SCO v. Novell
Encyclopedia
SCO v. Novell was a United States lawsuit in which the The SCO Group (SCO) claimed ownership of the source code for the Unix
operating system, including portions of Linux
. SCO sought to have the court declare that SCO owned the rights to the Unix code, including the copyrights, and that Novell
had committed slander of title
by claiming those rights for itself.
The case hinged upon the interpretation of asset-transfer agreements between Novell and one of SCO's predecessor companies, the Santa Cruz Operation. Novell counter-sued, claiming that the asset-transfer agreements did not, in fact, transfer the intellectual property rights SCO sought. Novell further asked the Court to find that SCO had breached the agreements by signing Unix license agreements with Sun Microsystems
and Microsoft
without paying Novell the agreed percentage of those agreements.
Novell was found to be the owner of the Unix copyrights, and SCO was found to have breached the asset-transfer agreements.
from Unix's creator, AT&T
, on June 14, 1993. Novell's rights to parts of the Unix source code were established as part of the settlement in USL v. BSDi
.
On September 19, 1995, Novell entered into an Asset Purchase Agreement (APA) with the Santa Cruz Operation ("Santa Cruz"), a Unix vendor. The APA transferred certain rights regarding Unix, and Novell's UnixWare version of Unix, from Novell to Santa Cruz. These rights included the right to develop and market new versions of UnixWare, and the right to license SVRX (System V Release X) UNIX incidentally or with Novell's permission. It also required Santa Cruz to act as Novell's agent for the collection for certain royalties due under such licenses.
In 2000, Caldera Systems acquired the Server Software and Services divisions of Santa Cruz, as well as the UnixWare and OpenServer Unix technologies. Caldera Systems thus became the legal successor to Santa Cruz for the purposes of the APA. A year later Caldera Systems changed its name to Caldera International in 2001 and to The SCO Group (SCO) in 2002. Although the Santa Cruz Operation was colloquially known as "SCO," legally The SCO Group is a different company from the Santa Cruz Operation.
to compel Linux
users to pay them software license fees, claiming that unspecified SCO intellectual property
had been improperly included in Linux. As part of this campaign, SCO made several statements that they were the owners of Unix, inferring that they held the copyright for the original AT&T
source code of UNIX, and derivatives of that code.
After SCO filed suit against IBM
, claiming that IBM had violated SCO's copyrights to Unix, Novell publicly responded to these allegations. On May 28, 2003, Novell claimed that although it had transferred certain Unix assets to SCO’s predecessor, the Santa Cruz Operation, it had never transferred the copyrights upon which the IBM case hinged.
While SCO publicly claimed victory, behind the scenes SCO and Novell traded a series of heated letters. In these letters, Novell continued its claim that Novell was still the legal owner of the Unix copyrights.
On October 14, 2003, Novell registered several key Unix copyrights with the United States Copyright Office. After the registrations became public knowledge, Novell issued a press release on December 22, 2003 stating:
On January 13, 2004, Novell announced that it was indemnifying
Linux users—agreeing to protect them from lawsuits by third parties, like SCO, on the basis of violating the copyrights claimed by Novell. The same day, Novell released the letters that SCO and Novell had exchanged in the previous months. SCO immediately responded with a press release reiterating its earlier claim, and announcing that it was preparing to file a lawsuit against Novell.
to the Federal court system on February 6. This removal was upheld in the court's June 9 ruling.
On February 10, 2004, Novell filed a motion to dismiss the case. Novell requested dismissal for failure to state a claim upon which relief could be granted. Novell argued that:
In response, SCO filed several memoranda opposing Novell's motion to dismiss the case. Additionally, SCO filed a motion to remand the case back to State court. Novell countered that, because the case would hinge upon interpretation of Federal copyright law, it should be tried in Federal court.
On May 9, 2004, Federal Judge Dale A. Kimball heard both parties' arguments and took both motions under advisement. Judge Kimball denied SCO's motion to remand and partially granted Novell's motion to dismiss on June 9, 2004, on a pleading technicality. The case was dismissed without prejudice, which allowed SCO to amend their complaint to include properly pleaded special damages.
, breach of contract
, failure to remit royalties
, and failure to conduct audit obligations. Novell sought damages in excess of SCO's net worth, and, as SCO was quickly burning through its assets and cash on hand, Novell asked the court to sequester this money from SCO so that it would not be spent before the resolution of the case. Novell also asked the court to attach
SCO's assets pending adjudication of their claims. Had Novell won this motion, SCO would have been forced to file for bankruptcy
. Novell accused SCO of licensing Unix System V Release 4 to Microsoft and Sun Microsystems without then sending Novell the one hundred percent of the license fees as required by the APA. (Novell would then have been obligated to pay SCO five percent of the license fees as an administration fee, but only after SCO had sent the money to Novell first.)
In the counter-claim, Novell stated that SCO had asked Novell to participate in the SCO's Linux IP Infringement Licensing Plan. When Novell refused, SCO asked Novell to turn the Unix copyrights over to SCO, a request Novell also refused.
SCO filed a second amended complaint on February 6, 2006, containing the original slander of title claim as well as several new claims, including unfair competition, copyright infringement, and breaching a purported non-compete agreement.
division (a European vendor of Linux operating systems) filed a request for arbitration
with the Secretariat of the International Chamber of Commerce
's International Court of Arbitration in Paris
, France
. Years earlier, while still known as Caldera International, SCO had signed contracts with then-independent SuSE, among others, involving the United Linux
product. The United Linux members agreed that each member would have broad licenses to exploit and distribute Linux products that included United Linux technology. These agreements included clauses requiring the members to use an arbitration process to resolve disputes.
SuSE's arbitration request was a response to SCO's amended complaint against Novell. The arbitration process has relatively strict timelines, unlike the U.S. courts' procedures. Novell filed a Motion to Stay Claims Raising Issues Subject to Arbitration in the U.S. courts, saying that four of SCO's five claims had been brought to arbitration, including the claim of copyright infringement, and thus should be stayed until the Arbitration Tribunal
rendered its decision. Novell also filed an Answer to SCO's 2d Amended Complaint and Counterclaims, claiming a large number of affirmative defense
s, including a claim that SCO committed fraud upon the U.S. copyright office.
, Novell had obtained copies of SCO's Unix licensing agreements with Microsoft and Sun. Upon reviewing the agreements, Novell claimed that they breached the APA. The added claims were conversion
and breach of fiduciary duties. SCO stipulated
to Novell's motion, and therefore Judge Kimball granted it.
, or if that was rejected, then for a preliminary injunction. Novell alleged that SCO, through their agreements with Sun and Microsoft, licensed Novell's property without paying Novell the royalties it was due under the APA. Novell asked the court to force SCO to turn the over the royalties to Novell—or, in the alternative, be forced to put the money into a collective trust, where neither party would be able to access it until the issue was decided by the courts.
On August 10, 2007, Judge Kimball ruled that "...Novell is the owner of the UNIX and UnixWare Copyrights." Novell was awarded summary judgment on a number of its claims, and a number of SCO's claims were denied. SCO was instructed to account for, and pass to Novell, an appropriate portion of its income from the Sun and Microsoft licenses.
Judge Kimball's ruling stated that "SCO is obligated to recognize Novell's waiver of SCO's claims against IBM and Sequent," referring to other cases SCO had filed against those companies for allegedly violating SCO's intellectual property rights in Unix. After the ruling, Novell announced they had no interest in suing people over Unix, stating "We don't believe there is Unix in Linux."
. As SCO was a Delaware corporation, the bankruptcy filing was made with a the United States Bankruptcy Court
for the District of Delaware. The filing caused all pending litigation to be automatically stayed as required by the United States Code
.
On November 27, 2007, United States Bankruptcy Judge Kevin Gross lifted the automatic stay so as to allow the Utah court to determine how much money SCO owed Novell, but the bankruptcy court retained jurisdiction over any constructive trust that the Federal court might create.
On July 16, 2008, the Utah court awarded
The decision, which SCO could appeal, granted Novell the asked-for $2,547,817 award due to the 2003 Sun Agreement's modification of the 1994 confidentiality provisions. These modifications permitted the release of OpenSolaris
.
On November 20, 2008, Kimball's final judgment in the case affirmed his August 10, 2007 ruling, granting Novell the award plus interest of $918,122, plus $489 additional interest for every day after August 29, 2008 should SCO fail to pay the award by that date. The ruling also ordered a constructive trust of $625,486.90. Judge Kimball dismissed the case with no possibility to re-file the suit with an amended complaint
, restricting SCO to pursue the case only in appeals.
Novell filed a petition for a writ of certiorari on March 4, 2010, seeking intervention by the Supreme Court of the United States
. Novell argues that there is a circuit split
on the correct interpretation of the Copyright Act's transfer requirements, and that the correct requirements are more strict than the 10th Circuit's holding in this case.
.
SCO appealed the district court judgment to the United States Court of Appeals for the Tenth Circuit
on July 7, 2010.
On August 30, 2011 the Appeals Court affirmed the trial decision
Unix
Unix is a multitasking, multi-user computer operating system originally developed in 1969 by a group of AT&T employees at Bell Labs, including Ken Thompson, Dennis Ritchie, Brian Kernighan, Douglas McIlroy, and Joe Ossanna...
operating system, including portions of Linux
Linux
Linux is a Unix-like computer operating system assembled under the model of free and open source software development and distribution. The defining component of any Linux system is the Linux kernel, an operating system kernel first released October 5, 1991 by Linus Torvalds...
. SCO sought to have the court declare that SCO owned the rights to the Unix code, including the copyrights, and that Novell
Novell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...
had committed slander of title
Slander of title
In law, slander of title is normally a claim involving real estate in which one entity falsely claims to own another entity's property. Alternatively, it is casting aspersion on someone else's property, business or goods, e.g. claiming a house is infested with termites , or falsely claiming you own...
by claiming those rights for itself.
The case hinged upon the interpretation of asset-transfer agreements between Novell and one of SCO's predecessor companies, the Santa Cruz Operation. Novell counter-sued, claiming that the asset-transfer agreements did not, in fact, transfer the intellectual property rights SCO sought. Novell further asked the Court to find that SCO had breached the agreements by signing Unix license agreements with Sun Microsystems
Sun Microsystems
Sun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982...
and Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
without paying Novell the agreed percentage of those agreements.
Novell was found to be the owner of the Unix copyrights, and SCO was found to have breached the asset-transfer agreements.
Background
Novell, a vendor of proprietary network operating systems, acquired the rights to the original Unix source code when it purchased Unix System LaboratoriesUnix System Laboratories
Unix System Laboratories was originally organized as part of Bell Labs in 1989. USL joined with the UNIX Software Operation, also a Bell Laboratories division, in 1990. It assumed responsibility for Unix development and licensing activities...
from Unix's creator, AT&T
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...
, on June 14, 1993. Novell's rights to parts of the Unix source code were established as part of the settlement in USL v. BSDi
USL v. BSDi
USL v. BSDi was a lawsuit brought in the United States in 1992 by Unix System Laboratories against Berkeley Software Design, Inc and the Regents of the University of California over intellectual property related to UNIX...
.
On September 19, 1995, Novell entered into an Asset Purchase Agreement (APA) with the Santa Cruz Operation ("Santa Cruz"), a Unix vendor. The APA transferred certain rights regarding Unix, and Novell's UnixWare version of Unix, from Novell to Santa Cruz. These rights included the right to develop and market new versions of UnixWare, and the right to license SVRX (System V Release X) UNIX incidentally or with Novell's permission. It also required Santa Cruz to act as Novell's agent for the collection for certain royalties due under such licenses.
In 2000, Caldera Systems acquired the Server Software and Services divisions of Santa Cruz, as well as the UnixWare and OpenServer Unix technologies. Caldera Systems thus became the legal successor to Santa Cruz for the purposes of the APA. A year later Caldera Systems changed its name to Caldera International in 2001 and to The SCO Group (SCO) in 2002. Although the Santa Cruz Operation was colloquially known as "SCO," legally The SCO Group is a different company from the Santa Cruz Operation.
SCO goes on the offensive
In 2003, SCO initiated a campaignSCO-Linux controversies
The SCO-Linux controversies are a series of legal and public disputes between the software company SCO Group and various Linux vendors and users. The SCO Group alleges that its license agreements with IBM means that source code that IBM wrote and donated to be incorporated into Linux was added in...
to compel Linux
Linux
Linux is a Unix-like computer operating system assembled under the model of free and open source software development and distribution. The defining component of any Linux system is the Linux kernel, an operating system kernel first released October 5, 1991 by Linus Torvalds...
users to pay them software license fees, claiming that unspecified SCO intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
had been improperly included in Linux. As part of this campaign, SCO made several statements that they were the owners of Unix, inferring that they held the copyright for the original AT&T
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...
source code of UNIX, and derivatives of that code.
After SCO filed suit against IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
, claiming that IBM had violated SCO's copyrights to Unix, Novell publicly responded to these allegations. On May 28, 2003, Novell claimed that although it had transferred certain Unix assets to SCO’s predecessor, the Santa Cruz Operation, it had never transferred the copyrights upon which the IBM case hinged.
Novell asserts it owns the copyrights
On June 6, 2003, SCO held a press conference in which it revealed a second amendment to the asset purchase agreement between Novell and Santa Cruz Operation. SCO claimed this amendment supported its claim to the Unix copyrights. In response, Novell issued a press release in which it stated:While SCO publicly claimed victory, behind the scenes SCO and Novell traded a series of heated letters. In these letters, Novell continued its claim that Novell was still the legal owner of the Unix copyrights.
On October 14, 2003, Novell registered several key Unix copyrights with the United States Copyright Office. After the registrations became public knowledge, Novell issued a press release on December 22, 2003 stating:
On January 13, 2004, Novell announced that it was indemnifying
Indemnity
An indemnity is a sum paid by A to B by way of compensation for a particular loss suffered by B. The indemnitor may or may not be responsible for the loss suffered by the indemnitee...
Linux users—agreeing to protect them from lawsuits by third parties, like SCO, on the basis of violating the copyrights claimed by Novell. The same day, Novell released the letters that SCO and Novell had exchanged in the previous months. SCO immediately responded with a press release reiterating its earlier claim, and announcing that it was preparing to file a lawsuit against Novell.
Utah state court
SCO filed a Slander of Title lawsuit against Novell on January 20, 2004. Filed in Utah state court, the lawsuit requested both preliminary and permanent injunctions assigning all of Novell's Unix copyright registrations to SCO and forcing Novell to retract all of their claims to the Unix code.United States District Court for the District of Utah
Novell removed the lawsuitRemoval jurisdiction
In the United States, removal jurisdiction refers to the right of a defendant to move a lawsuit filed in state court to the federal district court for the federal judicial district in which the state court sits. This is a general exception to the usual American rule giving the plaintiff the right...
to the Federal court system on February 6. This removal was upheld in the court's June 9 ruling.
On February 10, 2004, Novell filed a motion to dismiss the case. Novell requested dismissal for failure to state a claim upon which relief could be granted. Novell argued that:
- SCO did not show a valid transfer of copyright ownership, because the Asset Purchase Agreement was merely a promise to assign and that the Agreement is therefore-by law-not sufficient to transfer the copyrights to SCO; and
- SCO did not specify specific special damages required for such a claim.
In response, SCO filed several memoranda opposing Novell's motion to dismiss the case. Additionally, SCO filed a motion to remand the case back to State court. Novell countered that, because the case would hinge upon interpretation of Federal copyright law, it should be tried in Federal court.
On May 9, 2004, Federal Judge Dale A. Kimball heard both parties' arguments and took both motions under advisement. Judge Kimball denied SCO's motion to remand and partially granted Novell's motion to dismiss on June 9, 2004, on a pleading technicality. The case was dismissed without prejudice, which allowed SCO to amend their complaint to include properly pleaded special damages.
Novell's counter-suit
On July 29, 2005, Novell filed a counter-suit against SCO claiming slander of titleSlander of title
In law, slander of title is normally a claim involving real estate in which one entity falsely claims to own another entity's property. Alternatively, it is casting aspersion on someone else's property, business or goods, e.g. claiming a house is infested with termites , or falsely claiming you own...
, breach of contract
Breach of contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
, failure to remit royalties
Royalties
Royalties are usage-based payments made by one party to another for the right to ongoing use of an asset, sometimes an intellectual property...
, and failure to conduct audit obligations. Novell sought damages in excess of SCO's net worth, and, as SCO was quickly burning through its assets and cash on hand, Novell asked the court to sequester this money from SCO so that it would not be spent before the resolution of the case. Novell also asked the court to attach
Attachment (law)
Attachment is a legal process by which a court of law, at the request of a creditor, designates specific property owned by the debtor to be transferred to the creditor, or sold for the benefit of the creditor. A wide variety of legal mechanisms are employed by debtors to prevent the attachment of...
SCO's assets pending adjudication of their claims. Had Novell won this motion, SCO would have been forced to file for bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
. Novell accused SCO of licensing Unix System V Release 4 to Microsoft and Sun Microsystems without then sending Novell the one hundred percent of the license fees as required by the APA. (Novell would then have been obligated to pay SCO five percent of the license fees as an administration fee, but only after SCO had sent the money to Novell first.)
In the counter-claim, Novell stated that SCO had asked Novell to participate in the SCO's Linux IP Infringement Licensing Plan. When Novell refused, SCO asked Novell to turn the Unix copyrights over to SCO, a request Novell also refused.
SCO filed a second amended complaint on February 6, 2006, containing the original slander of title claim as well as several new claims, including unfair competition, copyright infringement, and breaching a purported non-compete agreement.
SuSE arbitration
On April 10, 2006, Novell's SuSESUSE Linux distributions
SUSE Linux is a computer operating system. It is built on top of the open source Linux kernel and is distributed with system and application software from other open source projects. SUSE Linux is of German origin and mainly developed in Europe. The first version appeared in early 1994, making...
division (a European vendor of Linux operating systems) filed a request for arbitration
Arbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...
with the Secretariat of the International Chamber of Commerce
International Chamber of Commerce
The International Chamber of Commerce is the largest, most representative business organization in the world. Its hundreds of thousands of member companies in over 130 countries have interests spanning every sector of private enterprise....
's International Court of Arbitration in Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
. Years earlier, while still known as Caldera International, SCO had signed contracts with then-independent SuSE, among others, involving the United Linux
United Linux
United Linux was an attempt by a consortium of Linux distributors to create a common base distribution for enterprise use, so as to minimize duplication of engineering effort and form an effective competitor to Red Hat...
product. The United Linux members agreed that each member would have broad licenses to exploit and distribute Linux products that included United Linux technology. These agreements included clauses requiring the members to use an arbitration process to resolve disputes.
SuSE's arbitration request was a response to SCO's amended complaint against Novell. The arbitration process has relatively strict timelines, unlike the U.S. courts' procedures. Novell filed a Motion to Stay Claims Raising Issues Subject to Arbitration in the U.S. courts, saying that four of SCO's five claims had been brought to arbitration, including the claim of copyright infringement, and thus should be stayed until the Arbitration Tribunal
Tribunal
A tribunal in the general sense is any person or institution with the authority to judge, adjudicate on, or determine claims or disputes—whether or not it is called a tribunal in its title....
rendered its decision. Novell also filed an Answer to SCO's 2d Amended Complaint and Counterclaims, claiming a large number of affirmative defense
Affirmative defense
A defendant offers an affirmative defense when responding to a plaintiff's claim in common law jurisdictions, or, more familiarly, in criminal law. Essentially, the defendant affirms that the condition is occurring or has occurred but offers a defense that bars, or prevents, the plaintiff's claim. ...
s, including a claim that SCO committed fraud upon the U.S. copyright office.
Licensing agreements
On September 22, 2006, Novell sought leave to file amended counterclaims. Through discoveryDiscovery (law)
In U.S.law, discovery is the pre-trial phase in a lawsuit in which each party, through the law of civil procedure, can obtain evidence from the opposing party by means of discovery devices including requests for answers to interrogatories, requests for production of documents, requests for...
, Novell had obtained copies of SCO's Unix licensing agreements with Microsoft and Sun. Upon reviewing the agreements, Novell claimed that they breached the APA. The added claims were conversion
Conversion (law)
Conversion is a common law tort. A conversion is a voluntary act by one person inconsistent with the ownership rights of another. It is a tort of strict liability...
and breach of fiduciary duties. SCO stipulated
Stipulation
In the law of the United States, a stipulation is an agreement made between opposing parties prior to a pending hearing or trial. For example, both parties might stipulate to certain facts, and therefore not have to argue those facts in court. After the stipulation is entered into, it is...
to Novell's motion, and therefore Judge Kimball granted it.
Novell's motion for summary judgement
Novell filed a Motion on September 29, 2006 asking for summary judgmentSummary judgment
In law, a summary judgment is a determination made by a court without a full trial. Such a judgment may be issued as to the merits of an entire case, or of specific issues in that case....
, or if that was rejected, then for a preliminary injunction. Novell alleged that SCO, through their agreements with Sun and Microsoft, licensed Novell's property without paying Novell the royalties it was due under the APA. Novell asked the court to force SCO to turn the over the royalties to Novell—or, in the alternative, be forced to put the money into a collective trust, where neither party would be able to access it until the issue was decided by the courts.
On August 10, 2007, Judge Kimball ruled that "...Novell is the owner of the UNIX and UnixWare Copyrights." Novell was awarded summary judgment on a number of its claims, and a number of SCO's claims were denied. SCO was instructed to account for, and pass to Novell, an appropriate portion of its income from the Sun and Microsoft licenses.
Judge Kimball's ruling stated that "SCO is obligated to recognize Novell's waiver of SCO's claims against IBM and Sequent," referring to other cases SCO had filed against those companies for allegedly violating SCO's intellectual property rights in Unix. After the ruling, Novell announced they had no interest in suing people over Unix, stating "We don't believe there is Unix in Linux."
SCO's bankruptcy
The parties were expected to go to trial on September 17, 2007 in order to determine exactly how much money SCO owed Novell. However, on September 14, the SCO Group filed for bankruptcy under Chapter 11 of the United States Bankruptcy CodeChapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
. As SCO was a Delaware corporation, the bankruptcy filing was made with a the United States Bankruptcy Court
United States bankruptcy court
United States bankruptcy courts are courts created under Article I of the United States Constitution. They function as units of the district courts and have subject-matter jurisdiction over bankruptcy cases. The federal district courts have original and exclusive jurisdiction over all cases arising...
for the District of Delaware. The filing caused all pending litigation to be automatically stayed as required by the United States Code
United States Code
The Code of Laws of the United States of America is a compilation and codification of the general and permanent federal laws of the United States...
.
On November 27, 2007, United States Bankruptcy Judge Kevin Gross lifted the automatic stay so as to allow the Utah court to determine how much money SCO owed Novell, but the bankruptcy court retained jurisdiction over any constructive trust that the Federal court might create.
Trial to determine damages
For the purposes of the trial to determine how much money SCO owed Novell, SCO was named the defendant and Novell was named the plaintiff, because SCO had not prevailed on any of its initial claims. The trial commenced April 30, 2008. Novell sought the recovery of $19,979,561 from SCO based on its licenses to Microsoft, Sun, and others.On July 16, 2008, the Utah court awarded
The decision, which SCO could appeal, granted Novell the asked-for $2,547,817 award due to the 2003 Sun Agreement's modification of the 1994 confidentiality provisions. These modifications permitted the release of OpenSolaris
OpenSolaris
OpenSolaris was an open source computer operating system based on Solaris created by Sun Microsystems. It was also the name of the project initiated by Sun to build a developer and user community around the software...
.
On November 20, 2008, Kimball's final judgment in the case affirmed his August 10, 2007 ruling, granting Novell the award plus interest of $918,122, plus $489 additional interest for every day after August 29, 2008 should SCO fail to pay the award by that date. The ruling also ordered a constructive trust of $625,486.90. Judge Kimball dismissed the case with no possibility to re-file the suit with an amended complaint
Complaint
In legal terminology, a complaint is a formal legal document that sets out the facts and legal reasons that the filing party or parties In legal terminology, a complaint is a formal legal document that sets out the facts and legal reasons (see: cause of action) that the filing party or parties In...
, restricting SCO to pursue the case only in appeals.
Circuit court appeal
On August 24, 2009, the U.S. Court of Appeals for the Tenth Circuit partially reversed Kimball's August 10, 2007 summary judgement, insofar as Kimball had found that Novell owned the copyright to Unix. The portion dealing with the 2003 Sun agreement was upheld by the appeals court. As a result, SCO could pursue its ownership of the Unix copyrights at trial. However, it remained liable for the $2,547,817 royalty award.Novell filed a petition for a writ of certiorari on March 4, 2010, seeking intervention by the Supreme Court of the United States
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
. Novell argues that there is a circuit split
Circuit split
In the context of United States federal courts, a circuit split exists when two or more circuits in the United States court of appeals system have different interpretations of federal law....
on the correct interpretation of the Copyright Act's transfer requirements, and that the correct requirements are more strict than the 10th Circuit's holding in this case.
Trial on remand for copyright issues
The jury trial on the remanded copyright issues began on March 8, 2010 before Judge Ted Stewart. It was expected to last three weeks. On March 30, the jury returned a unanimous verdict in favor of Novell. On June 10, Judge Stewart ruled in favor of Novell on all issues, closing the case. The court found that Novell had not committed slander of title, was not now required to transfer the copyrights under the APA, that its copyright waivers issued to IBM were authorized, and that they did not violate the covenant of good faithImplied covenant of good faith and fair dealing
In contract law, the implied covenant of good faith and fair dealing is a general presumption that the parties to a contract will deal with each other honestly, fairly, and in good faith, so as to not destroy the right of the other party or parties to receive the benefits of the contract...
.
SCO appealed the district court judgment to the United States Court of Appeals for the Tenth Circuit
United States Court of Appeals for the Tenth Circuit
The United States Court of Appeals for the Tenth Circuit is a federal court with appellate jurisdiction over the district courts in the following districts:* District of Colorado* District of Kansas...
on July 7, 2010.
On August 30, 2011 the Appeals Court affirmed the trial decision
External links
- Novell's Unique Legal Rights - Novell's official page about this lawsuit
- SCO v. Novell at SCO.com - SCO's official page about the lawsuit
- Novell-SCO Timeline at GroklawGroklawGroklaw is an award-winning website covering legal news of interest to the free and open source software community. Started as a law blog on May 16, 2003 by paralegal Pamela Jones at Radio UserLand, it has covered issues such as the SCO-Linux lawsuits, the EU anti-trust case against Microsoft, and...
- Groklaw's Legal documents section for SCO vs Novell - An archive of court documents related to this lawsuit
- Novell Files Arbitration Request in Paris -The Jacobs Declaration
- Novell Files Motion to Stay, Answer with Counterclaims etc.