Can Microsoft get its $12 million back from SCO?

Can Microsoft get its $12 million back from SCO?

Summary: Microsoft spent an estimated $12 million back in 2003 to "protect" itself against potential violations to the Unix copyright, which SCO claimed it owned. Wonder if the Redmondians are going to try to get their money back, now that a judge has ruled that SCO's claims are invalid....

TOPICS: Microsoft

A judge has ruled that SCO doesn't own the Unix copyright. -- SCO's claim to which was at the crux of its threats against Linux. What does this ruling mean to Microsoft, if anything?

As my blogging colleague Dana Blankenhorn notes, the SCO ruling seemingly has no impact on Microsoft's allegations of patent violations by the Linux and open-source communities.

But industry historians may recall that Microsoft wasn't totally removed from the whole SCO-Unix-copyright matter.

Microsoft played matchmaker back in 2003 when SCO needed money to help fund its lawsuits agains IBM and various other Linux players and customers. Microsoft suggested that hedge fund BayStar Capital invest $50 million in SCO.

Microsoft also backed SCO's play to convince other vendors and customers to license SCO's technology to avoid potential infringement lawsuits. (Maybe that's where Microsoft got its patent-licensing ideas ....)

One of the first companies to snap up two SCO licenses was Microsoft, to the tune of $12 million, according to BusinessWeek. Sun Microsystems and Computer Associates also bought into SCO's plan.

I wonder if Microsoft will attempt to recoup its $12 million, now that SCO's Unix licensing strategy has been exposed as a sham? I asked the Softies for any statements they might want to make, re: the SCO matter. So far, no word back.

Update: Late on August 13, a Microsoft spokesman sent the following reply: "Unfortunately, we won't be commenting on the ruling."

Update No. 2: As Seattle Post-Intelligencer blogger Todd Bishop pointed out, there is some wording in the judge's ruling regarding who should get the royalty payments made by Microsoft (and Sun) to SCO. Bishop says the actual amount Microsoft paid to SCO is $16.75 million. The ruling makes it sound as if anyone is going to get paid back by SCO, it's going to be Novell, not Microsoft.

Topic: Microsoft


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • It's only $12 million

    I would think they'd rather part with the $12 million than set precedent and have to refund Novell (and others) its protection money if it is ever shown that Novell's Linux does not infringe on MS patents.
    Michael Kelly
    • 12 Million?

      They made that back after 2 weeks.
    • Which is only $3 million more than they have ...

      ... and $13 million less than they owe Novell for not turning the license fees over and awaiting the return of their %5 of it as an agent fee from Novell. Novell never authorized the sale of those licenses either.

      Funny it took this long for it to be noticed by any significant number of commentators.
      Still Lynn
  • Why?

    They can make more money than that in an hour.

    Why give the lawyers a percentage?
    • I'd say to stop from forming a habbit

      Tossing 12 million in the fire is a bad habbit to get into. Also they are public company and I'm sure shareholders don't like to see money wasted like this. 12 million is a lot of cash. Sure it's only a fraction of what Microsoft makes but it's still a lot of cash. If you get into the habit of losing millions it does add up and suddenly you find one day you're wondering where the money went.

      I've seen this behavior on a smaller scale and I've seen the problems it causes. I've seen big oil companies wast hundreds of thousands of dollars doing stupid thing. They pull in more than Microsoft does in one day then Microsoft makes in a month.

      The only thing Microsoft has going for them is the shareholders don't seem to be very aware. So they can get away this I'm betting. I don't believe Microsoft pays dividends do they? If they do or did then there would be trouble.
  • Why would they worry over chump change?

    And didn't they get their money's worth with all the problems it caused Linux?
    • Novell should ask for triple damages

      because M$ funded and instigated the $CO dog against it and OSS!
      Linux Geek
      • Conversion

        The Court stated that SCOX is liable for "conversion," which is a fancy way of saying that the money isn't theirs in the first place.

        Funny thing about "conversion:" it's not dischargable in bankruptcy. Another funny thing? The Court can order [b]any[/b] recipient of money from the tortfeasor who reasonably might have known what was going on to fork over.

        That includes management, directors, and (tee hee!) their lawfirm.
        Yagotta B. Kidding
        • Love it!

          The law going to cause lawyers to pay up now that's justice.
    • What problems?

      Dell offers Linux
      Lenovo Offers Linux
      Linux adoption is on the rise.

      Looks like Linux is doing better than ever and if anything, the stupid suit only bolstered Linux and opened more doors than ever! So if anything, it was a $12M advertisement campaign for Linux! Guess we should thank Microsoft and SCO for that, eh!? ]:)
      Linux User 147560
    • And you wonder why no one believes you

      You claim to own a business and you call 12 Million chump change. It's attitudes like that cause businesses to pull Enron type schemes or go under.

      If 12 Million is chump change and you treat it like that the when you wonder where the billions went you find it was ignoring all that money you called chump change.
      • To Microsoft, $12 million is chump change...

        ... while $12 million to me would be early retirement.

        It is all a matter of perspective.
        Confused by religion
      • Do a little math,

        1 billion = 1,000 million

        57 billion - $57,000 million

        57,000 million - 12 million = 56,988 million

        transalted = Chump Change
        • If you think $12 Million is chump change for anyone...

          you're an idiot. Oh yeah, it's Ax. Saying Ax is an idiot is an oxymoron. I'm still trying to figure out what "transalted" is. Maybe it's like "trans-fats". If you really think $12 million is such chump change to them, go into their campus at Redmond and ask them to write out you out a check for that amount. Explain to them after the laughter dies down that what you're asking for is just chump change, then wait another little while for the laughter to die down again. At this point, you might want to look for the closest exit because once they catch their breath a call to security will be next.
    • Re: Why would they worry over chump change?

      [i]And didn't they get their money's worth with all the problems it caused Linux?[/i]

      LOL! What problems??

      none none
    • Egad. I Find Myself in Agreement with No_Ax.

      [i]And didn't they get their money's worth with all the problems it caused Linux?[/i]

      Precisely the point I made in my post--MS was paying for FUD, not IP. Considering that No_Ax and I are usually on opposite ends of the galaxy, there must be truth to it.
      • Yeah, then he blew it...

        by calling $12M chump change. I guess it is true...a broken clock is right twice a day.
    • Chump change indeed!!

      I've gotta admit, Don, when you are right, you are waaaaaay RIGHT!!

      Asking for it back would not only be an admission of being gamed by a disorganized cluster of totally clueless b[l]ackwater dipsticks but would probably take a little of the satisfaction out of the volume of FUD that it bought them. Good insight on this point!!
      Still Lynn
  • MS is having a really bad day

    OOXML as a fastrack process is DOA. It has to go through the full process, open discussion and revision. SCO loses, they may or may not have any license, Google throws in with OIN and now they have no standard for documents.

    Kinda makes me wonder if MA, with it's mandate for an open standard, will have to revisit the issue since they adopted nothing of consequence.

    Toss in Linux on Acer, Dell, Lenovo, it has been a bad hair month for MS.


    I seem to remember someone stating that OOXML would pass with flying colors.
    • I will take Microsoft's "bad hair month"

      ... anytime over a year of "good hair" from F/OSS.
      Confused by religion