Novell Inc. has won an important battle in its ongoing UNIX war with SCO, after a federal Utah judge decided Novell still holds patents and intellectual property rights over UnixWare and UNIX System V.

SCO, formerly known as Caldera Systems and based in Lindon, Utah, launched its crusade against major Linux vendors like Red Hat, Novell or even IBM back in 2003, claiming that these companies have “devalued” the UNIX operating system version for which SCO holds copyright, by adding codebase, without authorization.

Novell sold UnixWare (which it had acquired from AT&T) to the Santa Cruz Operation Inc in 1995 but claims to have retained the rights to UNIX and UnixWare. Caldera Inc later acquired Santa Cruz Operation's UNIX business before changing its name to SCO Group and launching its intellectual property war.

Novell’s 2005 attempt to make judges dismiss SCO's slander of title claim (because SCO did not bring enough arguments to prove Novell had acted maliciously) has been received with a slightly positive response, but Judge Kimball declined to offer Novell full satisfaction, saying that “"Even though Novell argues that it has evidence to support its alleged good faith basis for claiming ownership of the Unix copyrights, the proper place to introduce that evidence and argue its significance is not on a motion dismiss."

SCO had two ultra-powerful allies in its endeavor, namely Microsoft and Sun Microsystems. Although someone might think the two companies were interested in seeing SCO win because that would also give them the upper hand against a free and increasingly popular OS (Linux) and against one of its top supporters and promoters (IBM), things are more complicated than that. In fact, according to a court exhibit, Sun had acquired a "right to use license" (RTU license) from SCO, for its commercial Linux end-users. In addition, Sun had bought "a UnixWare source code license to developers," and both licenses "contained a covenant not to sue, which provided that the licensee would not be exposed to liability for the use of SCO's intellectual property in Linux."

Microsoft and Sun also paid for UnixWare rights, and incidental rights to the older UNIX System V source code, which is quite strange, since the two had already paid for the right to use UNIX before. They were probably in the situation of paying SCO to ensure they would not be sued for using Linux...

Anyway, despite Microsoft and Sun’s support for SCO, Judge Kimball recently ruled that Novell owns the UNIX SVRX and UnixWare copyrights and that SCO owes Novell payment for the UNIX SVRX licenses it sold to Microsoft and Sun.

Novell had previously filed a counter-suit against SCO in order to grab its share from the money SCO received from the SVRX [Unix System V Release any] license agreements signed in 2003 with Sun and Microsoft. SCO has received at least $25,846,000 from these two companies through its SVRX Licenses. Later on, fueled by this capital “injection”, SCO started its war with IBM, asking for damages that went from the initial $1 billion to more than $5 billion.

The judge also considered SCO's claim of slander of title, non-compete and unfair competition claims against Novell as unfounded, but, just as it happened before, he declined to offer Novell full satisfaction without a trial, saying that Novell’s similar claim against SCO (slander of title) needs a separate judgement.

Kimball also refused Novell the right to claim SCO’s assets to cover the SVRX license liabilities, because the actual amount at stake is a factual issue yet to be determined- probably in the next few weeks, if SCO and Novell don’t reach a mutually favorable agreement in the mean time.

On Novell’s PR blog, Joe LaSala, Novell's senior vice president and general counsel, expressed his satisfaction with the outcome of the whole deal, which now ensures a solid future for the Linux and open-source community:

"In the spring of 2003, Novell set out to ensure that SCO’s groundless claims would not interfere with the development of Linux. Today’s court ruling vindicates the position Novell has taken since the inception of the dispute with SCO, and it settles the issue of who owns the copyrights of UNIX in Novell’s favor. The court’s ruling has cut out the core of SCO’s case and, as a result, eliminates SCO’s threat to the Linux community based upon allegations of copyright infringement of UNIX. We are extremely pleased with the outcome."

“This is a meaningful message in terms of people adopting open-source software,” said James Zemlin, executive director of the Linux Foundation, a nonprofit consortium formed to foster the operating system, cited by The New York Times. “This says that Linux is a safe solution and people can choose it with that in mind.”

On August 7, Novell and IBM have announced a new partnership at the LinuxWorld/Next Generation Data Center trade show in San Francisco, aimed at capturing “a larger piece of the growing open source application server market.”

Under the agreement, Novell will deliver and support WebSphere Application Server Community Edition (WAS CE) as part of SUSE Linux Enterprise Server.