May 12, 2004

Novell asks judge to scrap SCO's lawsuit

Author: Bob Mims

SALT LAKE CITY, Utah -- A federal judge has taken under advisement a request that he dismiss The SCO Group's "slander of title" complaint against Novell Inc. -- a ruling that could foreshadow the fate of SCO's separate, marquee Linux-rights suit against IBM.

At the heart of SCO's 13-month-old suit against Big Blue is its claim to all copyrights to Unix, which the Lindon, Utah software company had licensed to IBM. SCO, which seeks a minimum of $5 billion and maximum of $50 billion in damages, charges IBM illegally sold Linux applications containing its misappropriated Unix code.

SCO also has sued Linux end users Daimler-Chrysler and AutoZone for allegedly violating its rights, and has launched a global campaign to pressure other corporations using the freely-distributed operating system to buy special licenses -- so far, a largely unsuccessful effort.

Not long after SCO sued IBM in March 2003, Novell publicly challenged SCO's claims, insisting it retained Unix copyrights as part of its 1995 deal to sell Unix to SCO.

"There are people out there right now who won't take [Linux] licenses with us ... or invest in the company, because there's a question out there that [Novell] raised," SCO attorney Brent Hatch argued in opposing Novell's bid to end the slander suit during a U.S. District Court hearing Tuesday.

Hatch further cautioned Kimball, who also is the presiding judge in the SCO-IBM case, that by embracing Novell's claim that SCO never obtained all rights to Unix he might hand "a very important victory" to foes and negatively affect the Utah company's chances in other litigation.

Novell attorney Michael Jacobs noted that documents related to the 1995 Unix sale to SCO specifically excluded "all copyrights and trademarks" except for "certain assets" granted for development of SCO's UnixWare. Further, he argued, the deal limited SCO's enforcement of any Unix copyrights solely to derivative code it developed on its own -- not what it obtained from Novell.

Finally, Jacobs said a specific "written instrument of conveyance" is required by federal copyright law to transfer the Unix rights SCO claims it received nearly nine years ago.

Hatch disputed those interpretations, insisting existing contract documents and amendments made it clear the Unix source code and all rights to it were included in the sale. "The source code without the associated copyrights isn't worth anything," he said.

On a separate motion, Hatch sought to convince Kimball that the case -- earlier moved from state to federal court at Novell's behest -- should be remanded back to state jurisdiction.

Jacobs countered that by raising the disputed Unix copyrights -- the truth or falsity of which was critical to determining slander -- SCO had put the case solidly in the purvey of the federal bench.

Kimball took both motions under advisement, but did not indicate when he would rule.

Bob Mims covers technology, biotechnology, and health issues for the Salt Lake Tribune. This story is reprinted by special arrangement.


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