Jury Decision Confirms Novell's Ownership of Unix

By Chris Preimesberger  |  Posted 2010-03-30

In an IP copyright case that stretches back to 2004, a jury in Salt Lake City ruled March 30 that networking and middleware software maker Novell legally retains ownership rights to the Unix enterprise operating system, defeating a stubborn legal challenge from The SCO Group of Lindon, Utah.

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

In its lawsuits, SCO Group, which has been in bankruptcy for several years, had been seeking about $251 million in Unix license fees plus unspecified damages.

Years ago, SCO Group's original goal was to gain licensing control over the open-source Linux operating system, which is modeled after the original Unix code created at AT&T's Bell Laboratories in the early 1970s. However, Linux-the Unix-like programming language created by Linus Torvalds-is open-source software governed by the international GNU Public License.

Linux kernel development is now controlled by the worldwide Linux community and centered at the nonprofit Linux Foundation in Portland, Ore., which employs Torvalds and several of his co-developers. There is no way for SCO Group-nor any other commercial entity-to gain ownership over the operating system.

SCO, which stands for Santa Cruz Operation, originally had filed a slander-of-title lawsuit in 2004 charging that Novell curtailed its business and damaged its reputation by claiming it sold service rights but not IP copyrights.

Several variations of Linux-including Red Hat, Novell SUSE, Ubuntu and CentOS-now run most of the servers in enterprise business and Internet data centers.

Novell executives who had worked for the company in the 1990s had testified that they intended to sell the copyrights along with the operating system itself, court documents revealed. SCO Group had tendered an amendment to the contract in 1996 that included a transferal of the copyrights, but the jury ruled that the document was never voted on by the Novell board and enacted as a binding agreement.

Waltham, Mass.-based Novell issued the following statement March 30: "Novell is very pleased with the jury's decision confirming Novell's ownership of the Unix copyrights, which SCO had asserted to own in its attack on Linux. Novell remains committed to promoting Linux, including by defending Linux on the intellectual property front.

"This decision is good news for Novell, for Linux and for the open-source community."

"Obviously, we're disappointed in the jury's decision," SCO trial lawyer Stuart H. Singer told The Associated Press. "We were confident in the case, but there's some important claims remaining to be decided by a judge."

Former U.S. District Judge Edward Cahn, the trustee for SCO's bankruptcy filed in Delaware, said in a statement, "SCO intends to continue its lawsuit against IBM, in which the computer giant is accused of using Unix code to make the Linux operating system a viable competitor, causing a decline in SCO's revenues.

"The copyright claims are gone, but we have other claims based on contracts," Cahn said.

IBM had utilized Unix and Linux code several years ago in an initiative called Project Monterrey. SCO Group said it will keep up the legal fight on that front.

Editor's note: This story has been updated to include a correction to the Santa Cruz Operation's name and a clarification on the origin of Linux.

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