Judge Confirms That Novell Owns Unix Rights in SCO Case

Is the 7-year-old intellectual property lawsuit between Unix server maker SCO Group and Novell finally at its end? If it isn't officially over, then it's very, very close.

Salt Lake City U.S. District Judge Ted Stewart on June 10 closed the case-from the federal district perspective, anyway-by reaffirming that SCO's claims against Novell in the long-running litigation over ownership of Unix operating system copyrights were unconvincing.

In its lawsuit, SCO Group, which filed for bankruptcy protection in 2007, had been seeking about $251 million in Unix license fees plus unspecified damages from Novell, which bought the rights in 1995.

On March 30, a Salt Lake City jury confirmed that the licensing rights to the Unix operating system belong to Novell and not to the SCO Group. But SCO, which has made a virtual business out of trying to exact licensing fees and penalties from companies such as IBM, Novell and others via litigation, still had a couple of appeal options left.

On June 10, one of those doors closed with Stewart's declaration.

SCO, which declined to comment on the June 10 decision, still could appeal to the next level, which is the 10th U.S. Circuit Court of Appeals. It is unknown at this time whether the Lindon, Utah-based company will continue its legal fight.

"Evidently, the jury found Novell's version of facts to be more persuasive," Stewart wrote in his commentary. "This conclusion is well supported by the evidence."

Stewart's declaration dealt with a few remaining issues left over from the three-week jury trial in March and whether SCO should be granted a new trial, which Stewart denied.

Lawyers for SCO, who had asked Stewart to order the transfer of copyrights to its control, argued that the company had operated for years believing that it owned the Unix rights and thought it had the contracts to prove it.

SCO Group, under a contract first signed by an earlier iteration of the company [originally called Santa Cruz Operation, then Caldera, before SCO Group] with Novell back in 1995, makes its own Unix-based server and provides maintenance services for its installed base.

Over a number of years, SCO came to claim that it not only owned the Unix code for licensing purposes but, by extension, that Linux is a derivative of Unix and should also be considered licensable.

SCO Group's long-term goal was to find a way to gain licensing control for its SCOsource server software over the Linux operating system, which is modeled after the original Unix code created at AT&T's Bell Laboratories in the early 1970s.

Several variations of Linux-including Red Hat, Novell SUSE, Ubuntu and CentOS-now run most of the servers in enterprise businesses and Internet data centers, and theoretically there would be huge proceeds from the licensing of all those millions of servers.

However, Linux-the Unix-like operating system created by Linus Torvalds-is separate open-source software governed by the international GNU Public License.

When it allowed SCO Group to take over maintenance of customers using Unix in their enterprise IT systems in 1995, Novell never sold the ownership rights to the operating system to SCO, the jury said. Judge Stewart agreed with that assessment.

Even if SCO Group decides to call it a day in this case, it faces possible legal retribution from IBM, Novell and Red Hat-all of whom have been sued by SCO at one time or another and who have initiated pending punitive lawsuits of their own.