The company announced second quarter revenue of $6.0m, down from $7.1m a year ago, but managed to cut its net loss to $1.1m from $4.7m a year ago on lower legal costs for its ongoing court cases against IBM, Novell, and Red Hat.
While SCO’s claims that Linux infringed its intellectual property and IBM had breached its contract and copyright obligations boosted the company’s revenue in 2003, Novell’s challenge over copyright ownership combined with a lack of evidence on SCO’s part has hit the company’s SCOsource intellectual property revenue hard.
While quarterly SCOsource revenue has been in the region of $20,000 to $35,000 for the proceeding eight quarters, the second quarter’s $0 revenue figure is a symbol of how little impact the company’s legal claims are now having.
Court papers filed in the slander of title case against Novell recently included the deposition of SCO CEO, Darl McBride, wherein he stated that the company has speculated that its plan to license intellectual property to Linux users could be worth billions of dollars.
Instead the company’s financial results indicate that SCOsource has generated a total of $27.5m since early 2003, at a cost of $55.2m. Of course those costs include the ongoing court cases, which could theoretically still result in payback for the Lindon, Utah-based Unix vendor.
SCO is asking for $5bn in damages for its claims against IBM, although its hopes of winning that case rest not only on convincing the court that IBM breached contracts by contributing code from its own Unix variants to Linux, but also on convincing the court hearing its slander of title case against Novell that it, and not Novell, is the rightful owner of the Unix copyrights.
Based on its opinion that it is the rightful owner of the Unix copyrights, Novell has waived SCO’s copyrights claims against IBM.
Both cases are being heard by US District Judge Dale Kimball, who decided in December that the Novell case will go to trial first, in September. Kimball recently held two hearings for a number of summary judgment motions that could vastly reduce the content of that trial, but has yet to announce his decisions.
