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SCO and Novell File Proposed Findings of Fact/Conclusions of Law
Tuesday, April 29 2008 @ 03:32 PM EDT

SCO and Novell have each now filed their Proposed Findings of Fact and Conclusions of Law. What's that? Well, when a judge reaches a decision and issues his or her decision, there is also a list of the facts he or she considers established at the trial, and the legal facts established. An example of the latter would be to find that the APA created an agency relationship between SCO and Novell regarding SVRX royalties. Judge Kimball asked the parties to file on the day the trial began, and so they have.

SCO's filing is 54 pages, with some cases attached. Novell's is 21. I'm sure you can figure out why SCO's is longer. The parties can file revised versions, of course, depending on what comes out in evidence at trial, but this gives the judge an overview of how each side thinks he should rule. It also helps us to get a taste of what is enfolding in the courtroom in Utah as we speak, because the filings are a map to what each side hopes to prove. And it will be a help to the appeals court later.

Here are all the filings:

528 - Filed & Entered: 04/29/2008
Proposed Findings of Fact
Docket Text: Proposed Findings of Fact by Novell, Inc.. (Sneddon, Heather)

529 - Filed & Entered: 04/29/2008
Proposed Findings of Fact
Docket Text: Proposed Findings of Fact by SCO Group. (Attachments: # (1) Exhibit A-C (Unpublished Cases))(Normand, Edward)

The Microsoft License

Sticking just to the Findings of Fact sections of both filings, we learn that the Microsoft license had three segments, so it was titled a "Release, License and Option Agreement." Section 1 was a release of claims, but SCO says no particular technology was mentioned. Just whatever SCO IP existed, Microsoft could use it in its products. Naturally, Novell claims at least some of that $1.5 million. Section 3 was about UnixWare, "Option to Purchase UnixWare License," which Microsoft eventually did license, so Novell isn't asking for any money from that $2 million plus later $5 million, although it believes it could argue the matter, if it thought it was worth it. Remember that older copyrights to UnixWare remained Novell's also. And a very valid question would be: what use did Microsoft have for UnixWare?

But Section 4 of the license, "Option to Purchase License to Other SCO Assets" lists 34 versions of UNIX, and at least 28 of them are identified in the 1995 APA as SVRX. Presumably the others are post-APA. Microsoft paid $250,000 for that option and $8 million when it exercised its option. SCO claims that the license was still for UnixWare, as per Exhibits A and B. Only Exhibit C mentions OpenServer and "older versions of UNIX". Supposedly this license gave Microsoft broader rights to UnixWare. Then, in an amendment, allegedly Microsoft obtained a license to "BSD Code" which SCO says does not include any SVRX releases. I say allegedly, because I can't think of any SCO right to license BSD code, unless SCO is talking about errno.h again. Don't tell me that Microsoft paid money for that!

The Sun License

And we finally get to learn what the Sun license was for. According to SCO, Sun had never had a UnixWare license, only a license to SVRX, and it was a buyout so it could open source Solaris. But then SCO starts to provide wording that is very odd indeed in a Findings of Fact. It says not that Sun did X or Y because of A or B. Instead it says that SCO perceived that Sun needed a license because of X or Y. I take it that means that SCO really will not call Sun as a witness and also that the agreement may not be so clear on its face.

According to SCO, it "perceived" that Sun had fallen behind the industry, being on Sparc only and not Intel, that Sun had tried to develop Intel compatibility for Solaris, but it had failed.

[ Update: Sun had Solaris for Intel at least from March of 1993, by the way. Just saying.]

According to SCO, that is what it needed UnixWare for. Say, what? How is a court supposed to find as a fact that SCO perceived such and so? Where is Sun? It should be the one to say what it wanted the license for.

Plus, where is the logic? First SCO argues that UnixWare is just the latest version of System V. Then it argues that Sun already had System V licenses. But it needed UnixWare to be Intel compatible? SCO told the court in the IBM litigation that IBM wanted *System V* in order to be Intel-compatible. So... what happened? Situational logic, I guess.

SCO says it doesn't market older versions of System V separately any more, according to them because "earlier versions do not take advantage of hardware enhancements made to new processors and peripherals adopted by computer manufacturers." It adds this:

The current version of UnixWare incluldes the important parts of the prior releases of System V coupled with modifications that take advantage of improvements made to computer systems by hardware manufacturers.

That may be so, but Sun didn't license "the current version" of UnixWare in 2003. That's because SCO did a major overhaul of UnixWare later in time. It announced an upgrade of System V also. So hopefully Novell is aware of what looks to me like an attempt to confuse the court, as this wording, truthful as it might be on its face, is misleading if the intent is to present to the court that this latest version is what Sun licensed. It can't be. Not in 2003. And as for older versions not being marketable, what about the newer ones? Can't they be marketed separately? Obviously, they can, since the SCO account lists at least five releases of System V which Sun licensed in 2003, along with the buyout of the 20-some versions it already had licensed, plus two versions of UnixWare, and SCO says three of the new versions of System V are not listed in the APA. So right there it gives the lie to any idea that System V isn't still being marketed. Sun also licensed some device drivers. SCO claims the terms require Sun to license the tech "for value".

Novell adds an interesting detail regarding the value of the System V versus the UnixWare licenses:

32. The evidence presented at trial established that the Sun SCOsource License conveyed substantial rights to the SVRX intellectual property retained by Novell.

33. SCO did not establish the separate value of any SCO UnixWare intellectual property rights conveyed by the Sun SCOsource License.

So that tells us what Novell plans to establish at trial.

Other SCOsource Licenses

Novell mentions that SCO entered into 22 other SCOsource licenses, in addition to the Sun and Microsoft ones:

34. SCO also entered into 22 additional SCOsource licenses ("Other SCOsource Licenses"):
  • Computer Associates Int'l; Everyone's Internet, Ltd.; HEB; Questar Corp.; CDM; Legget & Platt Inc.; Parkhead Systems; and Siemens AG (Oce Printing Sys.) executed written SCOsource licenses.

  • Denise Evans; Gotley Nix Evans Pty Ltd.; John Curtis; Jose Garcia Rodriguez; Kellogg Corporation; Robert Twigg; Sphinx CST Ltd.; and Stephen McManus executed electronic SCOsource licenses.

  • Cymphonix; DTR Business Systems, Inc.; IMCORP, Inc.; MPA Systems Pty Ltd.; Synnex Canada Ltd.; and Seneca Data Distributors Inc. each acted as a distributor for a SCOsource license.

I know. More than you thought. Who was it said there is a sucker born every minute? So now you know who they all were, the SCOsource licensees. SCO earned $1,156,110 from them. It gave Novell nothing. The terms, Novell says, were all pretty much like the EV1 license we already saw, a license for SCO IP, defined as SVRX rights:

40. As noted above, SCO's complaint about "companies' internal Linux usage" was in fact a complaint that those companies were using SVRX code that SCO claims is in Linux. SCO has never identified any unique SCO UnixWare code in Linux and therefore has never identified any SCO UnixWare infringement supposedly excused by the Other SCOsource Licenses.

Ergo, Novell feels it should get that money. That's as far as I've gotten so far, and we can read the rest together. The conclusions of law part likely will address a fundamental weakness on SCO's side: did it have the authority to enter into the SCOsource licenses at all? If not, the the wording of the agreements may not mean so much, if Novell decides not to ratify them. In that case, I guess Novell could argue that they aren't contracts at all, since they were never authorized, or that only parts of them were. Folks, we are entering some very complex waters now.


SCO and Novell File Proposed Findings of Fact/Conclusions of Law | 160 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Authored by: PolR on Tuesday, April 29 2008 @ 03:39 PM EDT
If any are needed

[ Reply to This | # ]

OT Threads
Authored by: PolR on Tuesday, April 29 2008 @ 03:41 PM EDT
Follow the directions in red to make your clickies, or read the tutorial.

[ Reply to This | # ]

Authored by: Anonymous on Tuesday, April 29 2008 @ 03:41 PM EDT
Does anyone know how the rules about commingling apply here?

It sounds to me like:
Bob gave me his CDs to sell for him.
I put a bunch of Bob's CDs in a box, tossed in a few of my own, and sold them to
I didn't give Bob any money, and refused to account for his CDs.
Now that he found out about the sale to Sally, I am claiming she really just
wanted my CDs, and Bob's weren't worth anything.

What does the law say about commingling assets in this case?

[ Reply to This | # ]

SCO and Novell File Proposed Findings of Fact/Conclusions of Law
Authored by: red floyd on Tuesday, April 29 2008 @ 03:42 PM EDT
Didn't CA deny that they'd bought SCOSource? I thought they said they'd bought
some other license, and SCOX threw in a SCOsource

I am not merely a "consumer" or a "taxpayer". I am a *CITIZEN* of the United
States of America.

[ Reply to This | # ]

News Pick Threads
Authored by: PolR on Tuesday, April 29 2008 @ 03:43 PM EDT
Please put a meaningful title so we know which article you refer to. A clicky
might be welcome if you know how to make it.

[ Reply to This | # ]

SCO and Novell File Proposed Findings of Fact/Conclusions of Law
Authored by: Anonymous on Tuesday, April 29 2008 @ 03:57 PM EDT
SCO’s understanding in 2003 was that Sun had tried several times to develop Intelcompatibility for Solaris (which was based on pre-UnixWare SVRX) but had not succeeded.
They must not have very good understanding, since I was running Solaris on an Intel box back in 2000. According to Wikipedia, Solaris x86 was first released in May 1993.

I will agree that it may not have been successful from a marketing/penetration standpoint, but I don't think that has anything to with how much they needed UnixWare, and more about how much Sun was selling it for at the time.

[ Reply to This | # ]

Research needed
Authored by: Anonymous on Tuesday, April 29 2008 @ 03:59 PM EDT
on those additional SCOsource licenses were they licensed directly from SCO
Group or were they done through a foreign subsidiary.

This is important as only the two main SCO corporations are in bankruptcy. If
the licenses were made with foreign subsidiaries that are not in the bankruptcy
pile then it will be getting more complex as to who had permission.

[ Reply to This | # ]

Authored by: Steve Martin on Tuesday, April 29 2008 @ 04:05 PM EDT

Then, in an amendment, allegedly Microsoft obtained a license to "BSD Code" which SCO says does not include any SVRX releases.
Wait just one pea-pickin' minute. Am I missing something?

If Microsoft licensed BSD code from TSG, then one of two situations must be true:

  1. They licensed code that was pre-settlement. In this case, any BSD code that TSG even remotely might have rights to would be by virtue of the AT&T code contained in pre-settlement BSD. Such code would definitely be pre-APA SYstem V code, and as such would fall under the umbrella of TSG's obligation to remit 100% of System V royalties to Novell.
  2. They licensed code that was post-settlement. All BSD code that was post-settlement was devoid of any code to which AT&T could claim rights. As such, since AT&T had no rights to post-settlement BSD code, neither does The SCO Group.
So just what "BSD" code could Microsoft have possibly licensed from The SCO Group? Code that once was owned by AT&T but now is subject to royalty payments to Novell? Or code that is free of AT&T encumbrance, and so to which TSG holds no right to license to anyone?

What am I missing?

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

[ Reply to This | # ]

Wait a minute
Authored by: karl on Tuesday, April 29 2008 @ 04:24 PM EDT
Wait a minute. SCO's been saying they were Unixware licenses, not System V, right? That Unixware doesn't really include System V and it's only incidental, etc?

But in their filing, they say about the Sun license:

The current version of UnixWare incluldes the important parts of the prior releases of System V coupled with modifications that take advantage of improvements made to computer systems by hardware manufacturers.

The dodge here might be that they're saying the important parts of prior already licensed releases of System V. Still it appears they've contradicted their own position about the irrelevance of System V to Unixware...

[ Reply to This | # ]

SCO and Novell File Proposed Findings of Fact/Conclusions of Law
Authored by: Anonymous on Tuesday, April 29 2008 @ 04:26 PM EDT
Sun did not need a license from SCO to develop "Intel compatibility"
for Solaris. Sun had gotten that long before via a joint development agreement
with and the later purchase of, the Intel Sys V Unix business developed by
Interactive Systems Corporation back in the '90's. This fantasy by SCO was
obviously written by someone completely ignorant of the history of Unix and
Solaris operating systems.

[ Reply to This | # ]

The Supplementary License list
Authored by: Anonymous on Tuesday, April 29 2008 @ 04:34 PM EDT
At least 3 of the newly revealed Licenses are to Australians, one to an English manufacture. The most interesting is the Australian PR firm "Gotley Nix Evans Pty Ltd" as SCOX had services with them.

The Written contracts:
1. Computer Associates Intl -- the Canopy (Center7) lawsuit settlement, repudiated by CA
2. Everyone's Internet, Ltd -- known and regretted by EV1
3. HEB -- A Texas grocery, el Corton points out that Exhibit 17 to the 480 filing identified this company previously.
4. Questar -- likely the large Gas company, but not certain.
5. CDM -- possibly a Massachusettes based geotechnical consulting company.
6. Leggett & Platt Inc -- box springs, shelving, and cast aluminum manufacaturing.
7. Parkhead Systems -- already listed as a creditor: PARKHEAD SYSTEMS PTY L TD. 137 PENTECOST AVENUE. TURRAMURRA, NSW
8. Siemens AG (Oce Printing Sys.) -- enterprise scale production printing

The Electronic licenses.
9. Denise Evans --?? The Derek Evans name in the Australian PR firm below is the tech oriented partner.
10. Gotley Nix Evans Pty Ltd -- Australian PR for Sophos anti-virus and similar, handled SCO's Australian PR including discussion of MyDoom
11. John Curtis -- ?? is now Provo based Ridgeline Capital, small time politician and animal doc. Many software types in the "linked in" listing for this common, unremarkable name.
12. Jose Garcia Rodriguez -- ?? possibly Industrial Computing and Computer Networks" unit of the University of Alicante. or a tech -- outsourced to financial firms. No clear identification.
13. Kellogg Corporation -- likely not the cereal as this is "Kellogg Company"
14. Robert Twigg -- ?? a stale resume on the web leads to a Dallastown PA based mainframe jockey
15. Sphinx CST Ltd -- Office equipment sales, Leeds, UK
16. Stephen McManus -- ?? El Corton speculates that this name might belong to a Texas based salesman formerly associated as the founder of USinternetworking, Inc.

The Distributor Licenses:
17. Cymphonix -- a Utah packet shaping appliance, Ty Mattingly was an investor, and McBride featured it in the Sept 2006 conference call.
18. DTR Business Systems -- SCO partner
19. IMCORP Inc -- Georgia bar code and POS integrator, POS for auto parts stores
20. MPA Systems Pty LTD -- Australian reseller
21. Synnex Canada LTD --
22. Seneca Data Distributors -- Big server sales

[ Reply to This | # ]

I hate being impatient....
Authored by: Lazarus on Tuesday, April 29 2008 @ 05:09 PM EDT
But it's half an hour after the close of case for today...

Any updates from observers?

(Yes, I know, hitting refresh/reload doesn't make the news come out faster any
more than it makes UPS trucks deliver packages sooner.)

[ Reply to This | # ]

Sun and Microsoft Witnesses
Authored by: Anonymous on Tuesday, April 29 2008 @ 05:17 PM EDT
Did I miss something?

Of course, we all know why SCO wouldn't want to bring in Sun or Microsoft for
witness testimony, but why couldn't Novell do it? Seems to me that Novell would
want to get to the bottom of what those licenses were for.

[ Reply to This | # ]

SCO shared Libraries
Authored by: rsteinmetz70112 on Tuesday, April 29 2008 @ 06:48 PM EDT
I notice that SCO again brought up the shared libraries. They also make a
sweeping statement that SCO had never licensed their libraries to be used
separately from the operating system.

SCO may have changed the license, to say something different but that does not
match my reading of the Santa Cruz License. That license said you may use the
software, "in whole or in part" on a computer subject to limitations
on the number of users and processors. I doubt SCO changed it for a long time
after they acquired the products.

I used to use about 10 SCO OpenServer 5.0.6 systems and still have the licenses.
I believe they would still allow me to migrate to Linux and use the libraries,
provided I no longer used the OpenServer Operating System. The license was very
short even allowed for the transfer of licenses provided they were registered
with Santa Cruz.

Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

Solaris and Confidentiality
Authored by: mattflaschen on Wednesday, April 30 2008 @ 12:38 AM EDT
It seems to me the briefs tell a radical different story on OpenSolaris.
Specifically, Novell says:

"The 1994 Sun Agreement prevents Sun from publicly releasing or
"opensourcing" the Solaris source code, because of the confidentiality
obligations included in that agreement."

However, SCO says almost exactly the opposite:

"In the 1994 agreement, for $82.5 million, Sun had purchased from Novell
[...] the right to provide access
to the Solaris source code to an unlimited number of Sun’s customers and
sublicensees, whether or not they had a license to UNIX source code."

To me, this seems like a critical issue. If Novell licensed Sun the right to
distribute Solaris source code in 1994, then OpenSolaris is probably safe and
SCO doesn't owe Novell any money on account of that (they still owe money for
other reasons). If SCO licensed that right to Sun in 2003, that license may be
in jeopardy until Novell ratifies, and SCO definitely owes royalties for that
part of the license.

[ Reply to This | # ]

So what happens when Novell wins...
Authored by: kutulu on Wednesday, April 30 2008 @ 11:34 AM EDT

So I'm kinda confused as to what the possibly outcomes of this trial are. Essentially, from my understanding, Novell's argument is two-fold:

  1. The money SCO received from SCOSource is for SVRX so it's legally ours
  2. SCO had no right to enter into SCOSource licenses in the first place without our consent

If the court finds that #2 is, in fact, correct, and Novell declines to ratify those agreements, what happens to the $$? Does it go back to the people that originally paid it to SCO? And since SCO is deep into a bankruptcy case, do all those invalid licensees become creditors?

[ Reply to This | # ]

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