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Judge Orders SCO To Pay Novell $2.5 Million

SCO, which is in bankruptcy protection, may have gotten off lightly. Novell believed it was entitled to more than $20 million in compensation.

A federal judge has ordered software vendor The SCO Group to pay Novell $2.5 million to settle a long running dispute between the two companies over ownership of the Unix operating system.

In a decision Wednesday, Utah District Court Judge Dale Kimball, who had previously ruled that Novell, and not SCO, owns the rights to Unix, found that SCO improperly collected Unix royalties that rightfully belonged to Novell. Kimball ordered SCO to pay Novell $2.5 million in restitution.

SCO collected the royalties from Sun Microsystems, which had entered into a Unix licensing deal with SCO on the belief that SCO was the title holder to the operating system. Kimball ruled that SCO did not have to make restitution to Novell for Unix royalties collected under a similar deal with Microsoft.

SCO, which is in bankruptcy protection, may have gotten off lightly -- Novell believed it was entitled to more than $20 million in compensation. In a statement, SCO officials said they were relieved at the order. "We are pleased ... that the court agreed that Novell is not entitled to anywhere near the more than $20 million dollars it was seeking," said SCO.

"This is also an important step forward in the capitalization and reorganization plan for SCO that will allow us to emerge from Chapter 11," the company added. SCO also said it plans to appeal Kimball's initial ruling on the ownership of Unix, which was handed down last August.

SCO filed for Chapter 11 bankruptcy in September and is undergoing a reorganization. In February, the company announced a $100 million capital commitment from private equity group Stephen Norris Capital Partners and plans to go private. The deal was later shelved, however, and SCO has yet to emerge from bankruptcy.

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