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Week 2, Day 7 of SCO v. Novell Trial - More McBride and Botosan Opens a Door - Updated
Tuesday, March 16 2010 @ 08:20 PM EDT

Chris Brown was in the courtroom for us today. It was all Darl McBride today, and there also was some sparring over SCO expert, Christine Botosan, he reports. It looks like the jury will be hearing about Judge Dale Kimball's ruling after all, because Novell intends to ask her about what happened to the stock when he issued his rulings.

And there will be more Darl tomorrow. Also Novell has filed its opposition to SCO introducing IBM materials, as they asked to yesterday.

Here's the filing:

03/16/2010 - 802 - NOTICE OF FILING of Opposition to SCO's Letter to the Court of March 15, 2010, Regarding Admission of Deposition Testimony from the IBM Case filed by Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 03/16/2010)

Here's the opening:
By letter dated March 15, 2010 (“Letter”), SCO requested that the Court allow SCO to introduce at trial in this case deposition testimony that was given by SCO witnesses in another case. Because Novell was not a party to the other case and was not represented at the depositions, SCO’s request should be denied.
Here is Part 1 of Chris Brown's report, with more to follow:
Part 1 - The "Botosan" Issues

The entire day was used to (nearly) finish the testimony of Darl McBride on direct by Mr. Singer and cross-examination by Novell's Mr. Eric Acker. SCO expects perhaps a "few more minutes" to complete redirect then perhaps a half hour for Novell's "re-cross." This will occur tomorrow morning.

As yesterday, Mr. McBride looked well-prepared and directed many of his answers to Mr. Singer's questions directly to the jury. Answers to Mr. Acker's questions were directed to Mr. Acker.

Before court began, it was heard that Novell had some issues regarding SCO's witness, Christine Botosan, they wished to discuss with the judge. The court clerk asked if they wished the judge to be alerted and start early to hear it. Novell indicated they did and Judge Stewart opened court at 08:25.

Novell's Sterling Brennan told Judge Stewart that an issue has come up and Novell, not wanting there to be any evidentiary surprises, wanted to tell the judge about it. He said SCO will be calling Dr. Botosan to testify. Her analysis runs through 2007. He discusses various events in the case and SCO's history that had an impact on SCO's stock history. He specifically mentions various individual rulings by Judge Kimball and the market reaction to them. Mr. Brennan opined that if SCO presents her testimony, SCO will be opening the door to be cross-examined on these events.

SCO's Mr. Hatch said that this is the first time they've heard this. He said the only period that Ms. Botosan will be testifying about is 2003.

Mr. Brennan asked, Why cut off her causation analysis at the end of 2003? There were significant events on January 20, 2004 when this suit was filed. Judge Kimball's 2004 ruling had a significant effect on the market.

Judge Stewart said he believes that it is within the realm of Novell's cross-examination and will allow it. If this leads to mention of Judge Kimball's ruling he will be required to indicate to the jury that the ruling was overturned.

Pretty short "Part 1". Part 2 will cover the remainder of Darl's direct examination by Mr. Singer.

Here's a chart showing the ups and downs of the SCO stock from 2002 to today, and I think you'll have to agree that 2007 made a huge impact in the down direction. But what I see also is that the stock in 2003 overall continued to go up until a high in 2004. Here's SCO's opposition [PDF] to Novell's Motion for Daubert Hearing [PDF] on Botosan. If you read it, you'll see that SCO said she'd forecast lost revenue for 2004 and 2005, based on another study by Deutsche Bank. So, I'm surprised SCO is claiming she was going to stick to 2003 in her testimony. And I wonder how glad they are now they prevailed on that motion?

While we await part 2, here's the coverage from the Salt Lake Tribune's Tom Harvey. Funniest part:

Seeing declining revenues and a chance to license Linux, Acker also asked McBride if SCO had decided to alter its business.

"So you changed the business from a software company to a litigation company?" the attorney asked.

"That's not true," McBride replied.

Hmm. Let's define our terms, I would have asked him. "When you say the word 'true', what do you mean by that?" Hahahaha.

And here's Chris's Part 2 Report:

Part 2 - Direct Examination of Darl McBride by Stuart Singer, cont'd

In a number of cases on exhibits Mr. McBride is asked to read sections of exhibits aloud. Generally I only wrote down enough information sufficient that we might be able to identify the document later rather than trying to transcribe his reading of the passages. I apologize for any inconvenience.

Darl McBride took the stand and then the jury was brought back in.

SCO's Stuart Singer showed SCO exhibit 1, Amendment 2 to the APA, and asked: Yesterday you stated you found some comfort in reading Amendment 2?

McBride: Yes, this effectively replaced the language in the APA saying we had received the copyrights to Unix and Unixware.

Q: Are you still CEO?

McBride: No.

Q: When did you lose your job?

McBride: Last year.

Q: Do you own any shares?

McBride: Yes, 26,000 shares and significant options.

Q: When you were brought on board what products did SCO have?

McBride: They were Unix and OpenServer. They were also trying to dabble in selling Linux.

(In several points later, I believe Darl uses the phrase 'SCO Unix' in situations where both SCO OpenServer and Unixware are being referred to.)

How were SCO's Unix products used? Darl describes various customer usages such as how when people place their orders at about 10,000 McDonald's stores it goes through a SCO server, that the green screen you can see behind the counter with the orders on it is SCO's; that an F-16 aircraft cannot launch without getting a key from a SCO Unix server, etc.

Mr. Singer asks, What was SCO's financial shape in 2002?

McBride: Bad shape. I was brought in to turn it around. Revenue had dropped significantly.

Q: Was money spent on research and development?

McBride: Yes, tens of millions of dollars spent on R&D.

Mr. Singer introduces exhibit Y10, a letter from Darl to Caldera shareholders in August 2002. He described it as an optimistic letter describing what he's found in his two months there and provides a roadmap for SCO.

Mr. Singer highlighted the bullet points and Darl explained them. Bullet 1) Ownership of Unix rights. Mr. Singer asked, Was ownership of Unix copyrights important to SCO's business? Yes, they are required to enforce or protect their rights. It's like the Beatles trying to protect their music. They can't do it without the copyrights.

Bullet 3) is the resellers. He mentions an example of a local Utah small business, Wasatch Marine, who developed their business system running on SCO Unix. He said SCO's 300 people cannot focus on supporting every little small business with their needs, that this is where a local vendor comes in. He said that SCO has value in their extensive reseller channels.

Bullet 4) The company has a market capitalization of $10 million where their competitors, like Red Hat and others, have market caps of $100 million or more. He said that the company has no debt, and has loss quarter by quarter, though no debt, that it's an opportunity for investors.

Mr. Singer asks what percent market share did SCO have? About 43% of the market uses Unix from us (he also mentioned an 85% market share, but I missed the definition what what that market was). And sales was dropping? Yes, sales was dropping precipitously. Why? Primarily due to competition from Linux. Before this Linux was a hobbyist, garage band, operating system. Then there was a transition where Linux was being adopted by big business. Later we found that IBM had taken large amounts of our code and placed it in Linux.

How did you learn this? In 2002 when I took over, I talked to a lot of people in the company. Among those I spoke to was John Terpstra, the Linux evangelist for the company. He told me in his one-on-one interview that there was code in Linux that was being misused, but that it's an opportunity. He identified specifically the dynamic linker code. So we created a program where we could provide companies a license to use these libraries in Linux.

Mr. Singer shows exhibit Y11, a press release where this program was going to be announced. Mr. Singer asks, But this press release was never sent out? We didn't because two days before, IBM came to us and asked us not to release it and to discuss it. Why?

Novell's Eric Acker objects, hearsay. Sustained.

Mr. Singer presents another press release (missed date) where SCO is announcing the SCOsource division. Mr. McBride states that SCO formed a new group with a charter to license the Unix intellectual property. Mr. McBride reads the first paragraph, "SCO is the owner of Unix intellectual property..." Mr. Singer directs him to the third paragraph and asks who Chris Sontag was. He's [was] the VP over SCOsource division. SCO is making the SCO API binaries available to new customers. Mr. Singer asked something. Mr. McBride, In December 2002 IBM is concerned about the SCOsource division and is in disagreement with the licensing. We decided we were going to go ahead anyway.

Mr. Singer asked further about his conversation with IBM. Mr. McBride says that while he was in New York, IBM's Karen Smith called regarding our press release that had gone out, and I had a breakfast meeting with her. What did she tell you? She told me they're not worried about SCO suing them because SCO never received the copyrights from Novell in 1995. She implied she was in discussions with Novell. When I first put together the plans on this in 2002, I called in my brother Kevin McBride, one of the smartest people I know. He's not an IP lawyer, but he put me in touch with one.

Mr. Acker asks for a sidebar. More noise and discussions. I notice the jury mostly all smiling and chatting amongst each other. During the trial they seem to be paying close attention and no indication that I saw of being bored or inattentive.

Mr. Singer returns from sidebar and asks Mr. McBride, In the fall of 2002 did you look at the APA? Yes. Were you aware at this time of the Amendment 2?

McBride: No.

Q:Did you contact Novell?

McBride: Yes, Greg Jones. I was aware that the APA had a copyright exclusion clause. Greg said their Unix files were in an off-site storage office. (I believe he reported that Mr. Jones was not inclined/too lazy to go look at the files.) Mr. Jones asked that I put together a proposed letter (providing clarification on what copyrights passed to SCO).

Mr. Singer, Did Greg ever say SCO did not own copyrights?

McBride: No.

Q: Did Greg ever say Novell owned copyrights?

McBride: No.

Mr. McBride described how SCO put together a team to examine and found Linux contained material amounts of technology IBM had donated to Linux against the contract rights. SCO put IBM on notice of contract violation. SCO expanded the SCOsource licenses.

Q: Were there two types of SCOsource licenses?

McBride: Yes, the vendor license for selling large companies source code licenses to develop Unix like we had. And there was the Right to Use license for end users of Linux to run Linux to their heart's content.

Mr. Singer shows SCO exhibit 241, May 12, 2003 letter sent by Darl. This was sent to a "lot of different companies?"

McBride: Yes.

Q: Why tell companies about your rights?

McBride: To establish foundation of our rights and put these companies on notice.

Q: Was this important?

McBride: Yes.

Q: Could you tell me about the Linux development process?

McBride: Anyone around the world can contribute code to a pool of code. There is no process to tell if contributed code was free of restrictions. Linux was trying to replicate what SCO did. Many of these contributors worked for companies with access to Unix.

Q: How does this compare?

McBride: Most proprietary software is developed within a company then they go to market with it and stand behind it. And Linux? It's exactly the opposite. The end user gets a license that basically says if you have an issue, it's your problem.

Q: What was the reaction to your letter?

McBride: Some asked why? Some asked how they can become compliant.

Q: And others?

McBride: Hard-core Linux loyalists had a severely negative reaction to this.

Mr. Singer presents SCO exhibit 254, a press release dated May 28, 2003 which describes performance for the quarter ending April 30, 2003. Then exhibit 229 SCO performance end of June 2003, a financial presentation to the SCO Board of Directors on June 26, 2003. Novell's Mr. Acker objects on basis it's hearsay and also that it appears to be two documents, the second document appears to be a draft of something else. But first that it's not an official company document.

Mr. Singer counters that it was created in the normal course of business. After the back part was separated, it was admitted. The bar chart represents both past performance and projected future performance. Mr. McBride confirms that the future performance bars are noted with an F.

(From my vantage it seemed that the past performance bars declined steadily, but the future bars were higher and improved. But remember, exhibits are not "displayed" to those behind the bar, but my view was of the small monitor at the podium. The nearer monitor before Mr. Singer appears to have been adjusted in such a fashion that makes it harder to discern content.)

Mr. McBride reports it as first quarter with SCOsource revenue and forecast for the year. $27.25 million projected for 2003 and $40 million projected for 2004.

Mr. Singer presents SCO exhibit 748. It's a PowerPoint presentation overview of the company that was used by SCO with companies interested in SCOsource. Mr. Acker objects to document as hearsay. Sustained.

Mr. Singer then asks Mr. McBride, Did you create a "code room?"

McBride: Yes.

Q: Could you describe it?

McBride: It had binders containing all our license agreements. It had examples of infringing code. Companies could come in and see example infringing code.

Q: Did you register copyrights?

McBride: Yes.

Mr. Singer introduces exhibit 533. A press release announcing that SCO had registered the copyrights. Mr. Singer asks Mr. McBride to read the first paragraph aloud, he does. He describes the registration as a "jurisdictional prerequisite." He states that SCO will hold harmless companies that take a license. Paragraph 4) Hundreds of ... infringing. Kernel 2.4.x... He reports that Linux now scales to 16 and 32 processors using SMP taken from Unix.

Mr. Singer introduces exhibit 533, a SCO press release dated August 5, 2003 regarding the SCOsource license. First paragraph referenced. Mr. Singer asks, SCO had a right to use license and also had vendor licenses going on at this time?

McBride: Yes.

Q: Did you have discussions with Hewlett Packard?

McBride: Yes.

Mr. Singer shows "Carly Fiorina letter." Mr. McBride says that HP had asked for a letter from SCO, a "comfort" letter, since they had a Unix license, to reassure the market. Letter states that HP has made an admirable effort to comply. Did HP also enter into a release agreement? Yes, a separate discussion of a vendor license for Linux with vice president Joe Beyers. The discussion went very deep, near to conclusion.

Mr. Singer shows exhibit T19. Mr. McBride describes it as a draft agreement put together by HP as a result of the discussions. It includes a covenant not to sue.

Mr. Singer: And HP to make payments to SCO for this agreement?

McBride: Yes, $5 million, plus $5 million every three months for 15 months, totalling $30 million.

Q: And this was proposed by HP?

McBride: Yes, this was proposed by HP.

Q: What happened?

McBride: HP ultimately said they could not complete the transaction as long as Novell was still saying they hold the copyrights.

Mr. Singer presents exhibit T42, described by Mr. McBride as a PowerPoint used to discuss SCOsource with customers. That it was used by salesmen. Mr. Acker objects, asying this is a classic hearsay document. Mr. Singer, This is what was said to customers. Judge Stewart asks if this is part of business record? Yes. Novell asserts hearsay. Judge Stewart states that out of an abundance of caution he's not going to admit it.

Mr. Singer presents exhibit 517, a press release by Novell dated December 22, 2003. It's identified as being on the same day of SCO's earnings announcement, where Novell asserts ownership of Unix.

Mr. Singer presents exhibit 824, SCO's earnings press release also dated December 22, 2003. He asks Mr. McBride to read the first paragraph out loud. "SCO, owner of Unix... announce earnings of..." He asks him to read the 2nd paragraph aloud, SCOsource license revenue. He asks, Were there business opportunities you pursued after this?

McBride: Yes.

Q: Was Google one of these?

McBride: Yes.

Q: Was Google attractive as a licensee?

McBride: Yes, Very.

Q: Did you have a phone conversation with Google where Google expressed interest?

McBride: Yes.

Objection by Mr. Acker. Objection to line of questioning eliciting responses of people who are not here to testify. Mr. Singer requests to approach with cases to support his ability to question. Judge Stewart discusses the prospect briefly then calls a 10-minute break to allow Mr. Singer to put them together. The jury departs.

After the break, but before the jury returns, Novell's Mr. Acker announces that he's learned something. That SCO can use hearsay of customers, and if we don't object we can too. Mr. Singer states that he's found some 3rd and 4th circuit cases to the effect but not 10th circuit. Judge Stewart says they are both wrong and that in his research he found a 10th circuit case to say the witness may say they were going to take a license, and then that they chose not to, but cannot say why. The case is a criminal one, but he believes it applies. There is some brief discussion of citations and decide to go with the 10th circuit case. Mr. Acker then motions to strike Darl's testimony regarding same but Judge Stewart says it's too late. That Mr. Acker didn't object at the time and that it would be hard for the jury to remember what's being stricken (struck?). But to go from this point forward. The jury is brought back in.

Mr. Singer continues questioning, and Darl McBride says that Google was given a discounted price, but Google did not take a license. Mr. Singer asks, Dell? Yes. Satisfactory conclusion? No.

Exhibit 394, an announcement made by Novell of a Linux indemnification program. Mr. McBride says that it competes with SCO's program. What about Novell's terms and conditions? It's available to all Novell customers with a minimum of $50,000 in sales in the year preceeding claim.

McBride: Into 2004, after a very successful year, and 4 to 5 people in the SCOsource sales force, but with Novell's second claim to own Unix it put a severe damper on the program. SCO had to shutter it and lay off the 4 to 5 sales people.

Thus ended Mr. Singer's direct examination.

Part 3 - Cross examination of Darl McBride by Mr. Acker.

Here's SCO's May 14, 2003 press release about stopping Linux distribution. You'll find the text of their March 7, 2003 press release about suing IBM here. Here's the January 22, 2003 press release about SCOsource.

Here's the final part of Chris's report for the day:

Part 3 - Cross-examination of Darl McBride by Novell's Mr. Acker

Mr. Acker had a lot of energy and established a number of facts for Novell quickly at the very beginning. I suspect this was pretty effective with the jury as it was a fresh start following the long morning of Mr. Singer's direct.

Mr. Acker asks Darl McBride, Do you recall your time working at Novell?

McBride: Yes.

Acker: Is it true you were not involved in the APA while at Novell?

McBride: That's true.

Acker: Is it true you were not present at Novell Board of Directors meetings? McBride: True.

Acker: Have you read the Novell Board of Director's meeting minutes?

McBride: Yes.

Acker: And do those Board of Director's meeting minutes say Novell approved a deal where the Unix copyrights were excluded? (question rephrased and re-asked a couple times, then answered reluctantly)

McBride: Yes, based on the minutes.

Acker: Was the first time you read that seven years later?

McBride: Yes.

Acker: Santa Cruz was selling Unix in the market without copyrights?

McBride: Yes, they had their own copyrights.

Mr. Acker asked, You put out a press release saying you owned the patents? Mr. McBride answered, there was a press release that mentioned patents.

Acker: The APA and Amendment 2 do not mention obtaining patents?

McBride: True.

Acker: But you put out a press release claiming ownership of patents?

McBride: I wouldn't put it that way.

Acker: When you took over SCO it was not doing well?

McBride: Yes.

Acker: This is your first time as a CEO of a publicly traded company?

McBride: Yes.

Acker: SCOsource was to save the company?

McBride: I wouldn't say that.

Acker: You were to turn around the company?

McBride: Yes.

Acker: So you changed the business from a software company to a litigation company?

McBride: No, that's not true.

Acker: But you needed a law firm to pursue litigation?

McBride: We had to be willing to sue to protect rights.

Acker: At LinuxWorld 2002, you told the Linux community that you own copyrights?

McBride: Yes. [PJ: They put out this press release saying they owned the patents too.]

Acker: You told them you own patents when you didn't?

McBride: We came to that conclusion over time.

Acker: Did it cause a stir?

McBride: Yes.

Acker: A lot of press coverage?

McBride: It was covered widely. Judge Stewart then asks if Novell will be admitting exhibit I12 and P12? Mr. Acker replies, Yes, we will, and does so. Both are copies of press coverage and are handed to Darl to read. Mr. Singer objects, allowing them if not "used for the truth of the matter." I'm sure Mr. McBride has been directed by counsel to read everything he's handed on cross slowly, carefully, and completely before proceeding. He does so. Quite carefully indeed. Eventually Mr. Acker asks if he's completed reading I12 written by Maureen O'Gara?

McBride: Yes.

Acker: It's someone you know?

McBride: Yes.

Mr. Acker says there was a leak of SCOsource before it was announced wasn't there?

McBride: I'm not aware of that.

Mr. Acker reads first paragraph from her January 2002 article.... "sources say it sounds like a protection racket..." then asks Mr. McBride, Isn't it true that many in the Linux community viewed the SCOsource program as a protection racket?

McBride: I'm not aware of that.

Acker then asks, Isn't it true that many believed this was a protection racket and that SCO would never be able to prove Unix is in Linux?

Eventually Mr. McBride got to "No" but admitted that there are some who hold that opinion.

Mr. Acker asked if Mr. McBride's reputation is on the line?

McBride: Yes.

Acker: Once you went down that path you were committed to it?

McBride: Yes.

Acker: You were selling Linux, in the business, up to May 2003?

McBride: Yes.

Acker: Then you flip flopped?

McBride: I wouldn't say that.

Acker: You stopped selling Linux?

McBride: Yes, we believed it would be disingenuous to keep selling Linux while making statements and selling our SCOsource product.

Acker: SCOsource wasn't a real product was it? It was a license wasn't it?

McBride: Yes.

Acker: You had been reading the APA for months by January 2003?

McBride: Yes.

Acker: Reading the 1.1B exclusion of copyrights?

McBride: Yes.

Acker: And when you read this, it was a problem?

McBride: Yes, it was a head scratcher.

Darl McBride then started to go on about how he read the rest of the APA... Judge Stewart interrupted him and directed him to only answer the questions. That Mr. Singer can bring out more if he wishes.

Acker continues, A reasonable person reading the APA could come to a conclusion... see the exclusion, and conclude copyrights were excluded?

McBride: Yes, you could do that.

Mr. Acker refers to section 4.16A of the APA and asks, this section created an agency relationship for SCO to collect customer royalties?

McBride: Yes, that's true.

Acker: Collect revenues where 95% flows back to Novell?

McBride: Yes.

Acker introduces exhibit D11, Caldera's 10K for the end of 2002. [PJ: I believe that would be this one.] Directs Mr. McBride to 415 near the end of the document. Judge Stewart interjects to request Mr. Acker explain Bates. He states 415 is the last digits of the Bates number at bottom of pages and used for tracking exhibits.

Mr. Acker asks, Is that your electronic signature?

McBride: Yes.

Mr. Acker, while looking toward the jury, asks Mr. McBride, And you are aware that the SEC requires CEO's to affirm under penalty of perjury the truthfulness of the filings? Long delay...

Mr. McBride: Oh, I'm sorry, I thought you were asking the jury.

Mr. Acker: No, they won't let me do that. Mr. McBride affirms he knows the SEC requirement.

Mr. Acker reads from the 10K where Caldera reports they have an agency relationship to collect royalties for Novell. Asks, Is that correct?

McBride: True.

Acker: 95% to Novell and 5% retained by SCO?

McBride: Yes, that's true.

[PJ: Here's the paragraph I believe they are referencing:

Restricted Cash and Royalty Payable to Novell, Inc.

The Company has an arrangement with Novell, Inc. ("Novell") in which it acts as an administrative agent in the collection of royalties for customers who deploy SVRx technology. Under the agency agreement, the Company collects all customer payments and remits 95 percent of the collected funds to Novell and retains 5 percent as an administrative fee. The Company records the 5 percent administrative fee as revenue in its consolidated statements of operations. The accompanying October 31, 2002 and 2001 consolidated balance sheets reflect the amounts collected related to this agency agreement but not yet remitted to Novell of $1,428,000 and $1,894,000, respectively, as restricted cash and royalty payable to Novell. The October 31, 2001 balances were reclassified from cash and equivalents and other royalties payable to conform to the current year presentation.

Mr. Acker asks, After discovering this "problem" with the APA, you called an old colleague at Novell? Greg Jones who had no involvement with the APA?

McBride: Yes, I called other people too, lawyers there first.

Mr. Acker asks, Did you take notes of these conversations?

McBride: No.

Acker: Did you keep records of these conversations?

McBride: No.

Acker: But Mr. Jones did?

McBride: I don't know.

Mr. Acker produces an email from Mr. Greg Jones to someone internal at Novell to be introduced. Some back and forth about whether it can be admitted and Judge Stewart directs Mr. Acker to try to lay some foundation. Mr. Acker asks Darl if the contents are an accurate account of the conversation, and if it's the same email Darl also read during his March 27th, 2007 deposition? Darl reads the email. Very carefully. Then answers, No.

Mr. Acker then pulls up Darl McBride's deposition testimony and calls attention to page 64, lines 4-9. [PJ: I think they mean this document, but pages from that deposition that we don't have publicly available. We have excerpts only; Mr. Acker has the entire deposition.] Mr. Singer stands while searching through paper copy of the deposition and and indicates he's having problems locating the reference. Mr. Acker repeats the reference. Mr. Singer says he's still having problems finding it and asks for assistance. Mr. Acker makes no move to assist. Each is a bit testy in their remarks. Judge Stewart calls a sidebar, and Mr. Singer brings the document with him. White noise. During the sidebar discussion I saw no efforts being made to refer to any documents, just a discussion.

Mr. Acker returns to the podium and continues with, You asked Mr. Jones to find the document?

Mr. McBride answers, Yes.

Acker, He couldn't find it?

McBride: Correct.

Mr. Acker continues, You had the APA with section 1.1B which you believed was a problem?

McBride: Correct.

Acker: You wanted a clarification letter to be executed clarifying what copyrights had been transferred and Novell would not execute it?

McBride: Correct.

Acker: And you have no documents to support that?

McBride: Correct.

Mr. Acker asks, And so the jury can only rely on your testimony and Mr. Jones' testimony?

McBride: Yes, and I wish they could hear him testify.

Acker: And they will.

Eric Acker then produces an email from Mike Anderer to SCO in the fall of 2002 and admits it as C12. He asks Darl to confirm who Mike Anderer is and that he hired him; that he was principally the go-between with Microsoft. He reads where Mr. Anderer opines that Novell transferred to SCO substantially less than what was transferred to Novell and asks Mr. McBride if that is correct?

McBride: Yes.

Mr. Acker continues reading, It excludes copyrights, patents, trademarks, & just about everything else. Asks Mr. McBride, Isn't this what your paid consultant told you?

McBride: Yes.

Mr. Acker refers to exhibit H12 and H14 and asks Darl to confirm this is his letter to Novell's Mr. Messman in 2003 and to over a thousand other companies? [PJ: You can find the entire Novell-SCO correspondence on Novell's website, as PDFs, and as text here on Groklaw.]

Darl reviews the exhibits carefully and hesitantly answers, Yes.

Mr. Acker responds saying, Like Mr. Jacobs, I'll raise my hand if this is a trick question.

Darl responds incredulously, You mean these haven't been the best questions yet?

Acker: Nope, arm not raised. He continues, In this letter you put these companies on notice?

McBride: Yes.

Acker: There was a firestorm of reaction to the letter?

McBride: Yes.

Acker: Lots of press?

McBride: Yes.

Acker: There were many people who didn't like the letter?

Darl answers, There were those who didn't like it.

Mr. Acker then brings up a portion of exhibit O-14, an eWeek article dated May 24, 2003. [PJ: I believe they are discussing this eWeek article, SCO Warns Linux Users of Legal Liability, with Peter Galli's byline.]

Discussions earlier in the day on usage of this exhibit required it to be redacted to remove references to other cases. [PJ: The article mentions Red Hat and SuSE and UnitedLinux. It also mentions the anger in the Linux community, quoting Bruce Perens saying "We will now ... never recommend any products by SCO or Caldera..." And it quotes Gartner's George Weiss: "SCOs lawsuit can be construed as an attempt to raise shareholder value through claims of intellectual-property infringement or to pressure IBM into an acquisition. If the SCO lawsuit is not upheld, the SCO installed base would face a potentially weakened SCO and should then plan for migration from OpenServer and UnixWare within the next five years."]

Mr. Acker reads the 1st paragraph starting with "SCO group on Wednesday raised the stakes..." and asks, You were hearing comments like this following the letter?

McBride: Yes.

Mr. Acker quotes a woman further down the exhibit where a she says their company takes intellectual property seriously, but she's not (doing something). [PJ: It's Leigh Hunt, spokesperson for Red Hat, who was quoted, "We've heard all these allegations and rumours and threats, but we haven't seen any specific code referenced that we are in violation of. We have done extensive work to make sure that we are not in violation, and we take intellectual property very seriously. We remain certain that we are not in violation of anyone's intellectual property."]

Mr. Acker asks, You heard comments like that, didn't you? Yes. Erick Acker then produces exhibit A16, a CNet article. Mr. Singer objects on relevance and also discussed mention of other lawsuits. Overruled. Regarding the report, Mr. Acker asks Darl if a Linux group in Germany obtained an injunction to shut down SCO's German website? Yes.

Mr. Acker reads from exhibit P17 where Bruce Perens states that SCOsource appears to violate the GPL and opens SCO to suits by every programmer with code in the (Linux) kernel. Asks Darl, You were hearing comments like that?

McBride: Correct.

Referring to exhibit X17, a USAToday article from July 30, 2003, Mr. Acker reads, The whole thing is like finding your grandmother's recipe for Bundt Cake... and asks, You heard comments like this?

McBride: Yes, it's the first time I heard of bundt cakes.

Mr. Acker asks further, You heard comments like this from your own people?

McBride: No, not about bundt cake.

Mr. Acker then turns to exhibit A15, a letter from Larry Gasparro dated May 21, 2003. Mr. Acker confirms that Mr. Gasparro works in the SCOsource program?

Darl replies, SCOtech, no, the Libraries program.

Mr. Acker reads, "... until CFOs and CIOs are convinced, they are 'wait and see' until it's proved in court."

Darl confirms it says that.

Mr. Acker asks, And this is a week before Novell says anything regarding Unix ownership?

Darl answers, Correct.

Mr. Acker follows up, Mr. Gasparro is saying the corporate stance is wait and see until it's proven in court... a week before Novell's announcement?

McBride: Yes.

Mr. Acker reads SCO's reported SCOsource earnings from SCO's earnings report of December 22, 2003, then asks, This isn't the first time you told people these numbers? Darl doesn't seem to understand. Mr. Acker then turns to exhibit M14, a May 14, 2003 SCO press release which Mr. Acker states is announcing to the investing public the same numbers of $4 million and estimated revenue of $21 million.[PJ: Here's the transcript of the teleconference, and here's the referenced press release.]

Mr. McBride confirms that.

Mr. Acker then asks, Didn't SCO's stock go up?

Darl says he doesn't know.

Mr. Acker replies that it went up 39 cents. He produces exhibit Q33, a chart of stock prices. Mr. Singer objects and Judge Stewart tells Mr. Acker to lay more foundation before usage. Mr. Acker replies that he'll ask further question on it to lay foundation. He then, referring to the chart, asks Darl if he has any reason to doubt the closing price of (states price, I didn't record it. But I noted that exhibit had not been admitted yet).

Darl replies that he doesn't know.

Mr. Acker then went on to produce the slide of the December 22nd stock values SCO used in its opening, and asks Darl what price it opens at? [PJ: It's not referenced directly, but here is SCO's December 22, 2003 press release on their 4Q earnings and here's the transcript we did of the teleconference.]

McBride: $10.

Acker: The conference call is at 9:00 Central Mountain Time (sic)?

McBride: Yes. Stock drops past $9, just over $8.

Acker: This is before Novell's comment, the stock has already dropped, even after having SCO having made its second announcement of revenue for the 2nd quarter?

McBride: Yes.

Acker then asks, And the stock closed at the end of the day, even after Novell's announcement, higher than it closed after you announced the quarter's earnings the first time?

McBride: Yes. Judge Stewart then asks Mr. Acker how much longer? He replies, A little bit. Judge Stewart asks would this be an appropriate point to take a break? Mr. Acker, Yes.

After the jury leaves, Judge Stewart states that the Court is not pleased with the way Mr. Acker asked a question on the (Q33) exhibit, got what he needed, then moved on. The court asks in the future he (Mr. Acker) have more respect for the court's rulings. Mr. Acker apologized.

Mr. Singer asked the court how much longer Mr. Acker would be, so they can plan witnesses? Mr. Acker responds to the court, about one hour. The court then took a break.

On return, before the jury was called back in, Mr. Singer refers to exhibit I748 saying SCO wishes to bring it in to counter Mr. Acker's news articles. Judge Stewart allows I748 to consist of articles, but not SCO's Powerpoint. Mr. Acker briefly reviews articles and agrees to their use.

The jury is called back in. While they are on their way, a brief discussion was started between Judge Stewart and Mr. Singer relating to timing of witnesses, but it was cut off prematurely by the entrance of the jury.

Mr. Acker then produces exhibits N13 and T13, the Microsoft and Sun agreements. Asks Mr. McBride, Are these the agreements SCO was referring to?

McBride: Yes.

Mr. Acker asks, These are UnixWare licenses?

Darl responds that they are UnixWare in the SCOsource division.

Mr. Acker repeats, UnixWare?

Darl replies, based on Unixware.

Mr. Acker then refers to Darl's phone call with Novell's Jack Messman. Asks confirming timing of call...

McBride: He was flying back from New York, and when he lands he finds he has a voicemail on his cell phone from his secretary. He drives back to his office. No, he doesn't call Messman right away; he talks with people to decide what to do first.

Acker then asks, So, late in the afternoon you call him. You fax him the amendment?

McBride: Yes.

Mr. Acker continues, He says on the phone, "OK, Darl, You have the coyprights?"

Darl answers, Yes.

Mr. Acker asks, This was a big deal?

McBride: Yes.

Acker: Did you take notes?

McBride: No.

Acker: Did you document it?

McBride: No, there were others in the room, didn't think he needed to.

Acker: Did Chris Sontag document it?

McBride: No.

Mr. Acker continues, So within 12 hours of the phone call, you wrote a letter to Mr. Messman, where you reference this phone call? And you don't mention this alleged confession?

Darl pauses to read the letter. Carefully. Eventually Mr. McBride responds that he stated that he was referring to the phone call.

Mr. Acker asks, Did you mention the admission? Mr. Acker had to ask the question several times, each with dissembling responses, but eventually Darl confirms that he hadn't.

Mr. Acker hands him another exhibit, J16, a June 11, 2005 letter from Darl to Jack Messman. He reads paragraph 4 and asks, You referenced the June 5th call?

McBride: Yes.

Mr. Acker asks, Nowhere in this letter do you mention the alleged admission?

McBride: No (additional verbiage in answer)

Mr. Acker highlights where IBM's license is being referred to as an SVRx license and asks, Was IBM's license an SVRx license?

Mr. McBride reads the statement, carefully, then answers Yes.

Mr. Acker then asks, During the period from June 6th to June 11th (?) you were telling the investing public that SCO owned the copyrights?

McBride: Yes.

Mr. Acker then produces exhibit L17, a July 21, 2003 interview with Darl. He refers Darl to the 3rd page and reads where questioner asks "Well Novell would say you don't actually own these copyrights..." Mr. Acker repeats, "Novell will say they don't own those coyprights," Is that correct?

McBride: Yes.

Mr. Acker produces exhibit J19, an email dated August 18th, 2003 containing 18 pages of articles. Refers specifically to page 6, an article dated August 6th, 2003 and page 16, an article dated August 18th, 2003. Mr. Singer objects to introducing entire exhibit. Mr. Acker ordered to redact unnecessary content before it's published to jury. Mr. Acker then quotes Darl (as of August 18th, 2003) saying, "in regard to Novell's recent claim that Novell still owns copyright... It only took four days to hit the eject button on that claim." Mr. Acker asks if that is correct?

McBride: Yes. Mr. Acker refers to exhibit P45, a transcript of SCO's conference call of November 2003. [PJ: Here's our unofficial transcript.]

Mr. Singer objects, admitted just a portion of transcript.

Darl confirms that SCO executives are on the call including Robert Bench. Acker: That the call was to the investing public?

McBride: Yes.

Mr. Acker reads where it's stated that "the copyright issue is resolved, we did a deep dive..." Mr. Acker asks, While these statements were made, you had received a private letter from Mr. LaSala (Novell) indicating copyrights had not been resolved?

Mr. McBride responds, That's not right.

Mr. Acker produces exhibit of letter from Mr. LaSala dated August 4th, 2003. Reads and asks to be confirmed, Copyrights not transferred to Santa Cruz.

McBride: True.

Mr. Acker shows exhibits where Novell was stating no transfer of copyrights. Asks, But in public you were saying the issue was resolved?

McBride: Yes, he was relying on statement by Jack Messman.

Mr. Acker then asks, Then Novell placed all the correspondence, the APA, amendment 1, and amendment 2 on their website?

McBride: Yes.

Mr. Acker asks, And left the question of copyright ownership to the investing public?

McBride: I don't know who they left it to.

Mr. Acker then asked about Mr. McBride calling Chris Stone, an investor, for investment money in a cell phone protector. I didn't get the details of this interchange.

Mr. Acker produces exhibit Q22, SCO's SEC 10K report dated January, 2004.[PJ: I think he means this one.] He reads "We initiated the SCOsource agreements... resulted in $28 million in revenue". He asks, Is this correct?

Darl, Yes.

Mr. Acker then reads the future performance disclaimers in the report. After each statement he asks Darl, Is this accurate? Darl responds, Yes. "...including strength of our claims to Unix...?" Correct?

McBride: True.

Mr. Acker then asks a bunch of quick questions of Darl regarding his financial interest in this case. I may not have the details accurately. Darl confirmed each statement. On becoming CEO Darl was granted 1,000,000 shares of stock options in June 2002 with a strike price of 22 cents. True, True, True. 600,000 shares have vested? Darl doesn't know. Mr. Acker asks, These shares are not counting your additional shares you hold? Correct. That with a strike price of 22 cents, if you were to exercise your options at a stock price of $1.22 you would make $600,000? Correct. At stock price of $2.22 you would make $1.2 million? Correct. If the price were $5.22, you would make millions? Correct. Mr. Acker asks, You have substantial financial interest? Darl replies that he has a significant material interest in the company. Mr. Acker asks if he has a reputational stake? Correct. Asks if he believes Novell has harmed his reputation? Yes. Mr. Acker asks if Darl stands to gain a lot of money? Correct.

That ends Mr. Acker's cross-examination.

Unfortunately with work today, I got a very late start on this report and will be unable to finish my last four pages consisting of Mr. Singer's redirect. I know, it's disappointing, but I've got to get to bed so I can get to the court bright and early tomorrow. It's 11:30pm now (MDT for those who know the correct time zone here, not CMT). I will complete Mr. Singer's redirect report tomorrow along with his completion of redirect. And I should be able to get an earlier start on the report (finger's crossed).

I know I speak for everyone when I say, we are happy to wait for such thorough and detailed reports, and we are very grateful to Chris for attending despite recent illness, and I wish to express my personal thanks for his stick-to-it-iveness. Imagine if all we had was the Salt Lake Tribune. We are not under their space or time constraints, and so Groklaw can take advantage of the limitlessness of the Internet and tell you everything we know, no matter how long it takes or how long it ends up. We are trying for an historical record of the entire SCO saga, and I'd say we're achieving our aim, but it's only because of volunteers like Chris. If you'd like to help, join in, by all means, and attend if you can.

Final Update: Chris's report on the last part of the day:

Part 4 - SCO's Mr. Singer's redirect of Darl McBride

SCO's Mr. Singer, on redirect, asked Mr. McBride if he was laid off during a series of cost-cutting moves?

McBride: Yes.

Singer: Did you learn patents were not included?

McBride: Yes.

Q: Did you file claims based on patents?

McBride: No.

Q: Did you attempt to sell a license which included patents?

McBride: No.

Q: Is there APA language that copyrights are excluded?

McBride: Yes.

Q: Regarding Amendment 2, did it amend this language?

McBride: Yes.

Q: Could a reasonable person reading Amendment 2 believe that Novell had not retained copyrights?

McBride: Yes.

Q: Do you recall exhibit C12, the Mike Anderer letter of Jan 4, 2003?

McBride: Yes.

Q: At this time was SCO aware of Amendment 2?

McBride: No.

Q: Was Mr. Anderer provided a copy of Amendment 2?

McBride: No, not at this time. Later.

Q: When he was sent a copy, what was his response?

McBride: "This is fantastic news!"

Q: You were shown a series of articles of the public's response?

McBride: Yes.

Q: Subsequently, you set up a code room where you presented a response to customers?

McBride: Yes.

Q: And there were articles supportive of your claims after that?

McBride: Yes.

Mr. Singer enters exhibit 748. Quotes Laura DiDio. Quotes Bill Claybrook ("If true, Linux community should be concerned.")

Q: Were there various opinions in the public about your claims?

McBride: Yes.

Mr. Singer refers to the Gasparro email and confirms with Mr. McBride that Gasparro worked at SCO. Brings his attention to the 2nd and 3rd paragraphs where he reports that members of the Linux community had belief there were issues with Intellectual Property for quite some time. Asks, Was this consistent with some of the press articles?

McBride: It was consistent.

Q: SCO chose not to contest claims in Germany. Why?

Darl answers, Because it (SCO) wanted to contest its claims in the US.

Mr. Singer states, You were facing two main types of opposition, copyright ownership and Linux infringing Unix. Which was the most significant to overcome?

McBride: Copyright infringement.

Q: On May 14th, 2003 SCO's stock price closed at $3.55?

McBride: Yes.

Q: And then it went up?

McBride: The price trended up to $9 or $10 mark.

Singer: Is there a difference between projected earnings and actual earnings?

McBride: Yes.

On this next point there were quite a few objections by Novell to Mr. Singer's questioning including no independent recollection and (attempted) parroting of Maureen O'Gara (from an article of hers). Judge Stewart admonished Mr. Singer to not lead the witness. The questioning was intended to elicit testimony that the market already knew early in the day of May 28th that Novell would be making a press release later in the day. The best result that was obtained was that there was "buzz" in the market.

Mr. Singer referred to SCO exhibit 95, Darl McBride's letter to Novell's Jack Messman on June 6, 2003. Asks, You wanted Novell to affirm publicly that Novell does not claim the copyrights (has he had affirmed privately)?

McBride: Yes.

Mr. Singer refers to a the letter of the following day from Novell's Mr. LaSala and asks, After reading the letter did you feel a need to restate in your letter?

McBride: No.

He refers next to the first paragraph of the June 11th Jack Messman letter and notes it reads SVRx. Asks Mr. McBride to turn to the APA section 4.16a and asks if SVRx licensing has a defined meaning?

McBride: Yes.

Q: Does it require you to look to schedule (?) to determine its meaning?

McBride: Yes.

Mr. Singer directs him there to item 6 and asks, Do you see IBM's software development license?

McBride: No.

He then turns to page 3, item 3 of the schedule. Reads the header of item 3 then turns to the next page for item "L". He asks Mr. McBride to read 3L aloud. He does so.

Mr. Singer asks Mr. McBride if the Microsoft and Sun agreements were Vendor or RTU agreements? Vender agreements.

Referencing the series of articles in the summer of 2003, Mr. Singer asks, You thought the copyright ownership issue was resolved?

McBride: Yes.

Q: Did you think Novell was going to make an about-face?

McBride: No.

Mr. Singer also references an exhibit (from the articles) page 16 out of 19, and reads the quote "In regard to Novell's recent claim... press the eject button" and asks, What were you referring to? Mr. McBride answers that it's the finding of Amendment 2, talking to Jack Messman, and Jack saying "You have the copyrights."

Judge Stewart asks Mr. Singer how much more he has, and Mr. Singer responds 2-3 minutes to finish redirect. When asked, Mr. Acker estimates 10 minutes for re-cross. Judge Stewart then calls a recess and the jury is released for the day.

Judge Stewart then addresses Mr. Singer and asks if we are behind schedule. Mr. Singer reports that yes, we are and that he is not in control of duration of cross-examination. They then discussed remaining witnesses and Mr. Singer estimates SCO will be finished with their case by noon on Thursday. Judge Stewart asks, How does that comport with a three-week trial? Novell (Mr. Jacobs?) replies that he thinks it will work just fine. He reports that both sides have been exchanging information on time and believe they are doing OK.

That was the end of Tuesday, March 16th session.

If it's true that SCO never offered patents in a license, why did Microsoft announce that it had licensed copyrights and patents in its SCOsource license? Because it did. Microsoft's statement, as reported by ZDNet UK in August of 2003 went like this:
According to a statement from Microsoft, the company will license SCO's Unix patents and the source code. That code is at the heart of a high-stakes, billion-dollar lawsuit between SCO and IBM, which is aggressively pushing Linux as an alternative to Windows in corporate back shops.

Microsoft's Windows has a monopoly in the market for desktop operating systems, with a market share greater than 90 percent. Linux, which has been developed by thousands of contributors and can be freely obtained, has caught on as a worthy competitor in the market for corporate servers. In the past two years, Microsoft has repeatedly labelled Linux a threat to the Redmond, Washington-based computing giant, partly because of its low cost.

Late on Sunday, Microsoft general counsel Brad Smith said acquiring the licence from SCO "is representative of Microsoft's ongoing commitment to respecting intellectual property and the IT community's healthy exchange of IP through licensing. This helps to ensure IP compliance across Microsoft solutions and supports our efforts around existing products like services for Unix that further Unix interoperability."


  


Week 2, Day 7 of SCO v. Novell Trial - More McBride and Botosan Opens a Door - Updated | 305 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Thanks Chris.
Authored by: Anonymous on Tuesday, March 16 2010 @ 08:30 PM EDT
You are making a tricky job look easy. It really is appreciated.

[ Reply to This | # ]

Corrections here, please...
Authored by: jbeadle on Tuesday, March 16 2010 @ 08:33 PM EDT
Please note the correction in the title line.

Thanks,
-jb

.

[ Reply to This | # ]

Off Topic threads
Authored by: bugstomper on Tuesday, March 16 2010 @ 08:35 PM EDT
Off topic here, preferably with clickable links

[ Reply to This | # ]

News Picks Thread
Authored by: bugstomper on Tuesday, March 16 2010 @ 08:37 PM EDT
All the News that's fit to Pick goes here, with the title in the Title and HTML
in the links.

[ Reply to This | # ]

COMES reports here
Authored by: PolR on Tuesday, March 16 2010 @ 08:37 PM EDT
Thanks to all the Comes volunteers.

[ Reply to This | # ]

The "Darl is out of touch with reality" thread...
Authored by: jbeadle on Tuesday, March 16 2010 @ 08:40 PM EDT
I know there are lots of folks that just *know* it's true (possibley including
me)...

Thanks,
-jb

.

[ Reply to This | # ]

Week 2, Day 7 of SCO v. Novell Trial - More McBride and Botosan Opens a Door
Authored by: Steve Martin on Tuesday, March 16 2010 @ 08:40 PM EDT

"SCO's Mr. Hatch said that this is the first time they've heard this. He said the only period that Ms. Botosan will be testifying about is 2003."

The SCO Group defended Dr. Botosan's methodology (including her methodology extending into 2007) in opposing Novell's Daubert motion. Now, they want the Judge to believe that they are going to dispose of Dr. Botosan's expert report to the extent that it extends past 2003?

As PJ might say, "Puh-leese!"

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

[ Reply to This | # ]

Ruling overruled?
Authored by: PolR on Tuesday, March 16 2010 @ 08:41 PM EDT
If this leads to mention of Judge Kimball's ruling he will be required to indicate to the jury that the ruling was overturned.
Judge Kimball 2004 ruling Novell alluded to was not overturned. Let's hope that Stewart doesn't confuse the many Kimball rulings.

[ Reply to This | # ]

When does Novell get a turn?
Authored by: Anonymous on Tuesday, March 16 2010 @ 09:13 PM EDT
When does Novell get a turn?

[ Reply to This | # ]

Part 1 - The "Botosan" Issues
Authored by: Anonymous on Tuesday, March 16 2010 @ 09:16 PM EDT
The more Novell can imply that her later study results rebut the earlier
results, the more years they bring into the open.

Can they manage to get results for 2007 brought in? If so, that forces the 2007
ruling in too, and the appeal history means that one would have to be explained
in full.

I bet they're going to go through the deposition with a fine-tooth comb again.
And that means that SCO will have to tread even more lightly, for fear of
accidentally pulling in the dreaded rulings.

It should make for interesting cat-and-mouse tomorrow.

[ Reply to This | # ]

SCOG historical stock charts
Authored by: PolR on Tuesday, March 16 2010 @ 09:24 PM EDT
Here is a chart of SCO stocks since 2000, courtesy of Yahoo Finance.

Here is an annotated chart of SCO stocks from March 2003 to March 2004 courtesy of LWN.net.

The annotated chart shows the timing of events line Novell claiming Unix copyrights. Correlation is not causality. Read with a shovel of salt.

[ Reply to This | # ]

Today's SLT Article
Authored by: Anonymous on Tuesday, March 16 2010 @ 09:50 PM EDT
Latest SLT Article.

Improved balance. While still only reporting what actually happened today, and drawing no conclusions, it does at least have a balance of the direct & cross-examination.

Best quote is one of these two:

"So you changed the business from a software company to a litigation company?" the attorney asked.
Eric Acker quizzed McBride on whether SCO had instead shot itself in the foot in its attack on Linux

[ Reply to This | # ]

Interesting footnote in Novell-802
Authored by: caecer on Tuesday, March 16 2010 @ 09:51 PM EDT
"Use of deposition transcripts from another case to impeach a witness
testifying at trial presents a different issue, not (yet) before the
Court." Why would this even be considered an issue? Surely sworn
testimony in another case, even before another court, may be used to attempt
impeachment? Wouldn't any statement sworn on pains of perjury, no matter where
made (provided not under duress)?

[ Reply to This | # ]

McBride: "our code"
Authored by: Steve Martin on Tuesday, March 16 2010 @ 11:29 PM EDT

"Later we found that IBM had taken large amounts of our code and placed it in Linux. "

So now he's back to claiming that the code IBM donated to Linux was "their code" rather than IBM's own code.

I wonder how well that little datum will fly in front of Judge Campbell when IBM points out that (a) The SCO Group has identified no System V code in Linux, and (b) The SCO Group has stated in interrogatory responses that their claims are not about System V, but rather IBM's own code.

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

[ Reply to This | # ]

Objection was timely!
Authored by: Anonymous on Tuesday, March 16 2010 @ 11:39 PM EDT
There is some brief discussion of citations and decide to go with the 10th circuit case. Mr. Acker then motions to strike Darl's testimony regarding same but Judge Stewart says it's too late. That Mr. Acker didn't object at the time and that it would be hard for the jury to remember what's being stricken (struck?). But to go from this point forward.
From the report, the objection was immediate, there was a recess and then the judge ruled. What more could Novell have done?

[ Reply to This | # ]

More questions for Botosan - correcting for macroeconomics
Authored by: Anonymous on Wednesday, March 17 2010 @ 01:33 AM EDT
So she's got these ideas about Novell PR affecting stock price, and projecting revenue...

Has she looked at other companies track records in the same period?

  • 2001 - market crashed for several reasons - Y2K spending was over... businesses stopped investing in IT because they didn't need to.
  • 9/11 caused everybody to stop spending marketing dollars and many people didn't go on planes.
  • so 2002 sucked for everyone, and 2003 wasn't much better.
  • 2004-2007 economy was booming thanks to housing bubble.
  • 2007-2008 SUXOR!!!! like people would spend money on these outrageous licenses. Everybody is laying people off.
Basically just wondering how, if at all, Botosan has corrected for macroeconomics.

I mean, even if everyone decided that IBM had put stuff in Linux illegally, and didn't have the opportunity to mend that fault, there's still no basis to assume such revenue for SCOsource, because people could have moved to a BSD variant. They can't sue BSD. (Again.)

[ Reply to This | # ]

Lock, Stock, and Barrel
Authored by: Anonymous on Wednesday, March 17 2010 @ 02:33 AM EDT
= Majority, no? The APA says they bought The Unix Business (TM)
oh, sorry the trademark was excluded because somebody else already
had dibs on it. Delusions of grandeur emanate from hot air fueled
perpetual motion machines.

[ Reply to This | # ]

Week 2, Day 7 of SCO v. Novell Trial - More McBride and Botosan Opens a Door - Updated
Authored by: Anonymous on Wednesday, March 17 2010 @ 03:46 AM EDT

Why is "slander of title" even on the table? Wasn't the appeal
decision that a much narrower, different issue needed to be the subject of a
jury trial?

[ Reply to This | # ]

I think this confirms Jimbob0i0's great catch.
Authored by: Ian Al on Wednesday, March 17 2010 @ 04:05 AM EDT
Please look here and search for

'Darl admits slander/fraud?'

---
Regards
Ian Al

I sentence you to seven years, or more with good behaviour.

[ Reply to This | # ]

I'm so angry that Darl gets to say that on the stand
Authored by: billyskank on Wednesday, March 17 2010 @ 04:26 AM EDT
"Later we found that IBM had taken large amounts of our code and placed it
in Linux."

So how come the "large amounts" of code boils down to a few hundred
lines, in an ongoing suit over the alleged copying that presumably the jury
isn't allowed to know about?

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

[ Reply to This | # ]

Whatever you do, don't mention the bankruptcy.
Authored by: Ian Al on Wednesday, March 17 2010 @ 04:54 AM EDT
I noticed Singer's question about whether Darl was still CEO and when he lost
his job. Singer was obviously trying to get the jury to consider Darl's
testimony as not biased towards SCOG because they fired him. The jury are not
yet sufficiently aware of Darl's bias against orange jump suits.

Singer will realise that he is skirting the question of bankruptcy rather
closely. He should be careful. I remember one side in the SCOG v IBM trial
blurting out the contents of an email in open court that the court had sealed.
Perhaps he is less informed than I am!

---
Regards
Ian Al

I sentence you to seven years, or more with good behaviour.

[ Reply to This | # ]

SCO Source Press Release (22 Jan. 2003) @ LinuxWorld 2003
Authored by: Steve Martin on Wednesday, March 17 2010 @ 06:43 AM EDT

Gnu (10% - 20%)
GNU code in System V? Where?

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

[ Reply to This | # ]

A couple of questions
Authored by: Anonymous on Wednesday, March 17 2010 @ 06:49 AM EDT

Thanks for the very interesting and detailed report! A couple of questions:

Acker continues, A reasonable person reading the APA could come to a conclusion... see the exclusion, and conclude copyrights were excluded?

McBride: Yes, you could do that.

Was this referring to just the APA or combined APA + Amendment 2? If its referring to both then isn't this exchange another example that shows that Novell couldn't have slandered TSG even if TSG were found to own the code? Also, if Novell put these contract documents on their website then it is possible that other companies being persued by TSG could have read the documents and come to the reasonable conclusion that TSG did not own the copyrights and therefore that they did not need a SCOsource license.

After the jury leaves, Judge Stewart states that the Court is not pleased with the way Mr. Acker asked a question on the (Q33) exhibit, got what he needed, then moved on. The court asks in the future he (Mr. Acker) have more respect for the court's rulings. Mr. Acker apologized.

What was this all about? I don't understand why Acker shouldn't be allowed to ask the questions he wants, get the responses that he was looking for and then move on. That was my understanding of what he should be doing. What have I missed?

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Week 2, Day 7 of SCO v. Novell Trial - Witness Timing
Authored by: Faluzeer on Wednesday, March 17 2010 @ 07:38 AM EDT
Hmmm

Given that SCO appear to be concerned about the amount of witnesses they still
need to call in their allotted time, I wonder if they will try to avoid calling
Lee Johnson (I think that is the name) and thus force Novell to decide to call
him if Novell wants to establish the scope of the collusion.

---
Regards
Faluzeer

[ Reply to This | # ]

Maybe Stewart should make rulings that command respect
Authored by: Anonymous on Wednesday, March 17 2010 @ 07:52 AM EDT

The court asks in the future he (Mr. Acker) have more respect for the court's rulings

Yeah, well, what goes around, comes around. If Stewart wants "respect" he should have showed less bias in some recen t rulings.

Of course, Acker should still obey the court's rulings. Only obedience is required; respect for Stewart is not, I fear, possible.

[ Reply to This | # ]

SLT vs SFT
Authored by: Anonymous on Wednesday, March 17 2010 @ 08:04 AM EDT
First thank you to Chris.
Second PJ you are wrong to give the SLT a break because of space and time
limitations.

I read the SFT's report of the Hans Reiser trial. In that case the detail of
reporting ( albeit on his blog ) was on par with Chris's. If the SFT could do
such a detailed job, there is no reason why the SLT could not have done the
same.

[ Reply to This | # ]

OK, Darl, you have the copyrights
Authored by: Anonymous on Wednesday, March 17 2010 @ 08:11 AM EDT
"Mr. Acker continues, He says on the phone, "OK, Darl, You
have the coyprights?""

In the exchange about this "alleged" remark of Messman's
Acker seems to be implying that Darl is lying. Do we have
any testimony from Messman himself about whether he
made any such statement about the copyrights?

[ Reply to This | # ]

Week 2, Day 7 of SCO v. Novell Trial - More McBride and Botosan Opens a Door - Updated
Authored by: Anonymous on Wednesday, March 17 2010 @ 09:04 AM EDT
The article title has "- Updated" at the end. It had that the first
time that I saw this article. I could not find anywhere within the article that
stated which part was the update as PJ normally does. I was just curious what
the update was?

[ Reply to This | # ]

The Court system may be broken, but
Authored by: ChrixOne on Wednesday, March 17 2010 @ 09:47 AM EDT
this sure is great entertainment.

Does anyone know where there is a picture of Mr. Acker?

I have this image of him looking like Hugo Weaving as "Agent Smith"

"Miisteerr Maac Brriide! So good to see you again."

I also see that the judge isn't as powerful as we think. When he rapped Acker
over the knuckles, he did it outside of the hearing of the jury. If some of his
rulings were known to the jury, I believe it might have the reverse effect. If
the jury begins to believe that the court is showing undue partiality to SCO the
game may really be up.

There is a limit to how hard he can lean on the scales of justice before it
becomes counter-productive.

[ Reply to This | # ]

McBride Cross missed opportunity
Authored by: Anonymous on Wednesday, March 17 2010 @ 10:10 AM EDT

and Darl explained them. Bullet 1) Ownership of Unix rights. Mr. Singer asked, Was ownership of Unix copyrights important to SCO's business? Yes, they are required to enforce or protect their rights. It's like the Beatles trying to protect their music. They can't do it without the copyrights.

Too, bad Novell didn't get a chance to impromptu add this in their list. I have a killer question they could have added in to totally disprove SCO's theory. Here it is:

Me :"So, you need copyrights to enforce your rights in Unix?"
McBride: "Yes."
Me:"The RIAA has made millions in enforcing copyrights for the Music industry, including the Beatles. Yet they don't own any of those copyrights, but noly have a contract with the music companies that do. Yet they make a very good living enforcing those rights. Are you sure about that 5 minutes needing copyrights to enforce? How does the RIAA do it?"
McBride:"No comment."

-- Celtic_hackr

[ Reply to This | # ]

Could it have been a question?
Authored by: Anonymous on Wednesday, March 17 2010 @ 10:12 AM EDT
Mr. Acker continues, He says on the phone, "OK, Darl, You have the
coyprights?"

"'OK, Darl, You have the copyrights ?'?"

Like when you catch someone in a lie, and you are looking at the evidence.





[ Reply to This | # ]

Possible questions to McBride
Authored by: PR3J on Wednesday, March 17 2010 @ 10:37 AM EDT
Would these questions be allowed ?
I mean, it is at stake on SCO vs IBM ...

1. Do you know how many lines of code Linux have (no need to be exact here) ?
2. To this day, how many of these lines of code are confirmed as infringing SCO
code ?
3. To this day, how many of these lines of code still in dispute in other courts
?


---
PR3J
----
"[T]he IQ of a mob is the IQ of its most stupid member, divided by the number of
mobsters." - Terry Pratchet - Maskerade

[ Reply to This | # ]

The questions I would have asked Darl...
Authored by: Anonymous on Wednesday, March 17 2010 @ 10:42 AM EDT
in regards to "damages" from "slander of title":

Q: Has SCO ever publically identified exactly what code would be
"licensed" via SCOSource?

And, when he finally admits "no", follow up with

Q: Why not?

That would end any question as to whether or not SCOSource is a "protection
racket".

[ Reply to This | # ]

Odd line of questioning
Authored by: DaveJakeman on Wednesday, March 17 2010 @ 10:48 AM EDT
I found Singer's questioning of Darl to be leading off in different, almost
random directions. Whilst reading it, I kept wondering: what relevance is this?
Maybe that was intentional: to confuse the jury.

Acker's questioning, on the other hand, seemed laser-precise, crisp and direct.
It was very clear what he was aiming at and what the relevance was. It
obviously made Darl uncomfortable, too.

[ Reply to This | # ]

Limerick Thread
Authored by: Tim Ransom on Wednesday, March 17 2010 @ 11:08 AM EDT
Happy St. Patrick's Day, folks. Here's a bunch of limericks that I couldn't help
but write recently (genetic predisposition?). The good news is that I am no
longer compelled to pump these out, so there will be a respite for the next 51
weeks or so:

There once was a PR flack named Blake
Who cried "I don't know how much more I can take!
I said "take a jab at PJ"
In an email one day.
What a moronic mistake!"

There once was a paid shill named Mo
Who would stoop so incredibly low
She demanded "war pay"
For the things she would say
For her "Lambchop" at new S-C-O

A fellow from Utah named Ty
Caused a fuss when he did testify
"I found this in my shed,
Lee and I spoke about Ed,
He keeps shaking his head at me. Why?"

A lawyer who waxed histrionic
As if his larynx were bionic
Blurted out "to this day"
To his client's dismay
How could he have been so moronic?

A cowboy from Utah, McBride
Couldn't find me, as hard as he tried
Then his brother's vexation
With a web application
Left both of them nowhere to hide

Judge Stewart did file a decision
Which was met with loud howls of derision
He didn't explain
Why Novell asked in vain
To follow the rules with precision

Judge Stewart from Utah did say
"Things were surreal today!
S-C-O's antics
Were so comicly frantic
Was it court or the Cirque du Soleil?"

An interminable court room battle
Augmented by Darl's public prattle
Caused observers to say
At the end of the day
"That Darl is all hat and no cattle"

The Bowlegged IP Posse
Could use the late Mister Bob Fosse
To teach them to dance
Without splitting their pants
And when to act coy or be bossy

A litigious man named Ralph Yarro
Was certain right down to his marrow
He could sue IBM
And get money from them
Now his chance of surving is narrow

Ralph said "to our utter destruction!"
And it was not a mistaken deduction
He sued IBM
To get money from them
But his case had Electrolux suction

When Darl McBride took the stand
Things didn't go quite as he planned
When his lies were laid bare
He cried out "No fair!
You said that you would raise your hand!"

An Irishman loudly decried
Black marks on his national pride
"First Chief O'Hara
Then Maureen O'Gara
And now it's this moron McBride"

Is there anything quite so beguiling
As when Irish eyes are smiling?
Even Darl McBride
Can share in the pride
'Cause it's Blarney he's so fond of piling

A man looking for procrastination
Was struck with a strong inclination
For killing his time
Finding words that would rhyme
Despite other folk's irritation


---
Thanks again,

[ Reply to This | # ]

Ex-SCO CEO testifies Novell claim inflicted harm
Authored by: JamesK on Wednesday, March 17 2010 @ 11:10 AM EDT
Get your shovel ready. You'll need it!

Our friend at SLT

---
IANALAIDPOOTV

(I am not a lawyer and I don't play one on TV)

[ Reply to This | # ]

Can Novel ask Darl to PROVE that there is Unix in Linux?
Authored by: Eeyore on Wednesday, March 17 2010 @ 11:32 AM EDT
Darl says "Later we found that IBM had taken large amounts of our code and
placed it in Linux." Can Novell ask him to PROVE that statement? If he
can't prove it and he stated it as a fact it would tend to lead to discredit his
testimony (and potentially get the IBM case solved too). ;)

[ Reply to This | # ]

McBride 2 licenses
Authored by: Anonymous on Wednesday, March 17 2010 @ 12:01 PM EDT
McBride: Yes, the vendor license for selling large companies source code
licenses to develop Unix like we had. And there was the Right to Use license for
end users of Linux to run Linux to their heart's content.

Here McBride acts like he is the nice guy giving Linux users all they want.
Strange how if this were indeed true, somehow the linux community didn't have
the same mutal feeling. Of course he wants the jury to think he was all nice to
the linux community. Quite contrary, he is trying to take linux code for his
business use and then turn on it.

Hope the jury understands SCO was using Linux for profit and now turning against
it tryin to enforce copyrighs on something that they themselves were givng away
for free at one point. When he business didn't succeed, just turn your backs on
the Linux community and claim they tainted your code. Really bad ethics.

[ Reply to This | # ]

Acker picked Darl's case to pieces
Authored by: Anonymous on Wednesday, March 17 2010 @ 12:29 PM EDT
I can't imagine how a jury can rule "slander of title" here when Darl
testifies that everything (except some internal heresay by uninvolved people)
points to copyright non-transfer, and that damage from SCO's actions hit before
Novell's statements.

Never mind that the evidence does not support one iota of copyright transfer: we
are talking about slander of title here, maliciously and wittingly claiming
non-transfer of title contrary to better knowledge.

There is no sense in this lawsuit except as a trial run and money burner: when
they fail here, they get another run by restarting suing for the copyrights,
since this case is only about Novell being a malicious non-owner of the
copyrights, not about Novell being a non-owner of the copyrights.

But I can't see this case as good for anything except burning through more
money.

[ Reply to This | # ]

thus spoke Darl ..
Authored by: Anonymous on Wednesday, March 17 2010 @ 12:50 PM EDT
"Mr. Singer asks, What was SCO's financial shape in 2002?

McBride: Bad shape. I was brought in to turn it around. Revenue had dropped significantly.

Q: Was money spent on research and development?

McBride: Yes, tens of millions of dollars spent on R&D
"
--

Is there any evidence for this, what are the actual figures ? What was the flow from 'Linux' back to Caldera/SCO ?
--

"In 2002 when I took over, I talked to a lot of people in the company. Among those I spoke to was John Terpstra, the Linux evangelist for the company. He told me in his one-on-one interview that there was code in Linux that was being misused, but that it's an opportunity. He identified specifically the dynamic linker code. So we created a program where we could provide companies a license to use these libraries in Linux"

Stopping Linux desktop adoption sabotage, John Terpstra Oct 2005

"I share Caldera's enthusiasm for working with Linux and UNIX technologies and look forward to additional opportunities in expanding Internet business applications," Terpstra said. "My experience with Caldera demonstrates that they have the talent, the vision, the passion, and the resources to realize their industry-specific goals", John Terpstra Nov 2000 ?
--

The liar is a person who uses the valid designations, the words, in order to make something which is unreal appear to be real

[ Reply to This | # ]

why did Microsoft announce that it had licensed copyrights and patents
Authored by: Anonymous on Thursday, March 18 2010 @ 12:28 AM EDT
Because that's Microsoft's way of doing business, licensing patents,
and suing for patent infringements. Maybe Microsoft have found
copyright law too hard.

[ Reply to This | # ]

Week 2, Day 7 of SCO v. Novell Trial - More McBride and Botosan Opens a Door - Updated
Authored by: Anonymous on Thursday, March 18 2010 @ 10:14 AM EDT
<blockquote>If it's true that SCO never offered patents in a license, why
did Microsoft announce that it had licensed copyrights and patents in its
SCOsource license?</blockquote>

Tinfoil hat time: It's not because SCO had anything; they were funding a sock
puppet proxy as well as trying to lend credibility to their claims to sow FUD
against Linux.

[ Reply to This | # ]

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