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SCO and Novell Ask for More Time to Haggle About Final Judgment or Not, Interest Amount

Wednesday, July 30 2008 @ 08:57 PM EDT

SCO and Novell have jointly filed an intriguing document, Joint Motion for Extension Regarding Deadlines for Proposed Final Judgment and Pre-Judgment Interest Submission [PDF], and we find out what's been going on since the trial ended early in May.

SCO wants the Utah District Court's July 16th order to be a final judgment, presumably so it can appeal, as they just told their customers and partners they intend to do shortly. And the Order instructed Novell to file within fifteen days a brief telling the court what Novell seeks in the way of prejudgment interest and also the final judgment "consistent with these Findings of Fact, Conclusions of Law, and Order, the courts's August 10, 2007 Memorandum Decision and Order, and the parties' stipulations with respect to the disposition of certain causes of action." Novell believes it's inappropriate at this time to enter a final judgment. Here's why:

Novell has informed SCO that it believes entry of Final Judgment is inappropriate given the pendency of claims subject to an arbitration-related stay and given the Bankruptcy Court's reservation of issues pertaining to the entry of a constructive trues.

Novell is saying the whole story isn't decided yet, until there is a decision on the trust and also until there is word from the arbitration in Switzerland, which is currently stayed [PDF] by the Bankruptcy Court in Delaware.

SCO's position is that it has some "material related to that resolution" which it expects to be able to turn over to Novell within ten days, whatever that means. Maybe they're sorry now they got the Swiss arbitration stayed. It would be ironic indeed if it delayed their appeal.

They are also haggling over the amount of pre-judgment interest, but the reason they are haggling is because they hope to reach a stipulation on it. It's always better to work things out, if you can. It's a lot cheaper. So they jointly ask for more time, until August 22, to try to resolve all these issues. I don't doubt the motion will be approved, since they both want it. It's been referred to Magistrate Judge Brooke Wells. I know. It's just like the good old days.

Here's the Docket entry:

543 - Filed & Entered: 07/30/2008
Motion for Extension of Time
Docket Text: Joint MOTION for Extension of Time Regarding Deadlines for Proposed Final Judgment and Pre-Judgment Interest Submission filed by Defendant Novell, Inc.. (Attachments: # (1) Text of Proposed Order) Motions referred to Brooke C. Wells.(Sneddon, Heather)

What does the part mean where the judge told Novell to construct the final judgment consistent with the parties' stipulations? Remember that the parties shaved off certain issues, that may or may not ever be litigated but for sure were not litigated in the trial that just happened? In the parties Joint Status Report, filed back in mid-August of 2007 -- heavens, almost a full year ago -- SCO and Novell each told the court what it thought was left for trial after the August 10th order. Here's a relevant snip from that order:

The parties agree that the Court did not dismiss any alleged portion of the claim concerning technology other than the UNIX and UnixWare copyrights the Court has held were retained by Novell. The parties disagree as to whether SCO has pled or can pursue such a claim, but agree that any such portion is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration. No aspect of this claim will be tried during the September 2007 trial.

Of course, SCO filed for bankruptcy relief, which delayed the trial until April of 2008. Also, the judge wrote in the August 10 order a section about the SUSE arbitration, because those claims were divided off of the main trunk of the litigation, to coin a phrase, and that branch is in Switzerland, not yet decided:

The parties, however, have not specifically addressed whether any of SCO's copyright infringement claims are based on copyrights SCO may have obtained in derivatives of the technology included in the Assets. In the copyright ownership discussion, Novell recognized that SCO would have the copyright to the new merged product. Novell also recognized that joint copyright notices are used that demonstrate a copyright ownership by SCO as of 1996. SCO's non-compete and copyright infringement claims also relate to SUSE Linux. The SUSE Linux claims have been stayed pending arbitration.

And Novell reserved certain rights in case SCO decides to pursue any further issues, after the trial. Here's what the Joint Status Report said was left of SCO's claims after the August 10 order that would *not* go to trial that could conceivably be resurrected:

2 - Breach of the APA and TLA: The parties agree this claim is dismissed to the extent it concerns the UNIX and UnixWare copyrights the Court has held were retained by Novell, and to the extent it concerns Novell's waiver of claims asserted against IBM and Sequent. The parties agree that the Court did not dismiss any alleged portion of the claim concerning technology other than the UNIX and UnixWare copyrights the Court has held were retained by Novell. The parties disagree as to whether SCO has pled or can pursue such a claim, but agree that any such portion is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration. No aspect of this claim will be tried during the September 2007 trial....
4 - Copyright Infringement: The parties agree that this claim is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration.
5 - Unfair Competition: The parties agree this claim is dismissed to the extent it concerns the UNIX and UnixWare copyrights the Court has held were retained by Novell, and to the extent it concerns Novell's waiver of claims asserted against IBM (including Sequent). The parties agree that the Court did not dismiss any alleged portion of the claim concerning technology other than the UNIX and UnixWare copyrights the Court has held were retained by Novell. The parties disagree as to whether SCO has pled or can pursue such a claim, but agree that any such portion is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration. No aspect of this claim will be tried during the September 2007 trial.

And here's what the parties thought was left of Novell's claims, the parts that would not be handled at the trial:

1 - Slander of Title: The parties agree that Novell shall dismiss this claim without prejudice to renewing it should there be any subsequent adjudication or trial of copyright ownership-related issues. The parties will incorporate this agreement into the proposed final judgment....
9 - Accounting: The parties agree that the Court's Order moots this claim. No aspect of this claim will be tried during the parties' September 2007 trial.
Further, the parties have agreed that Novell will not pursue punitive damages under any claim, without prejudice to seeking such relief should there be any subsequent adjudication or trial in this action or any enlargement of the issues for this trial beyond that contemplated by this report. The parties will incorporate this agreement into the proposed final judgment.

That is why, quite aside from the appeal, I kept telling you that this SCO saga is far from over. It would not a bit surprise me to find SCO suing Novell next for post-APA copyrights for UnixWare and OpenServer, which is what it keeps talking about over and over, and for breach of the APA and TLA, but if it does, Novell can bring back to the table its slander of title claim and can then seek punitive damages, which it was otherwise willing to forego.

Litigation isn't like the olden times, when a couple of guys would go into a meadow and have a gun duel to settle their differences. That tended to be final rather quickly, rightly or wrongly. Litigation is more like chess, but not a single game. It's like a tournament, where winning one game isn't enough to prevail altogether. So hang on. There is a lot more to go.

But here's what was definitely established, subject only to reversal on appeal, even before the trial:

The parties agree that the Court's Order establishes that Novell is entitled to direct SCO to waive claims against IBM, Sequent, and other SVRX licensees; that Novell is entitled to waive such claims on SCO's behalf; and that SCO is obligated to recognize such a waiver.

That means that when IBM revs up again, it will be all about IBM's counterclaims. That's the part I don't hear SCO talking about lately.

SCO and Novell Ask for More Time to Haggle About Final Judgment or Not, Interest Amount | 217 comments | Create New Account

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Off Topic

Authored by: Kilz on Wednesday, July 30 2008 @ 09:15 PM EDT

Please make links the clicky kind. :)