1. They licensed their code under the GPL. They thus have no cause for their lawsuit, which is bad, and have wasted tons of money on legal fees and blew their reputation with the entire Linux and Unix community.
On the contrary, SCO has turned up a profit *because* of the case. They were losing money selling Linux, but since then they stopped selling it and put up a division whose job is just to collect royalties on the disputed Unix System V code. Microsoft was one of those who paid for the license. This division has already proven to be profitable for them.
As for the legal fees, I read somewhere that the deal with the lawyer (who represented MS in the anti trust case) is he only gets paid a percentage of any cash awards or settlement. So there's no money out for SCO. So it all translates to good business for SCO, though that doesn't make the situation any less bizarre...
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