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SCO is in the midst of a suit against Novell, claiming the company's public claims of ownership of Unix assets has hurt its business. Yet in the latest documents to be filed, SCO admits that because it was unable to raise enough money to buy Unix outright, a compromise was agreed.

'To help bridge the gap between the purchase price of the Unix business and the price Santa Cruz could afford, the parties agreed to a narrow exception to the complete transfer of the Unix business,' it reads.

SCO's PR Director Blake Stowell explains it thus: 'When AT&T and Novell owned the UNIX business, they licensed UNIX to thousands of entities. Some of these entities chose to pay an up front one-time fee, while others chose to pay a quarterly royalty fee over time.

'At the time that the Santa Cruz Operation purchased the UNIX business from Novell, they weren't in a position to pay Novell multiple hundreds of millions of dollars. Novell a few years previously had paid AT&T more than a billion dollars for the UNIX business, so in order to make it possible for the Santa Cruz Operation to acquire the business, both parties (Novell and the Santa Cruz Operation) agreed that any companies that had entered into licensing agreements to that point (the end of 1995) and had agreed to pay quarterly royalty fees rather than a lump sum payment, that the Santa Cruz Operation would agree to pass

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those quarterly royalties on to Novell and keep a 5 per cent processing fee. Any licensing agreements that the Santa Cruz Operation entered into after the UNIX property was fully acquired would be the property of the Santa Cruz Operation and would not be subject to quarterly royalty fees.'

The filing also says that 'in 2002, as part of the review of its intellectual property, SCO contacted Novell to confirm SCO's understanding that the Unix and Unixware copyrights had been transferred under the [Asset Purchase Agreement] and to ask if Novell had documents concerning the APA'. It adds that an agreement was prepared to confirm that all such assets had been transferred but that Novell never signed it. However, SCO points out that Novell did not question SCO's ownership of Unix during this process. Yet, the fact that SCO asked perhaps shows some uncertainty as to the effect of the transaction.

SCO also argues that Novell had the right to receive royalties from existing SVRX Unix licencees but, claims that Novell's lack of action on this matter means it forgoes the right to claim retrospective payment.

Perhaps the most interesting note though is that SCO also says: 'Novell retained the right to ... direct Santa Cruz to take certain actions, to protect that future binary royalty stream'.

SCO's $5bn suit against IBM includes claims for damages in the region of $2bn for IBM's and IBM-owned Sequent's continued Unix business, subsequent to SCO withdrawing its Unix licence in July 2003.

But following that turn of events, Novell stepped in claiming it had rights under the agreement through which Unix assets were transferred to SCO to reinstate that licence.

SCO's statement therefore appears to lend weight to Novell's move.

The full document can be viewed here.

SCO had not returned requests for comment at the time of writing.