817, plus interest. That's not as much money as I (and I think most people) were hoping for, but hey. SCO doesn't have a lot of cash on hand anymore. Too much over $2.5M and the exact amount awarded becomes an academic exercise. A $2.5M award two or three years ago would've been serious bad news. Now, not so much.

PJ suggests the ruling was designed to discourage SCO appeals, which is an interesting notion. She doesn't elaborate, but I think I see what she's getting at. It's possible Kimball is indulging in a bit of game theory here. They can either take the current deal, fork over the $2.5M, and have Kimball's rulings stand as the final judgment in the case, or they can appeal and see what's behind door #2. It could be a better deal, but it could also be much, much worse. If he'd awarded Novell, say, $25M, there's zero chance SCO would fork over a cent voluntarily. They'd be on the next plane to Denver to file an appeal, because they'd have nothing to lose by doing so. Now, they'll have to think it over a bit more. In the end I think they'll still try to appeal, because they're a bunch of freakin' morons who won't listen to common sense, take their half-a-loaf (or pathetic-smidgen-of-a-loaf really) and go the hell away already. But it does up the odds that the appeals court will take one look at the case and decide SCO is exactly as I've just described them. $2.5M is also an amount Novell can reasonably ask the BK court to hand over, where a request for $25M probably wouldn't get a hearing.

As I've said before on numerous occasions, I don't actually care whether Novell gets a cent back from SCO, just so long as SCO doesn't have the money anymore. If it all gets spent on lawyers and accountants and various BK hangers-on, that's fine with me. The moment Novell cozied up to Microsoft, I ceased to concern myself about their continued well-being. I'm sure their new friends in Redmond will take good care of them. Or not. My main concern has always been the claims and counterclaims in the IBM case (remember the IBM case?), and putting SCO's silly Linux accusations to bed permanently. If today's ruling means SCO lives long enough to properly lose the IBM case, I'd call it a good thing.

The main downside of today's ruling is that SCO and its few remaining friends and allies (i.e. MOG) will spin it as a glorious victory. Which will inevitably suck in a new crop of clueless daytrading bagholders, create a temporary stock bubble, and allow the current bagholders to unload their shares at somewhat less of a loss. I think that's pretty much inevitable, and I can't muster a great deal of sympathy for people who rush in to buy stocks ending in ".PK" without doing any research. As far as I'm concerned Darl and friends can shill this ruling to high heaven, for all the good it'll do them. They still owe $2.5M they may or may not have at this point, and even if they do have the cash on hand they're still losing money and customers at an astonishing rate, and there's still the IBM case looming on the horizon.

Today's ruling breaks the long logjam that prevented various other matters from moving forward. So from here I think things proceed along a few tracks, possibly in parallel. Regarding a SCO appeal, I think we'll see an attempt in short order. I've heard conflicting things about whether they'll need the BK court's approval to mount an appeal or not. Even if it doesn't, the center of excitement will now move back to Delaware. The pending ruling was SCO's excuse for not filing a new reorg plan with the BK court. Now they'll need to either come up with a new plan, or a new excuse. And as for the IBM case, I don't see any compelling reason the BK court ought to leave it stayed at this point, if IBM asks to have the stay lifted.

Overall sentiment: "Yay!" Although without all-caps and with a single exlamation point. It's not an absolutely crushing victory, but I'll take it.

Haven't done one of these in over a month, for the simple reason that nothing of importance has happened in over a month. The SCO v. Novell trial came and went, and Kimball didn't rule from the bench at the end, and now it's over a month later and we still don't have a ruling. I suppose I ought to have anticipated this, but I seriously didn't. I figured there'd be a ruling the moment closing arguments were done. Or if not that moment, the next day, certainly. Or within a week, for sure. But no.

There was supposed to be a post-trial hearing in the BK case where SCO would unveil the shiny new reorg plan, but that didn't happen. SCO's new omnibus reason for delay is the lack of a ruling in the Novell case. Which is actually about the most reasonable excuse they've come up with in the last four years. Until Kimball rules, they don't know what they owe Novell, and they also can't appeal yet. Without knowing what their legal & financial universe looks like, there's no way for SCO to know what lies to tell next, so really there's no way for them to move forward at all.

At this point I'm more or less OK with waiting. It's not great, by any means, but the Linux community can afford to wait a lot longer than SCO can. I've never been a big fan of "winning" by running out the clock on SCO, but it looks like that's how it's going to go down, and I guess I can live with that. There's a bit of poetic justice in SCO going under like this, "running out the clock" being one of those sports metaphors Darl can't get enough of.

For old times' sake, if for no other reason, I did a news search for SCO. Here are the slim pickins:

• A Heise article dated May 30th which seems to be a belated English translation of a piece about Kimball's big ruling last August.
  
  
• SCO gets a mention in this list of Top Ten Linus Quotes.
  
  
• My eyes lit up when I saw the headline "SCO's UnixWare measures up with open source additions". For a split second I thought we might have one of those ultra-rare product-related news stories. But no dice. This piece dates to July 2004. At the time, NetworkWorld concluded that UnixWare was a decent OS, and performed better than Mac OS X 10.3 on certain benchmarks. On the other hand, UnixWare 7.1.4 is still the most recent version of the OS nearly four years later, while Mac OS X is up to 10.5.x, with 10.6 on the way.
  
  One rather poignant bit from the review:
  

  The SCO Update service (not tested, as no updates had been issued at the time we tested) connects to the host for updates from the mothership.

  
  
  And as far as I know, the update situation never improved after that. For all we know, SCO Update might be the end-all, be-all, all-singing, all-dancing Platonic ideal of software update apps, but we'll never know for sure because there aren't any updates. Oh, so sad.
  
  
• Good news for this humble blog's surprisingly large UK readership: You won't be seeing Boies & Co. on your side of the pond anytime soon. It's actually kind of a shame -- I'd really like to see Boies in a powdered wig. I wonder what sort of powdered wig would go with his dirty sneakers?
  
  
• In other Boies news, the AIG-Greenberg suit continues.
  
  
• Maybe you haven't heard, but HBO has a new movie about the 2000 election, just in time for the 2008 election. Boies is played by the one and only Ed Begley Jr. Perhaps not the most unkindest cut of all, but probably in the top ten.
  
  
• In his copious free time while he's not burning the midnight oil on SCO's behalf, Boies is also helping defend Bank of New York Mellon in a money laundering suit brought by the Russian government. Yeah, good luck with that. It's actually kind of an interesting case. In essence, the Russian side is arguing that the US federal RICO Act applies worldwide, a legal argument one doesn't often encounter outside the US.
  
  
• Another BS&F racketeering case, again defending the accused. They seem to be developing a real specialty in RICO law. Good news, Darl & Ralphie!
  
  
• Not that they've given up on appealing the judgements of the free market. Perhaps you've heard of the ConnectU vs. Facebook suit, in which ConnectU (who you may not have heard of) alleges that Facebook swiped their precious methods and concepts. Naturally, BS&F is working for the party whose service failed in the marketplace. Some things never change.
  
  
• Although some things never change, nearly everyone involved in the SCO saga has moved on. PJ mostly talks about ODF these days. Boies pretends the SCO suit never happened. IBM, Novell, and Red Hat are too busy making money off Linux to lose any sleep over SCO. Even MOG has other things on her mind these days. A number of articles such as this one now list her as "Virtualization News Desk editor" at SYS-CON. To the extent that "virtual" is an antonym of "real", this is probably a good career move for her.
  
  
• Daniel Lyons has moved on as well, and he's managing to stay busy. On the heels of his fleeting 15 minutes of fame as the "Fake Steve Jobs", he just had a cameo appearance at something called "MEFCON", a trade show sponsored by the "Mobile Entertainment Forum" in LA. The way the press release is phrased, it sounds as if Lyons appeared in character, similar to how Sacha Baron Cohen often appears as Borat.
  
  So next time you're on the bus, and there's a creepy guy across the aisle surfing pr0n on his phone and fumbling around under his trenchcoat and generally having himself a "mobile entertainment" experience, remember that Lyons is getting his cut of the proceeds.
  
  
• A Lyons article about an in-car navigation widget he's become fond of. In passing, he nonchalantly mentions he's been house hunting in Boston recently. If there's a widget that alleviates the horrors of driving in Boston, that's great and all. But actually buying a house there has very little to do with GPS coordinates and MLS listings, and everything to do with who your great-great-grandparents were. Invent a widget to overcome that little hurdle, and you'll really be on to something.
  
  Right after that little tidbit, he quotes Raymond Carver, one of the least Bostonian, and least Lyons-esque, writers I can imagine. It's not clear to me what the Carver reference adds to the piece, other than pointing out to readers (yet again) that the author knows how to make fancy-schmancy literary references.
  
  
• A piece on the glorious new Windows Embedded Standard 2009, which as it turns out is based on XP and not Vista. Which leads us to the inevitable Endroolage:
  

  
  "It will go on lower-performance systems than Vista would run on," Rob Enderle, principal analyst for The Enderle Group, told InternetNews.com. "Plus, XP is a product that people have been comfortable with for the last seven years."
  

  
  
  Over in the Rob-o-Sphere, creating Vista was an inspired act of genius, and running away from Vista is an equally inspired act of genius. The sun always shines, and the bluebirds always sing, and it's always morning in America inside the Rob-o-Sphere.
  
  
• A randomly selected bit of "Paul Murphy" word salad: "Is Java Windows for Unix?". Honestly, the only reason I can see why he has a career as an Important Tech Pundit is that he kept the negatives. And since that fateful day he's remained mired in that distant era when there were such things as negatives.
  
  
• Over on c.u.s.m., a fun thread on shell history and which shell is best. Yes, I checked, this is a new thread, not one dating to 1990 or so. Give 'em another 20 years and they might work themselves up to having a proper KDE vs. Gnome flamewar. Assuming SCO OSes exist 20 years from now, which I sincerely doubt.
  
  

So it's day 4 of 4 in the SCO v. Novell trial, so it'll all be over some time later today. Unless they find a way to drag the thing out longer, which shouldn't be ruled out.

GL has a raft of new stories up.

• Updated: GL's Report on the Last Day of the Trial in Novell v. SCO".
  
• First off, a first look at Day 3, with SCO presenting its case (such as it is).
  
• Transcripts for the first two days, made possible by generous GL donors.
  
• Day 1 transcript as text.
  
• Day 2 transcript as text.
  

Elsewhere on the interwebs:

• Salt Lake Tribune: "SCO-Novell trial ends, judge promises decision soon"
  
• InformationWeek: "SCO On The Stand", which begins "There are times when the jokes just seem to tell themselves."
  
• Computerworld's IT Blogwatch: "SCO in court again: Novell wants its $19,979,561.00". Although it's really just a bunch of links to other stories you've probably already seen.
  
• ZDNet: "SCO chief testifies: 'Linux is copy of Unix'".
  
• Couple of Slashdot stories: "Darl McBride Takes the Stand In Novell v. SCO", and then SCO's McBride Testifies '
  Linux Is a copy of UNIX'.
  

From GL's now heavily-updated Day 2 story, we learn that Darl took the stand yesterday, and it sounds like it was quite a show. One courtroom observer delivers a quote for the ages:

Darl took issue with what he believed was Mr. Acker calling him a liar. Mr. Acker took exception and said he thought it had already been established that Mr. McBride tells the truth in the 10Qs.

And the morning batch of media coverage:

• Ars Technica: "Deluded SCO CEO on witness stand: 'Linux is a copy of UNIX'"
  
  
• OSNews: "McBride: 'Linux Is a Copy of UNIX'". Seems like Darl's star turn in the witness box isn't garnering many rave reviews. It's kind of puzzling really -- he had to have known he'd be on the stand sooner or later. And for the kind of money SCO's paying the guy, he could certainly afford some basic intro-level acting classes. But noooo. That's hubris for ya, I guess.
  
  
• CIO Today reprints yesterday's Deseret News story, in case you haven't seen it.
  
  
• Salt Lake Tribune: "Novell may expand its claims". Confusingly, the title refers to the possibility of Novell going after Sun and Microsoft. I actually don't see that happening, or at least I don't see those potential disputes ending up in court like this one. They'll sit down behind closed doors and work something out, the way normal companies usually do, and we'll see some PR about an exciting new partnership between various firms, the financial terms of which will not be disclosed. Happens all the time. Sometimes I think people forget just how abnormal SCO's behavior really is.
  
  
• Ians-Blog: "Novell v. SCO -- PJ needs your help!" Fortunately these days "help" just means PayPal donations, as SCO appears to have gotten out of the stalking business. At least for the time being.
  
  
• CelebrityPro.com: "Chris Brown News - First Word from Day 1 of the Novell v. SCO Trial". This one is probably not worth your time other than for the amusement value. Apparently there's another, R&B singing, non-courtroom-observing Chris Brown out there. It looks like CelebrityPro just aggregates all stories and blog posts containing a name. For each story, it generates a page full of cheesy youth-oriented flash ads (Axe body spray and so forth), with a link back to the original story.
  
  At least I think that's what's going on. The other possibility is that "our" Chris Brown is the real celebrity, and he's finally getting his 15 minutes. It's unlikely, but possible -- after all, I've never heard of that other guy, so how famous could he be, really?