Legal Issues

by Mike Masnick

Filed Under:
copyright, lawsuits, linux

novell, sco

SCO Gets Wrist Slapped Over Novell Unix Copyrights

from the this-ain't-over-yet dept

More than five years after SCO went on its quixotic quest to try to sue Linux out of existence, it's finally had to pay at least some of the price. As you probably know, soon after SCO sued IBM, Novell pointed out that it was pretty sure SCO was wrong in claiming to hold copyrights over Unix code. In fact, Novell was pretty sure that it still owned those copyrights. SCO then took Novell to court over the issue -- making that the main arena for SCO's claims. It took plenty of time, but the judge ruled that, indeed, Novell owned the copyrights, basically derailing SCO's entire basis for its lawsuits. At first it appeared as if SCO was just going to give up. It declared bankruptcy and many hoped it would just go away. Unfortunately, it received a lifeline in the form of a $100 million line of credit, allowing it to keep on suing.

As for the Novell case, a judge has finally come down with the final ruling on a fine, and it's basically a slap on the wrist to SCO. Rather than buying Novell's argument that 95% of SCO's licensing revenue actually belongs to Novell, the judge took a much more limited approach saying SCO only owes $2.5 million. It's not peanuts, but it's a lot less than many had hoped. It certainly will allow SCO to keep going (and potentially appeal this ruling) which is why many are labeling this as a mixed bag sort of ruling. Still, as has been pointed out, SCO is the one that kicked this off, suing IBM and then Novell... and the end result is that SCO is paying out $2.5 million. That's probably not what the company's execs expected when they started down this path.

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  • identicon
    ehrichweiss, 17 Jul 2008 @ 12:11pm


    I was under the impression that the 100 million "lifeline" was on several conditions and it was only potentially 100 million, the initial offering being $5 million with up to an additional $95 million credit line and none of it until after the bankruptcy court approved. I hadn't heard anything else about it so do you have some info I don't?

    reply to this | link to this | view in chronology ]

  • identicon
    sco watcher, 17 Jul 2008 @ 12:12pm

    show us the money

    Unfortunately, it received a lifeline in the form of a $100 million line of credit, allowing it to keep on suing.

    Despite all the $100 million hoopla surrounding “mideast financers” no one's actually seen the money.

    Don't have time to dig up relevant documents from the Judge Gross's bankruptcy court and elswhere right now—I'm still reading Judge Kimball's decision. But the $100 million is not exactly anywhere in sight. Yeah, I know there was a big press release... a lot of publicity, “news” reports, et cetera... but where's the plan of reorganization that's supposed to be filed with the bankruptcy court? Huh? Huh?

    We do know the original SNCP plan is deader than a doornail, and the speculators are rumored to be negotiating a different deal. Clear away some smoke, though, and where's the money?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Jul 2008 @ 12:15pm

    Sucks to be Stephen Norris Capital Partners right now doesn't it!

    reply to this | link to this | view in chronology ]

  • identicon
    W Klink, 18 Jul 2008 @ 9:02am

    Remember, this particular suit started because SCO sued Novell because Novell dared claim that they still retained the copyrights that SCO was suing IBM over. The court already slapped SCO down entirely on that issue and turned the case around on SCO. This ruling re-affirms that earlier slap down that totally devastated their case against IBM and added that they owe $2 million dollars that SCO illegally took from money that belonged to Novell.

    So in a case that SCO initiated, they have been told that they don't own the copyrights for which they are suing IBM (their real hope for big bucks) and were ordered to hand over the money that Sun gave them. Yes, it's too bad that they get to keep the money MS gave them as well, but this is hardly a slap on the wrist.

    I, of course, won't be personally satisfied until Darl is in prison...

    reply to this | link to this | view in chronology ]

  • identicon
    John Wilson, 18 Jul 2008 @ 9:19am

    They aren't getting off all that easy..

    The $100 million has never materialized nor was the deal done that would have supplied it.

    The closer reality is that SCO's cash flow is, for all practical purposes zero. As for whatever cash on hand they have they're spending it like a drunken sailor.

    The $2.5 million judgement would empty their bank account and then some.

    Darl keeps dreaming of appealing the judgement but his company is bankrupt and it keeps looking like they won't ever get out of Chapter 11.

    Each reorg scheme they come up with seems to be based on nothing more than moonbeams and dust. He also seems fixated on the idea that putting this mess in front of a jury would save his sorry butt.

    And just wait, IBM is lining up waiting for the ruling on its case which may just provide a few more nails for SCO's coffin.

    In light of all this can someone tell me just how it is that McBride still has a job?



    reply to this | link to this | view in chronology ]

  • icon
    Ron Larson (profile), 18 Jul 2008 @ 12:25pm

    Can Novell now sue SCO?

    Can Novell (and eventually every one else that SCO sued) now turn around and sue SCO for the cost of having to defend themselves from their scam?

    I don't think that recourse was part of this judgment. So SCO could still be slammed with counter suits.

    But, I'm no lawyer. Just thinking.

    reply to this | link to this | view in chronology ]

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