SCO: not dead yet?

The agreement between Novell and the Santa Cruz Operation was a mess which never clearly spelled out what was being sold. It is far from surprising that Novell and the company now known as the SCO Group disagree on its particulars. The lawyers involved in making that agreement, quite simply, did not do their job. Even so, the district court, in 2007, was able to obtain enough clarity from this document to conclude that there was no question at all of whether the Unix copyrights had been transferred to SCO. The result was a summary judgment throwing out SCO's claims regarding those copyrights. That judgment was welcomed in the community, but there may be justice to SCO's claim that it was a little too hasty.

The appeals court took that view of the district court ruling, finding SCO's arguments sufficiently credible to create some doubt as to the facts in the case. As the ruling states:

It is worth noting that the appeals court did not rule that the copyrights do, in fact, belong to SCO. In fact, the ruling reads:

All the court has said is that there is enough doubt here that a full trial is needed to resolve the question. The end result could well be the same - Novell could still win - but SCO has created enough uncertainty to gain its full day in court.

SCO did not prevail in all of its appeals, though. The district court had ruled that SCO had converted ("stolen") $2.5 million in licensing revenue from Sun which, by the asset purchase agreement, truly belonged to Novell. The appeals court agreed with this part of the summary judgment and left SCO on the hook. This ruling has led some observers to believe that SCO may now head quickly into Chapter 7 bankruptcy, resulting in the liquidation of the company. Should that happen, it is said, the SCO zombie will truly be gone forever.

Unfortunately, the end of the SCO Group would not necessarily mean the end of the troubles it has created. Chapter 7 bankruptcy would result in the sale of SCO's remaining assets to pay the claims of the company's creditors. Those assets are likely to include office chairs belonging to both remaining employees, a storage locker full of unsold Caldera OpenLinux boxes, Darl McBride's bullhorn, a few SCO Mobile Server manuals - and the claimed ownership of the Unix copyrights. The bankruptcy trustee's job will be to sell all of these assets for the highest price possible.

The Unix copyright "asset" is an uncertain value, to say the least; it could evaporate entirely when SCO v. Novell runs its full course. But SCO v. Novell was always a sideshow; the real game is the multi-billion dollar claims against IBM. Who would be willing to bet that no trolls willing to try for that payoff exist? Instead, such trolls must certainly exist, and some of them will be well funded. One of them could come out of the bankruptcy process owning these "assets" and the related lawsuits.

What we could see then is a new push on these claims, with more money behind it and, possibly, less buffoonery as well. The new owner might just succeed in establishing ownership of the Unix copyrights - that agreement is, as was stated previously, a mess - and carry the IBM case forward. The fact that SCO's original claims against IBM are still without merit offers little comfort; we could be in for another extended period of FUD and bad press before the courts finally come to that conclusion.

Things need not go that way, of course. Should SCO go into chapter 7, we might see Novell and/or IBM hold their noses and buy the Unix claims themselves, putting an end to the entire affair. It could be the cheapest way for them to go. One assumes that lawyers in those companies are thinking about their options at this point; they, too, must be tired of this whole circus by now.