SCO Wins Delay For IBM Trial, Gets To Battle Novell In Court

But court denies SCO's efforts to bificurate IBM's counterclaims

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SCO scored two legal victories late this week, getting the court's OK to push back the start of its IBM trial until November 2005 and to hear SCO's case against Novell.

With that, SCO's case against IBM, filed in April 2003, will now formally begin Nov.1, 2005. It was originally scheduled to begin next April. SCO earlier this week asked that the trial be delayed until September.

A U.S. District Court in Utah court also decided that it would hear SCO's slander case against Novell, but the war over who owns the full rights to Unix System V--SCO or Novell--will be heard in a federal courtroom.

Late Thursday, a Utah judge denied Novell's motion to dismiss SCO's slander lawsuit against the Provo, Utah-based company. SCO alleged in the suit, filed in January, that Novell publicly and falsely claimed ownership rights to Unix in a public statement last June.

The former Santa Cruz Operation (SCO) bought Unix System V from Novell in a $100 million deal in September 1995. But Novell claims that an amended contract signed with SCO roughly a year later transferred critical Unix ownership rights back to it.

However, it was a mixed victory for Lindon, Utah-based SCO. This week's court ruling denied SCO's request to split IBM's counterclaims against it into a separate lawsuit and determined that SCO's case against Novell will be heard in a federal courtroom.

After earnings calls on Thursday, before the rulings were issued, SCO CEO Darl McBride predicted that the court would ultimately uphold SCO's legal positions against IBM and Novell. "Novell says they transferred copyright, but they never did. We disagree totally with what Novell has said and what they've done in the marketplace. And it's had an impact," McBride said, alleging that Novel's claims resulted in a downturn in SCOsource licensing revenue over the past quarter. "We'll have our days in court, and that will have a positive outcome for us."

McBride also responded to public criticism about the delay sought by SCO. He said the delay was necessitated by IBM's legal machinations, not those of SCO. "The reality is a long delay was put in place by IBM. ... IBM filed 14 counterclaims [against SCO]," McBride said. "But mark my words: There will be a day that will come when we see documents that will contradict IBM's current posturing."

On Friday, Novell said in a statement that it was delighted that the court ruled to hear the SCO-Novell case in a federal courtroom, where copyright issues will be under a bigger legal spotlight. SCO wanted the case heard in a Utah state court.

"Novell is pleased that the court denied SCO's attempt to send the case back to state court," Novell said in the statement. "We asserted that SCO's lawsuit involves a question of copyright law and is, thus, a matter for the federal courts, and [U.S. District] Judge [Dale] Kimball agreed. Novell is also encouraged that Judge Kimball dismissed SCO's complaint because it failed to plead special damages. Whether SCO decides to file an amended complaint that attempts to meet the court's standards is up to SCO."

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