I've been thinking about something for a few days now. It's about the latest Novell-Microsoft deal that was announced on August 20, where Microsoft agreed to buy another $100 million worth of vouchers from Novell. I was wondering: how come two public companies can make a deal that seems to me to be material and yet keep pieces of the deal secret?

We never did get all the details about the original deal from November of 2006 (Novell's 8K). And now there's this new one, which so far is only described in broad strokes. I wonder if we will be kept in the dark about some of its terms too? Isn't there supposed to be a filing within 10 days or so? How is the public to know whether to invest in either company, if we don't know what the deal's terms are with specificity? Are investors supposed to just guess?

It turns out that Psystar, the company being sued by Apple, is owned by two brothers, ages 22 and 24, according to a story in the Miami Herald, now on Free Republic's site:Attorneys for Apple are accusing Psystar Corp., owned by Rudy and Robert Pedraza, of copyright and trademark infringement and breach of contract for building and selling "cloned" computers that run on Apple's Leopard operating system....

Rudy and Robert Pedraza, 24 and 22, grew up tinkering with computers and helping out at their parents' networking and IT business.... "Apple had to sue," attorney Randy Friedberg said Monday from Olshan Law in New York, where he handles intellectual property and technology matters. "They're very protective of their IP and their brand." Friedberg called the lawsuit "far-reaching" because of its demand to recall all computers Psystar has sold, which Apple estimates is in the thousands. "I think Apple's goal was to say: 'Don't screw with us,'" Friedberg said. "And I do believe they'll end up putting these kids out of business."

Someone sent me a link to a comment on the Internet alleging a supposed connection between Psystar and a securities fraud case, but after hours of digging, I believe I can demonstrate that it isn't the same folks. Let me show you what I found.

There is an unexpected reaction from major government IT agencies in six countries condemning the ISO/IEC refusal to act on the four appeals against OOXML, which they say "reflects poorly" on ISO/IEC. They have signed and sent an open letter to ISO, which I'll show you in full. The countries represented are South Africa, Brazil, Venezuela, Ecuador, Paraguay, and Cuba. Here's a paragraph to give you a taste:Given the organisation's inability to follow its own rules we are no longer confident that ISO/IEC will be capable of transforming itself into the open and vendor-neutral standards setting organisation which is such an urgent requirement. What is now clear is that we will have to, albeit reluctantly, re-evaluate our assessment of ISO/IEC, particularly in its relevance to our various national government interoperability frameworks. Whereas in the past it has been assumed that an ISO/IEC standard should automatically be considered for use within government, clearly this position no longer stands.

How in the world can ISO/IEC claim that the OOXML approval has not been damaging to ISO/IEC's reputation now? Have you ever heard of such a thing?

I thought you might like to read a hot-off-the-presses appellate court decision [PDF] in a case from Washington State, McKee (Michael) v. AT&T Corp., where the court just found certain clauses in AT&T's EULA "unconscionable". I have it as text for you.

But what does that mean? This ruling will help you find out. The ruling explains what the term means. And there's a section on choice of law, too, which some of you were asking about the other day, so you can see how the court chose Washington State, despite the AT&T argument that it should be New York.

Now that we've decided to follow the Apple v. Psystar case, I was particularly interested in sharing it with you, because this ruling will help you understand one of the affirmative defenses Psystar has raised, claiming that Apple's terms are both substantively and procedurally unconscionable. It's their 13th affirmative defense.

I also want you to see why I always tell you that it's in the court system that the little guy at least has a chance to get a fair shake, no matter how huge and powerful the other side might be.

Novell filed today, as per the deadline, two documents, one an unopposed filing regarding interest due Novell by SCO -- SCO has agreed to the sum of $918,122 in prejudgment interest and $489 per day until the final judgment is entered.

That could be a while. The second filing informs the court that Novell still believes that a final judgment is premature, since the arbitration is not yet finished. It reminds the court that those claims were automatically stayed by the Bankruptcy Court, and that while SUSE disputed that, SCO successfully argued that the automatic stay should include the arbitration. When the Bankruptcy Court partially lifted the bankruptcy stay to allow Novell to drag SCO back to Utah on the two issues we saw at trial (the amount owed, and whether SCO had the right to enter into SCOsource licenses), the claims in arbitration remained under stay, so both the Utah court and the Bankruptcy Court stayed the arbitration claims, so Novell's position is that this prevents entry of final judgment at the moment.

Novell says it understands SCO may want to file a motion "advocating some particular disposition of those claims." Novell says if they do, as Novell expects SCO will, Novell will respond at that time.

Here it is, fresh off the docket, Psystar's Answer with Affirmative Defenses with Counterclaims [PDF] to Apple's complaint. We'll read it together. And I'll work on a text for you, so we can all discuss it in detail.

Update: I have the first half done as text. You can be reading it as I finish, and I'll tell you a couple of things to explain what I'm seeing.

First, there are styles of lawyering. Some lawyers, when responding to a complaint, deny everything, like Jimmy Cagney in a gangster movie being interrogated by the coppers. They don't admit nuttin'. Lawyers in that school, if there is an allegation that states that the defendant is a human, will respond with something like, "The phrase human is undefined and vague and on that basis defendant denies the allegation." This law firm is apparently in that category.

Second, my suspicions have been further aroused that this litigation is perhaps more gunfire aimed at FOSS, like the SCO litigation and the Jacobsen case and the Wallace antiGPL lawsuit, all strange and all using a surrogate who either sues on its own initiative or who seems to deliberately behave in a way to ensure litigation, followed by attacks on one of more FOSS license. Psystar is raising as defenses the "Apple Public Source License" and "other open source licenses" and the first sale doctrine, a topic dear to the heart of anti-GPL trolls. I think it's time to research who the Psystar people are and play Where's Waldo, just in case.

Third, I'm glad we have a trademark/trade dress case to follow. Why? Because as it plays out, I think you'll see why trademark law matters and how you can proactively defend your project from any barracudas out there.

SCO has filed a motion [PDF], titled Debtor's Motion for (1) a Determination that Stock Options Granted to Executives Were Awarded in the Ordinary Court of Debtors' Business and (2) Continuing Authority to Grant Ordinary Course Stock Options. SCO says it consulted with the US Trustee's Office and it says it takes no position on this motion. But SCO says they are filing the motion "in an abundance of caution." And it has filed a motion [PDF] to be able to file evidence and give testimony about the stock plan under seal.

Well. I would want that too, I'm thinking, all things considered. It's comforting to know there are still people on earth who still want SCO stock. Relax. Just joking around.

The first motion has to do with stock options granted under the SCO 2004 Omnibus Stock Incentive Plan, attached as Exhibit A [PDF], options that SCO granted on August 26, 2008. That was Tuesday. So they granted them and now they are asking the court to say it's OK and to let them do it again in the future.

The plan "is designed to promote the interests of SCO and its stockholders by incentivizing and rewarding employees who make a long-term contribution to the success of the company," SCO says. But trust me, if you want to know just how incentivized the SCO executives have been, you probably want to read their 2008 Proxy Statement, filed with the SEC on March 5, 2008. Looking at both documents together brings them both into a more nuanced context.

Do you remember Darl McBride testifying at trial in SCO v. Novell in April that if you wanted to get Unix source code, the only way to get it was to license UnixWare and that UnixWare was just the latest version of Unix? The court believed that story, so for the sake of history and truth, then, here is a Novell SEC 10K filing from 1994, when Novell was the place you went to in order to license UnixWare and Unix System V. They sold both UnixWare and Unix source code as two separate products.

I've been getting email asking if I'll be covering the newly filed Apple v. Psystar litigation. Here's Apple's complaint [PDF]. I must tell you frankly that I was in the "a pox on both their houses" category, so I thought I probably wouldn't do so in depth.

But then I noticed media reports that Psystar has announced that it will be filing antitrust (!) counterclaims. Antitrust? I couldn't help but reflect -- and I confess it was my first reaction -- that it's so odd that all Microsoft's competitors end up dealing with unexpected allegations, sometimes from small companies, against them in court or before regulatory bodies that just happen to threaten their viability in the marketplace.

Remember Google was accused, and cleared, of an antitrust allegation in the US and before the EU Commission? And IBM was accused of copyright infringement in connection with Linux by SCO, as laboriously chronicled right here on Groklaw. And now Apple has to deal with litigation counterclaims that, so far, seem to me to be dubious at best from a company that just suddenly showed up last year doing things that a first-year law student, or even a mere paralegal like myself, would assume were going to get them royally sued into nonexistence. Now there are announced counterclaims that just happen to go to the heart of Apple's business.

The parties stipulated to another extension on the deadline for Novell to file a brief describing what pre-judgment interest it wants from SCO on the amount ordered by the Utah District Court on July 16. The new deadline is August 29. Just a brief note in case you were wondering why there was no filing on the 22nd

Also, I was going through some older materials, and I found a color-coded comparative chart [PDF] that a volunteer made for us long ago. It's a comparison of a July 8, 2003 S3 with an October 14, 2003 amendment, an S-3/A. There was a further amendment, an S-3/A filed on October 23, 2003 as well. It's fascinating to watch the SCO story morph just in these three versions, particularly now, when we can compare all three with what SCO testified to at trial.

When I read that Radio New Zealand had just decided to start adding Ogg Vorbis files to their online offerings, I was curious. How do folks make such decisions? I surely wish everyone would do what Radio New Zealand has just done.

So I asked Richard Hulse of Radio New Zealand, the station's media manager, to tell me how they came to decide to add Ogg Vorbis to their collection of interviews and broadcasts, already offered as MP3s and in Windows Media Audio. His answers are instructive, and you may find it helpful to note his suggestions on how to effectively request other sites to offer Ogg Vorbis files. And if any of you wish to respond to his requests for help with a how-to, please feel free to lend a hand to make this a success.

KDE has decided to offer its code contributors an option to use a Fiduciary Licence Agreement that it worked out with FSFE's Freedom Task Force. It's a recommendation, not a requirement. It's a copyright assignment vehicle designed to ensure legal maintainability of the project. And I hear that the response has been very positive already.

At first I was going to put the FSFE press release in News Picks, but I consider this such a wise legal decision on KDE's part, because -- as the press release phrases it, it "enables projects to ensure their legal maintainability, including important issues such as preserving the ability to re-license and certainty to have sufficient rights to enforce licences in court" -- that I am putting it here, so you will consider it too for your project, especially if yours is an international project. You may recall Groklaw's Sean Daly interviewed Shane Coughlan, who leads the Freedom Task Force project, when it was first announced in early 2007. If you have questions, here's the Freedom Task Force contact page. Notice in the press release that the FLA template was used to come up with an FLA for KDE in particular, and you can do something similar for your project, with the Freedom Task Force's help.

I also wanted to mention that FSFE has a Legal and Technical Network now:The Freedom Task Force coordinates a European Legal and Technical Network. Each participant is referred to as a 'delegate' of the respective network. Membership is by invitation only and if you are interested in participating you can contact us.

Our goal is to strengthen the legal foundation of Free Software through building connections between professionals and researchers active on the continent. The network currently has over 50 legal experts, over 30 technical experts and covers sixteen European countries. It also maintains contacts in Canada, the USA, South Korea, Singapore and Taiwan.

Some network delegates are explicitly recommended by FSFE. To be explicitly recommended the delegate must be approved by the governing council of FSFE.

I think, after thinking a lot about Jacobsen v. Katzer, that the US needs something similar, a place where you can go to find attorneys who know something about FOSS and understand how to protect your interests without doing damage to the FOSS ecosystem at large.

More bills, bills, bills in the bankruptcy, but it's winding down. But SCO is winding up. Guess where Me Inc Software, the subsidiary, is located? In Utah, or Delaware, or anyplace that the US bankruptcy court in Delaware or the creditors can get at the profits, which SCO executives have described as an anticipated "river of revenue"? Nay, m'lords. In Hong Kong. We learn from the bills that there is a Me Inc Software foreign subsidiary now in China, filing profits tax forms.

So, what do you think? Can Novell get its money from a Hong Kong foreign subsidiary? I'm sure we all agree that SCO would never try to stiff anyone, so the fact that they are setting this up just before the bankruptcy court is about to decide on the question of how Novell will get the money the Utah court decided SCO owes them must be entirely coincidental. I feel a song coming on: Ah, sweet mystery of life
At last I've found you...
T'is love and love alone that can repay

I hope Novell likes music, because methinks it will never see that $3 million. The other creditors? Do they still hope? Like a raisin in the sun. Hark! There is one, buried in the bills, asking about the status of the case. Dream on, my friend! Lie back, try to relax, while I tell you about Hong Kong.

SCO was taken to court again in Germany, by one of the companies that got an injunction years ago, Heise is reporting, and now it must pay a fine to the company, Thinking Objects Software GmbH. Three companies took SCO Germany to court back then, and this is one of the three. I'll show you a computer translation first of the headline in Heise. It is perfection: SCO Group Germany must check software updates of the nut/mother company message to read out

Sounds like a job for ELIZA. I'll try to explain what I understand the article to be saying, but if you have a better translation, please provide it.

SCO was enjoined from making certain claims in Germany, and it signed an agreement in 2003 not to say them there, because its alternate choice was to have to prove them immediately, so it chose silence. As a result, SCO can't say in Germany that Linux violates SCO's IP or that end users could be liable for violations of SCO's intellectual property or that Linux is an unauthorized derivative of UNIX. Unless it can prove it. Good luck with that. SCO hasn't been successful proving that anywhere, so it can't say that in Germany. But the US website makes such claims, which were apparently shown in Germany too. Naughty, naughty.

It seems that SCO pled the "we didn't see what the US was doing when it updated the page" defense, but it was told that it used that excuse once before, so now it must pay a fine to the complaining company. Here's an incident that happened in 2007, to refresh your memory. And here's a 2003 offense, for which SCO was ordered to pay a 10,000 EU fine. Are they incorrigible? Well. Let's leave that to God. However, the Heise report indicates that they are at least repeat offenders.

Most of the attorneys who are listed as being involved in SCO v. AutoZone have been told that by the court they are in violation of Special Order 109, which is a requirement to participate in the electronic filing system. They are instructed to go to the US District Court for the District of Nevada website and sign up.

It sounds quite alarming, the way it's worded, but trust me, they don't drag them out at dawn and shoot them for this or disbar anyone. It's just the wording of the notice, which is standard. You can find Special Order 109 [PDF], In re: AUTHORIZATION FOR CONVERSION TO CASE MANAGEMENT/ELECTRONIC CASE FILING, here. It's local to Nevada, but it's part of the federal court system switch to digitalization. The Clerk of the Court is responsible to keep the official record, and so there has to be a way to identify when an attorney is who he says, when a document is filed. So this is what it refers to, that they need passwords and such. It also represents their consent to being served electronically.

Kurt Opsahl of EFF has just announced that the restraining order on the MIT students has been lifted:Today, Judge George O'Toole lifted the gag order on three MIT students who were sued by the Massachusetts Bay Transportation Authority for discovering a security vulnerability in the MBTA's fare payment system. The Court found that the MBTA was not likely to prevail on the merits of its claim under the federal Computer Fraud and Abuse Act. MBTA had argued that the CFAA, which prohibits the transmission of a program that causes damage to a computer, also covers "verbal transmission," such as talking to people at conferences. Judge O'Toole, however, looked closely at the statute, and held that the CFAA does not apply to security researchers like the students talking to people. More details to follow.

[Update: The MBTA had sought to convert the temporary restraining order into a preliminary injunction to last for five months, to give them time to fix the vulnerabilities -- here's the motion [PDF] -- and that was denied. It's worth reading, this motion, if only to see why this thing swirled out of logical bounds. One issue is that when the MBTA hears the word hacker, they seem to think it means cracker, and they viewed the DefCon conference as a meeting where people go to learn how to break in to other people's stuff, which naturally panicked them. And they seem to imagine that using Wireshark, which used to be called Ethereal, is "illegal activity", as you can read on page 25. Nor did they understand geek humor. Just a real culture clash, with misunderstandings that led to litigation that now seems to be resolvable, now that the MBTA's attorney says he wants to meet with the students, to learn more about their research findings.]

So the attempt to stretch the Computer Fraud and Abuse Act has failed. Please read the statute for yourself, and ask yourself: do you want talking about computers and security to become a crime punishable by fines and imprisonment and subject to FBI and Secret Service oversight? That's what almost just happened. You can find the documents in MBTA v. Anderson here. If you read the MBTA's complaint, you'll find the allegations of violations of the CFAA on page 12. I think you'll find the MBTA interpretation of the statute shocking ("... the damage constitutes a threat to public health and safety... affects a computer system used by a government entity for national security purposes..."). The research was about getting a ride on a subway for free. In any case, the judge didn't buy it, with respect to the restraining order.

I've been puzzling over something in the ISO press release announcing that the four appeals against OOXML as an ISO standard, from Brazil, India, South Africa and Venezuela, would go no further. In the press release, it said this:According to the ISO/IEC rules, DIS 29500 can now proceed to publication as an ISO/IEC International Standard. This is expected to take place within the next few weeks on completion of final processing of the document, and subject to no further appeals against the decision.

Wait a second. What's that "subject to no further appeals against the decision" part? What rules would those be? When I read the JTC1 Directives, Edition 5, Version 3.0 [PDF], I see in the section on appeals another step you can take if the TMB/SMB decide not to proceed with your appeal, which is what just happened: 11.4 Appeal Against a Decision of the TMB/SMBs

An appeal against a decision of the TMB/SMB shall be submitted to the Secretaries-General with full documentation on all stages of the case.

The Secretaries-General shall refer the appeal together with their comments to the members of the Councils within one month after receipt of the appeal.

The Councils shall make their decision within three months.

So, ask your lawyer, but I read that as saying a denial by the TMB/SMB is *not* necessarily the last word, no matter what the press release said, if an NB wishes to bring the appeal to the next level, which would be to the "Secretaries-General" and "the Council".

Who's that? How does that work? I've done some digging, and here's the joke. Three of the appealing NBs are listed as members of the Council. Again, ask your lawyer, but here's what I've found.

More bankruptcy filings. And there are upbeat chirpings in the air in Utah, with SCO proclaiming its own future brighter than they thought it would be, and you can read all about it in Tom Harvey's article in the Salt Lake Tribune, which calls SCO "the comeback kids". No bias there.

It might be a tad early for that title, methinks. IBM still looms on SCO's horizon, after all. Novell was a sideline. The main event has yet to occur.

SCO doesn't need as much money as they thought they would to give to Novell, so maybe Darl McBride can stay on as CEO after all, we learn. There's a new business plan that sounds like it has to do with calendars online and messaging, and ... well, read about FC Mobile Life, its project with FranklinCovey, for yourselves: That type of transaction is essentially what happens with the FranklinCovey product FC Mobile Life, which provides near-instant communication for scheduling, delegating tasks and sending text, photos and audio, said Jeff Hunsaker, SCO president and COO.

"Our focus here is on collaboration, and it's real time. It's real-time collaboration with people you trust, with a group. We've kind of brought it all together. That's the value we bring here."

FC Mobile Life can work on BlackBerries and phones running Windows Mobile, with iPhone compatibility under development. The system interacts and updates information on a Web browser and smart phone. SCO also is working to integrate Microsoft's Outlook e-mail and calendar into the system.

So that's the plan. The new one. Real time collaboration with people you trust. Hmm. Trust ... People you trust. Hmm. Remember when they used to call Darl McBride "the Linux Killer"? Methinks that's still the real business plan. In his dreams.

SCO keeps changing its story of "infringement", and so over the years, we've tried to track all the twists and turns, comparing their allegations with evidence available on the Internet or in our collections. SCO made it harder when it removed its collection of press releases from its site and from the Internet Archive. I had forgotten all about it, but years ago, before they did that, I had saved their list of older press releases, meaning for us to eventually look at all of them. Then, they disappeared, and I just stumbled across the information again now, and I'd like to share it with you. Even the names of the press releases could be useful. If anyone gets sued at any point, at least they'll know what to ask for in discovery.

I also discovered a wonderful site, Sourcewire that still has tons of Caldera press releases from 2001. Here's one I found there, the announcement about OpenUnix 8. That's the one with LKP, the Linux Kernel Personality. Guess what LKP included? The LKP technology in Open UNIX 8 will include the same GNU tools and libraries built into Caldera OpenLinux(tm), which were developed with close adherence to the specifications of the proposed Linux Standards Base (LSB). Open UNIX 8 will track this developing standard, assuring the highest degree of application compatibility.

Libraries, eh? How fascinating. Isn't this fun? And what a dovetail, in that we just showed you what was included in OpenLinux. I have some more to show you on that in a later article. But do you see how valuable all scraps of information are? You just never know when it will matter in litigation, somewhere, some time.

Here are some more screenshots for you, showing the real Santa Cruz Operation relationship with Linux before the modern day SCO Group began suing the world and its dog. Back in the late 1990s, Santa Cruz had what it called its "Linux strategy". It included both money and support to help Linux succeed.

Our first headline, from 1998, is "SCO Sponsors Linux." Yes, Santa Cruz represented itself at the time as hopping on board the Linux train, which even back then was being used in the corporate environment. At the time, SCO wanted to encourage Linux as an alternative to Microsoft, which at the time was considered its "enemy". In a press release, it talked about its "ongoing strategy to support the Linux and Open Source movements". Let me show you, please, what I found.