Novell Legal Effort May Undermine SCO-IBM Lawsuit
Date: Thursday, December 07 2006 @ 08:02:23 EST
Topic: SCO related
Novell asked federal Judge Dale Kimball to declare that Novell had the
right to issue a waiver to IBM for Unix use when SCO refused Novell's
demands to do so three years ago. If that waiver is upheld, then SCO's
claims could be argued to be based on nonexistent rights.
SCO has insisted that for the more than $100 million it spent on Unix
in 1995, it obtained all rights to the code and its use.
The SCO Group's struggle to keep its Linux-related lawsuits against IBM and Novell viable this week faced increasingly dismal prospects.
A new legal effort by Novell could, if successful, fatally undermine
the foundation for both its US$5 billion contract and copyright suit
against IBM, and its "slander of title" case against Novell.
SCO Against the Ropes?
SCO has spent tens of millions of dollars on the cases in more than 3
1/2 years of litigation. It contends IBM illegally leaked SCO-owned
Unix code into the freely distributed Linux operating system; and it is suing Novell for claiming it, not SCO, owns Unix.
Specifically, Novell asked federal
Judge Dale Kimball to declare that Novell had the right to issue a
waiver to IBM for Unix use when SCO refused Novell's demands to do so
three years ago. If that waiver is upheld, then SCO's claims could be
argued to be based on nonexistent rights.
SCO has insisted that for the more than $100 million it spent
on Unix in 1995, it obtained all rights to the code and its use. Novell
counters that the purchase limited what assets SCO acquired while
safeguarding "certain Unix rights" for Novell.
The motion was filed late Friday, the day after Kimball
upheld Magistrate Judge Brooke Wells' June decision striking two-thirds
of SCO's case against IBM.
Ruling Hurts Stock Price
SCO attorney Stuart Singer acknowledged Novell's latest
motion "obviously is directed at the heart of the case. [But] we
believe it is mistaken, and we will vigorously oppose it."
SCO's share prices continued to plunge to levels not seen
since before it first filed suit against IBM, in March 2003 -- and
raised the specter of delisting by the Nasdaq exchange, which requires
members shares to trade at $1 or more.
The company's stock has been in freefall since Kimball's
ruling -- its stock had traded above $4.50 before Wells' earlier
decision in June.
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