SCO Group Owes Novell $2.5 Million In Long-Running Unix Suit

The SCO Group owes Novell $2.5 million for improperly claiming and collecting royalties for the Unix SVRx operating system, a federal judge ruled Wednesday. The decision is the latest chapter in the companies' four-year legal wrangle over which company owns the intellectual property rights to Unix.

This week's ruling by U.S. District Court Judge Dale Kimball follows his 102-page decision handed down Aug. 10 ruling that Novell, not SCO, owns the rights to Unix. This week's "finding of fact, conclusions of law and order" from Judge Kimball deals with the question of what SCO owes Novell from royalties SCO collected through a licensing agreement with Sun Microsystems.

"SCO was unjustly enriched by retention of the revenue under the Sun agreement and Novell is entitled to restitution," Kimball stated in his 43-page decision this week. But the judge found that Novell was not entitled to royalties SCO collected under a licensing deal with Microsoft.

The case began in 2004 when Lindon, Utah-based SCO sued Novell claiming that it owned the intellectual property rights to Unix SVRx, including copyrights to the operating system's source code. That claim stemmed from a 1995 deal under which Novell sold Unix to The Santa Cruz Operation. Novell, based in Waltham, Mass., has argued that it retained Unix copyrights under the disputed agreement. A company called Caldera later bought The Santa Cruz Operation's Unix division and then changed its name to The SCO Group in 2002.

This week's ruling, while not a huge sum, is the latest blow against SCO which filed for Chapter 11 bankruptcy in September 2007. The latest ruling also allows both sides to appeal the decision.

SCO sued IBM in 2003 charging that IBM misappropriated SCO's proprietary Unix code and built it into Linux. SCO also sued auto parts retailer AutoZone and automaker DaimlerChrysler in 2004, both major Linux users, arguing that their use of the open-source operating system violated SCO's Unix copyrights. Those cases initially caused some to worry about the legal underpinnings of Linux. But observers say last year's ruling that SCO never owned Unix effectively brought those cases to an end.

Novell and SCO executives were not immediately available for comment.