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[Updated] Novell Wipes the Floor with SCO

It’s an utter rout. Linux is apparently saved. SCO Thursday lost its bid to get the jury verdict awarding Novell the Unix copyrights overturned along with its bid to get the copyrights despite the jury decision. It also lost its right to sue IBM for copying Unix code into Linux.

Unless it decides to appeal, one of its lawyers said, it’s all over for SCO. And it’s not clear if SCO has the financial staying power to last through an appeal. The legal bill for another appeal is already paid; it’s SCO basic viability that’s in question. Of course, it doesn’t have to be an operating company to get an appellate decision.

Deciding what to do next ultimately rests with the bankruptcy trustee, the retired district court judge currently in charge of SCO, and he was out-of-pocket Thursday. SCO’s general counsel Ryan Tibbets said the company’s lead outside lawyer was also out-of-pocket and anyway “you can’t come up with a strategy in three hours.”

SCO has 30 days to make a move.

After a federal jury found in March that the Unix copyrights never transferred to the Santa Cruz Operation and so never transferred to its descendent SCO, SCO filed two post-trial motions with the Utah district court that heard the case. One – and it was a long shot – asked the judge who presided over the case to overturn the jury’s verdict as a matter of law. The second – a little less of a long shot – asked for a new trial on the grounds that it wasn’t clear Novell should have won.

The judge denied both motions. He simply found Novell’s rendering of events, its evidence and its witnesses – which he details – overwhelmingly more credible and dismissed out of hand SCO’s contention that the “verdict cannot be squared with the overwhelming evidence and the law.”

It was also agreed by SCO and Novell before the trial began that in the event SCO lost the judge would decide whether to award SCO the copyrights anyway because it should have gotten them under the muffled intent of the infamous amended Asset Purchase Agreement (APA).

SCO kinda had its hopes pinned on this move but the judge also denied this maneuver, which is called specific performance in legal circles, because SCO didn’t need them to exercise its limited rights and because the intent was absent - “Novell purposefully retained those copyrights,” he said.

More importantly, along with it he decided that Novell had every right to waive SCO’s contract claims against IBM, so barring a miracle IBM will never stand trial.

It’s just what IBM had in mind when it told Novell back in 2003 that Novell had the discretion under the APA to do so although the judge finds that Novell acted “to protect its own interests and those of the open source community and...not...because of influence by IBM or any ill-will toward SCO.”

In his decision the judge wrote that “The court finds that Amendment No 2 was not intended to confirm that the Unix and UnixWare copyrights were transferred to SCO under the APA, as argued by SCO. Rather, the court finds that Novell made a conscious decision to retain the copyrights in the APA and that intent was reflected throughout the negotiating and drafting of Amendment No 2. The court finds that Amendment No 2 was only meant to confirm that SCO had the right to use the Unix technology. The court finds the testimony of Novell’s witnesses, especially Ms Amadia and Mr Tolonen, to be credible. The court finds SCO’s witnesses to be less credible for a number of reasons, including the fact that many were not directly involved in the negotiation and drafting of Amendment No 2. Additionally, as previously stated, many have a financial interest in this litigation.”

Meanwhile, Novell has filed a notice of appeal in its 2004 WordPerfect antitrust case against Microsoft after Microsoft got the thing dismissed. Any claims went along with the software to Caldera.


© 2008 SYS-CON Media Inc.