Weakened SCO vows to fight on

Group remains confident of seeing lawsuits through to fruition

Peter Williams, vnunet.com 09 Jun 2004

The SCO Group has insisted that it still has the stomach - and the cash - to pursue its open source related lawsuits.

The company reached a compromise last week with its main venture capital backer, BayStar Capital, which had sought to redeem $40m in preferred shares.

SCO has agreed to pay BayStar $13m in cash and 2.1 million shares of common stock, and BayStar has indicated that the disputed shares will be retired rather than redeemed.

And on the eve of the company's second-quarter results announcement, Marc Modersitzki, SCO's PR and marketing manager, told vnunet.com that SCO is ready to fight on.

"Chief executive Darl McBride is going to address the cash position tomorrow," said Modersitzki.

"We have enough to see our lawsuits through to fruition. We are still very motivated. Some of the legal battles will be addressed tomorrow. We still feel very confident about our position."

The legal battle with IBM is currently is in the discovery phase, during which both sides have to hand over information requested by the other party. IBM wants the case dismissed on the ground that SCO has not provided any supporting evidence.

But Modersitzki said: "We are confident and happy with the things we have turned over [to the court] already. IBM says we have not turned anything over, but that is not the case. We have."

In addition to last week's request SCO had also asked for a delay to the scheduled trial date from April 2005 to September 2005, and for IBM's counterclaims against SCO to be split into a separate case.

These motions were heard on Tuesday but no date has been set for the judge's ruling.

Cases involving Novell and Red Hat are waiting on the judge's rulings on motions to dismiss (by Red Hat and Novell) to relocate to Utah (by SCO vs Novell) and an SCO request to wait until its IBM case is resolved (vs Red Hat).

DaimlerChrysler and Autozone are being sued by SCO for alleged violations of Unix agreements and Unix copyrights respectively.

AutoZone has requested that its case await the outcome of the IBM case while SCO, ironically, has opposed this. DaimlerChrysler has asked for SCO's claim to be thrown out.

Sara Ellacott, technology group partner at law firm Nabarro Nathanson, said: "SCO started off with a lot of publicity. Along the way it has dropped, amended or had its charges questioned by IBM, and its hope for cheap wins up front have not materialised."

And Philip Carnelley, software research director at Ovum, told vnunet.com. "The venture capital investors gambled on SCO coming good on the licensing regime rather than the ongoing business, and it seems they are trying to get their money back."

See also: