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Novell Files for Partial Summary Judgment - on 4th Claim Re SCOsource
Saturday, December 22 2007 @ 12:40 PM EST

Novell has done what it said it would do, file a motion asking for partial summary judgment, specifically on its Fourth Claim for Relief for declaratory judgment on the grounds that SCO was without authority to enter into the SCOsource licenses:
478 - Filed & Entered: 12/21/2007
Motion for Summary Judgment
Docket Text: MOTION for Summary Judgment on Novell's Fourth Claim for Relief filed by Defendant Novell, Inc.. (Sneddon, Heather)

479 - Filed & Entered: 12/21/2007
Memorandum in Support of Motion
Docket Text: MEMORANDUM in Support re [478] MOTION for Summary Judgment on Novell's Fourth Claim for Relief [REDACTED] filed by Defendant Novell, Inc.. (Attachments: # (1) Exhibit 1)(Sneddon, Heather)

480 - Filed & Entered: 12/21/2007
Declaration
Docket Text: DECLARATION of David E. Melaugh re [478] MOTION for Summary Judgment on Novell's Fourth Claim for Relief [REDACTED] filed by Novell, Inc.. (Attachments: # (1) Exhibit 2 # (2) Exhibit 5 # (3) Exhibit 6 # (4) Exhibit 7 # (5) Exhibit 8 # (6) Exhibit 9, Pt. 1# (7) Exhibit 9, Pt. 2 # (8) Exhibit 9, Pt. 3# (9) Exhibit 10 # (10) Exhibit 12)(Sneddon, Heather)

481 - Filed & Entered: 12/21/2007
Notice of Conventional Filing
Docket Text: NOTICE OF CONVENTIONAL FILING of Memorandum in Support of Novell's Motion for Summary Judgment on its Fourth Claim for Relief, and Declaration of David E. Melaugh filed by Defendant Novell, Inc. [FILED UNDER SEAL] (Sneddon, Heather)

We have the redacted version of the memorandum in support already, so we can dive right in. As you see, there are a gazillion exhibits attached to the Declaration, and as soon as they are all uploaded, we'll plug them in here too. Most of them you've seen before, things like the Asset Purchase Agreement. But we'll scurry about and upload those soon too. I just knew you'd want to know about this right away.

Update: OK, they're all there now, except for the sealed ones, which are as usual the ones you would like to see the most, like the agreement with Cymphonix and Computer Associates and some internal presentations. I'd pay to see those.

Here's the Memorandum in Support as text, thanks once again to Steve Martin:

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

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, 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 and 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.
MEMORANDUM IN SUPPORT OF
NOVELL'S MOTION FOR SUMMARY
JUDGMENT ON ITS FOURTH CLAIM
FOR RELIEF



[REDACTED pursuant to the August 2,
2006 Stipulated Protective Order]



Case No. 2:04CV00139

Judge Dale A. Kimball

1

I. INTRODUCTION

With the Court's permission, Novell brings this additional Motion for Summary Judgment to further refine and narrow the issues for trial. This motion is based substantially on the Court's August 10, 2007 Order resolving the parties' motions for summary judgment. (Docket No. 377, "Order.") To decide this motion, the Court need only apply the plain prohibitions found in the APA to the equally plain text of SCO's SCOsource licenses.

The APA prohibits SCO from modifying existing SVRX Licenses and from entering into new SVRX Licenses. That prohibition is subject only to limited exceptions, and those exceptions do not apply here. SCO thus was without authority to enter into or amend those licenses.

In addition, Amendment 2 to the APA prohibits SCO from modifying or entering into "buyout" licenses of SVRX rights, without exception. Because, again, it is plain from the face of SCO's SCOsource license with Sun that it modifies a prior SVRX buyout, SCO was without authority to enter the Sun SCOsource license.

II. STATEMENT OF UNDISPUTED FACTS

The Court is generally familiar with the facts of this matter, which are briefly repeated below. (See Order at 2-42.)

The APA and its Prohibitions

1. The Asset Purchase Agreement prohibits SCO from modifying existing SVRX Licenses and from entering into new SVRX Licenses. (Declaration of David E. Melaugh in Support of Novell's Motion for Summary Judgment on its Fourth Claim for Relief, filed herewith ("Melaugh Decl."), Ex. 9 (APA) at § 4.16; Order at 92.)

2. SCO can amend existing SVRX Licenses only "as may be incidentally involved through its rights to sell and license [UnixWare software]" or "to allow a licensee under a particular SVRX License to use the source code of the relevant SVRX product(s) on additional

1 (2)

CPU's or to receive an additional distribution, from [SCO], of such source code." (Id.; see also Melaugh Decl., Ex. 10 (Amendment No. 1) ¶ 10 (amending APA § 4.16).)

3. SCO can enter into new SVRX Licenses only "as may be incidentally involved through its rights to sell and license [UnixWare software]." (Id.)

4. In addition, before entering into "any potential transaction with an SVRX licensee which concerns a buy-out of any such licensee's royalty obligations," SCO must obtain Novell's consent. (Melaugh Decl., Ex. 12 (Amendment No. 2) at § B.) This prohibition is subject to no exceptions.

SCOsource

5. SCO's "SCOsource" program was, fundamentally, a campaign to extract licensing revenue based on SCO's now-rejected claim to own the SVRX copyrights. (Order at 29 ("SCOsource ... was an effort to obtain license fees from Linux users based on claims to Unix System V intellectual property.").)

6. SCO has never claimed SCOsource had anything to do with SCO's UnixWare derivative rights.

Sun's SCOsource License

7. In 1994, Sun Microsystems, Inc. ("Sun") entered into an SVRX License with UNIX Systems Laboratories. Sun's 1994 SVRX License was a "buy-out," as that term is used in Amendment No. 2 (Order at 94; Melaugh Decl., Ex. 12 (Amendment No. 2).)

8. In 2003, SCO entered into a "Software License Agreement" with Sun. (Melaugh Decl., Ex. 11 at SCO1287208; Order at 94.) That agreement is explicitly intended to "amend and restate" the 1994 license agreement.

9. SCO characterizes the 2003 Sun Software License Agreement as a "SCOsource" license. (Melaugh Decl., Ex. 14 (SCO interrogatory response listing SCOsource licenses) at NOVTR 4238, 4241.)

2 (3)

10. Both the 2003 Sun SCOsource license and the 1994 license are "SVRX Licenses" within the meaning of the APA. (Order at 41, 101.)

11. The principal effects of the Sun SCOsource license were to:

REDACTED

Microsoft's SCOsource License

13. In 2003, SCO entered into a "Release, License and Option Agreement" with Microsoft. (Melaugh Decl., Ex. 13 (Microsoft SCOSource license).)

14. SCO characterizes the 2003 Microsoft Release, License and Option Agreement as a "SCOsource" license. (Melaugh Decl., Ex. 14 (SCO interrogatory response listing SCOsource licenses) at NOVTR 4238, 4241.)

15. The 2003 Microsoft SCOsource license is an SVRX License. (Order at 41, 101.)

REDACTED

Other SCOsource Licenses

REDACTED

3 (4)

REDACTED

18. These licenses were each entered into under standardized terms. "The central feature of [these] other SCOsource agreements is the covenant not to sue and the waiver of claims by SCO for the companies' internal Linux usage." (SCO's Memo. in Opp. to Novell's Motion In Limine No. 2 to Preclude SCO from Contesting Licenses Conveying SVRX Rights are "SVRX Licenses," Docket No. 421 ("SCO SVRX Opp."), at 3.)

19. The Everyone's Internet SCOsource license is representative of the rights these licenses conveyed. That license grants, with certain limitations, the "right and license to use ... SCO IP." (Melaugh Decl., Ex. 15 (Everyone's Internet Agreement) at § 2.1.) The definition of "SCO IP" makes clear that the license conveys SVRX rights:

"SCO IP" means the SCO UNIX®-based Code alleged by SCO to be included, embodied, or otherwise utilized in the Operating System.

...

"UNIX-based Code" means any Code or Method that: (i) in its literal or non-literal expression, structure, format, use, functionality or adaptation (ii) is based on, developed in, derived from or is similar to (iii) any Code contained in or Method devised or developed in (iv) UNIX System V or UnixWare®, or (v) any

4 (5)

modification or derivative work based on or licensed under UNIX System V or UnixWare.
(Id. at §§ 1.7, 1.10 (emphasis added).)

III. ARGUMENT

A. SCOsource Was a Campaign Purporting to License Novell's SVRX Copyrights.

As this Court has already observed, SCOsource was, fundamentally, a campaign to extract licensing revenue based on SCO's now-rejected claim to own the SVRX copyrights. (Undisputed Facts ¶ 5; Order at 29 ("SCOsource ... was an effort to obtain license fees from Linux users based on claims to Unix System V intellectual property.").) Indeed, the name for the first iteration of the SCOsource program was "SCO System V for Linux." (Melaugh Decl. Exs. 1 at SCO1275739, 2 at SCO1270161, 3 at SCO1537795.)

One of the acts SCO undertook as part of SCOsource was to send a letter to every Fortune 1000 company (Id., Exs. 4-7.) In that letter, SCO asserted:

We have evidence that portions of UNIX System V software code have been copied into Linux and that additional other portions of UNIX System V software code have been modified and copied into Linux, seemingly for the purposes of obfuscating their original source.
(Id., Ex. 6 (May 12, 2003 Letter) at SCON 24113.) SCO later followed up on that correspondence with another, more specific letter identifying particular SVRX files, claiming:
[A]ny distribution of Linux by a software vendor or a re-distribution of Linux by an end user that contains any of the identified System V code violates SCO's rights under the DMCA, insofar as the distributor knows of these violations.
(Id., Ex. 8 (Marsh Decl.) at Ex. 1.)

From start to finish, SCO never claimed SCOsource had anything to do with SCO's UnixWare derivative rights, and any attempt by SCO to recast SCOsource now should fail. (Undisputed Facts ¶ 6.)

5 (6)

B. SCO Had No Authority to License Novell's SVRX Copyrights.

As this Court has also observed, SCO is generally barred from modifying existing SVRX Licenses and from entering into new SVRX Licenses. (Undisputed Facts ¶ 1; Order at 92.) These prohibitions are consistent with other aspects of the APA's transactional structure: SCO doesn't own the SVRX copyrights and it doesn't own the revenue from SVRX Licenses. (Order at 99-101.) The APA provides only limited exceptions to that general bar, none of which apply here.

1. SCO Had No Authority to Amend Sun's SVRX License.

Sun has entered into a variety of SVRX Licenses with Novell and its predecessors, the most recent of which Sun executed with Novell in 1994. (Undisputed Facts ¶ 7; Order at 94.) SCO's SCOsource license with Sun explicitly acknowledges it is intended to "amend and restate" Sun's 1994 SVRX License. (Undisputed Facts ¶ 8) This Court has confirmed that the Sun SCOsource license is an SVRX License. (Undisputed Facts ¶ 10) SCO was without authority to amend Sun's SVRX License for two independent reasons.

First, SCO has no authority to "amend, modify or waive any right under or assign any SVRX License." *Undisputed Facts ¶¶ 1-2; Melaugh Decl., Ex. 9 (APA) at § 4.16(b).) That general prohibition is subject to only two exceptions. SCO may amend licenses "as may be incidentally involved through its rights to sell and license [UnixWare software]" or "to allow a licensee under a particular SVRX License to use the source code of the relevant SVRX product(s) on additional CPU's or to receive an additional distribution, from [SCO], of such source code." (Id.; See also Melaugh Decl., Ex. 10 (Amendment No. 1) ¶ 10.) Neither exception applies here.

As reflected above in Section III.A, there can be no debate that SCOsource is, fundamentally, a program to license Novell's SVRX rights. (Undisputed Facts ¶¶ 5-6) SVRX was not merely "incidental" to some UnixWare license — it was at the heart of the SCOsource licenses. That is true of the Sun SCOsource license. Its principal effects were to:

REDACTED

6 (7)

REDACTED

Second, before entering into "any potential transaction with an SVRX licensee which concerns a buy-out of any such licensee's royalty obligations," SCO must obtain Novell's consent. (Undisputed Facts ¶ 4; Melaugh Decl., Ex. 12 (Amendment No. 2) at § B.) This prohibition is subject to no exception. There is no dispute that Sun's 1994 agreement with Novell was a "buy-out," as that term is used in Amendment No. 2. (Undisputed Facts ¶ 7.) Sun's 2003 SCOsource license explicitly acknowledges that it is intended to "amend and restate" that 1994 license. (Undisputed Facts ¶ 8.) By definition, Sun's 2003 SCOsource license therefore "concerns" a buy-out, and SCO was required to obtain Novell's consent to the license. SCO did not, and was therefore without authority to amend Sun's SVRX License.

2. SCO Had No Authority to Enter Into the Microsoft SCOsource License.

This court has held the Microsoft SCOsource license is an SVRX License. (Undisputed Facts ¶ 15; Order at 41, 101.) The Microsoft SCOsource license does not, on its face, modify any existing Microsoft SVRX license and is therefore a "new" SVRX License. The APA prohibits SCO from entering into new SVRX Licenses. (Undisputed Facts ¶ 1.) The APA allows only one exception, discussed above: "as may be incidentally involved through its rights to sell and license [UnixWare software]." (Undisputed Facts ¶ 2.)

As with the Sun SCOsource license, there can be no dispute that SVRX played more than a merely "incidental" role in Microsoft's SCOsource license.

REDACTED

7 (8)

REDACTED

As the sole exception does not apply, SCO was without authority to enter into the Microsoft SCOsource license.

3. SCO Had No Authority to Enter Into the Other SCOsource Licenses.

SCO also entered into [REDACTED] other SCOsource licenses. (Undisputed Facts ¶ 17.) These licenses were each entered into under standardized terms. (Undisputed Facts ¶ 18.) Taking the SCOsource license with Everyone's Internet as an example: the license grants, with certain limitations, the "right and license to use ... SCO IP." (Undisputed Facts ¶ 19; Melaugh Decl., Ex. 15 (Everyone's Internet Agreement) at § 2.1.) The definition of "SCO IP" makes clear that the license conveys SVRX rights. (Id.) The remaining "other" SCOsource licenses convey similar rights to SVRX.

These licenses each convey SVRX rights and are therefore SVRX Licenses. Because no exception applies here, SCO is barred from entering into these new SVRX Licenses.

a. The Other SCOsource Licenses are SVRX Licenses.

For purposes of this motion, it is not necessary to examine the licenses individually. SCO has admitted that "[t]he central feature of the other SCOsource agreements is the covenant not to sue and the waiver of claims by SCO for the companies' internal Linux usage." (Undisputed Facts ¶ 18; SCO SVRX Opp. at 3.) The Court need therefore only decide that, as a matter of law, licenses that excuse a company's purported past and future infringement of SVRX copyrights are "SVRX Licenses" within the meaning of the APA.

This Court has held that "the only possible interpretation of the APA [is] that SVRX License means all contracts relating to the list of SVRX products provided in Item (VI) of Schedule 1.1.(a)" and the Auxiliary Products listed in Amendment 1. (order at 34, 77, 91.) It is

8 (9)

plain that a contract permitting a party to use code contained in the SVRX products listed in the APA is a contract "relating to" those products and is therefore an SVRX License.

SCO has, in the past, contended that because the emphasis of the other SCOsource licenses is "the avoidance of litigation with SCO," these agreements are not SVRX Licenses. (SCO SVRX Opp. at 3-4.) There is no merit to such an argument. The Court has held that licenses granting SVRX rights are SVRX Licenses. (Order at 34, 77, 91.) Neither the plain language of the APA nor the Court's orders interpreting that language support any argument that licenses granting SVRX rights are SVRX Licenses unless they are primarily litigation-avoidance agreements. Indeed, any license to intellectual property is ultimately a litigation-avoidance agreement — a license is an affirmative defense to a claim of infringement. See, e.g., Evolution, Inc. v. Prime Rate Premium Fin. Corp., No. 03-2315-KHV, 2004 U.S. Dist. LEXIS 25017, at *15 (D. Kan. Aug. 13, 2004) ("The existence of a license, exclusive or non-exclusive, creates an affirmative defense to a claim of copyright infringement.") (attached as Exhibit 1). Under SCO's logic, any license granting rights to copyrights could always be instead characterized as a "litigation-avoidance agreement."

SCO has also contended that the other SCOsource licenses are not SVRX Licenses because SCO did not deliver any physical software along with the licenses. That also makes no difference. Intellectual property is intangible. A license to use a copyright conveys rights whether a copy of the work is appended to the contract or not, and, again, nowhere in the APA or the Court's orders is there anything limiting SVRX Licenses to just those licenses that convey physical instantiations of the licensed rights.

b. SVRX Plays More Than an "Incidental" Role in the Other SCOsource Licenses.

Given that the SCOsource licenses are SVRX Licenses, SCO can only enter into such licenses if they are "incidentally involved through its rights to sell and license [UnixWare software]." (Undisputed Facts ¶¶ 1, 3; Melaugh Decl., Ex. 9 (APA) at § 4.16(b).) As SCO has

9 (10)

admitted, the purpose of these licenses was to excuse the licensee's purported infringement of SCO's intellectual property rights. (Undisputed Facts ¶ 18; SCO SVRX Opp. at 3.) SCO has never contended that Linux infringes its UnixWare derivative intellectual property. (Undisputed Facts ¶ 6.) SCO has only contended that SVRX is infringed. There can therefore be no contention that the "incidental" exception applies.

CONCLUSION

For the reasons stated above, Novell is entitled to a declaration that SCO was without authority to enter into the SCOsource licenses.

DATED: December 21, 2007

ANDERSON & KARRENBERG

By: /s/ Heather M. Sneddon

Thomas R. Karrenberg
Heather M. Sneddon

-and-

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, pro hac vice
David E. Melaugh, pro hac vice

Attorneys for Defendant and
Counterclaim-Plaintiff Novell, Inc.

10 (11)

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 21st day of December, 2007, I caused a true and correct copy of the MEMORANDUM IN SUPPORT OF NOVELL'S MOTION FOR SUMMARY JUDGMENT ON ITS FOURTH CLAIM FOR RELIEF 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

11 (12)


  


Novell Files for Partial Summary Judgment - on 4th Claim Re SCOsource | 118 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here...
Authored by: Erwan on Saturday, December 22 2007 @ 12:56 PM EST
If any.

---
Erwan

[ Reply to This | # ]

News picks discussions here...
Authored by: Erwan on Saturday, December 22 2007 @ 12:57 PM EST
Make the article name your comment title...

---
Erwan

[ Reply to This | # ]

OT, The off topic thread...
Authored by: Erwan on Saturday, December 22 2007 @ 12:58 PM EST
As usual. Remember to use the "Preview" button...

---
Erwan

[ Reply to This | # ]

SCO made it too easy
Authored by: Christian on Saturday, December 22 2007 @ 01:21 PM EST
So close and yet so far.

Not the Sun deal - there was no hiding the nature of that.

But SCO could have squeaked by with some of the other deals if only they had written "UNIX software owned by SCO" instead of "UNIX System V or UnixWare." The thing was already so ambiguous, but a little more ambiguity would have helped them.

Novell would have been left trying to argue that what the contract meant was different from what it said, based on the letters, press, etc. That would have been a difficult or impossible legal argument. But SCO went and stuck the words "System V" into the agreements and made it simple for everybody.

[ Reply to This | # ]

The value of the Santa Cruz deal
Authored by: Anonymous on Saturday, December 22 2007 @ 01:25 PM EST
Has anyone analyzed the value Santa Cruz got for the money they paid Novell?
The business 'goodness' of the deal isn't obvious to me. In particular, I don't
see how they hoped to recoup their investment.

[ Reply to This | # ]

Novell Files for Partial Summary Judgment - on 4th Claim Re SCOsource
Authored by: Anonymous on Saturday, December 22 2007 @ 02:02 PM EST
Looks like the SCO lawyers are going to have to work during the Christmas season
this year...who knew legal work could *possibly* interfere with with
holidays....?

[ Reply to This | # ]

Novell Files for Partial Summary Judgment - on 4th Claim Re SCOsource
Authored by: dio gratia on Saturday, December 22 2007 @ 02:19 PM EST
We see the roots of "methods and concepts" in Exhibit 8 in a letter
from Mr. Tibbits to Mr. Marsh, used as ammunition by Phillip Langer in a
threatening letter to Mr. Marsh. The Tibbits letter appears to be the source of
associating "methods and concepts" with copyright, where it doesn't
appear to have been meant that way.

[ Reply to This | # ]

That letter to every Fortune 1000 company - coming back to haunt them ;)
Authored by: SilverWave on Saturday, December 22 2007 @ 03:04 PM EST
One of the acts SCO undertook as part of SCOsource was to send a letter to every
Fortune 1000 company (Id., Exs. 4-7.)



---
Software Patents give Hardware Patents a bad name.

If the Pharmaceutical industry does not want to be included in the backlash...
arrange for a separation.

[ Reply to This | # ]

479 Exhibit 1
Authored by: Artiken on Saturday, December 22 2007 @ 03:09 PM EST
Exhibit #1 is a summary judgment ruling. It looks like it pretty much covers
Novell's argument pretty well.

I love this quote. End of Page 2 and beginning on page 3. Very applicable to SCO
vs world. I wonder if Judge Kimball will use this quote in his decision.

<Quote>
"Summary judgment maybe granted if the non moving party's evidence is
merely colorable or is not significantly probative. Anderson, 477 U.S. at
250-51.

"In a response to a motion for summary judgment, a party cannot rely on
ignorance of facts, on speculation, or on suspicion, and may not escape summary
judgment in the mere hope that something will turn up at trial." Conaway v.
Smith, 853 F.2d 789,794 (10th Cir. 1988).

Essentially, the inquiry is "whether the evidence presents a sufficient
disagreement to require submission to the jury or whether it is so one-sided
that one party must [*4] prevail as a matter of law." Anderson, 477 U.S. at
251-52."
</Quote>

First citation looks to me like boilerplate. Gee could you spell it out for me
judge?

Thank you judge. Second citation DEFINITELY covers SCO's arguments and facts.
Did I say SCO and facts in the same sentence without using Lack(Absence of) and
Facts together? Oops. Shame on me. So what about Fishing trips? Yup that is
covered.

The third citation is interesting. More boilerplate. My paraphrase, "If the
facts need a jury to decide which ones can be used, then there is no summary
judgment." Hmmm. Sorry SCO, you lose on this one. Judge Kimball already
ruled that there will be no jury.

Slam Dunk.
Pay Novell.
Ca-ching. More like Ca-thud. No ching sound, because there is no ching left.
Sorry Novell.

Artiken
------
"How dare you ruin a perfectly good argument with nasty little things like
FACTS. Shame on you." --- common BBS argument message base tagline.

[ Reply to This | # ]

What are the consequences?
Authored by: mtew on Saturday, December 22 2007 @ 03:32 PM EST
From what I have seen of the facts, Novell is very likely to get this.

What I do not know is what the consequences of the declaration would be. Could
someone explain (not speculate) what the result of such a declaration would be.

---
MTEW

[ Reply to This | # ]

SCO's disgusting display
Authored by: Anonymous on Saturday, December 22 2007 @ 06:01 PM EST
The documents presented really present the disgusting display of money hungry
scam artists at work.
While SCO drooled at $699.00 per CPU income, EV1 worried their business would
fail if they were required to pay it.
While SCO could care less what they really owned, EV1 worried they owned enough
to be sued.
It seems SCO's miscalculation is that only a few were really scared by their
empty threats.
SCO's stance would have been much stronger if everything that had gone before
did not bring questions about SCO's assertions. In other words if SCO had facts
instead of bully tactics.

[ Reply to This | # ]

Here come de judge.
Authored by: Ian Al on Sunday, December 23 2007 @ 04:48 AM EST
I have a mental image of the judge reviewing the case with the parties. He
arches his hands and sums up.

"There are only two issues left to resolve; how much do SCOG owe Novell on
the SVRX licences and was SCOG outside of their rights to let the SCOSource
licences. Now, the question of how much SCOG owe is not possible to resolve with
a summary judgement and must go to trial.

OK, let's review the most efficient way to finish the proceedings. Is there
anything left that might be resolved with a summary judgement? Anything at all?
When you consider all the things I said in the 10th August order might there be
something for a summary judgement? Do you think? An SJ?

Yes Novell, you think you might have something. Something based on what I have
already ordered. Something that still needs to be resolved. Something for a
summary judgement. I'll look forward to seeing the motion."

It's almost as though the judge was prompting Novell. Of course, the judge was
just being thorough and following best practice so we shouldn't assume that,
just because the order drops so many hints about how surprised he was that the
issue of right to let licences had not been the subject of a request for summary
judgement, it was on his mind in any way.

Just supposing that he awards the summary judgement to Novell, what effect would
it have? I have been on a rollercoaster ride of informed comment that goes from
the licences being voided and the parties having to pay Novell or sue SCOG, to
the parties having no reason to question SCOG's position as an authorised agent
of Novell. SCOG have every reason to believe that Novell would have refused
permission to do the SCOSource business because the Novell CEO (IIRC) told them
just that. However, proving that they would have rejected SCOSource licencing in
court would be another matter altogether. This rank amateur comes to the
conclusion that Novell will accept that position and not challenge the validity
of the licences. They will use the judgement to deny SCOG even the 5%.

When the trial is over and SCOG are unable to pay Novell what is rightfully
theirs, then what? SCOG will be in the position of violating their fiduciary
duties under the contract and violating the terms of the contract. They will be
unable to put right the damage to Novell through lack of funds. Novell will
divide the APA into tangible assets like the manuals and intangible assets like
the right to provide support to SVRX contracts. They will be able to get the
judge to void the executory parts of the APA because the damage done to those
parts of the contract is irreparable.

Going through the intangible assets, it is clear that the management of the SVRX
contract revenue and the 5% fee must stop. No further SVRX contracts or contract
changes can occur. No support contracts for SVRX users can be let, revised or
renewed by SCOG.

Looking at the combined product, Unixware 7, a large part of the product is
still SVRX and/or Unixware 2. I cannot see how Unixware 7 or Openserver can be
sold or supported. SCOG have irreparably damaged the parts of the APA that made
that business possible. Without the repair of the damage to the APA terms, I
cannot see how the Unixware 7 and Openserver business can continue.

What could SCOG sell to a company such as York? It seems to me to be a set of
copyrights to SVRX manuals. It might include updated manuals for the combined
product. This does not seem to be a highly valuable asset. Without the Unix
business assets, the litigation assets vanish. There is no copyright or contract
to be violated and there is no business to be damaged.

It's not about the money, even the Sun and Microsoft money, we know that. For
IBM and Novell and for any Linux based companies, the voiding of the SCOG Unix
business and litigation is the most valuable asset of all.

---
Regards
Ian Al

When nothing else makes sense, use Linux.

[ Reply to This | # ]

Trademark
Authored by: mattflaschen on Thursday, January 03 2008 @ 06:44 PM EST
Note on page 36/53 of Exhibit 8 to the Melaugh Declaration, SCO says in a
footnote, "UNIX and UnixWare are a registered trademark of The Open Group
in the US and other countries" There is no mention of any Santa Cruz
trademark in any country. Just something to keep in mind...

[ Reply to This | # ]

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