RealTime IT News

SCO's AutoZone Case Still Idling

A judge has agreed to delay the proceedings of SCO Group's copyright-themed lawsuit against AutoZone , a ruling that's a partial win for both sides.

The lawsuit, filed against AutoZone in March, claims that, as a large user of Linux, the auto parts retailer "violated SCO's UNIX copyrights by running versions of the Linux operating system that contain code, structure, sequence and/or organization from SCO's proprietary UNIX System V code in violation of SCO's copyrights."

AutoZone had argued in a recent motion that any decision would be premature until a separate case over whether SCO has a claim to parts of Linux is settled. The judge agreed with the company, which argued that SCO Group must establish two facts: that it owns "valid and enforceable copyrights in Unix," and that the Linux kernel "infringes those rights," according to the filing.

"The resolution of each of these prior filed actions will significantly clarify, if not resolve, SCO's claims against AutoZone," the filing continued. "Staying SCO's claims will thereby avoid duplicative litigation and save the parties and the court significant time and expense that may ultimately prove to be unnecessary."

However, SCO Group officials don't consider the ruling a setback. The judge in the case also ruled that SCO has 90 days to build up a case against AutoZone -- 60 days for discovery (examination of facts and documents) and 30 days for depositions -- at which time SCO can ask the court for a preliminary injunction against AutoZone. If the injunction isn't filed, the case will be suspended until the IBM case is resolved.

The AutoZone case is just one of five around the country in which the SCO Group is involved. Each case, at least peripherally, touches on the company's contention that IBM staffers improperly swiped and placed SCO's UNIX code into select parts of the Linux kernel.

The Linux community is also fighting SCO. Linux distributor Red Hat filed a seven-count lawsuit against the owners of the UNIX System V source code in August 2003: two counts showing its Linux technology does not infringe on SCO Group's source code and five counts of SCO Group executives spreading "unsubstantiated innuendo and rumor."

IBM, which licensed some UNIX code from the SCO Group for its own operating system, AIX, was originally sued for breach of contract. Lawyers for the plaintiff argued AIX staffers used some of its code to bolster the Linux code, thereby violating its contract with the SCO Group.

The case was later split to include a copyright infringement suit after the company said it received U.S. copyright registrations for Unix System V and UnixWare source code.

Novell , however, chimed in, saying that when it sold the UNIX code to the SCO Group in 1995, it did not include the copyright registrations. The SCO Group quickly filed a slander suit against Novell.

The SCO Group also sued two of its customers -- AutoZone and Chrysler-Daimler -- for refusing to certify their systems were not using Linux.

The cases, except for the IBM/SCO battle, have ground to a standstill. Lawyers in the Red Hat/SCO case send updates on the IBM case to the presiding judge, as will lawyers in the AutoZone v. SCO case if SCO isn't successful with a preliminary judgement against AutoZone.

Last month, the SCO Group was allowed to extend the timeline of its case against IBM and proceed with its slander suit against Novell, in two separate rulings.

Last week, the SCO Group elaborated on its slander lawsuit against Novell in an amended complaint, asking the judge for a preliminary and permanent injunction to force Novell to: transfer all Unix and UnixWare rights, titles and interest, as well as the operating system and source code; Novell retract any statements it made regarding ownership of the Unix and UnixWare copyright; and restrict Novell from making any ownership claims in the future. The SCO Group is also asking for a jury trial to determine an amount for "actual, special and punitive damages," the filing states.

In the IBM case, the SCO Group on July 6 issued a "Renewed Motion to Compel," saying the company did not provide adequate documentation from the SCO Group's initial request last year. The company is especially keen on personal correspondence, e-mails and notes from Sam Palmisano, IBM chairman and CEO, IBM board of directors and Irving Wladawsky-Berger, IBM's vice president of technology and strategy.

On Tuesday, Judge Dale Kimball allowed the SCO Group to file an over-length memorandum to reply to a 19-page IBM memorandum explaining why it should not have to produce the requested information. The SCO Group is asking to extend it's 28-page memorandum to reply to IBM's reply.

The only thing that is settled thus far is that the expanding paperwork trail will delay final resolution of the case for years, which puts the SCO Group in a bad place financially. In its last quarter ending in April, the company only posted $11,000 in revenues from its SCOsource licensing program and belatedly released server updates to its UnixWare and OpenServer product line last month.

Blake Stowell, a SCO spokesperson, said company executives are confident they have the funding to make it through a years-long court process against several companies.

"In our last earnings call we reported $50-plus million in cash still and $50 million is more than plenty; if we had to completely depend on that alone for the legal fees, then that would be enough," he said. "We don't believe that we'll actually have to burn through all that cash, though."

He said he believes the company will return to profitability soon, saying there has been interest in the ISV and reseller communities for UnixWare 7.1.4 and that an update to its OpenServer, currently at version 5.0.7, is expected by the end of the year.