Novell Corp. says SCO Group Inc. owes it nearly $20 million. SCO says it owes Novell virtually nothing.
Those two stances are the focus of a four-day trial that started Tuesday in federal court in Salt Lake City. The companies fighting over Lindon-based SCO's licensure of certain technologies in 2003 and 2004 and how much Novell should get from that licensing.
SCO sued Novell in 2004 after Novell claimed to own the Unix operating system and UnixWare software. U.S. District Judge Dale Kimball last year ruled that Novell was indeed the owner of Unix copyrights, freeing Novell to file counterclaims seeking revenues that SCO had received from companies licensing certain technologies from SCO.
SCO, through its "SCOsource" initiative, received money from Microsoft Corp., Sun Microsystems Inc. and other Fortune 1000 companies that used Linux, an open-source operating system that competed with Unix. SCO had sued International Business Machines Corp. in 2003, saying that IBM inappropriately inserted proprietary Unix code into Linux.
In opening arguments Tuesday before Kimball in the bench trial for the lawsuit against Novell, the two sides seemed to agree that SCOsource included licensing of Novell-owned technology, which is several versions of Unix System V collectively called "SVRX," and of SCO-controlled technology, which is UnixWare and OpenServer.
Kimball had ruled last August that Novell was entitled to SVRX licensing revenue. On Tuesday, Novell attorney Michael Jacobs said SCOsource's focus was the valuable SVRX, for which Novell should receive royalties. But SCO attorney Stuart Singer said the only a small part of the Microsoft and Sun agreements involved SVRX, and Novell's rights to that licensing money represent "no significant value."
Singer said SCO had the rights to license UnixWare technology and that SVRX may have "incidentally" been licensed with it. "UnixWare is System V technology," he said.
But Jacobs said Microsoft's licensing agreement featured 28 versions of SVRX.
Jacobs likened the situation to a tree, with the trunk being System V's code base and the branches being various "flavors" of Unix. Novell believes the value is in the trunk, while SCO would contend that it is in the branches, including UnixWare, Jacobs said.
Novell has contended that SCO never provided Novell with any licensing revenue and refused to disclose the SCOsource contracts.
SCO filed for bankruptcy protection last September. Stephen Norris & Co. Capital Partners LP had proposed buying $5 million in SCO stock and loaning the company up to $95 million to reorganize, but recently said it instead wanted to negotiate to buy SCO's assets.SCO's lawsuit against IBM is stayed because of the bankruptcy but could be reopened.