SCO attacks Novell over Linux sales

After three years of accusations, SCO Group has finally begun aiming a legal charge of copyright infringement toward a Linux supplier.

The claim is in an amendment SCO proposes to make to its lawsuit against Novell, whose sales of Linux, SCO argues, violate SCO's purported Unix copyrights. SCO filed its request to add the claim on Dec. 30, nearly two years after it first filed its suit against Novell.

In the proposed claim, the SCO argues, "SCO is the sole and exclusive owner of the copyrights in Unix... Novell has infringed and continues to infringe SCO's copyrights by copying, reproducing, modifying, sublicensing and/or distributing Linux products containing unauthorised contribution of SCO's copyrighted material. Novell's unauthorised copying in its use and distribution of SuSE Linux includes... the appropriation of numerous data structures and algorithms contained in or derived from SCO's copyrighted material."

The case is before US District Judge Dale Kimball in federal district court in Utah, the same venue as SCO's case against IBM that was the company's first legal volley.

In 2004, SCO accused Autozone of violating Unix copyrights, a case that's on hold pending results from IBM's case. But this time the charge would be levelled at a Linux supplier rather than a user, at a company that has direct involvement in the creation of the open source operating system.

AT&T developed Unix then sold its interest to Novell. In 1995 and 1996, Novell sold at least some of the technology to the Santa Cruz Operation, a company the SCO Group acquired in 2000 and named itself after. Novell, meanwhile, became a Linux seller when it acquired SuSE in 2004, and SCO sued Novell for slander of title after Novell argued it never sold the Unix copyrights central to SCO's case.

The proposed claim is no surprise given SCO's high-profile accusations of copying. In April 2003, chief executive Darl McBride told ZDNet UK sister site CNET News.com, "We're finding... cases where there is line-by-line code in the Linux kernel that is matching up to our UnixWare code... We're finding code that looks likes it's been obfuscated to make it look like it wasn't UnixWare code — but it was."

But it's a mystery to some why it took so long for the company to raise the copyright infringement charge in court against its primary legal targets.

"It doesn't make sense, unless the strategy was to bring added pressure on Novell to settle," said Brian Ferguson, an intellectual property attorney with McDermott, Will & Emery who has been monitoring the SCO case. "Usually you have your claims well put together before you bring the lawsuit."

Trying to add the new claims won't be easy, he added. "They're going to have a very long row to hoe to prove to the court that they should be able to amend the complaint to add these claims when they could have and should have been brought when they filed the original lawsuit," Ferguson said. "Most courts do not look favourably on this type of action."

In a 30 December filing arguing that it should be permitted to amend its complaint, SCO said it seeks to make the move partly in response to Novell's July 2005 countersuit against SCO. Novell's counterclaims "significantly expand the scope of the litigation, such that it is sensible for SCO to add the new claims in the Second Amended Complaint," SCO said.

The proposed amended complaint also adds two claims that Novell breached its contract, the 1995 Asset Purchase Agreement by which it sold some Unix technology and its 1996 Amendment. And it adds a claim of unfair competition.

Nibbling around the edges
SCO long has claimed that Linux is tainted with Unix intellectual property SCO claims to own, but in the courts, it has only nibbled around the edges of the idea.

Its first lawsuit against IBM in March 2003, SCO accused IBM of misappropriating trade secrets, but it dropped that claim in an amended suit in February 2004.

That amended suit added a charge of copyright infringement, but it was limited to IBM's continuing shipment of its AIX version of Unix even though SCO said it had terminated the Unix contracts of IBM and another Unix licensee IBM acquired, Sequent. Although that suit's copyright infringement charge was related to AIX, the amended suit did assert in arguments leading up to the claim, "A significant amount of Unix protected code and materials are currently found in Linux 2.4.x, 2.5.x, and 2.6.x releases in violation of SCO's contractual rights and copyrights."

SCO's reticence has hurt its case. Kimball slammed SCO for failing to release evidence to underscore its claims against IBM. In October, SCO provided a sealed list of 217 areas that SCO says show IBM violations of contracts by moving Unix technology to Linux. On 22 December, it updated the list to 293 examples.

Another issue could more directly affect the Novell case. Magistrate Judge Brooke Wells, who is overseeing the discovery phase of the IBM trial, ruled in December that not all Unix assets were transferred from Novell to the Santa Cruz Operation and, later, to the SCO Group, according to the Groklaw site that monitors the SCO case closely.

The IBM case is scheduled for trial 27 February, 2007. The Novell case is scheduled for June 25, 2007.