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Novell v. SCO a Slam Dunk?
Monday, August 29 2005 @ 11:35 AM EDT

Today eWeek asked two attorneys to comment on the Novell blockbuster Answer with Counterclaims. It's a little hard for attorneys to comment on a case they aren't actually part of, naturally, because they are presumably busy with cases of their own and can miss a few details, as a result. And heaven only knows it's possible to be misquoted or selectively quoted. But I think they both may have missed some pieces of evidence already on the table.

Both focus on the 1995 Asset Purchase Agreement [PDF] and Amendment 2, and because the documents aren't so obvious on the surface on the point of copyright transfer, on that basis feel that it won't be a slam dunk for Novell.

That depends on how you define "it". The APA issues are old news, of course. We know all about the copyright confusion, although we also know that so far, Judge Kimball has said that it's his opinion that there was no copyright transfer by means of the APA and Amendment 2. Maybe the two lawyers didn't get the memo on that.

But it's the new claims that have shifted the focus on the Novell litigation. First, who needs a slam dunk? Novell just needs to prevail in the end. But the new Novell counterclaims have totally shifted the balance and the focus of that law suit. Just having the copyright issue before a judge is an enormous achievement. SCO has avoided doing so with all its power, and now they are trapped. Do you really believe, if they had any confidence they owned the copyrights, they'd have held back from asserting that right earlier? Instead, they brought that funny slander of title lawsuit, which looked like it was never going to settle the issue of who owned the copyright.

Now the issue of who is the copyright holder is squarely before the court, at last, and it wasn't SCO who put it there. That is the big news. Why do you think SCO never brought a flat-out straight copyright infringement claim? Why do you think they didn't bring a breach of contract claim against Novell, for that matter? Because they felt *confident*? Puh-lease.

It's the Novell counterclaims that are more likely candidates for a slam dunk, not the copyright issue. I marvel that anyone would opine on slam dunks, frankly, until SCO at least has a chance to respond, but if we are going to throw out ideas, here's something to chew on. The copyright ownership issue isn't just a matter of he said, she said. There is evidence on paper, too, and so far, it's pretty much all on Novell's side.

For example, we have the Novell Board of Director notes on the eve of the deal, saying that copyrights would be retained. That's not imperfect memories trying to recall what happened. It's contemporaneous evidence on paper. We have Unixware copyright notices as well, showing up long after the deal with Santa Cruz, with Novell still listed as copyright owner. If you have UnixWare, try it for yourself, and you'll see. Here's the copyright notice you'll see when you start up UnixWare 2.1.2:

Copyright 1996 The Santa Cruz Operation, Inc. All Rights Reserved.
Copyright 1984-1995 Novell, Inc. All Rights Reserved.
Copyright 1987, 1988 Microsoft Corp. All Rights Reserved.
How do I know? Santa Cruz employee Roger Binns back in 1998 wrote an email which you can find on the internet telling us so. You find that notice in emails on the subject on the Internet for years after the deal went down, indicating that Novell is telling the truth and that they did retain the copyrights, while Santa Cruz got copyrights on anything new from the time of the deal onward. That too isn't a matter of people struggling to remember the four corners of a deal a decade or so later. It's evidence on paper.

So far, we have nothing much on SCO's side but SCO saying, "But we must have gotten the copyrights. We paid them money."

Judge Kimball has already indicated that SCO needs to come up with something on paper that says the copyrights transferred, or else. So while no one, I think, can expect a slam dunk on that issue, it's already played out pretty far, and so far SCO is obviously losing on that point. It's only on the issue of whether Novell said more than it should have, for example, that Kimball kept SCO's slander of title corpse warmed up a little longer.

One attorney, John Ferrell, opines that all the rest of Novell's counterclaims are a sideshow:

John Ferrell, a founding partner of Palo Alto, Calif.-based technology law firm Carr & Ferrell LLP, said, "The claims and counterclaims involving rejected audit demands, public slander, missed royalty payments, false securities filings, and the like, are all sideshows; contract interpretation is the big-top, main event."
I beg to differ. Legally, he's correct that this is the piece that matters to all the rest of SCO's legal fantasies, except for the contract claims against IBM, but practically speaking, those "side shows" are very likely to make it difficult for SCO to make it to the main event in one piece. That is the piece the two forgot to mention.

Oh, and another thing. SCO has yet to show any copyrights that have been infringed. The judge said so, and so, naif that I am, I would suggest that might make the APA business of very little practical value to SCO, even if it were to prevail on the copyright issue. From IBM's standpoint, it doesn't matter who holds the copyright. They've already apparently convinced the judge that unless SCO comes up with something new, they are not infringing the copyrights in question in any way.

In real life, practical considerations are often more weighty than theoreticals or legal purity. One attorney, Thomas Carey says SCO v. IBM stands for "procedural purity," meaning, I think, that in his eyes the judge is giving SCO too many chances to prove its case, or at least a sufficiency. I am aware that some of you would agree.

He also is quoted as saying he can't make sense of the deal, and he views it as, "I hereby sell you a rock. But I retain title to the rock. What kind of sense does that make?" However, it was actually more like this. SCO wanted the rock and all the mineral rights within and underneath it, but they didn't have enough money, so Novell sold them the rock and the right to build a hotel on it, but they retained the underground mineral rights, so should somebody stike oil while digging in the yard, it's not the hotel owner who gets to claim it. Nothing odd about that. It happens all the time.

And speaking of not making sense, if Novell did sell everything, including all the copyrights, why would Santa Cruz have to pay 95% of everything to Novell? For what?

2013: I found this today in drafts, and realized I never hit the publish button, because I had to take time to find the links to the documents mentioned, and apparently I forgot all about it. So here it is, just because it's important to have the story complete, for historians. But this note is so you know why there are no comments. ~pj

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