Novell: SCO May Settle Unix Suit

Beleaguered software vendor Novell (NOVL), which has been fighting a lawsuit by bankrupt SCO Group for the last several years, could see a silver ligning, writes Ladenburg Thalmann analyst Aaron Schwartz in a note this morning. He says SCO may settle with Novel in its claim of infringement of intellectual property SCO holds with respect to the Unix operating system, rather than proceed to a jury trial against Novell.

Schwartz notes that the incoming court-appointed bankruptcy trustee for SCO Group fired Darl McBride, the CEO, on Monday. McBride had made himself a vilain in the world of Linux and open source software by suing numerous parties reselling or distributing the Linux operating system, including IBM (IBM), but also Daimler (DAI), claiming Linux infringes on Unix operating system rights that SCO acquired several years back.

At any rate, Schwartman says the firing of McBride, and the company’s announcement Thursday that it will settle claims against Autozone (AZO), indi ate the company may look to settle with Novell as well, which would ease legal costs for Novell and perhaps lead to “a redirection of legacy royalties” to Novell. Schwartzman maintains a “Buy” rating on Novell and a $6 price target.

Novell shares today are down 5 cents, or 1%, at $4.34.