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Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Tuesday, February 10 2004 @ 05:25 PM EST

Novell has done it again. Another letter to SCO, and some documentary proof that SCO's interpretation of 2.01 of the Asset Purchase Agreement is wrong, all wrong, from Novell's standpoint. Novell has the new correspondence on its web site as well as the attached proof, bringing us up to February 6. It's dynamite, once again.

Unless I am missing something, I think the ballgame is over for SCO as far as their legal theory about derivatives having to be kept confidential and not being allowed to be donated to Linux. Novell by this letter "hereby directs SCO to waive any purported right SCO may claim to require Sequent (or IBM as its successor) to treat Sequent Code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license." They have until noon, February 11, to comply. This could be part of why SCO has been so quiet of late. The theory of their case may just have blown up in their face. Of course, SCO has a different interpretation of the Asset Purchase Agreement, which you can read in the correspondence on Novell's site.

Also, and I've been expecting this. Novell has filed with the local Utah state court a Notice of Removal. It points out that to get the SCO v. Novell lawsuit settled involves interpretation of copyright law, which is federal law. Consequently, Novell asks that the case be transferred to federal court. Anyone in the mood to transcribe it?

Here's the letter. I am definitely getting to like Novell.

********************************************************************

Joseph A. La Sala, Jr.
Senior Vice President
General Counsel and Secretary

NOVELL VIA FACSIMILE AND CERTIFIED MAIL
RETURN RECEIPT REQUESTED

February 6, 2004

Mr. Ryan E. Tibbitts
General Counsel
The SCO Group
[address]
RE: Sequent Computer Systems

Dear Mr. Tibbitts:

On May 29, 2003, SCO sent a letter to Sequent Computer Systems providing notice that it would terminate Sequent's SVRX license agreement as of Secptember 2, 2003 if Sequent did not remedy certain alleged breaches of the license agreement. On August 11, 2003, SCO sent another letter to Sequent purporting to terminate Sequent's SVRX license agreement. IBM, on behalf of Sequent, responded to these letters by letter of August 14, 2003.

As it has with IBM and other SVRX licensees, SCO appears to be taking the position that code developed by Sequent, or licensed by Sequent from a third party, which Sequent incorporated in its UNIX variant but which itseld foes not contain proprietary UNIX code supplied by AT&T under the license agreement between AT&T and Sequent ("Sequent Code"), must nevertheless be maintained as confidential and may not be contributed to Linux. As we have said before, SCO's position defies both logic and the terms of the SVRX license agreement.

SCO cites, as support for its position, section 2.01 of Sequent agreement, which, like other SVRX licenses, provides as follows:

Such right to use includes the right to modify such SOFTWARE PRODUCT and to prepare derivative works based on such SOFTWARE PRODUCT, provided the resulting materials are treated hereunder as part of the original SOFTWARE PRODUCT.

As we have said, however, this provision merely confirms that AT&T retained ownership of its code even if it was incorporated in a derivative work, and does not purport to impose confidentiality or use restrictions on Sequent Code.

In fact, SCO's interpretation of section 2.01 is plainly contrary to the position taken by AT&T, as author of and party to the SVRX licenses. AT&T clarified the meaning of section 2.01 in its $ echo publication, which AT&T described as its own newsletter "to reach all UNIX System V licensees through one defined medium" and "keeps them abreast of any product announcements, policy changes, company business and pricing structures."

Specifically, in an edition of $ echo dated April 1985 (the same month that the Sequent license agreement was signed), AT&T announced that changes would be made to the SVRX license agreement "to clarify ownership of modifications or derivative works prepared by a licensee." AT&T said this and other announced changes were "in response to direct feedback from AT&T licensees and [were] intended to make the contracts more responsive to the needs of the licensees." AT&T then followed up by adding to section 2.01 a sentence clarifying that AT&T "claims no ownership interest in any portion of such a modification or derivative work that is not part of a SOFTWARE PRODUCT." Even more clearly, the August 1985 edition of $ echo explained that this "sentence was added to assure licensees that AT&T will claim no ownership in the software that they developed -- only the portion of the software developed by AT&T." Copies of the April and August 1985 editions of $ echo are enclosed for your convenience.

For these reasons, and the reasons stated in our October 7, 2003 letter to you about IBM-developed code, SCO's position on Sequent Code is unsupportable.

Under Section 4.16(b) of the Asset Purchase Agreement, Novell retains the right, at Novell's "sole discretion and direction," to require SCO to "amend, supplement, modify or waive any rights under, or . . . assign any rights to, any SVRX License to the extent so directed in any manner or respect by [Novell]." That section further provides that to the extent SCO "shall fail to take any such action concerning the SVRX Licenses" as directed by Novell, Novell "shall be authorized, and hereby is granted, the rights to take any action on [SCO's] own behalf."

Accordingly, pursuant to Section 4.16(b) of the Asset Purchase Agreement, Novell hereby directs SCO to waive any purported right SCO may claim to require Sequent (or IBM as its successor) to treat Sequent Code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license.

Novell directs SCO to take these actions by noon, MDT, February 11, 2004, and to notify Novell that it has done so by that time.

Sincerely,

Joseph A. LaSala, Jr.

cc: Mr. Darl McBride
Mr. Ronald A. Lauderdale,
Vice President and Assistant General Counsel, IBM


  


Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court | 342 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Ikarius on Tuesday, February 10 2004 @ 06:33 PM EST
Ok, so I've a couple of question about this. It's clear what AT&T's intended
interpretation of a "derivative work" was, but the fact that they had
to put it into a newsletter implies that either 1) not everyone understood it,
or 2) the legal definition of that phrase was unclear, or a combination of both.


In the case of 2 or 3, is SCOX beholden to AT&T's clarification via a
newsletter, or only to the letter of the contract?

And then my other question.... something I may have missed in the great volumes
of information which have been posted here- do we have any case law that truly
clarifies what the legal interpretation of "derivative work" would be
in this lawsuit?

--Ross

[ Reply to This | # ]

Any copy of the amended Sys V license available?
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:33 PM EST
The August 1985 $echo describes it, bu says something likle "contact your
Account Representaive for an updated sample of the License"
Do we have one?

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:35 PM EST

Very nice. Has Novell sent a similiar letter on behalf of IBM for AIX? I'm not
sure it's necessary, given the Side-Letter to SOFT-00015, but it seems like such
documentation in AT&T's publications could clear up confusion about the
meaning of the Side-Letter.

[ Reply to This | # ]

woo!
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:37 PM EST
God loves Novell . . .Netware kicks ass. . . .

And NOVELL is quickly earning a spot the heart of linux enthusiasts.... Now they
need to port their cool and huge rights-management to linux.

Strike two for SCO!

[ Reply to This | # ]

Novell
Authored by: savage on Tuesday, February 10 2004 @ 06:38 PM EST
oops!
I got fooled by Novell! My thought was that they were going to do just enough
to satisfy the courts, but otherwise just ignore SCO, due to the fact that there
PROBABLY wouldn't BE a SCO by the time SCO vs NOVELL got to the courts. Kudo's
to Novell for not resting on thier laurls! Yet again I have been proven wrong,
quite happily this time.


Instructions for sco
1.) open drawer
2.) place body part in drawer ( your choice)
3.) repeatedly slam drawer while repeating "I will NOT
commit fraud ever again"

[ Reply to This | # ]

Game Set and Match!
Authored by: grendelkhan on Tuesday, February 10 2004 @ 06:40 PM EST
How exactly are they going to respond to this one? It is now officially OVER
for SCOX. When AT&T, the people the sold the license in the first place
defines derivative works, and it's not the way SCOX has been doing it, I don't
know how Darl can spin this one.

[ Reply to This | # ]

A burr under cowboy Darls saddle
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:40 PM EST
Looks like SCOX is in new and uncomfortable situation. They need to get this
little technical "issue" dealt with some "specificity" and
"in a timely manner", to have any hope of having any hope in their
proceedings with IBM. And as other posters have pointed out, Novell has the
timing of an old pro.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: rakaz on Tuesday, February 10 2004 @ 06:42 PM EST
Did anybody notice the name of the judge on Novell's Notice of Removal... Right,
Judge Dale A. Kimball.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: mossc on Tuesday, February 10 2004 @ 06:43 PM EST
Having read through the "Notice of Removal" it sounds like it is a
done deal. I assume that is incorrect and this actually has to be decided by a
judge.
Can someone say if this is already decided?

Is the Name "Judge Dale A. Kimball" and the date stamp an indication
that Judge Kimball already approved this?

Is it significant that it is Judge Kimball?

Chuck

[ Reply to This | # ]

OT: eBay auction
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:44 PM EST
So when do we start seeing SCO office furniture on eBay? Looks like it will be

very soon now...

[ Reply to This | # ]

Straight from the horses mouth!
Authored by: cybervegan on Tuesday, February 10 2004 @ 06:46 PM EST
How on earth will SCO try to wriggle out of this one?

The amusement value of this case is only outweighed by the
seriousness of its potential to damage Linux and the
industry that's grown up around it.

This is like watching a fireworks display of mammoth
proportions.

I have read a lot of sci-fi, but none of it comes close to
this. Even William Gibson couldn't have come up with so
many parallel plots. I'm aghast.

I always respected Novell a lot anyway, often thinking
that their marketing sucked, but their products always
stood head-and-shoulders above the competition. This just
improves their standing in my eyes - showing that there
*are* principled corporations out there!

SCO must be seriously peeved about this!

8-) cybervegan

---
Stand and fight we do consider
Reminded of an inner pact between us
That's seen as we go
And ride there
In motion
To fields in debts of honor
Defending

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:47 PM EST
Darl;
I know you are reading this, so make a note to yourself to stop trying to steal
Linux's IP and start trying to avoid jail time. Time to ammend those SEC filings
too.

[ Reply to This | # ]

Offeror is King
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:48 PM EST

Does that apply here? And who offers the license for AIX? Can SCO use the same
license, with different intended meaning?

[ Reply to This | # ]

The Relevant Quote
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:50 PM EST

From the August 1985 release, page 5:

As discussed in the OEM/VAR Senimar in March, AT&T has made several significant changes to the software agreements. In the interest of keeping licensees up to date, the changes are listed here. Contact your Account Executive for information or specimen copies.

Changes To The Software Agreement

[snip]

Section 2.01 - The last sentence was added to assure licensees that AT&T will claim no ownership in the software that they developed -- only the portion of the software developed by AT&T.

Note that this document does not state that AT&T is now changing the license to mean that AT&T claims no ownership in software developed by a licensee, but simply that the last sentence of 2.01 is being added to assure licensees that no claim is made by AT&T.

Ask not for whom the bell tolls, TSG...

[ Reply to This | # ]

Typo
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:51 PM EST
which itseld foes

which itself does

[ Reply to This | # ]

  • Typo - Authored by: Anonymous on Tuesday, February 10 2004 @ 07:03 PM EST
SCO: Man the pumps...
Authored by: Anonymous on Tuesday, February 10 2004 @ 06:58 PM EST
IIRC in 1985, AT&T was trying to get people to use its Unix vs.Xenix and
such other competitors. MS-DOS and Macs were all the rage then and Unix was
trying to advance commercially. It makes sense that AT&T would try and
liberalize their licensing terms. Seeing the charges in the newsletters it's
clear why they didn't do so well. OTOH, I think this is a pretty dead on
torpedo in the side of the SS SCO.

[ Reply to This | # ]

Notice of Removal in text
Authored by: eggplant37 on Tuesday, February 10 2004 @ 07:01 PM EST
Here's the Notice of Removal in text transcribed:

ANDERSON & KARRENBERG
Thomas R Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
700 Bank One Tower
50 West Broadway
Salt Lake City, UT 84010
Telephone: (801) 534-1700
Facsimile: (801) 364-7697

Attorneys for Defendant Novell, Inc.

--------
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION
--------

THE SCO GROUP, INC., a Delaware corporation,
Plaintiff,
vs. NOVELL, INC., a Delaware corporation,
Defendant

-------

NOTICE OF REMOVAL OF CIVIL ACTION UNDER 28 U.S.C. !! 1441 AND 1446

(Federal Question Jurisdiction)

[stamped] Judge Dale A. Kimball
DECK TYPE: Civil
DATE STAMP: 02/06/2004 @14:49:53
CASE NUMBER: 2:04cv00139 DAK

---------

Defendant Novell submits this Notice of Removal of this action to the United
States District Court for the District of Utah, Central Division, pursuant to 28
U.S.C. !! 1441 and 1446. In support of this removal, Novell states the
following:

1. On January 20, 2004, an action was commenced in the Third Judicial District
Court, in and for Salt Lake County, State of Utah, entitled The SCO Group, Inc.
v. Novell, Inc., Civil Case No. 040900936. A true and correct copy of the
Summons, Complaint, and all other process, pleadings,and orders served upon
Novell are attached hereto as Exhibit A as provided in 28 U.S.C. ! 1446(a).

2. On January 20, 2004, The SCO Group, Inc. ("SCO") served Novell
with a copy of the Summons and Complaint. Aside from the material in Exhibit A,
Novell is not aware of any other process, pleadings or orders served upon Novell
in this action.

3. Novell files this Notice of Removal within one year of the date the action
was originally filed and within thirty days of receipt of the Complaint by
Novell. Removal is accordingly timely.

4. Promptly after filing this Notice of Removal, Novell shall give written
notice of the removal to SCO by and through its designated counsel, and to the
Clerk of the Third Judicial District Court in and for Salt Lake County, State of
Utah as provided in 28 U.S.C. ! 1446(d). A true and correct copy of the Notice
to Plaintiff and to Clerk of the Court of Removal of Civil Action to Federal
Court (without exhibits) is attached hereto as Exhibit B.

JURISDICTION

5. This Court has original jurisdiction over this action pursuant to 28 U.S.C.
! 1331 (federal question) in that SCO's cause of action arises under the Federal
Copyright Act, 17 U.S.C. ! 101 et.seq.

FEDERAL QUESTION JURISDICTION

6. A district court has original jurisdiction over cases "arising
under" federal law. 28 U.S.C. ! 1331.

7. A case arises under federal law if it requires interpretation of the
Copyright Act. T.B. Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir. 1964)
("an action 'arises under' the Copyright Act . . . if the complaint . . .
assert a claim requiring construction of the Act."); Gerig v. Krause
Publ'n., Inc., F. Supp. 2d 1261, 1267, 1267 n.5 (D. Kan. 1999) (stating that the
Tenth Circuit has adopted this test).

8. In its Complaint, SCO sets forth a cause of action for slander of title
based upon its alleged ownership of certain copyrights by transfer from Novell.
SCO alleges that it has become the sole and exclusive owner of certain
copyrights by virtue of the Asset Purchase Agreement and Amendment No. 2
thereto. (Ex. A. Compl. PP 17.)

9. SCO further alleges that Novell has made false claims of ownership of the
UNIX and UnixWare copyrights. (Ex. A, Compl. PP 24.)

10. One of the elements of a slander of title claim under Utah law is that
"the [allegedly slanderous] statement was false." First Security Bank
of Utah v. Banberry Crossing, 780 P.2d 1253, 1256-57 (Utah 1989). SCO has
alleged that Novell's statements asserting ownership of the UNIX and UnixWare
copyrights are false.

11. Accordingly, SCO's cause of action for slander of title requires that it
prove Novell's statements of asserting ownership of the UNIX and UnixWare
copyrights are false; that is, that SCO owns the UNIX and UnixWare copyrights.

12. According to SCO's Complaint, Novell's statements asserting ownership of
the UNIX and Unixware copyrights are false because the Asset Purchase Agreement
and Amendment No. 2 constitute a transfer of copyright ownership to SCO.

13. The Copyright Act exclusively governs all transfers of copyright and states
that "[a] transfer of copyright owndership . . . is not valid unless an
instrument of conveyance or a note or memorandum of the transfer, is in writing
. . . . " 17 U.S.C. ! 204(a).

14. Therefore, SCO will need to establish that the Asset Purchase Agreement
and/or Amendment No. 2 constitutes an "instrument of conveyance" or
"note or memorandum of [ ] transfer" under the Copyright Act
sufficient to transfer copyright ownership to SCO. 17 U.S.C. ! 204(a).

15. The Asset Purchase Agreement and/or Amendment No. 2 does not consitute a
"instrument of conveyance" or "note or memorandum of [ ]
transfer" under the Copyright Act sufficient to transfer copyright
ownership. 17 U.S.C. ! 204(a).

16. The question of whether a purported copyright assignment constitutes an
"instrument of conveyance" or "note or memorandum of [ ]
transfer" under the Copyright Act requires interpretation of the Copyright
Act and is sufficient to render this action within the original jurisdiction of
the federal courts. Jasper v. Bovina Music, Inc., 314 F.3d 42, 46-47 (2d Cir.
2002).

17. Therefore, this action is removable to this Court pursuant to 28 U.S.C. !
1441.

VENUE

18. Removal to the United States District Court for the District of Utah,
Central Division, is proper because the Complaint was filed in Salt Lake County,
Utah. 28 U.S.C. ! 1441(a).

WHEREFORE, Defendant Novell gives notice that the above-described action pending
against it in the Third Judicial District Court, in and for Salt Lake County,
State of Utah, is removed to this Court.

DATED: February 6, 2004.

ANDERSON & KARRENBERG

[signed]
---------------
Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon
Attorneys for Defendant Novell, Inc.

--------------------------------

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 6th day of February, 2004, I caused to be mailed a
true and correct copy of the foregoing NOTICE OF REMOVAL OF CIVIL ACTION UNDER
28 U.S.C. !! 1441 AND 1446, via first class U.S. mail, postage prepaid, to the
following:

Brent O. Hatch
Mark R. Clements
HATCH JAMES & DODGE, P.C.
10 West Broadway, Suite 400
Salt Lake City, Utah 84101

Kevin P. McBride
1299 Ocean Avenue, Suite 900
Santa Monica, California 90401

Stephen N. Zack
Mark J. Heise
BOIES, SCHILLER & FLEXNER LLP
100 Southeast Second Street, Suite 2800
Miami, Florida 33131


[signature]
--------------

--------------------------------

Exhibits/
Attachments
to this document
have not been
scanned.

Please see the
case file.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: archivist on Tuesday, February 10 2004 @ 07:01 PM EST
Hehe now its almost over can I book seats at the movie premiere.

This will run and run, sequels till the death of sco.

Big nasty corporations are the good guys.

Small bug ridden sco and its parasites (darl etc) get all they deserve and
more.

Perry Mason for IBM's lawyer?

Got to be a 10 hr movie there's is so much to get in.

Is it to be a Groklaw script?

[ Reply to This | # ]

Lemme Guess....
Authored by: kberrien on Tuesday, February 10 2004 @ 07:09 PM EST
The press headline tomarrow will read.... er...

Actually, there probably WON'T be any headlines... er.. and the stock will go
up.

This world is crazy.

[ Reply to This | # ]

The last few straws on the camel's back
Authored by: Anonymous on Tuesday, February 10 2004 @ 07:14 PM EST
The SCOX share price has been remarkably stable the last few days, skimming the
200 day moving average, its like everyone is holding their breath... this Novell
"direction" to Darl is a stunning arrow in the back that tomorrow will
visibly protrude from the front.

The centre cannot hold... surely some revelation is at hand...

[ Reply to This | # ]

Retroactive Change?
Authored by: arch_dude on Tuesday, February 10 2004 @ 07:18 PM EST
The $echo articles were written after Sequent signed the License. When AT&T
states that they will add a sentence to the license, does this actually affect
prior signed contracts, or does it only affect newer contracts that have the new
wording?

I don't see how this article can directly change the Sequent contract. I do
believe that the article constitutes ironclad evidence against the crazy SCOG
theory. Furthermore, SCOG has absolutely no recourse to ignorance: they knew or
should have known that this article or something very like it existed. I'm
fairly sure that this article in $echo is the reputed "open letter"
that is referred to in the publicly available histories of the USL v BSDi case.
This is important since it will make it hard for SCOG to plead ignorance as a
defense during the IBM v SCO Lantham act portion of this soap opera.

So, even if SCOG used this Novell letter as an excuse to drop all claims arising
from the "derived works" theory, IBM can crush the
ethically-challenged idiots.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Tuesday, February 10 2004 @ 07:29 PM EST
Whether removal is proper is not nearly as clear as the
parent post suggests. Depends on whether the court sees
this as a contractual issue. To quote T.B. Harms Co. v.
Eliscu, "?if the case concerns a dispute as to ownership of
a copyright, and the issue of ownership turns on the
interpretation of a contract, the case presents only a
state law issue, and unless the complaint asserts a remedy
expressly granted by the Copyright Act, federal
jurisdiction is lacking in the absence of diversity
jurisdiction."

[ Reply to This | # ]

What is left for SCOG?
Authored by: PolR on Tuesday, February 10 2004 @ 07:42 PM EST
They have dropped trade secrets claims. The derivative work theory is busted. Do
they still have a claim against IBM that have something to do with Linux? I
can't think of any.

I guess they will just ignore Novell as usual. Would that he repeated breaches
of their contract with Novell? Could the APA be cancelled? Do I smell the odor
of System V rights reverting back to Novell?

IANAL

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: dodger on Tuesday, February 10 2004 @ 07:45 PM EST
Who notifies Judge Wells about this letter which punches holes in Heise's
arguments in court last week.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: mac586 on Tuesday, February 10 2004 @ 07:52 PM EST
These letters from Novell have a very dramatic flair. They go from a simple tap
on the shoulder, then a finger in the chest, and now there is this thunderclap
as Novell delivers an open handed slap to the face.

That should wake up SCOG.

It is yet to be determined if SCOG are any better at lawyering when they are not
sleep walking.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Tuesday, February 10 2004 @ 08:09 PM EST
Once I went to a meeting at Novell in Provo. They have really cool faucets in
their bathrooms, and that made me like them a lot; plus they gave me a shirt and
some lasagna.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Tuesday, February 10 2004 @ 08:20 PM EST
The Fat Lady isn't singing yet in this case...

But I think I can see her warming up in the bullpen.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: pooky on Tuesday, February 10 2004 @ 08:23 PM EST
Okay, that's great and all but why doesn't every SVRX licensee have a written
letter of understanding from AT&T to clarify the intent? IBM has one, why
doesn't Sequent?

It might be useful that AT&T stated as much in a letter, but SCO is going to
just claim that a) That "intent" was never represented to them when
purchasing the assets from oldSCO and b) it's in a newsletter and doesn't have
any legal bearing on the wording of the license because it isn't a modification
to the license itself.

I'm sure however that SCO is going to claim that the timing of the letter from
Novell was designed soley to destroy SCO and for no other reason.

-pooky

---
Veni, vidi, velcro.
"I came, I saw, I stuck around."

[ Reply to This | # ]

Summary of the case so far
Authored by: Anonymous on Tuesday, February 10 2004 @ 08:27 PM EST
SCO is suing IBM for trade secret violation they cannot show and copyright
infringement of the code they do not own. They want no less than 3 billion
dollars for this.

Me thinks, maybe I should sue IBM. I can come up with a far better case :-)

[ Reply to This | # ]

I Smell a Countersuit Coming
Authored by: CyberCFO on Tuesday, February 10 2004 @ 08:32 PM EST
The additional letters that are available on the Novell site from the 4th and
the 6th look suspiciously to me like additional groundwork being laid for a
countersuit being filed in the same Federal Court the Slander of Title suit was
just removed to.

Perhaps since SCO has said outright in the Feb 6 letter that Novell has no
iterest in the new Sun and Microsoft licenses, Novell will sue for breach of
contract.

---
/g

[ Reply to This | # ]

Not sure $ echo will actually make a difference.
Authored by: mobrien_12 on Tuesday, February 10 2004 @ 08:33 PM EST
The letter does not make it clear that the contractual changes were automatic,
and it doesn't seem like Sequent had obtained a copy of the revised contract.

Maybe it will help IBM's case a little bit because they can say "see, this
is what they really meant" but a newsletter article doesn't seem like a
binding legal document.

Of course, I'm not a lawyer, so I could be way off on this.

Anyway, I've got to admire Novell for this.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: butrusgali on Tuesday, February 10 2004 @ 08:37 PM EST
this is what call in the country playing hard ball....

i hope novell becomes a true friend of OS

[ Reply to This | # ]

Canopy responsibilties
Authored by: moogy on Tuesday, February 10 2004 @ 08:39 PM EST
Correct me if I am wrong, but I believe that if SCO does not
back down on their position on derivative works of SVRX and
their claims of terminating Sequent's and IBM's licenses and
then if Canopy does not replace the CEO and executives who
engaged the company in these unfounded claims they are now
definately responsible for the actions of the company and
share the legal responsibilities and consequences.

---
Mike Tuxford - irc.fdfnet.net #Groklaw
First they ignore you, then they laugh at you,
then they fight you, then you win. --Gandhi

[ Reply to This | # ]

Novell letter to SCO accuracy
Authored by: widowmak3r69 on Tuesday, February 10 2004 @ 08:45 PM EST
I've no idea how this would affect them, but has anyone noticed that Joseph
Lasala Jr put MDT on his letter instead of MST? We are not on Daylight Savings
right now, we're on Standard time. Does this actually give SCO an extra hour to
comply? Has anyone seen anything in any of the documents that lays out how
Novell is supposed to notify SCO of it's waiver of rights? Does this change
anything legally? Probably a stupid question, but you know, IANAL does have the
word ANAL in it. ;)

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: MattZN on Tuesday, February 10 2004 @ 08:45 PM EST
Just another nail in SCO's coffin. Well, ok, maybe this one is more on the order of a Railroad Spike. Lets not forget, however, that SCO is fighting for its life here and has already ignored a half dozen death blows, e.g. like Novel telling SCO they can't revoke IBM's UNIX license, and Novel telling SCO that they owe Novel its cut from SCO's licencing deals... and SCO will probably ignore this one too.

We all know that SCO is dead. The real question before us is whether Daryl will try to muck the accounting to get his bonus out of SCO before it goes under, or whether D.B. will suck in its fradulent little belly and update its analyst targets for SCOX... You know... whether the bad guys actually get anything out of SCO or not.

And when will the media catch on anyways?

-Matt

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Tuesday, February 10 2004 @ 08:50 PM EST
I am not sure this letter really changes very much in the case.

1) Novell had already ordered SCO to waive the IBM breaches, and SCO had ignored
Novell. SCO will probably simply ignore this letter also.

2) The new information from the $ echo newletter is really already in the IBM
Feb 1985 letter of understanding, so it doesn't change the case very much.

The $ echo newletter says AT&T was not claiming ownership of code that is
not part of SysV, but SCO is arguing that while they don't own the code that IBM
and Sequent added to their versions of modified SysV, that the contract limits
what IBM can do with that code that they wrote. They had to treat it the same as
the SysV code, which means they could not contribute it to Linux.

What the license says is "the right to modify such SOFTWARE PRODUCT and to
prepare derivative works based on such SOFTWARE PRODUCT, provided the resulting
materials are treated hereunder as part of the original SOFTWARE PRODUCT."

The "resulting materials" clearly includes the source code. So for
example, IBM starts with SysV code and adds JFS code to it and calls the
resulting product AIX. Now AIX is clearly a derivative work of SysV and IBM must
keep its source code confidential. If IBM removes the JFS code from AIX, so it
no longer contains any SysV code, under copyright law this extracted version of
JFS is not a derivative work of SysV. SCO is using some definition of derivative
work where the extracted JFS is somehow still a derivative work of SysV, even
though it contains no SysV code.

I don't see where this new letter sheds any more light SCO's definition of
derivative work.

Do lawyers here think SCO is going to convince the court to let SCO take this
question of the definition of a derivative work to a jury or will the court at
some point rule on what the definition is?

[ Reply to This | # ]

Thank you Mr. Heise, we're all in the clear.
Authored by: Anonymous on Tuesday, February 10 2004 @ 08:57 PM EST
I think all of you are missing a point.
SCO is not actually claiming to own the code (under their current convoluted
theory) but as I understand Mr. Heise's arguments in the latest transcript, SCO
is saying that IBM breached the contract by publicizing and failing to hold
confidential that derivative code. They may, according to SCO, belong to IBM,
but IBM can't publish or use them outside of IBM's own internal framework. By
that definition IBM could distribute a binary version of them for use with IBM's
Linux distribution, but not contribute them to the public kernel nor publicize
their source code. In short they can't collect from you and me for having them
(because they belong to IBM) but they can sue IBM for breach of contract for
letting them out in the wild. I have no idea if any judge in his right mind will
accept this theory of ownership under law, but I also don't seem to see anyone
having realized that by making the whole argument hinge around IBM's own code
rather then SVRX they have effectively shot their licensing argument dead as a
doornail.
They may or may not be able to collect from IBM but they don't have rights to
IBM's code, no matter what they think.
The other point is that while AT&T may have issued a clarification in their
magazine, unless they actually provided that change to IBM and it was signed and
the contract appropriately modified, SCO could actually claim that this proves
their case. How? Well if AT&T thought that such a modification was required
to change the contract to specify the lack of AT&T interest in derivative
code then not including it was a clear sign that for whatever contract they
didn’t change they intended to hang on to those rights. IN other words, if such
a change in the contract grants a waiver, then it must be required to grant that
waiver, if you purposely don’t include it then you meant not to waiver those
rights for that contract. It’s backwards logic, but might actually fly in a
contract law case.

As I said, IBM may or may not be liable for a breach of contract, but IBM does
own those derivatives unless they specifically assigned them back to AT&T,
which means it might be illegal for them to distribute them, but not up to SCO
to get cash for them (from me and thee.)
Thanks Mr. Heise. You just let every LINUX user off the hook.

[ Reply to This | # ]

Checkmate.
Authored by: Anonymous on Tuesday, February 10 2004 @ 09:36 PM EST
I wonder if it’s no mere coincidence that Novell sent this letter when they did.
It’s public shortly after SCO drops the trade secret portions of the law suite,
and essentially hinges the whole thing on derivative works, and IBM not
complying with SCO’s termination of the license.

Darl: I hear the best way to leave town quick is to take southwest airline’s
flights 1359 and 2206 departing SLC airport and 7:25 am. You’ll have a layover
in in phoenix, but you’ll be in florida by 2. From there, you should have no
trouble making your way to south America anonymously.

[ Reply to This | # ]

Lest anyone still thinks Linux is still not big business...
Authored by: kberrien on Tuesday, February 10 2004 @ 10:04 PM EST
Way off target, but interesting

Windows 98 lifeline 'prompted by Linux threat'
http://news.zdnet.co.uk/software/windows/0,39020396,39119059,00.htm

Is it me, or would this be the first concrete check against MS's
dominance/monopoly? A year ago (remember the licensing fiasco) MS wouldn't
think twice about shoving upgrade pressure on us. Now if they re-support NT 4!
Wow.

[ Reply to This | # ]

August 1985 $echo
Authored by: Anonymous on Tuesday, February 10 2004 @ 10:28 PM EST
The August 1985 $echo does in my opinion have the legal
authority of a contract. It is similar to a rider that you receive in
your insurance bill, which clarifies the language of your
insurance coverage. At the bottom of the rider, it usually says
"Keep this with your policy, it's now an addendum to it" (roughly
stated).
Also, I read on Groklaw in the past few days something
regarding IBM getting some legal grief regarding releasing
printer drivers. I'm not sure of the specifics, but in the same
edition of the $echo, AT&T answers a question regarding
when they will begin to provide device drivers. The answer, in
so many words, is that they would prefer their licensees to
develop device drivers, and will grant permission to distribute
source code for such drivers...

Lastly, in the same 1985 edition of $echo, AT&T mentions
software that will run on their new 'AT&T 3B' PC family
(running UNIX SysV). One of the offerings is Microsoft
Word...
Thanks to PJ and all, from a Minne-snow-ta lurker

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: idahoan on Tuesday, February 10 2004 @ 10:32 PM EST
hmmm, I wonder who is now running away with their tail
tucked between their legs???? ;)
I forget the exact terminology/phrase that was used by "the Darl".

I hope I did this right..it's my first posting.

[ Reply to This | # ]

How about a concise list ...
Authored by: zapyon on Tuesday, February 10 2004 @ 10:57 PM EST
of possible breaches of contract and violations of laws collectable on a new
page here at Groklaw. Similar to timelines, etc.

The parent posts would be a nice start.

Kind regards

Andreas

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Wednesday, February 11 2004 @ 12:04 AM EST
Do any of you people who are praising Novell realize that Novell tried the same
thing SCO is doing to Linux, they just did it to BSD. They weren't quite so
obnoxious about it, but they certainly tried to make very bogus claims to BSDs
intellectual property.

DanW

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Glenn on Wednesday, February 11 2004 @ 12:12 AM EST
Some things are beginning to become clear. IBM is using its discovery
requests to pin SCOG down, I.E. make SCOG make a legal statement as to what its
precise claims are and is using SCOG's own public and legal statements to do so.
Of course, SCOG is resisting this a hard as it can, knowing that this will give
IBM a real target to demolish.
The second is that Novell's actions and information via its correspondence
with SCOG and the two AT&T newsletters effectively scuttle any claims that
SCOG has been trying to make. I am hoping that some news site gets hold of this
(I'm not holding my breath) and actually reports it.

Glenn

[ Reply to This | # ]

Fascinating...
Authored by: The Mad Hatter r on Wednesday, February 11 2004 @ 12:14 AM EST


The more I see, the more I wish I'd become a lawyer specializing in corporate
law and IP. This is the sort of case that you get once in a life time.

Right now SCO looks like a bar room drunk, taking swings at everything that
moves.

It's at the point where my wife is complaining that I'm spending too much time
reading Groklaw, and wondering if I'm having an affair with PJ!



---
Wayne

telnet hatter.twgs.org

[ Reply to This | # ]

  • like an old boxer - Authored by: Anonymous on Wednesday, February 11 2004 @ 06:04 AM EST
  • Fascinating... - Authored by: Anonymous on Wednesday, February 11 2004 @ 04:30 PM EST
Hmmm...
Authored by: Anonymous on Wednesday, February 11 2004 @ 01:34 AM EST
Doesn't TSG's refusal to comply with Novell's orders in regards to waiving any
purported rights TSG continues to claim against IBM, Sequent, and SGI constitute
breach of contract? Wouldn't that be grounds for terminating the contract and
recovering the assets thus transfered?

And on a totally marginally related topic, any word on how Novell's audit of TSG
fared?

[ Reply to This | # ]

  • Hmmm... - Authored by: Anonymous on Wednesday, February 11 2004 @ 03:31 AM EST
  • Hmmm... - Authored by: Anonymous on Wednesday, February 11 2004 @ 03:40 AM EST
    • Hmmm... - Authored by: Budgreen on Wednesday, February 11 2004 @ 12:41 PM EST
      • Hmmm... - Authored by: Anonymous on Wednesday, February 11 2004 @ 01:57 PM EST
  • Hmmm... - Authored by: pooky on Wednesday, February 11 2004 @ 10:54 AM EST
Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Wednesday, February 11 2004 @ 03:56 AM EST
You mean (Darl McBride as Dr. Evil), "Five BILLLLIONN Dollars,
hahahaha".

[ Reply to This | # ]

MS trying to avoid GPL?
Authored by: Anonymous on Wednesday, February 11 2004 @ 06:20 AM EST
A twist on the MS involvement occurred to me. They may have analysed the case,
and concluded that IBM could win, acquire SCO's rights (whatever they actually
are) as part of the settlement in the countersuit, then (in conjunction with
Novell) GPL the whole thing and assign the copyrights to the FSF.

One of MS's bigger worries is that GPL code will get into an MS product. I
imagine that where they really want to use something that's been released under
GPL, they would be prepared to pay the copyright owner to acquire rights under
other terms.

In that case their acquisition of a licence from SCO is no more than a prudent
step to ensure that they have access to UNIX source unencumbered by the GPL.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: jdv on Wednesday, February 11 2004 @ 08:19 AM EST
The section in the IBM/SCO agreement that SCO keeps repeating, is: "...
provided the resulting materials are treated hereunder as part of the original
SOFTWARE PRODUCT.".

The texts Novell has now dug up only say that AT&T "claims no ownership
interest in any portion of such a modifation or derivative work that is not part
of a SOFTWARE PRODUCT."

SCO's argument, however, is not that the code IBM submitted to Linux is now
owned by SCO, but that IBM should have treated it 'as part of the original
SOFTWARE PRODUCT.', which SCO interpretes as 'keep it a secret'.

Am I missing something here?

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: jrzagar on Wednesday, February 11 2004 @ 09:38 AM EST
AT&T must have had some darned good lawyers, because it seems to me that the quoted text says exactly the opposite of what it's supposed to mean.  Maybe my mistake is trying to interpret this contract in plain language, because I would have translated this:
Such right to use includes the right to modify such SOFTWARE PRODUCT and to prepare derivative works based on such SOFTWARE PRODUCT, provided the resulting materials are treated hereunder as part of the original SOFTWARE PRODUCT.

to mean this

You are allowed to modify our stuff.  You are also allowed to create derivative works based on our stuff.  But you've got to treat the derivative work as if it falls under our original contract terms.
But this is the kind of thinking that'll get me transferred to SCOville, so what am I missing?

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Wednesday, February 11 2004 @ 10:48 AM EST
Listen,

The legal fiction that SCO subscribes to regarding derivative works is only a weak excuse. What they are saying, in essence, is this:

"We believe we own contractual rights to IBM's and Sequent's 'derivative' works: namely JFS, NUMA, RCU, etc. Sure, we distributed these features in Linux under the GPL, but we didn't know they were there. So the GPL doesn't apply to us, and we can now claim damages and demand payments/royalties."

SCO - A Linux distributor and a Linux contributor - didn't know about JFS, NUMA and RCU in Linux? Even casual Linux enthusiasts knew about these highly-visible contributions from IBM. These weren't exactly hush-hush contributions that happened in secret, and they weren't put into Linux just yesterday.

Even if SCO can prove (somehow) that they do have some rights over these contributions, they will have a very hard time explaining away the GPL. SCO clearly knew these significant features had been contributed to Linux; they needed to in order to sell it. SCO can't go back and say, nevermind, we really didn't mean to distribute that under the terms that we agreed to. If they try to tell the judge that they were ignorant of the contributions, they won't make a good impression. Linux development doesn't happen in the dark.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: greybeard on Wednesday, February 11 2004 @ 10:50 AM EST
Would you not expect SCOG to reply: "Why no, we are not discussing the
operation of Copyright Law at all. Rather, we are involved in a simple contract
dispute over the ownership of said copyrights. Consequently, the courts of Utah
are perfectly suitable for settling the contract dispute."

Looks to me like the beginning of another long slog through the docket. Well, a
war of attrition is better than no war at all.

[ Reply to This | # ]

Spelling Error
Authored by: Anonymous on Wednesday, February 11 2004 @ 11:03 AM EST
which itseld foes not contain proprietary...

unless that is in the original.

Mike A.

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: pfusco on Wednesday, February 11 2004 @ 02:09 PM EST
How long will it be before we hear SCO's response and then Novells actions from
that point?

---
only the soul matters in the end

[ Reply to This | # ]

Novell Writes to SCO Again and Also Files Notice of Removal to Transfer to Federal Court
Authored by: Anonymous on Wednesday, February 11 2004 @ 05:27 PM EST
Remember that Novell is in the same situation as SCO from this point of view:
NetWare (like UnixWare) is a truly dead product and Novell (like SCO) has no
product in the wings, at least before the SuSE acquisition.

Remember too that UnixWare started as a Novell product and completely collapsed
under Novell's care before SCO became it's owner. Novell bought WordPerfect,
Digital Research, Serius, and other companies and ran them into the ground
losing an enormous amount of money as well as value for it's stockholders.

Novell is fighting for its survival and its past history is not encouraging.
Novell is going head-to-head with SCO because it needs linux (or sees it as a
magic bullet) and simply hasn't had time to destroy SuSE, Ximian, et al before
it goes off in search of another magic bullet.

Novell is not adverse to using the courts the same way SCO has. Do you remember
Novell vs Microsoft over the issue of the IPX stack in Windows for Workgroups ?


Novell, like Microsoft, SCO, and others is someone you want as a vendor, not a
friend.

[ Reply to This | # ]

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