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SCO's Reply Memo in Support of its Motion for Judgment on Novell's 4th Claim - Updated - As Text
Friday, April 25 2008 @ 11:42 AM EDT

SCO is simply determined to entertain us with its creative filings. Its Trial Brief filed yesterday was enjoyably illogical, indeed. And before we can even finish reading it, here's yet another masterpiece, SCO's Reply Memorandum in Support of SCO's Motion for Judgment on the Pleadings on Novell's Claims for Money or Claim for Declaratory Relief [PDF], in which SCO soldiers on with its claim that Novell has to tell us all this exact minute whether it ratifies SCOsource or not in order to get any money from those agreements.

This is an issue that eventually needs to be addressed by Novell and Sun and Microsoft et al, but I don't see how it's SCO's business. The issue that immediately faces them is whether SCO had the authority to enter into the agreements in the first place. If not, then for sure *SCO* doesn't get to keep the money. SCO acknowledges that possibility, but argues that in that case, the money should go not to Novell but back to Sun and Microsoft. Except it doesn't exactly ask for that relief, so in real life, it would end up staying in SCO's hands. SCO argues that if SCO had no authority to enter into SCOsource licenses, then the agreements are void. But no court has yet decided that question, and in the meantime, SCO took in millions. So now what?

SCO doesn't want Novell to get it, so it argues about whether Novell should get anything if it doesn't ratify, as if that were the very next issue that must be decided. It cites cases where the principal took the money and then *later* repudiated, whereas Novell never took any money, had no knowledge of the details of SCOsource, protested against them when they read about them in the media, asked for an accounting which SCO never provided, and now says that since SCO took in millions in what Judge Kimball has ruled are at least in part SVRX licenses, SCO owes Novell the money it improperly received and kept for itself. SCO's sophistry is based on the concept that Novell must choose *first* whether or not to ratify; Novell's position is that it wants the court to first decide if SCO had the authority to enter into the agreements at all. If not, then Novell will decide what to do next.

SCO's problem is that it never acknowledges that the purpose of a court is to figure out what is fair, not what is clever.

SCO responds to Novell's illustration about the car:

Novell offers a hypothetical factual scenario that serves only to underscore that, alleging SCO's lack of authority, Novell cannot prevail on its claims for money. In that hypothetical, Novell has Scott selling Nathan's car without Nathan's permission -- but where Scott and Nathan are merely "friends." As a fundamental matter, Novell thus side-steps a core premise of its own allegations -- that Novell and SCO have a principal-agent relationship.

In any event, the precedent illustrates that Novell's own hypothetical would not be resolved as Novell rhetorically proposes it should be, whatever the relationships between Nathan and Scott. If Nathan brought suit and alleged that Scott lacked authority to sell the car, these results would follow:

  • Where Nathan is an alleged principal, having declined to ratify Scott's sale of the car, Nathan would not have triggered the legal relations "as between" himself and Scott that would make Scott subject to a fiduciary duty to account to Nathan. ...

  • Where Nathan is merely Scott's friend, the necessary premise of Nathan's suit means the sales contract is void. It would be as if the contract never existed, so that Nathan would not be entitled to the sales proceeds....

Under either set of facts, Nathan would have no right to the money paid for the car. Otherwise, Nathan would get the money paid for a car that Marty could not even keep, because he actually never bought it -- a truly surprising result.

However, what SCO fails to address is this: who is going to make SCO pay back Microsoft and Sun? I guess they get to sue SCO later or something, in SCO's universe.

However, this illustration leaves out the reality -- namely that Novell has not yet failed to ratify. It's a decision SCO wants them to have to make before they even have the money in hand, before there is even a decision to make, since the court has not yet ruled on whether or not SCO had the authority to enter into the agreements. If they did, the agreements can't be void, I don't think, no matter how many of Nathan's cars can fit on the head of a SCO pin.

Following SCO's logic leaves out that step and it leaves the money with SCO, and if the court imagines that it is safer in SCO's hands than in Novell's, it will ride along with SCO's car theft illustration, in which SCO gets to scam people in Novell's name and then SCO gets to decide how to fix the problem, meanwhile holding on the the proceeds. Say, what?

Thanks to Steve Martin, we have it now as text:

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

Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE, PC
[address]
[phone]
[fax]

Stephen N. Zack (admitted Pro Hac Vice)
BOIES SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

David Boies (admitted pro hac vice)
Robert Silver (admitted pro hac vice)
Edward Normand (admitted pro hac vice)
BOIES SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Devan V. Padmanabhan (admitted pro hac vice)
DORSEY & WHITNEY LLP
[address]
[phone]
[fax]

Stuart Singer (admitted pro hac vice)
BOIES SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Attorneys for Plaintiff, The SCO Group, Inc.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC., a Delaware
corporation,

Plaintiff/Counterclaim-Defendant,

vs.

NOVELL, INC., a Delaware corporation,

Defendant/Counterclaim-Plaintiff.
REPLY MEMORANDUM IN SUPPORT
OF SCO'S MOTION FOR JUDGMENT
ON THE PLEADINGS ON NOVELL'S
CLAIMS FOR MONEY OR CLAIM FOR
DECLARATORY RELIEF



Civil No. 2:04 CV-00139

Judge Dale A. Kimball
Magistrate Brooke C. Wells

(1)

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. ("SCO"), respectfully submits this Reply Memorandum in Support of its Motion for Judgment on the Pleadings on Novell's Claims for Money or Claim for Declaratory Relief.

PRELIMINARY STATEMENT

Novell's opposition reflects a misapprehension of, or desire not to confront, the basic law of agency. Novell's claims for money concern this question: Is Novell entitled to money? Novell alleges that SCO acted as Novell's agent in signing the SCOsource Agreements and that SCO lacked the authority to do so. Under those facts and the well-established law, Novell could be entitled to the payments under the Agreements only if it had ratified them — which Novell now emphasizes it has not done. SCO therefore brings this Motion, because Novell fails to allege facts necessary for Novell to win its claims for money, and the Court cannot even infer "the opposite" of what Novell has alleged.

Novell improperly seeks to avoid what the Tenth Circuit has long recognized as "the horns of a dilemma," contending that "as between" itself and SCO, it should have the money it seeks. Under the law, however, whether the agent holds the money paid for its allegedly unauthorized contract has nothing to do with the merits of the principal's claim for the money: "It is repugnant in every sense of justice and fair dealing that a principal shall avail himself of the benefits of an agent's act and at the same time repudiate his authority." Yahola Sand & Gravel Co. v. Marx, 358 P.2d 366, 372 (Okla. 1960) (citing authority, quotations omitted). The most recent authority confirms: "Once the principal has ratified the agent's act, the agent is subject to a fiduciary duty to account to the principal as if the agent had acted with actual authority," where

(2)

"legal relations as between agent and principal are affected by whether the agent has acted with actual authority." Restatement (Third) of Agency § 4.02, Comment b (2006) (emphasis added).

It is also true that under its allegations, whether it is a principal or not, Novell has rendered the Agreements "void" — legal nullities for which Novell has no entitlement to the payments made thereunder. In short, on SCO's Motion, the only question is whether Novell has any right to payments under either unratified or void contracts. It does not.

ARGUMENT

I. NOVELL CANNOT PREVAIL ON ITS CLAIMS FOR MONEY.

Novell mistakenly argues (at 2-5) that SCO must prove "that an agent acting in excess of its authority is entitled to keep the proceeds of that excess." Like any plaintiff seeking to recover money from a defendant, Novell must allege facts giving it the right to the money at issue. Novell has failed to make such allegations.

A. The Basic Law of Agency.

Contending as its central argument (at 1) that "[r]atification is a matter between Novell and the licensee," Novell misapprehends the law of agency. In disavowing them, Novell made the decision that the SCOsource Agreements do not fall under the principal-agent relationship between itself and SCO. It makes sense that an alleged principal cannot have the fruits of such a contract. The most recent authority confirms:

Ratification has an immediate effect on legal relations between the principal and agent . . . . Ratification recasts those legal relations as they would have been had the agent acted with actual authority. Legal consequences thus "relate back" to the time the agent acted. .. Once the principal has ratified the agent's act, the agent is subject to a fiduciary duty to account to the principal as if the agent had acted with actual authority.
...

2 (3)

[L]egal relations as between agent and principal are affected by whether the agent has acted with actual authority . . . . The effect of actual authority, which the ratification provides, relates to an action that the agent has already taken.
Restatement (Third) of Agency § 4.02, Comment b (2006) (emphasis added). "That is, when a person ratifies another's act, the legal consequence is that the person's legal relations are affected as they would have been had the actor been an agent acting with actual authority at the time of the act." Id. § 4.01, Comment b.1

The longstanding authority — including precedent cited in SCO's opening memorandum which Novell declines to address — emphasizes the inequity of the position Novell here seeks to maintain. "A principal may not, in equity, ratify those parts of the transaction which are beneficial and disavow those which are detrimental." The N. River Ins. Co. v. Transamerica Occidental Life Ins. Co., No. Civ. A. 399-CV-0682-L, 2002 WL 1315786, at *7 (N.D. Tex. June 12, 2002) (Ex. A) (citations and quotations omitted). "It is repugnant in every sense of justice and fair dealing that a principal shall avail himself of the benefits of an agent's act and at the same time repudiate his authority." Yahola Sand & Gravel Co. v. Marx, 358 P.2d 366, 372 (Okla. 1960) (citing authority, quotations omitted). Seeking to preserve some later argument that counterparties like Microsoft and Sun do not have any rights under their 2003 agreements with SCO, Novell plainly cannot recover any alleged "SVRX Royalties" under those agreements.

3 (4)

These equitable principles alone make clear that permitting Novell to recover any alleged SVRX Royalties would result in a "manifest injustice" warranting reconsideration of the Court's Order dated August 10, 2007. (SCO's Opening Mem. at 2.)

B. Novell's Argument About SCO's Supposed Burden Is Mistaken.

Novell therefore misses the point in maintaining (at 3-4) that the four cases cited in SCO's opening brief on which Novell chooses to focus do not hold that "where an agent improperly takes money from third parties in the principal's name, the agent is entitled to keep that money if the principal disclaims the agent's authority." The cases do not need to show that for SCO to prevail on its Motion; they need only show, as they do, that the principal cannot have the fruits of a contract that an agent negotiated and that the principal has disavowed. (SCO's Opening Mem. at 7-8.)

The precedent makes clear that the principal's lack of entitlement to the money paid under such a contract does not turn on who has possession of the money. The commentary to Section 47 of the Restatement (First) of Restitution, which SCO cited and which Novell does not dispute as relevant authority, provides the following, telling illustrations:

1. A shows B a telegram from C, A's principal and the owner of Blackacre. By erroneous interpretation of the legal effect of the telegram, both parties believe that it authorizes A to sell Blackacre. B pays A for Blackacre. B is entitled to restitution from A unless C ratifies or A, before learning of the mistake, pays C the money.

2. Same facts as in Illustration 1, except that B sends the money to C. B is entitled to restitution from C, unless C ratifies.
Restitution (First) of Restitution § 47 (1937) (emphasis added). In either event — whether he had come into possession of the money or not — the principal is not entitled to the money. This

4 (5)

authority belies Novell's argument (at 2-3) that the precedent turns on whether the agent had already "properly remitted" the fruits of the contract to the principal. The illustrations make clear that there is no requirement that an agent must remit the fruits to the principal before the principal's lack of entitlement to them can be resolved. Novell does not — because it cannot — cite any case holding that a principal can recover the fruits of a contract that the principal chose to disavow as unauthorized. The precedent says the exact opposite.

In addition, any contract executed by a party without the authority to execute it is "void."2 Novell (at 4-5) thus unsuccessfully seeks to downplay the significance of the "unremarkable principles" it purports to summarize from the cases SCO has cited: A void contract is "no contract at all,"3 but rather an unenforceable promise.4 The law provides that

5 (6)

"when a contract is void, it is as if the contract never existed."5 Under a void contract, as shown in SCO's opening brief and herein, the counterparty who made payments under the purported agreement is entitled to those payments.

C. Novell's Hypothetical Does Not Come out as Novell Assumes It Should.

Novell offers a hypothetical factual scenario that serves only to underscore that, alleging SCO's lack of authority, Novell cannot prevail on its claims for money. In that hypothetical, Novell has Scott selling Nathan's car without Nathan's permission — but where Scott and Nathan are merely "friends." As a fundamental matter, Novell thus side-steps a core premise of its own allegations — that Novell and SCO have a principal-agent relationship.

In any event, the precedent illustrates that Novell's own hypothetical would not be resolved as Novell rhetorically proposes it should be, whatever the relationships between Nathan and Scott. If Nathan brought suit and alleged that Scott lacked the authority to sell the car, these results would follow:

  • Where Nathan is an alleged principal, having declined to ratify Scott's sale of the car, Nathan would not have triggered the legal relations "as between" himself and Scott that would make Scott subject to a fiduciary duty to account to Nathan. (See Part I.A, above.)

6 (7)

  • Where Nathan is merely Scott's friend, the necessary premise of Nathan's suit means the sales contract is void. It would be as if the contract never existed, so that Nathan would not be entitled to the sales proceeds. (See Part I.B, above.)
Under either set of facts, Nathan would have no right to the money paid for the car. Otherwise, Nathan would get the money paid for a car that Marty could not even keep, because he actually never bought it — a truly surprising result. Most relevant to SCO's Motion, Nathan's allegations would not create any scenario under which he could have the money at issue.

II. IN THE ALTERNATIVE, NOVELL'S CLAIM FOR DECLARATORY RELIEF IS IMPROPER AND MUST BE DISMISSED.

Novell seeks to reserve the right to ratify the SCOsource Agreements, contending without citation (at 1) that whether to ratify "is not a choice that Novell needs to make now" and (at 5) that "Novell is under no obligation to decide now whether to ratify SCO's improper acts." These arguments are wrong.

First, contrary to its uncited legal argument, Novell clearly did have the obligation to choose whether to ratify the Agreements. Novell was obligated to "promptly repudiate" SCO's authority to execute the SCOsource Agreements "within a reasonable time" — a matter of "months" — after learning of them.6 Novell cannot now reverse course, whatever the resolution of its claim for declaratory relief at trial. Indeed, Novell cites no authority even suggesting that a

7 (8)

principal can use a trial to determine whether to make the binding decision on whether to ratify the allegedly unauthorized contract at issue.

Novell therefore is wrong in contending that SCO has merely manufactured Novell's obligation to have made such a choice years ago. In fact the Tenth Circuit long ago observed that, faced with the choice of whether or not to ratify, "the principal is impaled on the horns of a dilemma." Maryland Cas. Co. v. Queenan, 89 F.2d 155, 157 (10th Cir. 1937); accord First Nat'l Bank of Cicero v. United States, 625 F. Supp. 926, 932 (N.D. Ill. 1986). Yet "when the principal has no avenue through which to claim ownership of the disputed property except through its agent," it must ratify (and accept the consequences flowing from that ratification) to claim such ownership. Cicero, 625 F. Supp. at 932.

Second, even in trying to reserve the right to ratify the Agreements, Novell conflates the narrow, backward-looking declaratory relief it seeks with a general, forward-looking declaration. The declaratory relief Novell actually seeks at trial is improper. SCO showed in its opening brief that where a party seeks a declaration that amounts to an "advisory opinion" or that would apply to only a "hypothetical state of facts," the declaratory claim fails. (SCO's Opening Mem. at 9-10.) That is precisely the type of declaration Novell seeks through its arguments in its opposition brief. The question of whether SCO had the authority to execute the SCOsource Agreements would be relevant only if, after trial, Novell were to decline to accept any recovery on its claims for money, and only if, at the time, the Court were to conclude that Novell had exercised its right to choose whether to ratify within a reasonable period of time. The record thus leaves no doubt that Novell is seeking a declaration regarding only a hypothetical state of facts.

8 (9)

Novell as much as admits that it seeks an advisory opinion, maintaining without citation (at 5) that "one might reasonably expect Novell to wait until the propriety of SCO's acts is resolved by this Court before it makes any decisions regarding the SCOsource licenses," and (at 7 n.5) that "a decision by this Court that SCO did have the authority to enter into the agreements renders any ratification decision-making unnecessary." Novell's uncited argument is wrong — as an alleged principal, Novell was obligated to make the referenced decision well before trial; it cannot base that decision on how its claim for declaratory relief turns out.

Finally, even under Novell's apparent argument that the solely backward-looking declaratory relief its seeks is somehow the same as the separate, forward-looking relief it seeks in the same Fourth Claim for Relief, at a minimum the Court should dismiss those portions of Novell's claim that relate to the Sun and Microsoft Agreements. There is no evidence at all that the unique circumstances under which those two agreements were negotiated are likely to recur; the propriety of SCO's execution of these agreements has no bearing on future Linux-related agreements of the sort that Novell says it is concerned SCO may execute.

9 (10)

CONCLUSION

SCO respectfully requests, for the reasons set forth herein and in SCO's Opening Memorandum, that the Court dismiss Novell's Sixth, Seventh, and Eighth Claims for Relief or Novell's Fourth Claim for Relief.

DATED this 24th day of April, 2008.

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

BOIES, SCHILLER & FLEXNER LLP
David Boies
Robert Silver
Stuart H. Singer
Edward Normand

DORSEY & WHITNEY LLP
Devan V. Padmanabhan

By: ___/s/ Edward Normand________

10 (11)

CERTIFICATE OF SERVICE

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc., hereby certifies that a true and correct copy of the foregoing Reply Memorandum in Support of SCO's Motion for Judgment on the Pleadings on Novell's Claims for Money or Claim for Declaratory Relief was served on this 24th day of April, 2008, via CM/ECF to the following:

Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon
ANDERSON & KARRENBERG
[address]

Michael A. Jacobs
Matthew I. Kreeger
Kenneth W. Brakebill
David E. Melaugh
MORRISON & FOERSTER
[address]

___/s/ Edward Normand________

(12)

1 The same rules apply even as to someone who was only purporting to be an agent of the principal — a situation in which, by Novell's logic, the principal supposedly would be even more "entitled" to any benefits the purported agent had received. Instead, the law provides that "if he was not an agent when he acted, the subsequent ratification by the principal subjects him to the liability of a fiduciary with respect to the transaction. Thus, if he made a profit or received property which would have been a violation of his fiduciary duty if in fact he had been an agent, the ratification subjects him to a duty to pay to the principal what he has received." Id. § 4.08, Comment a.
2 CSX Transp., Inc. v. City of Garden City, 325 F.3d 1234, 1240 (11th Cir. 2003) (citing authority); Prescott v. United States, 731 F.2d 1388, 1393 (9th Cir. 1984) (same); Emerson v. Labor Investment Corp., 284 F.2d 946, 949-50 (10th Cir. 1960) (same); SBRMCOA, LLC v. Bayside Resorts, Inc., No. 2006-42, 2007 WL 1795732, at *5 (D.V.I. Apr. 18, 2007) (Ex. B) (same); CSX Transp., Inc. v. City of Garden City, Ga., 391 F. Supp. 2d 1234, 1239 (S.D. Ga. 2005) (same); Demko v. Luzerne County Community Coll., 113 F. Supp. 2d 722, 729-33 (M.D. Pa. 2000) (same); Byrd v. Martin, Hopkins, Lemon and Carter, 564 F. Supp. 1425, 1428-29 (W.D. Va. 1983) (same); Poway Royal Mobilehome Owners Ass'n v. City of Poway, 149 Cal. App. 4th 1460, 1473 (2007) (same); St. Charles County v. "A Joint Bd. or Comm'n", 184 S.W.3d 161, 165-66 (Mo. Ct. App. 2006) (same); Pierce County v. Wash. Shellfish, Inc., 126 Wash. App. 1020, 2005 WL 536097, at *3 (2005) (Ex. C) (same); Miller v. Marshall County, 641 N.W.2d 742, 750-51 (Iowa 2002) (same); Red Dog Saloon v. Sedgwick County Bd. of Comm'rs, 33 P.3d 869, 871 (Kan. Ct. App. 2001) (same); Failor's Pharmacy v. Dep't of Social and Health Servs. v. Dep't of Social and Health Servs., 886 P.2d 147, 153 (Wash. 1994) (en banc) (same); Weese v. Davis County Comm'n, 834 P.2d 1, 3 (Utah 1992) (same); In re Estate of Griffin, 812 P.2d 1256, 1258-59 (Mont. 1991) (same); Vt. Dep't of Pub. Serv. v. Mass. Municipal Wholesale Elec. Co., 558 A.2d 215, 220 (Vt. 1988) (same).
3 Sandvik AB v. Advent Int'l Corp., 220 F.3d 99, 109 n.7 (3d Cir. 2000); accord Lum v. Kauai County Council, Civ. No. 06-00068 SOM/BMK, 2007 WL 1482403, at *3 (D. Haw. May 18, 2007) (Ex. D); In re Donnay, 184 B.R. 767, 784 (Bankr. D. Minn. 1995); United States ex. rel. Gulbronson v. D&J Enters., No. 93-C-233-C, 1993 WL 767689, at *7 (W.D. Wis. Dec. 23, 1993) (Ex. E); Gull Labs., Inc. v. Diagnostic Tech., Inc., 695 F. Supp. 1151, 1154 (D. Utah 1988).
4 See 1 Williston on Contracts § 1:20 (4th ed. 2007) ("Void promises are not legally binding, have no legal effect, and, therefore, are not contracts."); Restatement (Second) of the Law of Contracts § 7 (1981), Comment a (an unenforceable promise "is often called a void contract," "such a promise is not a contract at all," and "[i]f the term 'contract' were defined to refer to the acts of the parties without regard to their legal effect, a contract could without inconsistency be referred to as 'void.'").
5 Laborers' Pension Fund. v. A&C Environmental, Inc., 301 F.3d 768, 779 (7th Cir. 2002); accord Bd. of Trustees of the Masons and Plasters Pension Fund Local 56 Dupage County, Ill. v. O'Donnell Plastering, Inc., No. 01 C 9257, 2003 WL 174207, at *4 (N.D. Ill. Jan. 27, 2003) (Ex. F).
6 Dodson Int'l Parts, Inc. v. Hiatt, No. 02-4042-SAC, 2003 WL 22327176, at *13 (D. Kan. Sept. 25, 2003) (Ex. G); Inamed Corp. v. Kuzmak, 275 F. Supp. 2d 1100, 1119 (C.D. Cal. 2002); Merex A.G. v. Fairchild Weston Sys., Inc., 810 F. Supp. 1356, 1370-71 (S.D.N.Y. 1993); Heller Ehrman White & McAuliffe v. Price, No. A106899, 2005 WL 2293512, at *6-7 (Cal. App. Sept. 21, 2005) (Ex. H); Norcal Mut. Ins. Co. v. Newton, 84 Cal. App. 4th 64, 78-79 (Cal. App. 2000); Riss v. Angel, 934 P.2d 669, 683 (Wash. 1997); Moran v. Knights of Columbus, 151 P. 353, 360 (Utah 1915).

  


SCO's Reply Memo in Support of its Motion for Judgment on Novell's 4th Claim - Updated - As Text | 354 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCO's Reply Memo in Support of its Motion for Judgment on Novell's 4th Claim
Authored by: Anonymous on Friday, April 25 2008 @ 11:47 AM EDT
SCO has a record of denial, denial and more denial. So since they denied the
Novell is owed money, they will soon deny that they owe Novell any money.
Someday someone has to pay the money in this case so we now know that SCO will
deny that they have to pay.

[ Reply to This | # ]

SCO's Reply Memo in Support of its Motion for Judgment on Novell's 4th Claim
Authored by: Anonymous on Friday, April 25 2008 @ 12:04 PM EDT
Unless im mistaken .. if you sell something that isnt your's
and the person that the sold item was sold off from dosent get the money nor the
goods back , that's theft and people go to jail for that.

But what do i know IANAL for SCO :DDDDDDd

[ Reply to This | # ]

Why do SCO's Creditors care who (apart from them) keeps the money?
Authored by: yorkshireman on Friday, April 25 2008 @ 12:19 PM EDT
Since SCOs creditors are paying for these lawyers - surely the only thing they
care about is whether SCO can keep any money.

Apart from being spiteful to Novell do the creditors really car whether Novell
or Microsoft/Sun have the money?

[ Reply to This | # ]

Off Topic
Authored by: Kilz on Friday, April 25 2008 @ 12:23 PM EDT
Please make links the clicky kind

[ Reply to This | # ]

"...no matter how many of Nathan's cars can fit on the head of a SCO pin."
Authored by: josmith42 on Friday, April 25 2008 @ 12:24 PM EDT
Brilliant!

---
This comment was typed using the Dvorak keyboard layout. :-)

[ Reply to This | # ]

Corrections
Authored by: Kilz on Friday, April 25 2008 @ 12:26 PM EDT
In case of mistakes (we are all human, even PJ)

[ Reply to This | # ]

Think like SCO
Authored by: Anonymous on Friday, April 25 2008 @ 12:40 PM EDT
1. If SCO had no authority to license SVRX rights, then SVRX rights did not
convey and weren't validly covered in the SCOlicense.

2. SCOlicense language to the contrary is invalid - SCO can't convey what they
don't have. The licenses must be for something else.

3. Therefor SCO doesn't have to pay royalty to Novell for SVRX.

4. If MS, SUN, et al still want those rights, they can negotiate with Novell.
This is an unrelated issue -- not part of this case.

5. If MS, SUN, et al thought they had acquired those rights from SCO? Sorry
about that, they can sue SCO if they were damaged. This is an unrelated issue --
not part of this case.

6. On the other hand, if and ONLY IF SCO had authority to convey the rights,
then they would owe royalty.

-- Anymouse


[ Reply to This | # ]

News Picks Comments Here
Authored by: artp on Friday, April 25 2008 @ 01:16 PM EDT
Refer to the article you are commenting on.

Clickies appreciated - the article may have scrolled off the sidebar.

---
Userfriendly on WGA server outage:
When you're chained to an oar you don't think you should go down when the galley
sinks ?

[ Reply to This | # ]

Nathan and Scott
Authored by: Steve Martin on Friday, April 25 2008 @ 03:41 PM EDT

TSG claims:

Under either set of facts, Nathan would have no right to the money paid for the car. Otherwise, Nathan would get the money paid for a car that Marty could not even keep, because he actually never bought it -- a truly surprising result.

But in that scenario, Nathan's car would been taken without his permission (i.e. stolen), Scott would have sold a car he didn't own, and Marty would be in possession of stolen goods. That can't be right; that would make Scott a thief.

Oh. Wait a minute...

(And these guys actually passed the Bar??)

---
"When I say something, I put my name next to it." -- Isaac Jaffe, "Sports Night"

[ Reply to This | # ]

I *knew* I'd find a use for the word 'disingenuous' today!
Authored by: Anonymous on Friday, April 25 2008 @ 04:02 PM EDT
SCO seem to be trying to dispute that SCO and Novell have an agent/principle
relationship.

But without that relationship SCO (as detailed by the APA) had no authority to
issue the licenses in the first place. So Novell hasn't ignored the question -
SCO have already implicitly answered it by selling the license as an agent of
Novell.

In fact, Sun, MS and Novell all relied on SCO being an agent in their decisions
and SCO never did anything to suggest otherwise - so wouldn't estoppel prevent
SCO from even bringing the issue up? Or are they just trying to say that they'd
rather be considered frauds (representing themselves as Novells' agents and/or
selling something they didn't own) than breakers of their fiduciary
responsibility?

I'm so confused - I don't see this as a better option for SCO. I assume they
wouldn't even be able to claim the 5% agent fee (as they weren't acting as
ageent) and Novel would be able to void the licenses without any fear of penalty
as SCO simply stole Novell's property (as SCO wasn't an agent).

It must be Friday...

[ Reply to This | # ]

HTML in progress
Authored by: Steve Martin on Friday, April 25 2008 @ 05:02 PM EDT
Just so nobody will duplicate the effort, I've begun the HTML, I'm about halfway
through the markup. Should have it done (or nearly so) soon.


---
"When I say something, I put my name next to it." -- Isaac Jaffe, "Sports Night"

[ Reply to This | # ]

So, about Monday...
Authored by: Anonymous on Friday, April 25 2008 @ 05:21 PM EDT
What wild and crazy trick will SCO pull out of it's hat on Monday? That there
will be one is inevitable, because they can't seriously be considering showing
up in court on Tuesday with what we've seen here.

The tap dancing wookie absolutely MUST be upstaged before Tuesday am, and only a
top drawer, genuinely spangled, bangled and belled, de-fedoraized wabbit will
suffice.

Abra cadabra what will it be? Inqiring minds are afraid to ask...

[ Reply to This | # ]

Where's MOG?
Authored by: Anonymous on Friday, April 25 2008 @ 05:52 PM EDT
After this stupendous filing, shouldn't we have had yet another scathing
"heads will roll" article from the Mogster by now?

Bob.

[ Reply to This | # ]

Whats wrong with this statement?
Authored by: Wardo on Friday, April 25 2008 @ 05:59 PM EDT
"... hypothetical factual scenario ..."

Oh, oh, oh pick me, I know the answer to this one... It's an oxymoron.

I hope that wasn't a direct quote from Novell's brief.

Wardo

---
caveat lector...
Wardo = new user(lawyer = FALSE,badTypist = TRUE,badSpeller = TRUE);

[ Reply to This | # ]

  • Poole was right! - Authored by: Anonymous on Friday, April 25 2008 @ 06:26 PM EDT
Of course Novell needs to know how much before it decides
Authored by: thorpie on Friday, April 25 2008 @ 06:26 PM EDT

It is extremely important that Novell knows how much is offered before it decides whether it will ratify.

At a garage sale Scott sells three cars, in a bulk lot, and says to Nathan "I sold your car in a bulk lot that I sold for $10,000" For his share of the $10,000 Nathan may offer Scott $100 or he may offer Scott $9,900. If the car is worth $5,000 Scott will not accept the $100, he will ask for the car back. If he is offered $8,000 he will take the cash.

He cannot be expected to make this decision before he knows how much he will be offered.

In Novell's case it is more complicated because SCO does not have the cash to pay in any case. If the court decides Novell is entitled to $30 million and Novell can only recoup $10 from SCO then Novell and M$/Sun will have to 'discuss' whether the licences stand or not. If the licences don't stand M$ can have $5 and Sun can have the other $5.

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

[ Reply to This | # ]

SCO's Reply Memo in Support of its Motion for Judgment on Novell's 4th Claim
Authored by: Anonymous on Friday, April 25 2008 @ 06:57 PM EDT
SCO soldiers on with its claim that Novell has to tell us all this exact minute whether it ratifies SCOsource or not in order to get any money from those agreements.
If SCO can get Novell to "ratify" the licenses, then SCO will no doubt immediately claim that since Novell has ratified the licenses, then no harm has been done and no conversion has taken place. The money in question then (in SCO's view) becomes a normal pre-petition debt between SCO and Novell, and Novell can just join the long line of creditors. SCO could then file a bankruptcy exit plan which includes canceling most of their debt. SCO then keeps the money, and the Novell trial is concluded with no serious consequences for SCO.

That's not how the arrangement between SCO and Novell was suppose to work. SCO however would no doubt like to change the question from whether SCO sold licenses without authority to one of whether nor not funds which were not remitted on time before the bankruptcy simply constitute a debt. There is more scope for argument with this line of reasoning and it avoids the question of conversion altogether. At the very least, it would require yet another trial at a later date to decide this (SCO would argue that Novell didn't file this claim soon enough in bankruptcy court).

I imagine that SCO expects Novell to eventually tell Microsoft and Sun that they have valid license agreements. Novell can do this however without "ratifying" the SCO sales. Novell just has to give Microsoft and Sun documents that say they have licenses while remaining silent about how these licenses were obtained. That is, Novell giving Microsoft and Sun licenses doesn't necessarily have to ratify SCO's actions. Novell however would likely wish to leave this until after all issues with SCO have been settled.

[ Reply to This | # ]

I would like to thank everyone who worked on converting these documents to Text
Authored by: The Mad Hatter r on Friday, April 25 2008 @ 09:50 PM EDT


Your hard work is very much appreciated.



---
Wayne

http://sourceforge.net/projects/twgs-toolkit/

[ Reply to This | # ]

SCO's Reply Memo in Support of its Motion for Judgment on Novell's 4th Claim - Updated - As Text
Authored by: Anonymous on Friday, April 25 2008 @ 10:41 PM EDT
"SCO's problem is that it never acknowledges that the purpose of a court is
to figure out what is fair, not what is clever."

Exactly!

What we are seeing here is a whole lot of huff, puff & table thumping. They
have nothing but instead of withdrawing honorably these sleazes are gonna keep
at it to the bitter end.

Moreover 'Vexatious litigant' is the term used in other countries. Apparently
American courts have no concept of this. US courts appear blinded by process to
any concept of fairness.

[ Reply to This | # ]

The love triangle dilemma
Authored by: Anonymous on Friday, April 25 2008 @ 11:42 PM EDT
M$ is the gigolo with the dark shades, short memory and unlimited credit.

SCO is last night's gold digging, runny mascera, napkin note quickie, who
stepped over to the bar to get another drink, only to turn around and to find
Novell, the budding starlet in the designer dress, driving the borrowed Ferrari
has taken her seat. The bartender is expecting payment and no matter how wildly
SCO waves, M$ doesn't look her way at all.

[ Reply to This | # ]

I am not a lawyer
Authored by: FreeChief on Saturday, April 26 2008 @ 12:15 AM EDT
I am not a lawyer, and very glad of that. I like to think I have better things to do in life than prove obfuscated drivel is still drivel. Still I have this advice, based on tactics of rhetoric, not the law.

If your opponent proposes an analogy in which you play the part of a car thief, it will be better to argue that the analogy is not apt, than to elaborate it in an attempt to show that car theft is validated by legal precedent.

Duh!

  --Programmer in Chief

[ Reply to This | # ]

SCO Argues....
Authored by: Anonymous on Saturday, April 26 2008 @ 01:51 AM EDT
So SCO argues "I beat my wife because she deserved it", and lists the
reasons, after the judge has ruled it is unacceptable to begin with.

SCO ignored concerns with their story from the beginning, they ignored concerns
brought by the people they sued, they ignore court rulings, and they will
continue to ignore until their "utter destruction". If SCO can be
shown to have a business plan, that is it.

[ Reply to This | # ]

Surely SCO is right on this point?
Authored by: Anonymous on Saturday, April 26 2008 @ 01:55 AM EDT

We believe, and Novell has asserted, that SCO had no right to enter into the deals with Sun and Microsoft, because it didn't own what it sold to them.

What has that got to do with Novell? If anybody was cheated, it was Sun and Microsoft. Novell simply has no standing in the matter.

Of course, as we know, Sun and Microsoft were not cheated; they basically wanted to give money to SCO to fund SCO's lawsuits. SCOsource was just an excuse, and at the same time, the payments were intended to give credibility to SCO's claims. But Sun and Microsoft could have found other excuses.

[ Reply to This | # ]

Bass ackwards logic
Authored by: Anonymous on Saturday, April 26 2008 @ 03:34 AM EDT
SCO is left to argue that black is white, up is down, hot is cold, the world is
flat, the sky is pink and bankrupt is a successful business plan. Everying in
these last two documents is 180 degrees from reality.

What possible good can it do them? The end result will still be Chapter 7, only
with the well poisoned instead of merely muddied. Their best chance to exit
with even a little saving grace was after Kimball's ruling almost a year ago.
Instead they compounded what was already evident - their utter lack of a case -
by insulting the judge and trying yet again.

It makes no sense whatsoever.

[ Reply to This | # ]

Isn't theft a crime in Utah?
Authored by: jmc on Saturday, April 26 2008 @ 04:01 AM EDT
If Judge Kimball says that SCO misappropriated money - and not just a trivial
amount but tens of millions, isn't this a case of forget all the various civil
lawsuits, forget Chapter 11, it's wakey wakey time for the local prosecutor's
office and quickly before Darl and co find a nice extradition-treaty-free
country to go to?

[ Reply to This | # ]

Twist In The Road
Authored by: sproggit on Saturday, April 26 2008 @ 04:15 AM EDT
SCO's line in argument got me thinking about the possibility of Novell going
after Microsoft and Sun at some point in the future.

Then I remembered that Microsoft did that deal with Novell, I think it was
November or December 2006, in which MS provided that "Patent Pledge"
for SuSE Linux. Unfortunately, I don't recall if the precise terms of the deal
were ever fully announced by either party. I do remember the FOSS community
going up in arms over the news.

But suppose that this move by Microsoft was designed to work at many different
levels. Suppose Microsoft foresaw the inevitable victory of Novell in their case
with SCO and realised that the purchase of a license to the SVRX code base to
legitimise "Windows Services for Unix" might expose MS to a future
legal threat from Novell? Novell are not about taking suit to Microsoft in
search of settlements, and have been very successful in this regard in the past.
PJ doesn't refer to MoFo as "Leagl Ninjas" without good reason...

So suppose the deal between Microsoft and Novell for IP indemnity was a 2-way
deal. The wording could have been 2 way and MS certainly paid Novell a chunk of
cash. What was it? $200-odd Million? [ That might sound like a lot, but
Microsoft make something like $45 Billion a year. That's almost a billion a
week, so the payment to Novell would amount to little more than the operating
profit from a single day of operations ].

Do you think that there could have been a move inside that move and that it was
always the intent of MS to strike a 2-way indemnity deal? Was this just an
elaborate hustle, offering Novell a large enough pot of cash so that they failed
to stop and look in enough detail to spot the potential future revenue that
would have come about if Novell had the legal opportunity to sue MS for
infringement?

I suspect we'll never know.


p.s. One little footnote for the record. I've recently read a post to the effect
that noone ever gets to see the source code for MS Windows. Actually, that's not
true. Although I've never worked for either company, I know that IBM, for one,
has access to the Windows Source. IBM produce a product known as an ISX Card.
It's basically an Intel Server on a single circuit board, minus any form of
storage device. The board is slotted into an IBM iSeries [AS/400] mid-range
Server and then works with it like a symbiotic pair. Anyway, in order to develop
the IBM hardware necessary to ensure that the machine imitated a regular PC such
that it could run Windows, IBM needed to see more of the internals of that OS.
They signed an NDA and as a result have access to the source code. So in some
circumstances, it is possible.

[ Reply to This | # ]

Oh, it's entertainment alright..
Authored by: Peter Baker on Saturday, April 26 2008 @ 05:29 AM EDT
I must say it contains parts that made me laugh out loud. I liked this one:

Novell clearly did have the obligation to choose whether to ratify the Agreements. Novell was obligated to "promptly repudiate" SCO's authority to execute the SCOsource Agreements "within a reasonable time" — a matter of "months" — after learning of them.

Where does one start? LOL :-)

---

= P =

[ Reply to This | # ]

For once, feeling sorry for SCO's lawyers
Authored by: Anonymous on Saturday, April 26 2008 @ 06:32 AM EDT
Remember that this is the _best_ that they can come up with!

Would you like to be working on this? I wouldn't. Almost everything is against
you, and your client doesn't do you any favours.

And I would imagine that the people working on this are none too pleased to be
associated with it.

And then there's the issue of sanctions. I would imagine that SCO said that they
would take care of them, if they happened. But how is a bankrupt company going
to do that?

Up a creek. Rock hard place. Frying pan. In a briar patch.

JeffV

[ Reply to This | # ]

Double-talk seems to be fashionable
Authored by: Anonymous on Saturday, April 26 2008 @ 07:14 AM EDT

SCO's lawyers are merely keeping up with modern trends. I liked this one, seen in a NY Times report today:

Guantαnamo, a military spokeswoman said, does not have solitary confinement, only “single-occupancy cells.”

[ Reply to This | # ]

Less than 24 hours to trial. Anything happening?
Authored by: Anonymous on Monday, April 28 2008 @ 11:49 AM EDT

Time to trial: 23 hours 11 minutes.

Any last-minute motions? Offers to settle? Interlocutory appeals? Fleeing the country?

[ Reply to This | # ]

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