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December 4, 2006

Novell tries to cripple SCO copyright claims against IBM

Novell Inc has filed a request for a partial summary judgment that it has the right to direct SCO Group Inc to take certain actions that would cripple SCO's already diminished breach of contract and copyright case against IBM Corp.

By CBR Staff Writer

The Waltham, Massachusetts-based company’s filing is the latest in the legal menage-a-trois that resulted from Lindon, Utah-based SCO’s 2003 claims that IBM breached a contract by contributing its Unix code to the Linux operating system.

Novell disputes that it sold the rights to Unix to SCO’s predecessor in 1995 but maintains that in any case it has the right to force SCO to call of the dogs. Novell has asked the court for a partial summary judgment that it has the authority to waive SCO’s claims against IBM on SCO’s behalf.

If Novell is successful, the result would be to nullify SCO’s remaining breach of copyright claims against IBM, which were filed after IBM ignored SCO’s termination of IBM’s right to distribute Unix System V code within its AIX and Dynix Unix operating systems.

The slander of title dispute between SCO and Novell is based on the complex Asset Purchase Agreement through which Novell transferred its previous Unix operating system business to the Santa Cruz Operation in 1995.

The deal saw Novell retain the right to receive royalty payments related to Unix System V licenses, approval rights over new and amended System V licenses, the right to instruct Santa Cruz to take certain actions related to System V licenses, and the right to audit license arrangements.

As the successor to Santa Cruz, SCO claims that the APA and subsequent amendments give it copyright claims over the Unix operating system, which it is now seeking to protect via its SCOsource business and associated lawsuits. Novell maintains that it retained the rights to Unix and UnixWare, and in October filed for a summary judgment that is entitled to 95% of SCO’s intellectual property licensing revenue.

The slander of title case between the two was launched after SCO said IBM had breached its copyright by contributing Unix System V code to Linux, although those charges were dropped when SCO amended its case in 2004. The remaining copyright dispute between SCO and IBM focuses on IBM ignoring SCO’s termination of its Unix System V license.

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The latest motion filed by Novell would not decide who has ownership of the Unix copyrights, but whether Novell had the right to waive SCO’s actions in a way that would make the copyright claims irrelevant in what remains of the case against IBM.

While SCO’s case against IBM was filed first, US District Judge Dale Kimball, who is handling both cases, last week decided that the IBM case will go to trial after the Novell case, which is scheduled for September.

Judge Kimball made the scheduling change as he approved an earlier ruling limiting the SCO’s claims against IBM to just 106 items of claimed evidence, as opposed to the 293 it first presented.

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