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Jury sides with Novell in Unix copyright ownership case against Lindon-based SCO Group

Published: Wednesday, March 31 2010 12:00 a.m. MDT

SALT LAKE CITY — Novell Inc. did not transfer the Unix copyrights when it sold the computer operating system, according to a jury verdict issued Tuesday in a case closely monitored by software aficionados.

The unanimous verdict caps three weeks of conflicting testimony in a jury trial that itself caps a long and contentious battle over the Unix copyrights. The SCO Group Inc., based in Lindon, sued Novell, saying it got the copyrights when it bought Unix in 1995. Novell, based in Waltham, Mass., said it retained the copyrights.

The jury in the case, tried before U.S. District Judge Ted Stewart, agreed with Novell. Deliberations took just under eight hours over the course of two days.

"This is a significant victory for Novell and, I think, a tremendous victory for the open-source community," said Novell attorney Sterling Brennan.

So-called "open-source" fans believe that software should be shared and available for anyone to make improvements. That is the basis of the Linux operating system.

The case centered on what happened to the copyrights in 1995 when Novell transferred Unix to Santa Cruz Operating Co., which later sold the system to a Utah company, Caldera International. That company eventually became the SCO Group.

The lawsuit SCO filed against Novell had asked the jury to determine who owned the copyrights and, if it decided in SCO's favor, to consider damages. SCO had claimed it lost at least $200 million in sales after Novell said it still owned copyrights. SCO had also filed suit against IBM, saying that some of the code in the popular, open-source Linux operating system was based on Unix code. And SCO a few years ago sent letters to businesses that used Linux, telling them they needed to buy licenses, since it claimed part of Linux used its copyrighted Unix code. That, in turn, has riled the open-source community, which had supported Novell's ownership claim.

Ambiguous language in the sales contract between Santa Cruz and Novell was used by both companies in their competing claims to ownership of the copyrights. SCO claimed that an amendment executed some months after the original sale clarified that it owned the copyrights. Novell disagreed.

It is unknown what the verdict means to the future of SCO, which is in a bankruptcy proceeding, but it's believed to be a death knell for the SCO lawsuit against IBM.

"Obviously, we're disappointed in the jury's decision," SCO lawyer Stuart H. Singer told the Associated Press. "We were confident in the case, but there's some important claims remaining to be decided by a judge."

Singer said SCO will ask the judge to award it the copyrights "even if we didn't have them before. It's a setback, but it's not over."

Within a few minutes of the verdict, Novell had posted a statement online: "Novell is very pleased with the jury's decision confirming Novell's ownership of the Unix copyrights, which SCO had asserted to own in its attack on Linux. Novell remains committed to promoting Linux, including by defending Linux on the intellectual property front.

"This decision is good news for Novell, for Linux and for the open-source community," it said.

The open-source community was quick to respond. "Thank you, Novell, for never giving up and never giving in," said a post on an online blog, Groklaw.com, which has followed every detail of the dispute and has been a harsh critic of SCO. "Those of us who love to use Linux will forever be thankful to you."

Novell attorney Brennan added that while there are still a few issues to be decided in the case and SCO has a right to appeal, "This verdict largely brings an end to this."

e-mail: lois@desnews.com

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