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How the Trial Will Go, Beginning Tomorrow (SCO v. Novell)
Monday, April 28 2008 @ 08:59 PM EDT

The trial in SCO v. Novell -- which has morphed into exclusively Novell's counterclaims against SCO -- begins tomorrow morning, and the parties have filed a Joint Pretrial Stipulation [PDF] and then an Amended one [PDF]. For purposes of this trial, Novell is the plaintiff and SCO the defendant, so Novell will be going first. Thanks to the Stipulation, we know how the trial is structured. Each side will limit itself to 10 hours. It's 10 hours sort of like football, though, so don't imagine it will all be over in, say, a long day or two days. A football team might have a minute left on the clock, but it takes a half hour to play it out. Similarly here, 10 hours each doesn't count things like conferences with the judge at the bench and things like that. It will go like this:
  • Novell's opening statement
  • SCO's opening statement
  • Novell's affirmative witnesses
  • SCO's affirmative witnesses
  • Novell's rebuttal witnesses, if any
  • SCO's sur-rebuttal witnesses, if any
  • SCO's closing statement
  • Novell's closing statement

They've also exchanged lists of witnesses they will call and in what order, and they agree that if there are to be any changes, they'll each make an effort "in good faith" to notify each other with at least 24 hours' notice, if possible.

I know what you're thinking. SCO. Good Faith. Hardy Har. But Novell got SCO to agree that this stipulation isn't a green light to suddenly add surprise witnesses. If SCO tries anything like that, the stipulation can be pointed to, and SCO will need to present a very good reason. Still, I wouldn't be amazed if there were a surprise or two here or there which SCO will say it couldn't help. They have a history of loving surprises.

To me, the biggest surprise is that so far as we know, SCO isn't calling any witnesses, like Microsoft or Sun, to tell the court what its SCOsource license was for. SCO needs somebody to say it was for UnixWare. That's a huge and stunning blank.

To be able to stick to 10 hours each, they also decided to stipulate to waive objections to the admission of certain exhibits, which they list on an attachment, but it's a list we can't really comprehend now. Those who attend might try to keep track of the exhibits as they are offered. Then we'll be able to piece it together. If you are curious, here's what they won't have to take time to do, thanks to the stipulation, for the exhibits on the list.

They aren't agreeing to the content being relevant or accurate or material or how much weight any exhibit has, and they explicitly restrict this stipulation to this trial only. Any later litigation after appeal, well, it's back to GO on these exhibits and either side can object. And they are each free to argue to Judge Kimball that hearsay, for example, in an admitted exhibit should be afforded no weight.

They also agree to exchange any demonstratives no less than 24 hours before they use it with a witness at trial. They can modify the demos, though, as the trial progresses and evidence is presented, so long as they tell each other as soon as practical. This doesn't apply to the summary judgment motions or the opening or closing statements. They can show and tell whatever they please in those, without sharing first. Demonstratives are graphics and charts and graphs and stuff like that. It can, in our digital age, also be animation, if the court has the facilities, and large firms may even have an in-house graphics department.

Here are the filings:

04/28/2008 - 526 - STIPULATION (Pretrial) by Novell, Inc.. (Attachments: # 1 Exhibit A)(Sneddon, Heather) (Entered: 04/28/2008)

04/28/2008 - 527 - STIPULATION (First Amended Joint Pretrial Stipulation) by Novell, Inc.. (Attachments: # 1 Exhibit A)(Sneddon, Heather) (Entered: 04/28/2008)

I think it's sort of obvious what the various categories of witnesses are, but if not, here's a breakdown of how evidence is presented at trial, and how witnesses are used, on's Dictionary. And a court can itself call witnesses, according to the Federal Rules of Evidence, not that it happens often that I've seen. But wouldn't it be a hoot if Judge Kimball called Microsoft to come and testify, which would lead to cross examination, and ... I guess I'm getting too excited, huh? But in a perfect world, we'd get to find out exactly what Microsoft meant by telling the world it had licensed SCO's patents and such, when SCO had exactly no patents at the time. I'd like to ask them, "What due diligence did you do?" "Why were you interested in a license?" And "what have you used the code for?" "Were there any changes to the agreement that you caused to come into being?" Like offering more money if SCO agreed to make a big media splash about Linux allegedly having legal problems? Just asking. Oh. Then I'd want to ask, "Did Microsoft's server offerings go up in adoption in comparison to Linux following the SCO announcement of litigation?"

Confess. You want to know too. And I'm just guessing that might be exactly why SCO isn't calling any witnesses from Microsoft or Sun -- the scary cross examination possibilities.


How the Trial Will Go, Beginning Tomorrow (SCO v. Novell) | 323 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Off-Topic Thread
Authored by: wholeflaffer on Monday, April 28 2008 @ 09:38 PM EDT
Keep your off-topic comments here!

[ Reply to This | # ]

Newspicks Thread
Authored by: wholeflaffer on Monday, April 28 2008 @ 09:40 PM EDT
You may discuss the Newspicks (from the right hand column of the main page)

[ Reply to This | # ]

Authored by: wholeflaffer on Monday, April 28 2008 @ 09:43 PM EDT
Please suggest any corrections to the main article here.

[ Reply to This | # ]

Confessing desires
Authored by: tce on Monday, April 28 2008 @ 10:16 PM EDT

[ Reply to This | # ]

SCO's sur-rebuttal witnesses
Authored by: Anonymous on Monday, April 28 2008 @ 10:33 PM EDT
Will they have to ask the court before they call over-length sur-rebuttal

Sorry -- could not resist

[ Reply to This | # ]

Who can call and whatnot...
Authored by: Anonymous on Monday, April 28 2008 @ 10:36 PM EDT
Can't (or couldn't should be more to the point) Novell
call (have called) the signing authority of Microsoft to
testify as to what exactly they thought they were
purchasing? I don't think it is only SCO that can do
that...The question I got was why Novell didn't do that to
show SCOSource intent?!?!

[ Reply to This | # ]

I still think SCO won't show up
Authored by: kawabago on Monday, April 28 2008 @ 11:01 PM EDT
They will come up with something to delay it if they have to have a car crash to
do it.

[ Reply to This | # ]

Explanation for no Sun/MS witnesses
Authored by: tknarr on Monday, April 28 2008 @ 11:06 PM EDT

I think the explanation's simple: agency. As agent, SCO's supposed to put Novell's best interests above it's own. If there's a mixture of code involved, the onus is on SCO to detail the breakdown, not Novell. All Novell has to do is assert that some SysV code is licensed in there and then it becomes SCO's job to sort out and show what part of the fee doesn't belong to Novell. Any failure accrues in Novell's favor.

But SCO doesn't want to call Sun and MS to the stand. I'm pretty certain neither can (without being shredded by Novell) assert that the agreements weren't about SysV at all, and it's better to be silent on a point than to hand your opponent ammunition to use against you. SCO's all-in at this point, remember: any position other than "no SysV at all" is instant death for them. And Novell doesn't want to call them either. It'd cost Novell money to bring in third-party witnesses, and the best their testimony could offer is exactly what Novell'll get from SCO's silence. No gain there.

[ Reply to This | # ]

Authored by: TropicalCoder on Monday, April 28 2008 @ 11:37 PM EDT
It appears that SCO has > 7 1/2 pages of exhibits to Novel's < 3 1/2
pages. If the outcome of the trail were to be decided by number of exhibits
alone, SCO wins hands down. Of course, Novel will try to get as many of SCO's
exhibits as possible ruled as inadmissible. On the other hand, SCO will be doing
the same. If each is successful the same percent of the time in getting the
other's evidence thrown out, SCO still wins at least the exhibit contest.
Perhaps their intent is to overwhelm the judge with exhibits to the point where
he can't think straight any more.

[ Reply to This | # ]

  • Exhibits - Authored by: tknarr on Tuesday, April 29 2008 @ 03:26 AM EDT
  • Exhibits - Authored by: Steve Martin on Tuesday, April 29 2008 @ 06:14 AM EDT
  • Smoke AND Mirrors - Authored by: Anonymous on Tuesday, April 29 2008 @ 10:45 AM EDT
  • Exhibits - Authored by: Anonymous on Tuesday, April 29 2008 @ 10:53 AM EDT
    • Exhibits - Authored by: Anonymous on Tuesday, April 29 2008 @ 01:35 PM EDT
Getting Ready for Trial
Authored by: webster on Monday, April 28 2008 @ 11:51 PM EDT

  1. The first question, is Kimball already in trial? If he is carrying over a day or so, there will be no trial starting tomorrow. You can be sure the lawyers checked.
  2. The Novell exhibit list covers three pages to SCO's eight.
  3. Each side gets ten hours for everything. If one doesn't use the ten hours, the other side doesn't get to use it. Someone should bring a chess clock. How will they handle objections to questions and answers as they arise? Does the loser pay?
  4. Novell is the Plaintiff with the burden of proof so they get to start and conclude, first and last word. It's a big advantage.
  5. Kimball is trying this himself without a jury. He will probably refresh himself with the relevant parts of his August 10 decision. Woe to SCO if they try and fight the last battle. Kimball has already concluded they owe for SVRX. The only issue is how much.
  6. How will Novell prove the amount? The contracts themselves should help. Similar deals. Deals with previous Unix code. Other contemporary deals of other types of Unix. The experts will have a broad market with which to apply their opinions. They will also have to attest to the usefullness of the code. The big question is if they will go into the use and earnings from the code by SUN and the Monopoly. They could also evaluate it by lines or complexity and use of the two components, Unixware and SVRX. What if the price is grossly inflated for such products? How will Novell explain or rebut that? How will SCO explain it?
  7. Misperception: A Defense for SCO. This code is not very valuable. Novell shouldn't get much. At the time Unix was in decline. Not even Novell, or its predecessors, wanted to promote it. SCO came along and created value in this code when they thought they discovered this code in Linux. The mere allegation of SVRX code in Linux created immense value. Look at the millions the Monopoly and SUN paid for it! Well now as it turns out, and as the Court has ruled, there is no SVRX in Linux. The SVRX and Unixware are worth little without this claim. So the real valuation of these deals come from the allegation of the code in Linux, not the code itself. So the Court should valuate the code according to its decision and accord little value to the licenses without the Linux. Better to call it the "Misperception not FUD" defense. In other words the SVRX code was only incidental to the license due to the claim that some of it was in Linux. So SCO can skate. The basis of valuation does not exist, i.e. SVRX in Linux.
  8. Let's hope the reports and transcripts come out fast.


Tyrants live their delusions. Beware. Deal with the PIPE Fairy and you will sell your soul.

[ Reply to This | # ]

Any Sign...
Authored by: sproggit on Tuesday, April 29 2008 @ 01:31 AM EDT
... that David Boies will turn up for SCO, either way?

We don't quite know what Darl meant when he announced to the world that they had
managed to secure BSF's services.

Also, although we do know that Darl McBride is very much looking forward to his
day in Court and to proving things at trial, this first round engagement is all
about proving how much SCO owes Novell. Once we get done with this, there is IBM
to think of.

Judge Kimball's Memorandum and Order of August 10th took a big chunk out of
SCO's arguments, but was that enough to close out their case in 'IBM' as well? [
It all seemed to come down to about 200 lines of disputed code and a whole bunch
of 'methods and concepts'. ] Of course, it now turns out that some of IBM's
counter-claims [ things like the interference in business that came about as a
result of SCO's claimed revocation of IBM's AIX license ] could be the most
significant items left to play out between SCO and IBM. Or did we miss

[ Reply to This | # ]

Both have 400+ exhibits!
Authored by: Anonymous on Tuesday, April 29 2008 @ 04:28 AM EDT
Both have 400+ exhibits, that is much.

I wonder if they have brought them in paper format too.

IMANAL (just didn't login)

[ Reply to This | # ]

How the Trial Will Go, Beginning Tomorrow (SCO v. Novell)
Authored by: Anonymous on Tuesday, April 29 2008 @ 05:04 AM EDT
There’s something important here that hasn’t been fully aired, that reveals the
“high wire act without a net” that SCO/BSF is apparently going to try as its
“best alternative” to – well, otherwise, they’ve got nothing.

Here’s the risk SCO is taking:

1) In Judge Kimball’s summary judgment decision before the BK filing, Kimball
determined that the MS and SUN licenses were SVRX licenses. Therefore, he
determined that Novell was due at least its contractual right to 95% of some
amount of the total revenue, and that SCO’s retaining those amounts and
nondisclosure of the licenses amounted to conversion (civil theft).

2) Novell also argued in its briefs in the initial summary judgment motions that
SCO lacked the capacity to enter into the MS and SUN contracts. As we pointed
out here on Groklaw, these contracts appear to fit the category of contracts
that required the approval of Novell to become effective with respect to Novell.
This is critical, as I will explain. Novell didn’t actually make a specific
motion for summary judgment on this particular point, but raised it in its
arguments. After Judge Kimball did issue his ruling on the summary judgment
motions that were before him, and ruled in Novell’s overwhelming favor, Kimball
indicated to Novell that he would be ‘receptive’ to another summary judgment
motion asking for a declaration that the MS and SUN licenses were, in fact,
unauthorized, and Novell promptly filed that motion, and this motion is before
Judge Kimball now – he will hear arguments on that motion on the second day of
this trial.

3) There has been some understandable confusion about what “unauthorized” would
mean if Kimball reached that conclusion, and the result is complex because it
involves 3 triangulated parties and the law of agency. But what is critical here
is that “unauthorized” would definitely mean is that, as between Novell and SCO,
that the contracts would not be “facts that speak for themselves” – they could
not, in my opinion, be offered into evidence as definitive statements of the
obligations between Novell and SCO.

4) Now, why would they be ‘unauthorized”? Primarily because the underlying
arrangement between Novell and Santa Cruz under the APA required that Santa Cruz
(and hence SCO) had to come to Novell for approval of these licenses BEFORE it
could enter into the license with the 3rd party customer. As we discussed here
on Groklaw, there were intelligent business reasons to set up the lines of
authority that way under the APA. One compelling reason for Novell was that its
agent (Santa Cruz/SCO) might otherwise be able to set up a license that licensed
a variety of rights, mixing SVRX rights with “other” non-Novell related rights,
and then collude with the customer to place “extra” valuation within the license
contract on the “non-Novell” rights and to correspondingly undervalue the SVRX
rights. This would, of course, result in Novell getting 95% of a falsely-small
number, and permit the agent to keep the rest, and then the agent could share
that ‘gain’ with the 3rd party, buying the 3rd party’s collusion as well. So –
the only structural way to prevent that was for Novell to maintain approval
rights, and therefore to be able to say, when a license was proposed by the
agent – “hey, wait a minute, you’re playing with numbers here, I’m not going to
approve until you restructure the allocations as to my 95% to fit market
reality.” Approval rights created a more natural counter-balance against the
possibility of mischief, and Novell couldn’t overplay it’s approval rights
without taking the risk of tanking the deals altogether and also dis-incenting
its agent from finding new deals – so the approval rights made sense, and that’s
why both parties (Novell and Santa Cruz) accepted that arrangement. (By the way,
does the agent misbehavior contemplated in the section above sound a little bit
like any of the facts that are now before us?)

5) In addition to the question of authorization, there is the question of
“fiduciary duty”. Novell has argued effectively by citing compelling case law
that SCO, under its duties as agent generally and under the specific agency
relationship under the APA, had a resulting fiduciary duty to keep Novell
informed, to hold Novell’s money for Novell, to remit money to Novell, etc.
This ‘trusted’ arrangement places a higher legal duty on SCO, and, if breached
by the fiduciary, changes the normal order of evidentiary presumptions and
duties at trial regarding that breach. Normally Novell, as plaintiff in a civil
action, would have the affirmative duty to put the necessary minimum facts in
play to support its claim. But if a fiduciary duty is breached, and because the
fiduciary not only has a higher duty but also has, in effect, the possession of
evidence itself (because the agent acted, not the principal, to enter into the
contract with the 3rd party), the law requires that the evidentiary duty
“shifts” from the plaintiff to the defendant-fiduciary. So in this case, Novell
has argued in its trial briefs that SCO will bear the affirmative duty to show
its theory of the apportionment of the revenue, meaning it has to provide facts
that show why, in SCO’s view, that the 95% allocation only goes to a small
fraction of the license revenue.

6) One normal way that a plaintiff could prove these facts is by a contract, IF
the MS and SUN contracts, if they were properly ratified, would “speak for
themselves” as long as they weren’t ambiguous, and the parol evidence rule and
the “4 corners of the document” principle would apply. But -- if they were
supposed to be disclosed by SCO to Novell and ratified, and if they were never
disclosed or ratified, then as between Novell and SCO they aren’t evidentiary of
anything definitive. The alleged allocations, in that case, don’t speak for
Novell. They have no weight. They can just as easily represent collusion as they
do “truth”. So – this is why the finding of “authorization” is so important.

7) Now if the contracts are found to be unauthorized, then – SCO has a problem.
If it tries to establish its case by putting the contracts into evidence, then –
well, the contracts don’t mean anything. They don’t provide any definitive
evidence. And if that is all SCO offers, AND the contracts are found to be
unauthorized, then Novell will get a directed verdict awarding Novell on its
presumptive theory that 95% of all the revenue belongs to Novell.

8) So – what evidence could SCO bring to “prove” its own theory of allocation?
That’s easy. SCO would have to put MS and SUN on the stand, and MS/SUN would
have to say “we intended to buy the following rights, and this is how we valued
it to our business”, etc. And, as PJ has pointed out, once the direct
testimony was completed under SCO’s questioning, then Novell’s lawyers would
approach the witnesses and get their chance to cross-examine and -- well, “all
hell would break loose”. The whole scam could become exposed.

So – since SCO cannot take that chance and thereby kill its litigation lottery
once and for all. Accordingly SCO has provided notice to Novell and the court,
via its witness list, that SCO will NOT be calling MS and SUN as witnesses. No
surprise there. But this choice is a high-wire act because SCO absolutely needs
them as witnesses, procedurally, to make its case, if it loses the authorization
argument. Without MS/SUN, and without an authorized contract, SCO has no
evidence, and to try to get the “intent” of MS and SUN into evidence otherwise
will run afoul of the hearsay rule. If the intent of MS and SUN is to be brought
into evidence, then without the authorized contracts, SCO must bring those
witnesses to the court.

So SCO must do something. But SCO can’t do the very same thing that it must do.
And there’s no net underneath them if they fall.


[ Reply to This | # ]

SCO's Day in Court
Authored by: DaveJakeman on Tuesday, April 29 2008 @ 05:42 AM EDT
SCO have been telling us over and over, how much they've been looking forward to
their Day in Court. And we've been looking forward to it too. So finally, the
day arrives.

SCO dissed the Judge by declaring bankruptcy on the Eve of Trial, after assuring
him their business was robust enough to see them through. Then they dissed him
again, saying he's an ain't no good Judge.

Now we await SCO's return to the Honorable Dale A. Kimball's courtroom. Their
woeful case aside, well might they squirm.

With all fairness, let Justice be served.

Monopolistic Ignominious Corporation Requiring Office $tandard Only For

[ Reply to This | # ]

Let's say...
Authored by: Anonymous on Tuesday, April 29 2008 @ 12:17 PM EDT
that SCOX is found to have licensed *whatever* outside their authority in
regards to their agent relationship with Novell.

And, as a result, 95% of the monies SCOX got from MSFT and SUNW are determined
to be owed to Novell.

Back to bankruptcy court we go, I assume and, if so, can the bankruptcy court
start recovering monies, from SCOX's lawyers, since the converted money was
obviously paid to their lawyers as well as others?

[ Reply to This | # ]

This will not be on court TV
Authored by: Anonymous on Tuesday, April 29 2008 @ 12:48 PM EDT
But if it was, there would be a lot of geeks tuned in.
When done, there will be the court transcripts to read, but will there be audio
that I can listen to, (ie podcast). I would like to hear the emotions in the
arguments. It would good for my soul.

[ Reply to This | # ]

Is court adjourned?
Authored by: DannyB on Tuesday, April 29 2008 @ 01:43 PM EDT
Biff just showed up on Y! SCOX minutes ago.

Does that mean court is now adjourned?

...anxiously clicking refresh hoping for an update...I need my fix... :-) :-)

The price of freedom is eternal litigation.

[ Reply to This | # ]

Proposed Findings of Fact are Now Posted
Authored by: sproggit on Tuesday, April 29 2008 @ 02:19 PM EDT
Hey everybody, for those of you that don't mind a visit there, SCO's web site, in the Legal section, is showing 2 postings dated today [Tuesday 29th April].

Each are "Proposed Findings of Fact" and one comes from Novell and the other from SCO.

I quickly checked the Novell Press Room on their site, but nothing is showing there just yet.

I know that there is a certain reluctance to post links to SCO or other related web sites... personally I don't mind taking up some of their bandwidth for my own entertainment... [but please don't flame me for that ;o) ]

If you don't mind a similar act, you can find the docs here.

[ Reply to This | # ]

Authored by: argee on Tuesday, April 29 2008 @ 02:38 PM EDT
Lets say this trial ends, and one of the parties
appeals. Probably SCO.

But ... the BK court only allowed this to go to trial, not
to appeal. So, can the BK court simply say "Kimball's
ruling stands, no appeal, and I will go on with Chapter 11
or 7 procedings accordingly."

In fact, I think the one that will want to appeal is SCO,
but that will finish the money off. I don't think that the
BK judge Gross will let the genie out of the BK court once
THIS trial is over.


[ Reply to This | # ]

If you act as agent, and expect 5% commission...
Authored by: GriffMG on Tuesday, April 29 2008 @ 06:19 PM EDT
and then decide to exceed your parameters by a pretty wide margin.

Why would you still expect to get 5%?

I reckon 100% of the fees might be due to Novell.

Why stop at 95%

Keep B-) ing

[ Reply to This | # ]

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