Novell denies non-compete agreement with SCO

The SCO Group Inc. Chief Executive Officer Darl McBride is incorrect in his contention that his company has a non-compete agreement with Novell Inc. that will be violated if Novell completes a planned acquisition of SuSE Linux AG, Novell said in a written statement this week.

“Mr. McBride’s characterization of the agreements between Novell and SCO is inaccurate,” Novell said. “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.”

McBride said in an interview this week that the US$210 million SuSE Linux acquisition Novell is working on would infringe on an agreement Novell signed with The Santa Cruz Operation Inc. when Novell sold the rights to its Unix System V software in 1995. SCO bought Santa Cruz Operation’s Unix business in 2000, acquiring with the technology the non-compete agreement, McBride said. [Please see CDXPO : SCO CEO: Novell-SuSE breaks SCO contract.]

Novell, based in Provo, Utah, has received no formal communication from SCO about the non-compete agreement, and will respond if SCO pursues legal action, the company said.

McBride said SCO won’t pursue action against Novell until after Novell closes the SuSE deal, which Novell expects to complete by the end of January.