SCO Group Ordered to Pay Novell $2.55m
Yesterday, after years of legal fighting against Linux, the SCO Group Inc. has had the tables turned and been ordered to pay $2.55 million to Novell for collecting Unix Licensing revenue from Sun Microsystems Inc. that it wasn’t entitled to collect.
When the battle started in 2003, SCO was intent on ensuring companies like IBM, Novell Inc and others would pay them large amounts of money for alleged infringements on SCO-owned Unix code. This 43-page decision, made by District Court Judge Dale A. Kimball in Salt Lake City, ruled that the money was owed to Novell under an arrangement made by SCO’s predecessor, the former Santa Cruz Operation, which was later bought over by Caldera International Inc. and became the SCO Group.
In the 1980s Novell acquired the Unix systems business of AT&T Corp. Novell broke up and sold off its Unix properties in 1994 and 1995, including a deal with the former Santa Cruz Operation.
Kimball’s ruling found that SCO owes $2.55 million to Novell through a 1995 Unix purchase agreement. In 1995, the Santa Cruz Operation didn’t have enough cash to buy all of Novell’s Unix business, so as part of the deal, Novell allowed the sale to take place on the condition that Novell would receive 100 percent of the royalties for Unix System V Release X (SVRX, all versions) licenses. Any revenue was to collected and passed on to Novell, minus a 5 percent admin fee that was returned by Novell.
The court ruled that Novell were owed the $2.55 million after a Unix licensing deal made by SCO with Sun Microsystems was deemed unlawful.
SCO have made an un-attributed statement following Kimball’s ruling, who believe that it does not owe money to Novell.
“We are reviewing today’s ruling by Judge Dale Kimball with our counsel and will be assessing the next steps over the coming days and weeks.
“This ruling is an important step in our ability to pursue the appeals to try to get all of our claims heard by a jury as soon as possible. We are pleased, however, that the court agreed that Novell is not entitled to anywhere near the more than $20 million it was seeking. Importantly, the court ruled that Novell has no right to any royalties from UnixWare or OpenServer sales by SCO, which is where the bulk of SCO’s revenue is earned.
”We continue to disagree with the premise of this trial and believe that Novell is not owed anything, but that they have interfered with SCO’s UNIX rights.”
Novell has not commented on the ruling thus far.
This part of the five-year legal battle began in September but stalled when SCO filed for bankruptcy protection while the company reorganised. In August, Kimball undercut much of SCO’s case in a ruling that said Novell was the rightful owner of the Unix and UnixWare copyrights. That earlier decision has led to this ruling, after the court went on to determine how much SCO had to pay Novell for Unix licensing revenue it incorrectly received from Sun Microsystems. The courts found that SCO didn’t have to repay Novell for any licensing revenue from Microsoft Corp.
A few months after SCO filed its bankruptcy application, in February, SCO unveiled plans to take the company private.
SCO has been causing a stir since its 2003 lawsuit against IBM, when it alleged that IBM improperly contributed some of SCO’s Unix intellectual property for use in Linux. SCO then took it upon themselves top sue Novell, claiming that the company had falsely claimed to own the legal rights to Unix.













