Wednesday, August 29, 2007

SCO Unix Suit Bites the Dust and Novell Gets Closure

While SCO has issued a statement indicating that the ruling against SCO in its legal fight with Novell does not mark the end of SCO's legal strategy, Joe LaSala, Novell's general counsel, said the ruling against SCO vindicates the position Novell has taken since the dispute's inception, and settles the issue of who owns the copyrights of Unix.

The Linux camp is celebrating. The SCO Group's attempts to lay claim to Linux seem to have run out of gas after years of legal wrangling.

For four and a half years, SCO has vehemently claimed that it owns the copyrights to Unix. SCO implicated Linux by alleging the free operating system relies on code stolen from Unix. But a Utah judge has ruled against SCO, deciding that SCO does not own the copyrights to Unix, making the Linux allegation moot in this case.

SCO acknowledged its disappointment in a statement issued on August 10. However, that statement more than hinted that SCO is refusing to give up without an even longer fight, which means that Novell might find itself back in court with SCO again.

SCO's Tenacity

"The court clearly determined that SCO owns the copyrights to the technology developed or derived by SCO after Novell transferred the assets to SCO in 1995," SCO said in its statement.

"What's more," the statement continued, "the court did not dismiss our claims against Novell regarding the non compete provisions of the 1995 Technology License Agreement relating to Novell's distribution of Linux to the extent implicated by the technology developed by SCO after 1995. Those issues remain to be litigated."

The way SCO sees it, although the district judge ruled in Novell's favor on important issues, the case has not yet been fully vetted by the legal system. SCO plans to continue to explore its options.

A Tangled Web

The tangled Web began in 2003, when SCO sued IBM for taking code from Unix and putting it into Linux. In a case-changing twist, Novell stepped up and claimed it owned Unix copyrights. That forced SCO to take on Novell before taking aim at IBM.

Big Blue could not immediately be reached for comment, but Joe LaSala, Novell senior vice president and general counsel, commented on the ruling in his blog. Today's court ruling, he wrote, vindicates the position Novell has taken since the inception of the dispute with SCO, and it settles the issue of who owns the copyrights of Unix in Novell's favor.

"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," LaSala continued. "We are extremely pleased with the outcome."

SCO Surprises

The analyst and legal communities seem unsurprised by the SCO ruling. "Folks in the know in the open-source intellectual property communities have sensed -- at least from the evidence and findings they had seen -- that Novell had a pretty solid case," said Charles King, principal analyst at Pund-IT. "SCO can say they are going to keep fighting, but it's unclear to me what they are going to be fighting for."

Indeed, the ruling suggests Novell has the right to pursue its own sanctions against SCO, but SCO has no basis to pursue copyright-infringements remedies against Novell on the Unix side. It's a potentially devastating outcome for SCO, which has sunk considerable resources into litigating the case at the expense of its own reputation.

Linux users, meanwhile, waited for the possibility of lawsuits against them. Some purchased indemnification insurance to guard against litigation. "It's definitely a tough time for SCO," King noted. "But a lot of champagne was probably spilled in various open-source community offices over the weekend."

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