SCO's KIA, but what about the rest of the troopers?

Steven J. Vaughan-Nichols

August 11, 2007

Opinion -- When Judge Kimball ruled against SCO [ ] in favor of Novel and said that Novell owned Unix's IP (intellectual property), that was the end of SCO. So now, SCO's legal cases are dead -- but what about its friends and partners?

I've said since the beginning that there was next to nothing to SCO's claims [ ] that Unix IP had illegally been transferred into Unix. After all, SCO itself had incorporated Linux code into Unix [ ]. I thought the APA (Asset Purchase Agreement), which gave SCO the right to sell Unix but didn't give the company the IP rights to Unix, would prove SCO's case's Achilles' heel [,1895,1611154,00.asp ].

I presume SCO will appeal. Much good it will do them. SCO may still thrash a bit, like a snake with a broken back, but it's dead and done.

I always knew the APA would end up killing SCO. SCO never really had much of a case in its Linux IP court actions, but it did have the merest smidgen of claims -- albeit no real evidence -- needed to make an IP case. The APA case, however, was simple contract law. And, SCO was on the wrong side of the contract [,1895,1841965,00.asp ].

So what happens now? First, SCO really is vulture bait. The company's been trying to start up a mobile middleware business, but that's doing no great shakes and the company's core Unix business has continued downhill [ ].

The court also decided that SCO owes Novell at least some of the money it made from its Sun and Microsoft licensing deals [ ]. That should wipe out SCO's cash reserves nicely.

With Novell now firmly in charge of SCO's, excuse me, Novell's Unix and UnixWare IP, SCO's Unix business is now road kill. The only real question I have at this point is, "When will SCO's bankruptcy proceedings start?"

SCO's Unix reseller partners should now run, not walk, to become Linux resellers [ ]. If you're stuck with supporting SCO UnixWare and OpenServer, it would be wise to visit Novell PartnerNet [ ], say by the next business day, and start talking partnership.

Then, there's Sun. At one time, Sun was an SCO supporter. That was back in the day when Sun was in one of its "We hate Linux" phases. Sun's Jonathan Schwartz -- then Sun VP of software and today Sun's president and CEO -- said in 2003 that Sun had bought "rights equivalent to ownership" to Unix [,1895,1496519,00.asp ].

SCO agreed. In 2005, SCO CEO Darl McBride said that SCO had no problem with Sun open-sourcing Unix code [,1895,1785664,00.asp ] in what would become OpenSolaris [,1759,1828655,00.asp ]. "We have seen what Sun plans to do with OpenSolaris and we have no problem with it," McBride said. "What they're doing protects our Unix intellectual property rights."

Sun now has a little problem, which might become a giant one: SCO never had any Unix IP to sell. Therefore, it seems likely that Solaris and OpenSolaris contains Novell's Unix IP. Whoops! Mr. Schwartz, I'd suggest calling Novell CEO Ron Hovsepian real soon now. Oh, and Mr. Schwartz, when I saw Hovsepian last Wednesday night, I believe he said he was going home for the weekend. Under the circumstances, I'm sure he wouldn't mind you calling him at home.

Microsoft, of course, has also helped SCO out. The Windows giant bought a Unix license [,1895,1492533,00.asp ] it almost certainly didn't need and Microsoft executives convinced BayStar Capital [,1759,1542865,00.asp ] to waste -- or was that invest? -- $50 million on SCO. That deal eventually blew up [,1759,1639732,00.asp ] in everyone's face, but SCO got some much-needed capital.

Since Microsoft and Novell are on good terms [,1895,2168356,00.asp ] at the moment, Microsoft appears to have gotten away clean. On the other hand, I wonder whether, when Microsoft and Novell partnered up in November [ ], the company already realized that Microsoft was the one that needed IP protection from Novell.

Oh, and Microsoft, given SCO's example with what happens to companies that start court cases on the foggiest of IP claims, I'd shut up now about your even more vague patent claims [ ]. Consider this a word to the wise.

Finally, there are SCO's stock owners. What can I say except, "You poor dumb jerks." It's over.

Copyright 2007