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8/29/2007
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SCO Likely To Appeal Novell Ruling, CEO Darl McBride Says

McBride says he was caught off guard by the judge's decision because SCO's position was backed by nine witnesses.

The SCO Group will likely appeal a judge's decision to toss its ownership claim on the Unix operating system, company CEO Darl McBride said in an interview Tuesday.

"We believe this is a very appealable case," McBride said.

McBride said he believes that U.S. District Court Judge Dale Kimball missed the mark when he ruled that Novell, and not SCO, holds copyrights over the widely used computer operating system. "We thought we had a pretty legitimate story," said McBride.

Kimball ruled on Aug. 10 that a 1995 asset transfer agreement from Novell to SCO did not include Unix copyrights.

The decision eviscerated a lawsuit that SCO filed against Novell in 2004 after Novell refused to acknowledge SCO's ownership claims over Unix. The rest of the case is scheduled to be tried starting Sept. 17, but the remaining issues focus mostly on how much SCO owes Novell for Unix licensing fees the court said it improperly collected.

The fees were collected primarily from Sun Microsystems and Microsoft and total about $25 million.

McBride said Kimball's ruling "was a pretty hard shot." He said he heard the news while sitting in a conference room preparing for SCO's launch of new mobile products. "I got a call from our general counsel; he dropped a bomb," McBride said.

McBride said he was caught off guard by Kimball's decision because, he claims, most of the evidence presented during pre-trial proceedings favored SCO's argument that the asset transfer agreement included Unix copyrights. "It was backed up by nine witnesses from the SCO and Novell management teams that negotiated the deal in 1995 and all of them said SCO owns the copyrights," McBride said.

SCO is considering two forms of appeal, according to McBride. The company may wait until the trial is wrapped up and file a conventional appeal. Alternately, it may file what's known as an interlocutory appeal, which would ask the courts for a review of Kimball's ruling on the Unix copyright issues before the trial begins, McBride said.

The case's repercussions extend beyond Unix. SCO has argued that the open source operating system Linux contains parts of Unix and that SCO therefore is entitled to royalties from Linux users.

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