Page Two

By Steven Vaughan-Nichols  |  Posted 2004-12-22 Print this article Print

In regard to SCOs lawsuits against IBM and other companies concerning Unix IP issues, McBride said, "Litigation efforts have centered around discovery and motion practice in the various cases." In the one concrete new legal development, McBride indicated that SCO would no longer be pursuing its case against DaimlerChrysler AG at this time. In July, Judge Rae Lee Chabot of Oakland County Circuit Court in Michigan had dismissed SCOs claims, except for the issue of DaimlerChrysler not filing its response to SCO in a timely manner.

"After the court dismissed the certification claim, we determined that it would not be a wise use of resources to pursue the timeliness claim alone. Therefore, we moved to stay that claim pending further clarification of the issues on the IBM case," McBride said.

SCO is staying the course with its other legal actions with AutoZone Inc., IBM, Novell Inc. and Red Hat Inc. In no small part, this is because SCO has a new financial relationship with its lawyers.

The new agreement with Boies Schiller & Flexner "caps our legal fees and ensures we have their representation through the conclusion of the IBM litigation, including the appeal process," said Bert Youngs, chief financial officer of SCO.

"The revised fee agreement limits the overall cash costs of the legal fees associated with our litigation from September 1, 2004, to a total of 31 million, other than any contingency fees. In return for this new fee arrangement, weve agreed to increase the contingency associated with any award on a scaled basis from 20 to 33 percent, depending on the overall size of the judgment or settlement," Young said.

"We cant overstate the importance of our finalized agreement with our legal team," McBride added.

During the earnings call, McBride did not address the issues of a major executive shakeup at the Canopy Group, SCOs parent company and majority stock holder. Both Canopy Chief Executive Ralph Yarro and CFO Darcy Mott have left their positions.

Yarro has been replaced by Bill Mustard. Mustard comes from Smooth Engine, a senior management consulting company. A replacement for Mott has not been named.

According to Blake Stowell, SCOs communications director, however, Yarro is still SCOs chairman and Mott remains on SCOs board.

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Steven J. Vaughan-Nichols is editor at large for Ziff Davis Enterprise. Prior to becoming a technology journalist, Vaughan-Nichols worked at NASA and the Department of Defense on numerous major technological projects. Since then, he's focused on covering the technology and business issues that make a real difference to the people in the industry.

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