The SCO Group Inc. and Novell Inc. were fighting in federal court Tuesday, with Novell trying to dismiss SCO's case against it and SCO trying to get the case put back in state court.
U.S. District Judge Dale Kimball heard arguments from Lindon-based SCO and Massachusetts-based Novell that focused on whether a 1995 asset purchase agreement between the companies conveyed from Novell to SCO copyrights to the Unix computer operating system and UnixWare.
SCO sued Novell, which has major operations in Utah, for "title slander" in January. At the time, SCO claimed that Novell has hurt SCO business by, in part, making false and misleading claims that it owns the Unix and UnixWare copyrights.
On Tuesday, SCO attorney Brent Hatch said the dispute with Novell has companies shying away from obtaining licenses from SCO and is keeping investors away. SCO has offered companies licenses to use its Unix intellectual property in Linux computer operating system distributions.
Novell's push to dismiss is seen by experts as critical, because a dismissal could cripple SCO's multibillion-dollar lawsuit against International Business Machines Corp. SCO has accused IBM of violating a license agreement between the companies by placing Unix source code into Linux, a freely distributed operating system that is enhanced by contributions from developers worldwide. Novell and IBM are among companies that have begun developing products using Linux.
Without Unix ownership, SCO has no case against Novell or IBM, experts have said.
Most of Tuesday's arguments were about the 1995 agreement and what it means. Novell attorney Michael Jacobs said the agreement was a contract but it was not an instrument conveying copyrights to SCO.
Hatch disagreed. "We will show at trial . . . that what was being transferred here was everything in Unix and UnixWare," Hatch said. SCO will even be able to have Novell witnesses acknowledge that, he said.
Hatch said a Novell chief executive years ago made public statements in which he viewed the contract as a transfer of ownership. For eight years, Novell treated the contract as a transfer of copyrights, Hatch said, but doesn't have that stance now.
"This (agreement) couldn't be more clear as an instrument of conveyance," Hatch said.
Hatch said Jacobs essentially was trying to put on his defense now, without consideration of documents, correspondence, witnesses or other evidence in the case.
Regarding the jurisdictional question, Hatch said the case does not allege federal questions or seek a federal remedy. Allowing it to remain in federal court would result in all copyright cases becoming federal questions, he said. He accused Novell of "shopping for a federal court jurisdiction."
The concern, he said, is that during or after the case, the losing side should not be able to claim the federal court did not have jurisdiction. "That ought to happen now, not later," Hatch said.
Jacobs said the complaint about ownership transfer makes it a federal matter.
SCO is seeking various injunctions, plus damages to be determined at trial.
E-mail: bwallace@desnews.com