US Bankruptcy court has granted Novell’s motion to lift SCO’s bankruptcy stay, enabling Novell to continue with its lawsuit through which the company aims to recover licensing royalties owed to it by SCO.
Lindon-based SCO purchased all of Novell’s UNIX software licenses in 1995 and the two companies have been battling over the rights since 2004. Novell argued that according to the 1995 purchase agreement, it retained the rights to all UNIX copyrights and that SCO has breached the agreement. SCO, however, argued that it owns the copyrights and accused Novell of copyright infringement.
The Utah district court ruled in August 2007 that Novell owned the rights to UNIX and is entitled to royalties from these licenses. The district court scheduled the trial for September 17 to determine the amount Novell is owed and whether SCO had the authority to license the UNIX software. But SCO filed for Chapter 11 protection on September 14 to avoid the trial.
According to Informationweek, SCO recently asked the bankruptcy court for permission to sell off certain UNIX assets to York Capital Management, a private investment group, but withdrew the request after Novell and IBM told the court that SCO’s ownership of the assets is questionable.
As per Novell’s estimates, SCO owes it approximately $32m. SCO revealed in recent SEC filings that the company will not survive if forced to pay the sum estimated by Novell.
Source: ComputerWire daily updates