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25 August 2009, 13:02

SCO vs. Linux: Unix copyright dispute enters the next round

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SCOvsLinux.png Litigation between the SCO Group and Novell over the copyright to Unix grinds slowly onwards. The Court of Appeals has affirmed that SCO must pay approximately $2.5 million in royalties to Novell, but has remanded the question of whether the copyright to Unix was passed on to SCO when the distribution rights were sold, back to the Utah District Court for retrial.

In its ruling, the Court of Appeals largely acknowledged the three agreements made between the SCO Group and Novell in 1995. In addition to the Assets Purchase Agreement, the agreements include two schedules which are strongly disputed by the two parties and, according to the appeal judges, contain a number of ambiguities. The judges attested that Judge Kimball had great difficulty in clarifying these ambiguities in an agreement that was ten years old. However they said, a summary judgement about the crucial question of whether the copyright was sold in the transaction was not appropriate for the scale of the case. According to the Court of Appeals, the summary judgementPDF of more than 100 pages reached by Judge Dale Kimball two years ago is controversial enough to warrant a full trial in which a jury of several members will be better suited to clarify the controversial aspects. For this reason, the Court of Appeals remanded the case back to the District Court for jury trial.

Two new judges have been appointed to hear the case after Judge Dale Kimball has recused himself from the proceedings between Novell and SCO (and between IBM and SCO about the Unix System V code that was allegedly illegally incorporated into Linux) without giving any reasons. Judge Ted Stewart will lead the jury trial between Novell and SCO, and Judge Tena Campbell will be dealing with the case between IBM and Novell.

In an initial statement, SCO said it is pleased with the ruling. The vendor has also scheduled an investor conference call during which SCO boss Darl McBride intends to explain the ruling today. In various earlier interviews with news agencies, McBride said that SCO will fight for its intellectual property, calling Linux a "knock off of our Unix". According to the executive, the development and distribution of Linux drove his previously successful company to the brink of bankruptcy, which it now hopes to avoid with the help of the new trial.

Darl McBride's appearances gave the impression that the company is back to the way it was in 2007, although a Chapter 11 Trustee will still be appointed to conduct SCO's business affairs in McBride's place. Following the Court of Appeal's ruling, the Trustee will initially have to find the $2.5 million the company has been ordered to pay to Novell. He will also decide how to handle the court cases.

In an initial statement, Novell said it was pleased that the ruling affirmed the District Court's decision to award the outstanding royalties. Novell also expressed considerable scepticism about the further progress of the case and said that, in light of the recent court decision to appoint a Chapter 11 Trustee, it remains to be seen whether there will even be a jury trial in the copyright case. In any case, Novell said that it will pursue the matter to its conclusion: "Novell intends to vigorously defend the case and the interests of its Linux customers and the greater open source community."

(Detlef Borchers)

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