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Joint Statement Re Court's December 6, 2007 Order
Thursday, December 13 2007 @ 09:21 PM EST

Here it is, at last, the joint statement the Honorable Judge Dale Kimball requested the parties in SCO v. Novell file, Joint Statement Regarding Court's December 6, 2007 Order [PDF]. He had asked when they would be available for trial and whether the trial would be, in their estimation, any shorter. The answer to the latter is no. They still think it will be four days, because when they were ready for trial before, the issue of a constructive trust was going to be handled post-trial.

So when will it be? They say they are both free on the following dates: January 11-21 and January 31 to February 22, 2008. Here's the interesting part. Novell says that the Swiss arbitration is currently pencilled in to be heard April 16-25, 2008. So, evidently Swiss law is not altogether captive to US bankruptcy law, and so it has been scheduled for a hearing, but the footnote says it's holding the date open, I guess hoping this ball of wax will be taken care of by then, and indeed it looks like it will. SCO says the parties shouldn't assume that it will happen, because that matter was stayed. But in the footnote, we learn that Novell is thinking of going back to bankruptcy court, probably after the trial, I'm guessing, and, in light of lifting the stay on the Utah case, asking again to lift the stay on the Swiss arbitration. After all, if you want resolution, you can't really get it unless you finish both.

Judge Kimball also asked if any issues could be settled by summary judgment. No, says SCO. They have no plans. Like they could, even if they wanted to. And Novell says yes, they have a plan, to ask for summary judgment on Novell's 4th claim, "seeking a declaration that SCO was without authority to enter into the Sun, Microsoft, and other SCOsource licenses." It will file by December 21, but Novell sees no need to hold back scheduling the starting date for the 4-day trial.

I know. It's getting exciting now. Unless you are SCO. I hope some of you are synchronizing your calendars.

Just to remind us, here is Novell's 4th Claim:

FOURTH CLAIM FOR RELIEF
(Declaratory Relief: Rights and Duties under § 4.16(b) of the Asset Purchase Agreement)

111. Novell incorporates by reference all prior paragraphs as if they were set forth here in full.

112. Under § 4.16(b) of the APA, Novell has the right, at its sole discretion, to direct SCO to waive any rights under any SVRX Licenses. In the event that SCO fails to take any such action at Novell's direction, § 4.16(b) gives Novell the right to take any action on SCO's own behalf. SCO refused to perform its corresponding duties under § 4.16(b) and substantially and materially breached § 4.16(b) by:

a. Purporting to cancel or terminate SVRX licenses, including the IBM and Sequent SVRX licenses, and then refusing to waive these purported rights as directed by Novell; and

b. Refusing to recognize actions taken by Novell on SCO's behalf pursuant to § 4.16(b), including Novell's waiver of SCO's purported claims against IBM and Sequent.

113. Novell seeks a declaration pursuant to 28 U.S.C. § 2201 that:

a. Under § 4.16(b) of the APA, Novell is entitled, at its sole discretion, to direct SCO to waive its purported claims against IBM, Sequent and other SVRX licensees; and

b. Under § 4.16(b) of the APA, Novell is entitled to waive on SCO's behalf SCO's purported claims against IBM, Sequent and other SVRX licensees, when SCO refuses to act as directed by Novell; and

c. SCO is obligated to recognize Novell's waiver of SCO's purported claims against IBM and Sequent.

114. Under § 4.16(b) of the APA, SCO is obligated to seek Novell's prior approval to enter into new SVRX Licenses or amendments of SVRX Licenses, subject to limited exception. SCO did not perform its corresponding duties under § 4.16(b) and substantially and materially breached § 4.16(b) by:

a. Purporting to enter into new SVRX licenses without Novell's prior approval, including agreements with Sun, Microsoft and other licensees of SCO's Intellectual Property Licenses, without demonstrating that either of two limited exceptions was applicable; and

b. Purporting to enter into amendments of SVRX Licenses without Novell's prior approval, including agreements with Sun, Microsoft and other licensees of SCO's Intellectual Property Licenses, without demonstrating that a limited exception was applicable.

115. Novell seeks a declaration pursuant to 28 U.S.C. § 2201 that:

a. Under § 4.16(b) of the APA, SCO was obligated to seek Novell's prior approval to enter into new SVRX licenses or amendments to SVRX licenses, including SCO's agreements with Sun, Microsoft and other licensees of SCO's Intellectual Property Licenses; and

b. Under § 4.16(b) of the APA, SCO is obligated to seek Novell's prior approval to enter into new SVRX licenses or amendments to SVRX licenses, unless SCO can demonstrate to Novell that any exceptions to the prohibitions against new licenses and amendments by SCO are applicable.

116. Novell pleads in the alternative for a declaration pursuant to 28 U.S.C. § 2201 that SCO had no authority to enter into the Sun and Microsoft SVRX Licenses, as well as the Intellectual Property Licenses with Linux end users and UNIX vendors.

Now, Novell brought a motion for partial summary judgment on that 4th claim in December of 2006, so they must believe that they have additional arguments that they can now make. Here's the Memorandum in Support, Redacted Declaration in Support by Kenneth Brakebill. SCO's Opposition was sealed but there was a redacted version, and so was Novell's Reply. But SCO filed a Cross Motion on this 4th claim, if you recall. Novell's Opposition was filed under seal, and so was SCO's reply, but there is a redacted version. Novell also filed evidentiary objections regarding SCO's witness testimony "based on five grounds: inadmissable parol evidence, lack of personal knowledge, hearsay, the best evidence rule, and improper authentication". If you read some opining that the judge ignored SCO's witnesses, you'll find that document helpful. Then there was another declaration by Kenneth Brakebill, also sealed. There was a hearing in June of 2007.

Here's the funny detail. Novell won its motion and SCO's cross motion was denied. So to figure out what Novell might ask for next in summary judgment, you need to carefully analyze the August 10th Order. They see something that I haven't, which is hardly surprising, given that they are lawyers and I am not and also given that so many documents were sealed.

But I have an argument I'd make regarding the arbitration, that it'd be good to go forward while everyone there still has it fresh in mind. Trying to reconstruct all that happened just on Novell's Fourth Claim for Relief reminded me of things I'd already forgotten. Meanwhile, lawyers have retired, moved on, whatever. And even this document, by its style in the PDF, is new, so support staff seems to have changed too. So how about we get this resolved while all the people who put forth a tremendous effort to focus on all the details are still alive and on the case? Maybe it'd be good to finish up before SCO spends every last Novell farthing on lawyers to sue Novell with, too. You know, in the interests of justice. And all that.

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

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
David E. Melaugh, pro hac vice
[address]
[phone]
[fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
Heather M. Sneddon, #9520
[address]
[phone]
[fax]

Attorneys for Defendant & Counterclaim-Plaintiff Novell, Inc.

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

THE SCO GROUP, INC., a Delaware corporation,
Plaintiff and Counterclaim- Defendant,

v.

NOVELL, INC., a Delaware corporation,
Defendant and Counterclaim- Plaintiff.
JOINT STATEMENT REGARDING
COURT'S DECEMBER 6, 2007
ORDER



Case No. 2:04CV00139

Judge Dale A. Kimball

1

Pursuant to the Court's December 6, 2007 Order, Defendant and Counterclaim-Plaintiff Novell, Inc. ("Novell"), by and through its counsel, and Plaintiff and Counterclaim-Defendant The SCO Group, Inc. ("SCO"), by and through its counsel, make the following joint statement:

Motions for Summary Judgment

Novell anticipates filing a motion for summary judgment on its Fourth Claim for Relief, seeking a declaration that SCO was without authority to enter into the Sun, Microsoft, and other SCOsource licenses. Novell will be prepared to file this motion by December 21, 2007. Both parties agree that the trial need not be deferred pending a ruling on the motion for summary judgment.

SCO does not anticipate filing a motion for summary judgment. SCO does not believe the subject matter of Novell's proposed motion can properly be resolved on summary judgment, as the issue involves the question of whether any SVRX license aspects of these licenses were "incidental" to non-SVRX license aspects, which is closely tied to the issues that this Court will be trying on apportionment of licensing income.

Trial Length and Schedule

The parties anticipate that trial will last four days. Because the parties had agreed to address the issue of any constructive trust in post-trial briefing, the bankruptcy court's decision to reserve that issue for itself is not expected to reduce the trial length.

The parties agree they are available for trial January 11-21 and January 31 to February 22, 2008. Novell has not proposed the second half of April for trial, because the SUSE arbitration is presently scheduled for hearing in Zurich April 16-25, 2008. SCO proposes to make April available for trial because that arbitration has been held to be subject to the automatic stay in bankruptcy and the parties should not assume that the stay will be lifted.1 One of SCO's

2

lead counsel has conflicts for the month of March (a four-week trial in federal court in Kentucky) and May (arbitration in Florida, followed by a one-week trial in Wisconsin). Novell's lead counsel has a conflict for the first half of June (trial in federal court in Delaware).

DATED: December 13, 2007

ANDERSON & KARRENBERG

/s/ Heather M. Sneddon
Thomas R. Karrenberg
Heather M. Sneddon
Attorneys for Novell, Inc.

DATED: December 13, 2007

HATCH, JAMES & DODGE

/s/ Brent O. Hatch
(Signed by filing attorney with the consent
of Brent O. Hatch)
Brent O. Hatch
Mark F. James
Attorneys for The SCO Group, Inc.

3

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 13th day of December, 2007, I caused a true and correct copy of the foregoing JOINT STATEMENT REGARDING COURT'S DECEMBER 6, 2007 ORDER to be served to the following:

Via CM/ECF:

Brent O. Hatch
Mark F. James
HATCH JAMES & DODGE, P.C.
[address]

Stuart H. Singer
William T. Dzurilla
Sashi Bach Boruchow
BOIES, SCHILLER & FLEXNER LLP
[address]

David Boies
Edward J. Normand
BOIES, SCHILLER & FLEXNER LLP
[address]

Devan V. Padmanabhan
John J. Brogan
DORSEY & WHITNEY, LLP
[address]

Via U.S. Mail, postage prepaid:

Stephen Neal Zack
BOIES, SCHILLER & FLEXNER LLP
[address]

/s/ Heather M. Sneddon

4

1According to Novell, in light of the bankruptcy court's decision to lift the stay over this litigation, SUSE is evaluating whether to make a similar motion regarding the arbitration. In the meantime, the arbitration tribunal is holding open an April hearing date.

  


Joint Statement Re Court's December 6, 2007 Order | 310 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections
Authored by: Anonymous on Thursday, December 13 2007 @ 09:59 PM EST
As needed.

---
--Bill P, not a lawyer. Question the answers, especially if I give some.

[ Reply to This | # ]

Off Topic
Authored by: Anonymous on Thursday, December 13 2007 @ 10:00 PM EST
Off-topic topics, as it were.

---
--Bill P, not a lawyer. Question the answers, especially if I give some.

[ Reply to This | # ]

News Picks discussion
Authored by: Anonymous on Thursday, December 13 2007 @ 10:01 PM EST



---
--Bill P, not a lawyer. Question the answers, especially if I give some.

[ Reply to This | # ]

Joint Statement Re Court's December 6, 2007 Order
Authored by: John Hasler on Thursday, December 13 2007 @ 10:05 PM EST
Here's the interesting part. Novell says that the Swiss arbitration is currently scheduled to be heard April 16-25, 2008. So, evidently Swiss law is not altogether captive to US bankruptcy law, and so it has been scheduled for a hearing.
The footnote says that the arbitration tribunal is holding open a hearing date.

---
IOANAL. Licensed under the GNU General Public License

[ Reply to This | # ]

Next move?
Authored by: Anonymous on Thursday, December 13 2007 @ 10:06 PM EST
Am I correct that the next move is for Kimball to schedule the trial?

And then for the trial to actually happen this time? I can't wait...

MSS2

[ Reply to This | # ]

  • Next move? - Authored by: Anonymous on Thursday, December 13 2007 @ 10:32 PM EST
    • Wrong Order! - Authored by: rsteinmetz70112 on Friday, December 14 2007 @ 09:21 AM EST
      • Wrong Order! - Authored by: Anonymous on Friday, December 14 2007 @ 09:47 AM EST
      • Wrong Order! - Authored by: Anonymous on Friday, December 14 2007 @ 03:04 PM EST
        • Here: - Authored by: Anonymous on Friday, December 14 2007 @ 03:18 PM EST
          • There: - Authored by: Ed L. on Friday, December 14 2007 @ 07:27 PM EST
SCO:English Translation
Authored by: Anonymous on Thursday, December 13 2007 @ 10:41 PM EST
SCO: "SCO does not anticipate filing a motion for summary judgment"

English: SCO will file a ridiculous motion shortly.

[ Reply to This | # ]

SCO can't afford the trial to happen
Authored by: kawabago on Thursday, December 13 2007 @ 10:51 PM EST
So my prediction is that the trial will not happen. SCO will close up shop and
liquidate before they will stand and be judged. SCO is not peopled by the brave
and stoic but instead by cowards and liars. If it comes right down to it, they
simply won't show up.

[ Reply to This | # ]

Kentucky March conflict--Nascar antitrust case led by David Boies
Authored by: Anonymous on Thursday, December 13 2007 @ 10:56 PM EST
The 4 week trial in Kentucky that interferes with a March date is the Nascar anti-trust trial, with Boies as the lead Plantiff lawyer.

Source: November story on Trial status
Cached news story

[ Reply to This | # ]

Next? More "Who's On First"
Authored by: Anonymous on Thursday, December 13 2007 @ 11:03 PM EST
One has to admit that SCO has utilized it's lawyers (hired with Novell's money -
haha) extremely "well".

The marvelous move by SCO to create a new company and then hire Novell's lawyers
to (fill in the scenario of choice) has got to be .. well... marvelous.

I have no idea WHO'S behind all of SCO's moves; but it's obviously someone who
has read Sun Tzu's 'The Art Of War' several times (every day?)

Be interesting to watch SCO et al. take on Steve Jobs.

[ Reply to This | # ]

Cool News
Authored by: digger53 on Thursday, December 13 2007 @ 11:10 PM EST
Time for Novell's lawyers to break out the butchers's steel to put the finishing
touches on their filet knives...

[ Reply to This | # ]

Clarification
Authored by: Anonymous on Thursday, December 13 2007 @ 11:16 PM EST

Novell brought a motion for summary judgment on that 4th claim in December of 2006, so they must believe that they have additional arguments that they can now make.

Novell's motion was for partial summary judgment on Counterclaim 4. The motion didn't ask for summary judgment on the authority issue, so that issue has never been before Kimball. In his request [473] for this joint statement by the parties, he pretty clearly indicated that this was an omission on Novell's part, and the issue was now ripe for summary judgment.

[ Reply to This | # ]

  • Clarification - Authored by: Anonymous on Friday, December 14 2007 @ 07:57 AM EST
Joint Statement Re Court's December 6, 2007 Order
Authored by: Anonymous on Friday, December 14 2007 @ 12:43 AM EST
Hiding from scrutiny while stating "it is clear and there is no
question", is not going to work for SCO forever.

Just, as others have noted, long enough for Ralph and Darl to get a few more
checks.

[ Reply to This | # ]

    Surely the IBM trial must proceed?
    Authored by: thorpie on Friday, December 14 2007 @ 12:55 AM EST

    I mean, without the $4 billion that IBM owes SCO, no wonder they are such a predicament!

    Bringing on the IBM trial so that this money goes into their coffers will allow them to fully settle with everybody, pay Novell out, settle the arbitration, even pay the cleaners.

    Please, oh please, lift this stay!

    ---
    The memories of a man in his old age are the deeds of a man in his prime - Floyd, Pink

    [ Reply to This | # ]

    Question re Linux Licenses
    Authored by: sproggit on Friday, December 14 2007 @ 01:29 AM EST
    During the course of these trials, I remember PJ writing an article about
    testimony attached to a filing that came from a guy who had, unfortunately, been
    suckered into purchasing a Linux "SCOsource" license from SCO.

    Reading the text of this counterclaim, I think there is linkage between Novell's
    claim and that event. If the Court finds that SCO entered into these licenses
    illegally [and at this stage I don't think we need concern ourselves with
    apportionment issues, just whether or not they had the permission to do this
    unilaterally] then I would expect all such licenses to effectively be null and
    void in the eyes of the law.

    So at that point does it mean that any existing license holders automatically
    become creditors in the SCO bankruptcy case too?

    I ask not because I think that SCO are good for the money [they almost certainly
    aren't ] but because this change might have some impact on whether the
    bankruptcy proceedings change from Chapter 11 to Chapter 7.

    Any thoughts?

    [ Reply to This | # ]

    Oh dear, PJ makes two appalling mistakes!
    Authored by: Ian Al on Friday, December 14 2007 @ 06:44 AM EST
    Novell is thinking of going back to bankruptcy court, probably after the trial, I'm guessing, and, in light of lifting the stay on the Utah case, asking again to lift the stay on the Swiss arbitration.
    Novell have never asked for the stay to be lifted. Suse asked that the automatic stay did not apply to the arbitration. The judge said that it applied to Suse over which he had jurisdiction and that it was in the debtor's interest. That does sound as though, even if Novell win the Utah case in a big way (or, do I mean 'when') he might not agree to unlifting the Suse stay.

    It doesn't directly affect Novell at this point. The order of 10th August found that Novell owned the Unix copyrights. Judge Kimball made the point that it was only the new Unixware stuff for which SCO might have copyright and we know that such stuff could only make it into UnitedLinux if SCO put it there.

    Suse say that it is the effect on their Linux business they want sorted out, but the Novell case has effectively just done that. If the arbitration ever does restart, SCO have already lost. The only thing left for Suse is the damages that SCO have clearly inflicted upon them. I think the phrase I am looking for is 'good luck with that!'.

    As I see it, there is little real value for Suse in keeping the arbitration alive. Only while SCO is still in the business of selling on slander and libel (aka, the 'pigpoke' conspiracy) is it worth keeping the option open.

    Now, on to the second mistake. You had better sit down!

    It's getting exciting now. Unless you are SCO.
    There is no way that SCO is not getting excited about their day in court. Just not in a nice way!

    ---
    Regards
    Ian Al

    When nothing else makes sense, use Linux.

    [ Reply to This | # ]

    Novells fourth claim has two parts
    Authored by: Anonymous on Friday, December 14 2007 @ 07:41 AM EST
    I think I see why Novell can bring another motion for summary judgement on the
    fourth claim. The fourth claim has two distinct parts, one part is related to
    Novell's rights to direct SCO to waive the IBM claims, and the other part is
    about SCO's inability to enter into new, or amend existing, SVRX licenses
    without Novell's permission.

    The original motion for partial summary judgement only addressed the first part
    of the fourth claim, and they did win that one, and the judge declared that
    Novell had the right to direct SCO to waive the IBM claims, and after SCO
    refused to do that, Novell had the right to waive them on SCO's behalf.

    The new motion for summary judgement on the fourth claim will probably be for
    the second part, which would be asking for a summary judgement declaration that
    SCO did not have the right to enter into the MS, Sun and other deals without
    Novell's permission.

    [ Reply to This | # ]

    Judge looks booked up!
    Authored by: Larry on Friday, December 14 2007 @ 09:05 AM EST
    **So when will it be? They say they are both free on the following dates:
    January 11-21 and January 31 to February 22, 2008.**

    After looking at Judge Kimballs schedule. I dont see it happening in January or
    February. My Guess is March 11,12,13,14 at the earliest.

    [ Reply to This | # ]

    SCO Knew That Cheating Pays - Just Like MJ Baseball Owners
    Authored by: Anonymous on Friday, December 14 2007 @ 07:25 PM EST
    There seems to be an ongoing lashing here of $CO's DMcB and Gate$; for their
    "interesting" approach to business. But Mitchell's just released
    'Report On Steroid Use in Major League Baseball' makes it very clear, that:
    CHEATING PAYS! Major League Baseball is a multi billion dollar business and it
    knew steroids were in use for the last 15 years.Is cheating "American As
    Apple Pie"?

    [ Reply to This | # ]

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