| Novell goes for SCO's throat |
Oct. 02, 2006
On Sept. 25, IBM took its crack at ending its case with SCO by summary judgment. Now, it's Novell's turn, and the company appears to be attempting to cut off SCO's lifeline to its cash reserves.
On Sept. 29, Novell Inc. filed for "partial summary judgment as to its Sixth, Seventh, Eighth, and Ninth Claims for Relief for constructive trust, breach of fiduciary duty, conversion, and accounting, respectively" at the U.S. District Court in Salt Lake City.
These claims are not, as one might think, concerning Novell's claims that it, and not The SCO Group Inc., still owns Unix's copyrights. Novell has claimed that neither the APA (asset purchase agreement) of Sept. 19, 1995, which transferred Unix and UnixWare to Santa Cruz Operations, nor Amendment 2 to the APA gave SCO any copyrights to Unix.
Instead, Novell is going after the money that SCO has made from Unix. In particular, according to Novell's memo in support of its motion for summary judgment, the company wants its share of the "payments SCO received from SVRX [Unix System V Release any] license agreements that it executed in 2003 with Sun Microsystems, Inc. ("Sun") and Microsoft Corporation ("Microsoft")."
It was these very same multi-million dollar payments that SCO used to fuel its lawsuits against IBM, Red Hat, and Novell.
Novell claims that "The APA makes SCO the fiduciary of Novell, entrusting SCO 'to collect and pass through to [Novell] one hundred percent (100%) of the SVRX Royalties.'"
The Linux company goes on to state that "SCO breached its trust relationship with Novell." SCO then, received at least $25,846,000 from Sun and Microsoft through these SVRX Licenses. Rather than pass through these amounts to Novell, SCO converted these payments for its own benefit."
There's still more to Novell's claims.
In its memo, Novell also asserts that "SCO breached its obligations in other ways as well. For three years, SCO intentionally concealed the contents of these agreements. Notwithstanding Novell's express right under the APA to conduct audits of royalties, fees, and other amounts SCO collects under SVRX Licenses, Novell's repeated requests for copies of the agreements were ignored. Only recently through this litigation was Novell able to obtain copies of the Sun and Microsoft agreements and thereby confirm SCO's violations. Now, having finally acquired them, Novell moves for partial summary judgment and seeks to impose a constructive trust on the Sun and Microsoft monies that SCO wrongfully retained."
Novell then spells it out for the court.
"Even if the Court were to deny summary judgment, the Court should preliminarily impose a constructive trust remedy. SCO is on the verge of insolvency and will likely be unable to satisfy any adverse judgment relating to its failure to remit the Sun and Microsoft monies. Moreover, SCO has repeatedly stated in public filings with the Securities and Exchange Commission that its financial state is unlikely to improve unless and until it prevails in its litigation against IBM and Novell. Given recent developments in the IBM case, SCO's financial picture will therefore continue to deteriorate for the foreseeable future. Because SCO has no 'equitable interest' in the Sun and Microsoft revenues, Novell is likely to succeed on the merits that SCO wrongfully converted a trust res in violation of its agency obligations to Novell. Novell faces irreparable injury without an immediate injunction. Therefore, a preliminary injunction should be granted."
In short, Novell is arguing that even if the court doesn't immediately agree with Novell about the Microsoft and Sun payments, SCO is going broke and Novell's share of the money should be put into a trust so SCO can't spend any more of it.
By not focusing on the arguments over who owns what in Unix but instead hammering on the far more simple matter of SCO not living up to its business contract, Novell hopes to put a quick end to SCO and its seemingly endless Linux litigation.
-- Steven J. Vaughan-Nichols
Do you have comments on this story?
Talkback here
NOTE: Please post your comments regarding our articles using the above link. Be sure to use this article's title as the "Subject" in your posts. Before you create a new thread, please check to see if a discussion thread is already running on the article you plan to comment on. Thanks!
(Click here for further information)
|
|
|
7 Advantages of D2D Backup
For decades, tape has been the backup medium of choice. But, now, disk-to-disk (D2D) backup is gaining in favor. Learn why you should make the move in this whitepaper.
4 Legal Reasons to Control Internet Access
The Internet is obviously a valuable resource for many organizations. However, many are exposed to legal liability concerns because they fail to control Internet access. Learn if you're safe in this white paper.
Rapidly Resolve J2EE Application Problems
Whether you are in the process of building J2EE applications or have J2EE applications already running in production, you must ensure that they deliver the expected ROI. Learn how in this white paper.
Load Testing 2.0 for Web 2.0
There are many unknowns in stress testing Web 2.0 applications. Find out how to test the performance of Web 2.0 in this white paper.
Build Better Games Online
For the game infrastructure providers, life is complex. Making money from games has become more complicated. Why? Find out in this white paper.
Building a Virtual Infrastructure from Servers to Storage
This white paper discusses the virtual storage solutions that reduce cost, increase storage utilization, and address the challenges of backing up and restoring Server environments.
Gaining Faster Wireless Connections with WiMAX
Welcome to what is quickly becoming the hyperconnected world where anything that would benefit from being connected to the network will be connected. Learn more in this white paper.
Is Your Desktop a Security Threat?
The new wave of sophisticated crimeware not only targets specific companies, but also targets desktops and laptops as backdoor entryways into those business’ operations and resources. Learn how to stay safe in this white paper.
Increasing SAN Reliability by 100 Percent
Storage area networks (SAN) are a strong part of storage plans. Learn how to increase your reliability and uptime by 100 percent in this case study.
|
|
|
|
|
news feed