SCO stock plunges after ruling

LINDON — SCO Group Inc. stock nose-dived Monday following a Friday court ruling that could cripple the company's separate case against International Business Machines Corp.

U.S. District Judge Dale Kimball on Friday ruled that Novell Inc. — and not SCO — owns the copyrights covering the Unix computer operating system. The ruling is a setback for Lindon-based SCO in its lawsuits against Novell and IBM over the use of Unix in the Linux computer operating system.

SCO is seeking billions of dollars in royalty payments from hundreds of companies and is also in litigation with Red Hat Inc., a maker of Linux software. SCO's case against Novell had been set for trial next month.

SCO bought certain rights to the Unix operating system, which Linux was modeled on, from Novell in 1995 for $145 million, including the right to license Unix to others. SCO sued for slander of title after Novell publicly disputed ownership of the Unix copyrights and said that SCO didn't have the right to demand royalties from IBM.

"The bill of sale is clear: all copyrights were excluded from the transfer," Kimball wrote in his 102-page ruling. "Novell is the owner of the Unix and UnixWare copyrights."

In the aftermath of the ruling, SCO stock fell nearly 72 percent Monday, falling $1.12 to close at 44 cents. During the past year it had been as high as $3.11 but not lower than 77 cents.

Attempts to contact SCO for comment on Monday were unsuccessful, but the company had released a prepared statement in which it said it was "obviously disappointed" with Kimball's ruling.

"However, 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," the statement said. "This includes the new development in all subsequent versions of UnixWare up through the most current release of UnixWare and substantial portions of SCO UnixWare Gemini 64."

SCO also said that it owns the "exclusive, worldwide license to the UnixWare trademark," that some other ownership claims "were not challenged and remain intact" and that other issues remain to be litigated.

"Although the district judge ruled in Novell's favor on important issues, the case has not yet been fully vetted by the legal system and we will continue to explore our options with respect to how we move forward from here," SCO statement said.