The SCO Group's slander lawsuit against Novell will continue following a judge's rejection of Novell's request that the entire case to be dropped.

Judge Dale Kimball wrote: "Even though Novell argues that it has evidence to support its alleged good faith basis for claiming ownership of the Unix copyrights, the proper place to introduce that evidence and argue its significance is not on a motion to dismiss."

He continued: "The court cannot rule as a matter of law on Novell's intent at the motion to dismiss stage before any discovery is considered in the case."

"We are pleased the court has denied Novell's second attempt to dismiss this case," a SCO spokesman said. Novell officials declined to comment.

In the lawsuit, filed January 2004, SCO is seeking damages from what it claims are Novell's false representations about it owning the source code for Unix and UnixWare. SCO purchased Unix Systems Laboratories (USL) assets from Novell. USL was the owner of the Unix trademark and the Unix System V source code, but Novell maintains it did not transfer copyright during the SCO purchase and so it, not SCO, is the owner.

SCO's claim on the Unix System V source code is the foundation of its legal claim on parts of open-source OS Linux. That claim has so far seen SCO launch lawsuits against IBM, Autozone and DaimlerChrysler.

At issue is the wording of the 1995 asset purchase agreement between Novell and SCO, and an October 1996 amendment.

The judge will now produce a schedule for the discovery process.