Computer Associates Pays Off SCO

jford235 writes "Forbes reports that CA has paid the fee to SCO for their license. The deal went down in August but today CA has says that they have taken steps to "distance itself from SCO"."

Misleading Headline

Articles say that the liscenses were thrown in as part of a seperate breach of contract settlement. They were not "purchased".

Re:Misleading Headline

Read Groklaw as ever [groklaw.net]. There is more in later stories too).

Re:Misleading Headline

SCO sued International Business Machines Corp. [...] a year ago

Misleading use of the word 'sued' also.

I've seen this a lot, especially with regard to SCO's actions. Wouldn't the correct usage be SCO filed suit against IBM [...] a year ago?

As stated in the Forbes article, it could be taken to mean that SCO successfully sued IBM... or maybe I'm not as hot at my native language as I thought.

Yeah...

Slashdot already reported this last week. How SCO was spinning the breach of contract money as a Linux license.

Re:Misleading Headline

Specifically, Charles Forelle spake thusly in the Wall Street Journal:

The Islandia, N.Y., company, one of the biggest makers of corporate software, said that although it signed the licenses, it didn't pay for them -- and never would. It said it agreed to sign the licenses only to settle a lawsuit with the Canopy Group, one of SCO's major investors.

Re:Misleading Headline

Headlines are usually written by the editors, not the journalists.

Piercing the corporate viel

Why were SCO IP licenses involved at all? Wasn't the lawsuit between CA and Canopy? Could this be enough to pierce the corporate viel between SCO and Canopy?

Re:Piercing the corporate viel

The relationship between SCOX and Canopy certainly seems, to us, like an abuse of the corporate form. I'd guess the SEC will eventually become involved.

Re:Piercing the corporate viel

Repost [slashdot.org].

They only needed to pierce the veil as long as Canopy stayed behind the scenes. The limitation of liability afforded a corporation's shareholders only covers the shareholder from responsibility for the actions of the corporation; it does not in any way protect a shareholder from liability for his or her own actions.

With this deal, Canopy commited an overt act in furtherance of SCOX's campaign to mislead the public in SCOX's anti-linux campaign when they made the UnixWare license (with the linux indeminification attached) part of the CA lawsuit settlement. SCOX then used this deal to misleadingly imply that CA had entered into a voluntary deal to license linux. I'd say this falls under IBM's Lanham Act claims[See this [groklaw.net], start at 84.) IBM doesn't need to pierce the veil, Canopy pulled is aside themselves.

Cheers,
Craig

Re:Misleading Headline

I would be like SCO throwing in a Linux license with every Happy Meal and claim that it sold a billion Linux licenses.

Yes, CA did NOT pay for these licenses

As you can see here [cnn.com] CA was GIVEN these licenses as part of a settlement with Canopy Group, one of SCO's major investors. Canopy was looking to lighten the financial burden, and so they threw in the licenses like they were water.

Re:Yes, CA did NOT pay for these licenses

It's not quite the same. If I were the lawyer for CA and Canopy offered to include the licenses then I would immediately agree.

Why?

First, it creates no liability for CA. In a worst case situation, the licenses mean nothing.

Second, it costs nothing.

Having it in a settlement agreement is not comparable to purchasing the licenses, even for a penny.

The only slant you could put on this is that, as the lawyer for CA, you would not let them include meaningless content in the agreement even though it created no risk for CA. For example, I doubt CA would have allowed Canopy to include licenses or indemnification for Microsoft products.

Actually, maybe I am wrong about that. I think Canopy may be able to offer MS licenses considering they are a MS subsidiary.

Re:Yes, CA did NOT pay for these licenses

... it creates no liability for CA. In a worst case situation, the licenses mean nothing.

Sounds reasonable, but recent events have shown that it is dangerous to have any kind of legal agreement with SCO. SCO's legal actions have all been against companies with which it has a formal contract or license agreement. At this stage, I would want SCO to give me money to compensate for the risk involved in doing business with them.

Re:Misleading Headline

They were purchased in the sense that CA had some business with Canopy. Canopy then figured "Hey, let's mention that this stuff also includes Linux licenses blah blah" and the CA people said: "Well if it's not going to increase the price, why not?"

So in the end CA bought licenses, but only because SCO wanted to put the licenses down as "sold", not because they would have sold them in any other way.

It's like giving away free stuff along with other things, then later claiming everybody bought your stuff when they just bought something else.

Re:Misleading Headline

... like giving away free stuff along with other things ...

Ahhh, like AOL disks. Maybe that is the future business model for SCO. Get a free Linux license with your PC Magazine.... :-)

Re:Misleading Headline

That's exactly right.

CA went to the store and bought a computer. Someone threw three AOL disks in the box while they weren't looking.

Now AOL's trying to claim they've been a customer for 135 days, because, after all, those were 45 day free trial CDs.

Actually, it's even sillier than that. CA got Unixware licenses. SCO has just gone around saying they won't sue anyone who purchases Unixware licenses to cover their Linux intallations. At no point did CA see 'Linux license' on anything, even if they had checked the box carefully thy would have ended up with them.

Re:Misleading Headline

Even worse, the story is completely consistant with the claims quoted yesterday [slashdot.org] which reported [infoworld.com]:

By acquiring the UnixWare licenses (

ed: as part of a settlement of an unrelated lawsuit brought by Canopy, not SCO), CA indemnified itself against a possible Linux lawsuit from SCO, said Sam Greenblatt, the senior vice president and chief architect of CA's Linux Technology Group. "We did an agreement with the Canopy Group and in the agreement with the Canopy Group, we acquired UinxWare(sic) licenses," he said. "For every UnixWare license you acquired, you got indemnified for that number of Linux licenses."

Kind of wierd to post this. Am I missing something?

Re:Misleading Headline

Articles say that the liscenses were thrown in as part of a seperate breach of contract settlement. They were not "purchased".

Oh, MY GOD!!!

Guy 1: Hey, what about that 100 grand you owe me!
Guy 2: Hey, did you know I own the Brookling Bridge? Let's just throw it in the deal, ok!

Update the Article!

Yes, this article is both misleading and old news. You can find this from CA on Newsforge [newsforge.com]:

CA senior VP of product development Mark Barrenechea says that Bench's claim is nonsense. CA has not paid SCO any Linux taxes, he said.

Drawing up short of calling SCO a liar, Barrenechea claims that SCO has twisted a $40 million breach-of-contract settlement that CA paid last summer to the Canopy Group, SCO's biggest stockholder, and Center 7, another Canopy company, and has turned it into a purported Linux license.

As a "small part" of that settlement, Barrenechea said, CA got a bunch of UnixWare licenses that it needed to support its UnixWare customers. SCO, he said, had just attached a transparent Linux indemnification to all UnixWare licenses and that is how SCO comes off calling CA a Linux licensee.

You'll also find this on news.com.com.com.com [com.com]:

Computer Associates, which has begun making its management software available on Linux, acknowledged it had the license, but took pains to distance itself from SCO's methods.

"CA disagrees with SCO's tactics, which are intended to intimidate and threaten customers. CA's license for Linux technology is part of a larger settlement with the Canopy Group. It has nothing to do with SCO's strategy of intimidation," said a statement from Sam Greenblatt, senior vice president and chief architect of CA's Linux Technology Group.

Greenblatt has been an outspoken Linux fan. "The whole world is going to unite around a single operating system, and it's going to be Linux," he said in a keynote address at the LinuxWorld Conference and Expo in January.

Basically Canopy threw in the licenses as part of a settlement with Canopy's Center7 company. I wonder if SCO broke any confidentiality agreements regarding the settlement by announcing that CA was a Linux IP Licensee. ;)

CA should have known better than to allow this

'Articles say that the liscenses were thrown in as part of a seperate breach of contract settlement. They were not "purchased".'

That's a crucial piece of information. One that SCO will deliberately mishold or put endless spin on.

I'll probably be modded as flame for this, but I have to say I think that CA wasn't thinking when they allowed that "licensing" to be thrown in as part of the terms of any settlement. Now SCO will run around using this as ammunition for their continued litigation.

It's not like CA or anyone else doesn't know who or what they were dealing with...

How does that saying go? Fool me once, shame on you, fool me twice, shame on me?

.

Re:CA should have known better than to allow this

CA ended up with UnixWare licenses, not Linux licenses. It's just that SCO has turned all UnixWare licenses into Linux licenses.

Re:Misleading Headline

CA: "I did not have relations with that ho!"

Ugh...

...is it even legal to do that when the court hasn't even made a decision yet?

Re:Ugh...

..is it even legal to do that when the court hasn't even made a decision yet?

Yes.. if you look at the SCO "IP license" it is so insanely unspecific, you could be paying for anything and nothing. (which of course you are..)

But the statement in the article that it "may provide key legal ammunition" is just pure bullocks.
No court would view the fact that you've convinced third parties outside of the court room as evidence that you're right.

(BTW: This is a Reuters story, WTF are they linking to Forbes for? Given the amount of ./-baiting crap they've published earlier, why should ./ reward them with page hits for stories that they didn't even originate?)

oooh, this is grey area...

"(SCO) is grasping at straws to purport CA as a SCO supporter," Computer Associates said in a statement. "CA stands in stark disagreement with SCO's tactics, which are intended to intimidate and threaten customers."

In August when CA did this they weren't intimidating/threatening? CA didn't know any better because they weren't paying too much attention to SCO's bullshit and not enough to the people who actually have a clue?

Sucks when you are caught between a rock and a hard place I guess.

Stupid CA

Seriously, when will these companies stop supplying SCO with more money for these legal challenges? I work with a company that sells software for both Linux & OpenServer, and let me tell you, about 1/2 to 2/3 of our major SCO Resellers have switched or are switching to Linux. Still havent had a single customer switch to SCO from linux.. If companies just sit tight and let SCO keep pursuing their death-wish, they will implode on their own.

What is it with Forbes and inaccuracy?

This is getting to be an ongoing grudge with Forbes... First their editorialists skew every fact they can find in attempts to cheerlead SCO on, now this.

Didn't CA already explain the whole Canopy/SCO financial thing?

/P

Re:What is it with Forbes and inaccuracy?

I think Forbes supports SCO as a Microsoft proxy. The article is full of statements which don't really make sense.

I particularly liked this part: "Generally, if an IP holder is able to demonstrate that others in the industry have taken a license, thereby respecting the IP holder's claims, that can be used as evidence that is persuasive to a jury,"

So the score is SCO 4 GPL 4,000,000.

Re:What is it with Forbes and inaccuracy?

SCO lawyer: CA licensed our IP. And Chewbacca is a Wookie. Not an Ewok, a Wookie! And CA licensed our IP! Ladies and Gentlemen of the jury, you have to find IBM guilty, because Chewbacca is a Wookie, and CA licensed our IP.

Money and "keeping score"

I particularly liked this part: "Generally, if an IP holder is able to demonstrate that others in the industry have taken a license, thereby respecting the IP holder's claims, that can be used as evidence that is persuasive to a jury,"

So the score is SCO 4 GPL 4,000,000.

I really like this, but I have to point out a subtle point that skews the 'scoring', and it is an important point, especially as it's what the Slashdot editors (WTH, Slashdot editors! WTH??) are getting wrong.

The reason that juries consider the existence and number of industry licensors to be significant is that it's assumed the licensors are "putting their money where their mouth is" -- they are investing their money in the licenses because they believe that they are paying the person who legally owns the intellectual property rights, in exchange for the freedom to use those rights safely and legally.

Of course, because juries make this consideration, it's becoming a less reliable consideration to make -- I think we can safely say that convicted software pirate [vnunet.com] Microsoft paid for its SCO licenses solely for the purpose of swaying public opinion and possible juries. And while we may decry their decision as foolish and/or cowardly, there is unfortunately a certain basic logic to EV1's decision to buy SCO's license; one can be entirely sure a claim is without merit and entirely unsure that a jury would recognize the lack of merit.

But fewer than 4,000,000 companies have put their money into Linux -- or if they have, the amounts have been orders of magnitude lower. Microsoft-funded "studies" on TCO aside, it is easier and cheaper to go with Linux, and in this specific arena, that works against us, because doing something that's easy and cheap doesn't make as much of a statement as something that's more costly and difficult. There is still a cost and effort to comply with the GPL -- companies like Cisco and Linksys have found that out -- but again, the 'investments' have been orders of magnitude lower.

And this is the central point that the Slashdot editors got wrong in the headline, stating that "Computer Associates Pays Off SCO" when the only party claiming that CA paid any amount of money for SCO's Linux licensing has been SCO. Why, again, would we take SCO's word for it? SCO could do this to anyone that pays them any money, for anything: throw in licenses for free and then claim that they weren't free, that they represent an investment of money and therefore an endorsement of SCO's claims.

Yes, Forbes published the egregiously wrong Dan Lyons "Linux's Hit Men" article. But in this case, Forbes published the correct and balanced information and it is Slashdot that grossly mischaracterized the events to the detriment of Linux.

Isn't this a repeat?

Wasn't it already said that CA was buying a UNIX licenses and they added linux into the contract just for completeness?

CA was tricked

CA lost a lawsuit against another company controlled by Canopy (SCO's parent company.)

As a part of that settlment, SCO was required to purchase UnixWare licenses from SCO. SCO placed language in that license that also gave CA the right to SCO's Linux IP. Now SCO is using this to say that CA is a licensee.

The really interesting part is that this shows Canopy manuvering other companies it controls to benefit SCO. This may give IBM an opportunity to "pierce the corporate veil" and go after Canopy's assets in the counter-suit.

Yeah, CA paid for them - $0.00

From Dow Jones Business News [yahoo.com]:

The Islandia, N.Y., company, one of the biggest makers of corporate software, said that although it signed the licenses, it didn't pay for them -- and never would.

Mike

Key legal ammunition?

This article starts of with a complete untruth by stating that this "Purchase" is "key legal ammunition". It is no such thing has it will not have relevance in the court case so is more propaganda ammunition than anything.

sure?

They say this is not true http://business.newsforge.com/article.pl?sid=04/03 /05/0249257&mode=thread

Re:sure?

They say this is not true http://business.newsforge.com/article.pl?sid=04/03 /05/0249257&mode=thread

You are right and I think if you read deeply both articles are saying the same thing. From the forbes one:

"Computer Associates said its license for Linux is part of a legal settlement with Canopy Group, SCO's major shareholder."

And from News Forge:

"Barrenechea claims that SCO has twisted a $40 million breach-of-contract settlement that CA paid last summer to the Canopy Group, SCO's biggest stockholder, and Center 7, another Canopy company, and has turned it into a purported Linux license."

It seems that SCO are once again desperately trying to twist the facts to sopport their case. In reality, SCO "just attached a transparent Linux indemnification to all UnixWare licenses"

What a lame headline...

To run this story under that headline makes this site seem as desperate as Forbes. The real story is easy for anyone to see about 5p down

>>"(SCO) is grasping at straws to purport CA as a SCO supporter,"
>>"CA stands in stark disagreement with SCO's tactics, which are intended to intimidate and threaten customers."

Misleading lede

Computer Associates International Inc. said on Monday it has licensed the freely available Linux operating system software from SCO -- a move that could become key legal ammunition for the SCO Group Inc. in a battle over who owns the software.

The editor who let this lede get published should be taken out and, er, fired. It does not make a shred of difference in court if somebody actually caved to SCO's extortion; just because CA believed SCO's lie does not make the lie true.

Re:Misleading lede

Hell, they let Daniel Lyons post some rambling bit of nonsense wherein he "investigated" Groklaw. He read the PO box from her domain registration (which is NOT even the town where she lives...) and discovered that IBM might have an office somewhere in that general area. He then found out that IBM, once upon a time, had given some computers to Ibiblio (which recently became the host of Groklaw).

That's it. That's the supposed "connection" between them. And half of it was WRONG.

And Forbes let Daniel Lyons publish that. Why? Because PJ chastized him for not bothering to do ANY research. And now we see how poor his researching skills really are. Hell, I could do better than that, and I'm just an amature. Yet, given what I know, if I had access to some of the databases PIs use, I could probably have PJs info in a few minutes. And I'm just some schmoe, not an "investigative reporter."

The lesson here? Forbes' "research" consists primarily of corporate PR documents. IBM hasn't put out any, SCO has, so Forbes prints SCO's story and never bothers to research after that.

At least, that's the most consistant interpretation I can give of it. In the mean time, guess which magazine I tell everyone NOT to bother reading or subscribing to? I would encourage the rest of you to do the same, unless you want to read rehashed press releases for some reason...

CA sees it a little different

Here is the funny thing. CA is saying they did not pay off SCO. They were just buying unix liscense they were forced to by as the result of losing a lawsuit about unix liscenes. SCO threw they indemdification for one linux manchine for every unix liscense in there so they could claim CA was a linux liscense. CA keeps saying they want nothing to do with the linux liscense.

Forgive them

I know a lot of people are going to be upset (and understandably so) with any company who pays SCO protection (er, I mean licensing) money.

But we have to look at it from the businesses point of view. Until the case with IBM is settled, and SCO is proven to be the litigous bastard Microsoft funded puppets that they are, many companies will unfortunately make a business decision - pay a little money now, rather then possibly a lot later in lawyer's fees. So I can't entirely blame them.

But given the article and the memo leak that it is in fact MS that paid SCO a significant amount of money in order to start their puppet suing with the explicit goal of creating FUD about Linux, why hasn't any federal prosecutor stepped up and done an investigation on Microsoft and SCO? File racketeering charges against these guys - they're no better then the Mafia.

Re:Forgive them

Forgive them

I don't think so.

many companies will unfortunately make a business decision - pay a little money now, rather then possibly a lot later in lawyer's fees. So I can't entirely blame them.

Its required for companies to honor their contracts. One of those contracts is the GNU license which they agreed to when they got Linux. One of the conditions of that license was that nobody is allowed to tack new conditions onto the GNU license. These companies expect to get free use of Linux both now and in the future and to have it supported by the Linux community. Fair enough, but part of the deal is to stick to the agreements which they've made with that community. It's not to their advantage or anyone elses to cave in on this. So far this seems to have been understood by pretty much everyone and only EV1 has given in.

Change the article title

The least you could do was change the title, as it stands your spreading FUD, try editing it to something more in line with reality like: CA Settlement mis-represented, Canopy Groups twisted web. or CA says 'not willing participant in fiaSCO' or CA says '2 for 1 licenses' do not an enorsement make.

WTF?

I was under the impression that CA bought the licenses under a sealed settlement under completely unrelated suit. Unless I'm mistaken, CA bought licenses for UnixWare (or some other Old-SCO product), for which each automatically included a binary Linux license.

It sounds like SCO quitely tacked on the "free Linux binary license" in order to give the illusion of legitamacy within the indrustry to their Linux claims. It's a sneaky, bullshit move. I hope that the courts see this the same way I do. OTOH, the EV1 move was not trickery on SCO's part. That was just EV1 being stupid.

Re:WTF?

Yes, although if memory serves, EV1 also stated that their payment to SCO had something to do with an earlier settlement (at least that's what one of the press releases indicated). It really sounds like both CA and EV1 are hedging their bets while being scared by SCO. If SCO wins, they can say that they knew it all along. If SCO loses, then they will write off their payments as unrelated to SCO's IP.

Pressure...

The damage has been done now.

It is nerve wrecking for a person to be sued. For companies, if you turn out to be the target of a company attempting to make money out of litigation, you have very little course for action that will save you. You fight it and you lose money, while the trial is going on, you are dragged into the light.

You pay them off and there is a chance that the deal could bite you later.

There are no paths to getting out of this. CA just took the option that they thought would be better. Now they are tossing themselves back into the fight when SCO decides to release the details of the deal.

They should have not commented, put out a generic statement about how they do not endorse others, and let it ride.

SP --- Prays that we stop giving SCO attention.

I have a few other news updates.

1) Kennedy was shot.

2) The Beatles broke up.

3) The Berlin Wall is down.

4) The Soviet Union is no more.

5) Slashdot editors have poor memories or cannot search their own archives.

Re:WRONG WRONG WRONG

The sad part is when you consider how many article submissions were rejected in favor of posting this misleading repeat.

They key point is in the last paragraph

The payment has nothing to do with whether Linux contains SCO code. It's part of a settlement for something entirely different. CA might just as significantly have agreed to license the use of the word "is". The very last paragraph of the article contains the key point:

Computer Associates said its license for Linux is part of a legal settlement with Canopy Group, SCO's major shareholder. In August, Computer Associates signed the SCO license and paid $40 million to Canopy Group to settle breach-of-contract charges, but news of that deal surfaced only recently on Web sites.

I hope that the papers will at least get this right, after botching the job on the AutoZone lawsuit.

I have a nice bridge you might want

Intellectual property, or IP, experts said CA's license could help convince a jury that SCO has a justified claim on Linux.

So if I can convince one person to pay me toll, that proves to a jury I really do own the Brooklyn Bridge? This reduces reductio ad absurdum down to the absurdum.

The only reason SCO is doing this

"Generally, if an IP holder is able to demonstrate that others in the industry have taken a license, thereby respecting the IP holder's claims, that can be used as evidence that is persuasive to a jury..."

To jury in closing args: "It must be our IP, and many others agree... we've already licensed it to several, large, well-respected technology companies."

Whether you agree with SCO or not (I don't), they're making a hell of an effort to control some key elements of open source software. We shouldn't laugh it off and expect them to go away... these guys are going for the kill... they're deadly serious. Their lawyers don't care whether they actually own any code or not. Wake up to this threat before it's too late.

Re:The only reason SCO is doing this

Licence your IP [theregister.co.uk]

I laughed and laughed...

who knew shit could be worth so much

I was just waiting for the daily SCO story after reading this [theregister.co.uk] new BOFH.

Thanks for pushing SCO's FUD

Don't the /. moderators even bother to RTFA at all?

The headline effectively states CA bought a SCO Linux license, when nothing of the sort happened.

Canopy put a SCO Linux "license" in with other stuff in the settlement of a breach of contract lawsuit.

And now SCO (and /., apparently) start spouting off hou that means CA bought a Linux "license".

Anyone now doubt that Canopy and SCO are intertwined? Or that they both have Bill Gates hand shoved up their asses like the ragged sock puppets they are?

The license fee was all of $19,000

CA's payment was only $19,000 - not bad to settle a $40 million lawsuit. I don't think CA's paying SCO $19,000 qualifies as a ringing endorsement.

Well, what's new?

"(SCO) is grasping at straws to purport CA as a SCO supporter,"

Tell me one area where SCO isn't grasping at straws lately.

You Have Purchased Linux Licenses From Me

For going through the trouble of reading the subject and/or body of this post, I hereby grant you license to IP I own in Linux.

Heh heh, now I can submit a press release claiming I sold Linux licenses to hundreds or thousands of Slashdot readers. Muahahahah!

(I feel compelled to add a disclaimer that this is satire and as far as I know I currently don't own any IP in Linux and therefore can't grant you any license. Geez, that's a joke kill.)

Taco

Do you try to stay up with the SCO situation? RTFA, editor! CA is pissed that anyone even assumes they caved into SCO's demands.
Throw in Michaels antics and stuff like this and your surprised there's not that many subscribers?

CA should help the OSDL defence fund

A good way for CA to distance themselves from SCO is to publically donate money to the OSDL defence fund. Issue press releases that you do so and that you don't approve of the SCO intimidation tactic.