Ex-SCO CEO testifies Novell claim inflicted harm

Published March 16, 2010 6:50 pm
Trial » But attorney questions whether damage wasn't self-inflicted.
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Ex-SCO CEO Darl McBride testified Tuesday that Novell's claims to own the copyrights of Unix in 2003 preceded a sharp decline in SCO's shares and a significant drop in revenues.

A Novell attorney, however, suggested SCO's financial problems were of its own making when it angered many people with its attack on the rival Linux operating system.

McBride, in his second day of testimony in SCO's lawsuit against Novell, said Novell's copyright claims eventually led to the demise of SCO's program to license users of Linux. SCO started selling licenses after McBride became CEO and was told that significant parts of the company's Unix system had been used to improve Linux in violation of the company's copyrights, McBride told the jury assembled to hear the case.

He pointed to the loss of a proposed $30 million licensing agreement with Hewlett-Packard.

H-P "said it was difficult to complete this transaction as long as Novell was out there saying they owned the copyrights," he said.

The testimony in the trial that is expected to last at least another week goes to SCO's contention it suffered significant financial losses as a result of Novell's alleged false claims in 2003 to have retained the copyrights to Unix when it sold the operating system in 1995. SCO filed for bankruptcy protection in 2007, and McBride was fired as CEO by the trustee last October.

Lindon-based SCO had sued IBM in 2003 for allegedly violating its Unix license by using that code to make significant changes in Linux, then sued Novell the next year for claiming ownership of the Unix copyrights based on the ambiguous language of a 1995 agreement.

Novell retracted that claim after an amendment to the 1995 contract was discovered that appeared to clear up the confusion in SCO's favor. But SCO says IBM then colluded with Novell to reassert ownership in order to blunt SCO's claims to Linux, around which IBM and Novell were building products.

In cross-examination Tuesday, Novell attorney Eric Acker quizzed McBride on whether SCO had instead shot itself in the foot in its attack on Linux, which is open source software whose codes are available for free to individuals and to companies that want to build products around it.

Acker pointed to news accounts and other evidence that showed the animosity generated in the open source community, which is fiercely loyal to the idea of software open to the public for free.

Seeing declining revenues and a chance to license Linux, Acker also asked McBride if SCO had decided to alter its business.

"So you changed the business from a software company to a litigation company?" the attorney asked.

"That's not true," McBride replied.

tharvey@sltrib.com" Target="_BLANK">tharvey@sltrib.com

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