The SCO Group, notorious for its legal campagin against Linux users and developers, was dealt a devastating blow last week. A federal judge ruled that Novell, not SCO, owns the copyrights to Unix, effectively cutting the foundations of SCO"s five billion dollar legal suit against IBM. SCO"s case was based on a 1995 asset purchase agreement for Unix between Novell and Santa Cruz Operations, a predecessor to SCO; the group claimed that the 1995 transaction concerned the entire Unix intellectual property, whereas Novell argued the contrary. As proof of its claims, Novell produced the original transaction agreement and bill of sale, which indicated that the purchase did not include the copyright. The agreement furthermore gives Novell the right to waive any claims for misuse of Unix by IBM, and requires SCO to forward all royalties that it received for the software to Novell.
This agreement could very well mark the end of SCO, as the software maker in 2003 inked a $10 million licensing agreement with Sun Microsystems, and a $16.8 million agreement with Microsoft. According to the contract, it should have paid 95 per cent of those funds to Novell, but failed to do so. In light of SCO"s most recent financial filings, the $25.46 million claim Novell has on SCO"s earnings could give SCO a negative total worth.
Novell hailed the ruling, with spokesperson Kevan Barney saying: "The court"s ruling has cut out the core of SCO"s case and, as a result, eliminates SCO"s threat to the Linux community based upon allegations of copyright infringement of Unix. We are extremely pleased with the outcome." Groklaw, a website closely following the case, had this to say: "The big picture is, SCO lost." SCO could not be reached for comment.