OT: M$'s role in this SCO shenanigans

[jack]

I'm only posting this because there has been some discussion in this NG
as of late regarding SCO. I'm posting the entire article from the
NYTimes because I realize that many of you don't want to bother with the
registration crap before you can enter the site. Later on.

J.
-------

[Start Article]

March 12, 2004
Microsoft Said to Encourage Big Investment in SCO Group
By STEVE LOHR

ore evidence emerged yesterday about Microsoft's role in encouraging the
anti-Linux campaign being waged by the SCO Group, a small Utah company.

BayStar Capital, a private investment firm, said Microsoft suggested
that it invest in SCO, which is engaged in a legal campaign against
Linux, a rival to Microsoft's Windows.

BayStar took Microsoft's suggestion to heart and invested $50 million in
SCO last October. But a spokesman for BayStar, Robert McGrath, said,
"Microsoft didn't put money in the transaction and Microsoft is not an
investor in BayStar." He added that Microsoft executives were not
investors as individuals in the investment firm, which is based in San
Francisco.

Mr. McGrath said the suggestion came from unidentified "senior Microsoft
executives" but not Bill Gates, the Microsoft chairman, or Steven A.
Ballmer, the chief executive.

Microsoft, Mr. McGrath said, is not indemnifying the investment firm
against risk or otherwise indirectly supporting BayStar's move. "The
issue for BayStar," he said, "is whether there is a good return on its
investment in SCO."

Microsoft, Sun Microsystems and a few other companies have struck deals
with SCO to license its technology. SCO owns the rights to Unix, an
operating system initially developed at Bell Labs. SCO contends that
Linux, a variant of Unix, violates its contract rights.

SCO's legal campaign began last year when it sued I.B.M., a leading
corporate supporter of Linux, and recently stepped up its legal attack
by filing suit against two companies that use Linux, DaimlerChrysler and
AutoZone.

The defendants are fighting the lawsuits, saying they have done nothing
wrong and challenging SCO's claim that its rights are as broad as the
company contends.

Microsoft stands to gain most from any slowing of the advance of Linux,
which is maintained and debugged by a network of programmers who share
code freely. That model of building software is called open source
development.

It is not particularly surprising that Microsoft, given its interests,
played the go-between for an investment in SCO. "But this shows is that
there is a lot more than meets the eye in SCO's litigation strategy,"
said Jeffrey D. Neuburger, a technology and intellectual property expert
at the law firm of Brown Raysman Millstein Felder & Steiner. "SCO has an
agenda, and Microsoft clearly has an agenda, and it's doing whatever it
can to further its cause."

The extent of Microsoft's behind-the-scenes role in SCO's legal effort
has prompted questions and speculation for months. Last week, a leaked
e-mail message from an adviser to SCO to the company added to the
controversy in the industry. In the memorandum, sent to two SCO
executives, Mike Anderer of S2 Strategic Consulting discussed a role in
financing SCO, writing that "Microsoft will have brought in $86 million
for us including BayStar."

SCO acknowledged that the e-mail message, obtained by the Open Source
Initiative and posted on the open-source advocacy group's Web site, was
authentic.

But SCO added that it was a "misunderstanding of the facts by an outside
consultant" who was not working on the BayStar financing. SCO added that
Microsoft did "not orchestrate or participate in the BayStar
transaction."

A SCO spokesman, Blake Stowell, said yesterday, "We stand by that."
[End article]
---------------------

 

[Tony Hill]

I'm only posting this because there has been some discussion in this NG
as of late regarding SCO. I'm posting the entire article from the
NYTimes because I realize that many of you don't want to bother with the
registration crap before you can enter the site. Later on.

I guess I've got to eat my words on this one, being the one arguing
that MS was smart enough not to get involved in this SCO money-making
scam. I can't help but think that some feces will hit the proverbial
fan in Redmond over this though, someone is likely going to get
canned. Even though what MS did was totally legit, the only thing
that can possibly come out of this is bad press.

 

[Stacey]

jack wrote:

The extent of Microsoft's behind-the-scenes role in SCO's legal effort
has prompted questions and speculation for months. Last week, a leaked
e-mail message from an adviser to SCO to the company added to the
controversy in the industry. In the memorandum, sent to two SCO
executives, Mike Anderer of S2 Strategic Consulting discussed a role in
financing SCO, writing that "Microsoft will have brought in $86 million
for us including BayStar."

And this isn't a monopoly or anti-trust? Oh yea that's right, MS pays
their "campain contribution" tax so they don't have to abide by any
laws....

 

[Stacey]

Even though what MS did was totally legit (...)

Is it? Given they are a monopoly, basically -paying- someone to attack the
competition is "legit"?

 

[Stacey]

Tony Hill wrote:

Still not exactly the sort of news MS wants to be associated with
though. I suspect some scapegoat is going to get hung out to dry over
this one.

Sure and they'll probably get a nice retirement package as part of the deal.
I can't believe Balmer & co. didn't know about this and support it. He's
had a hard on for Linux for years as he knows it's their only competition.
If they can make linux "illegal", MS can go back to doing whatever they
want without any worry about the consequences.

And yes MS does pay their way out of being punished for breaking US law.
They were deemed of breaking anti-trust/monopoly laws yet -nothing- was
done to them, except maybe having to pay some extra campain contributions.

Be interesting to see how MS get's treated in Germany after SCO has gone
after Dalmer-Crysler since it's come out who -is- a major player in the
backing of SCO.

 

[Tony Hill]

And this isn't a monopoly or anti-trust?

My understanding of it is that no, it's not monopoly or anti-trust
behavior and in fact is totally legit according to US law. Apparently
this sort of thing is somehow covered by freedom of expression type
rules... I dunno, I'm definitely no lawyer here, but that is what I
have read about it.

Still not exactly the sort of news MS wants to be associated with
though. I suspect some scapegoat is going to get hung out to dry over
this one.

 

[Tony Hill]

Sure and they'll probably get a nice retirement package as part of the deal.
I can't believe Balmer & co. didn't know about this and support it. He's
had a hard on for Linux for years as he knows it's their only competition.
If they can make linux "illegal", MS can go back to doing whatever they
want without any worry about the consequences.

While you might not like Microsoft, you should at least realize that
they aren't stupid. Even if SCO manages to win the contract dispute
against IBM (extremely doubtful) there isn't a hope in hell that it
will make Linux "illegal", that would go against every legal precedent
ever set.

And yes MS does pay their way out of being punished for breaking US law.
They were deemed of breaking anti-trust/monopoly laws yet -nothing- was
done to them, except maybe having to pay some extra campain contributions.

No argument from me on that point, I was simply saying that this
particular situation is, by all accounts, not against any law. No
anti-trust violations here, not an abuse of a monopoly position or
anything like that. It might be somewhat immoral, but apparently not
illegal. Only issue might be if the SEC finally comes to the
realization that the whole SCO ordeal is a scam and they get caught
for securities fraud, then MS might get hit with a small offshoot from
that. This is unlikely however, especially given that it's not even
Microsoft money that was behind it (it was the investment arm of the
Royal Bank of Canada that provided the money through BayStar, MS was
just a sort of go-between man here).

Be interesting to see how MS get's treated in Germany after SCO has gone
after Dalmer-Crysler since it's come out who -is- a major player in the
backing of SCO.

Legally I don't think that it will have a direct impact, however as
I'm sure you know, the anti-monopoly case against MS is still going on
in Europe, and moves like this may be taken in a rather poor light.
As I said earlier, nothing but bad press can come out of this deal
with SCO, it was a completely moronic thing for them to be a part of.

Aside from this, MS had only pretty legitimate dealings with SCO.
Even the money that they paid for SCOSource licensing looks like it
was probably for legit Unix IP (one of the new additions in Win2K3
Server, released just after MS licensed IP from SCO, are services and
tools for Unix designed to allow Windows servers to better interact
with Unix servers... so it doesn't even seem like MS was paying SCO
licensing money for Linux like everyone said at the time). But this
new deal was just dumb.

About the only possible way that SCO's case could have any sort of
negative impact on Linux at all is if the GPL is found to be
unenforceable, in which case all GNU/Linux software licenses are
revoked. Even then though it's only a matter of coming up with a new
revision to the GPL to fix whatever problems exist with the current
license and things are back to normal.

 

[KR Williams]

While you might not like Microsoft, you should at least realize that
they aren't stupid. Even if SCO manages to win the contract dispute
against IBM (extremely doubtful) there isn't a hope in hell that it
will make Linux "illegal", that would go against every legal precedent
ever set.

SCO win? Please! well... that would be like Clinton finishing
his term in office! Balderdash!

No argument from me on that point, I was simply saying that this
particular situation is, by all accounts, not against any law. No
anti-trust violations here, not an abuse of a monopoly position or
anything like that. It might be somewhat immoral, but apparently not
illegal. Only issue might be if the SEC finally comes to the
realization that the whole SCO ordeal is a scam and they get caught
for securities fraud, then MS might get hit with a small offshoot from
that. This is unlikely however, especially given that it's not even
Microsoft money that was behind it (it was the investment arm of the
Royal Bank of Canada that provided the money through BayStar, MS was
just a sort of go-between man here).

Oh, goodie! Can you spell RICO? ;-)

Legally I don't think that it will have a direct impact, however as
I'm sure you know, the anti-monopoly case against MS is still going on
in Europe, and moves like this may be taken in a rather poor light.
As I said earlier, nothing but bad press can come out of this deal
with SCO, it was a completely moronic thing for them to be a part of.

It's certainly not the first time M$ has been caught with dirty
hands.

Aside from this, MS had only pretty legitimate dealings with SCO.
Huh?

Even the money that they paid for SCOSource licensing looks like it
was probably for legit Unix IP (one of the new additions in Win2K3
Server, released just after MS licensed IP from SCO, are services and
tools for Unix designed to allow Windows servers to better interact
with Unix servers... so it doesn't even seem like MS was paying SCO
licensing money for Linux like everyone said at the time). But this
new deal was just dumb.
Please.

About the only possible way that SCO's case could have any sort of
negative impact on Linux at all is if the GPL is found to be
unenforceable, in which case all GNU/Linux software licenses are
revoked. Even then though it's only a matter of coming up with a new
revision to the GPL to fix whatever problems exist with the current
license and things are back to normal.

Indeed. ...but how can a license, freely given, and taken be
judged illegal. Perhaps because of no transfer of wealth?
....though I think that's been covered rather well too.

 

[Tony Hill]

SCO win? Please! well... that would be like Clinton finishing
his term in office! Balderdash!

Hehe, interesting choice in analogy... so who's playing the role of
"the intern" here? :>

Indeed. ...but how can a license, freely given, and taken be
judged illegal. Perhaps because of no transfer of wealth?
...though I think that's been covered rather well too.

Legally it hasn't been covered rather well at all, or at least not
tested. I doubt that it'll happen, but this IS the US legal system
we're talking about and here logic, intelligence and generally "doing
the right thing" are extremely rare occurrences. Fortunately for this
case, 99% of US law seems to simply go by who has the deepest pockets,
and IBM has some of the deepest pockets of them all.

 

[Stacey]

Fortunately for this
case, 99% of US law seems to simply go by who has the deepest pockets,
and IBM has some of the deepest pockets of them all.

More than MS? Lets not forget what MS's position is on all of this and MS
already knows how to get it's way.

 

[KR Williams]

Hehe, interesting choice in analogy... so who's playing the role of
"the intern" here? :>

BillyG or StevieB, take your pick. ;-)

Legally it hasn't been covered rather well at all, or at least not
tested.

Tested, no. It seems to have some legal heavies believing that
it will stand though.

I doubt that it'll happen, but this IS the US legal system
we're talking about and here logic, intelligence and generally "doing
the right thing" are extremely rare occurrences.

Not really. Even stupid things tend to get corrected, though not
always. Coffee - 1, M$ - 0.

Fortunately for this
case, 99% of US law seems to simply go by who has the deepest pockets,
and IBM has some of the deepest pockets of them all.

Not really. There has to be something approaching sanity in a
case to make it through the courts. Note that juries normally
don't sit in judgement of these sorts of cases. ...and certainly
don't during appeals.

 

[KR Williams]

More than MS?

More than M$ can directly fund, yes. Do note that they're
already going around the fringes to feed money to SCO. They're
*trying* to be in innocent bystander here. It won't work.

Lets not forget what MS's position is on all of this and MS
already knows how to get it's way.

....and IBM doesn't? IIRC, IBM's been spending $1B/year for the
better part of ten(?) years on Linux development. A few hours of
lawyer's time doesn't seem excessive in comparison. Reading the
claims and counter-claims, is appears to me that IBM is serious
in this one. I've never known IBM to be as aggressive (or as
obvious) as this in any IP suit. ...perhaps even more so than
the anti-trust suit of '68.