SCO suitor vows to keep up Unix copyright war

Firm has no plans to give up legal fights that have battered SCO’s business, reputation; McBride out if deal goes through.

The second route, and the most likely SCO/SNCP could take Radcliffe believes, is over the question of copyright of Unix. If SCO could reverse the August federal court ruling against it and claim Unix copyrights, and if it can prove there is Unix code in Linux, then it could wreak havoc with Linux users, including an existing case against AutoZone.

"Those are two big 'ifs'," said Radcliffe. "And the problem there is that IBM and SCO have spent three years [battling] and SCO has been unable to prove there is Unix code in Linux."

SNCP came on the scene Thursday with what it initially called an "up to $100 million" offer and a reorganization plan for SCO that includes new product lines.

SCO's board of directors unanimously agreed that the offer was the best long-term plan for the company.

"It's not like $100 million has been forwarded to a law firm to continue this lawsuit [against Novell]," says Jim Zemlin, executive director of the Linux Foundation.

"The five million in cash plus a loan at credit card like interest rates is a very small investment for [SNCP] and that sort of speaks to the merit of this. I don't think it is an action anyone should care that much about."

A summary judgment in SCO's case against Novell was issued on Aug. 10, 2007, when Federal Judge Dale Kimball ruled that Novell owned the Unix and UnixWare copyrights. SCO had claimed Unix ownership during a very public campaign that included suits against IBM, Novell and others.

In 2003, SCO claimed that Linux was an illegal derivative of Unix, which SCO said it had purchased from Novell in 1996.

Also in 2003, SCO targeted its first legal fight over Unix royalties at IBM, filing a $1 billion copyright infringement suit claiming Big Blue had violated SCO's rights by contributing Unix code to Linux.

Eventually, SCO took on Novell and lost on Kimball's August ruling.

Beginning April 29, Kimball will preside over a four-day trial to determine what SCO owes Novell in licensing fees. The award could reach into the millions.

The SNCP offer is the second offer SCO has entertained to rescue the company.

In October, SCO received an offer of US$36 million from JGD Management for its business and intellectual property. JGD Management, a debtor of SCO, is an investing arm of York Capital Management, which owned more than 91,000 shares of SCO stock from March 2005 to September 2006.

The deal ultimately fell through.

In November, SCO bounced back releasing an upgrade to its OpenServer 6 Unix server even while dealing with bankruptcy.

Jeff Hunsaker, president and chief operating officer of SCO, said in a statement, "not only will this deal position us to emerge from Chapter 11, but it also marks an exciting future for our business. This significant financial backing is positive news for SCO's customers, partners and resellers who continue to request upgrades and rely upon SCO's Unix services to drive their business forward."

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