SCO Group has asked the judge hearing its slander of title case against Novell to reconsider his decision that Novell is entitled to a portion of the $25.9m in intellectual property revenue SCO earned from deals with Microsoft and Sun.
With SCO’s total assets standing at less than $20m, the result could have a significant impact on its financial position as well as its legal claims against IBM, Novell, Red Hat, and others.
Judge Dale Kimball decided last month that Novell is the rightful owner of the Unix System V copyrights and that SCO owes Novell a proportion of the SCOsource licensing revenue it generated via the Microsoft and Sun deals, with the precise amount to be decided at trial.
Novell believes it is entitled to a portion of the revenue thanks to the nature of the Asset Purchase Agreement by which it sold its Unix business to Santa Cruz Operation, a predecessor of SCO, back in 1995. However, SCO insists that the licensing of Unix System V code was incidental to a UnixWare license, meaning that Novell would not be entitled to it.
At the core of the disagreement is whether the Microsoft and Sun deals related more to Unix System V – the core Unix code base – to which Novell is entitled to 100% royalties minus a 5% fee, or UnixWare – the operating system based on Unix System V – to which Novell is not entitled to royalties.
SCO maintained that the licensing deal were mainly related to the UnixWare operating system, although that would appear to differ from what it told the Securities and Exchange Commission in June 2003.
These license agreements will be typical of those we expect to enter into with developers, manufacturers, and distributors of operating systems in that they are non-exclusive, perpetual, royalty-free, paid up licenses to utilize the Unix source code, including the right to sublicense that code, it wrote at the time.
Despite that, SCO is insistent that the deals were related to UnixWare rather than System V Release X (SVRX) code, and that there are therefore doubts over whether Novell is entitled to any of the revenue. At a minimum, a triable issue exists as to whether SVRX licensing incidental to a UnixWare license constitutes a separate ‘SVRX License’ as to which Novell is entitled to royalties, wrote SCO in its legal filing.
With the jury due to decide how much of the Microsoft and Sun revenue Novell is entitled to, the company would also like the jury to decide whether the revenue should be considered incidental and whether Novell is therefore entitled to it at all. If SCO’s position were determined to be correct, no retrial of that issue would be required, the company added.
As well as deciding that Novell was the rightful owner of the Unix copyrights and entitled to a portion of SCO’s IP revenue, Judge Kimball also ruled that Novell had the right to waive SCO’s contract and copyright claims against IBM. According to IBM, that decision has obliterated SCO’s legal claims against it.