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Novell Responds to SCO Non-Compete Claims

Nov 19, 2003, 14:00 (19 Talkback[s])
(Other stories by Pamela Jones)

PR: Novell Statement on SCO Claims Regarding a Non-Compete Clause in Novell-SCO Contracts

Novell has seen the November 18 InfoWorld article in which SCO CEO Darl McBride refers to a supposed non-compete agreement between Novell and SCO. Mr. McBride's characterization of the agreements between Novell and SCO is inaccurate. There is no non-compete provision in those contracts, and the pending acquisition of SUSE LINUX does not violate any agreement between Novell and SCO.

Novell has received no formal communication from SCO on this particular issue. Novell understands its rights under the contracts very well, and will respond in due course should SCO choose to formally pursue this issue.

Groklaw: Asset Purchase Agreement

"Here is the Asset Purchase Agreement between SCO and Novell. It has particular importance now that SCO is claiming a non-compete clause it says it will enforce if Novell tries to release a Linux distribution. They appear to be referring to clause 1.6. However, as you will see, the interpretation they are giving that clause appears to be dependent on Linux actually containing SCO's code, something that is yet to be proven and which many feel is unlikely ever to be proven.

"Here is the language I think they are referring to:

"'Seller agrees that it shall use the Licensed Technology only (i) for internal purposes without restriction or (ii) for resale in bundled or integrated products sold by Seller which are not directly competitive with the core products of Buyer and in which the Licensed Technology does not constitute a primary portion of the value of the total bundled or integrated product...'"

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