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A Significant Novell Press Release Post-Amendment 2 Says Novell Sold "UnixWare product lines"
Friday, November 19 2010 @ 09:57 PM EST

I just found a Novell press release dated November 26, 1996, which makes it *after* the October 16th, 1996 Amendment 2 was signed. Guess what it says Novell sold off to Santa Cruz? "The UnixWare product lines". I'm pretty excited about digging this up.

SCO is arguing in its Reply Brief in its appeal that Amendment 2 changed the excluded assets language of the APA so that it gave SCO the copyrights and everything:

The exclusion of all copyrights was subsequently amended in Amendment No. 2 so that copyrights "required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies" were not excluded from the sale, and thus remained within the encompassing reach of all "right, title and interest," including all "ownership" rights in UNIX and UnixWare that was sold to SCO. This appeal focuses on whether these contractual agreements, and the evidence surrounding them, properly allow a finding that none of the UNIX and UnixWare copyrights were required by SCO to exercise its rights in the UNIX and UnixWare technologies it acquired.
But here in this press release, we see what Novell told the world it sold, and once again, it was just the UnixWare business, the UnixWare product lines. No mention of UNIX at all, by the way. Let me show you the press release, because I think this knocks SCO's arguments out.

The press release includes the financials, but here's the text, with the important words emphasized by me:


Novell Reports Strong Fourth Fiscal Quarter 1996 Results
17 Cents Earnings Per Share On $384 Million Revenue

Orem, UT -- November 26, 1996 --Novell, Inc. (NASDAQ:NOVL) today reported revenue of $384 million and net income of $59 million for its fourth fiscal quarter ended October 26, 1996. Earnings per share were $0.17 on 346 million weighted average shares outstanding. These results compare with year-ago net income of $59 million or $0.16 per share and revenue of $481 million. Prior-year results include contributions from product lines that have since been discontinued or sold.

The first comparable period following Novell's divestiture of its personal productivity applications and UnixWare product lines and the company's reduction of channel inventory was the third fiscal quarter of 1996. In that quarter, Novell reported revenue of $365 million and net income of $59 million or $0.17 per share.

John A. Young, Novell chairman, said, "We're pleased that the business changes Novell has been implementing all year are having their effect on financial results. In the fourth fiscal quarter of 1996, the company achieved slightly greater profitability on almost $100 million less revenue than in the year-earlier quarter. Sequentially, revenue growth of $19 million, or 5 percent, over the third fiscal quarter of 1996 reflects the improving nature of Novell's ongoing network software business."

"We plan to move rapidly through this transition period as we position the company to address the Internet/intranet markets. Our actions continue to be directed at energizing the company for profitable revenue growth."

Novell president Joseph A. Marengi said: "The sequential gain in fourth quarter revenue was driven by strong market demand for new versions of our major products. We saw significant growth in Novell server software revenue, up $32 million or 15 percent sequentially to $247 million. Of this, revenue from our new directory-enabled IntranetWare full service intranet platform and NetWare 4 increased 38 percent to $181 million from the third quarter. In addition, our new GroupWise 5 E-mail and collaboration system, the November Comdex winner of PC Computing's 1996 Most Valuable Product Award, increased 24 percent sequentially. ManageWise 2.1, Novell's market leading, PC-based network management software, grew 18 percent from the prior quarter."

"Looking forward, we are advancing our strategy to establish Novell Directory Services (NDS) as the de facto industry standard for the rapidly expanding Internet/intranet markets. To promote mass adoption of NDS across all server platforms, we are distributing our directory to major UNIX providers today and to system providers delivering Microsoft's NT operating system in early 1997. This action will seed the market for Novell and our partners to build revenue from cross-platform, value- added network services server replication, messaging, management, and security that use our directory as a foundation."

On the balance sheet, cash and short-term investments were slightly more than $1.0 billion, compared with $1.3 billion at October 28, 1995. During 1996, Novell repurchased 33 million shares of its common stock for approximately $450 million.

For fiscal year 1996, earnings were $0.35 per share on revenue of $1.4 billion, compared with $0.90 per share and $2 billion in fiscal 1995. Year-earlier results include revenue from discontinued or sold lines of business.

Founded in 1983, Novell (NASDAQ:NOVL) is the world's leading provider of network software. The company offers a wide range of network solutions for distributed network, Internet/intranet and small-business markets. Novell education and technical support programs are the most comprehensive in the network computing industry. Information about Novell's complete range of products and services can be accessed on the World Wide Web at

Forward looking statements in this release are made under the Safe Harbor Reform Act of 1996. These statements are based on current expectations and actual results may differ materially due to risks, uncertainties, and other factors. Additional information covering factors that could cause results to differ materially from projected statements can be found in Novell's 10-K and 10-Q filings, as well as the annual report.

Founded in 1983, Novell (NASDAQ: NOVL) is the world's leading provider of network software. The company offers a wide range of network solutions for distributed network, Internet/intranet and small-business markets. Novell education and technical support programs are the most comprehensive in the network computing industry. Information about Novell's complete range of products and services can be accessed on the World Wide Web at


A Significant Novell Press Release Post-Amendment 2 Says Novell Sold "UnixWare product lines" | 82 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections go HERE, please...
Authored by: N_au on Friday, November 19 2010 @ 10:08 PM EST

[ Reply to This | # ]

Off-topic goes here!
Authored by: N_au on Friday, November 19 2010 @ 10:09 PM EST

[ Reply to This | # ]

News Picks here
Authored by: N_au on Friday, November 19 2010 @ 10:13 PM EST

[ Reply to This | # ]

A Significant Novell Press Release Post-Amendment 2 Says Novell Sold "UnixWare product lines"
Authored by: rsteinmetz70112 on Saturday, November 20 2010 @ 12:41 AM EST
What is the legal significance of this?

Novell didn't ever say that SCO didn't buy the Unixware Business.

Neither does this press release say what else Novell may have sold to SCO.

As far as I know this was never introduced into evidence so it cannot be
considered in the legal cases.

Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

A Significant Novell Press Release Post-Amendment 2 Says Novell Sold "UnixWare product lines"
Authored by: Anonymous on Saturday, November 20 2010 @ 01:26 AM EST
Would the person writing the press release have known the difference between
unix and unixware? Have any press releases been found that mention that they
retained copyrights or unix?

[ Reply to This | # ]

UnixWare Watch in 1995 and UnixWare/OpenServer Watch in 1996 may also be of interest...
Authored by: leopardi on Saturday, November 20 2010 @ 06:19 AM EST

especially this item from UnixWare/OpenServer Watch v1, #11, 6 February 1996 (with my emphasis):


First, an apology. In UOW #10, there were several incorrect uses of the UNIX trade mark, for which your UOW Editor takes full responsibility. Also, some of the writing might have confused some readers into thinking that SCO had taken the reins of the entire UNIX System business, and not just the UNIX System licensing and UnixWare businesses SCO purchased from Novell. Again, apologies from your editor.

Now, an explanation. Usually, X/Open's guide to the use of its trade marks is right next to me when I create UOW. This was not the case with UOW #10, but will be the case for all future issues. Meanwhile, if you'd like a copy of the guide, contact Graham !Bird, X/Open's Director of Branding, at, and I'm sure he'll be glad to send you a copy, so all of your references to UNIX, Spec 1170, UNIX 95 and the like are consistent with the desires of the owners of the marks.

Finally, a commitment. UTG and its member companies are committed to supporting and complying with the leading standards in the open systems industry, particularly those promulgated by X/Open. While bodies like X/Open promulgate and oversee standards, specifications, interfaces and the trade marks that accompany them, UTG members are committed to consistent, interoperable and compliant implementations of those standards.

In the next few weeks and months, you'll see UTG deliver more details about this commitment. UTG also plans to intensify its work with members and other companies, to broaden acceptance of SCO's UNIX System implementation and to increase its interoperability with other environments important to business computing.

[ Reply to This | # ]

1996 10K SEC Filing explains it even better ...
Authored by: Laomedon on Saturday, November 20 2010 @ 01:17 PM EST
Filed Jan 24, 1996:
In December 1995, Novell sold its UnixWare product line to the Santa Cruz Operation, Inc. (SCO). The Company realized a small gain and recorded $19 million of UNIX technology royalty revenue from this transaction in the first quarter of fiscal 1996. Under the agreement, Novell received approximately 6 million shares of SCO common stock, resulting in ownership of approximately 17% of SCO common stock. The agreement also calls for Novell to receive a revenue stream from SCO based on revenue performance of the purchased UnixWare product line. This revenue stream is not to exceed $84 million net present value, and will end by the year 2002. In addition, Novell will continue to receive revenue from existing licenses for older versions of UNIX System source code.

[ Reply to This | # ]

UNIX wasn't a product line
Authored by: Anonymous on Saturday, November 20 2010 @ 01:44 PM EST

Novell wasn't selling new System V licenses at the time of the APA. It's not clear that Novell ever did license System V apart from UnixWare to any new licensees. So there would be no reason for a press release to mention UNIX as a product line distinct from UnixWare.

This release doesn't prove anything, and even if it did, it would have no effect on the appeal, because new evidence isn't going to be introduced on appeal.

[ Reply to This | # ]

No consideration
Authored by: Anonymous on Saturday, November 20 2010 @ 02:20 PM EST
Amendment 2 was executed with no consideration to Novell. This fact alone
should be enough to settle the issue.

[ Reply to This | # ]

The world according to GARP (Uh! I mean tSCOg)
Authored by: dmarker on Sunday, November 21 2010 @ 04:46 PM EST

AFAICT tSCOg never expected a searchlight to be shone on them & their
claims. I am sure they believed they could muddy the waters sufficiently to make
some big money with their threats against IBM, Linux & Linux customers.

They read the original APA between Novell & Santa Cruz Op & seemed to
think they could argue the case "we need the copyrights to carry out our
business" - what was their idea of 'the business' ?, it was their SCOSource
and the litigation business they wanted to carry out.

But it seems to me the issue at the heart of it all was and is that Novell never
sold SCO (Santa Cruz Op & thus tSCOg as successors in interest) any
SCOSource or litigation business. Novell sold Santa Cruz the UnixWare business
& the management (for a 5% fee) of prior licensing streams for Unix source.
And Novell stipulated that they could step in if anything Santa Cruz did, was
harmful to Novell's business. tSOCg keep trying to hide from this last aspect.

Lets face it, the day Caldera changed their name to SCO, they set in motion a
plan of deception & confusion that they hoped would allow them to shake out
a lot of money from many companies & some big corporations. They had
achived litigation success before in the Caldera/Microsoft DR-DOS settlement.
This time they thought they could go fot the really big dollars against IBM
& Linux but it spiraled out of control & others got involved (Microsoft
via Baystar & intoducing BS&F).

The tSCOg litigation saga has been an 'orchestrated litany of lies' (mixed in
with deceptions & half truths & manipulation of facts etc: etc: etc: )

Thank the lord Groklaw came along :) - a scorching light of openness that has
burnt tSCOg's hide (in every sense of the word) again and again.


[ Reply to This | # ]

A Significant Novell Press Release Post-Amendment 2 Says Novell Sold "UnixWare product lines"
Authored by: tanner andrews on Wednesday, November 24 2010 @ 10:50 AM EST

If the press release was not introduced in the trial, then it will not [or should not] affect the appeal. You usually do not get to bring new stuff in at the appeal.

I am not your lawyer; please ignore above message.

[ Reply to This | # ]

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