decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books
Your contributions keep Groklaw going.
To donate to Groklaw 2.0:

Groklaw Gear

Click here to send an email to the editor of this weblog.


Contact PJ

Click here to email PJ. You won't find me on Facebook Donate Paypal


User Functions

Username:

Password:

Don't have an account yet? Sign up as a New User

No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
SCO Files Its Response to Novell's Petition for Rehearing En Banc
Thursday, October 01 2009 @ 09:17 PM EDT

So much happening at once! Today was the day for SCO to file its response to Novell's request for a rehearing en banc in the appeal, and here it is:

10/01/2009 - Open Document - [9698273] Response filed by SCO Group to Appellee Novell, Inc.'s Petition for Rehearing and Rehearing En Banc. Served on 10/01/2009. Manner of Service: email, clerk.

Note the header: "By and through Edward N. Cahn as Chapter 11 Trustee." I'm really surprised he'd let his name be put on this document. SCO is continuing to argue that it got UNIX lock, stock and barrel. But we know that they never got the patents, or all the trademarks.

Here's the argument:
The APA conveys "all rights and ownership" in the list of UNIX software programs identified on the attached Schedule 1.1(a). When a party acquires "all rights and ownership" in a set of works, courts have repeatedly found such language to satisfy Section 204(a), particularly where the asset is computer software.
If you know patents are excluded, then in this instance I think it has to mean something else. Duh. Here is the APA [PDF], and the schedule SCO references begins on page 58, if you'd like to focus in. Schedule 1.1(a) is indeed a list of UNIX software, and the header for that Schedule is "Assets". However, please turn to page 62, the very next schedule, 1.1(b), and it is called "Excluded Assets", and lo and behold, it clearly excludes, on page 63, "A. All copyrights and trademarks except for the trademarks UNIX and UnixWare" and "B. All Patents."

See what I mean? It kind of turns my stomach.

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

No. 08-4217

IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

THE SCO GROUP, INC.,
by and through Edward N. Cahn as Chapter 11 Trustee,
Plaintiff-Appellant,

v.

NOVELL, INC.,
Defendant-Appellee.

____________________________

On Appeal from the United States District Court for the District of Utah
Hon. Dale A. Kimball, Presiding
No. 2:04-CV-00139-DAK

_______________________________

RESPONSE OF APPELLANT, THE SCO GROUP, INC.,
TO PETITION FOR REHEARING AND REHEARING
EN BANC OF APPELLEE, NOVELL, INC.

David Boies
Brent O. Hatch (5715) Robert Silver
HATCH, JAMES & DODGE, Edward Normand
BOIES, SCHILLER & FLEXNER LLP
[address, phone] Brent O. Hatch (5715)
HATCH, JAMES & DODGE, PC
[address, phone]

Stuart Singer
BOIES, SCHILLER & FLEXNER LLP
[address, phone]

Devan V. Padmanabhan
DORSEY & WHITNEY LLP
[address, phone]

APPELLANT'S AMENDED CORPORATE DISCLOSURE STATEMENT

On August 25, 2009, the United States Bankruptcy Court for the District of Delaware appointed Edward N. Cahn, of the law firm of Blank Rome LLP, as Chapter 11 Trustee for Debtor The SCO Group, Inc. ("SCO"). Pursuant to Federal Rule of Bankruptcy Procedure 2012(a), upon his appointment, the Trustee was automatically substituted for the debtor-in-possession as the party-in-interest in this matter. SCO is not owned by a parent corporation. No publicly held corporation owns 10% or more of SCO's stock.

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES ..................................................................... iii

INTRODUCTION ..........................................................................1

BACKGROUND ............................................................................2

LEGAL STANDARD.....................................................................5

ARGUMENT ...................................................................................5

I. THE PANEL'S DECISION DOES NOT INVOLVE A QUESTION OF
EXCEPTIONAL IMPORTANCE, WHERE IT DOES NOT CHANGE
EXISTING COPYRIGHT LAW AND IS NOT IN CONFLICT WITH
ANY DECISION OF ANY COURT OF APPEALS......................................5

A. The Panel's Decision Applies Existing Copyright Law to the
Unique Structure of the Amended APA...............................................5

B. The Panel's Decision Is Consistent with the
Well-Established Precedent in This Court. ..........................................8

C. The Panel's Decision Is Not in Conflict with
Any Decision of Any Court of Appeals. ..............................................9

II. THE PANEL'S DECISION DOES NOT UNDERMINE
THE POLICY OF THE COPYRIGHT ACT. ...............................................13

III. THE PANEL'S DECISION PROPERLY REJECTS NOVELL'S
RELIANCE ON THE BILL OF SALE.........................................................14

CONCLUSION............................................................15

ii

TABLE OF AUTHORITIES

Cases

Am. Plastic Equip., Inc. v. Toytrackerz, LLC,
Civil Action No. 07-2253-DJW, 2009 U.S. Dist. LEXIS 27787
(D. Kan. Mar. 31, 2009) ........................................................................12

Chugrue v. Cont'l Airlines, Inc.,
977 F. Supp. 280 (S.D.N.Y. 1997) ..................................................................6

Dick Corp. v. SNC-Lavalin Constructors, Inc.,
No. 04 C 1043, 2004 WL 2967556 (N.D. Ill. Nov. 24, 2004) ........................9

Foraste v. Brown Univ.,
290 F. Supp. 2d 234 (D.R.I. 2003) ................................................................12

ITOFCA, Inc. v. MegaTrans Logistics, Inc.,
322 F.3d 928 (7th Cir. 2003) ...........................................................................6

Konigsberg Int'l, Inc. v. Rice,
16 F.3d 355 (9th Cir. 1994) ...........................................................................11

La Resolana Architects, PA v. Clay Realtors Angel Fire,
416 F.3d 1195 (10th Cir. 2005) .......................................................................8

Liu v. Price Waterhouse,
302 F.3d 749 (7th Cir. 2002) ...........................................................................9

Lyrick Studios, Inc. v. Big Ideas Prods., Inc.,
420 F.3d 388 (5th Cir. 2005) .........................................................................11

Morgan v. Hawthorne Homes, Inc.,
2009 U.S. Dist. LEXIS 31456 (W.D. Pa. Apr. 14, 2009) .............................11

Pamfiloff v. Giant Records, Inc.,
794 F. Supp. 933 (N.D. Cal. 1992)......................................................... 11, 12

iii

Radio Television Espanola S.A. v. New World Entm't, Ltd.,
183 F.3d 922 (9th Cir. 1999) .........................................................................11

Relational Design & Tech., Inc. v. Brock,
No. 91-2452-EEO, 1993 WL 191323 (D. Kan. May 25, 1993)......................6

Rico Records Distribs., Inc. v. Ithier,
No. 04 Civ. 9782 (JSR), 2006 WL 846488 (S.D.N.Y. Mar. 30, 2006)...........9

Schiller v. Schmidt, Inc.,
969 F.2d 410 (7th Cir. 1992) ...........................................................................9

SCO Group, Inc. v. Novell, Inc.,
No. 08-4217, 2009 WL 2581735 (10th Cir. Aug. 24, 2009)................ passim

Spectrum Creations, L.P. v. Carolyn Kinder Int'l, LLC,
No. SA-05-CV-750-XR, 2008 WL 416264 (W.D. Tex. Feb. 13, 2008).........9

Statutes and Rules

Fed. R. App. P. 35(a) ...........................................................................5

Fed. R. App. P. 40(a) ...........................................................................5

Tenth Cir. R. App. P. 35.1(A).....................................................................5

iv

INTRODUCTION

Novell's arguments regarding the Panel's decision of August 24, 2009, do not remotely satisfy the standards for rehearing or rehearing en banc. Novell concedes that the Panel's decision does not conflict with any decision of this Court or the Supreme Court, and the decision does not involve a question of exceptional importance, where it does not change existing copyright law and does not conflict with any decision of any other Court of Appeals.

What the Panel decision does is modest: it holds that in the sale of the UNIX business from Novell to SCO's predecessor-in-interest, the amended Asset Purchase Agreement ("APA") did not as a matter of law exclude the transfer of UNIX copyrights; a trial was required on those issues; and the entry of summary judgment was improper. In the course of that decision, the Panel correctly held the amended APA satisfied the requirements of Section 204(a) of the Copyright Act because the amended APA is a written instrument transferring copyrights.

The amended APA identified the assets sold as "all rights and ownership of UNIX, UnixWare and Auxiliary Products," including but not limited to programs listed in detail in Schedule 1.1(a) of the Agreement. While the original APA excluded "all copyrights and trademarks" from the sale, Amendment No. 2 removed that exclusion so that the copyrights required for SCO "to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies" were

not excluded. This Amendment thus brought the APA into conformity with the intent of the parties as reflected in testimony from both Novell and Santa Cruz executives that the copyrights were intended to transfer. The Panel's decision that a new Bill of Sale was not required to accompany this Amendment so as to comply with Section 204(a) is perfectly sensible, and does not conflict with any authority.

The courts applying Section 204(a) have repeatedly considered extrinsic evidence to determine the parties' intent which the leading authorities on copyright law agree is the paramount goal in interpreting the transfer document. Novell cannot cite a single case holding either that a court should disregard extrinsic evidence of the parties' intent in determining whether a writing satisfies Section 204(a) or that an agreement specifically identifying copyrights (like the amended APA) cannot satisfy Section 204(a). Instead, Novell proposes a standard under which a reasonable dispute between parties regarding their intent to transfer particular copyrights could not be resolved like any other contract dispute. As the Panel concluded, neither the language nor the legislative history of Section 204(a) supports "such an onerous restraint on the alienability of copyrights."

BACKGROUND

This litigation arose from the well-publicized statements Novell made in 2003 claiming ownership of the copyrights to the UNIX operating system that it

2

had sold to SCO's predecessor-in-interest under the APA more than seven years earlier. In March 2003, SCO brought a lawsuit in the district court alleging that IBM, a UNIX licensee, had breached SCO's contract and intellectual property rights by contributing UNIX-derived source code to Linux in a strategic effort to transform Linux from an upstart program into a UNIX competitor. By this time, Novell had itself made a strategic shift to Linux and would shortly, with a $50 million investment by IBM, purchase global Linux distributor SuSE Linux. On May 28, 2003, Novell publicly claimed that it had the right under the APA to waive SCO's claims against IBM, and that Novell and not SCO owned the UNIX copyrights because the APA had failed to transfer them. Yet a few days later, immediately after SCO had located and sent Novell a copy of Amendment No. 2, Novell publicly admitted that "the amendment appears to support SCO's claims that ownership of certain copyrights for UNIX did transfer to SCO in 1996." Novell later retracted its retraction and continued to assert ownership of the UNIX copyrights.

Before the district court and on appeal, SCO presented overwhelming evidence that the parties intended to transfer ownership of the UNIX copyrights under the APA. Such evidence included the unequivocal testimony of ten witnesses from both sides of the transaction who negotiated the deal, including Novell's own President, chief negotiator, and officers overseeing the transaction.

3

The evidence also included Novell's transfer of UNIX copyright registrations to SCO and Novell's contemporaneous admissions that its engineers had modified the copyright notices on existing UNIX code to reflect the change in ownership from Novell to SCO. Shortly after the transaction closed, Novell executives also sent many letters to Novell's key customers explaining that "Novell transferred to The Santa Cruz Operations, Inc., ('SCO') its existing ownership interest in UNIX System-based offerings and related products as listed in Attachment A." (Emphasis added.) The products listed on Attachment A included "All Releases of UNIX System V and prior Releases of the UNIX system" language that covers the listing of assets in Schedule 1.1(a) of the APA.

The Panel correctly ruled that the district court had erred (among other ways) in ruling as a matter of law that Novell had retained the copyrights and rights to waive SCO's claims against IBM and others. As to copyright ownership, the Panel rejected Novell's position that the APA and Amendment No. 2 must be read separately, and concluded that the amended APA plainly transferred copyright ownership under contract and copyright law. In its petition, Novell does not challenge any of the Panel's rulings, except its conclusion that the APA satisfies the writing requirements of the Copyright Act, and that a second bill of sale after Amendment No. 2 was not required to effectuate the transfer.

4

LEGAL STANDARD

The general rule is that an "en banc hearing or rehearing is not favored and ordinarily will not be ordered." Fed. R. App. P. 35(a); see also Tenth Cir. R. App. P. 35.1(A) ("En banc review is an extraordinary procedure" that is "disfavored"). The exceptions are when such consideration is "necessary to secure or maintain uniformity of the court's decisions," or "the proceeding involves a question of exceptional importance." Id. Novell argues for rehearing en banc under only the second exception, conceding that the Panel's decision does not conflict with any decision of the Supreme Court or of this Court.1

ARGUMENT

I. THE PANEL'S DECISION DOES NOT INVOLVE A QUESTION OF
EXCEPTIONAL IMPORTANCE, WHERE IT DOES NOT CHANGE
EXISTING COPYRIGHT LAW AND IS NOT IN CONFLICT WITH
ANY DECISION OF ANY COURT OF APPEALS.

A. The Panel's Decision Applies Existing Copyright Law to the
Unique Structure of the Amended APA.

Section 204(a) of the Copyright Act requires that a "transfer of copyright ownership" include "an instrument of conveyance, or a note or memorandum of the transfer." Considering that language, as the Panel observes, the cases applying

5

Section 204(a) ask whether the writing at issue evidences the parties' intent to engage in a transfer of "copyright ownership" as opposed to other categories of ownership rights. SCO Group, Inc. v. Novell, Inc., No. 08-4217, 2009 WL 2581735, at *9-10 (10th Cir. Aug. 24, 2009).

The amended APA, as the Panel explains in detail, id. at *6-11, meets the foregoing standard. Without revisiting the full breadth of the Panel's reasoning, the Panel's decision makes the following critical points:

  • The APA conveys "all rights and ownership" in the list of UNIX software programs identified on the attached Schedule 1.1(a). When a party acquires "all rights and ownership" in a set of works, courts have repeatedly found such language to satisfy Section 204(a), particularly where the asset is computer software.2

  • While the original APA excluded "all copyrights" from transfer, Amendment No. 2 expressly clarified the parties' intent by narrowing the exclusion only to those copyrights not required for SCO to

6

    exercise its rights with respect to the acquisition of UNIX and

    UnixWare technologies.

  • Because the amended APA specifically excised the "all copyrights" language from the Excluded Assets in Schedule 1.1(b), the amended APA clearly is an instrument of the conveyance of copyrights identified among the Assets in Schedule 1.1(a) and not excluded by Schedule 1.1(b). As the Panel explained, to hold otherwise would mean that the amendment was a nullity. SCO, 2009 WL 2581735, at *14-15.

  • Novell's argument that a second bill of sale must accompany Amendment No. 2 is misplaced for two independent reasons: (1) it is not necessary for the Bill of Sale to have been executed at the same time as Amendment No. 2, and (2) Section 204(a) requires only a "note or memorandum of transfer," and thus Amendment No. 2 (and the amended APA) satisfy that requirement by "evincing a clear intent to revise or clarify the formal schedule of copyrights transferred by Novell to Santa Cruz."

The Panel's decision and reasoning thus break no new ground in the interpretation and application of Section 204(a), but rather turn on the Panel's

7

detailed assessment of the particular provisions of the APA and Amendment No. 2 consistent with the statute and relevant precedent.

B. The Panel's Decision Is Consistent with the
Well-Established Precedent in This Court.

The Panel's decision and reasoning is entirely consistent with the rules of statutory interpretation that the Supreme Court and this Court have established and follow. Under these rules, the analysis of Section 204(a) must "start with the language of the statute." La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1200 (10th Cir. 2005). As the Panel observes, Section 204(a) does not impose any heightened burden of clarity or particularity. SCO, 2009 WL 2581735, at *8-9.

No case has interpreted Section 204(a) to mean that the scope of assets properly transferred under a sufficient writing cannot be determined by recourse to extrinsic evidence that an entire category of otherwise admissible evidence of the parties' intent should be deemed irrelevant and excluded if the writing contains an ambiguity on the scope of copyrights transferred. Nothing in the language of Section 204(a) or even its legislative history suggests that Congress intended to revise the rules of contract interpretation in such blunderbuss fashion. Novell thus proposes a new rule that no court has previously followed, that would conflict with the well-established precedent interpreting Section 204(a), and that would subvert longstanding rules of statutory interpretation.

8

C. The Panel's Decision Is Not in Conflict with
Any Decision of Any Court of Appeals.

The Panel's decision not only is entirely consistent with this Court's precedent, but also is not in conflict with any decision of any Court of Appeals. Novell acknowledges that courts that have specifically addressed the issue in contrast to the cases Novell cites have considered extrinsic evidence of the parties' intent in applying Section 204(a).3 These cases have not found such consideration to undermine the purposes of the Copyright Act. SCO cited several such opinions, and Novell makes no effort to distinguish or even address those cases in its petition.

Novell fails to cite (and SCO has not found) any decision from any other federal court in conflict with the Panel's decision:

  • No decision holds that a writing that specifically references copyrights, much less a writing that specifically identifies them, cannot satisfy Section 204(a).

9

  • No decision holds that a court cannot consider extrinsic evidence of the parties' intent in determining whether the writing at issue satisfies Section 204(a).

  • No decision holds that extrinsic evidence is admissible to determine only whether a party has transferred all its copyrights, but is not admissible to determine whether the parties intended to transfer only a subset of such copyrights.
As the Panel decided: "Where ambiguity persists in the language of a parties' shared agreement concerning a copyright transfer, the transfer is not invalidated; instead, we look to parol evidence to construe the terms of the agreement." SCO, 2009 WL 2581735, at *9.

Instead, the cases Novell cites address particular circumstances involving a combination of elements not at issue here namely, scenarios in which there is no signed writing at all, or in which the writing at issue says nothing about copyrights and the parties do not attempt to cite any extrinsic evidence of the parties' intent outside of the writing or writings at issue. As the Panel observed:

the majority of cases that Novell draws our attention to, in which alleged copyright transfers are found not to satisfy Section 204, involve transactions where it is not clear whether the parties intended that copyrights would transfer at all not disputes over which specific copyrights were within the scope of an intended transfer.

10

Id. In fact, several of the cases Novell cites set forth standards that directly support the Panel's decision.4 Even the principal cases on which Novell relies do not, on close inspection, support Novell's position.5

11

None of Novell's cases addresses a detailed written agreement that transfers all ownership rights; identifies the copyrights at issue in the written document itself; contains numerous material terms setting forth the types of rights that copyrights comprise; and therefore reflects, on its face, the parties'

12

negotiations and bargaining over the subject of copyrights. Just as importantly, none of the decisions holds that the court cannot consider extrinsic evidence in assessing whether the writing at issue satisfies Section 204(a), and several of those decisions in fact do consider whether such evidence exists in their analyses. The precedent is not at all inconsistent with the Panel's core reasoning that where a detailed contract clearly contemplates the transfer of a discrete set of copyrights, a jury is entitled to consider the extrinsic evidence of the parties' intent to transfer some or all of the copyrights.

II. THE PANEL'S DECISION DOES NOT UNDERMINE
THE POLICY OF THE COPYRIGHT ACT.

Novell argues that the decision conflicts with the policy of Section 204(a). Novell's argument fails for several reasons.

First, the plain language and legislative history of Section 204(a) no more require that the instrument meet some heightened standard of specificity in referring to "copyrights" than they require that the parties use the word "copyrights" in the first place that is, there is no such requirement at all.

Second, as the Panel's decision points out, ambiguities in instruments of transfer obviously are common: Written memorializations of copyright ownership, like written memorializations of all manner of private agreements, inevitably are subject to more than one interpretation. SCO, 2009 WL 2581735, at *8-9. Yet Novell proposes a standard under which a reasonable dispute between parties

13

regarding their intent to transfer particular copyrights or even, as the Panel points out, a dispute that one party in effect manufactures by pointing out any ambiguity in the writing at issue could not be resolved like any other contract dispute, but instead would result in invalidating the transfer altogether. Id. at *9. Neither the language nor the legislative history of Section 204(a), as the Panel correctly reasoned, supports "such an onerous restraint on the alienability of copyrights." Id.

Third, it is Novell's position that would undermine the purposes of the Copyright Act. If a detailed Asset Purchase Agreement, memorializing the sale of a software business, is not a sufficient writing to convey copyrights, there would be greater uncertainty as to how far parties must go to comply with Section 204(a). Where the parties to an agreement indisputably intended to transfer copyrights as part of numerous other ownership rights, and where all of the copyrights at issue are identified in the agreement, the policy and goals of Section 204(a) are fully satisfied. Ordering a trial on these issues of intent hardly creates an issue of "exceptional importance."

III. THE PANEL'S DECISION PROPERLY REJECTS NOVELL'S
RELIANCE ON THE BILL OF SALE.

As the Panel determined, Novell's argument that the parties needed to execute a second bill of sale in connection with Amendment No. 2 misapprehends both the facts of the transaction and the requirements of Section 204(a) for two reasons. First, by its own terms, Amendment No. 2 amends the schedules of assets

14

being transferred to Santa Cruz, and there is no requirement that another bill of sale needed to have been executed at the same time as the amendment.

Second, the Panel correctly found that even if there had been no bill of sale, Section 204(a) requires only a "note or memorandum of transfer" a standard that Amendment No. 2 itself (and the amended APA) easily satisfies by "evincing a clear intent to revise or clarify the formal schedule of copyrights transferred by Novell to Santa Cruz."6 Id. This unremarkable holding does not approach the standards for rehearing or rehearing en banc.

CONCLUSION

SCO respectfully submits, for the foregoing reasons, that the Court deny Novell's motion for rehearing and rehearing en banc.

15

Respectfully submitted on this 1st day of October, 2009.

/s/ Edward Normand
David Boies
Robert Silver
Edward Normand
BOIES, SCHILLER & FLEXNER LLP
[address, phone]

Stuart Singer
BOIES, SCHILLER & FLEXNER LLP
[address, phone]

Brent O. Hatch (5715)
HATCH, JAMES & DODGE,PC
[address, phone]

Devan V. Padmanabhan
DORSEY & WHITNEY LLP

Attorneys for Plaintiff-Appellant, The SCO Group, Inc., by and through Edward N. Cahn as Chapter 11 Trustee

16

CERTIFICATE OF SERVICE

I, Edward Normand, hereby certify that on this 1st day of October, 2009, a true and correct copy of the foregoing RESPONSE OF APPELLANT, THE SCO GROUP, INC., TO PETITION FOR REHEARING AND REHEARING EN BANC OF APPELLEE, NOVELL, INC. was filed with the court and served via electronic mail to the following recipients:

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

Michael A. Jacobs
George C. Harris
David E. Melaugh
MORRISON & FOERSTER
[address]

Counsel for Defendant-Appellee Novell, Inc.

/s/Edward Normand
Edward Normand
Boies, Schiller & Flexner LLP
[address, phone, fax, email]

17

CERTIFICATE OF DIGITAL SUBMISSION

The undersigned certifies with respect to this filing that no privacy redactions were necessary. This RESPONSE OF APPELLANT, THE SCO GROUP, INC., IN OPPOSITION TO PETITION FOR REHEARING AND REHEARING EN BANC OF APPELLEE, NOVELL, INC. submitted in digital form is an exact copy of the written document filed with the Clerk. The digital submission has been scanned for viruses with the most recent version of a commercial virus scanning program (using Symantec Antivirus which is updated weekly) and, according to the program, is free of viruses.

Dated: October 1, 2009

/s/ Edward Normand
Edward Normand
Boies, Schiller & Flexner LLP
[address, phone, fax, email]


1 Although Novell styles its motion as one for rehearing or rehearing en banc, Novell asserts no grounds for rehearing by the Panel, and indeed makes no argument for such rehearing. Novell does not identify any issue as to which the Panel "overlooked or misapprehended" the facts or any controlling law. Fed. R. App. P. 40(a).

2 See ITOFCA, Inc. v. MegaTrans Logistics, Inc., 322 F.3d 928, 931 (7th Cir. 2003) (written intent to transfer "all assets" can indicate intent to transfer copyrights); Chugrue v. Cont'l Airlines, Inc., 977 F. Supp. 280, 284-85 (S.D.N.Y. 1997) (written agreement to transfer "all right, title and interest" in software indicated intent to transfer copyrights); Relational Design & Tech., Inc. v. Brock, No. 91-2452-EEO, 1993 WL 191323 at *6 (D. Kan. May 25, 1993) (transfer of "all rights" in software program included copyright).

3 See, e.g., Liu v. Price Waterhouse, 302 F.3d 749, 755 (7th Cir. 2002); Schiller v. Schmidt, Inc., 969 F.2d 410, 413 (7th Cir. 1992); Spectrum Creations, L.P. v. Carolyn Kinder Int'l, LLC, No. SA-05-CV-750-XR, 2008 WL 416264, at *85 (W.D. Tex. Feb. 13, 2008); Rico Records Distribs., Inc. v. Ithier, No. 04 Civ. 9782 (JSR), 2006 WL 846488, at *1 (S.D.N.Y. Mar. 30, 2006); Dick Corp. v. SNC-Lavalin Constructors, Inc., No. 04 C 1043, 2004 WL 2967556, at *5 n.5 (N.D. Ill. Nov. 24, 2004).

4 In Radio Television Espanola S.A. v. New World Entm't, Ltd., 183 F.3d 922 (9th Cir. 1999), for example, the court expressly contemplates that where the "facts" surrounding the negotiation of the document at issue are "compelling," the writing at issue need not be clear on its face. Id. at 928. Similarly, in Morgan v. Hawthorne Homes, Inc., Civil Action No. 04-1809, 2009 U.S. Dist. LEXIS 31456 (W.D. Pa. Apr. 14, 2009), the court acknowledges with approval: "When interpreting facially ambiguous documents, some courts have looked to the surrounding circumstances to clarify the intent of the parties." Id. at *47-48.

5 In Lyrick Studios, Inc. v. Big Ideas Prods., Inc., 420 F.3d 388 (5th Cir. 2005), the court did not even consider whether there was sufficient reference to "copyrights" in the writings at issue to satisfy Section 204(a), because the plaintiff in that case contended that it had received copyright ownership only through the grant of an exclusive license. Id. at 391. The court thus did not determine whether a signed agreement transferring assets referred to copyrights with "reasonable certainty," but rather concluded only that the parties had never entered into an exclusive license, where they had never entered into any contract in the first place. Id. at 393-96.

Konigsberg Int'l, Inc. v. Rice, 16 F.3d 355 (9th Cir. 1994), is also easily distinguished. There, the court addressed whether a letter sent over three years after the parties entered into an oral agreement satisfied Section 204(a). The court held that it did not suffice because (a) "it was not substantially contemporaneous with the oral agreement"; (b) it was not "a product of the parties' negotiations"; (c) it was written "a year and a half after the alleged term [of the agreement] would have expired"; and (d) it was written "6 months into a contentious lawsuit." Id. at 357. In short, the letter "came far too late to provide any reference point for the parties' license disputes." Id.

In Pamfiloff v. Giant Records, Inc., 794 F. Supp. 933 (N.D. Cal. 1992), as in Konigsberg, the court addressed whether certain documents created after the parties entered into the alleged oral agreement satisfied Section 204(a), with respect to certain publishing rights claimed by the plaintiff. The first document at issue was a recording agreement that "makes no mention of any transfer of ownership rights," or even publishing rights; the second document "was never signed by any party and contains no date," and also made no reference to publishing rights. Id. at 935-36. Neither document made any reference to the "rights to reproduce, perform, distribute, market, promote, or otherwise exploit the compositions" that publishing rights comprise. Id. at 936.

Foraste v. Brown Univ., 290 F. Supp. 2d 234 (D.R.I. 2003), concerned whether certain Brown University's "Policies and Procedures Relating to Copyright" satisfied Section 204(a) with respect to certain photographs that plaintiff took while employed by Brown. The court said no, reasoning that the policies and procedures contained "no material terms specific to the contested photographs," and emphasized that the plaintiff "himself acknowledges that he did not even contemplate ownership of the photographs" until well after Brown adopted the policies and procedures, that "there is no evidence of a negotiation or 'meeting of the minds'" between the parties "regarding the contested photographs," and that there "is no indication" that the plaintiff "ever bargained for the copyrights he now seeks." Id. at 239-40. In addition, the court in Foraste specifically considered whether there was extrinsic evidence of the adoption of the policies and procedures, the parties' interpretation of them, and the parties' performance thereunder.

In Am. Plastic Equip., Inc. v. Toytrackerz, LLC, Civil Action No. 07-2253-DJW, 2009 U.S. Dist. LEXIS 27787 (D. Kan. Mar. 31, 2009), the court held that plaintiff failed to demonstrate chain of title between itself and Marx Toys, Inc., where there was "no written document memorializing that assignment in the record," but rather only a declaration from an officer of Marx Toys that he had assigned copyrights to plaintiffs in his official capacity. Id. at *18. In short, there was no written agreement before the court at all; it decided only that a unilateral declaration of the officer of a company cannot itself satisfy Section 204(a).

6 The Panel correctly rejected Novell and the District Court's position that the reference in Amendment 2 to having been executed as of a given date meant that the Amendment did not have retroactive effect. Clearly, an amendment to the schedules of assets being sold is intended to relate to the transfer of those assets at the closing and under the Bill of Sale. The reference in Amendment 2 to transfer of copyrights owned by Novell "as of the date of the Agreement," i.e, the APA, confirms that.

18


  


SCO Files Its Response to Novell's Petition for Rehearing En Banc | 227 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCO Files Its Response to Novell's Petition for Rehearing En Banc
Authored by: jbeadle on Thursday, October 01 2009 @ 09:38 PM EDT
Thanks for your quick action in getting this posted, PJ!!

-jb

.

[ Reply to This | # ]

The corrections thread
Authored by: jesse on Thursday, October 01 2009 @ 09:41 PM EDT
Corrections here please

[ Reply to This | # ]

  • Heh... - Authored by: jbeadle on Thursday, October 01 2009 @ 09:43 PM EDT
    • Heh... - Authored by: Sunny Penguin on Friday, October 02 2009 @ 05:28 PM EDT
      • Heh... - Authored by: Anonymous on Friday, October 02 2009 @ 05:42 PM EDT
Off Topic posts here, please...
Authored by: jbeadle on Thursday, October 01 2009 @ 09:41 PM EDT

... and if you reference links, please make them clicky, and post in html mode,
as shown in the "Post a Comment" page.

Thanks,
-jb

[ Reply to This | # ]

News picks
Authored by: jesse on Thursday, October 01 2009 @ 09:43 PM EDT
News pick comments

[ Reply to This | # ]

Excuse me ...
Authored by: Anonymous on Thursday, October 01 2009 @ 09:53 PM EDT
This Amendment thus brought the APA into conformity with the intent of the parties Ė as reflected in testimony from both Novell and Santa Cruz executives Ė that the copyrights were intended to transfer.
This statement is provably false, is it not? Some people may have claimed that the copyrights were intended to transfer, but others did not. Why is stuff like this not perjury?

[ Reply to This | # ]

OCRed and emailed to PJ n/t
Authored by: SirHumphrey on Thursday, October 01 2009 @ 10:03 PM EDT

[ Reply to This | # ]

Electronic filing, and malware
Authored by: tiger99 on Thursday, October 01 2009 @ 10:11 PM EDT
Look at the end of the pdf:
The digital submission has been scanned for viruses with the most recent version of a commercial virus scanning program (using Symantec Antivirus which is updated weekly) and, according to the program, is free of viruses.
Utterly inadequate. Any credible anti-virus product will update itself a number of times each day.and there is still a window for day zero viruses. Weekly updates are utterly useless.

Says a lot about BSF, I think.....

[ Reply to This | # ]

Disingenious
Authored by: Anonymous on Thursday, October 01 2009 @ 10:13 PM EDT
I think that the word that best encompasses this En Banc defense is
'disingenious'.

The weight of authority on this side is much less and it is VERY dwimmer crafty
with respect to its wording. Making very FINE differential assertions about
this opinion not being in conflict with this court or the supreme court... but
not addressing that the decision is in conflict with other circuits, etc.

I think it a very interesting issue. I wonder if the appeals court judges will
feel the same.

---
Clocks
"Ita erat quando hic adveni."

[ Reply to This | # ]

By and through
Authored by: mattflaschen on Thursday, October 01 2009 @ 10:20 PM EDT
The title page says, "by and through Edward N. Cahn as Chapter 11
Trustee". Does this mean he personally approved this, or is it just a
formality. My guess is he's still just reviewing things before getting
involved.

[ Reply to This | # ]

SCO Files Its Response to Novell's Petition for Rehearing En Banc
Authored by: Anonymous on Thursday, October 01 2009 @ 10:27 PM EDT
Do they get an ABA on this or are the two arguments (Novell's and TSCOG's) all
they get?

Tufty

[ Reply to This | # ]

Facts, law, table
Authored by: Anonymous on Friday, October 02 2009 @ 12:14 AM EDT
IANAL, but they seem to be misstating some facts and playing loose with the law.
Is SCO claiming that they got the copyrights to code that Novell was unlikely to
possess? I may see ambiguity in the contract and APA. But I don't see an
interpretation of the APA that would give copyrights to SCO for the UNIX source
that they need to proceed. I am not sure if they have even identified what
copyrights got transferred other than those that Novell has already
acknowledged. Is there even an issue for which relief can be sought? The keep
5% for your trouble give us 95% screams to me that Novell retain whatever
copyrights that they had to the UNIX source.

[ Reply to This | # ]

SCO Files Its Response to Novell's Petition for Rehearing En Banc
Authored by: Steve Martin on Friday, October 02 2009 @ 12:55 AM EDT

"Where the parties to an agreement indisputably intended to transfer copyrights as part of numerous other ownership rights, and where all of the copyrights at issue are identified in the agreement, the policy and goals of Section 204(a) are fully satisfied."
Wait, wait! Exactly where "in the agreement" are the transferred copyrights "identified"?? The specific copyrights transferred are not identified anywhere! The only mention of which copyrights are even discussed is the phrase "copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies" from Amendment 2.

So which copyrights are transferred? And for that matter, were those copyrights registered by The SCO Group prior to launching this litigation?

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

[ Reply to This | # ]

SCO has brought Cahn onboard.
Authored by: Anonymous on Friday, October 02 2009 @ 01:49 AM EDT

We know that Darl & cronies are smooth talkers (heck, Darl talked himself into a millionaire-class top job without having any accomplishments on his resume).

Looks like they've convinced Cahn that they have a case. So much for our hopes of a swift end to this charade.

[ Reply to This | # ]

Meet the new boss
Authored by: billyskank on Friday, October 02 2009 @ 02:25 AM EDT
same as the old boss. :(

---
It's not the software that's free; it's you.

[ Reply to This | # ]

It makes some sense to me that he would do this.
Authored by: darkonc on Friday, October 02 2009 @ 02:39 AM EDT
He has a history as a litigator. His job is to take care of the needs of the creditors, and that means getting (or saving) as much of the money as possible.

The only way for SCO to get anything out of this whole mess is to win something in court. This part of the process was already running, and I think he realizes that if he doesn't get a win here, SCO is worth less than a torpedoed torpedo boat.

Yes, this argument is ugly and stupid, but it's (somehow) gotten SCO this far .. and he clearly can't think of anything better (or, should I say, less ugly and stupid). The response to this will also give him an idea of just how steep a hill he has to climb to get SCO to 'the other side of the hill'.

In all honesty, I don't think he would be able to look himself in the mirror if he didn't try this -- even if he was shaking his head as he was writing it.

That having been said, I doubt that he would ever suggest to a client that they start on such a kamikaze course as this.

---
Powerful, committed communication. Touching the jewel within each person and bringing it to life..

[ Reply to This | # ]

An amazing document- SCOG must think the judges are STOOOOPID
Authored by: Anonymous on Friday, October 02 2009 @ 03:01 AM EDT
I went to my Ferrari dealer, intending to buy a Ferrari.

The Ferrari dealer negotiated with me, intending to sell me the Ferrari.

Turned out I could not afford it. So he sold me the Ferrari, but included an
"excluded assets" clause that left out the car itself.

[ Reply to This | # ]

SCO Files Its Response to Novell's Petition for Rehearing En Banc
Authored by: AMackenzie on Friday, October 02 2009 @ 03:57 AM EDT
Don't you mean "more money"? ;-)

Novell certainly got a LOT of "extra consideration" to do as a result
of this bone-headed amendment.

[ Reply to This | # ]

Plus ca change, plus c'est le meme chose ..
Authored by: Anonymous on Friday, October 02 2009 @ 04:29 AM EDT
I think we now have our definitive answer as to how Cahn intends to play this ..
same as before, Last minute filings and fantasy-land legal positions.

Looks like we could have a few more months/years of this to enjoy :)



[ Reply to This | # ]

Get over it.
Authored by: Anonymous on Friday, October 02 2009 @ 08:23 AM EDT
Everyone who is trying to blame the trustee for this brief, is being ridiculous.
His job is to find every bit of money he can for the estate. Three appellate
judges thought SCO had enough of a claim that it should be sent to a jury,
instead of being decided as a matter of law. What else do you expect him to do?

To blame that on the trustee is foolish. It is not his fault. His job has
nothing to do with protecting the open source community from SCO. He is just
doing his job in letting Boise, et al, respond to Novel's request to the
appellate court. I am not saying I like that he allowed them to file this
ridiculous brief, just this I understand that he didn't have much choice, given
his position.

If you really need to blame someone, how about the judges that went totally
against standing law in, not just their own circuit, but all the other circuits
too? Seems to me they have more to do with this situation than the trustee.

[ Reply to This | # ]

SCO Files Its Response to Novell's Petition for Rehearing En Banc
Authored by: Anonymous on Friday, October 02 2009 @ 09:10 AM EDT
So?

[ Reply to This | # ]

SCO Files Its Response to Novell's Petition for Rehearing En Banc
Authored by: sschlimgen on Friday, October 02 2009 @ 10:09 AM EDT
I'm not as disappointed by seeing the Trustee's name on this motion as PJ
apparently is. In my opinion, he was highly constrained by having to work within
the parameters of what SCO has previously filed, and pressured for time as well.
After all, what were the Trustee's options for the reply, really?

1. "Your appellate court honors, everything that SCO has filed in this case
is a pile of highly polished, gilded horse droppings, and I cannot support it. I
guess Novell wins."

2. "Your appellate court honors, there is sufficient gold in the gilding of
this pile of horse droppings to form a nugget of legal truth, and here it is,
and Novell should lose."

At least in this filing, I see more and better references to case law, so
apparently he managed to kick BS&F into actually _doing_ some research
rather than simply smoking the good stuff and throwing darts at boilerplate
tacked up on the conference room walls.

I'll withhold judgement on the Trustee until he files something more that is
verifiably on his own initiative. The motion to hold payments was good, IMO, but
I'm waiting to see his report to the BK judge about the whole of SCO's
litigation dreams.

Steve

---
Meandering through life like a drunk on a unicycle.

[ Reply to This | # ]

Question about Novell's voluntary dismissal of claims...
Authored by: Anonymous on Friday, October 02 2009 @ 02:39 PM EDT
In item number 388 (from the Novell timeline), there's this gem:
In the wake of the Courtís August 10 Memorandum Decision and Order, the parties have met and conferred and have considerably narrowed the issues for trial. The parties have agreed that Novell shall dismiss its First, Second, and Fifth Claims, as well as any claim for punitive damages, subject only to a right to renew such claims should there be any subsequent adjudication or trial in this action or any enlargement of the issues for trial beyond that contemplated by the August 17, 2007 Joint Statement. Novell has sought SCOís consent to also dismiss Novellís Third Claim, for breach of contract, under the same terms. SCO will not consent, necessitating this motion seeking leave to dismiss the claim pursuant to Federal Rule of Civil Procedure 41(a)(2). Voluntary dismissal is appropriate here. The Courtís August 10 Order has given Novell the bulk of the relief Novell sought under this Claim, interpreting the APA in most respects in the fashion advocated by Novell. What remains of the Third Claim is essentially duplicative of the remaining claims, and seeks the same equitable relief as those claims. Dismissing the Third Claim will further streamline this matter.

Will any of this come into play if the fun and games get returned for a jury trial? That is, can Novell, having to go before a jury, now return to asking for punitive damages?

[ Reply to This | # ]

From my perspective
Authored by: Anonymous on Friday, October 02 2009 @ 06:48 PM EDT
Is it just me or does SCO lawyers sound like they are wining like little kids.
The tone sounds like this is there last hope. Are they screaming at the top of
there lungs just to be heard?
I think I hear the fat lady warming up.

[ Reply to This | # ]

Do Actions Speak Louder Than Words?
Authored by: sproggit on Saturday, October 03 2009 @ 07:36 AM EDT
Several times over we have seen commentary to suggest that in the period
immediately prior to SCO filing suit against IBM, SCO approached Novell and
attempted to obtain copyrights. This included approaches by Mr McBride himself.

Apologies if we've examined this point in detail before, but precisely what
evidence do we see on the record that these attempts actually took place? Are
there telephone logs? Were there letters, emails or faxes? Has any part of this
supposed discussion been memorialised in a form that would stand up to legal
scrutiny?

If so, this seems to suggest to me that SCO themselves wanted to be certain that
they had all their bases covered, and weren't entirely convinced of that fact.

I have been surprised by the fact that this came out in statements made by
Novell, but then doesn't seem to have been substantiated in any sort of
vigourous way. I would love to have seen Darl on the stand to give an
explanation of why he thought he needed to obtain copyright transfer from Novell
if he also thought he already had them...

[ Reply to This | # ]

Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )