SCO Group
Encyclopedia
TSG Group, Inc. is a software company formerly called The SCO Group, Caldera Systems, and Caldera International. After acquiring the Santa Cruz Operation's Server Software and Services divisions, as well as UnixWare
and OpenServer technologies, the company changed its focus to UNIX
. Later on, Caldera International changed its name to SCO and then to The SCO Group to reflect that change in focus.
The company was part of the Canopy Group
, but became independent in March 2005, after the settlement of a lawsuit between the Noorda family and a chairman of the group, Ralph Yarro
, also former CEO of the Canopy Group. As part of the settlement, Canopy transferred all of its shares to Yarro.
In September 2007, SCO filed for Chapter 11 bankruptcy protection
.
In 2011, after selling major assets to a new company, UnXis, SCO renamed itself to TSG.
which was best known for selling three UNIX
variants for Intel x86 processors: Xenix
, SCO UNIX (later known as SCO OpenServer
), and UnixWare
. Eric Raymond, in his book The Art of Unix Programming
, calls SCO the "first UNIX company". Prior to this UNIX vendors were either computer hardware manufacturers or telephone companies.
In 1993, SCO acquired two smaller companies and developed the product line that was named Tarantella. In 2001, SCO sold its rights to UNIX and the related divisions to Caldera Systems. After selling its UNIX interests, SCO retained only its Tarantella product line, and therefore changed its name to Tarantella, Inc.
Caldera Systems, which purchased SCO's UNIX properties, changed its name to Caldera International in 2001 and to The SCO Group (NASDAQ
: SCOX; now delisted: SCOXQ.PK) in 2002. Caldera International's name-change to The SCO Group has created some confusion between The SCO Group (formerly known as Caldera International) and Tarantella (formerly known as SCO). The company described here is the The SCO Group (formerly Caldera International). Although generally referred to simply as "SCO" up to 2001, the parent company is sometimes referred to as "old SCO" or "Santa Cruz" to distinguish it from "The SCO Group" to whom the U.S. trademark "SCO" was transferred.
systems community. Originally called "The SCO XENIX 386 Developer Conference", this unique educational conference was held on the redwood-forested campus of the University of California at Santa Cruz, overlooking the Monterey Bay
.
Held annually since 1987, the conference is now called "SCO Forum". After Caldera Systems acquired SCO's Server and Services divisions in 2001, the conference was moved to Las Vegas
, where the 2008 SCO Forum was held.
Featured speakers over the years have included Douglas Adams
, Scott Adams
, Dave Barry
, Clifford Stoll
, John Perry Barlow
, Linus Torvalds
, and Scott McNealy
. Musical entertainment at SCO Forum has included concerts by Jefferson Starship
, Tower of Power
, Roger McGuinn
, Jan & Dean, The Kingsmen
, The Surfaris
, and Deth Specula
.
Recent SCO Forum presentations have focused on presenting SCO's side of the SCO vs IBM legal battle. Speakers have included Darl McBride
and Rob Enderle
. SCO has also refocused the conference on technical presentations.
based in Utah
, was founded in 1994 by Bryan Sparks and Ransom Love
, receiving start-up funding from Ray Noorda's Canopy Group
. Its main product was Caldera Network Desktop, a Linux distribution
mainly targeted at business customers and containing some proprietary additions. Caldera, Inc. later purchased The Linux Support Team Software GmbH and its LST Linux distribution. LST was made the basis of their following product Caldera OpenLinux
.
Caldera, Inc. inherited a lawsuit against Microsoft
when it purchased DR-DOS
from Novell
in 1996. This lawsuit related to Caldera's claims of monopolization
, illegal tying, exclusive dealing
, and tortious interference
by Microsoft.
In August 1998, the original Caldera, Inc. company split into two daughter companies named Caldera Systems, Inc. and Caldera Thin Clients, Inc. Caldera Systems took over the Linux business, while Caldera Thin Clients took over the DOS and embedded business. The shell company Caldera, Inc., remained responsible for the law suit only.
Microsoft reached a settlement in January 2000 with Caldera, Inc., after which Caldera, Inc. stopped its operation. The payments involved in this settlement were later revealed inadvertently during the Novell v. Microsoft antitrust lawsuit as documented on Groklaw.
Later in 2000, Caldera Systems acquired several UNIX properties from the Santa Cruz Operation, including OpenServer and UnixWare, proprietary operating systems for PCs
that would be expected to compete directly with Linux.
Caldera Systems reincorporated in Delaware on 2 March 2000 and completed an IPO of its common stock. By way of a temporary Caldera Holdings, Inc., the company reorganized in August 2000 and became Caldera International, Inc. (CII) in March 2001.
In 2002, Caldera International joined with SuSE Linux, Turbolinux
and Conectiva
to form United Linux
in an attempt to standardize Linux distributions.
Later that year, CEO
Ransom Love left the company and was replaced by Darl McBride
, and the company changed its name to The SCO Group in August 2002.
for an unprecedented US$1 billion and demanded that Linux end-users pay license fees. Microsoft
bolstered SCO's financial situation in 2003 by purchasing a license to UNIX technology and by helping to arrange funding. A new division called SCOsource
was created to license the company's intellectual property
(IP). These claims provoked outrage among Linux users, who denied that Linux had copied SCO's intellectual property. Linux distributor Red Hat
filed suit against SCO in Delaware
. Novell
, from whom SCO claimed to have acquired its UNIX IP, announced that it had not sold the copyrights to SCO and that it retained them. In response, SCO sued Novell for slander of title
in Utah
, home state of both SCO and Novell.
Subsequently, the SCO Group sued two former customers (AutoZone
and DaimlerChrysler
). In SCO v. AutoZone, SCO claimed that AutoZone violated SCO copyrights by using Linux. In SCO v. DaimlerChrysler
, SCO claimed that DaimlerChrysler breached its UNIX license contract by inappropriately using derivative works of UNIX and by refusing to respond to requests for certification of compliance by SCO. SCO's suit against DaimlerChrysler was dismissed in 2004.
After announcing its legal claims against various Linux users and vendors (see SCO-Linux controversies
), the company suspended sales and development of its Linux related products. Attention was shifted to the UnixWare and OpenServer UNIX products previously acquired from the Santa Cruz Operation.
Shortly after Judge Dale Kimball's ruling on August 10, 2007, on September 14, 2007, SCO Group filed for reorganization under Chapter 11 of the United States Bankruptcy Code
.
On October 14, 2009, SCO Group announced that the Company had terminated CEO Darl McBride
's contract.
s, the lawsuits themselves concern contractual issues which are tangential to the issue of whether or not Linux infringes any copyrights. Further complicating the issue is the legitimacy of SCO claims concerning the ownership of System V Release 4.0 (SVR4) Unix copyrights. The success or failure of the claims will also have a profound effect on the financial future of The SCO Group, itself. SCO has, to date, made little headway in this dispute. In particular, in February 2005, Judge Dale Kimball, the judge in the SCO v. IBM
case has stated:
On August 10, 2007, Judge Kimball, hearing the SCO v. Novell
case, ruled that "...the court concludes that Novell is the owner of the UNIX and UnixWare Copyrights". Novell was awarded summary judgments on a number of claims, and a number of SCO claims were denied. SCO was instructed to account for and pass to Novell an appropriate portion of income relating to SCOSource licences to Sun Microsystems
and Microsoft. A number of matters are not disposed of by Judge Kimball's ruling, and the outcome of these are still pending.
On August 24, 2009, the 10th Circuit Court of Appeals issued its findings on SCO's appeal of the 2007 summary judgment. It reversed Judge Kimball's summary judgment rulings on ownership of UNIX and UnixWare copyrights, SCO’s claim seeking specific performance, the scope of Novell’s rights under Section 4.16 of the APA, and the application of the covenant of good faith and fair dealing to Novell’s rights under Section 4.16 of the APA. It upheld Kimball's ruling on royalties due Novell. The reversed judgments were remanded to trial in Utah Federal court.
On March 30, 2010 a federal jury found unanimously that the copyrights to Unix and UnixWare did not transfer to SCO. Then on June 10, Judge Stewart granted all remaining claims of Novell, and denied all claims of SCO, closing the case.
The SCO website now gives details of a new appeal against Novell, Inc, dated September 9, 2010 and presumably lodged with the United States Court of Appeals.
In it, he describes his examination of SCO's claims of infringement, using both the "COMPARATOR" and "SIM" tools.
He concluded that, "Despite an extensive review, I could find no source code in any of the IBM Code [including AIX, Dynix, Linux, or JFS] that incorporates any portion of the source code contained in the Unix System V Code or is in any other manner similar to such source code. Accordingly, the IBM Code cannot be said, in my opinion, to be a modification or a derivative work based on Unix System V Code."
Groklaw - Dr. Randall Davis's 2nd Declaration - I Found No Identical or Similar Code
for failing to issue an annual 10-K
report in a timely manner as required by U.S. Securities and Exchange Commission regulations. In late April 2005, after complying with the filing requirements, the NASDAQ switched trading of the SCO Group from "SCOXE" (which denotes a listing which may be delisted soon) back to their original "SCOX" stock symbol.
On June 20, expert Brian W. Kernighan filed a declaration on behalf of IBM. He testified that he had performed an analysis of SCO's specific claims and that there was no similarity between the portions of Linux identified by SCO and the allegedly copyrighted works.
On July 1, federal Judge Dale A. Kimball denied The SCO Group's motion to amend their claim against IBM yet another time (a third amended complaint) and include new claims regarding Monterey
on the PowerPC
architecture. In the same decision, the five-week jury trial date was set for February 2007.
On July 14, Groklaw
obtained an email from Michael Davidson to SCO Group senior vice president Reginald Broughton sent on August 13, 2002. In it, Davidson describes The Santa Cruz Operation's own investigation into whether or not Linux
contained proprietary UNIX
source code
. "At the end, we had found absolutely nothing, i.e., no evidence of any copyright infringement whatsoever," Davidson concluded. At which time SCO presented as evidence an e-mail from a Robert Swartz, a consultant hired by SCO to compare UNIX and Linux source files, that copyright infringement could exist.
of company stock, at closing, being less than $1 for 30 consecutive trading days. To regain compliance with continued listing requirements, the company must maintain a closing bid price greater than or equal to $1 for at least 10 trading days. The stock regained compliance on June 12, 2007.
On August 10, Judge Dale Kimball issued a ruling in SCO v. Novell
which found that "Novell is the owner of the UNIX and UnixWare copyrights" and SCO to be in breach of its SVRX licensing agreement with Novell. The ruling also cast further doubt on SCO's claims that IBM
and Linux
infringe against any SCO source code, and upheld Novell's right to force SCO to waive its copyright claims against IBM and Sequent
. In response, on Monday, August 13, SCO stock fell over 70%, to 44 cents a share.
The trial in SCO v. Novell
was due to start on Monday September 17, in order to determine how much money SCO owed Novell. On September 14, SCO Group filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code
. As a result of the petition for bankruptcy, all pending litigation was automatically stayed as per U.S.C.
§ 362. On September 27, NASDAQ issued SCO a notice of potential delisting, under their discretionary authority. SCO appealed this decision, but on September 19, it received another delisting warning for an insufficient bid price. On October 23, SCO announced that they had reached an agreement with York Capital Management. Pending Bankruptcy Court approval, York was to purchase most of SCO's business for a total of approximately $36 million, including financing. After Novell, IBM, and the United States Trustee objected to the deal, SCO withdrew the proposed sale on November 20, without prejudice. SCO was delisted from NASDAQ on December 27, due to its bankruptcy filing.
between it and Stephen Norris Capital Partners
(SNCP). Under the proposed deal, subject to Bankruptcy Court confirmation, SNCP would pay SCO up to $100 million (including a $95 million loan at LIBOR + 17 percentage points). If the restructuring had been confirmed, SCO would have exited Chapter 11, gone private, and repaid all creditors (including Novell and IBM) in full. SNCP would then have received a controlling interest in SCO. A joint press release stated that SNCP's business plans for SCO include both "unveiling new product lines" and "see[ing] SCO's legal claims through to their full conclusion." The proposal was abandoned two months later.
On May 5, 2009, the U.S. Trustee's office, through its counsel Joseph J. McMahon, Jr., filed a motion in the SCO bankruptcy proceeding to convert the SCO's Chapter 11 to a liquidation under Chapter 7
.
On June 15, 2009, Darl McBride announced during the liquidation
hearing that they had come to an agreement with Gulf Capital Partners for funding to pay off the debts and continue its litigation against IBM
and others, through the sale of its UNIX division.
On August 5, 2009, Judge Gross ordered the appointment of a Trustee according to Chapter 11
by the U.S. Trustee's office.
On August 24, 2009, the 10th Circuit Court of Appeals issued its findings on the appeal of the 2007 summary judgment. It affirmed the judgment on royalties due, while reversing the summary judgments on ownership of UNIX and UnixWare copyrights, SCO’s claim seeking specific performance, the scope of Novell’s rights under Section 4.16 of the APA, and the application of the covenant of good faith and fair dealing to Novell’s rights under Section 4.16 of the APA. The reversed judgments were remanded to trial.
On August 25, 2009, Edward Norman Cahn
, was named as Chapter 11 trustee for SCO's cases.
Following this, on October 14, 2009, the SCO Group announced that the company has eliminated the Chief Executive Officer and President positions, consequently terminating Darl McBride's position, and that the remaining members of the current management team, including Chief Operating Officer, Jeff Hunsaker, Chief Financial Officer, Ken Nielsen and General Counsel, Ryan Tibbitts, will continue to work closely with the Chapter 11 trustee and his advisors.
On October 14, 2009, McBride was terminated as Chief Executive Officer and President of The SCO Group. Jeff Hunsaker left SCO on November 13, 2009. SCO stated that they intended to hire him temporarily as a consultant.
In June, Judge Ted Stewart decided that SCO was obligated to recognize Novell's waiver of SCO’s purported claims against IBM and Sequent. The Court also judged in favor of Novell and against SCO on SCO’s claim for breach of the implied covenant of good faith and fair dealing, ordering the case to be closed.
On September 16, the SCO Group announced that it was “ pursuing a sale of substantially all of the assets of its UNIX(R) business, including certain UNIX system V software products and related services”, and requested that interested parties show “ financial wherewithal to close on the transaction on or before October 5, 2010 at 5:00 p.m.”, but as of December 2010, no announcement of any actual sale had been made.
Since May 2010, SCO Group has repeatedly cancelled its Bankruptcy hearings—as of December 2010, their next scheduled hearing is January 18, 2011. It has also filed an appeal of SCO v. Novell, which is scheduled to be heard on January 20, 2011.
product business.
The terms of sale are to be submitted to the bankruptcy court, where SCO’s Chapter 11 case is also pending, for approval on 2 March 2011 (the original date of the hearing has been postponed by two weeks).
On 5 April 2011, the U.S. Securities and Exchange Commission temporarily halted trading on SCO stock in response to SCO's failure to make required periodic filing for over two years.
On 11 April 2011, UnXis completed the purchase.
SCO filed amendments to their certificates of incorporation on 15 April 2011. The SCO Group, Inc. was renamed TSG Group, Inc., and SCO Operations, Inc. became TSG Operations, Inc.
On 30 August 2011, the United States Court of Appeals for the Tenth Circuit
affirmed SCO's loss to Novell in the second jury/bench trial. SCO's appellate brief had argued that there were evidentiary errors and other issues at trial. The affirmed verdict held that Novell did not transfer the UNIX copyrights to SCO in the amended asset purchase agreement, and that Novell has the right to waive certain alleged license violations.
UnixWare
UnixWare is a Unix operating system maintained by The SCO Group . UnixWare is typically deployed as a server rather than desktop. Binary distributions of UnixWare are available for x86 architecture computers. It was originally released by Univel, a jointly owned venture of AT&T's Unix System...
and OpenServer technologies, the company changed its focus to UNIX
Unix
Unix is a multitasking, multi-user computer operating system originally developed in 1969 by a group of AT&T employees at Bell Labs, including Ken Thompson, Dennis Ritchie, Brian Kernighan, Douglas McIlroy, and Joe Ossanna...
. Later on, Caldera International changed its name to SCO and then to The SCO Group to reflect that change in focus.
The company was part of the Canopy Group
Canopy Group
The Canopy Group is an investment firm founded by Ray Noorda, headquartered in Lindon, Utah. It serves as the parent company of various technology companies. One of its most well-known members was the SCO Group...
, but became independent in March 2005, after the settlement of a lawsuit between the Noorda family and a chairman of the group, Ralph Yarro
Ralph Yarro III
Ralph J. Yarro III is chairman of the board and the largest shareholder in The SCO Group, Inc. Previously, he was CEO of The Canopy Group, Inc....
, also former CEO of the Canopy Group. As part of the settlement, Canopy transferred all of its shares to Yarro.
In September 2007, SCO filed for Chapter 11 bankruptcy protection
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
.
In 2011, after selling major assets to a new company, UnXis, SCO renamed itself to TSG.
The Santa Cruz Operation (SCO)
Santa Cruz Operation (SCO) was a software company based in Santa Cruz, CaliforniaSanta Cruz, California
Santa Cruz is the county seat and largest city of Santa Cruz County, California in the US. As of the 2010 U.S. Census, Santa Cruz had a total population of 59,946...
which was best known for selling three UNIX
Unix
Unix is a multitasking, multi-user computer operating system originally developed in 1969 by a group of AT&T employees at Bell Labs, including Ken Thompson, Dennis Ritchie, Brian Kernighan, Douglas McIlroy, and Joe Ossanna...
variants for Intel x86 processors: Xenix
Xenix
Xenix is a version of the Unix operating system, licensed to Microsoft from AT&T in the late 1970s. The Santa Cruz Operation later acquired exclusive rights to the software, and eventually superseded it with SCO UNIX ....
, SCO UNIX (later known as SCO OpenServer
SCO OpenServer
SCO OpenServer, previously SCO UNIX and SCO Open Desktop , is, misleadingly, a closed source version of the Unix computer operating system developed by Santa Cruz Operation and now maintained by the SCO Group....
), and UnixWare
UnixWare
UnixWare is a Unix operating system maintained by The SCO Group . UnixWare is typically deployed as a server rather than desktop. Binary distributions of UnixWare are available for x86 architecture computers. It was originally released by Univel, a jointly owned venture of AT&T's Unix System...
. Eric Raymond, in his book The Art of Unix Programming
The Art of Unix Programming
The Art of Unix Programming by Eric S. Raymond is a book about the history and culture of Unix programming from its earliest days in 1969 to 2003 when it was published, covering both genetic derivations such as BSD and conceptual ones such as Linux....
, calls SCO the "first UNIX company". Prior to this UNIX vendors were either computer hardware manufacturers or telephone companies.
In 1993, SCO acquired two smaller companies and developed the product line that was named Tarantella. In 2001, SCO sold its rights to UNIX and the related divisions to Caldera Systems. After selling its UNIX interests, SCO retained only its Tarantella product line, and therefore changed its name to Tarantella, Inc.
Tarantella, Inc.
Santa Cruz Operation was a software company based in Santa Cruz, California which was best known for selling three Unix variants for Intel x86 processors: Xenix, SCO UNIX , and UnixWare. Eric Raymond, in his book The Art of Unix Programming, calls SCO the "first Unix company"...
Caldera Systems, which purchased SCO's UNIX properties, changed its name to Caldera International in 2001 and to The SCO Group (NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
: SCOX; now delisted: SCOXQ.PK) in 2002. Caldera International's name-change to The SCO Group has created some confusion between The SCO Group (formerly known as Caldera International) and Tarantella (formerly known as SCO). The company described here is the The SCO Group (formerly Caldera International). Although generally referred to simply as "SCO" up to 2001, the parent company is sometimes referred to as "old SCO" or "Santa Cruz" to distinguish it from "The SCO Group" to whom the U.S. trademark "SCO" was transferred.
SCO Forum
Beginning in 1987 SCO held an annual Summer conference for the international UNIXUnix
Unix is a multitasking, multi-user computer operating system originally developed in 1969 by a group of AT&T employees at Bell Labs, including Ken Thompson, Dennis Ritchie, Brian Kernighan, Douglas McIlroy, and Joe Ossanna...
systems community. Originally called "The SCO XENIX 386 Developer Conference", this unique educational conference was held on the redwood-forested campus of the University of California at Santa Cruz, overlooking the Monterey Bay
Monterey Bay
Monterey Bay is a bay of the Pacific Ocean, along the central coast of California. The bay is south of San Francisco and San Jose, between the cities of Santa Cruz and Monterey....
.
Held annually since 1987, the conference is now called "SCO Forum". After Caldera Systems acquired SCO's Server and Services divisions in 2001, the conference was moved to Las Vegas
Las Vegas, Nevada
Las Vegas is the most populous city in the U.S. state of Nevada and is also the county seat of Clark County, Nevada. Las Vegas is an internationally renowned major resort city for gambling, shopping, and fine dining. The city bills itself as The Entertainment Capital of the World, and is famous...
, where the 2008 SCO Forum was held.
Featured speakers over the years have included Douglas Adams
Douglas Adams
Douglas Noel Adams was an English writer and dramatist. He is best known as the author of The Hitchhiker's Guide to the Galaxy, which started life in 1978 as a BBC radio comedy before developing into a "trilogy" of five books that sold over 15 million copies in his lifetime, a television...
, Scott Adams
Scott Adams
Scott Raymond Adams is the American creator of the Dilbert comic strip and the author of several nonfiction works of satire, commentary, business, and general speculation....
, Dave Barry
Dave Barry
David "Dave" Barry is a Pulitzer Prize-winning American author and columnist, who wrote a nationally syndicated humor column for The Miami Herald from 1983 to 2005. He has also written numerous books of humor and parody, as well as comedic novels.-Biography:Barry was born in Armonk, New York,...
, Clifford Stoll
Clifford Stoll
*High-Tech Heretic: Reflections of a Computer Contrarian, Clifford Stoll, 2000, ISBN 0-385-48976-5.-External links:* at Berkeley's Open Computing Facility**, December 3, 1989* copy at Electronic Frontier Foundation, May 1988...
, John Perry Barlow
John Perry Barlow
John Perry Barlow is an American poet and essayist, a retired Wyoming cattle rancher, and a cyberlibertarian political activist who has been associated with both the Democratic and Republican parties. He is also a former lyricist for the Grateful Dead and a founding member of the Electronic...
, Linus Torvalds
Linus Torvalds
Linus Benedict Torvalds is a Finnish software engineer and hacker, best known for having initiated the development of the open source Linux kernel. He later became the chief architect of the Linux kernel, and now acts as the project's coordinator...
, and Scott McNealy
Scott McNealy
Scott McNealy is an American business executive. He co-founded computer technology company Sun Microsystems in 1982 along with Vinod Khosla, Bill Joy, and Andy Bechtolsheim.-Biography:...
. Musical entertainment at SCO Forum has included concerts by Jefferson Starship
Jefferson Starship
Jefferson Starship is an American rock band formed in the early 1970s. The group is a spin-off from the iconic 1960s psychedelic/folk group Jefferson Airplane. The band has undergone several major changes in personnel and genres through the years while retaining the same Jefferson Starship name...
, Tower of Power
Tower of Power
Tower of Power is an American R&B-based horn section and band, originating in Oakland, California, that has been performing for over 43 years. They are best known for their funky soul sound highlighted by a powerful horn section...
, Roger McGuinn
Roger McGuinn
James Roger McGuinn is an American singer-songwriter and guitarist. He is best known for being the lead singer and lead guitarist on many of The Byrds' records...
, Jan & Dean, The Kingsmen
The Kingsmen
The Kingsmen is a 1960s garage rock band from Portland, Oregon, United States. They are best known for their 1963 recording of Richard Berry's "Louie Louie", which held the #2 spot on the Billboard charts for six weeks...
, The Surfaris
The Surfaris
The Surfaris were an American surf rock band formed in Glendora, California in 1962. They are best known for two songs that hit the charts in the Los Angeles, California area, and nationally by May 1963: "Surfer Joe" on the A-side and "Wipe Out" on the B-side of a 45 RPM single.-Career:The original...
, and Deth Specula
Deth Specula
Deth Specula is a Santa Cruz "neo-bronto" five-piece rock band. Deth Specula was one of the first ten bands on The Internet Underground Music Archive and used the Internet to broadcast a live music concert from the Cowell Courtyard at the SCO Forum held on the University of California in Santa...
.
Recent SCO Forum presentations have focused on presenting SCO's side of the SCO vs IBM legal battle. Speakers have included Darl McBride
Darl McBride
Darl Charles McBride is the former CEO of The SCO Group. He became the CEO of Caldera International on June 28, 2002.On March 7, 2003, during McBride's tenure as CEO of the company, The SCO Group initiated litigation against IBM, alleging breach of contract and copyright infringement claims...
and Rob Enderle
Rob Enderle
Rob Enderle is an American technology analyst.Enderle has worked at several technology companies, including EMS Development Company, ROLM Systems and IBM, before becoming a technology analyst. He began his analyst career at Dataquest, before helping to launch GiGa Information Group...
. SCO has also refocused the conference on technical presentations.
Caldera Systems, Caldera Holdings, Caldera International
Caldera, Inc.Caldera (company)
Caldera was a US-based software company founded in 1994 to develop Linux- and DOS-based operating system products.- Caldera :Caldera, Inc...
based in Utah
Utah
Utah is a state in the Western United States. It was the 45th state to join the Union, on January 4, 1896. Approximately 80% of Utah's 2,763,885 people live along the Wasatch Front, centering on Salt Lake City. This leaves vast expanses of the state nearly uninhabited, making the population the...
, was founded in 1994 by Bryan Sparks and Ransom Love
Ransom Love
Ransom Love has been a co-founder of the meanwhile defunct Caldera company in 1994, and was President and Chief Executive Officer of one of its subsidiaries created on 21 August 1998, Caldera Systems, a company, which reorganized in August 2000 to become Caldera International in March 2001. He...
, receiving start-up funding from Ray Noorda's Canopy Group
Canopy Group
The Canopy Group is an investment firm founded by Ray Noorda, headquartered in Lindon, Utah. It serves as the parent company of various technology companies. One of its most well-known members was the SCO Group...
. Its main product was Caldera Network Desktop, a Linux distribution
Linux distribution
A Linux distribution is a member of the family of Unix-like operating systems built on top of the Linux kernel. Such distributions are operating systems including a large collection of software applications such as word processors, spreadsheets, media players, and database applications...
mainly targeted at business customers and containing some proprietary additions. Caldera, Inc. later purchased The Linux Support Team Software GmbH and its LST Linux distribution. LST was made the basis of their following product Caldera OpenLinux
Caldera OpenLinux
Caldera OpenLinux is a defunct Linux distribution that was created by the former Caldera Systems corporation. It was the early "business-oriented distribution" and foreshadowed the direction of developments that came to most other distributions and the Linux community generally.-Novell and...
.
Caldera, Inc. inherited a lawsuit against Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
when it purchased DR-DOS
DR-DOS
DR-DOS is an MS-DOS-compatible operating system for IBM PC-compatible personal computers, originally developed by Gary Kildall's Digital Research and derived from Concurrent PC DOS 6.0, which was an advanced successor of CP/M-86...
from Novell
Novell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...
in 1996. This lawsuit related to Caldera's claims of monopolization
Monopolization
The term monopolization refers to an offense under Section 2 of the American Sherman Antitrust Act, passed in 1890. Section 2 states that any person "who shall monopolize . ....
, illegal tying, exclusive dealing
Exclusive dealing
Exclusive dealing refers to when a retailer or wholesaler is ‘tied’ to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area...
, and tortious interference
Tortious interference
Tortious interference, also known as intentional interference with contractual relations, in the common law of tort, occurs when a person intentionally damages the plaintiff's contractual or other business relationships...
by Microsoft.
In August 1998, the original Caldera, Inc. company split into two daughter companies named Caldera Systems, Inc. and Caldera Thin Clients, Inc. Caldera Systems took over the Linux business, while Caldera Thin Clients took over the DOS and embedded business. The shell company Caldera, Inc., remained responsible for the law suit only.
Microsoft reached a settlement in January 2000 with Caldera, Inc., after which Caldera, Inc. stopped its operation. The payments involved in this settlement were later revealed inadvertently during the Novell v. Microsoft antitrust lawsuit as documented on Groklaw.
Later in 2000, Caldera Systems acquired several UNIX properties from the Santa Cruz Operation, including OpenServer and UnixWare, proprietary operating systems for PCs
IBM PC compatible
IBM PC compatible computers are those generally similar to the original IBM PC, XT, and AT. Such computers used to be referred to as PC clones, or IBM clones since they almost exactly duplicated all the significant features of the PC architecture, facilitated by various manufacturers' ability to...
that would be expected to compete directly with Linux.
Caldera Systems reincorporated in Delaware on 2 March 2000 and completed an IPO of its common stock. By way of a temporary Caldera Holdings, Inc., the company reorganized in August 2000 and became Caldera International, Inc. (CII) in March 2001.
In 2002, Caldera International joined with SuSE Linux, Turbolinux
Turbolinux
-Linux distribution:The Turbolinux distribution was created as a rebranded Red Hat distribution by Pacific HiTech employee Scott Stone. Scott was the lead release engineer through version 3.6....
and Conectiva
Conectiva
Conectiva was a company founded on August 28, 1995, in Curitiba, Paraná, Brazil, by a group of friends, among them Arnaldo Carvalho de Melo, who was a pioneer in the distribution of Linux and open source software in Brazilian Portuguese, Spanish and English for all of Latin America...
to form United Linux
United Linux
United Linux was an attempt by a consortium of Linux distributors to create a common base distribution for enterprise use, so as to minimize duplication of engineering effort and form an effective competitor to Red Hat...
in an attempt to standardize Linux distributions.
Later that year, CEO
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
Ransom Love left the company and was replaced by Darl McBride
Darl McBride
Darl Charles McBride is the former CEO of The SCO Group. He became the CEO of Caldera International on June 28, 2002.On March 7, 2003, during McBride's tenure as CEO of the company, The SCO Group initiated litigation against IBM, alleging breach of contract and copyright infringement claims...
, and the company changed its name to The SCO Group in August 2002.
The SCO Group
In or around 2003, SCO began to claim that Linux "contained SCO's UNIX System V source code and that Linux was an unauthorized derivative of UNIX". SCO filed suit against IBMIBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
for an unprecedented US$1 billion and demanded that Linux end-users pay license fees. Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
bolstered SCO's financial situation in 2003 by purchasing a license to UNIX technology and by helping to arrange funding. A new division called SCOsource
SCOsource
SCOsource is a business division of The SCO Group that manages its Unix intellectual property. The term SCOsource is often used for SCO's licensing program that allows corporate users of Linux to buy licenses to proprietary Unix technology that SCO claims exists in the Linux operating system...
was created to license the company's intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
(IP). These claims provoked outrage among Linux users, who denied that Linux had copied SCO's intellectual property. Linux distributor Red Hat
Red Hat
Red Hat, Inc. is an S&P 500 company in the free and open source software sector, and a major Linux distribution vendor. Founded in 1993, Red Hat has its corporate headquarters in Raleigh, North Carolina with satellite offices worldwide....
filed suit against SCO in Delaware
Delaware
Delaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
. Novell
Novell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...
, from whom SCO claimed to have acquired its UNIX IP, announced that it had not sold the copyrights to SCO and that it retained them. In response, SCO sued Novell for slander of title
Slander of title
In law, slander of title is normally a claim involving real estate in which one entity falsely claims to own another entity's property. Alternatively, it is casting aspersion on someone else's property, business or goods, e.g. claiming a house is infested with termites , or falsely claiming you own...
in Utah
Utah
Utah is a state in the Western United States. It was the 45th state to join the Union, on January 4, 1896. Approximately 80% of Utah's 2,763,885 people live along the Wasatch Front, centering on Salt Lake City. This leaves vast expanses of the state nearly uninhabited, making the population the...
, home state of both SCO and Novell.
Subsequently, the SCO Group sued two former customers (AutoZone
AutoZone
AutoZone is a retailer and distributor of aftermarket automotive parts and accessories. based in Memphis, Tennessee.-History:Originally a division of Memphis-based wholesale grocer Malone & Hyde, the company went under the name Auto Shack...
and DaimlerChrysler
DaimlerChrysler
Daimler AG is a German car corporation. By unit sales, it is the thirteenth-largest car manufacturer and second-largest truck manufacturer in the world. In addition to automobiles, Daimler manufactures buses and provides financial services through its Daimler Financial Services arm...
). In SCO v. AutoZone, SCO claimed that AutoZone violated SCO copyrights by using Linux. In SCO v. DaimlerChrysler
SCO v. DaimlerChrysler
The SCO Group v. DaimlerChrysler was a lawsuit filed in the United States, in the state of Michigan. In December 2003, SCO sent a number of letters to Unix licensees. In these letters, SCO demanded that the licensees certify certain things regarding their usage of Linux. DaimlerChrysler, a former...
, SCO claimed that DaimlerChrysler breached its UNIX license contract by inappropriately using derivative works of UNIX and by refusing to respond to requests for certification of compliance by SCO. SCO's suit against DaimlerChrysler was dismissed in 2004.
After announcing its legal claims against various Linux users and vendors (see SCO-Linux controversies
SCO-Linux controversies
The SCO-Linux controversies are a series of legal and public disputes between the software company SCO Group and various Linux vendors and users. The SCO Group alleges that its license agreements with IBM means that source code that IBM wrote and donated to be incorporated into Linux was added in...
), the company suspended sales and development of its Linux related products. Attention was shifted to the UnixWare and OpenServer UNIX products previously acquired from the Santa Cruz Operation.
Shortly after Judge Dale Kimball's ruling on August 10, 2007, on September 14, 2007, SCO Group filed for reorganization under Chapter 11 of the United States Bankruptcy Code
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
.
On October 14, 2009, SCO Group announced that the Company had terminated CEO Darl McBride
Darl McBride
Darl Charles McBride is the former CEO of The SCO Group. He became the CEO of Caldera International on June 28, 2002.On March 7, 2003, during McBride's tenure as CEO of the company, The SCO Group initiated litigation against IBM, alleging breach of contract and copyright infringement claims...
's contract.
Products
- SCO UnixWareUnixWareUnixWare is a Unix operating system maintained by The SCO Group . UnixWare is typically deployed as a server rather than desktop. Binary distributions of UnixWare are available for x86 architecture computers. It was originally released by Univel, a jointly owned venture of AT&T's Unix System...
, a modern UNIX operating system. UnixWare 2.x and below were direct descendants of Unix System VUNIX System VUnix System V, commonly abbreviated SysV , is one of the first commercial versions of the Unix operating system. It was originally developed by American Telephone & Telegraph and first released in 1983. Four major versions of System V were released, termed Releases 1, 2, 3 and 4...
Release 4.2 and was originally developed by AT&T, UnivelUnivelUnivel was a joint venture of Novell and AT&T's Unix System Laboratories that was formed in 1991 to develop and market the Destiny desktop Unix operating system,...
, Novell and later on The Santa Cruz Operation. UnixWare 7 was sold as a "best of breed" UNIX OS combining UnixWare 2 and OpenServer 5 and was based on System V Release 5. UnixWare 7.1.2 was branded OpenUNIX 8, but later releases returned to the UnixWare 7.1.x name and version numbering. - SCO OpenServerSCO OpenServerSCO OpenServer, previously SCO UNIX and SCO Open Desktop , is, misleadingly, a closed source version of the Unix computer operating system developed by Santa Cruz Operation and now maintained by the SCO Group....
, another UNIX operating system, which was originally developed by The Santa Cruz Operation. SCO OpenServer 5 was a descendant of SCO UNIX, which is in turn a descendent of XENIXXenixXenix is a version of the Unix operating system, licensed to Microsoft from AT&T in the late 1970s. The Santa Cruz Operation later acquired exclusive rights to the software, and eventually superseded it with SCO UNIX ....
. OpenServer 6 is, in fact, an OpenServer compatibility environment running on a modern SVR5 based UNIX kernel. - SmallfootSmallfootSmallfoot is the name of both a Rapid application development toolkit and an embedded operating system designed and released by Caldera Systems/The SCO Group in both Unix and Linux formats. Created for use in embedded environments such as point of sale systems and gaming, the toolkits are used to...
, an operating system and GUI created specifically for point of salePoint of salePoint of sale or checkout is the location where a transaction occurs...
applications. - SCOx Web Services Substrate, a web services-based framework for modernizing legacy applications.
- WebFace, a development environment for rich-UI browser-based Internet applications.
- SCOoffice Server, an e-mailE-mailElectronic mail, commonly known as email or e-mail, is a method of exchanging digital messages from an author to one or more recipients. Modern email operates across the Internet or other computer networks. Some early email systems required that the author and the recipient both be online at the...
and collaboration solution, based on a mixture of open-source and closed-source software. - In late 2004, SCO announced the launch of the SCO Marketplace Initiative, in which it offers pay-per-project development opportunities.
- In early 2006, SCO publicly released Me, Inc, a mobile services platform.
SCO-Linux lawsuits and controversies
The SCO Group was, in 2004, involved in a dispute with various Linux vendors and users. In this campaign SCO "announced that Linux contained SCO's UNIX System V source code and that Linux was an unauthorized derivative of UNIX". Although many are skeptical about their claims, SCO initiated a series of lawsuits and claims that so far have not been upheld by the courts. Thus far the impact on both Linux and Unix has been minimal. While making numerous public assertions that Linux infringes upon their copyrightCopyright
Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
s, the lawsuits themselves concern contractual issues which are tangential to the issue of whether or not Linux infringes any copyrights. Further complicating the issue is the legitimacy of SCO claims concerning the ownership of System V Release 4.0 (SVR4) Unix copyrights. The success or failure of the claims will also have a profound effect on the financial future of The SCO Group, itself. SCO has, to date, made little headway in this dispute. In particular, in February 2005, Judge Dale Kimball, the judge in the SCO v. IBM
SCO v. IBM
SCO v. IBM is a civil lawsuit in the United States District Court of Utah. The SCO Group asserted that there are legal uncertainties regarding the use of the Linux operating system due to alleged violations of IBM's Unix licenses in the development of Linux code at IBM.-Summary:On March 6, 2003,...
case has stated:
On August 10, 2007, Judge Kimball, hearing the SCO v. Novell
SCO v. Novell
SCO v. Novell was a United States lawsuit in which the The SCO Group claimed ownership of the source code for the Unix operating system, including portions of Linux...
case, ruled that "...the court concludes that Novell is the owner of the UNIX and UnixWare Copyrights". Novell was awarded summary judgments on a number of claims, and a number of SCO claims were denied. SCO was instructed to account for and pass to Novell an appropriate portion of income relating to SCOSource licences to Sun Microsystems
Sun Microsystems
Sun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982...
and Microsoft. A number of matters are not disposed of by Judge Kimball's ruling, and the outcome of these are still pending.
On August 24, 2009, the 10th Circuit Court of Appeals issued its findings on SCO's appeal of the 2007 summary judgment. It reversed Judge Kimball's summary judgment rulings on ownership of UNIX and UnixWare copyrights, SCO’s claim seeking specific performance, the scope of Novell’s rights under Section 4.16 of the APA, and the application of the covenant of good faith and fair dealing to Novell’s rights under Section 4.16 of the APA. It upheld Kimball's ruling on royalties due Novell. The reversed judgments were remanded to trial in Utah Federal court.
On March 30, 2010 a federal jury found unanimously that the copyrights to Unix and UnixWare did not transfer to SCO. Then on June 10, Judge Stewart granted all remaining claims of Novell, and denied all claims of SCO, closing the case.
The SCO website now gives details of a new appeal against Novell, Inc, dated September 9, 2010 and presumably lodged with the United States Court of Appeals.
List of recent SCO lawsuits
- SCO v. IBMSCO v. IBMSCO v. IBM is a civil lawsuit in the United States District Court of Utah. The SCO Group asserted that there are legal uncertainties regarding the use of the Linux operating system due to alleged violations of IBM's Unix licenses in the development of Linux code at IBM.-Summary:On March 6, 2003,...
(The SCO Group, Inc. vs. International Business Machines, Inc., case number 2:03cv0294, United States District Court for the District of UtahUnited States District Court for the District of UtahThe United States District Court for the District of Utah is the Federal district court whose jurisdiction is the state of Utah...
) - Red Hat v. SCORed Hat v. SCOThe Red Hat v. SCO lawsuit - Red Hat filed suit against The SCO Group on August 4, 2003. Red Hat is asking for a permanent injunction against SCO's Linux campaign and a number of declaratory judgments that Red Hat has not violated SCO's copyrights....
- SCO v. NovellSCO v. NovellSCO v. Novell was a United States lawsuit in which the The SCO Group claimed ownership of the source code for the Unix operating system, including portions of Linux...
- SCO v. AutoZone
- SCO v. DaimlerChryslerSCO v. DaimlerChryslerThe SCO Group v. DaimlerChrysler was a lawsuit filed in the United States, in the state of Michigan. In December 2003, SCO sent a number of letters to Unix licensees. In these letters, SCO demanded that the licensees certify certain things regarding their usage of Linux. DaimlerChrysler, a former...
2002
On June 28, 2002 Darl McBride became the CEO of SCO; soon thereafter the company pursued litigation against IBM and Linux. McBride accused Linux of containing "line-by-line" copies of SCO's proprietary source code.2004
Dr. Randall Davis (MIT) files his second declaration on behalf of IBM.In it, he describes his examination of SCO's claims of infringement, using both the "COMPARATOR" and "SIM" tools.
He concluded that, "Despite an extensive review, I could find no source code in any of the IBM Code [including AIX, Dynix, Linux, or JFS] that incorporates any portion of the source code contained in the Unix System V Code or is in any other manner similar to such source code. Accordingly, the IBM Code cannot be said, in my opinion, to be a modification or a derivative work based on Unix System V Code."
Groklaw - Dr. Randall Davis's 2nd Declaration - I Found No Identical or Similar Code
2005
On February 17 the SCO Group issued a press release that stated their stock may soon be delisted from the NASDAQ stock exchangeNASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
for failing to issue an annual 10-K
Form 10-K
A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission , that gives a comprehensive summary of a public company's performance...
report in a timely manner as required by U.S. Securities and Exchange Commission regulations. In late April 2005, after complying with the filing requirements, the NASDAQ switched trading of the SCO Group from "SCOXE" (which denotes a listing which may be delisted soon) back to their original "SCOX" stock symbol.
On June 20, expert Brian W. Kernighan filed a declaration on behalf of IBM. He testified that he had performed an analysis of SCO's specific claims and that there was no similarity between the portions of Linux identified by SCO and the allegedly copyrighted works.
On July 1, federal Judge Dale A. Kimball denied The SCO Group's motion to amend their claim against IBM yet another time (a third amended complaint) and include new claims regarding Monterey
Project Monterey
Project Monterey was an attempt to build a single Unix operating system that ran across a variety of 32-bit and 64-bit platforms, as well as supporting multi-processing...
on the PowerPC
PowerPC
PowerPC is a RISC architecture created by the 1991 Apple–IBM–Motorola alliance, known as AIM...
architecture. In the same decision, the five-week jury trial date was set for February 2007.
On July 14, Groklaw
Groklaw
Groklaw is an award-winning website covering legal news of interest to the free and open source software community. Started as a law blog on May 16, 2003 by paralegal Pamela Jones at Radio UserLand, it has covered issues such as the SCO-Linux lawsuits, the EU anti-trust case against Microsoft, and...
obtained an email from Michael Davidson to SCO Group senior vice president Reginald Broughton sent on August 13, 2002. In it, Davidson describes The Santa Cruz Operation's own investigation into whether or not Linux
Linux
Linux is a Unix-like computer operating system assembled under the model of free and open source software development and distribution. The defining component of any Linux system is the Linux kernel, an operating system kernel first released October 5, 1991 by Linus Torvalds...
contained proprietary UNIX
Unix
Unix is a multitasking, multi-user computer operating system originally developed in 1969 by a group of AT&T employees at Bell Labs, including Ken Thompson, Dennis Ritchie, Brian Kernighan, Douglas McIlroy, and Joe Ossanna...
source code
Source code
In computer science, source code is text written using the format and syntax of the programming language that it is being written in. Such a language is specially designed to facilitate the work of computer programmers, who specify the actions to be performed by a computer mostly by writing source...
. "At the end, we had found absolutely nothing, i.e., no evidence of any copyright infringement whatsoever," Davidson concluded. At which time SCO presented as evidence an e-mail from a Robert Swartz, a consultant hired by SCO to compare UNIX and Linux source files, that copyright infringement could exist.
2006
On November 29 and December 1, two critical decisions were released. In the first, Judge Dale A. Kimball affirmed Magistrate Judge Brooke Wells' June 28, 2006 Order striking most of SCO's claimed evidence of code misuse as being too vague to be worth adjudicating. In the second, Wells ruled from the bench in accepting IBM's motion to limit SCO's claims to those supported by evidence submitted by December 22, 2005 and not rejected by the court. SCO stock subsequently lost roughly 50% of its value in three days of exceptionally heavy trading.2007
On April 23, SCO received a second delisting notice from NASDAQ. This was triggered by the active bid priceBid price
A bid price is the highest price that a buyer is willing to pay for a good. It is usually referred to simply as the "bid."In bid and ask, the bid price stands in contrast to the ask price or "offer", and the difference between the two is called the bid/ask spread.An unsolicited bid or purchase...
of company stock, at closing, being less than $1 for 30 consecutive trading days. To regain compliance with continued listing requirements, the company must maintain a closing bid price greater than or equal to $1 for at least 10 trading days. The stock regained compliance on June 12, 2007.
On August 10, Judge Dale Kimball issued a ruling in SCO v. Novell
SCO v. Novell
SCO v. Novell was a United States lawsuit in which the The SCO Group claimed ownership of the source code for the Unix operating system, including portions of Linux...
which found that "Novell is the owner of the UNIX and UnixWare copyrights" and SCO to be in breach of its SVRX licensing agreement with Novell. The ruling also cast further doubt on SCO's claims that IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
and Linux
Linux
Linux is a Unix-like computer operating system assembled under the model of free and open source software development and distribution. The defining component of any Linux system is the Linux kernel, an operating system kernel first released October 5, 1991 by Linus Torvalds...
infringe against any SCO source code, and upheld Novell's right to force SCO to waive its copyright claims against IBM and Sequent
Sequent Computer Systems
Sequent Computer Systems, or Sequent, was a computer company that designed and manufactured multiprocessing computer systems. They were among the pioneers in high-performance symmetric multiprocessing open systems, innovating in both hardware and software Sequent Computer Systems, or Sequent, was...
. In response, on Monday, August 13, SCO stock fell over 70%, to 44 cents a share.
The trial in SCO v. Novell
SCO v. Novell
SCO v. Novell was a United States lawsuit in which the The SCO Group claimed ownership of the source code for the Unix operating system, including portions of Linux...
was due to start on Monday September 17, in order to determine how much money SCO owed Novell. On September 14, SCO Group filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
. As a result of the petition for bankruptcy, all pending litigation was automatically stayed as per U.S.C.
United States Code
The Code of Laws of the United States of America is a compilation and codification of the general and permanent federal laws of the United States...
§ 362. On September 27, NASDAQ issued SCO a notice of potential delisting, under their discretionary authority. SCO appealed this decision, but on September 19, it received another delisting warning for an insufficient bid price. On October 23, SCO announced that they had reached an agreement with York Capital Management. Pending Bankruptcy Court approval, York was to purchase most of SCO's business for a total of approximately $36 million, including financing. After Novell, IBM, and the United States Trustee objected to the deal, SCO withdrew the proposed sale on November 20, without prejudice. SCO was delisted from NASDAQ on December 27, due to its bankruptcy filing.
2008
On February 14, 2008, SCO filed a memorandum of understandingMemorandum of understanding
A memorandum of understanding is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in...
between it and Stephen Norris Capital Partners
Stephen Norris Capital Partners
Stephen Norris Capital Partners is a private equity firm that focus on co-investing alongside other private equity firms in leveraged buyout transactions...
(SNCP). Under the proposed deal, subject to Bankruptcy Court confirmation, SNCP would pay SCO up to $100 million (including a $95 million loan at LIBOR + 17 percentage points). If the restructuring had been confirmed, SCO would have exited Chapter 11, gone private, and repaid all creditors (including Novell and IBM) in full. SNCP would then have received a controlling interest in SCO. A joint press release stated that SNCP's business plans for SCO include both "unveiling new product lines" and "see[ing] SCO's legal claims through to their full conclusion." The proposal was abandoned two months later.
2009
On January 12, 2009, SCO filed a new reorganization plan with the bankruptcy court.On May 5, 2009, the U.S. Trustee's office, through its counsel Joseph J. McMahon, Jr., filed a motion in the SCO bankruptcy proceeding to convert the SCO's Chapter 11 to a liquidation under Chapter 7
Chapter 7, Title 11, United States Code
Chapter 7 of the Title 11 of the United States Code governs the process of liquidation under the bankruptcy laws of the United States...
.
On June 15, 2009, Darl McBride announced during the liquidation
Liquidation
In law, liquidation is the process by which a company is brought to an end, and the assets and property of the company redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation...
hearing that they had come to an agreement with Gulf Capital Partners for funding to pay off the debts and continue its litigation against IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
and others, through the sale of its UNIX division.
On August 5, 2009, Judge Gross ordered the appointment of a Trustee according to Chapter 11
by the U.S. Trustee's office.
On August 24, 2009, the 10th Circuit Court of Appeals issued its findings on the appeal of the 2007 summary judgment. It affirmed the judgment on royalties due, while reversing the summary judgments on ownership of UNIX and UnixWare copyrights, SCO’s claim seeking specific performance, the scope of Novell’s rights under Section 4.16 of the APA, and the application of the covenant of good faith and fair dealing to Novell’s rights under Section 4.16 of the APA. The reversed judgments were remanded to trial.
On August 25, 2009, Edward Norman Cahn
Edward Norman Cahn
Edward Norman Cahn is a former United States federal judge.Cahn was born in Allentown, Pennsylvania. He attended Lehigh University, where he played basketball and set a record by becoming the first Lehigh student to score 1,000 points; he graduated magna cum laude with a B.A. in 1955. Cahn...
, was named as Chapter 11 trustee for SCO's cases.
Following this, on October 14, 2009, the SCO Group announced that the company has eliminated the Chief Executive Officer and President positions, consequently terminating Darl McBride's position, and that the remaining members of the current management team, including Chief Operating Officer, Jeff Hunsaker, Chief Financial Officer, Ken Nielsen and General Counsel, Ryan Tibbitts, will continue to work closely with the Chapter 11 trustee and his advisors.
On October 14, 2009, McBride was terminated as Chief Executive Officer and President of The SCO Group. Jeff Hunsaker left SCO on November 13, 2009. SCO stated that they intended to hire him temporarily as a consultant.
2010
In March, the SCO Group's case against Novell for slander of title was heard by a jury in Utah, which unanimously ruled in favor of Novell. The jury determined that the Unix copyrights never transferred to SCO. A lawyer for SCO responded that the court still needed to rule on whether Novell had the right to waive SCO's claims against IBM in a related suit and whether Novell was obligated by the sales contract to transfer the copyright to SCO.In June, Judge Ted Stewart decided that SCO was obligated to recognize Novell's waiver of SCO’s purported claims against IBM and Sequent. The Court also judged in favor of Novell and against SCO on SCO’s claim for breach of the implied covenant of good faith and fair dealing, ordering the case to be closed.
On September 16, the SCO Group announced that it was “ pursuing a sale of substantially all of the assets of its UNIX(R) business, including certain UNIX system V software products and related services”, and requested that interested parties show “ financial wherewithal to close on the transaction on or before October 5, 2010 at 5:00 p.m.”, but as of December 2010, no announcement of any actual sale had been made.
Since May 2010, SCO Group has repeatedly cancelled its Bankruptcy hearings—as of December 2010, their next scheduled hearing is January 18, 2011. It has also filed an appeal of SCO v. Novell, which is scheduled to be heard on January 20, 2011.
2011
On 26 January 2011, the SCO Group announced that UnXis Inc. has been selected to purchase their softwareproduct business.
The terms of sale are to be submitted to the bankruptcy court, where SCO’s Chapter 11 case is also pending, for approval on 2 March 2011 (the original date of the hearing has been postponed by two weeks).
On 5 April 2011, the U.S. Securities and Exchange Commission temporarily halted trading on SCO stock in response to SCO's failure to make required periodic filing for over two years.
On 11 April 2011, UnXis completed the purchase.
SCO filed amendments to their certificates of incorporation on 15 April 2011. The SCO Group, Inc. was renamed TSG Group, Inc., and SCO Operations, Inc. became TSG Operations, Inc.
On 30 August 2011, the United States Court of Appeals for the Tenth Circuit
United States Court of Appeals for the Tenth Circuit
The United States Court of Appeals for the Tenth Circuit is a federal court with appellate jurisdiction over the district courts in the following districts:* District of Colorado* District of Kansas...
affirmed SCO's loss to Novell in the second jury/bench trial. SCO's appellate brief had argued that there were evidentiary errors and other issues at trial. The affirmed verdict held that Novell did not transfer the UNIX copyrights to SCO in the amended asset purchase agreement, and that Novell has the right to waive certain alleged license violations.
External links
- The SCO Group, Inc.—official site
- SCO intellectual property site
- UnXis
- Groklaw: News and Commentary about SCO lawsuits and Other Related Legal Information
- SCOX Bankruptcy information and documents