SCO Caps Legal Fees

Officials at the SCO Group put a $31 million cap on
legal fees, as they continue their controversial litigation against several
high-profile companies over parts of the Linux kernel.

According to a filing with the Securities and Exchange Commission (SEC), SCO
paid its teams of lawyers $12.6 million to cover outstanding legal fees and
expenses and agreed to pay a $2 million quarterly stipend through December
2005. The Lindon, Utah, company will still need to pony up any money
required for consultants, expert testimony or other types of expenses, and
have agreed to set aside a $5 million escrow account to cover those costs.

The Unix-based software development company is currently embroiled in a $5 billion
lawsuit with IBM , in which it claims Big Blue took licensed
Unix System V code from its AIX operating system and used it to bolster the
Linux kernel.

SCO is also suing Novell , Red Hat , Auto Zone and Daimler-Chrysler for other alleged Linux-based infractions.

Also included in the SEC filing is a contingency fee to be assessed if SCO collects revenues from its licensing program, sells the company or wins any one of the court
cases it’s currently involved in: 33 percent up to the first $350
million; 25 percent up to $700 million; and 20 percent for anything more than
$700 million.

A roundup of some background stories on the dispute:

internetnews.com’s Timeline of the SCO/IBM
Case
March 6,
2003
SCO files initial breach of
contract lawsuit against IBM for $1B
May 14,
2003

SCO suspends Linux sales, sends
1,350 letters to customers
June 16,
2003
SCO terminates IBM’s System V
licensing contract
July 21,
2003
SCO gets System V, UnixWare
copyrights
August 13,
2003
SCO terminates IBM subsidiary
Sequent’s System V contract
September 25, 2003 IBM files counterclaim to SCO
suit
December 5,
2003
Judge gives SCO 30 days to show
infringing code
January 12,
2004
SCO hands infringing code to
IBM
February 6,
2004
SCO seeks to add two copyright
claims to IBM suit, raise stakes to $5B
February 26,
2004
IBM says it won’t contest
infringement additions to suit
February 27,
2004
Court adds copyright claims to
SCO’s IBM suit
March 29,
2004
SCO seeks to split breach of
contract, infringement claims into separate trials
March 31,
2004
IBM files second counterclaim
to SCO suit
July 15,
2004
SCO files a Renewed Motion to
Compel while it continues lawsuit activities against Novell, Red Hat and
AutoZone.
August 18,
2004
IBM calls for summary judgment
on SCO’s contract claims
 

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