The complicated dispute dates back to February 1985 when IBM entered into a licence agreement with the then owner of the UNIX system, AT&T, in order to produce its own AIX operating system. The agreements required that IBM hold the UNIX software code in confidence, and prohibited unauthorised distribution or transfer.
In 1992, AT&T sold UNIX to Novell. Then, in 1995, the Santa Cruz Operation purchased rights in UNIX from Novell, including source code, source documentation, software development contracts, licenses and other intellectual property.
The initial contract specifically excluded copyright from the sale, while an amendment, dated October 1996, again specifically excluded copyrights, with the exception of “the copyrights and trade marks owned by Novell as of the date of the [contract] required for Santa Cruz Operations to exercise its rights with respect to the acquisition of UNIX and Unixware technologies."
The Santa Cruz Operation sold on these rights to Caldera International, which subsequently changed its name to The SCO Group.
In a series of lawsuits filed since March 2003, SCO has claimed intellectual property rights to parts of UNIX and Linux.
At first, it focused on suing IBM, saying it let parts of UNIX ‘slip’ into the Linux operating system in breach of SCO’s rights. Then SCO looked to end users, suing both AutoZone and DaimlerChrysler for damages and an injunction against their use of what SCO said was its source code.
It then became embroiled in a separate action against Novell, concerning the exact scope of the rights acquired by SCO in 1995.
Initially, SCO claimed to own patents in UNIX; now it talks only of copyrights and "other" intellectual property rights. But Novell believes that it still owns important copyrights in the UNIX system, and has publicised the fact.
In January 2004, SCO filed a slander suit against Novell – a suit that Novell has twice failed to have dismissed – seeking to silence Novell’s copyright claims.
The copyright issue is crucial to SCO. If it loses against Novell then it loses the bulk of its case against IBM, AutoZone and DaimlerChrysler. But Novell has now filed a counterclaim, including a request for a preliminary injunction.
In the counterclaim, Novell reveals that “by and during early 2003, SCO repeatedly asked Novell to transfer the UNIX Copyrights to SCO. In doing so, SCO conceded that title to the UNIX Copyrights remains exclusively with Novell. Novell rejected all of SCO's requests."
According to Novell, SCO is itself guilty of slander in claiming that it, rather than Novell, owns the UNIX copyrights. Novell wants damages and an injunction against SCO.
The software firm then accuses SCO of two breaches of contract.
According to the filing, SCO could not afford to buy Novell's assets and rights, so they agreed that Novell would receive shares in the company and retain certain rights as protection, including the right to receive royalty payments and control over certain UNIX licences granted by SCO.
Novell says SCO has refused to provide information about its licensing arrangements with companies that include Microsoft and Sun Microsystems, and has failed to make payments.
Novell asks that SCO be required to comply with the terms of the contract and, because SCO is “quickly dissipating its assets”, that a trust fund be set up to hold the monies that might be due to Novell if its claims are upheld.
