SCO, Novell continue bickering over Unix ownership

SCO says newly discovered documents will prove its assertions

The public disagreement continues between The SCO Group Inc. and Novell Inc. over who owns what in the world of Unix intellectual property rights.

In a conference call today with analysts and reporters, Lindon, Utah-based SCO said it has clear, documented evidence that proves its ownership of Unix, whereas Novell in a statement on its Web site continues to ask SCO to come out and publicly substantiate its claims.

"Today we are restating that SCO owns the Unix operating system along with all the contracts, claims and copyrights associated with Unix," Darl McBride, SCO's CEO, said during the call. "We also reassert that portions of System V code are found in Linux," as well as portions of resulting derivative code.

The battle of who actually has Unix property rights erupted three weeks ago, when SCO warned all commercial Linux users that they could be using its code illegally and recommended that commercial users seek legal advice to help them decide what to do about their use of Linux (see story).

That was followed last week by Novell's call for SCO to put up or shut up over its allegations (see story). In a letter on its Web site from Novell CEO and President Jack Messman, the company lashed out by challenging SCO's assertion that it owns the copyrights and patents to Unix System V.

Novell, which had previously acquired the Unix systems business of AT&T Corp., broke up and sold its Unix properties in 1994 and 1995. One of those deals was with the former Santa Cruz Operation, which was bought by Caldera International Inc. and later became The SCO Group.

In March, SCO sued IBM for $1 billion, alleging that the company misappropriated trade secrets related to SCO's Unix products to benefit IBM's Linux strategy (see story).

SCO's McBride said today that some industry analysts and others have accepted an offer to view some allegedly misappropriated code and that they have come away agreeing with some of SCO's assertions.

"These initial reviewers appear to be coming to the same conclusions as we have, namely that SCO's Unix source code has made its way into Linux," McBride said.

Two documents found by SCO confirm the company's claims, he said. The documents are an "Asset Purchase Agreement" between Novell and SCO from Sept. 19, 1995, and an amendment that followed on Oct. 16, 1996.

Novell has acknowledged that SCO sent a copy of the amendment to the company last night and that it "appears to support SCO's claim that ownership of certain copyrights for Unix did transfer to SCO in 1996."

But, Novell added, "the amendment does not address ownership of patents, however, which clearly remain with Novell." Novell said it didn't previously have a copy of the alleged amendment in its files.

In its reply today, Novell said it's still asking SCO "to address the fundamental issue Novell raised in its May 28 letter: SCO's still unsubstantiated claims against the Linux community."

A spokesman for Novell refused further comment today.

George Weiss, an analyst at Gartner Inc. in Stamford, Conn., said after the conference call that he recently viewed SCO's newly found documents and that they could bolster the company's claims. "They believe they have documents that to me look very legitimate," he said.

Weiss said he met with SCO this week to review the Unix claims, but he refused to sign a nondisclosure agreement, so he wasn't permitted to view some of the contested code. Based on those talks, he said, SCO "gave me enough information that there could be something there [to the claims], that they're not doing something frivolous."

McBride today confirmed that SCO is "having discussions with large players" about the status of his company since it began its recent defense of its Unix legal rights. Last week, McBride said that a buyout of his company could end the fight (see story). "We want to get this resolved," he said of the property rights issues. "We're open to any sort of scenario," said McBride.

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Copyright © 2003 IDG Communications, Inc.

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