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SCO goes down and Sun’s in Trouble

The decision is in, and SCO has gone down in defeat. The U.S. District Court in Utah has ruled in favor of Novell in SCO vs. Novell, the keystone case in SCO’s long, and ultimately unsuccessful war against Linux.

The foundation of Judge Dale Kimball’s decision, that Novell, and not SCO owns the IP (intellectual property) rights to Unix, remains as solid as ever. Instead of showing that Linux violated SCO IP rights to Unix, SCO’s actions has lead to the revelation that it never owned the IP rights to Unix in the first place.

This, within the narrow confines of this trial, means SCO owes Novell over $2.5-million for its Unix deals. In a larger sense it underlines that SCO never had a leg to stand on its case against IBM and Linux.

Kimball did throw SCO a sop. He ruled that, as Pamela Jones, editor of Groklaw, described it, “UnixWare is the latest version of UNIX and that it was the foundation of all the other agreements, even though SYSV (System V Unix) was also involved, or so SCO thought. He accepted SCO’s argument that if SCO was wrong about owning the copyrights, and it was, then it’s too bad for the licensees — they just got less than they thought they were paying for, and that is a matter for them to work through with SCO.”

For most of SCO’s customers that will matter little. There is one special case, though, where this might matter a great deal. SCO sold Sun the IP rights to Unix ( Sun then used this as part of the basis for its OpenSolaris release. In this case, Kimball didn’t simply rule that SCO hadn’t paid Novell the money it needed to from its post lawsuit Unix wheeling and dealings, the judge ruled that SCO had no right to sell Sun its Unix IP.

This puts the entire legal foundation of OpenSolaris, and Sun’s subsequent open-sourcing of the Solaris code under the GPL into question. Novell, according to sources close to the company, has not yet decided what, if any, action it will take against Sun.

What happens next? SCO could appeal, but the company is already in bankruptcy and recent attempts to refinance the company have come to nothing. This decision also points out that “SCO was unjustly enriched by retention of the revenue under the Sun Agreement and Novell is entitled to restitution.” This will count against SCO in its ongoing bankruptcy case.

If it were any other company, the only question would be who would end up with the company’s assets. SCO, however, has shown a remarkable ability to draw out its legal battles. For all practical purposes, SCO and its legal wars against Linux are over. Like a snake with a broken back, however, its thrashing may continue for a while longer. The real question is what will happen with OpenSolaris now.


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  2. I don’t think Sun is in too much trouble here. They did what they were supposed to. SCO is Novell’s fiduciary for Unix IP licensing. To get a Unix license, or change an old one, companies like Sun are supposed to contact SCO.

    SCO is supposed to contact Novell when it needs permission to license SVRX. SCO is supposed to divide up the license fees, giving Novell 100% of SVRX license fees.

    If Sun loses Open Solaris, it really won’t hurt them financially. They had no intent to harm Novell, and they did pay for what they got. So I don’t think Sun would be liable to Novell for damages.

    SCO, it seems, is the culprit here. It is through SCO that Unix Intellectual Property has been released into Open Source without the permission of the copyright holder, Novell.

    SCO accused IBM of doing this.
    SCO accused Linux distributors of doing this.
    SCO accused Linux users of doing this.

    It turns out it was SCO in the boardroom with a tort who committed the IP crime of leaking precious Unix IP into GPL’ed code!

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