Novell Files for Summary Judgment Against SCO

rm69990 writes "Novell filed a motion with Judge Dale Kimball asking him to grant summary judgment or a preliminary injunction on Novell's claims that SCO wrongfully retained the money it received from Microsoft and Sun for their SVRX licensing and sublicensing agreements. Novell indicated over a year ago, when they initially filed their counterclaims against SCO, that they were planning on asking Judge Kimball to force SCO to turn over these monies. However, Novell only recently received the actual licensing agreements between SCO, Sun and Microsoft through discovery, despite demanding copies of them as early as 2003, and thus was unable to determine that SCO had breached the APA until now, which is why this motion is being filed so late in the case. This motion will likely bankrupt SCO if granted."

Comments

This could be it.

[Anonymous Coward]

Judge K. can decide on the issue of whether SCO has kept Novell's money. It is just a matter of law and there is no realistic dispute over the facts. (If there was a real dispute over facts then it would have to go to a jury.) It's just a matter of reading the contract.

So, Judge K. issues a summary judgement saying that SCO has to give Novell 25 million dollars right now. That bankrupts SCO. That doesn't stop the court cases though. The bankruptcy trustee appointed by the court replaces SCO's management. The bankruptcy trustee then negotiates with the creditors (mostly Novell and IBM). All the cases are settled out of court. My WAG is that the out of court agreements include SCO (as directed by the trustee) admitting that they are wrong about all the cases and all the counterclaims.

The counterclaim we all care about the most is IBM's counterclaim number 10. That's the one that says that there is no copyrighted Unix code in Linux. That will be the end of that particular piece of FUD.

My fondest wish is that Darl goes to jail for Lanham act violations or for something the SEC charges him with.

Re:Its about time

[jonobp]

Yeah, they did.

Are they screwed? That is not a good question because they were screwed when the first filed suit.

Seriously, even if SCO wins, a verdict to that effect will not come around for perhaps 5-10 years. SCO thinks that they will then rake in a ton of money on their licensing. Like anyone would even use their Unix code by the time this is all said and done. I'm sorry but they killed their own company when the started all the lawsuits. They were so scared of Linux that they thought they needed to fight and figured that the US is so sue happy that they would win easily. They could have sucked years more out of their code because the large companies that use it are to scared to change anything until there is no other choice. SCO = stupid

Does anyone remember when SCO was actually a large company worth a few billion dollars? Now their stock is worthless and either Novell or IBM will kill them. Personally, if the Novell evidence is as open and shut as it seems, SCO will have to pay up and they will die. IBM will probably laugh and go out for beers with Novell. Perhaps we'll even see a Novell and IBM merger down the roads, that would be pretty cool.

Too Bad It Won't Go

[MikeyTheK]

Unfortunately, this has absolutely no chance of success. Motions for Summary Judgment are generally denied unless the other side's argument is so flimsy that there is no shot at it succeeding at trial, and is wasting the court's time. However, since a judge can't just dismiss a civil action for being st00pid, s/he generally first tries to get the parties to settle, and then tries to encourage the plaintiff (or defendant) to punt, to save them the embarrassment of granting a MSJ. If they refuse, then this might succeed.

In a case like this, though, where the facts and evidence are sure to be the crux of matters, there is no way the judge will grant it, which is unfortunate.

Re:Too Bad It Won't Go

[Scarblac]

Well, the motion isn't for the entire case, just one small specific sub-part of it - that SCO owes Novell those royalties. It seems to me (and I'm clueless about law except for following these things on Groklaw) that that point may be uncontroversial enough to grant the point.

Of course, SCO will get to file a defence first, but it seems it's pretty hard to give arguments at all - they did receive the royalties, the contract does say that a large part of those go to Novell, and they haven't paid yet. Those are facts. Perhaps they'll be able to make the issue seem slightly controversial, but that won't be easy.

the Baystar connection ..

[rs232]

"Mr. Emerson [Microsoft's senior vice president of corporate development and strategy] and I discussed a variety of investment structures wherein Microsoft would `backstop,' or guarantee in some way, BayStar's investment....Microsoft assured me that it would in some way guarantee BayStar's investement in SCO."

"Microsoft stopped returning my phone calls and emails, and to the best of my knowledge, Mr. Emerson was fired from Microsoft"

http://www.groklaw.net/article.php?story=200609292 12013816

Initially, there is no impact.

[khasim]

So if (when) SCO goes bankrupt, what are the implications for those companies that use their OS?

Their systems will be running the same software on Judgement +1 as they were on Judgement -1. So their immediate situation shouldn't be any different.

Also, if their management has any clue what-so-ever, they've already explored the costs/options involved in migrating.

The best case scenario for them would be for IBM to win EVERYTHING including sufficient cash awards that SCO would be unable to pay them (this is looking very possible if Novell gets their judgement). Then IBM could take the SCO business as partial payment (under the same terms with Novell as SCO had) and I'm sure that IBM would offer very inexpensive migration services to get everyone to Linux or AIX or something else.

This would be great PR for IBM's Linux drive. SCO attacked IBM/Linux and SCO was completely destroyed as a company and then IBM still took care of SCO's old customers (far better than SCO did with their lawsuits).

You cannot buy PR like that.

Re:If it's granted, what happens to the IBM case?

[KokorHekkus]

I read in the comments of the page that such a motion is only granted if it is shown that it will not make SCO bankrupt. I'm not a lawyer, and I don't understand why these motions exist then? Why would Novell get money from SCO in the first place? What has the deal with microsoft and sun to do with novell?

When SCO/Caldera bought some rights to Unix System V from Novell they couldn't/wouldn't pay enough money up front. So they agreed that of all future license there would be a 95/5 split between Novell and SCO/Calders (yes, 95% to Novell).

SCO is between a rock and a hard place

[Marcion]

SCO argues that the Asset Purchase Agreement gave SCO the rights to Unix, and thus the rights to hold IBM for account for its 'allegedly' putting Unix source code into Linux (most of the so-called 'evidence' for this was thrown out by the court because of the lack of line and file information). So if the Asset Purchase Agreement is held by the court to be valid then SCO owes Novell tens of millions. If the court says that the Asset Purchase Agreement is invalid then SCO does not have any property over the Unix code and Novell owns it all, Novell sacks SCO as their franchisee, and SCO do not have a business model or revenue income. Either way, I cannot see a future business model for SCO, their licence revenue is drying up year-on-year as people port their apps to Linux or Solaris; and all the people that can make money from Unix (as opposed to SCO who just lose it), that is Sun, IBM and HP, do not need SCO at all. Sun's Solaris is based on BSD and they have already bought a get out of jail free card for any Unix V pollution, and IBM had a licence from AT&T for AIX and want to move to Linux anyway, as with HP. Everyone else just uses Linux. If there is a market left for SCO, please tell me what it is?

Re:SCO is between a rock and a hard place

[Marcion]

>Novell isn't contesting that at all.

Indeed, it is SCO that wants to pick and choose which terms to accept. If the Judge does rule that they have to pay then it is game over for SCO.

Re:Business implications?

[MrNaz]

What, you mean they aren't using MacOS?

Re:'Bout Damn Time

[backwardMechanic]

Darl's never going to make it to Gitmo. He's not innocent.

Re:Don't be sorry.

[schon]

This was an attempt to spread fear about Linux ... and when that wasn't working, it became a pump-and-dump scam so SCO executives could sell off their stock options at a profit

No. If you look at the timeline, it began as an attempt to extort money from IBM. Caldera was dead (apparently they never figured out that nobody would buy a Linux distro that used per-seat licensing) so they hired Darl McBride to sue IBM for "something", in an attempt to get a buyout.

When IBM called their bluff, Caldera (now SCOX) began their media slams against them. This was when the stock pumping began (presumably, the stock pumping was done in an effort to encourage IBM to buy them sooner, rather than later.) At this time, they were publically stating that Linux was "clean", and it was just IBM who was at fault.

Around April 2003, MS threw $60M at them (this is the money that they owe Novell) for "licenses" that MS already had, and wasn't even using. It was at this point that SCOX changed their tune and started the whole "millions of lines of code was dumped into Linux", their threats to sue Linux end-users, and their $699 "license". (The inference is that MS saw an opportunity to spread FUD, and that's what the money was for. The timing is just too good .)

Re:If it's granted, what happens to the IBM case?

[Marcion]

If I remember rightly, SCO has to trasfer 100% and then Novell hands back 5% as a fee.

Re:Business implications?

[Linker3000]

Actually,

The assets of the bankrupt company belong to the creditors - that would in the majority be IBM so, in effect IBM would be able to use these assets to realise any monies owed.

In light of the fact that some of the potential 'assets' of SCO would have included the costs awarded to them IF they had won the case, IBM could now withdraw their request for summary judgement and pursue the claim(s) formerly alleged by SCO.

Now, since IBM is also a defendent in the case, they could ADMIT the claims in the original SCO lawsuit and pay themselves nominal damages BUT also now have the case proven and so open the floodgates for them to pursue Red Hat, Mandriva, Ubuntu, Slackware developers etc. etc. and each and every corporate and private Linux user.

The result would be that IBM becomes the most evil force in the empire, Microsoft becomes the people's friend, Bill Gates is made a saint and everyone starts installing GND/HURD (but can't explain why), the world's economic infrastructure implodes and the only way to do any serious computing is to submit a batched application via teleprinter to your local University who had the forsesight to store their old VAX 11/750 in 1987 'just in case'.

L3K

PS : IANALAMTUFCE

(I am not a lawyer and made this up for comic effect)