In the latest turn in the long-running saga over Unix and Linux operating systems, the Tenth Circuit Court of Appeals upheld a jury verdict that Novell, Inc. retained ownership in UNIX copyrights in its 1995 deal with SCO Group, Inc. The district court’s denials of SCO’s motions for judgment as a matter of law and for a new trial on the issue of Novell’s transfer of the copyrights to SCO were also upheld on appeal.
The case turned on the meaning of ambiguous grant language in the deal documents: the grant excluded “[a]ll copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies.” SCO argued that Novell had transferred the Unix copyrights because they were necessary for SCO to exercise its rights. According to Novell, however, the deal with SCO was limited to the rights to create its own Unix-based products, and to act as Novell’s agent in Novell’s existing Unix licensing business, and the Unix copyrights at issue were explicitly excluded from the deal to protect Novell’s royalty streams in that existing licensing business. The Appellate Court found that there was “ample evidence” in the record to support a finding that the copyrights were not transferred to SCO and were not necessary for SCO to exercise its rights under the terms of the deal.
Whether the Tenth Circuit’s decision closes this chapter in the long-running Unix/Linux saga remains to be seen. But it makes it less likely that SCO will continue to threaten users of Linux products with litigation.