Judge Won't Throw Out SCO Slander Lawsuit

Filed under
Legal

A federal judge refused to throw out The SCO Group's slander-of-title lawsuit against another Utah technology company, Novell Inc.

U.S. District Court Judge Dale Kimball ruled it was too early to sort through competing claims traded by SCO and Novell in their fight over ownership of copyrights to the Unix computer operating system and UnixWare.

Lindon-based SCO says Novell hurt its business and reputation by publicly and emphatically denying it sold copyrights when it allowed SCO to take over the business of servicing Unix technology, an operating system used by large corporations.

In his ruling Monday, Kimball refused to let Novell off the hook despite having previously raised doubts about whether any copyrights were transferred and finding merit in the competing ownership claims of both companies. Given that, Novell argued it couldn't have acted with malice in making its ownership claim. Malice is a required element of a slander.

But SCO argues Novell timed its announcement in 2003 to coincide with the release of an SCO earnings statement in an apparent effort to scare off investors and drive down SCO stock.

It also said Novell reiterated its claim after acknowledging it didn't have a copy of an amendment to the 1995 deal with SCO.

The slander-of-title case parallels another of SCO's lawsuits alleging IBM Corp. dumped confidential Unix code into the Linux operating system, which is freely distributed and has no mechanism in place to pay licensing fees.

SCO is suing International Business Machines Corp. for allegedly giving away Unix software code to Linux developers. SCO acquired rights to Unix through a series of corporate acquisitions and mergers.

IBM has denied the allegations while turning over millions of lines of code for examination by SCO. The case has dragged on for nearly three years and a trial isn't expected for another year.

Novell bought Unix from AT&T Corp. in 1992, and SCO has said its predecessor, Santa Cruz Operations Inc., paid Novell 6.1 million shares of SCO stock valued over $100 million for Unix rights.

Novell, which has operations in Provo and Waltham, Mass., and IBM are among companies that have begun developing products for use in Linux.

Associated Press