On Monday, August 10th, Circuit Court of Appeals reversed a decision which previously stated that Novell, owner of the SUSE Linux distribution, owns the source code of the Unix operating system. This ruling clears a path for SCO to pursue a copyright infringement claim against IBM to the tune of $1 billion. In the 54 page decision, the court said that it was overruling the 2007 judgment made by U.S. District Court for the District of Utah Judge Dale Kimball, who initially ruled in favor of Novell as the owner of the Unix OS and all UnixWare copyrights.
In a statement made to the Salt Lake City Tribune, Darl McBride, CEO at SCO, said that the federal appeals court decision was a tremendous victory for SCO, explaining that it would not only give the company the ammunition needed to follow through on a lawsuit against IBM, but a similar suit against Novell as well.
A History of Turmoil
This controversial legal matter goes back to 1993, when Novell purchased Unix System Laboratories, who at the time, owned all Unix copyrights and licenses, for more than $300 million. Just two years later in 1995, Novell elected to pull out and sold the Unix business to SCO. The confusion came about through differing stories from the two sides in regard to whether or not the acquisition included copyright ownership of the Unix source code.
It was in 2004 that Novell stepped up to claim ownership of the rights to Unix. This was shortly after SCO made the decision one year earlier to enforce the copyright through the courts. 2003 was a very heated year as it marked the time SCO claimed that the popular open-source Linux operating system was an illegal variant of the Unix code, which it said was purchased in full from Novell. From there, SCO lashed out fiercely, lining up IBM as its first target. The basis of SCO’s whopping $1 billion copyright infringement is that IBM violated its copyright ownership by contributing the Unix source code to Linux.
It didn’t take long before Microsoft joined in the chaos, signing on to license SCO’s Unix code under the Linux brand. Microsoft’s involvement resulted in mass confusion over open-source licensing and probable liabilities that corporate users could face for using the code. In response, SCO sent out approximately 1,500 letters to companies, giving stern warning that using the Linux OS would infringe on its intellectual property. When Novell claimed ownership of the Unix code, SCO immediately went on the offensive but in the beginning, things did work out its favor.
On August 10, 2007, a summary judgment was issued in the case of SCO vs. Novell. This turned out to be a bad day for SCO as the court ruled that Novell did indeed own the copyrights to both UnixWare and the Unix code, followed up by a $2.5 million judgment in favor of Novell. Shortly after the decision, SCO filed for a Chapter 11 bankruptcy.
With the recent reversal, SCO is cleared of paying Novell and can now take legal action to receive a big payoff from both Novell and IBM.
