SCO loses another round in Unix fight, to pay Novell US$2.55M

Court rules SCO must pay back Novell for licensing revenue it wasn't entitled to

At the beginning of its massive legal fight against Linux in 2003, The SCO Group imagined a day when companies like IBM, Novell and others would pay it large amounts of cash for alleged infringements on SCO-owned Unix code.

Instead, even as those legal fights meander through US courts, the tables were turned and SCO Wednesday was ordered to pay US$2.55 million to Novell for collecting Unix licensing revenue from Sun Microsystems that it wasn't entitled to collect.

In a 43-page decision, which was posted on the Groklaw.com Web site, US District Court Judge Dale A. Kimball in Salt Lake City ruled that the money was owed to Novell under an arrangement made by SCO's predecessor, the former Santa Cruz Operation, which later was bought by Caldera International and became The SCO Group.

Novell acquired the Unix systems business of AT&T in the 1980s. Later, Novell broke up and sold its Unix properties in 1994 and 1995, including a deal with the former Santa Cruz Operation.

In Kimball's ruling, the court said that SCO owes the US$2.55 million to Novell today through a 1995 Unix purchase agreement. At that time, the Santa Cruz Operation didn't have enough cash to buy all of Novell's Unix business. As part of the deal, Novell allowed the sale to go through with a limitation: It required that Novell would receive 100 per cent of the royalties for Unix System V Release X (SVRX -- all versions) licenses. Those revenues, under the agreement, were to be collected and passed on to Novell, minus a 5 per cent administrative fee that was to be returned by Novell, according to the court ruling.

The US$2.55 million award to Novell was for revenue brought in through a subsequent Unix licensing deal that SCO made with Sun Microsystems, which the court ruled was made without proper authorization.

In an unattributed statement following Kimball's ruling, SCO said it continues to believe that it does not owe money to Novell.

"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," the statement said.

"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. We are pleased, however, that the court agreed that Novell is not entitled to anywhere near the more than US$20 million it was seeking. Importantly, the court ruled that Novell has no right to any royalties from UnixWare or OpenServer sales by SCO, which is where the bulk of SCO's revenue is earned," the statement said.

"We continue to disagree with the premise of this trial and believe that Novell is not owed anything, but that they have interfered with SCO's UNIX rights," the statement said.

A Novell spokesman could not be reached for comment at deadline.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Todd R. Weiss

Computerworld
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Ada Chan

Dynabook Portégé X30L-G

I highly recommend the Dynabook Portégé® X30L-G notebook for everyday business use, it is a benchmark setting notebook of its generation in the lightweight category.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?