The SCO Group was dealt a legal blow Friday in its attempts to enforce what it sees as when a German court granted a preliminary injunction against the company.
Joe Eckert, spokesman for SuSE Linux A.G., said the court has ordered SCO to stop claiming that the Linux operating system is an illegal derivative of Unix. “If SCO ignores the courts order, it faces a fine of up to 250,000 euro,” he said.
But Ryan Tibbitts, SCOs in-house general counsel, on Friday said that the German court had just issued a temporary restraining order against the company. The legal action was brought against SCO by a number of Linux associations, including LinuxTag. This was also an ex parte proceeding, which meant the court has not heard any arguments from SCOs side, he said.
SCO intends to comply fully with the order until the matter is resolved. “We have retained German counsel to advise us on this, and we will vigorously oppose it as we believe we have overwhelming evidence to support our position. We expect to be able to have a hearing within the next two weeks on this, where we will be able to present affidavit and testimony to support those issues subject to the temporary restraining order.
“We are confident that once we are heard, the restraining order will be released and that will be the end of it. The order applies only to our German subsidiary and related to the letter we sent out to 1,500 companies around the world. It appears the German groups that brought the action saw the letter on a Web site and perceived that to be a direct threat against them. We dont view it that way,” he told eWEEK in an interview on Friday.
SCOs legal counsel also felt that the temporary retraining order had been sought “too quickly, so we believe it may be a bit of a publicity stunt,” Tibbitts said, adding that SCOs German lawyer had asked for a few extra days to respond to the claims and possibly avoid the court proceedings, but that LinuxTag and others had gone ahead and filed it anyway.
This legal setback came as SCO on Friday came out swinging against Novell and other critics of its claims that it owns the rights to the Unix operating system, threatening potential legal action against Novell going forward.
Earlier this week Novell made public a letter CEO Jack Messman sent to SCO CEO Darl McBride, in which Messman pointed out that the asset purchase agreement entered into between Novell and SCO in 1995 did not transfer these rights to SCO. Novell also asked SCO to back up its assertion that certain Unix System V code has been copied into Linux.
But, in a media and analyst conference call on Friday, McBride hit back, saying none of SCOs enforcement actions to date had been based on copyrights or patents. “There has been no assertion by Novell or anyone else that SCO does not hold these contract rights. As to the copyright matter, this is not important to our current enforcement actions; we reiterate today that we own the Unix copyright and the right to enforce these copyrights,” he said.
“Novell has publicly challenged our position with regard to copyright. We strongly disagree with Novells position and view it as a desperate measure to curry favor with the Linux community. I have turned the Novell matter over to our attorneys, and over the coming weeks we will take all steps we deem appropriate to rectify the issues,” he said.
SCOs enforcement actions embodied in its lawsuit against IBM and the letter it has sent to 1,500 commercial Linux users are also based on the contract rights from SCOs 30,000 Unix System V licenses with more than 6,000 entities. Its actions to date have been based on this set of licensing and sublicensing agreements, McBride said.
McBride quoted several provisions from the text of the 1995 agreement between Novell and SCO, which was contained in a previous SCO filing with the Securities and Exchange Commission, to “underscore to you the broad set of rights we hold.”
“SCO owns all rights and ownership in Unix and Unixware, all versions and all copies, all updates, including Unix and Unixware source code,” McBride said. “SCO owns all claims arising against any parties relating to any right, property or asset in the business of Unix and Unixware.
“SCO owns all software and sublicensing agreements, including the source code, and sublicensing agreements with OEMs, end users and educational customers. The total number of these agreements is approximately 30,000,” he said, stressing this wording was pulled directly from the text of its agreement with Novell.
Explaining why SCO decided to base its initial enforcement actions on its Unix rights and not copyright infringements, McBride said the rights and reach SCO have are “broad and deep,” and that while it does not rule out subsequent enforcement action taken on the basis of copyright, it elected not to do so at this point.
But SCO is coming under increasing pressure on its stance. Richard Seibt, CEO of leading Linux distributor SuSE Linux, also weighed in on the controversy this week, telling eWEEK in an interview, “I have seen the contract, and it contains specific asset exclusions.” Seibt also welcomed the contents of the Novell letter.
“This is a very important development as I think we will see very soon who is right and who is wrong. They are talking about a public contract document between the two parties,” he said.
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