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New Proposed Jury Instructions and Novell Tries Again on Prior Ct. Rulings
Thursday, March 18 2010 @ 09:56 AM EDT

The parties in SCO v. Novell have, as promised, filed their proposed jury instructions. And SCO has filed a proposed Jury Verdict form. And Novell has filed a new motion regarding letting the jury know about prior court rulings. SCO has, Novell says, once again crossed the line, despite the court's admonition not to do so. In its examination of Dr. Gary Pisano, it again elicited damages information all the way to 2007, long after there were favorable, to Novell, court rulings. As a result, Novell should be allowed to defend itself by telling the jury about them. Dr. Christine Botosan also calculated her figures into 2007, and Novell in its cross examination should be allowed to ask her about events that happened during that time period. "The prejudice to Novell is palpable," Novell points out.

The filings:

03/17/2010 - 810 - MOTION Renewed Motion Regarding Prior District Court Rulings filed by Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 03/17/2010)

03/18/2010 - 811 - Proposed Jury Verdict by Plaintiff SCO Group. (Hatch, Brent) (Entered: 03/18/2010)

03/18/2010 - 812 - Proposed Jury Instructions by SCO Group, Novell, Inc.. (Hatch, Brent) (Entered: 03/18/2010)

Neither Pisano nor Botosan, Novell says, factored in the impact of the district court rulings on the "projected success of the SCOsource campaign":
The jury thus has now heard evidence of between $100M and $250M in damages that SCO allegedly suffered from Novell's statements. But that evidence is premised ona demonstrable falsity: that Novell obtained no favorable district court rulings during the claimed damages period that also could have contributd to customer reluctance to take SCOsource licenses.
Earlier, the court ruled that the prejudicial effect of telling the jury about the earlier court rulings outweighed their probative value, but now that SCO has quantified damages up to 2007 as if those rulings never happened, "the prejudical effect of not informing the jury of those rulings is overwhelming." The damages calculations "are fundamentally flawed in their underlying assumptions, because they fail to take into account what actually happened -- which was that the Linux community learned in mid-2004 that there was a strong likelihood that Novell was right on the merits of its UNIX copyright ownership contentions and it learned in 2007 that Novell had in fact prevailed on that issue." How can the jury weigh the reliability of SCO's calculated damages, calculated by Pisano who "blinded himself to pertinent district court rulings", without that necessary information?

Can you believe people pay Pisano for calculations based on imagined projections that ignore what really happened?

SCO, Novell writes, brought this on itself. And what it would like now is the permission to cross examine Botosan on "the reliability of her damages opinions in view of Judge Kimball's rulings". Then Novell writes:

Novell acknowledges that the jury may wonder, in the wake of this evidence, why they are sitting jury service. Novell proposes that they be told the following after Dr. Botosan's testimony ends:
Ladies and Gentlemen: You may be wondering why, in view of the evidence you have heard of prior court rulings you have been called to jury service on the issues in this lawsuit. SCO appealed the district court rulings that you have heard about, and the Court of Appeals determined that a jury should decide the issues in this case. That is why you are here.
That last addresses the concern the judge expressed yesterday that if the prior court rulings were mentioned to the jury, he'd have to tell them about the appeals. He implied Novell wouldn't like that, but as you see, they don't mind a bit, so long as he doesn't mischaracterize what the appeals court actually did. Here's what they didn't do. They didn't overrule Judge Kimball in the sense of deciding that he was wrong about Novell retaining the copyrights. They said they expressed no opinion, other than that Novell had strong arguments. They just wanted the jury to make the final call.

  


New Proposed Jury Instructions and Novell Tries Again on Prior Ct. Rulings | 141 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Thread
Authored by: Hyrion on Thursday, March 18 2010 @ 10:12 AM EDT

It helps to put your correction in the subject and any further details in the body.

---
IANAL - But I am very curious and like to research.
There are many kinds of dreams. All can be reached if a person chooses.
RAS

[ Reply to This | # ]

News Links Thread
Authored by: Hyrion on Thursday, March 18 2010 @ 10:13 AM EDT

It's helpful to include a link to the news article in the first post about the news item so it's easier to find in the future.

---
IANAL - But I am very curious and like to research.
There are many kinds of dreams. All can be reached if a person chooses.
RAS

[ Reply to This | # ]

Off-Topic Thread
Authored by: Hyrion on Thursday, March 18 2010 @ 10:14 AM EDT

Try not to be on-topic.... it's a pet peeve of some ;)

---
IANAL - But I am very curious and like to research.
There are many kinds of dreams. All can be reached if a person chooses.
RAS

[ Reply to This | # ]

UNIX and Unixware
Authored by: Anonymous on Thursday, March 18 2010 @ 10:24 AM EDT

SCO says the instructions should show that SCO is claiming that Novell slandered
title for _both_ UNIX and Unixware.
Novell says that no, Novell only talked about UNIX, never Unixware.

Being a computer programmer this seems like reverse psychology to me. If the
jurors get these instructions, look at Novell's statements and see that Unixware
is not mentioned then the conjunction AND requires them to check the NO box.

If the instructions have only UNIX and not Unixware, the test is less
constrained and more easily passed.

[ Reply to This | # ]

The prejudice to Novell is palpable
Authored by: vb on Thursday, March 18 2010 @ 10:29 AM EDT
I'm guessing that phrase, in such clear language, is not often found in legal
motions. It's not a nice thing to say to a Judge.

I'm sure that some posters here have called the Judge the "I" word
(incompetent). This phrase is probably as close to the "I" word as
legally possible.


Which will happen:

- The Judge will be offended?

- The Judge will ignore the hint that he is less than a legal genius?

- The Judge will take realize that his level of judicial talent is showing and
will endeavor to raise his performance?





[ Reply to This | # ]

Classic line to remember...
Authored by: Jimbob0i0 on Thursday, March 18 2010 @ 10:43 AM EDT

Novell acknowledges that the jury may wonder, in the wake of this evidence, why they are sitting jury service.

I hope you have enjoyed this circus ladies and gentlemen and I hope you have a good book to read for the next week....

[ Reply to This | # ]

Novell proposes Judges notice to Jury
Authored by: Anonymous on Thursday, March 18 2010 @ 10:46 AM EDT
Novell, it seems is going to cross-examine Botosan ab out the prior rulings.
Regardless. They offer a form for the judge to use, rather than his threatened
statement. Considering, SCO has twice crossed the line since the Judge warned
them not to, and is going for at least three. I wonder if SCO is going to
scramble to put together a suggested notice and which, if any the judge will
use. Gosh, it's like a cliffhanger now. What will the judge decide today. Tune
all you Groklaw fans, same channel, can't say what time, but it'll be HERE.

"Novell acknowledges that the jury may wonder, in the wake of this
evidence, why they are sitting jury service. Novell proposes that they be told
the following after Dr. Botosan’s testimony ends:
Ladies and Gentlemen: You may be wondering why, in view of the
evidence you have heard of prior court rulings, you have been called to jury
service on the issues in this lawsuit. SCO appealed the district court rulings
that you have heard about, and the Court of Appeals determined that a jury
should decide the issues in this case. That is why you are here."

[ Reply to This | # ]

I had been thinking all along...
Authored by: Gringo on Thursday, March 18 2010 @ 10:55 AM EDT
...that this trial is going to blow up eventually!

[ Reply to This | # ]

Gee, how could anyone object to this?
Authored by: DMF on Thursday, March 18 2010 @ 11:24 AM EDT
From 811:

"1. Does SCO own the UNIX and UnixWare copyrights?"


What, like it's all the same thing, right?

[ Reply to This | # ]

SCO crossed a line - no problem the Judge will give them another pass.
Authored by: SilverWave on Thursday, March 18 2010 @ 11:30 AM EDT
and another...
and another...
and another...
...

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Here's how Unca Stewie will handle the Rulings motion
Authored by: Anonymous on Thursday, March 18 2010 @ 11:35 AM EDT
He'll say that the jury will make their ruling before knowing about the previous
rulings, but that he might - you know, if he's so inclined - allow them to know
about the previous rulings before awarding damages to SCO.

Unca Stewie has said "I'll fix it later, maybe" regarding prejudice to
Novell all along, and I'm guessing he's in too deep(*) to back out now. Just
got to keep digging, give Hatch Jnr his win, and let the Appeals Court sort it
out while he hits the golf course with Hatch Snr.

(*) If you thought "yeah... in someone's pocket", then you're not
alone.

[ Reply to This | # ]

Abandoning the event study is of no moment?
Authored by: amster69 on Thursday, March 18 2010 @ 12:03 PM EDT
"Abandoning the event study is of no moment."

This sentence appears at the end of (III). Any ideas as to what it means?

Bob

[ Reply to This | # ]

Me got a Problem
Authored by: lsmft on Thursday, March 18 2010 @ 12:05 PM EDT
Just read a post on another board about the ME sale and it brought up a curious
thought.

If Darl is questioned about the ME purchase. It will be shown that he is getting
an asset formerly valued at MILLIONS for only $35,000. I would think that this
is going to look very suspect if taken out of context. And yet the court will
not allow the context (bankruptcy) to be mentioned.

[ Reply to This | # ]

Exposing SCO
Authored by: Anonymous on Thursday, March 18 2010 @ 12:37 PM EDT
I wish they had asked Darl about the Linux communities desire to remove any
"stolen" code if SCO could just identify what was taken from them.
But SCO would not (and could not)identify any. This would show the jury that
SCO just wanted an excuse to charge people for using linux since their own
products were falling out of favor.

[ Reply to This | # ]

812 As text/html markup needs a little cleaning.
Authored by: bsm2003 on Thursday, March 18 2010 @ 12:42 PM EDT
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML>
<HEAD>
<META HTTP-EQUIV="CONTENT-TYPE" CONTENT="text/html;
charset=utf-8">
<TITLE>Brent O</TITLE>
<META NAME="GENERATOR" CONTENT="OpenOffice.org 3.1
(Unix)">
<META NAME="AUTHOR" CONTENT="BSF">
<META NAME="CREATED" CONTENT="0;0">
<META NAME="CHANGEDBY" CONTENT="Brian Moore">
<META NAME="CHANGED" CONTENT="20100318;9324700">
<META NAME="CreationDate" CONTENT="">
<META NAME="Creator" CONTENT="Acrobat PDFMaker 8.1 for
Word">
<META NAME="Producer" CONTENT="Acrobat Distiller 8.1.0
(Windows)">
</HEAD>
<BODY LANG="en-US" DIR="LTR">
<PRE> Stuart Singer
(admitted pro hac vice)
Brent O. Hatch (5715) ssinger@bsfllp.com
bhatch@hjdlaw.com Sashi Bach Boruchow (admitted pro
hac vice)
Mark F. James (5295) sboruchow@bsfllp.com
mjames@hjdlaw.com BOIES SCHILLER &amp; FLEXNER
LLP
HATCH, JAMES &amp; DODGE, PC
401 East Las Olas Blvd.
10 West Broadway, Suite 400 Suite 1200
Salt Lake City, Utah 84101
Fort Lauderdale, Florida 33301
Telephone: (801) 363-6363 Telephone: (954) 356-0011
Facsimile: (801) 363-6666 Facsimile: (954) 356-0022
David Boies (admitted pro hac vice)
dboies@bsfllp.com
Robert Silver (admitted pro hac vice)
rsilver@bsfllp.com
Edward Normand (admitted pro hac vice)
enormand@bsfllp.com
BOIES SCHILLER &amp; FLEXNER LLP
333 Main Street
Armonk, New York 10504
Telephone: (914) 749-8200
Facsimile: (914) 749-8300

Attorneys for Plaintiff, The SCO Group, Inc.


IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH</PRE>
<TABLE WIDTH=100% BORDER=1 CELLPADDING=4 CELLSPACING=0
STYLE="page-break-inside: avoid">
<COL WIDTH=128*>
<COL WIDTH=128*>
<TR VALIGN=TOP>
<TD WIDTH=50%>
<PRE><FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>THE SCO GROUP, INC., by and through the</FONT></FONT>
<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>Chapter 11 Trustee in Bankruptcy, Edward N.</FONT></FONT>
<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>Cahn,</FONT></FONT>

<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>Plaintiff/Counterclaim-Defendant,</FONT></FONT>

<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>vs.</FONT></FONT>

<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>NOVELL, INC., a Delaware corporation,</FONT></FONT>

<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>Defendant/Counterclaim-Plaintiff.</FONT></FONT></PRE>
;
</TD>
<TD WIDTH=50%>
<PRE><FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2><B>JOINT PROPOSED JURY</B></FONT></FONT>
<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2><B>INSTRUCTIONS</B></FONT></FONT>

<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>Civil No. 2:04 CV-00139</FONT></FONT>

<FONT FACE="DejaVu Sans Mono, monospace"><FONT
SIZE=2>Judge Ted Stewart</FONT></FONT></PRE>
</TD>
</TR>
</TABLE>
<PRE>
Plaintiff, The SCO Group, Inc. (“SCO”), and Defendant, Novell, Inc.
(“Novellâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>),

respectfully submit the following jointly proposed jury instructions in
connection with the trial

scheduled to conclude on March 26, 2010.

This joint filing summarizes the relevant arguments the parties made
in their previous

briefs on the jury instructions and is not intended to supersede those briefs.
The instructions

offered here cover the claims and elements in general terms. As trial
progresses, the presentation

of evidence may require additional, pin-point instructions. 1


OVERALL ORDER AND TITLES OF JURY INSTRUCTIONS

SCO's Proposed Order

SCO submits that the order of its proposed instructions reflects the
most logical order in

which to match the law the jurors must apply with the evidence that will have
come in at trial.

SCO's instructions first identify the elements of a slanderous statement and
falsity, including the

undisputed issue of ownership embedded in those elements. SCO's instructions
then proceed to

identify for the jury the law they must apply in assessing those elements. After
that, SCO's

instructions identify the element of malice and introduce the jury to the
defense of privileges.

Finally, SCO's instructions address damages. SCO submits that Novell's
alternative - to walk

through all of the formal elements and then offer instructions that return to
the elements that have

already been identified - is more confusing. 2

Novell's Proposed Order

The jury's primary task is to reach a verdict on the competing slander
of title claims. As

stated in Novell's Objections to SCO's Proposed Jury Instructions, Novell
believes that the jury

1
It is SCO's position, and Novell understands, that the jury will not be
instructed on unclean
hands, which is an equitable defense for the Court to decide. Novell continues
to maintain that
its unclean hands defense applies. (See Novell's Reply In Support of Proposed
Jury Instructions
at 16, Dkt. No. 786; Order at 2-3, Dkt. No. 761.)
2
The titles of SCO's instructions refer to each element, where appropriate.
should be advised first of the tort claim that they must decide - slander of
title - followed by a

separate instruction for each of the elements laid out in the first, overall
instruction. In addition,

Novell proposes that since the unprivileged nature of the publication is not an
affirmative

defense but rather an element of the tort itself under both Utah case law and
the Restatement, an

instruction on privilege should fall after the instructions on disparagement and
falsity. The

remaining instructions do not explicitly explain the enumerated elements of a
slander of title

claim but are relevant to the jury's deliberation of these elements (such as
contract interpretation,

copyright ownership, punitive damages, etc.). These instructions should follow
the slander of

title and elements instructions.




2
<U><B>OVERVIEW OF
INSTRUCTIONS</B></U>



</PRE>
<TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0>
<COL WIDTH=256*>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE> SCO's Proposed Ordering of Novell's Proposed
Ordering of</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE> Jury Instructions Jury
Instructions</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>1. The Elements of Slander of Title 1. The Elements of
Slander of Title</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>2. Element 1: Slanderous Statement 2. Element 1:
Slanderous Statement</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>3. Element 2: Falsity 3. Element 2:
Falsity</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE> - 4. Unprivileged
Publication</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE> - 5. Element 3:
Constitutional Malice</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE> - 6. Element 4: Special
Damages</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>4. Legal Principles for Interpreting the 7. Unprivileged
Publication</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>Amended Asset Purchase Agreement</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>5. Copyright Ownership 8. Interpretation of
Contractual Terms</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE> and Extrinsic
Evidence</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>6. Element 3: Constitutional Malice 9. Copyright
Ownership</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>7. Privileges and Abuse of Privileges</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>8. Element 4: Special Damages</PRE>
</TD>
</TR>
<TR>
<TD WIDTH=100% VALIGN=TOP>
<PRE>9. Punitive Damages</PRE>
</TD>
</TR>
</TABLE>
<PRE>



3
I. THE ELEMENTS OF SLANDER OF TITLE

JOINT PROPOSED INSTRUCTION NO. 1

In this case, as I have said, both SCO and Novell have brought claims
against each other.

SCO and Novell have each alleged that the other has slandered its title
regarding
ownership of copyrights over the UNIX [SCO #1: and UnixWare] computer operating
system[s].

Slander of title requires you to find that:

(1) there was [Novell #1: an unprivileged] publication of a
statement disparaging
claimant's title,

(2) the statement was false,

(3) the statement was made with constitutional malice, and

(4) the publication caused special damages.

I will now explain these four elements in more detail.



SCO's Argument

SCO disputes Novell's proposal to remove two words from, and add another
word to, the

agreed-upon joint instruction that the parties submitted to the Court on March
1, 2010. (Docket

No. 739 at 3.)

1. UNIX and UnixWare Copyrights. SCO disputes Novell's proposal to
change the

reference to “UNIX and UnixWare copyrightsâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>to only “UNIX copyrights.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>SCO's claims

clearly concern Novell's assertions of copyright ownership over the “UNIX and
UnixWare

copyrights.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(SCO's Second
Amended Complaint (Feb. 3, 2006) ¶¶ 9, 10, 21, 36, 37, 38, 39, 90,

91, 92, 94, 95.) The evidence will show that the distinction Novell attempts to
draw is an

artificial one and that a claim to own the UNIX copyrights is a claim to own
UnixWare

copyrights as well.




4
Furthermore, Novell has admitted in its Answer that it has claimed to own
the “UNIX

and UnixWare copyrights,â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>that “Novell
has registered its claim to UNIX and UnixWare

copyrights with the United States Copyright Office,â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>and that it has “publicly stated its belief that

it owns UNIX and UnixWare copyrights.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(Novell's Answer
(Apr. 10, 2006) ¶¶ 7, 8.) Novell

further admits “that on May 28, 2003 Jack Messman sent a letter to Darl
McBride of SCO in

order to assert Novell's claim to the UNIX and UnixWare copyrights.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>(Id. ¶ 37(a).) There is no

basis for Novell's request now to omit any reference to UnixWare in its
instructions to the jury.

2. Burden of Proof. SCO disputes Novell's addition of the word
“unprivilegedâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>

into this instruction regarding the elements of a slander of title claim that
SCO must prove. The

Utah Supreme Court has expressly referred to the “burden having
shiftedâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>to the plaintiff
to

demonstrate abuse of privilege. Ferguson v. Williams &amp; Hunt, Inc., 221
P.3d 205, 212 (Utah

2009). The cases Novell cites do not suggest a contrary result for purposes
here, because the

Court has already determined that the question of the applicability of any
privilege raises fact

issues for trial, because there are “factual issues concerning whether these
privileges applyâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>and

“whether the scope of these conditional privileges have been
transcended.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(Memorandum

Decision and Order Denying Defendant's Motion in Limine No. 7 to Determine That
Common

Law Privileges Apply to Allegedly Defamatory Publications, at 2.) The only
sensible result is

that Novell has the burden of proving the material facts necessary to support
its claim of

privilege.

The fact is that across jurisdictions, the defendant bears the burden of
proving that a

privilege applies to a defamatory statement. See, e.g., Sawheny v. Pioneer
Hi-Bred Int'l, Inc., 93

F.3d 1401, 1410 (8th Cir. 1996) (Iowa law); Keenan v. Computer Assocs. Int'l,
Inc., 13 F.3d

1266, 1269-70 (8th Cir. 1994) (Minnesota law); Esmark Apparel, Inc. v. James, 10
F.3d 1156,




5
1161 (5th Cir. 1994) (Mississippi law); Elbanna v. Captain D's, LLC, No.
3:07-cv-926-J-

32MCR, 2009 WL 435051, at *14 (M.D. Fla. Feb. 17, 2009) (Florida law); Dealer
Computer

Servs., Inc. v. Fullers' White Mountain Motors, Inc., No. CV07-00748-PCT-JAT,
2008 WL

462448, at *8 (D. Ariz. Oct. 17, 2008) (Arizona law); Gordon v. Dalrymple, No.
3:07-CV-

00085-LRH-RAM, 2008 WL 2782914, at *5 (D. Nev. July 8, 2008) (Nevada law);
Emiabata v.

Marten Transport, Ltd., 574 F. Supp. 2d 912, 919 (W.D. Wis. 2007) (Wisconsin
law); Jackson v.

Kan. County Ass'n Multiline Pool, No. 03-4181-JAR, 2006 WL 963838, at *23 (D.
Kan. Apr.

10, 2006) (Kansas law); Stevens v. Target Stores, No. 96 C 2291, 1997 WL 779090,
at *7 n.31

(N.D. Ill. Dec. 11, 1997) (Illinois law); Zeevi v. Union Bank of Switzerland,
No. 89 Civ. 4637

(MGC), 1992 WL 8347, at *5 (S.D.N.Y. Jan. 1992) (New York law).


Novell's Argument

The parties have a principled disagreement about two aspects of this
instruction. Novell

believes that the jury should be instructed that, as part of the cause of action
for slander of title,

the publication must be “unprivileged.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>Accordingly, Novell proposes adding this word to the

first element so that it reads: “(1) there was an unprivileged publication of
a statement

disparaging claimant's title.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>

Lack of privilege is an element of the claim for slander of title and must
be proven by the

party asserting the claim. See West v. Thomson Newspapers, 872 P.2d 999, 1007-08
(Utah 1994)

(“To state a claim for defamation, he must show . . . that the statements were
. . . not subject to

any privilegeâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>); Dowse v. Doris
Trust Co., 208 P.2d 956, 958 (Utah 1949) (publication “without

privilegeâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>is an element of
the claim).


Second, in Joint Proposed Instructions 1 and 2, SCO improperly seeks to
characterize

Novell's allegedly slanderous statements as asserting ownership of both the UNIX
and UnixWare


6
copyrights. As the evidence demonstrates, however, Novell did not claim
ownership of the

UnixWare copyrights in the allegedly actionable public statements. Novell's
press release of

May 28, 2003 states only that “SCO is not the owner of the UNIX
copyrights.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(Ex. 669.)

Novell's press release of December 22, 2003 states that “Novell believes it
owns the copyrights

in Unix.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(Ex. X23.) The
copyright registrations that Novell filed in October 2003 were for

UNIX only. (See Exs. S21, U21, V21, W21, X21, Y21, Z21, A22, C22, J23, K23,
M23.) In his

March 2004 address, Novell executive Chris Stone stated only that “[w]e still
own Unix.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(Ex.

A27.)

Because the allegedly actionable statements only asserted ownership of
the UNIX

copyrights, the references to “UnixWareâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>in Instructions 1 and 2 should be removed. To
instruct

the jury that Novell's statements referenced the “UnixWareâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>copyrights would misrepresent the

facts and would be highly prejudicial to Novell.




7
II. ELEMENT #1: SLANDEROUS STATEMENT

JOINT PROPOSED INSTRUCTION NO. 2

The first element is whether the [SCO: defendant] [Novell: party accused
of slander]
published a statement that disparaged the [SCO: plaintiff's] [Novell:
claimant's] title or
ownership of the UNIX [SCO: or UnixWare] copyrights. SCO alleges that Novell
made several
slanderous statements in 2003 and 2004. Novell alleges that SCO made several
slanderous
statements in 2003 and 2004.

For the statement to have been published, it must have been communicated
to someone
other than the [SCO: plaintiff] [Novell: claimant].

A statement is not slanderous if the context makes clear that the
speaker is expressing a
subjective view or an interpretation or theory, rather than an objectively
verifiable fact. You
may determine, however, that the [SCO: defendant] [Novell: speaker] intended to
convey a
statement of fact even if the [SCO: defendant] [Novell: speaker] has couched its
statements in
the form of an “opinionâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>or
“belief.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>

In deciding whether a publication [SCO: by defendant] disparaged the
[SCO: plaintiff's]
[Novell: claimant's] title, you should not view individual words or sentences in
isolation.
Rather, each statement must be considered in the context in which it was made,
giving the words
their most common and accepted meaning. You should also consider the
surrounding
circumstances of the statement, and how the intended audience would have
understood the
statement in view of those circumstances.

Statement of Issues
The only disputes between the parties with respect to this instruction
are:

(1) the disputes regarding whether SCO's claims concern UNIX and UnixWare
or merely
UNIX (see Joint Proposed Instruction No. 1), and

(2) whether the use of each of the terms “plaintiffâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>and “defendantâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>are appropriate to refer
to both SCO and Novell, which is discussed below.


SCO's Argument

1. References to “plaintiffâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>and “defendant.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>The Model Utah Jury Instructions

refer to “plaintiffâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>and
“defendantâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>as a matter of
course. The Court will have already instructed

the jury that the parties have each asserted claims against the other in this
case, including at the

outset of these instructions, where the parties have agreed to the following
instruction: “SCO

and Novell have each alleged that the other has slandered its title regarding
ownership of


8
copyrights over the UNIX [SCO #1: and UnixWare] computer operating
system[s].â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(Joint

Proposed Instruction No. 1.) Novell's proposal to deviate from the standard
formulation and

introduce multiple terms to refer to the same parties, including
“claimant,â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;
</SPAN></SPAN>“speaker,â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>“party

accused of slander,â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>and “party
accused of making a statement slandering another's titleâ€<SPAN
LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>

needlessly confuses the jury with additional terminology.


Novell's Argument

1. References to “plaintiffâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>and “defendant.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>Since Defendant and Counter-Plaintiff

Novell also asserts a claim for slander of title, using the terms
“plaintiffâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>and
“defendantâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>in the

jury instructions will mislead the jury and cause undue prejudice to Novell.
Throughout the trial,

witnesses and attorneys have consistently referred to SCO as the
“plaintiffâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>and Novell as
the

“defendant.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Novell believes
that it would be confusing to now turn the tables on the jury and

tell them that references to “plaintiffâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>and “defendantâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>include both parties, depending on the

context. Even with a general instruction upfront explaining that Novell has
brought its own

claim for slander of title, the jury is likely to be uncomfortable (or at least
unused to) considering

Novell as a “plaintiff.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>For this reason,
the term “claimantâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>should be used in
place of “plaintiffâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>

and where necessary, the term “party accused of slanderâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>(or some equivalent) should be used in

place of “defendant.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>




9
III. ELEMENT #2: FALSITY

JOINT PROPOSED INSTRUCTION NO. 3

The second element of a claim for slander of title is falsity of the
statement that
disparages title. “Falseâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>means that the
statement is either directly untrue or that an untrue
inference can be drawn from the statement. You are to determine the truth or
falsity of the
statement according to the facts as they existed at the time the statement was
made.
The statement, to be true, need not be absolutely, totally or literally
true, but must be
substantially true. A statement is considered to be true if it is substantially
true or the gist of the
statement is true.




10
IV. DISPUTED INSTRUCTION

SCO DISPUTED INSTRUCTION NO. 4: “LEGAL PRINCIPLES FOR INTERPRETING THE
AMENDED ASSET PURCHASE AGREEMENTâ€<SPAN
LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>

The element of a false statement concerns who owns the property at issue.
On that issue,
you should consider the Asset Purchase Agreement, as amended. You should be
guided by the
following legal principles in interpreting the amended Asset Purchase
Agreement.

Amendment No. 2 must be considered together with the Asset Purchase
Agreement as a
single document. The language of Amendment No. 2 controls wherever its language
contradicts
the Asset Purchase Agreement.

In deciding what the terms of the combined APA and Amendment No. 2 mean,
you must
decide what the parties intended at the time the contract was created and
amended.

You should consider the intent of the parties to the amended Asset
Purchase Agreement
apart from the language they used in the contract. Such evidence may take the
form of witness
testimony or documentary evidence of what they said or did or understood at the
time of the
transaction. You should interpret a contract to give meaning to all of its
provisions, instead of
leaving a portion of the writing useless or inexplicable. You should not
interpret a contract to
render one of its terms meaningless.

In deciding what the words in a contract meant to the parties, you must
consider how, as
a practical matter, the parties interpreted and applied the terms of the
contract in the years after
the contract was signed but before this disagreement between the parties arose.
The practical
construction the parties placed upon the combined Asset Purchase Agreement and
Amendment
No. 2 is the best evidence of their intention.

NOVELL'S DISPUTED INSTRUCTION NO. 7: “INTERPRETATION OF
CONTRACTUAL TERMS AND EXTRINSIC EVIDENCEâ€<SPAN
LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>

In deciding what the terms of a contract mean, you must decide what the
parties intended
at the time the contract was created. You should consider the usual and ordinary
meaning of the
language used in the contract and its amendments as well as the circumstances
surrounding the
making of the contract and its amendments.
With respect to your consideration of the agreement at issue here, where
contract terms are
clear, they should be given their plain and ordinary meanings.
In deciding what the words of a contract meant to the parties, you should
consider the
whole contract, not just isolated parts. You should use each part to help you
interpret the others,
so that all the parts make sense when taken together
With respect to who owns the property at issue, you are allowed to
consider what is called
“extrinsic evidenceâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>of the intent of
the parties to the contract. Extrinsic evidence may only be
considered to interpret ambiguous language.




11
You should assume that the parties intended the words in their contract to
have their usual
and ordinary meaning unless you decide that the parties intended the words to
have a special
meaning.
In deciding what the words in a contract meant to the parties, you may
consider how the
parties acted after the contract was created but before any disagreement between
the parties
arose.

You should also be guided by the following principles in interpreting the
amended Asset
Purchase Agreement and related agreements:

• Under the amended Asset Purchase Agreement (“APAâ€<SPAN
LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>), Santa Cruz
purchased
certain assets from Novell, listed in Schedule 1.1(a) and called
“Assets.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Those
Assets do not include the “Excluded Assetsâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>that are listed in Schedule 1.1(b),
which were retained by Novell.

• Under Section 4.16(a) of the APA, Santa Cruz was obligated to
administer the
collection of royalties from all UNIX SVRX licenses and transmit
100% of those
royalties to Novell, minus a 5% administrative fee for Santa
Cruz.

• Under Schedule 1.2(b) of the APA, Santa Cruz was entitled to
keep all royalties
from sales of UnixWare, unless certain sales thresholds were
met.
• Under Section 4.16(b) of the APA, Santa Cruz did not have the
authority to
amend, modify, waive any right under, or assign any UNIX SVRX
license
without Novell's consent. Santa Cruz also did not have the
authority to enter into
new UNIX SVRX licenses without Novell's permission, unless it was
doing so
incidentally to a UnixWare license.

• Under Section 1.6 of the APA and under the related Technology
License
Agreement, Novell obtained a license from Santa Cruz of the
technology included
in the Assets (as defined above) and any derivatives of that
technology created by
Santa Cruz. These provisions do not grant Novell a license to any
of the
Excluded Assets (as defined above), which Novell had kept under
the APA.
• The contractual language of Amendment No. 2, signed on October
16, 1996, as it
relates to copyrights, is ambiguous.

• Amendment No. 2 must be considered together with the original
Asset Purchase
Agreement as a single document.




12
SCO's Argument

1. Consideration of Extrinsic Evidence. Novell's proposal to
instruct the jury that it

“mayâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>or “is allowed
toâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>consider
extrinsic evidence is incorrect; the jury must consider it.

Novell lost that argument on appeal, not only with respect to the interpretation
of the amended

APA, but also more generally as a matter of California law. Extrinsic evidence
is admissible to

expose ambiguities in contractual language that might otherwise appear clear.
The SCO Group,

Inc. v. Novell, Inc., 578 F.3d 1201, 1209-10 (10th Cir. 2009). “As trier of
fact, it is the jury's

responsibility to resolve any conflict in the extrinsic evidence properly
admitted to interpret the

language of a contract.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Morey v. Vannuci,
64 Cal. App. 4th 904, 913 (1998). SCO's proposed

instruction properly captures the law, which is that the jury
“shouldâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>consider the
extrinsic

evidence.

2. Course of Performance Evidence. SCO's Proposed Instruction also
reflects clear

California law that the parties' course of performance is the best evidence of
the parties' intent.

The language that SCO proposes and to which Novell objects, including the
explanatory

language, is taken directly from the California Supreme Court's decision in
Universal Sales, 128

P.2d at 672. Remanding for trial, the Tenth Circuit cited Universal Sales for
the following

proposition: “‘[P]ractical construction placed by the parties upon the
instrument is the best

evidence of their intention.'â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>SCO, 578 F.3d at
1217.

The only remaining question then is whether it is somehow improper to
explain to the

jury that course of performance is the best evidence of the parties' intention.
The “course of

performanceâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>instruction is at
least as appropriate as the instruction, to which the parties

essentially agree, conveying general principles of contract interpretation.
Novell's counterpart

instruction is insufficient, as also explained above, because it is not optional
for the jury to

consider the parties' course of performance. There is a hierarchy of
considerations in


13
interpreting a contract, and when it comes to extrinsic evidence with respect to
an ambiguous

contract like the amended APA, course of performance is at the top.

3. Novell's Factual “Instructions.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>With respect to Novell's proposed instruction

regarding the meaning of certain provisions in the Asset Purchase Agreement,
such

“instructionsâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>do not address
the law governing the elements of the claim at issue and do not

instruct the jury on such law. As such, the proposed statements are not proper
jury instructions.

By contrast, the legal principles enumerated in SCO's Proposed Instruction
regarding the

interpretation of the amended APA directly relate to an element of SCO's claim
for slander of

title and properly instructs the jury on the law it must apply.

4. Language of the APA. In asking the Court to tell the jury
generally and without

distinction that the jury “should assume that the parties intended the words
in their contract to

have their usual and ordinary meaning unless you decide that the parties
intended the words to

have a special meaning,â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Novell proposes
an instruction that is inconsistent with the law and the

law of the case. Where such law bears directly on the terms of the contract at
issue, a jury

instruction reflecting the law of the case is appropriate. Joyce v. Simi Valley
Unified Sch. Dist.,

110 Cal. App. 4th 292, 304 (2003). In addition, with respect to issues of
contract interpretation,

it is inappropriate to give an instruction on an issue that is “for the jury
to determine after

weighing all of the evidence.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Risner v. Freid
and Goldsman, No. B188211, 2007 WL 2949298,

at *11 (Cal. Ct. App. Oct. 11, 2007). Where it has been determined that the
courts cannot

discern the parties' intent solely from the language of the contract, the court
cannot give an

instruction suggesting that the jury must try to do so. Cf. Deland v. Old
Republic Life Ins. Co.,

758 F.2d 1331, 1335-36 (9th Cir. 1985) (where the court should have interpreted
the language of

the contract as a matter of law, it should not have instructed the jury on the
issue).




14
Novell's Argument
In its competing instruction, Novell combines its former instructions on
contract

interpretation and extrinsic evidence (Novell Supp. Jury Instr. at 22-25, Dkt.
No. 787), and adds

further instruction to assist the jury in interpreting the amended Asset
Purchase Agreement.

Contract Interpretation

The first three paragraphs of Novell's instruction concern contract
interpretation and are

taken directly from the California Model Jury Instructions (“CACIâ€<SPAN
LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>). (See Novell
Supp. Jury

Instr. at 22-23, Dkt. No. 787.)

The first paragraph is the third paragraph of CACI 314. There are two
edits to the model.

The first is to address the fact that there are amendments to the contract. The
second edit

reconciles the permissive language of CACI 314 (“you may consider the usual
and ordinary

meaning of the languageâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>) with the
compulsory language of CACI 315 (“you should assume the

parties intended the words in their contact to have their usual and ordinary
meaning unless you

decide that the parties intended the words to have a special meaning.â€<SPAN
LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>). Novell has
changed

“mayâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>to
“shouldâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>in its proposed
instruction.

The second paragraph is taken from SCO's former proposed instruction no.
4, excising

the vague reference to “other agreements.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>(SCO Proposed Instructions at 7, Dkt. No. 743; see

Novell Objections at 10-11, Dkt. No. 774.) As stated, this is a correct
statement of law: where

contract terms are clear, they should be given their plain and ordinary
meanings. Novell's main

objection to SCO's current proposal is that it entirely ignores the role that
the plain language of

the contract plays in contract interpretation.

First, contrary to SCO's contention, the jury must start its
interpretation of the contract

with the actual words the parties used in the contract.



15
When a dispute arises over the meaning of contract language,
the
first question to be decided is whether the language is
“reasonably
susceptibleâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>to the
interpretation urged by the party. If it is not, the
case is over. If the court decides the language is reasonably
susceptible to the interpretation urged, the court moves to
the
second question: what did the parties intend the language to
mean?

So. Cal. Edison Co. v. Superior Ct., 37 Cal. App. 4th 839, 847-48 (Cal. Ct. App.
1995)

(emphasis added) (internal citations omitted); (see Novell Obj. at 11-12).
Indeed, ambiguous or

not, “[o]rdinarily it is presumed that the parties read and understood the
import of their contract

and that they had the intention which its terms manifest.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>Heidlebaugh v. Miller, 271 P.2d 557,

559 (Cal. Ct. App. 1954) (cited in SCO's Proposed Jury Instr. at 7, Dkt. No.
743.) Thus,

Novell's instruction that where contract terms are clear, they should be given
their plain

meanings is proper and sound.

The third paragraph is a verbatim copy of CACI 317. (See Novell Supp.
Jury Instr. at 22,

Dkt. No. 787).

Extrinsic Evidence

Paragraphs four through six address extrinsic evidence. The fifth
paragraph is verbatim

copy of CACI 315. (See Novell Supp. Jury Instr. at 25, Dkt. No. 787.) The sixth
paragraph is a

verbatim copy of CACI 318, discussing course of conduct. (Id.)

The fourth paragraph states that the jury is “allowed toâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>consider extrinsic evidence.

SCO would rather instruct the jury that they “shouldâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>or “mustâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>consider
extrinsic evidence. This

disagreement arises from the Tenth Circuit's decision in this case. The SCO
Group, Inc. v.

Novell, Inc., 578 F. 3d 1201, 1210-1211 (10th Cir. 2009).

The key issue is what role the Tenth Circuit's decision on summary
judgment should play

in the jury instructions. The extent of the Tenth Circuit's ruling on extrinsic
evidence was as

follows:



16
Because what copyrights are “requiredâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>for SCO to exercise its
rights under the agreement is not clear on its face, California
law
allows courts to consider extrinsic evidence to resolve the
ambiguity.

SCO Group Inc. v. Novell, Inc., 578 F.3d 1201, 1210-11 (10th Cir. 2009)
(emphasis added)

(internal citations omitted). Therefore, the court merely held that the jury is
“allowedâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>to

consider extrinsic evidence to decide “what copyrights are
‘required'â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>“for SCO to
exercise its

rights with respect to the acquisitions of UNIX and UnixWare
technologies.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Id.; see Ex. N8

(Amendment No. 2) at ¶ A. The Tenth Circuit's admissibility ruling does not
overturn well-

established contract law that interpretation of the contract begins with the
contract itself. This is

why Novell's instruction begins by informing the jury that clear contractual
language should be

given its plain and ordinary meaning.

Next, The Tenth Circuit's ruling allowed for the consideration of
otherwise inadmissible

extrinsic evidence in order to interpret the ambiguous language of Amendment No.
2. SCO

incorrectly argues that “it is not accurate to say that extrinsic evidence is
relevant only if the

language of the contract is unambiguous [sic].â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>Without citing to any part of it, SCO improperly

spins the Tenth Circuit's opinion to contravene established California contract
law. In fact, the

Tenth Circuit clarified that:

California law does not permit the use of extrinsic evidence to
establish an ambiguity in the parties' intent independent from
the
terms of the contract; instead, it can only be used to expose or
resolve a latent ambiguity in the language of the agreement
itself.

SCO Group, 578 F.3d at 1210. Thus, the jury must only consider extrinsic
evidence to interpret

ambiguous language, as Novell's proposed instruction explains.

Contrary to SCO's objections, the jury is not required to disregard the
clear language of

the contract in favor of extrinsic evidence. As this Court has noted, it is up
to the jury to weigh

all of the evidence. (See Order at 4, Dkt. No. 763 (“The real evidence in this
case is not the


17
summary judgment ruling or the Tenth Circuit's decision, but the evidence used
in making those

decisions.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>).) The jury is
allowed to interpret the contract language with the extrinsic evidence

and determine for itself what the intended language means. “As trier of fact,
it is the jury's

responsibility to resolve any conflict in the extrinsic evidence properly
admitted to interpret the

language of a contract.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Morey v. Vanucci,
64 Cal. App. 4th 904, 913 (Cal. Ct. App. 1998).

Indeed the California Model Jury instructions say that the jury must decide the
intent of the

parties, but that in doing so it may consider the language of the parties as
well as extrinsic

evidence. CACI 314. 3

Thus, at most, the Tenth Circuit ruled that extrinsic evidence is
appropriate to interpret

what is “requiredâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>for SCO to
exercise its rights in Amendment No. 2. The Tenth Circuit's

finding does not preclude the jury from starting with the language of the
contract. 4 The Tenth

Circuit's holding just means that the parties are allowed to present extrinsic
evidence to the jury.

As one court as noted:

While it may be proper to enumerate elements which the jury
may
consider, an instruction which tells them they ‘must' or
‘should'
consider is liable to be misleading. * * * On the trial of the
case the
court should leave the jury perfectly free and untrammeled to
pass

3
Stating in full:
In deciding what the terms of a contract mean, you must
decide
what the parties intended at the time the contract was
created. You
may consider the usual and ordinary meaning of the language
used
in the contract as well as the circumstances surrounding the
making of the contract.


4
SCO cites to Deland v. Old Republic Life Ins. Co., 758 F.2d 1331, 1335-36 (9th
Cir. 1985) in
support of its proposition that the court cannot give an instruction suggesting
that the jury may
discern the parties' intent where the court was unable to do so. Deland says
nothing of the sort.
Deland was a case involving an insurance contract governed by Alaskan law in
which the court
provided an incorrect legal standard in the jury instruction. Id. (advising the
jury incorrectly to
apply plaintiff's subjective understanding of the contract as opposed to what a
“reasonable lay
personâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>would expect).


18
upon the credibility of the witnesses, determining for
themselves
the weight to be given to the testimony. * * * It is not the
province
of the court to tell the jury in any case what evidence is
the
strongest.

Lyons v. Chicago City Ry. Co., 258 Ill. 75, 85-85, 101 N.E 211 (Ill. App. Ct.
1913) (citations

omitted).

Third, even when extrinsic evidence is used to interpret ambiguous
language, the

interpretation must be consistent with the language used in the contract.
“Extrinsic evidence is

thus admissible to interpret the language of a written instrument, as long as
such evidence is not

used to give the instrument a meaning to which it is not reasonably
susceptible.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Morey, 64 Cal.

App. 4th at 912 (quoted in SCO Obj. at 19).. In fact,

This principle should not be confused with the dictates of
the parol
evidence rule . . . [which] generally prohibits the
introduction of
any extrinsic evidence, whether oral or written, to vary,
alter or add
to the terms of an integrated written instrument intended by
the
parties thereto as the final expression of their agreement.

Id. at 912 n. 4.

Lastly, SCO contends that the jury “must considerâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>the parties course of performance, but

cites to no authority to support its emphatic position. (SCO Obj. at 24
(emphasis in original).)

This is not so. (Order on Mots. In Limine 12 to 19 at 3, Dkt. No. 717 (“The
Tenth Circuit further

held that course of performance “evidence may be used to interpret an
ambiguous contractual

provision.'â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(quoting SCO
Group, 578 F.3d at 1217) (emphasis added).) The jury is entitled to

conclude that the parties' course of performance is irrelevant. (See Novell Obj.
at 15.)

Amended APA

The jury should be instructed as to the meaning of relevant portions of
the APA and

related agreements that are unambiguous. Under California law, the function of
the Court is to

interpret unambiguous provisions, and the function of the jury is to interpret
ambiguous



19
provisions of a contract. Schmidt v. Macco Constr. Co., 119 Cal. App. 2d 717,
734 (Cal. App.

1953) (“only the interpretation of the ambiguous clauses is one of fact, and .
. . the jury should be

so instructedâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>). This principal
is clearly embodied in the following comment from the Book of

Approved Jury Instructions (“BAJIâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>):

The issue of the interpretation of a contract, or a provision
thereof,
may arise in a jury trial. If the contract is not ambiguous or
uncertain, interpretation is a matter of law. If the contract is
ambiguous or uncertain, and uncontradicted extrinsic evidence
has
been received to explain the uncertainty or ambiguity, the
interpretation is also a matter of law. In both of these
situations,
the jury performs no function. The interpretation must be made
by
the Court.

On the other hand, if the contract is ambiguous or uncertain,
and
contradictory extrinsic evidence has been received to explain
away
the ambiguity or uncertainty, the jury's function is to interpret
the
contract or the ambiguous portion of the contract. Where there
are ambiguous and unambiguous clauses to the contract, the
jury should be instructed which clauses are clear, which are
ambiguous, and that only the latter should be interpreted by
them.

(California Civil Jury Instructions, BAJI No. 10.75 (citing Schmidt, 119 Cal.
App. 2d at 733)

(emphasis added).)

Here, the Tenth Circuit found that because “what copyrights are
‘required' for SCO to

exercise its rights under the agreement is not clear on its face,â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>extrinsic evidence is admissible

to resolve the ambiguity. The SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201,
1210 (10th Cir.

2009). However, the meaning of other provisions in the APA and related
agreements are not

ambiguous. Indeed, the Tenth Circuit laid out the “basic factsâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>underlying “Novell's transfer of

certain UNIX-related assets to Santa Cruzâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>as part of its background section, and elsewhere

assumed basic facts relating to the clear meaning of the agreement. Id. at
1204-1205, 1219.

Judge Kimball likewise outlined the basic undisputed facts relating to the APA
and

contemporaneous agreements in his summary judgment ruling. (Order at 3-9, Dkt.
No. 377.)


20
These portions of the prior rulings have not been appealed or overruled. The
Court should

therefore interpret unambiguous terms of the APA and related agreements as a
matter of law, and

highlight these terms in an instruction for the jury. 5

In this Court's ruling on Novell's motion to disqualify G. Gervaise
Davis III, the Court

stated that it is the “Court's role to instruct the jury on the lawâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>and “the jury's role to apply that

law to the facts of the case.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(Order at 8, Dkt.
745.) While the Court was willing to admit Mr.

Davis's testimony on whether the UNIX copyrights were necessary for SCO to
operate its

business, the Court would not permit Mr. Davis to (1) “tell the jury the law
they must apply in

considering whether the copyrights are required,â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>(2) “opine on the law the jury must apply in

deciding whether the parties to the APA intended to acquire the
copyrights,â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>or (3) “opine
on the

governing principles of contract interpretation, the relevance of extrinsic
evidence, the relevance

of course of performance, or anything of that nature.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>(Id.) Those subjects are for the Court to

address in its instructions to the jury. Novell's proposed instruction captures
general principles

of contract interpretation, as well as specific interpretations of unambiguous
APA provisions that

are within the Court's province to determine as a matter of law.

Specifically, the Court should highlight for the jury that the following
is clear:

Paragraph 7. Under the amended Asset Purchase Agreement
(“APAâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>), Santa Cruz
purchased certain assets from Novell, listed in Schedule 1.1(a) and called
“Assets.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>Those
Assets do not include the “Excluded Assetsâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>that are listed in Schedule 1.1(b), which were
retained by Novell.

The basic structure of the APA in terms of “Assetsâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>and “Excluded Assetsâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>is clear, and

not in dispute. APA § 1.1(a); SCO Group, 578 F.3d at 1205; 1210 (the “APA
explicitly provides

that ‘. . . the Assets to be so purchased shall not include those assets (the
“Excluded Assetsâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>) set

5
In addition to those proposed here by Novell, there may be other unambiguous
terms that the
Court finds would be helpful to highlight for the jury. These may be added to
this instruction as
the trial proceeds.


21
forth on Schedule 1.1(b).â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>); (see also Order
at 3-4, Dkt. No. 377.) This paragraph is necessary to

provide a roadmap for the jury's consideration of the APA, as amended, and to
clarify to the jury

which rights were transferred and which were retained. Novell only sold “part
of its UNIX

businessâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>to Santa Cruz
(SCO Group, 578 F.3d at 1204) and the APA may not be interpreted

otherwise. Given the repeated testimony by witnesses that Novell sold the UNIX
business to

Santa Cruz “lock, stock and barrelâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>(see, e.g., Trial
Tr. 230:15-20, Mar. 10, 2010), it is important

for the Court to clarify that the APA, by its unambiguous terms, only conveyed
certain assets to

Santa Cruz.

Paragraph 8. Under Section 4.16(a) of the APA, Santa Cruz was obligated
to administer
the collection of royalties from all UNIX SVRX licenses and transmit 100% of
those royalties to
Novell, minus a 5% administrative fee for Santa Cruz.

It is clear, and not in dispute, that the APA was “structured so that
Novell would retain a

95% interest in SVRX license royalties.â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>SCO Group, 578 F.3d at 1205; see also id. at 1219

(“Section 4.16(a) provides that “Following the Closing, Buyer shall
administer the collection of

all royalties, fees and other amounts due under all SVRX Licenses.â€<SPAN
LANG="zxx"><SPAN
LANG="zxx">&#65437;</SPAN></SPAN>); (Order at 3-4,
Dkt. No.

377.) This paragraph is necessary to clarify which rights Novell retained under
the APA.

Specifically, Novell did not “sell the complete UNIX business,â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>but unambiguously retained an

interest in SVRX license royalties. SCO Group, 578 F.3d at 1205.

Paragraph 9. Under Schedule 1.2(b) of the APA, Santa Cruz was entitled
to keep all
royalties from sales of UnixWare, unless certain sales thresholds were met.

The meaning of the APA with respect to royalties from sales of UnixWare
is also clear,

and not in dispute. Under the payment provision of the APA, Santa Cruz agreed to
pay Novell

“additional royaltiesâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>in connection
with the sale of UnixWare products in the amount identified

on Schedule 1.2(b). Schedule 1.2(b) provides that “[n]o royalties shall be
payable in connection




22
with [the UnixWare] Productsâ€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>unless certain
thresholds were met. This paragraph is necessary

to further clarify which rights were transferred and which were retained under
the APA.

Paragraph 10. Under Section 4.16(b) of the APA, Santa Cruz did
not have the
authority to amend, modify, waive any right under, or assign any UNIX SVRX
license without
Novell's consent. Santa Cruz also did not have the authority to enter into new
UNIX SVRX
licenses without Novell's permission, unless it was doing so incidentally to a
UnixWare license.

The basic meaning of Section 4.16(b) is also clear. As quoted by the
Tenth Circuit, Santa

Cruz did “not have the authority to, amend, modify or waive any right under or
assign any

SVRX License without the prior written consentâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>of Novell. SCO Group, 578 F.3d at 1205,

1219. Section 4.16(b) also provides that Santa Cruz “shall not, and shall have
no right to, enter

into future licenses or amendments of the SVRX Licenses,â€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>unless it was doing so incidentally to

a UnixWare license. (APA § 4.16(b).) This paragraph is necessary to further
clarify that Novell

retained certain assets and rights under the APA, while Santa Cruz received
others.

Paragraph 11. Under Section 1.6 of the APA and under the related
Technology
License Agreement, Novell obtained a license from Santa Cruz of the technology
included in the
Assets (as defined above) and any derivatives of that technology created by
Santa Cruz. These
provisions do not grant Novell a license to any of the Excluded Assets (as
defined above), which
Novell had kept under the APA.

The meaning of Section 1.6 of the APA and the TLA are also clear and not
in dispute.

Section 1.6 states that Santa Cruz must execute a license agreement which grants
Novell a

license to all of the technology included in the transferred Assets, and all
derivatives of that

technology. (Order at 5-6, Dkt. No. 377.) The TLA granted Novell such a license.
(Id. at 6.)

Because the license specifies the “Assetsâ€<SPAN
LANG="zxx"><SPAN LANG="zxx">&#65437;
</SPAN></SPAN>as defined by Section 1.1, the TLA by definition does

not include the “Excluded Assets.â€<SPAN LANG="zxx"><SPAN
LANG="zxx">&#65437; </SPAN></SPAN>This paragraph is
also necessary to clarify the structure of

the APA, including which rights Novell transferred and which rights Novell
retained.




23
In ad

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SCO files 8K regarding postpetition financing
Authored by: Laomedon on Thursday, March 18 2010 @ 12:43 PM EDT
SEC filing

8-K 1 v177731_8k.htm UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549
FORM 8-K
CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):  March 5, 2010
The SCO Group, Inc. (Exact name of registrant as specified in its charter)
Delaware 0-29911 87-0662823 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)   333 South 520 West Lindon, Utah 84042 (Address of principal executive offices, including Zip Code)   Registrant’s telephone number, including area code:  (801) 765-4999   355 South 520 West Lindon, Utah 84042  (Former name or former address, if changed since last report)   Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  Item 1.01 Entry into a Material Definitive Agreement   As of March 5, 2010, The SCO Group, Inc., (the “Company”) obtained funding for $2.0 million in postpetition financing (the “Loan”) in the form of a secured super-priority credit agreement (the “Secured Credit Agreement”), from a group of private lenders including Seung Ni Capital Partners, LLC, Jan Loeb, Leap Tide Capital Management, Inc., Steven Shin, Henry C. Beinstein, Stanley A. Beinstein, Neil J. Gagnon, Robert Dyson, WBS LLC, Ne Obliviscaris, Ltd., Darcy Mott, Clemons F. Walker and Herbert W. Jackson (collectively, the “Lenders”).  Other than WBS LLC and Robert Dyson, all of the other Lenders listed above are direct or indirect shareholders of the Company.  Proceeds from the financing will be used to fund the Company’s operating and administrative expenses, as well as litigation-related expenses.  In order to document this financing arrangement, the Company entered into a separate Secured Credit Agreement, Stock Pledge Agreement and Security and Pledge Agreement in favor of each Lender.  The Secured Credit Agreement and related documents, described below, which were entered into by the Company in connection with the $2.0 million financing were approved by order of the U.S. Bankruptcy Court on March 5, 2010 (the “Bankruptcy Court”).   The Secured Credit Agreement provides for a $2.0 million loan which bears interest at a rate of 14% per annum compounded quarterly, and has a loan fee (the “Loan Fee”) equal to 6.6 percent of any Litigation Proceeds, as defined in the Secured Credit Agreement.  Litigation Proceeds means the amount of any final non-appealable verdict or other award received by the Company in connection with the two pending litigation matters of the Company or other litigation matters between the Company and such parties, including, settlements, interest and attorney fees paid by the other parties to such litigation, as well as proceeds from the sale of Company assets occurring in connection with the settlement of such litigation (“Litigation Proceeds”).  The Loan has a maturity date of the earliest to occur of (a) October 31, 2011, (b) acceleration provisions under the agreement, (c) conversion of the Company’s bankruptcy case to a case under Chapter 7 of the Bankruptcy Code, (d) dismissal of the Company’s bankruptcy case, and (e) the confirmation of a plan of reorganization.  The Loan Fee is due and payable to the Lenders 10 calendar days following the date that the Litigation Proceeds become available to the Company.   The Loan is secured by a lien on substantially all of the assets of the Company.  Pursuant to applicable bankruptcy law and the Bankruptcy Court Order approving the Secured Credit Agreement, the Lenders’ lien is senior in priority to all other liens and claims and administrative expenses of the Company.   So long as the Loan is outstanding, upon an event of default, as such term is defined in the Secured Credit Agreement (“Event of Default”) and during the continuance of any Event of Default, the Lenders: (a) may by notice to the Company declare that all the Lenders’ loan commitment be terminated, whereupon any and all obligations of the Lenders to make a portion of the Loan shall immediately terminate; and (b) may by notice to the Company, declare the Loan, including all interest owed thereon and all other amounts and obligations payable under the Secured Credit Agreement due and payable.  The Company shall have a period of five (5) business days in which to either cure the default or obtain a scheduled court hearing with regard to the default.  In the event the Company fails to either cure the default or obtain a scheduled court hearing with regard to the default, the automatic stay provided in the Bankruptcy Code Section 362 shall be deemed automatically vacated without further action or order by the Bankruptcy Court, and the Lenders shall be entitled to exercise all of the respective rights and remedies under the Secured Credit Agreement and related documents, including all rights and remedies with respect to the collateral as provided in such agreements.  In the event of default under the Secured Credit Agreement that continues after notice, upon demand of the Lenders, the Company shall pay a late fee equal to 5% of any past due amount, and the interest rate applicable shall be increased by 6% per annum until the default is cured.  
  In addition, the Lenders have agreed that the Company may sell core assets, as defined in the Secured Credit Agreement, provided the Company utilizes 50% of proceeds from such core asset sales to pay the amounts due to the Lenders.  Sales of non-core assets are not subject to such restriction.  The Secured Credit Agreement contains representations, warranties and financial covenants which are typical for agreements of this type entered into by companies in bankruptcy, including a prohibition on the incurrence of additional indebtedness and incurring additional liens on the collateral securing the Loan.   In connection with entering into the Secured Credit Agreement, the Company also entered into a Stock Pledge Agreement with the Lenders pursuant to which the Company and its subsidiaries pledged shares of stock owned by them in their subsidiary companies (the “Shares”) as security for the Loan.  Except as otherwise provided in the Stock Pledge Agreement, and subject to the rights of the Lenders in the event of a default, the Company retains voting rights over the Shares, as well as the right to receive dividends or distributions with respect to such Shares.  In the event of default under the Secured Credit Agreement, the Lenders are entitled to exercise all rights under the Secured Credit Agreement and may sell the Shares pledged as collateral as described in the Share Pledge Agreement.   The Company and the Lenders also entered into a Security and Pledge Agreement and a Collateral Agent Agreement which provides a lien and security interest in favor of the Lenders in substantially all of the assets and properties owned or acquired by the Company or its subsidiaries as security for the Loan and related obligations.  The Security and Pledge Agreement contains representations, warranties, covenants and remedies provisions which are typical for agreements of this type entered into by a company in bankruptcy.   In connection with entering into the Secured Credit Agreement, the Company also entered into the Collateral Agent Agreement pursuant to which Seung Ni Capital Partners, L.L.C. agreed to act as collateral agent for the Lender.   The foregoing description of the Secured Credit Agreement and related documents does not purport to be complete and is qualified in its entirety by reference to the text of the agreements which are attached hereto as exhibits to this Form 8-K and are incorporated by reference herein.   This financing is intended to allow for the preservation of the value of the Company’s business while enabling the Company to proceed with asset sales, continue supporting SCO’s loyal UNIX customer base and to pursue litigation against, among others, IBM and Novell.  The Secured Credit Agreement provides that up to 50% of the Loan proceeds may be used to pay litigation trial costs and related expenses, including compensating employees assisting with the litigation and the remaining 50% of the Loan proceeds may be used for the payment of administrative expenses, in the Trustee’s discretion.   Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant   The information set forth in Item 1.01 is incorporated herein by reference.   Forward Looking Statements   The statements contained in this Form 8-K regarding (1) the Company’s plan of reorganization and (2) the Company’s financing efforts are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These statements are based on management’s current expectations and are subject to risks and uncertainties. We wish to advise readers that a number of important factors could cause actual results to differ materially from historical results or those anticipated in such forward-looking statements. These factors include, but are not limited to, outcomes and developments of our restructuring plan, outcomes and developments of our Chapter 11 case, court rulings in our bankruptcy proceedings, the impact of the bankruptcy proceedings on our other pending litigation, and our cash balances and available cash. These and other factors that could cause actual results to differ materially from those anticipated are discussed in more detail in the Company’s periodic and current filings with the Securities and Exchange Commission, including the Company’s Form 10-K for the fiscal year ended October 31, 2008, as amended, and future filings with the SEC. These forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date.  
  Item 9.01  Financial Statements and Exhibits.   (d)             Exhi bits   10.1           Form of Secured Super-Priority Credit Agreement dated as of March 5, 2010 among the Bankrupt Estates of The SCO Group, Inc., a Delaware corporation, and SCO Operations, Inc., a Delaware corporation, by and through Edward N. Cahn, solely in his capacity as Chapter 11 Trustee, as Borrower, and each of the Lenders listed in this Form 8-K.   10.2           Form of Stock Pledge Agreement dated as of March 5, 2010 by and among the Bankrupt Estates of The SCO Group, Inc., a Delaware corporation, and SCO Operations, Inc., a Delaware Corporation, by and through Edward N. Cahn, solely in his capacity as Chapter 11 Trustee, as Borrower, and each of the Lenders listed in this Form 8-K (included as Exhibit E to the Secured Credit Agreement, attached as Exhibit 10.1 hereto).   10.3           Form of Security and Pledge Agreement dated as of March 5, 2010 by and the Bankrupt Estates of The SCO Group, Inc., a Delaware corporation, and SCO Operations, Inc., a Delaware Corporation, by and through Edward N. Cahn, solely in his capacity as Chapter 11 Trustee, as Borrower, and each of the Lenders listed in this Form 8-K (included as Exhibit E to the Secured Credit Agreement, attached as Exhibit 10.1 hereto).   10.4           Collateral Agreement dated March 5, 2010 by and among Seung Ni Capital Partners, L.L.C., a Utah limited liability company, as collateral agent, and the Bankrupt Estates of The SCO Group, Inc., a Delaware corporation, and SCO Operations, Inc., a Delaware Corporation, by and through Edward N. Cahn, solely in his capacity as Chapter 11 Trustee, as Borrower, and each of the Lenders listed in this Form 8-K (included as Exhibit A to the Secured Credit Agreement attached as Exhibit 10.1 hereto).   99.1           Press rele ase issued by The SCO Group, Inc., dated March 15, 2010.  
  SIGNATURES   Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.   Dated: March 18, 2010     THE SCO GROUP, INC.           By: /s/ Kenneth R. Nielsen     Name: Kenneth R. Nielsen     Title: Chief Financial Officer    
  EXHIBIT LIST   10.1           Form of Secured Super-Priority Credit Agreement dated as of March 5, 2010 among the Bankrupt Estates of The SCO Group, Inc., a Delaware corporation, and SCO Operations, Inc., a Delaware corporation, by and through Edward N. Cahn, solely in his capacity as Chapter 11 Trustee, as Borrower, and each of the Lenders listed in this Form 8-K.   10.2           Form of Stock Pledge Agreement dated as of March 5, 2010 by and among the Bankrupt Estates of The SCO Group, Inc., a Delaware corporation, and SCO Operations, Inc., a Delaware Corporation, by and through Edward N. Cahn, solely in his capacity as Chapter 11 Trustee, as Borrower, and each of the Lenders listed in this Form 8-K (included as Exhibit E to the Secured Credit Agreement, attached as Exhibit 10.1 hereto).   10.3           Form of Security and Pledge Agreement dated as of March 5, 2010 by and the Bankrupt Estates of The SCO Group, Inc., a Delaware corporation, and SCO Operations, Inc., a Delaware Corporation, by and through Edward N. Cahn, solely in his capacity as Chapter 11 Trustee, as Borrower, and each of the Lenders listed in this Form 8-K(included as Exhibit E to the Secured Credit Agreement, attached as Exhibit 10.1 hereto).   10.4           Collateral Agreement dated March 5, 2010 by and among Seung Ni Capital Partners, L.L.C., a Utah limited liability company, as collateral agent, and the Bankrupt Estates of The SCO Group, Inc., a Delaware corporation, and SCO Operations, Inc., a Delaware Corporation, by and through Edward N. Cahn, solely in his capacity as Chapter 11 Trustee, as Borrower, and each of the Lenders listed in this Form 8-K (included as Exhibit A to the Secured Credit Agreement attached as Exhibit 10.1 hereto).   99.1           Press rele ase issued by The SCO Group, Inc., dated March 15, 2010.  
 

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Mistrial potential?
Authored by: Anonymous on Thursday, March 18 2010 @ 12:45 PM EDT

What are the odds that SCOGs own continued historically patterned behavior is going to result in causing a mistrial?

Anyone with experience observing mistrials willing to give an educated guess?

RAS

[ Reply to This | # ]

Can you believe people pay Pisano...?
Authored by: cbc on Thursday, March 18 2010 @ 01:23 PM EDT
Actually, business people do this all the time. They get some "great
idea". They need to convince the next higher layer of management (or a
government agency) that it is a great idea. The pay an expert, consultant, etc.
to do a study and estimate the costs, risks, and rewards using a set of,
perhaps, incomplete assumptions. Having gotten the necessary approvals using
the expert's words, they are free to gamble with other people's money, keeping
only a "small" percentage for their trouble.

[ Reply to This | # ]

The SCOrpion and the Judge
Authored by: jbb on Thursday, March 18 2010 @ 01:34 PM EDT
Judge Stewart tells the SCOrpion, "You fool! Why did you sting me again with damages going up to 2007 after I warned you not to? Now we shall both drown." The SCOrpion shrugged and replied: "I could not help myself. It is my nature."

Actually, I think this was part of a sneaky plan by SCO. They had asked the judge if Novell had the option of mentioning the rulings. The judge replied that no one should mention the rulings and if they do get mentioned, Novell will be punished. So SCO figured that if they yet again open the door by talking about damages up to 2007 and Novell wants to talk about the rulings then Novell will get punished thus creating a win win situation for SCO. Of course, IMO, the proper course for the judge to take is to punish SCO, not Novell for SCO's bad behavior. I think Novell's proposed instructions after Botosan's testimony would do very nicely.


---
You just can't win with DRM.

[ Reply to This | # ]

Pisano's testimony too weak to attack
Authored by: Christian on Thursday, March 18 2010 @ 01:47 PM EDT
Like nailing Jello to a wall.

Novell will lose, because Pisano's report is too silly to even attack sensibly. Pisano could have carefully analyzed the various reasons that people would choose to purchase or not purchase a SCOsource license. Instead, he just made up a number. He didn't say that Novell's continuing slander was more important than Linus's "show us the code, and we'll take it out." He didn't say anything, as far as I can tell from the able GL court reporting.

His assumption is that some percentage of people didn't buy SCO licenses because of Novell's press release and he doesn't need to justify this number any further. He just projected that effect to the time he wrote his report. He did not open the door to anything. You can write the questions and answers for yourself. "Dr. Pisano, did anything that happened later affect your calculation." "No, once Novell's initial claims to ownership poisoned the market, momentum was permanently lost and couldn't be recovered. Nothing later changed that." Patent nonsense, of course.

Novell had their chance to show that his percentage was pure fabrication. As long as SCO's experts aren't claiming damages arising from Novell's statements after the case started, I don't think Judge S will see an open door. Damage that occurred during the case caused only by earlier statements is fine.

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What happens if SCO wins?
Authored by: Anonymous on Thursday, March 18 2010 @ 02:08 PM EDT
1) I am not saying SCO will win. I am asking how the proceedings will evolve if
SCO should win. What is the normal procedure? How will bankrupcy modify it?

2) I seem to remember a case a while ago where I read that the loser has to post
a bond or something while appeals go on. Maybe place the disputed funds in
escrow?

3) This is the relevant part. If SCO should win big on Slander of Title and gets
the funds now they have fresh capital for their lawsuits. Furthermore if Novell
should then win on appeal, and the retrial or if Novell gets cert and prevails
at the SCotUS, it is quite possible that SCO will not have the money to pay back
( much less any funds for the verdict against ).

So Novell will have won the case but wound up paying SCO.

HandyGandy
Too lazy to get an account.


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"Can you believe people pay Pisano ..."
Authored by: ak on Thursday, March 18 2010 @ 02:36 PM EDT
Can you believe people pay Pisano for calculations based on imagined projections that ignore what really happened?

One should stress that a significant part of that money was paid since Edward N. Cahn is in charge.

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  • No. - Authored by: Anonymous on Friday, March 19 2010 @ 07:44 AM EDT
Reality is Palpable
Authored by: webster on Thursday, March 18 2010 @ 03:01 PM EDT
.

The judge has been vigilant against undue confusion and prejudice in his trial.
To do this he orders parties to leave out some undisputed history in the
controversy, the court rulings. He drew a line.

The fact is that the reality of SCO's campaign was confusing and prejudicial.
How can any business make a prudent, costly decision with a contested title and
a pending court case right on point. This information would reflect the serious
confusion executives faced due to the conflicting claims and then rulings IN
COURT. Admitting the rulings would be very damaging to SCO, but they reflect
the reality on the ground. It also reflects the refashioned SCO as a litigation
company.

The trial is botched. Granting Novell's Motion means mistrial. It has already
warped the trial had so far. To grant this motion now will warp it even more.
They would have to recall many of the witnesses for both direct and cross.
Granting this motion means that the Judge sees the prejudice for a mistrial. He
should make Novell withdraw it's motion for a mistrial if they prefer he grant
this motion.

It is inconceivable that SCO didn't know that they were close to Judge Stewart's
line when they prompted the good Doctor P into any damages extant during the
time of any of the District Court rulings. They were kind of trapped;
completely leaving out court rulings and contemporaneous damages leaves the
claim a pittance and the evidence stunted in time.

SCO better be careful or the Judge will be telling the Jury that the Supremes
have it.

~webster~

.

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More evidence of good lawyering... and a question
Authored by: GriffMG on Thursday, March 18 2010 @ 05:34 PM EDT
Both legal teams have had literally years to prep for this.

I can see MoFo cutting the mustard in a very dignified hardworking fashion...
but the Boyze seem to be imploding, even given the apparent advantages, they
seem to be losing the plot.

Am I missing something?

---
Keep B-) ing

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812 - Jury Instructions
Authored by: WWWombat on Thursday, March 18 2010 @ 09:31 PM EDT
I'm not sure I'd really call that a "joint" proposal - it is now over
60 pages long, and is one ongoing argument. I shouldn't have expected
otherwise!

It is an improvement - certainly it brings together the argued blocks of text
into a single document, and with a single proposed block of text for each (with
many options).

They've also condensed out some of the differences, so there is slightly closer
agreement over what building blocks to make the order out of. But there's no
agrement over the order.

But I don't think they've actually agreed on many of the differences of opinion
behind each option within a block of test.

I think Stewart and his Clerks are going to be busy for the next few days...

[ Reply to This | # ]

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