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Re: Linux's legal world after SCO

  • Subject: Re: Linux's legal world after SCO
  • From: "Rex Ballard" <rex.ballard@xxxxxxxxx>
  • Date: 22 Aug 2006 08:12:12 -0700
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nessuno@xxxxxxxxxxxxxxxxxxx wrote:
> > SCO can't simply drop the suit, because in Utah, filing fraudulent
> > claims is a really bad thing, and the Judge could even award tripled
> > damages to IBM.  Where would SCO get $9 billion in cash?  Perhaps from
> > a friendly billionaire or two who helped arrange funding in the first
> > place?
>
> I haven't heard too much about the BayStar connection since the
> original memos (emails) came out, showing the connection with
> Microsoft.  I'd be interested to know where it all stands now.  I think
> I saw some troll saying that the Microsoft connection had been
> completely debunked, but I don't remember details.

It's a matter of public record that Microsoft helped to Broker the
deal.
It's also a matter of public record that Microsoft got an unlimited use
license SCO shortly afterword (freeing it from an agreement not to
re-enter the Unix market).

The details of this deal were sealed by the courts, but IBM has issued
a discovery motion to have those unsealed for this case (court seals
can't be used to obstruct justice).

There does not seem to be a direct ownship in BayStar by Microsoft
corporation, but there may be a substantial interest being held by a
number of individuals who are Microsoft corporate employees, including
some executives and key Microsoft stockholders.  IBM has requested
records related to those holdings, and all communications with BayStar
related to their dealings with SCO.

There were clearly some very deep pockets funding this lawsuit, and
they were willing to fund far more than SCO could have afforded, given
their revenue and stock price at the time.

It could have just been a "pump and dump" scheme.  Which would make it
a matter for the SEC, but IBM is hoping that the communications will
show a link to deeper pockets with economic interests in keeping Linux
out of the marketplace, and limiting IBM's ability to promote Linux.

> The evidence looked pretty strong to me when it first came out---
> the authenticity of the emails wasn't denied.

Keep in mind that one can often use the letter of the law to legally
deny one thing and give the appearance of denying another.  Clinton
didn't say that he didn't have Sex with Lewinski, only that he didn't
have sexual relations.  She had direct physical contact with him, but
she always wore underwear. :D

A Microsoft executive could state publicly that Microsoft does not own
interests in BayStar, even though Microsoft exectutives DO own
interests in BayStar.  Microsoft could not say that they did not own
interests in SCO (Microsoft held 25% interest in the original SCO at
one time, not sure what current holdings are).  Microsoft couldn't get
control of the company, but they did succeed in placing a CFO with very
close Microsoft connections.

IBM will probably be looking at interactions between Microsoft and SCO
dating back to the original SCO/Microsoft Xenix partnership.

> I hope you're right, Rex, it would be interesting to see IBM pursuing
> Microsoft for this.  IBM has asserted publicly that Microsoft is behind
> the SCO case, and they have asked for big discovery.

What could get even more interesting is if IBM were able to prove
personal, rather than corporate connections.  These could result in
criminal procedings and felony convictions.

Once you are a convicted felon, you can't be a corporate officer.

>  Of course, Microsoft now destroys all internal emails after a month and most
> documents after a year (something like that), a lesson they learned
> after the DOJ case.

e-mails are one thing.   Contracts, DOUs, and other "money memos" are a
whole different bag.  If I recieve an e-mail from some guy that lists
some ad for some code, I might not have even read it, or might have
just previewed it.  Throwing that away is legal.

If I have an e-mail that is related to a contract with a client, and I
have attachments to that e-mail, there is a very good chance that that
e-mail, or at least it's attachement, will be archived in some form.
Deleting an e-mail that documents a formal or informal understanding
that could cost $thousands or even $millions if lost, is unlikely to
"dissappear".  At least ONE party will have saved the document somehow.

> Microsoft doesn't have much of a track record at
> winning lawsuits, they usually settle out of court so there's no record
> of their evil doings.

Actually, they often let a lawsuit drag out, so that their misdeeds
become a matter of public record.  They even provide full disclosure in
court transcripts.  But settlement always absolves all Microsoft
executives and employees of any wrongdoing, and Microsoft corporation.
The key element of the settlement is that the prosecution grants
immunity, disclaiming any wrongdoing.  In exchange, Microsoft appears
to make concessions which appear to be meaningful, and they make
payments to the plantiffs in the form of Microsoft "no cost" products
such as software and used hardware.  The REAL MONEY goes to the
plaintiff's lawyers, who can collect as substantial amount of currency
in exchange for such a generous "settlement".

It's a "winning formula" for Microsoft.  Commit criminal acts to gain
market advantage, extend that advantage to the point were criminal acts
are no longer necessary, and when they are discovered, and lawsuits are
filed, formulate a settlement which gives the plaintiff's attorneys a
huge wad of cash in exchange for a meaningless settlement.

It's Microsoft's way of saying "We are above the law, and can do
anything we want, so you had better cooperate".

When the leader of the local street-gang gets off on a technicality, he
not only sends a message to the community, but he has now identified
the traitors, and can take retaliatory actions against them.  When even
those retaliatory acts go unpunished, it further establishes the
dominance of the gang.

>  Might be different with IBM.   I'd be
> interesting in any further comments you might have.

My guess is that IBM would go for a really big settlement.

Keep in mind that IBM caught Bill Gates personally with his hand in the
till.  He had personally ordered the embezzlement of funds paid by IBM
for OS/2 development, to be diverted to Windows development.  Had
Microsoft not settled, Bill Gates would have been facing criminal
charges.  Instead, Microsoft offered a settlement, giving IBM complete
source and control over OS2, AND the right to co-install Windows.

3 years later, Microsoft demanded that IBM stop selling OS/2 (which IBM
had finally debugged from the mess Micrososft had handed them).  And
demanded that IBM pay for Windows licenses on machines that had been
shipped with ONLY OS/2.  Microsoft did not want OS/2 to be a viable
competitor to Windows 95, and ultimately used blackmail and extortion
to force IBM to stop selling OS/2.

Sam Palmisano was very closely involved with this whole mess, and may
feel that it's "payback" time.

http://www.theregister.co.uk/1999/06/12/killing_os_2_by_quotas/
<quote>
Sam Palmisano [svp personal systems group] emailed John Thompson [svp
software group] in September 1996 that "Once Windows 95 was announced,
retailers told us that they would no longer be ordering any OS/2
systems as their demand was going for Windows 95 only". What we can
never know with certainty is whether OS/2 would have been a success if
IBM had declined to license Windows 95.
</quote>

Sam Palmisano was also

http://www.pcworld.com/article/id,126372-page,1-c,lotusnotes/article.html
<quote>
Back in late 2003, IBM Chairman and Chief Executive Officer Sam
Palmisano challenged his company to move to a Linux-based desktop by
the end of 2005.
</quote>

Mum's the word  ;-)  :-D

For Sam, this might even be personal.


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