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Posted: 8:44 PM- Lindon software company SCO Group was dealt a heavy blow Friday when a judge ruled it doesn't own the rights to the Unix code it has accused IBM of putting into the open-source Linux computer operating system.
In a 102-page ruling, U.S. District Court Dale Kimball tossed out SCO's claim that it owns the Unix and UnixWare copyrights. At issue: whether SCO purchased all rights to Unix from Novell in 1995, or whether Novell retained ownership while granting limited licensing and development rights.
"If the parties intended to transfer UNIX and UnixWare copyrights as well, they could have easily demonstrated that intent while they were making the distinction for UNIX and UnixWare trademarks," Kimball wrote in Friday's ruling. "There is nothing in the text of the [Asset Purchase Agreement] that would support an interpretation of 'all copyrights' to mean only Netware copyrights."
Kimball's ruling stands to torpedo SCO's slander of title lawsuit against Novell and could also fatally undermine its bigger, $5 billion claim against Big Blue.
Joe LaSala, senior vice president and general counsel of the Waltham, Mass.-based software maker, said in a statement Friday the ruling "vindicates the position Novell has taken since the inception of the dispute with SCO" and "eliminates SCO's threat to the Linux community, based on allegations of copyright infringement of Unix."
Darl McBride, chief executive officer of SCO, did not return a telephone call seeking comment Friday.
SCO has spent tens of millions of dollars in court since first filing against IBM in March 2003. The software company accused IBM of damaging the value of its version of the Unix operating system by removing source code from two of its Unix products and illegally dumping the code into the freely distributed Linux system, which resembles Unix. IBM denies the claims and has filed a countersuit.
Earlier this year, U.S. Magistrate Judge Brooke Wells rejected SCO's argument that IBM programmers had destroyed potentially damaging code evidence soon after SCO filed suit.
In an 2006 ruling, Wells barred SCO from pursuing most of nearly 300 claims against IBM, ruling that the Utah company had failed to provide specific evidence of Unix code it claimed IBM had misappropriated into Linux. Even so, at the time, McBride vowed to see SCO's complaint to trial.
SCO has blamed competition from Linux for the ongoing slide in its revenues and operating losses. In June, the company said it had an operating loss of $1.1 million in the quarter ended April 30. A year earlier it lost $3.9 million.
Revenue slipped to $6 million from $7.1 million in the same quarter of last year. SCO is also pursuing a parallel lawsuit against auto parts retailer AutoZone for infringing on its Unix copyrights. It accuses AutoZone of running versions of Linux that contain SCO code.
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