July 18, 2008

Is SCO finally dead?

Author: Steven J. Vaughan-Nichols

Even though SCO has suffered another legal defeat, the company looks like it has enough willpower, if not sense, to keep its legal losing streak going.

On July 16th, Judge Dale Kimball ruled in favor of Novell in SCO vs. Novell and said that the maverick Unix company owed Novell $2.5-million for its Unix deals, and, oh, by the way, Novell, not SCO, really owns Unix. With no IP rights to Unix, it would appear that SCO's lawsuits against IBM, Novell, and Linux were done. Alas, the experts say "no."

Eric S. Raymond, co-founder of the Open Source Initiative says, "Sad to say, it ain't over. SCO is already saying it's going to appeal on a theory that it was entitled to a jury trial. Clearly, they think trying to get Judge Kimball reversed is an option."

So far, SCO hasn't officially appealed, but a SCO press release stated, "We are reviewing today's ruling by Judge Dale Kimball with our counsel and will be assessing the next steps over the coming days and weeks. This ruling is an important step in our ability to pursue the appeals to try to get all of our claims heard by a jury as soon as possible."

The result of this latest trial hasn't surprised anyone. As Jay Lyman, an open-source analyst for The 451 Group says, "As far as SCO, it's certainly no surprise to see this ruling and reinforcement that SCO's strategy to challenge the IP (intellectual property) rights to Linux and Unix has been a total failure."

Thomas Carey, chairman of the business practice group at the Boston-based Bromberg & Sunstein IP law firm still thinks "that the whole theory that the judge is proceeding under is odd. The notion that Novell sold the UNIX business but not the copyright in the UNIX code is a metaphysical leap that might not survive an appeal (if SCO can muster an appeal). Nonetheless, that is the foundation on which the most recent opinion builds."

Be that as it may be, the court has ruled that SCO never bought Unix's IP rights. This issue of what exactly SCO did, or did not buy, from Novell was rehashed in this most recent hearing. It can certainly be argued that SCO made a bad deal, but it does appear that that was the deal it made.

SCO is almost certain to appeal. Where it will get the money to so, since the company has been in bankruptcy since September 2007, is another matter. For a time, it looked like Stephen Norris & Co. Capital Partners (SNCP) would buy out SCO for the purpose of continuing its lawsuits, but that proposed deal seems to have come to nothing. Still, one way or the other, everyone agreed that SCO would continue its legal battles against Linux and Linux-related companies.

Winning, however, is another matter. As Raymond says, "SCO hasn't got a snowball's chance in a supernova of prevailing, but if that had ever been a serious consideration these lawsuits would

have been abandoned years ago."

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