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What the Judge Still Has to Decide in SCO v. Novell - Updated
Monday, April 19 2010 @ 08:02 AM EDT

We know that the jury in SCO v. Novell decided that SCO didn't get the copyrights in 1995 under the APA or by Amendment 2 or any fusion thereof. That killed SCO's slander of title claim as well. But that isn't the end. There were some issues the parties agreed before the trial which would be decided by Judge Ted Stewart. That has yet to happen.

The most important remaining issue is SCO's claim for specific performance. SCO's alternative claim, should it fail to win on the copyright issue, was that even if it were decided that it doesn't get the copyrights to date, under the APA Novell is obligated to turn them over now. I've seen some comments wondering if there will be another trial of these issues left for the judge to decide. The answer is no, I don't think so. It was all tried together. The jury rendered its verdict, and next comes the judge's. I don't know of any time frame.

Remember on the first day of trial there was a question about trying it all at once, whether it would be confusing to the jury? The judge, our eyewitness reported, ruled like this:

Another issue addressed this morning was the presenting of evidence on items which will be decided by the court. This could be confusing for the jury, says Novell. SCO's position is that everything is proof of slander of title, thus there's no need to separate the testimony.

Judge Stewart said that they'd 'play it by ear' during the course of the trial - if either side had evidence which was about something not before the jury, they could let the jury take an extended lunch or go home early, to avoid having to call a witness back on another day.

And that is why, beginning on day 2 of the trial, the judge sometimes asked questions of witnesses, if you recall. To be positive that there are no issues still to be addressed, I need to go through each day of the trial with a fine toothed comb, so this conclusion is pending that more exacting review, and even then, it really awaits the transcripts, to be really sure. But this is my understanding so far. I began the daily review, but by the time I finished day 2 of the trial, I realized I'd better tell you the overview now, and then supplement with details as needed as I continued, or it would be many days before I could tell you even this much.

Here's the breakdown on what the jury was to decide and what would be left to the judge, from docket #761 [PDF], the judge's order, Memorandum Decision and Order on Allocation of Issues for Bench and Jury Trial:

This matter is before the Court for a determination of which issues are to be decided by the Court and which are to be decided by the jury. In the Pretrial Order, the parties agreed that Plaintiff's claim for specific performance should be resolved by the Court and that the parties' claims for slander of title should be tried to the jury, but disagreed as to whether Plaintiff's remaining claim for breach of the implied covenant of good faith and fair dealing and Defendant's claim for declaratory judgment should be tried to the Court or the jury.

The parties now agree that:

1. Plaintiff's slander of title claim against Defendant should be tried to the jury;

2. Defendant's slander of title claim against Plaintiff should be tried to the jury;

3. Plaintiff's remaining claim that Defendant breached the implied covenant of good faith and fair dealing should be tried to the Court;

4. The Court should declare Defendant's rights under Section 4.16 of the APA;

5. Plaintiff's claim for specific performance should be tried to the Court; and

6. If Defendant's unclean hands is tried, it should be tried to the Court.

SCO was the Plaintiff, and its slander of title claim failed when its copyright claim failed. Novell's slander of title claim was tossed out by the judge at the end of the presentation of evidence at trial, on motion by SCO, because there was no evidence, he ruled, in support of the claim. That leaves #s 3, 4, and 5 (and maybe 6), and you can review what all that means to the parties here.

On the specific performance issue, it was SCO's third claim in its Second Amended Complaint:

G. In the Alternative, Novell Should be Ordered to Effectuate the Transfer

83. In its public statements, Novell has alleged that the APA (even together with Amendment No. 2) is a writing insufficient to have transferred the copyrights under Section 204(a) of the Copyright Act. Even if (contrary to precedent) this were true, SCO would be entitled to a transfer of the copyrights under the terms of the APA.

84. The parties to the APA repeatedly covenanted to take further actions necessary to consummate the transfer of the business to SCO.

85. Section 1.7(c) of the APA provides:

(c) Taking of Necessary Action: Further Action. If, at any time after the Closing Date, any further action is necessary or desirable to carry out the purposes of this Agreement the parties agree to take, and will take, all such lawful and necessary and/or desirable action.
86. Section 4.9 of the APA provides in part:
4.9 Commercially Reasonable Efforts. Subject to the terms and conditions provided in this Agreement, each of the parties hereto shall use its commercially reasonable efforts to take promptly, or cause to be taken all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated hereby ....
87. Section 4.12 of the APA provides:
4.12 Additional Documents and Further Assurances. Each party hereto, at the request of another party hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the consummation of this Agreement and the transactions contemplated herein.
88. The parties to the APA intended for the APA to transfer the business, including the copyrights, to Santa Cruz. As the successor-in-interest to Santa Cruz, SCO alleges that it is the current owner of the business, including the copyrights. In the alternative, if it is determined that the APA did not effectuate the transfer intended by the parties to the APA, Novell must take the actions necessary to effectuate that transaction in order to comply with Sections 1.7(c), 4.9, and 4.12 of the APA....

THIRD CLAIM FOR RELIEF
(Alternative Breach-of-Contract Claim Seeking Specific Performance)

101. SCO re-alleges and incorporates all prior paragraphs as if fully set forth herein.

102. UNIX and UnixWare, as well as the copyrights in UNIX and UnixWare, are unique and possess special value.

103. The intent of the parties to the APA, and the purpose and effect of the APA, were to transfer the UNIX and UnixWare business, including all copyrights, to SCO's predecessor in interest, Santa Cruz.

104. Under Sections 1.7(c), 4.9, and 4.12 of the APA, Novell is obligated to take all actions necessary to effectuate the purposes of the APA and consummate the transactions contemplated therein.

105. In its public statements, including its pleadings in this lawsuit, Novell has repeatedly claimed that the APA (even as amended) did not transfer the copyrights to SCO.

106. In its public statements, including its pleadings in this lawsuit, Novell has repeatedly claimed that, under the APA, it retained the right to take, or direct SCO to take, certain actions (such as waiving SCO's claims against IBM) that extinguish the value of the UNIX and UnixWare business.

107. In light of these continuing claims by Novell, SCO is entitled (as an alternative to its other claims for relief) to an order directing Novell to specifically perform its obligations under Sections 1.7(c), 4.9, and 4.12, by taking the actions necessary to effectuate the intended purposes of the APA and consummate the transactions contemplated therein.

108. In particular, SCO is entitled to an order directing Novell to execute documents (and take any other actions) necessary to transfer to SCO (a) the copyrights and (b) the UNIX and UnixWare business, without subjecting any portion of that business, other than the SVRX binary royalty stream, to Sections 4.16, 1.2(b), and 1.2(f) of the APA.

SCO's position seems foundationally tied to its assertion that the purpose of the agreement was to transfer everything lock, stock and barrel, including the copyrights, but that is exactly what the jury said was *not* the purpose of the agreement or at least not its end result. How that can not affect the above SCO reasoning is something I can't really imagine. That doesn't mean Judge Stewart can't find a way if he wants to, just that I can't imagine any way for it to happen that would make any sense, in that the evidence at trial included the Novell board minutes stating unequivocally that copyrights would not transfer. And if the purpose of the agreement was that copyrights would not transfer, what can the argument be that they should transfer now?

And since there was also evidence that the lower price reflected that the copyrights were not transferring, how can the judge order that they do so now, unless SCO pays for them? And then the question would have to be, with what money?

SCO wants to argue that even though it didn't get the copyrights yet, Amendment 2 gives it the right to get them now, so it can proceed with its litigation business. It is thinking about his part:

A. With respect to Schedule 1.1(b) of the Agreement, titled "Excluded Assets", Section V, Subsection A shall be revised to read:
All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. However, in no event shall Novell be liable to SCO for any claim brought by any third party pertaining to said copyrights and trademarks.
The part SCO has never explained in a way that makes sense to me is how this phrase can possibly mean the litigation business: "...required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies." Technologies isn't the same thing as copyrights. And if the purpose of the agreement didn't include the copyrights, I can't figure what could change that from this wording, unless SCO's position might be that they need the copyrights to be able to sue, and that one could reasonably have had that in mind as one part of what they wanted to acquire the technologies for. But is that something related to "the acquisition of UNIX and UnixWare technologies"? In his opening statement, Brennan pointed out that SCO ran their business without the copyrights from 1995 to 2003, when Darl McBride switched strategies and the company began to pursue a litigation strategy, so somehow SCO has to have convinced Judge Stewart that crossing that bridge to becoming a litigation company is a necessary and contemplated purpose of the APA necessary to "consummate the transactions contemplated therein", as SCO put it in its request for relief.

SCO's evidence seemed to be pointing to a conclusion that somehow the executives intended copyrights should transfer, but somehow the attorneys goofed or were wayward. But if you recall the verdict [PDF], our eyewitness reported:

When asked, Ms. Malley read the verdict:
Did the the Amended Asset Purchase Agreement transfer the copyrights?

And the jury had entered, No.

That leaves unspoken the answer to whether that means the jury thought it was not the intention of the APA that the copyrights transfer, but I believe that is what they meant. If they thought the copyrights were supposed to transfer, they would have answered that question with a yes. But does Judge Stewart agree?

Novell points out in its Motion in Limine No. 11 [PDF] that to prevail on the specific performance claim, SCO would have to prove it kept up its end of the agreement:

SCO's second and third claims for relief in its Second Amended Complaint are for breach of the covenant of good faith and fair dealing and specific performance.... To prevail on either claim SCO must prove that it substantially performed its own obligations under the Asset Purchase Agreement ("APA"). However, the law of this case is that SCO did not.... Cal. Civ. Code Section 3392 ("Specific performance cannot be enforced in favor of a party who has not fully and fairly performed"); Judicial Council of Cal. Civ. Jury Instr. 303 ("To recover damages ... for breach of contract, [plaintiff] must prove ... [t]hat [plaintiff] did all, or substantially all, of the significant things that the contract required"). SCO never pled that it substantially performed, and as explained below, the law of this case is that it did not.
It goes on to quote what Judge Dale Kimball ruled, affirmed by the Tenth Circuit, that SCO had no authority to enter into the 2003 Sun Agreement and SCO was ordered to pay damages, which to date it has not paid. And Novell cites California law, because the APA chose that as the relevant law.

However, Judge Stewart denied Novell's motion [PDF], so no evidence of SCO's being ordered to pay a monetary judgment could be presented at trial, because it would, in his view, prejudice the jury. I don't know what that decision means with respect to his own ability to include that information in deciding his ruling on specific performance. It would, presumably, preclude him granting SCO's claim on the basis that Novell failed to present evidence of SCO's failure to perform. But truthfully, I didn't understand Judge Stewart's reasoning on a number of decisions he made on motions in limine. If all issues, including the ones he was supposed to decide, were heard in one trial, prejudice to the jury isn't the only consideration in a fair trial, one would assume.

Let's take a brief look at some other details on other issues still pending. On its assertion that Novell can't waive infringement, SCO relies on Section 4.16 of the APA:

4.16 SVRX Licenses.

(a) Following the Closing, Buyer shall administer the collection of all royalties, fees and other amounts due under all SVRX Licenses (as listed in detail under item VI of Schedule 1.1(a) hereof and referred to herein as "SVRX Royalties"). Within 45 days of the end of each fiscal quarter of Buyer, Buyer shall deliver to Seller or Seller's assignee 100% of any SVRX Royalties collected in the immediately preceding quarter. Buyer shall diligently seek to collect all such royalties, funds and other amounts when due (and shall investigate and perform appropriate auditing and enforcement under such licenses at Buyer's cost including auditing two (2) SVRX licensees identified by Seller during each quarter in which SVRX Royalties are collected). In consideration of such activities described in the preceding sentence, Seller shall pay to Buyer within 5 days of receipt of SVRX Royalties from Buyer as set forth in the preceding sentence, an administrative fee equal to 5% of such SVRX Royalties. (b) Buyer shall not, and shall not have the authority to, amend, modify or waive any right under or assign any SVRX License without the prior written consent of Seller. In addition, at Seller's sole discretion and direction, Buyer shall amend, supplement, modify or waive any rights under, or shall assign any rights to, any SVRX License to the extent so directed in any manner or respect by Seller. In the event that Buyer shall fail to take any such action concerning the SVRX Licenses as required herein, Seller shall be authorized, and hereby is granted, the rights to take any action on Buyer's own behalf. Buyer shall not, and shall have no right to, enter into future licenses or amendments of the SVRX Licenses, except as may be incidentally involved through its rights to sell and license the Assets or the Merged Product (as such term is defined in the proposed Operating Agreement, attached hereto as Exhibit 5.1(c)) or future versions thereof of the Merged Product.

(c) Seller further covenants that immediately following the Closing Date neither it, nor any of its officers, directors or employees shall (i) take any material action designed to promote the sale of SVRX products or (ii) provide material compensation to any employee designed and intended to incentivize such employee to promote the sale of SVRX products, except for actions incidental to unrelated business activities of Seller.

The part in dispute is whether this section gives Novell the right to make SCO waive any infringement by IBM or anyone Novell wants to protect, even if SCO wants to sue them. When Novell's Sterling Brennan presented his opening statement on day 2 of the trial, he read this section, and our reporter said, "He read section 4.16, which says that Novell can tell SCO what it can and can't do to SVRX licensees." The first SCO witness that day, Robert Frankenberg, however said that Section 4.16 was to make sure that customers could do royalty buyouts. It was never intended to block SCO asserting IP rights, he testified. But you have eyes. You can read.

In SCO's Second Amended Complaint, SCO laid out its reasoning about the waiver issue:

69. To prevent a recurrence of the events leading to Amendment X, the parties decided to clarify Section 4.16 of the APA by entering into Amendment No. 2 to the APA on the same date they executed Amendment X. Paragraph B..5 of Amendment No. 2 provides:
This Amendment does not give Novell the right to increase any SVRX licensee's rights to SVRX source code, nor does it give Novell the right to grant new SVRX source code licenses. In addition, Novell may not prevent SCO from exercising its rights with respect to SVRX source code in accordance with the [APA].
70. Thus, Amendment No. 2 made it redundantly clear that Novell had retained no rights to control SCO's sole exclusive ownership of the source code and associated license agreements. In fact, Amendment No. 2 made clear that Novell could not unilaterally agree to a buyout even of SVRX royalties. Even with respect to its interests in the binary royalty stream, therefore, Novell lacked the authority to waste or forego the royalties, or to grant a licensee a buyout of its relationship with SCO.

71. Despite plain language to the contrary in Paragraph B.5, Novell has attempted to increase a "SVRX licensee's rights to SVRX source code," "prevent SCO from exercising its rights with respect to SVRX source code," and effectively "grant new SVRX source code licenses," by purporting to waive and revoke SCO's claims and rights against IBM.

So that is the issue there. I think you can see that this is in some ways even more important than the issue about specific performance, in that even if SCO owned the copyrights, if Novell can waive infringements, it can continue to do so for as long as SCO might try to sue over those copyrights.

[ Update: Both Michael DeFazio, on videotape, and Tor Braham on week 3, day 13 of the trial testified that Novell had the right to waive, and that the purpose was to protect its revenue stream:

Q: Is it your understanding that Novell had rights to waive without anything being protected?

DeFazio: He answers to the effect, Yes, the right to take action to protect the revenue stream. ...

Mr. Jacobs refers to a September 16th, 1995 draft of the APA with handwritten notes. Mr. Braham says the handwritten notes on the draft are his. Mr. Jacobs draws attention to section 4.1.6 and asks, What's going on?

Mr. Braham replies, Regarding the core Unix business, it would stay with Novell. He says he's making clear they would only act as Novell's agent, that they needed Novell's agreement for new SVRx licenses, that SCO is only an agent and if they don't perform, Novell could step in.

Mr. Jacobs: Define 'agent'. Mr. Braham does so. He says this section was Novell's attempt to protect itself.

Q: Did Novell restrict itself in any way? (Mr. Braham interprets the question substituting SCO) Yes, SCO was constrained by ... Mr. Jacobs asks, Was Novell limited? No.

Mr. Jacobs produces Novell exhibit V3, another draft of the APA (unknown date). Again he draws attention to section 4.1.6 and asks Mr. Braham to read aloud the box at bottom. He does so, "In the event that buyer shall fail to... seller has right to take action on its behalf." Braham said it was intended to be crystal clear that Novell retained the Unix business and Novell can take control.

- end update.]

As for unclean hands, Novell wanted to argue that because of SCO's refusal to identify the code it claimed was infringing, SCO had unclean hands in that it deliberately prevented companies from avoiding infringement or even knowing if it was in fact occurring. But, you say, that doesn't matter, any more, because SCO doesn't own the copyrights. But what if it gets them now? Do you remember when Novell filed its trial brief? It said this about unclean hands:

SCO has unclean hands if it (1) acted unconscientiously, or in bad faith, or unfairly, and (2) the bad conduct was connected with the subject matter of the lawsuit....Novell will show that, even if, arguendo, SCO owns the copyrights, it misused them by trying to collect royalties from companies that might not infringe the copyrights, and by refusing to give those companies the information they needed to either decide if they infringe the copyrights or change their code so they would not infringe.
I think it might still matter in that the IBM case has yet to be finished, and the Red Hat litigation is in the same boat. If SCO were found to have unclean hands, it would not then be able to collect any royalties from either company. I haven't yet found the answer to whether the issue was presented at trial. I'll add on if I find anything.

  


What the Judge Still Has to Decide in SCO v. Novell - Updated | 244 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here
Authored by: fettler on Monday, April 19 2010 @ 08:04 AM EDT
If any there may be

---
I've been eating Parkin - that's why I am so brown

[ Reply to This | # ]

Off Topic Matters
Authored by: fettler on Monday, April 19 2010 @ 08:14 AM EDT
If you like, you can post matters of an off topic nature here

---
I've been eating Parkin - that's why I am so brown

[ Reply to This | # ]

News Links
Authored by: fettler on Monday, April 19 2010 @ 08:16 AM EDT
Thirdly, all comments relating to News go here

---
I've been eating Parkin - that's why I am so brown

[ Reply to This | # ]

Now that Judge Stewart has to decide
Authored by: Anonymous on Monday, April 19 2010 @ 08:52 AM EDT
During the jury trial one could get the impression that Judge Stewart was
tilting to SCO's side, but in the end the jury found for Novell. Now we have a
set of rulings due to be made in which the judge has to render the judgements
himself. That will be interesting. I think that regardless what his initial
inclinations may have been, he will be guided by the jury decision, and cut
Novell more slack.

[ Reply to This | # ]

APA meant that more MONEY had to be paid for those copyrights (did it not mean that)?
Authored by: Anonymous on Monday, April 19 2010 @ 08:55 AM EDT
APA meant that more MONEY had to be paid for those copyrights (did it not mean
that)?

Since, Santa Cruz lacked enough money in the first place, then just asking for
copyrights would not get them transfered.

So, today, since the value to SCO is so high, then if SCO were to have them
transferred to them from Novell, I would think that, according to SCO, their
value to SCOsource, places the value at BILLIONS of dollars. So, where is SCO
to get this money.

Is the judge just to hand them over to SCO from Novell for Free? That would
maybe be a bit unfair to Novell and Novell shareholders, would not be right.

[ Reply to This | # ]

Unclean hands - was it tried?
Authored by: YurtGuppy on Monday, April 19 2010 @ 09:12 AM EDT
Was "unclean hands" tried?
6. If Defendant's unclean hands is tried, it should be tried to the Court.
I don't remember any testimony related to unclean hands during the trial.
Is that something which can show up in this next round of writings that are due from both SCO and Novell?

---

just swimming round and round

[ Reply to This | # ]

Specific performance
Authored by: Just_Bri_Thanks on Monday, April 19 2010 @ 09:20 AM EDT
Even if the Judge somehow, in some Bizzaro World ruling,
determines that the copyrights should go to TSCOG, there is
more than enough ammunition for Novel to appeal and prevail.

How much longer can TSCOG wait out the bankruptcy clock?

---
Bri. Just Bri. Thank you.
(With a long i sound.)
Without qualification, certification,
exception, or (hopefully) bias.

[ Reply to This | # ]

Funny how Novell's Slander claim was thrown out
Authored by: Anonymous on Monday, April 19 2010 @ 10:02 AM EDT
When it turns out that Novell held the title, not SCO. And as I recall, while
claiming in public that SCO owned the copyrights, Darl was demanding in private
that Novell transfer them, showing that he believed that Novell still owned
them.

I wonder if Novell will feel minded to appeal that. Not that there's much
point, other than principle, but perhaps Novell might be minded to demonstrate
that they'll defend themselves with terminal intensity.

[ Reply to This | # ]

What Copyrights for What? (Was: "What the judge ...")
Authored by: JCA on Monday, April 19 2010 @ 10:12 AM EDT
As far as i understand, we have with copyrights to two different subjects (at
least); the code and its documentation. Based on my experience with software
distributor license and software license agreements, there are different ways to
handle the issue of copyrights.
If the party distributing the software has ownership, he will write the End User
License Agreement ("EULA") to his liking; if he is not the owner of
the software, he may have to accept having to use wording in his EULA
"substantially similar" to a wording dictated by the owner.

In my experience, copyrights to the documentation may be a problem (albeit not
often encountered), as the End User may want to cut and paste parts of the
documentation into reports, presentations, and other documents. If the End User
deals with the owner of the copyrights, the case is uninteresting. However,
when the distributor does not hold the copy rights to the documentation, there
is a "problem", then whom shall the End User the the permission to
copy parts of the documentation from? The Distributor may have permission from
the holder of the copyrights to act on his behalf and therefore grant the End
User permission, otherwise the End User will have to get permission from the
owner of the copyrights. For marketing purposes, it looks much better if the
distributor can grant permission himself.

Now, could SCO be regarded a distributor? And when the agreement talks about
transfer of copyrights, are copyrights to the documentation only; that would
clearly make sense?

Best Regards,
JCA
(who is not a lawyer and does not want to become one)

[ Reply to This | # ]

What the Judge Still Has to Decide in SCO v. Novell
Authored by: Anonymous on Monday, April 19 2010 @ 10:13 AM EDT

That doesn't mean Judge Stewart can't find a way if he wants to, just that I can't imagine any way for it to happen that would make any sense

What does that have to do with anything? This is a US Court of Law. Nothing that happens has to make sense.

And since .... how can the judge order that they do so now, unless SCO pays for them?

How can you ask? See above. He can order whatever comes to his mind. Throughout the trial he demonstrated a clear bias for SCO, and now it is unconstrained by any jury.

[ Reply to This | # ]

What the Judge Still Has to Decide in SCO v. Novell
Authored by: Anonymous on Monday, April 19 2010 @ 10:41 AM EDT
"And since there was also evidence that the lower price reflected that the
copyrights were not transferring, how can the judge order that they do so now,
unless SCO pays for them?"


I don't see this. Either

Judge Stewart rules that "the copyrights" are part of the original
agreement and Novell has to transfer them (there is no money in this case).

or

Judge Stewart rules that "the copyrights" were not part of the orginal
agreement. In this case SCO could offer to
buy the copyrights, but Novell would not have to agree.

I see nothing in the agreement that can be construed as an option for SCO to buy
copyrights.

[ Reply to This | # ]

What the Judge Still Has to Decide in SCO v. Novell
Authored by: vadim on Monday, April 19 2010 @ 10:52 AM EDT
At this moment in time and space Novell has legal ownership of Unix copyrights.

So i think it could be good idea to defuse future threats against Linux is to
simply release all this code under GPL....

So even if the judge will decide that Novel should transfer copyright to SCO,
Linux community will be protected....

What do you think?

[ Reply to This | # ]

What the Judge Still Has to Decide in SCO v. Novell
Authored by: Anonymous on Monday, April 19 2010 @ 11:12 AM EDT
SCO lost, and I can only conclude that at some point will ultimately die (as
slowly and as painfully as the wait may be). I fear the real story may be in
darl(ing)'s getting the mobile business. Given his history, I suspect that we
have not seen or at least heard the last of this story.

[ Reply to This | # ]

What the Judge Still Has to Decide in SCO v. Novell
Authored by: Anonymous on Monday, April 19 2010 @ 12:22 PM EDT
" When asked, Ms. Malley read the verdict:

Did the the Amended Asset Purchase Agreement transfer the copyrights?

And the jury had entered, No.

That leaves unspoken the answer to whether that means the jury thought it was
not the intention of the APA that the copyrights transfer, but I believe that is
what they meant. If they thought the copyrights were supposed to transfer, they
would have answered that question with a yes. But does Judge Stewart agree?
"

Interesting. I agree with your contention that, given the background, it is
difficult to see how the Jury's decision
could mean anything other than they though it was not the intention of the APA
that "the copyrights" transfer. However, this is not written down
anywhere, so technically Judge Stewart can rule in favour of specific
performance without contradicting the jury.

[ Reply to This | # ]

Unclean Hands. - What the Judge Still Has to Decide in SCO v. Novell
Authored by: Anonymous on Monday, April 19 2010 @ 12:34 PM EDT
Don't forget, Novell received one of those SCO Source letters, and in their
official reply, they specifically detail that SCO did not identify the
infringing code. In fact they spend far more space in the letter with this part
of the response, than in the 'oh, by they way, you don't have the copyright' (to
paraphrase) you see at the end of the letter. So it is not just an issue of
Novell defending other customers, but it is also an issue of Novell defending
itself, in not knowing what, specifically, Novell was offending by their
distribution of Linux.

[ Reply to This | # ]

What the Judge Still Has to Decide in SCO v. Novell
Authored by: arch_dude on Monday, April 19 2010 @ 12:39 PM EDT
The copyrights in question are those owned by Novell and
"...required for SCO to exercise its rights with respect to the acquisition
of UNIX and UnixWare technologies."

The "SCO" in question here is Santa Cruz Operation.

But note:
Santa Cruz must have been able to excersize said rights, since they must have
completed the acquisition. We know this because if they had not completed the
acquisition, then they would not have been able to sell the acquired business.
But they did successfully sell the business, therefore, They must have already
acquired any copyrights they needed. But they acquired no copyrights, so they
must not have needed any, and therefore none of the copyrights at issue were
conveyed to TSCOG.

If in bizarro world copyrights convey, I think they would convey to Santa Cruz,
(i.e. Tarantella/Sun/Oracle) not to TSCOG.

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What the Judge Still Has to Decide in SCO v. Novell
Authored by: wvhillbilly on Monday, April 19 2010 @ 12:44 PM EDT
Concerning Novell's Motion in Limine #11...
However, Judge Stewart denied Novell's motion [PDF], so no evidence of SCO's being ordered to pay a monetary judgment could be presented at trial, because it would, in his view, prejudice the jury.
I should think Judge Stewart denying Novell's motion would prejudice the jury in favor of SCO if anything. But again ISTM that Judge Stewart apparently thought anything that favored Novell was prejudicial to the jury. But yet in spite of Judge Stewart giving SCO every possible break he could (and unfairly so IMO) the jury decided in favor of Novell.

Some questions:

If Judge Stewart rules in favor of SCO on specific performance, does SCO get the copyrights immediately or does Novell get a chance to appeal first?

If SCO gets the copyrights do they immediately get to restart their infringement litigation crusade?

If SCO gets to restart litigation are they still on BSF's dime or is it pay-as-you-go from here on out?

As far as SCO's performance under the contract goes, I recall it used a lot of weasel wording to convince Judge Kimball that SCOsource and the deals with Microsoft and Sun were all about UnixWare and not SVRx, contradictory to its previous assertions on the matter of what constituted SVRx and Unixware. Even so Judge Kimball did rule that part of the Sun agreement was SVRx, which should give Novell some leverage on the issue of SCO's failure to perform.

---
"It is written." always trumps, "Um, ah, well, I thought..."

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Isn't there more?
Authored by: Ian Al on Monday, April 19 2010 @ 01:09 PM EDT
In the motion practice SCOG said they didn't want any of the stayed issues like
the arbitration put before the jury.

I seem to remember that Judge Stewart accepted a stipulation by both parties to
continue the stay of both the arbitration issue and the non-compete issue (which
were originally stayed by Judge Kimball), but I have searched and cannot find
the article in which that was noted.

I found a comment from Judge Stewart saying that they would be resolved once the
outcome of the trial(s) was known. I would have thought that the case cannot be
made final until after the appeal deadline and after the stayed issues had been
resolved.

---
Regards
Ian Al

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

[ Reply to This | # ]

What the Judge Still Has to Decide in SCO v. Novell
Authored by: Anonymous on Monday, April 19 2010 @ 01:11 PM EDT
That leaves unspoken the answer to whether that means the jury thought it was not the intention of the APA that the copyrights transfer, but I believe that is what they meant. If they thought the copyrights were supposed to transfer, they would have answered that question with a yes. But does Judge Stewart agree?

I was on the jury. In deliberations we agreed that the APA could have transferred some of the copyright rights without necessarily transferring ownership. We agreed that the written contract was the best indicator of the parties intent.

It seemed clear that the intent of the deal was for Santa Cruz to develop UNIXWare, and that they would own any copyrights associated with the new development.

It was also clear that Novell intended to reserve some of the copyright rights to itself, which is how it could expect direct Santa Cruz/SCO how to act with regards to the licenses that produced the revenue stream.

A number of confusing points remained: Frankenburg's testimony that (C) transferred; The board minutes stating they did not; the written contract being the best indicator of the parties intent at the time of the deal; Tor's testimony that (C) were withheld; no testimony from Santa Cruz's lawyers from the APA negotiation; Santa Cruz/SCO doing business until 2003 without the (C) being an issue; Sabbath vs. Amadia in negotiation of A2 (Sabbaths' clerical error vs. Amadia not being authorized to change APA); Why A2 changed only schedule 1.1b and not 1.1a if the intent was to include copyrights; why A2 was so vague as to which rights were required for Santa Cruz to operate; why no one noticed during the review period that (C) were excluded in 1.1b.

The evidence seemed to work out to a tie, and per the instructions we had to find in favor of Novell. We did agree that it was possible for Novell to assign all of the rights of copyright without transferring ownership.

[ Reply to This | # ]

Something that I don't understand
Authored by: Alan(UK) on Monday, April 19 2010 @ 01:33 PM EDT
I understand that for a claim of slander of title to succeed, the copyrights
would have had to be transferred. I would understand that to mean that the APA+
would have had to be interpreted as saying that the agreement caused the
transfer, either at the time or at some time up until the alleged slander took
place.

If the agreement transferred the copyrights immediately, outright, it would
appear that Novell was not required to actually do something to make the
transfer effective. However, if the agreement required the copyrights be
transferred on request, do the copyrights belong to SCO without any action being
required of Novell?

If this is the case, as SCO has already asked for the copyrights, then SCO
already owns them. But the jury has said that the copyrights did not transfer.
Surely this ought to be the end of the matter and there is nothing left for the
judge to decide.

---
Microsoft is nailing up its own coffin from the inside.

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The Jury had to decide based on evidence presented at Trial, is the Judge so limited?
Authored by: UncleJosh on Monday, April 19 2010 @ 01:40 PM EDT
That is can Judge Stewart consider the (voluminous) record in addition to the
evidence presented to the jury in the 3-week trial?

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2 huge questions
Authored by: HockeyPuck on Monday, April 19 2010 @ 01:58 PM EDT
If SCO gets the copyrights; doesn't Novell still have the right to control new
licenses? I mean it is clear that allowing the SCOSource license to continue
would be a direct assault against Suse/Novell's business.

2nd question. SCO requires a Non-disclosure agreement to view the offending
code. So why would Novell need this since they have the copyrights, right to use
license and other protections. So why not show the code to them? They have
already seen the code. They are still under an NDA. But they could reassure
their customers (which in turn show Linux in general is fine).



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What the Judge Still Has to Decide in SCO v. Novell
Authored by: IANALitj on Monday, April 19 2010 @ 02:18 PM EDT
I am responding to one sentence of PJ's:

"Novell's slander of title claim was tossed out by the judge at the end of
the presentation of evidence at trial, on motion by SCO, because there was no
evidence, he ruled, in support of the claim."

I think that this is an overstatement. There are several elements to making out
a slander of title claim, and the judge ruled that Novell did not present
evidence for one of the necessary elements. He went so far as to suggest that
Novell had made out the other necessary elements.

It would take a review of the transcripts to see whether Novell would have
grounds for appeal.

Novell might not appeal on this issue if everything else goes well. However, if
things go badly for Novell on the post-trial motions, the tossing out of
Novell's slander of title claim might be an additional basis for the appeal that
I presume Novell would make. Also, if SCO appeals, it might be a basis for a
cross-appeal by Novell.

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The cranky old man version
Authored by: Lazarus on Monday, April 19 2010 @ 02:42 PM EDT
Ok, I'm not that old, but I am pretty cranky this morning. (Largely because
someone nearby is burning a large amount of -something-, and it's set my sinuses
off again.)


Given:

1) Novell won the trial (barring any additional appeals - and we know that SCO
will appeal).

2) The contracts state (basically) that if newSCO (successor in interest to
oldSCO who actually signed those things) determines that they -need- a copyright
to do their -UNIX- business, that Novell is supposed to turn it over.
2a) The copyright required may not be Novell's to turn over.
2b) OldSCO never asked for any copyrights. They did business 'successfully'
for more than a few years without any copyrights.

3) Darl, on the stand and under penalty of perjury, testified that newSCO did
not need any of the copyrights for their -UNIX- business; that they only needed
them for SCOSource (that which we have broadly labeled as a Linux extortion
scheme).

4) NewSCO did not comply with their existing contracts to turn over 100% of
UNIX money (and then have 5% remitted back to them).

Conclusion:

1) NewSCO has no -legitimate- basis for demanding transfer of copyrights at
this point.

1a) This lack of legitimacy will not stop SCO / BSF from insisting that the
copyrights be turned over anyway.


2) Who knows what this judge will rule.

3) It will all be appealled, one way or the other, anyway.

---
Darl McBride: The Uwe Boll of the business management world.

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The Baskin-Robbins defense
Authored by: jbb on Monday, April 19 2010 @ 03:17 PM EDT
I remember being surprised when I heard from our intrepid reporters that Judge Stewart started questioning one of SCO's witnesses about the many flavors of Unix. It seemed that the judge was doing Novell's work for them and this didn't make sense. About a week later I was reminded that there were some issues the judge had to decide which made me think that the reason Stewart was questioning the witness was to garner information needed for his decisions.

I realize SCO faces many other impediments on their way to fortune and glory but this one seems like yet another show-stopper. Every other Unix company had been able to acquire and use Unix technologies without the added benefit of getting the copyrights. This is rock solid evidence that the copyrights were not needed to acquire Unix technologies. Since the judge got SCO's witness (I don't remember who) to admit as much, I can't see how the judge would nullify the jury verdict and just hand the copyrights over to SCO even though their own witness said they were not required.


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

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"owned by Novell as of the date of the Agreement".
Authored by: Anonymous on Monday, April 19 2010 @ 03:36 PM EDT

Section 2.10 has:

"""Attachment E to this Schedule contains a listing of Seller's
copyright registrations covering product(s) of the Business."""

This is the only list of relevant copyrights. The APA excluded _all_ copyrights
including those in this list, and also all other copyrights including any for
SVRx source code and UnixWare prior to the APA.

If amendment 2 is to be held as promising transfer and the judge rules that
specific performance is to transfer them, then amendment 2 can be read to limit
these to just the list in Attachment E.

The list is only of technical publications and manuals.

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Rule 50(b) motion?
Authored by: Anonymous on Monday, April 19 2010 @ 04:43 PM EDT
Seems to me that before the Judge can rule on specific performance, he must rule
on the 50(b) motion - in which ruling he could overrule the jury and rule that
the copyrights _did_ transfer, right?

[ Reply to This | # ]

Notice of Appearance filed by Hewlett-Packard
Authored by: benw on Monday, April 19 2010 @ 06:57 PM EDT
The docket shows that HP's counsel Ramona Neal wants to be part of the
bankruptcy fun. I presume this means she will be at tomorrow's hearing? With
something to say/file, perhaps?

[ Reply to This | # ]

rights to SVRX
Authored by: Anonymous on Monday, April 19 2010 @ 07:16 PM EDT
71. Despite plain language to the contrary in Paragraph B.5, Novell has attempted to increase a "SVRX licensee's rights to SVRX source code," "prevent SCO from exercising its rights with respect to SVRX source code," and effectively "grant new SVRX source code licenses," by purporting to waive and revoke SCO's claims and rights against IBM.

Novell did not 'attempt to increase' IBM's rights. They merely confirmed the existing perpetual and irrevocable rights that IBM already held.

SCOg did not have any particular 'rights with respect to SVRX' except the right to use. They were Novell's agent.

Novell did not "grant new SVRX source code licenses,", they directed SCOg as the APA allowed, and then acted for SCOg in removing SCOg's revoking of an irrevocable licence.

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Findings of Fact
Authored by: ChrisP on Monday, April 19 2010 @ 08:45 PM EDT
Sterling Brennan has filed Novell's version of the facts as docket #852. Only
110 pages altogether. Now we await Brent Hatch's version of the facts. Will they
agree on anything?

---
SCO^WM$^WIBM^W, oh bother, no-one paid me to say this.

[ Reply to This | # ]

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