Novell backs off copyright claims against SCO

The SCO Group Inc. has found what it says is proof that it owns all copyrights related to the Unix operating system, a claim rival Novell Inc. had contested last month and for which SCO may seek to recoup damages.

SCO said Friday the proof is in an amendment to the asset purchase agreement through which SCO acquired Unix from Novell in 1995. The amendment dates from 1996.

"Today we slammed the door shut on (this copyright question) and threw away the key once and for all, so this issue doesn't come up again," said Darl McBride, SCO's president and chief executive officer, in an interview.

Last month, Novell said it hadn't transferred Unix's copyrights nor patents to SCO as part of their Unix purchase agreement.

But in light of SCO's finding, Novell on Friday reluctantly acknowledged that the amendment "appears to support SCO's claim that ownership of certain copyrights for Unix did transfer to SCO in 1996." However, Novell reiterated its claim that it holds the Unix patents.

Novell's response has left SCO's McBride dissatisfied. He wants Novell to issue a clear retraction and to own up to its incorrect claim regarding Unix copyright ownership, which left it "with eggs all over its face," McBride said.

"It's not our desire to litigate with Novell, but we believe they do need to take responsibility for their improper actions and for the injury and harm they've done to us in the marketplace" by claiming SCO didn't own the Unix copyrights, McBride said.

SCO's legal team is looking into the matter and may advise the company to seek money from Novell for damages, McBride said.

On the question of patents, McBride said Novell's name isn't on the Unix patents, but rather AT&T Corp.'s, which is the company that first developed the operating system. The patents are enforced by the copyright holder, which in this case is SCO, McBride said.

Novell didn't return calls seeking comment.

At any rate, the companies are involved in nothing more than a war of words so far. Neither has raised the issue with a court.

The Unix product in question is Unix System V, which is the core Unix code which SCO owns and licenses to third-parties which then use it to create their own derivative Unix versions, such as Hewlett-Packard Co.'s HP-UX, IBM Corp.'s AIX and Sun Microsystems Inc.'s Solaris.

Novell, based in Provo, Utah, launched its challenge last month in order to poke holes into SCO's legal challenges against the open-source Linux operating system. SCO has made allegations that Unix code it owns has been illegally copied into Linux software, including the Linux operating system kernel.

In Friday's statement, Novell again reiterated its demand that SCO present evidence to back up its allegations. SCO's McBride said the company has already begun showing its evidence to analysts, customers and other industry players.

So far, SCO, based in Lindon, Utah, has only formally sued one company over Unix and Linux: IBM. In March, SCO sued IBM, seeking at least US$1 billion, alleging misappropriation of trade secrets, unfair competition, contract interference and breach of contract, in attempts to damage Unix to benefit its Linux business.

Related to the case, McBride said SCO has also found evidence of AIX code having been copied into Linux software.

SCO has purposefully decided not to proceed with a copyright or patent violation charge against IBM, or anybody else for that matter so far, because it believes the avenue it has taken against IBM puts it on much stronger legal ground, its executives have said.

SCO also warned commercial Linux vendors of possible liabilities. It has also sent letters to about 1,500 large companies warning them they could be held liable for intellectual property violations related to their use of Linux software, and issued the same warning to commercial users in general via a press release last month. The warning has outraged and concerned many commercial Linux users.

SCO has no intention to sue commercial users, and will try every option before resorting to litigation, McBride said. "We plan to work out the issues with customers in a short, straightfoward and amicable way."

SCO has been receiving feedback from commercial users and is developing licensing programs to resolve any issues. SCO plans to detail those new programs aimed at commercial users in July, McBride said.

It also expects to resolve issues with commercial Linux vendors, such as Red Hat Inc. and SuSE Linux AG, "in ways short of litigation," he said.

More about AT&THewlett-Packard AustraliaIBM AustraliaNovellRed HatSun MicrosystemsSuseThe SCO Group

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