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A federal judge has refused a second time to dismiss the SCO Group's slander-of-title lawsuit against Novell Inc.

U.S. District Judge Dale Kimball's decision, which came five weeks after he heard oral arguments on the motion, means a key battle over copyrights to the Unix operating system will continue.

The suit has potentially critical ramifications for SCO's separate, $5 billion U.S. District Court complaint against IBM, which Kimball also is hearing. The Lindon software company has accused Big Blue of profiting from releases of the freely-distributed Linux operating system that purportedly contained purloined code from SCO-owned Unix.

"We are pleased the court has denied Novell's second attempt to dismiss this case," SCO spokesman Blake Stowell said Wednesday. "We look forward to taking discovery in the case and moving this issue to a resolution."

Calls to Waltham, Mass.-based Novell seeking comment were not immediately returned.

SCO sued Novell after that company publicly challenged SCO's claims on Unix. Novell insisted it still retained copyrights on Unix despite a 1995 sale agreement with a SCO predecessor company, and that, SCO claims, hurt business and sullied its reputation.

Had Kimball granted Novell's dismissal motion, it would have undermined the foundation of SCO's claims against IBM. Consequently, IBM attorneys could have used the Novell case to argue that SCO lacked standing to claim damages from the alleged code transfer to Linux.

Instead, Kimball, who had also rebuffed an earlier 2004 dismissal bid as premature, ruled there remained enough doubt over Unix ownership to justify further evidence-gathering and argument on the matter.

"Even though Novell argues that it has evidence to support its alleged good faith basis for claiming ownership of the Unix copyrights, the proper place to introduce that evidence and argue its significance is not on a motion [to] dismiss," Kimball wrote.

IBM and Novell are just two companies against whom SCO has filed suit based on its Unix-Linux claims. SCO also has sued Linux corporate users DaimlerChrysler and Autozone, and in turn has been sued by RedHat Inc., the world's leading Linux distributor.