He who is slient, is strongest.

SCO has withdrawn its "Motion of the Debtors for an Order Providing that Creditors' Committees are not Authorized or Required to Provide Access to Confidential Information of the Debtors or to Privileged Information", which it filed in September of 2007, when it first filed for Chapter 11 bankruptcy protection.

Remember that? They filed it back when SCO thought someone might care enough to actually form a creditors' committee. But since that never happened -- the top 20 unsecured creditors (SCO Group's and SCO Operation's list, PDFs) being mainly friends and allies of SCO -- it obviates the need to protect SCO's secrets from any such committee. There was supposed to be a hearing on that back in October of 2007, but that never happened, and so now for some unknown reason, they are clearing it off the docket.

There is a bankruptcy hearing scheduled for November 20th, and there's a Notice of Matters Scheduled for Hearing [PDF] just filed that tells us that the issue of the constructive trust has been resolved "in principal" and there will be a stipulation or consensual order filed. Good Golly, Miss Molly. Is Novell finally going to see some of its money from SCO? Has somebody sprinkled fairy dust in the air or something?

Psystar's counterclaims against Apple have been dismissed, which does not in the least surprise me. I told you they were off the wall, in my view. The judge agreed. He curls his lip to add that he found Psystar's cases "unenlightening". That's legalese for "are you kidding??" Here's the order [PDF], so you can read all about it.

The judge did give them 20 days to try again to get it right, following the map he lays out for them to make improvements:For all the above-stated reasons, Apple's motion to dismiss Psystar's counterclaims is GRANTED. Psystar may move for leave to amend within twenty calendar days of the date of the entry of this order. Any such motion should be accompanied by a proposed pleading and the motion should explain why the foregoing problems are overcome by the proposed pleading. Plaintiff must plead its best case. Failing such a motion, all inadequately pled claims will be dismissed without further leave to amend.

For more background, here's Apple's motion to dismiss, Psystar's Memorandum in Opposition [PDF], and here are Psystar's counterclaims to Apple's complaint.

What does it mean? It means the counterclaims are gone, and with them any motivation to settle on Apple's side, I'd think, and the complaint remains, unless Psystar can plead its best case within 20 days. Dum dee dum dum.

SCO, or more precisely, SCO Operations has filed an amended Schedule F [PDF], its list of unsecured nonpriority creditors, or in bankruptcy lingo "creditors holding unsecured nonpriority claims". Here's the original Schedule F [PDF], if you wish to compare the lists. Schedule F is found on page 7 of the older PDF.

It is interesting to compare, even without fully understanding what it all means.

Well. I got a very nice note from Gene Quinn. He's reading Groklaw. I'm reading what he is writing, because it's fascinating, and it's an opportunity to speak directly with a patent attorney who is a true believer.

His most recent article is one I think we should answer, since his fundamental question is this: why should software *not* be patentable? From a conceptual standpoint why not allow for software to be patented. What is the harm? I know many of you reading this have now gone into an apoplectic rage, but conceptually why should software be treated any differently? Isn't the problem that patent offices, particularly the United States Patent Office, are increasingly doing a poor job of finding relevant prior art and weeding out what is new and non-obvious from what is old and obvious? If prosecution were more meaningful, what is the harm in granting software patents? I see none because there is none....

Software is not a mathematical equation, nor is it a mathematical language. How anyone who writes software or professes to understand software could argue to the contrary is beyond me. Do people who write software actually think they are sitting down and writing mathematical equations and stringing them together? It is absurd to have such a narrow view of software. When you write software you are trying to enable a device, such as a computer, to provide certain functionality given a certain stimulus. So you are writing instructions for a computer or other device and explaining how the computer or device needs to process information. You do not explain how to process information with mathematical equations.

If you would read his article in full and then answer him here, in members-only space, I'll collect the best comments and try to tie it all together, if it works out well. It's an opportunity to reach not only Quinn but all the other patent attorneys who do read what he writes.

Game on?

Update 2: I'm reading your comments, and I don't think I can improve on them. So I'll let you all speak directly, by making this article public now.

More bills are in for SCO to pay in the bankruptcy. Tanner, Berger Singerman, and Pachulski Stang all have filed for mo' money. From the bills, we can discern through a glass darkly what's been going on. Here's what: the Swiss SUSE arbitration shows activity. You can find it on page 11 of Berger's Exhibit A, where we see a notation that SUSE has filed a "submission" to the tribunal. It references "SUSE arbitration statement to tribunal" also, but it could be the same thing. This happened on 10/1/08.

And what else? Research and strategizing on the plan went on in October, which to me points to work on a cramdown. You don't have to research and strategize over a wonderful plan where sufficient money is available for one and all from a fabulously rich prince on a camel. At least by the end of October, there was just researching and strategizing happening, from what we can see in the bills.

It turns out that Stephen Norris did attend SCO's Tec Forum after all, at least according to SCO's latest SCO Partner News newsletter someone sent me. He expressed that SCO's strengths are its customers and its products. That's why the investors he says he represents are "so excited about the business prospects of working with SCO" and in particular because of SCO's commitment to backward compatibility of "all its products -- going all the way back to Xenix". Hmm.

I said I'd write next about Microsoft in my series of articles trying to explain what In Re Bilski means. I also said it would be the last in the series, but it's not. I'm sorry it took me so long, but I decided as I was constructing the article that without the full text of the amicus brief Microsoft filed in the Bilski case, it was almost impossible to be comprehensible. So I took the time to do the text version of the PDF. You'll also want to have the decision [PDF] itself handy. The text version we did of the Bilski decision is here.

The Microsoft brief was filed along with Dell and Symantec, and it's an attempt to get the court to deny the Bilski claims while at the same time trying to keep the court from going all the way and deciding software should not be patentable. There are some logic bumps along the way, as you will see. The court diverged from Microsoft's argument about three-quarters of the way through, and it didn't directly address software patents, except in one footnote, mainly because Bilski wasn't about software. So it left unaddressed Microsoft's chief argument about why software should patentable, namely because of what it does to a computer. There will be future cases, though, that certainly will be on this point, so it seems a good time to point out everything we can think of to help the court understand what's wrong with the Microsoft-Dell-Symantec position. I'll start, but jump in any time. You'll see more than I will, since so many of you are programmers.

I'm smiling already just thinking about it. Anyway, what I thought would be just one article is now two, because of the length. Here, I'll just address what I understand Microsoft's arguments to be and what a "particular machine" is to Microsoft. I'll save the part about what it may mean for Microsoft's threats against Linux for the next article.

Continuing our series on the In Re Bilski ruling [PDF], here is Judge Mayer's dissenting opinion as text, the one that points out how utterly damaging all business methods patents are. Also, a reader sent me this link to what I agree is the best overview of the ruling that we've seen yet, by the law firm of Ladas & Parry. It sticks to what the ruling says, as opposed to predictions of what it might mean. Here's how they paraphrase Judge Mayer's dissent: The decision is too complicated. State Street should have been over-ruled and patents confined to technological inventions. Clear and simple. And if I might be allowed, Amen. But that might be a little too simplified. Here's a more substantive taste of Mayer's dissenting opinion, in his own words: The en banc order in this case asked: "Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?" I would answer that question with an emphatic "yes." The patent system is intended to protect and promote advances in science and technology, not ideas about how to structure commercial transactions. Claim 1 of the application of Bernard L. Bilski and Rand A. Warsaw ("Bilski") is not eligible for patent protection because it is directed to a method of conducting business. Affording patent protection to business methods lacks constitutional and statutory support, serves to hinder rather than promote innovation and usurps that which rightfully belongs in the public domain. State Street and AT&T should be overruled....

There is nothing in the early patent statutes to indicate that Congress intended business methods to constitute patentable subject matter....In passing the 1952 Act, Congress re-enacted statutory language that had long existed, thus signaling its intent to carry forward the body of case law that had developed under prior versions of the statute. Because there is nothing in the language of the 1952 Act, or its legislative history, to indicate that Congress intended to modify the rule against patenting business methods, we must presume that no change in the rule was intended. See, e.g., Astoria Fed. Sav. & Loan Ass'n v. Solimino ... ("[W]here a common-law principle is well established . . . the courts may take it as given that Congress has legislated with an expectation that the principle will apply except when a statutory purpose to the contrary is evident." Also clear and simple, but as you see, it isn't just State Street that Judge Mayer feels should be overruled but also AT&T, which I highly recommend you read, but not if you have high blood pressure and are a programmer. It was about methods patents, but also about whether or not one could patent a mathematical algorithm. Here's a quote for you: Because 101 includes processes as a category of patentable subject matter, the judicially-defined proscription against patenting of a "mathematical algorithm," to the extent such a proscription still exists, is narrowly limited to mathematical algorithms in the abstract. I know. It takes us into OMG territory. It's what Bilski was trying to address. The AT&T decision built on and depended on State Street, and Judge Mayer is saying that State Street came out of the blue, contradicting prior common law and the patent statutes, and it really needs to be clearly killed off and buried, along with any of its children, because it was a mistake, one that launched what he calls "a legal tsunami" of regrettable patents on what ought to be the unpatentable.

SCO has filed a Statement Regarding Entry of Final Judgment [PDF], responding to Novell's Response to SCO's Notice of Voluntary Dismissal , which asked the court to confirm the amount of the constructive trust the parties have agreed to and to make SCO pay it now, which in turn followed SCO's Notice of Voluntary Dismissal.

It's breathtaking to me. SCO actually argues, quoting selectively from the trial order's wording, that while one clause of the 2003 Sun agreement was not authorized, the rest of the agreement was, and in fact in the judge's "nuanced" trial order, that's what he meant, that SCO was authorized to enter into the agreement except for that one itsy bitsy part. Just excise that one clause, and what do you get? An *authorized* agreement. What? Don't hyperventilate. SCO does this.

Here's the part of the July 16, 2008 trial order SCO *doesn't* quote from: The Court concludes that Sun's 2003 Agreement License, therefore, "concerns" a buy-out, and SCO was required to follow the additional restrictions imposed by Amendment No. 2 on transactions that concern buy-outs. SCO did not comply with these terms. The Court thus concludes and declares that SCO was without authority to enter into the 2003 Sun Agreement under Amendment 2, Section B, of the APA. Do you see any wiggle room there? Any lack of clarity on the judge's part? If so, send your resume to Boies Schiller right away. They might have use for you.

Joke. Joke.

We need to take a quick break from the Bilski series because there are a number of filings in the SCO bankruptcy, including a notation in one filing that seems to indicate that SCO is considering resurrecting the name Caldera International. Take a look at this, Exhibit D [PDF], attached to Dorsey & Whitney's 9th monthly application for compensation. On page 9, we see two notations: 08/11/08 - D. Marx - 0.15 40.50 - Discuss foreign qualification issues of the Company's subsidiary, Caldera, with C. Peters

08/11/08 - C. Peters - 0.15 25.50 - E-mail correspondence with J. Bingham regarding Delaware reincorporation of Caldera International, Inc. What are they up to now? Are they thinking of returning to that name? As in, never mind? Or is there a plan for a new subsidiary?

Update: Page 4 is interesting too. A notation references "notification of change of directorship of ME Software" on 8/19/08. On the 21st, you see emails "regarding change of directors". Then on page 10, there are some notations regarding China, including one that reads "Review and revise termination of joint venture agreement."

Hearing November 20th -- I see there is going to be a hearing [PDF] on the SCO Omnibus Objections on November 20, 2008 at 9:30 AM, so if you are involved in that, you'll want to make arrangement to be represented there, by phone, by attorney, or in person, as per the instructions in the document.

Let's start here, the official bios of the justices that serve on the U.S. Court of Appeals for the Federal Circuit, the court that just rendered the ruling in In Re Bilski [PDF]. It will help us to understand their point of view, and that will make us more effective in responding. You'll have to make an effort to look at things from a different angle, since most of us feel so strongly that software patents are a curse on development and innovation. But it's worth it to try, if only so as to formulate arguments that can be effective in trying to help them, and those who think as they do, to realize that there is something new in the patent world, a development model that depends not on closing others out but on collaboration and shared science.

I know you want me to explain what the recent Bilski decision [PDF] means, because you are writing to me. I've shown you some of the apoplectic reactions from the patent bar. But what does it mean to us, to FOSS?

First, in a simplified nutshell, here is what Bilski means to everyone: You can't get patents any more on a pure mental process. You can no longer patent a process that you can think through all in your mind. In other words, abstract ideas are not patentable. There has to be either a particular machine or a transformation in the process. So pure "ideas" or "mental processes" are over. That means most business methods patents are no longer valid because they are outside the parameters of what is eligible for patenting. In simple terms, it means this: The End for the stupidest of the stupid patents. Yay! It means that the tide is turning. There could still be an appeal of Bilski, and even without one, there are ways to chip away at this decision's new standard for patentability, to try to get over the new turnstile, so to speak, and strategies on how to do that have begun already. I've spent the days since the decision issued researching for you, so I can explain Bilski to you. There is too much material for just one article. So, I'll break it up into parts. My purpose is to make sure you understand fully, so you can be helpful with your ideas and so you can explain this issue to others, so they understand what is involved for FOSS. If there are parts you don't understand, ask. If I don't know the answer, I can ask someone.

The most important reaction to Bilski, to me, is Red Hat's, which you can now read in full here. It's the most important to us, because what you and I want to know is: what about FOSS? What does Bilski mean to us? So, in this series of articles on the Bilski ruling, let's start there.

Novell has filed its Response to SCO's Notice of Voluntary Dismissal. It's ascerbic and funny as can be. It shows the court each and every tricky bit it thinks SCO might just be angling for.

I saw in the email exchange between the SCO and Novell attorneys that were attached to the David Melaugh Declaration that SCO has stepped on Novell's last nerve with its trickiness. And here we see the result. Novell points out each and every conceivable thing SCO might be trying for, leaving nothing for SCO to try later.

There are more bankruptcy filings in the SCO bankruptcy, including two that sent me on a deep search for what they mean. Tennessee's Department of Revenue has filed two Withdrawals of Claims, for claims 110 and 111. Why would Tennessee do that, I wondered? Are they giving up on getting paid? The amounts of the claims are a little over a thousand on one and a little over five thousand on the other. Had they decided it wasn't worth fighting for? Or was there a plan to go after SCO in some other way?

After hours and hours of research, I confess I am not sure what it means, bankruptcy not being my field. But if someone put a gun to my head and told me to tell what I think after all the research or else, I'd say my best guess is that Tennessee realized that SCO doesn't owe them those sums after all.

I learned some interesting things about withdrawing claims, though, which I'll share with you.

Pop some champagne! The Appeals Court decision [PDF] is in on Bilski: I'm still reading it, but on first quick reading, one thing is clear: it's a win! Eligible patent matter just got smaller. Here's a snip from the opening: We affirm the decision of the Board because we conclude that Applicants' claims are not directed to patent-eligible subject matter, and in doing so, we clarify the standards applicable in determining whether a claimed method constitutes a statutory "process" under § 101. This was an appeal against a rejection of a business methods patent, and the appeals court has now agreed with the rejection. At issue was whether an abstract idea could be eligible for patent protection. The court says no.

Buh-bye business methods patents! [Most of them: see update.]

Here we go. Novell has filed a motion asking the bankruptcy court to confirm the constructive trust amount and order SCO to pay it now: 586 - Filed & Entered: 10/29/2008
Motion to Approve (B)
Docket Text: Motion to Approve Order Confirming Constructive Trust and Directing the Debtors to Pay Funds to Novell Filed by Novell, Inc.. Hearing scheduled for 11/20/2008 at 09:30 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 11/13/2008. (Attachments: # (1) Notice # (2) Exhibit A# (3) Exhibit B# (4) Proposed Form of Order) (Poppiti, Jr., Robert) The parties have agreed on the amount to put in the constructive trust, Novell reminds the court, $625,486.90, "based on an uncontested reading of trust tracing law and SCO's relevant daily balance information" regarding the Sun SVRX royalties that the court concluded were Novell's from that deal, $2,547,817. What they don't agree on is when SCO should pay it.

All right. We can't be serious about SCO all the time. Time for a laugh. And this is funny. Thanks to Christopher B. Wright's using a Creative Commons license for his cartoons, we can add this one to our permanent collection. Enjoy.

P.S. I also love Ubersoft's phrase at the top of the page: UBERSOFT. We Patent, So You Can't. That captures the spirit of the patent system well.

I enjoyed Help Desk's take on a reorganization plan for SCO. Someone file this in court, please, the second SCO's exclusivity time period to come up with a plan runs out. Kidding.

SCO Group and SCO Operations have filed the monthly operating reports for September. Also Pachulski Stang filed its 11th monthly bill, which covers July, meaning there are more bills to come.

I find page 15 of SCO Operations' filing [PDF] fascinating. Am I going nuts or is SCO sending money to the foreign subsidiaries? Take a look.

Google has reached a settlement in the litigation over its Google Books feature. The settlement is complex, but on a quick look, it seems a bit like radio paying into a copyright clearinghouse to be able to play music. It has agreed to sell books and then pay 70% of revenues to authors via a "Books Rights Registry" being established; and Google also will pay the Registry 70% of net advertising revenues.

It's a good arrangement for Google and for the authors. For fair use, I'd call it a loss. Nevertheless, Google Books is still awesome. It hasn't been officially approved yet by the court, but it's reasonable to expect it will be. The parties will each call it a win, of course. Google: Today we're delighted to announce that we've settled that lawsuit and will be working closely with these industry partners to bring even more of the world's books online. Together we'll accomplish far more than any of us could have individually, to the enduring benefit of authors, publishers, researchers and readers alike. You can read the settlement in full. Here's the proposed Order [PDF], which one can opt out of, as it explains, or object to if you are in the settlement class. Here's the money part [PDF], who gets what. Google can continue Book Search, but books commercially available are in a "No Display" category. In addition, any author can opt out totally. We will have access to more books online now, according to Google's explanation.