Novell vs. SCO Heads into Extra Innings

The court has ruled against Novell's motion to dismiss SCO's claims, so the case about who actually owns Unix's copyrights will continue.

Novell Inc.s attempt to dismiss The SCO Group Inc.s claims that Novell maliciously and falsely claimed Unixs copyrights has been denied, so the case will now move into the discovery phase—in which all the documentation will be examined to see whos right and whos not in the case.

U.S. District Judge Dale Kimball ruled in Mondays Memorandum Decision and Order—the decision on Novells motion—that the court couldnt dismiss the case on matters of law because matters of fact in the case have yet to be determined.

"Even though Novell argues that it has evidence to support its alleged good faith basis for claiming ownership of the Unix copyrights, the proper place to introduce that evidence and argue its significance is not on a motion to dismiss," wrote Kimball.

The case will now enter into a discovery phase, where each side will seek to show that it, and not the other, is the actual owner of Unixs copyrights.

The lynchpin of SCOs case against IBM has always been that SCO owns Unixs copyrights. Novell challenged this assertion in 2003.

In a letter to SCO CEO Darl McBride in May 2003, Novell CEO Jack Messman pointed out that the APA (asset purchase agreement) entered into between Novell and SCO on Sept. 19, 1995, did not transfer Unix copyrights to SCO.

Messman wrote, "To Novells knowledge, the 1995 agreement governing SCOs purchase of Unix from Novell does not convey to SCO the associated copyrights. We believe it unlikely that SCO can demonstrate that it has any ownership interest whatsoever in those copyrights. Apparently you share this view, since over the last few months you have repeatedly asked Novell to transfer the copyrights to SCO, requests that Novell has rejected."

/zimages/5/28571.gifClick here to read more about Messmans letter to McBride.

SCO disagreed with this assessment.

Novells position is that, based on the APA and on a set of minutes from a 1995 Novell board of directors meeting, Novell clearly retained its Unix copyrights when it sold the operating system to the Santa Cruz Operation, the ancestor company to todays SCO.

In December 2003, Novell acknowledged that it registered 11 copyrights on the Unix System V source code, which lies at the heart of SCOs Unix claims.

This led to more claims and counterclaims between the two companies over who actually owns Unixs intellectual property. Finally, in January 2004, Lindon, Utah-based SCO sued Novell over its Unix copyright claims.

SCO charged, in a statement, that Novell had made "false statements with the intent to cause customers and potential customers to not do business with SCO." It also alleged that Novell had improperly filed copyright registrations over Unix technology already copyrighted by SCO; that Novell had made "false and misleading public claims" about the ownership of the Unix copyrights; and that Novell had tried to block SCOs enforcement of its copyrights.

Since then, the case has moved from state to federal court and Novell has sought to have the case dismissed on the grounds that the documents that SCO has shown to prove its Unix copyrights "fail on their face to meet the copyright law requirements."

The court disagreed though, and the case will go on.

The legal combatants will now move into a discovery phase in the same court, and the battle over who actually owns Unixs intellectual property will continue.

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