SCO Group Inc’s CEO, Darl McBride, has admitted that the company’s SCOsource intellectual property licensing business has brought in less revenue than the company hoped and is unlikely to do so while SCO’s title of slander court case against Novell Inc is ongoing.
The SCOsource business unit was set up by Lindon, Utah-based SCO in January 2003 to license and protect its Unix intellectual property (IP) firstly by licensing Unix libraries to other vendors, and then its Intellectual Property License for Linux to protect Linux users against claims that the operating system contains its IP.
SCOsource was initially successful with licensing deals with Microsoft Corp and Sun Microsystems Inc helping to contribute to revenue of $8.3m in the second quarter of fiscal 2003. That dropped to $7.3 million in the third quarter and while the fourth quarter showed $10.3 million, that was derived from the earlier Microsoft and Sun deals.
Revenue from SCOsource then plummeted to $20,000 in the first quarter of 2004, followed by $11,000 in the second quarter and $678,000 in the third quarter. Asked by ComputerWire if SCOsource had been less successful than the company had anticipated, McBride gave a simple answer: Yes.
SCOsource was launched as an initiative to give relief to end users that were asking for it, he added, stating that while there had been some initial interest, some users were now waiting for SCO’s legal claims to go through the courts, while others were completely ignoring the issue.
The biggest obstacle that has got in the way has been the Novell claims that they still own Unix, said McBride of Novell’s claim that it retained the copyright to the Unix System V code when it sold its Unix business to SCO predecessor Santa Cruz Operation Inc in 1995.
That claim prompted SCO to sue for slander of title in January 2004. Novell has twice attempted to dismiss the slander lawsuit. The second motion has yet to be heard but US District Judge Dale Kimball has previously agreed with SCO that the arguments about the agreements at the heart of the case would be more properly heard on potential later motions for summary judgment or trial.
Until the Novell claims are cleared up the clouds over SCOsource will keep it operating at a very low level, conceded McBride. We have had a lot of users saying ‘show us a court room victory and then we’ll step up’.