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SCO Files Suit Against Novell Over System V Ownership

nadamsieee writes "Yahoo! Finance is carrying a press release from SCO that details a new lawsuit against Novell for "Slander of Title". It looks like SCO has finally ditched their failing product line in favor of 24/7 litigation and PR work." To recap: Novell and SCO have a lengthy correspondence over the meaning of the contract between the two companies, Novell registers a claim with the U.S. copyright office over the code in dispute, SCO files this suit in response. Update: 01/20 23:04 GMT by M : SCO has placed their complaint (pdf) online.

34 of 608 comments (clear)

  1. SCO states that... by canfirman · · Score: 5, Insightful
    Novell has made false statements with the intent to cause customers and potential customers to not do business with SCO.

    Now, that's the pot calling the kettle "black".

    --
    It is not our abilities that show what we truly are... it is our choices.
  2. Plain Stupid by fernd1 · · Score: 3, Insightful

    Can a company sue another company for being plain stupid? I mean, SCO thought they were getting all of System V because they failed to grasp all of the ramifications of the contract they had with Novell. The only argument that they might have is the claim that Novell tricked them into a contract that they thought was more inclusive. From reading the correspondence, I don't think this is the case. It was just a matter of shear stupidity on SCO's part to agree to a contract under their assumption that it was more inclusive than it is.

    1. Re:Plain Stupid by markhb · · Score: 5, Insightful

      No, The SCO Group failed to understand the ramifications of the Asset Purchase Agreement that was signed between Novell and the Santa Cruz Operation, a separate company. Caldera bought the Operating Systems division of the latter, and then changed their name. Confusing the names is their First Line of Misdirection.

      --
      Save Maine's economy: write stuff down. All comments are exclusively my own, not my employer.
  3. Overrulling power of Novel by Delirium+Tremens · · Score: 2, Insightful

    Now, can't Novell simply ask SCO to stop annoying them, and if they don't stop, just proclaim on behalf of SCO that this one lawsuit is over?

  4. Quote of the day by Neurotoxic666 · · Score: 1, Insightful

    "Novell has made false statements with the intent to cause customers and potential customers to not do business with SCO."

    Yeeeaahh. Like ... threatening and suing your OWN customers didn't do any damage to your reputation. Sheesh. Drugs are bad, hmmkay?

    --
    You are more than the sum of what you consume. Desire is not an occupation.
  5. Last gasp by rkhalloran · · Score: 5, Insightful
    SCO is expecting to have their collective ass handed to them Friday in the IBM suit, and need something to keep the stock propped up while they unwind.

    Looking at the correspondence Novell's put up, and given that SCO has acknowledged paying Novell royalties for SysV recently, it's hard to see how they can be serious. We can only hope that the judge here doesn't allow McBride & Co. to drag out the disclosure process as they have in the IBM case.

    SCO delenda est!

  6. countersuit by Anonymous Coward · · Score: 5, Insightful

    No doubt Novell will file a countersuit. In fact, from Novell's correspondence it looks like Novell was preparing to file a suit over non-compliance with the purchase agreement. Maybe SCO saw it coming, and decided it would be better publicity to file first. Not that such a tactic will do SCO any good in the long run.

  7. to cause customers and potential customers ... by burgburgburg · · Score: 2, Insightful
    Novell has made false statements with the intent to cause customers and potential customers to not do business with SCO.

    No, Darl. It's all of the false statements that YOU have made that is causing customers and potential customers to not do business with SCO.

  8. Re:BSA? by onyxruby · · Score: 2, Insightful

    For how long though, I can't imagine that standing. Especially since BSA isn't exactly known for enforcing licenses for free software. BSA would love to sink their teeth in this. People using GPL'd software go the very root of their existance.

  9. You must remember... by Blic · · Score: 2, Insightful

    Caldera as a company was founded with the sole purpose of suing Microsoft over DR-DOS, which they had acquired. Litigation is nothing new, it's been their business model from day one.

  10. Re:SCO will last a long long time. by Saven+Marek · · Score: 4, Insightful

    > SCO will be in very hot water, because it could be seen as
    > a violation of a court order.

    But is there anything that can be done to SCO directly when it comes to violating a court order? What's the worst? a fine? the case is kicked out? They'll still keep suing and litigating and making press releases until there's no more money to do so, or they're forced to shut up about their claims by whatever part of the legal system can do so. So far they've played very close to the edge with respect to real legal action, and it's all been "we are going to sue" and "we have a licence ready to sell" and "you will need indemnification", but they haven't done more than that. So far, that's all press release, but it's a very effective way of spreading FUD, and they can keep that up for a long time.

    The cynic in me believes that when January 23 comes around and SCO haven't fully complied with the court order, the judge will nevertheless grant them some leeway, and it'll be another few months until SCO has to again cough anything up. They'll keep up the press releases in the meantime, for sure.

  11. Re:We don't need no stinkin product! by destine · · Score: 5, Insightful

    Don't think pump up, think stall. I would bet that in light of the fact that the IP that they claim to own is in fact in dispute, that they file a motion to let them finish this second trial first. It has relevance to the trial and I think it would be hard for the judge to say no to such a request.

    Meanwhile, they will be able to extor...er, persuade others to buy into that phantom ip litigation insurance and continue to pump up prices so that they can all sell their shares and get to the bahamas by next winter.

    Hopefully Novell will file a motion to keep them from selling snake oi...er ip litigation insurance. Best of luck Novell. Make it quick please.

  12. If only Novell could have pulled the plug.. by inf0mike · · Score: 3, Insightful

    .. on SCO before now. From my reading of the asset purchase agreement(s), Novell retained certain rights over SCO, including the right to "undo" certain things that SCO might do to their licensees, e.g. SCO revokes IBM's license, Novell un-revokes it. I find it surprising that they have not been able to just pull the plug on SCO for all of their recent behaviour. It's a shame, but I'm sure that if they could have done, they would have.

  13. Re:BSA? by minkeyboodle · · Score: 3, Insightful

    What do the Boy Scouts of America have to do with this? I guess they could roast SCO over an open fire. Or even better, they could tie them up with a bunch of cool knots.

  14. Re:Wow by rgmoore · · Score: 3, Insightful
    SCO pretty much had to do this. If they didn't, an end user or anyone else they sued could just ask for their case to be postponed whilst SCO and Novell sort out the copyright issue between them.

    But filing suit against Novell actually makes the situation worse, rather than better. Before the suit, a Linux user could only point to the possiblility of SCO's ownership being contested as an argument. Now they can point to an actual suit on the issue. There's no way that SCO can possibly sue anyone else until their suit against Novell is concluded.

    The only possible legal benefit I can see for SCO from this is a source of potential delay in their suit against IBM. If they can somehow argue that their suit against IBM should be continued eventually but that the ownership issue with Novell has to be cleared up first, they can get another indefinite delay. Since the IBM suit seems likely to run into trouble otherwise, and delay seems to be the name of SCO's game these days, that seems like the only short-term upside.

    --

    There's no point in questioning authority if you aren't going to listen to the answers.

  15. Re:We don't need no stinkin product! by Quixadhal · · Score: 2, Insightful

    Well, yes, there are two ways to win most games. You can try to outperform your opponents, and thus finish first, or best, or whatever metric shows that you won... or you can try to remove your opponents so that you win by default.

    SCO has chosen the second option.

  16. Re:So If You're Keeping a List.. by TheTimoo · · Score: 2, Insightful

    If they are the only ones doing business with them, doesn't that constitute as the hands that feed them?

    --
    "Be careful or be roadkill" - Calvin
  17. Wheeee!!! by MuParadigm · · Score: 2, Insightful


    Wheeee!!! Another SCO lawsuit!

    Darl and Co. really missed the boat on another revenue tie-in: Reality Programming. Can you *imagine* what a great comedy this would make? Just prop up the cameras, then let Darl, Chris Sontag, Blake Stowell, Jeff Hunsaker, Mark Heise, David Boies, Kevin McBride, and etc., rip.

    They'd make a *fortune*!!!

    And then they could sue Court TV for "IP infringement". More Money!

    Po' li'l set upon Darl. All the big corporate boys are conspiring against him. And all the li'l Linux boys are piling on.

    Seriously, though, I think Litigious Bastards 'R' Us, Inc. have finally signed their death warrant.

  18. The Technical Term Is... by Steve+B · · Score: 3, Insightful
    Novell has made false statements with the intent to cause customers and potential customers to not do business with SCO.

    projection (pr&-JEK-sh&n): The attribution of one's own attitudes, feelings, or desires to someone or something as a naive or unconscious defense against anxiety or guilt.

    --
    /. If the government wants us to respect the law, it should set a better example.
  19. Re:Next: IBM lawsuit on hold while this plays out by CAIMLAS · · Score: 4, Insightful

    Nonsense.

    Redhat's claims have nothing to do with who owns the property rights to UNIX, and IBM's case is nearly at a close, and doesn't really hinge on whether or not SCO owns UNIX - they've gotten this far, they're surely not going to suspend the case until the Novell/SCO case builds up for a matter of months, etc.

    As soon as one case concludes against SCO, SCO is pretty much done for. It doesn't really matter which one, and IBM's is the one that is closest to closure at the moment. Why not let it finish, instead of shutting it down?

    --
    ~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
  20. Re:We don't need no stinkin product! by Anonymous Coward · · Score: 2, Insightful

    I'm a Linux user and supporter, but I am also quite nervous about the possible outcomes of the "SCO vs Novell" lawsuit.

    Maybe this relates to the FUD I hear from SCO, but it also relates to how well Novell prepares its case for the courts.

    I have read the Sept. 19, 1995 Asset Purchase Agreement and related comments on "Groklaw", but to the layman, (IANAL), it is convoluted wording that is anything but clear to me. I read the assurances that it is legal and binding. However, the wording makes me feel that SCO, in its correspondence, has asked for title because they need it to maintain their business. It is possible that SCO has met this requirement of Ammendment #2 and the courts will honour their request for ownership of copyrights.

    On Novell's side, I am told, SCO has been making (royalty?) payments for sales of UNIX software, and has sent Novell letters for a clear statement that give SCO clear ownership. Also partly on Novell's side is the old lawsuit between AT&T and BSD, which appeared to acknowledge improper transfer of code back and forth between the two flavours of UNIX, but... this lawsuit never came to a full judgement on the issue (not the issue before the court at the time.)

    Lastly, it seems that there may, in fact, be some UNIX code in LINUX. If this is true, it is not necessarily part of the copywritable parts of SCO-UNIX (because it is common between several flavours of UNIX, and may or may not be in the public domain or may or may not be under BSD copywrite). This is all stuff the courts must sort out.

    A lot of the FUD will go away if Novell wins this court case.

    Maybe our support should focus on being sure Novell is WELL prepared for this court case.

  21. Re:Wow by schon · · Score: 4, Insightful

    On Friday, SCO has to stand before a Utah court and justify their pathetic little 60-some page document as complying with a court order to come up with some real evidence.

    And therein lies the rub.

    Think about it - SCO knows that they're in shit, and that they're on the verge of having the suit thrown out.. so enter...

    the obvious pump-n'-dump scheme

    If you're running a stock scam, and the whole thing is based on a frivolous lawsuit, and that lawsuit is about to come to an end, what would you do?

    Answer: do anything you can to keep the case in limbo - including filing another lawsuit and using that as an excuse to delay proceedings.

    IBM's discovery demand listed all SCO-owned source code in Linux (whether it was put there with SCO's authorization or not.) Since Novell contests what SCO owns, SCO can now go to the court and say "we can't answer number 12, because the code in question is being contested under another suit."

    My guess is that SCO will show up on Friday and ask for the case to be put on hold until their suit against Novell is settled.

  22. What goes around comes around. by dtfinch · · Score: 4, Insightful

    They've shown themselves to be:
    Copyright violators suing for copyright violation.
    Contract violators suing for breach of contract.
    Royalty stiffs (withheld payments from Novell) sending fraudulent invoices for royalties.
    And now they're slanderers suing for slander. Though technically it's libel.

  23. Re:BSA? by Billly+Gates · · Score: 3, Insightful

    Shit!

    Do not give SCO any idea's. Darl McBride reads /. himself regularly. Seriously.

    If anything would kill Linux raids surely would. Non techie VP's would not care what the outcome of the case is. All they know is the IT director who installed Linux needs to be fired.

    Microsoft is funding SCO and they are a member of teh BSA. They could easily arrange something. It would not supprise me.

  24. Press Release Came Quick by nathanh · · Score: 2, Insightful

    From internetnews.com.

    For its part, Provo, Utah-based Novell was caught unawares.

    "We can't comment because we haven't seen the filing yet," said spokesman Bruce Lowry. "But we can certainly say we will be defending our interests."

    In other words, SCO is issuing press releases within hours (maybe minutes) of filling lawsuits. Certainly before even discussing these matters with Novell. Surely that's not normal behaviour.

    There's a running joke on Groklaw that SCO is using press releases and lawsuits as a foul form of free advertising. Unfortunately I'm not finding the joke very funny anymore.

  25. SCO claims Novell is ruining their reputation?? by borgheron · · Score: 4, Insightful

    * Novell's false and misleading representations that it owns the UNIX
    and UnixWare copyrights has caused SCO irreparable harm to its
    copyrights, its business, and its reputation.

    I thought they were doing a fine job of ruining it all by themselves.

    GJC

    --
    Gregory Casamento
    ## Chief Maintainer for GNUstep
  26. Sorry for the cheap shot, but... by expro · · Score: 2, Insightful
    Sorry, but I work for SCO and I don't feel bad about it. And I'm not embarrassed to admit it.

    Yes, posting as AC wouldn't be a sign that you were embarassed, would it? I have seldom seen an attorney embarassed about anything he/she did in any case, they are used to slime (quite literally in the case of SCO attorney Hatch, who recently teamed up with the polluters and his Senator Father to make Utah safe for toxic waste dumping and defeat a popular referendum all in the name of the public good).

    And I think all this bad press about this lawsuit is unfair: IBM did never own Unix but they stated goal was to kill Unix by pushing Linux.

    Talk to Daryl if you want no more press. SCO is playing (well) to all the ignorants with completely false statements at every opportunity. Perhaps you have not seen the web sites archiving all the lies and contradictions he has made (hint, he does not link to them on your internal web site). It seldom is followed by the ridicule it merits in the popular press, so I agree that aspect is unfair. Tell him to shut up if you don't like it.

    I don't have negative feelings against the Linux community but we can't let IBM get away with this. Indeed Darl is just doing his job and definding SCO against this unfair method to put us out of business.

    Yes, I am sure it is nothing personal, violating the intellectual property of the community and slandering them. I am sorry, what does this have to do with suing Novell and other Linux users, who unlike SCO, stick up for the rights of the community? What does SCO have to offer anyone but lawsuits for everyone using their own intellectual property? SCO Unix was never worth anything, which the people selling it in a fire sale knew, which is why the suits are never about anything SCO ever owned or produced, but about what IBM and other community members produced for the community.

    I have heard many attorneys make this sort of claim that destroying innocents is nothing personal. Either you are an attorney or have listened far too long to particularly twisted ones to make any judgements about fair and unfair.

    I doubt there is a friend of Linux anywhere who doesn't see your evil intent despite such lawyerish disclaimers for the thing you are doing which is morally wrong, for which Daryl should be denied his Mormon Temple recommend -- open fraud does notqualify him. Every version of Linux Caldera distributed represents a lie by your company.

  27. SCO Stock Price and the Linux Lottery by DaveAtFraud · · Score: 3, Insightful
    I'm coming to the conclusion that against all common sense and reason, SCO's stock is indestructable.
    What everyone here seems to be missing here is that the stock is valued by the market based on an expected result. SCO has sued IBM for $3 billion and is making noises about shaking down every single Linux user for licensing their intellectual property. Those of us who know anything about the case think this has close to zero probability of happenning but lots of people out there just hear the SCO press blurbs and the blatherings of so-called industry analysts like Laura DiDio or pulp writers like/shills Dan Lyons and don't know any better. Lets keep the math easy and say such investors come up with SCO having a 1 in 10 chance of winning:
    10 percent of $3 billion is $300 million which is about double SCO's current market capitalization. Throw in something similar for licensing SCO IP to Linux users and you get a future valuation for SCO of somewhere around half a billion dollars. I don't feel like looking up how many shares they currently have outstanding but I'm betting that means their share price needs to about double. The gotcha is its like playing the lottery and the investor only makes money IF THEY WIN so the stock price is based on a future expected value that has a probability of coming to pass.
    Lots of investors will do the same analysis and keep the stock price up until something really goes wrong with SCO's case(s). Short term investors will also see a trend that every time the stock starts to slide, SCO releases some new claim that bouys it back up and may even try to time the press releases. It all combines to keep the stock propped up.

    Yeah, it sucks. The really scary thing is that this "system" works better than anything else that has been tried. Live with it.

    --
    They that can give up essential liberty to obtain a little temporary safety deserve neither safety nor liberty.
    Ben
  28. Re:A Better Version of the Asset Purchase Agreemen by Anonymous Coward · · Score: 1, Insightful
    No, they have the copyrights to Unix v5, v6, v7 and 32v. They didn't purchase any rights to SysV.

    These copyrights are the last four items listed in attachment E.

    Caldera later placed Unix v1-v7 and 32v under a BSD license. You can find it here.

  29. Re:It's about time. by wathead · · Score: 2, Insightful

    That picture of him makes me sick.I am so tired of seeing his lying face.
    Oh and that was in October of 2002 not 2003. I dont guess the Unix sales went as well as he intended and they got out of GNU/Linux as well.
    What ever happened with the Caldera stockholders class action lawsuit?
    They need more lawyers on staff.

  30. Re:funding by Dunark · · Score: 2, Insightful

    ...Novell is asserting that SCO owes Novell 95% of all those millions of dollars in licensing fees received in the SCO extortion campaign. ...

    Yeah, and Boies has a contract that says he gets 20%. That means SCO has to pay out 115% of all the "license fees" they collect.

  31. Re:Wow by who'd-da-thought · · Score: 3, Insightful

    Answer: do anything you can to keep the case in limbo - including filing another lawsuit and using that as an excuse to delay proceedings.

    However, looking at the date of when the suit was filed, it is dated January 20, 2004... they were supposed to hand-over the code that "SCO owns" and code that was improperly included into Linux by IBM with specificity to the court by January 13, a full week before that suit was filed against Novell.

    There is no excuse (if they actually know what the hell they own code-wise) that they couldn't obey the court order, and supply the information that was requested of them. Didn't SCO say all along that they had proof of code misappropriations by IBM into Linux? SCO was supposed to satisfy interrogatories 1, 2, 4, 12, and 13, which are [1]:

    INTERROGATORY NO. 1: seeks specific identification of all alleged trade secrets and confidential or proprietary information that SCO alleges IBM misappropriated or misused. This information is requested by product, file and line of code.

    INTERROGATORY NO. 2: For each alleged trade secret and any confidential or proprietary information identified in response to Interrogatory No. 1, Interrogatory No. 2 seeks further identification of: (a) all persons who have or had rights to the same; (b) the nature and sources of SCO's rights in the same; and (c) efforts to maintain secrecy or confidentiality of the same.

    INTERROGATORY NO. 4: For each alleged trade secret and any confidential or proprietary information identified in response to Interrogatory No. 1, Interrogatory No. 4 seeks information regarding each instance in which plaintiff alleges that IBM misappropriated or misused the same. In particular, this interrogatory seeks (a) the date of the alleged misuse or misappropriation; (b) the persons involved; c) the manner of misuse or misappropriation; and (d) the location of any method or code in any IBM product, Linux, open source or the public domain.

    INTERROGATORY NO. 12: Please identify, with specificity (by file and line of code), (a) all source code and other material in Linux (including but not limited to the Linux kernel, any Linux operating sytem and any Linux distribution) to which plaintiff has rights; and (b) the nature of plaintiff's rights, including but not limited to whether and how the code or other material derives from UNIX.

    INTERROGATORY NO. 13: For each line of code and other materials identified in response to Interrogatory No. 12, please state whether (a) IBM has infringed plaintiff's rights, and for any rights IBM is alleged to have infringed, describe in detail how IBM is alleged to have infringed plaintiff's rights; and (b) whether plaintiff has ever distributed code or other material or otherwise made it available to the public, as part of a Linux distribution or otherwise, and, if so, the circumstances under which it was distributed or otherwise made available, including but not limited to the product(s) in which it was distributed or made available, and the terms under which is was distributed or made available (such as under the GPL or any other license).

    [1] The above Interrogatories were taken from Groklaw


    SCO knew all along, before the court date in December, that Novell was contesting the ownership of SVRX. This may be why Novell only filed copyright and not a suit against SCO, since they probably didn't want to ruin any chance of SCO being squashed in the January 23 hearing.

    Either way, the Judge better hand SCO's ass to themselves for their conduct in this case, especially the dribble of an excuse that was given for not complying with the cort order. Hell, just throw the suit out of the window, and let SCO battle it out with Novell.

  32. Re:Novell partly to blame for this mess by Trepalium · · Score: 3, Insightful

    The Santa Cruz Operation paid $150M to Novell for Unixware, etc. Caldera paid $30M to SCO for these contracts, and SCO changed their name to Tarantella, and then Caldera changed their name to The SCO Group. Novell holds that The Santa Cruz Operation paid that money to become Novell's exclusive agent in selling Unixware, and related products. Caldera believes that they bought the copyrights. SCOldera is playing a name game here, hoping to muddle the issue further. They talk to the press as if Old SCO and New SCO are one and the same. They say incorrect things like they paid $150M to get the contracts, when they truth is they paid only $30M.

    --
    I used up all my sick days, so I'm calling in dead.
  33. Re:last ditch effort before their plan blows up by tgibbs · · Score: 2, Insightful

    SCO did file stuff, but some of it was "You told us we couldn't ask for anything from IBM, but we won't give IBM what it wants until we get what we want", and more of it was "Oh, gee, our executives don't give a damn about a $3billion lawsuit -- they went away for Xmas, and we couldn't reach them. Too bad."

    I suspect that it's all part of the Plan. SCO's discovery demands are ridiculous--unless of course you buy SCO's extreme interpretation of what comprises "derivative works." SCO's persistent refusal to come up with any real support for their accusations puts the judge in a difficult position. SCO almost seems to be daring the judge to dismiss the case. But by doing so without ruling upon the validity of SCO's interpretation of copyright law (which the judge cannot do without hearing arguments) provides grounds for an appeal. I figure that SCO wants to lose this round. SCO's stock will fall sharply. And the principals who have been unloading SCO at a healthy profit will turn around and buy it back at rock-bottom prices.

    Then there will be an appeal, and another barrage of press releases, the stock will go up again, and they'll sell again. Perhaps they'll even make it to the Supreme Court, and be able to run the whole churn their stock a third time.

    On the other hand, perhaps some judge will actually allow SCO's discovery demands. With that much information to fish in, chances are that they can find something that IBM did improperly, and that they can use to shake down IBM for a settlement.