[linux-elitists] Info on SCO Lawsuit

Karsten M. Self kmself@ix.netcom.com
Wed May 28 12:44:37 PDT 2003

on Wed, May 28, 2003 at 09:23:54AM -0700, Don Marti (dmarti@zgp.org) wrote:
> begin Jonathan Corbet quotation of Wed, May 28, 2003 at 08:57:36AM -0600:
> > I'm still trying to figure out what to make of today's developments.  SCO
> > now says that the suit isn't about patents or copyrights, it's a simple
> > breach of contract action.  How that fits in with the 1500 FUD letters is
> > not all that clear to me.
> Our Bible verse for today is Proverbs 28:4.
> Today's SCO statement seems to directly contradict Sontag's earlier
> allegations of "significant copyrighted and trade secret code
> within Linux"
> http://www.linuxjournal.com/article.php?sid=6877
> Why?  I asked attorney Dan Ravicher about this, and the magic words
> where the FUD letters are concerned seem to be "declaratory judgment"
> and "reasonable apprenhension of suit".
> If the McBride FUD letters give a third party a reason to believe
> that SCO will sue that third party, then the third party can bring
> its own suit against SCO in US federal court.  (This is what Felten
> et al. v. RIAA et al. was about.)

Today's Novell revalation makes this bit of SCO's 10-K stand out in 
sharp relief:


    Restricted Cash and Royalty Payable to Novell, Inc.

    The Company has an arrangement with Novell, Inc. ("Novell") in 
    which it acts as an administrative agent in the collection of 
    royalties for customers who deploy SVRx technology. Under the 
    agency agreement, the Company collects all customer payments and 
    remits 95 percent of the collected funds to Novell and retains 5 
    percent as an administrative fee. The Company records the 5 percent 
    administrative fee as revenue in its consolidated statements of 
    operations. The accompanying October 31, 2002 and 2001 consolidated 
    balance sheets reflect the amounts collected related to this agency 
    agreement but not yet remitted to Novell of $1,428,000 and 
    $1,894,000, respectively, as restricted cash and royalty payable to 
    Novell. The October 31, 2001 balances were reclassified from cash 
    and equivalents and other royalties payable to conform to the 
    current year presentation.

It would seem SCO admits here to licensing Novell's technology for SCO's 
Unix products, and actually realizes little revenue from Unix licensing
as it is -- save the 5% "administration fee".  One wonders when SCO are
planning on making current their $3.3m in arrears to Novell.


Karsten M. Self <kmself@ix.netcom.com>        http://kmself.home.netcom.com/
 What Part of "Gestalt" don't you understand?
   Geek for hire:  http://kmself.home.netcom.com/resume.html

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