The rising cost of free software: SCO v Novell

On Monday a US appeals court handed down a decision that could potentially repoen a $5-billion claim against IBM and send the open-source community into panic mode.

In 2003 the software company SCO Group sued IBM, claiming that IBM had infringed its copyright in the Unix operating code by donating it to the open-source Linux software ($5 billion damages were to be claimed). At which point, another software company, Novell, piped up, saying that they owned the Unix copyright. Novell have said they have no interest in suing over Unix (‘We don’t believe there is Unix in Linux’) – so why did they get involved in the SCO-IBM dispute? Possible motive: IBM was soon to invest $50 million in Novell’s new Linux enterprise. SCO then sued Novell but summary judgment was granted to Novell in 2007. The court also ruled that SCO must recognize Novell’s waiver of SCO’s claims against IBM. SCO filed for bankruptcy soon afterwards.

On Monday, a US appeals court reversed the 2007 summary judgment. The dispute concerns the scope of the rights in Unix that Novell sold to SCO’s predecessor, Santa Cruz Operation, in 1995. Novell say they retained ownership of the Unix copyright, granting Santa Cruz only an implied licence. SCO make much of the negotiations surrounding the contract. The appeals court held that California law does permit consideration of extrinsic evidence where a contract is ambiguous.

If SCO should win against Novell and, in spite of bankruptcy, go on to reopen the claim against IBM, then they stand to make not just a lot of money but heaps more enemies in the vociferous open-source community.…


Top right: the Linux Penguin is ready for a scrap