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To read comments to this article, go here
The Michael Jacobs Declaration in Support of Novell's Motion to Stay & SUSE's Arbitration Request- as text
Monday, April 24 2006 @ 06:21 AM EDT

Here's the Declaration of Michael A. Jacobs in Support of Novell's Motion to Stay [PDF] as text, thanks to the unswervingly productive Steve Martin, who reports his eyes are officially bleeding after doing this one. Mine too. It's 108 pages long. That's mainly because the SUSE request for arbitation is attached as one of the exhibits.

There are, as you can see, thirteen exhibits attached to this declaration. Steve did them all. But Geeklog doesn't like such a long document, and won't render it, so I've had to place links to some of the documents, such as to SCO's 2nd Amended Complaint, which Groklaw already has done as text. Only snips from Novell's Answer and Counterclaims and SCO's Answer to Novell's Counterclaims were included as exhibits by SUSE, so I'm providing the links, in case you'd like to read the entire documents.

What stands out are two things: they "assign a value to this arbitration of between USD 50 million and 100 million" and they claim when the UnitedLinux partners went into the project, they agreed to "have the LLC own and license to the members all IP rights the members may have in the UnitedLinux technology for the members' independent inclusion in, and marketing of, their own Linux products." No one was to sue any of the others for IP claims. Further, while SCO has been vague, the document states, about exactly what they think is infringing, SCO's list of files attached as an exhibit to their 2nd Answer seem to all be taken from the Linux kernel, and Caldera/SCO didn't contribute that to UL, SUSE points out. It wasn't theirs to contribute. According to the terms of the UL contracts and for a number of other listed reasons, SUSE says SCO has no right to sue SUSE or Novell or end users over anything in the Linux kernel:

82. The MTA and JDC preclude Respondent from asserting infringement claims against any technology included in the UnitedLinux kernel for multiple reasons, including: (a) the MTA and JDC divest Respondent of ownership of any copyrights it may have claimed in any technology included in the UnitedLinux Software (except for Pre-Existing Technology, which is not at issue); (b) Claimant has a broad royalty-free license to use any intellectual property rights associated with the UnitedLinux technology, including the right to sublicense such rights to Novell and to end-users; and (c) the MTA and JDC require the source code for the UnitedLinux kernel to be made available for free use and distribution under the GPL license terms.

If this SUSE gambit works, I'd say it's pretty much curtains for SCO as far as any copyright claims are concerned, even if they have any rights to any copyrights, which Novell says they don't. I guess that's what stands out. It really is curtains, if SUSE wins this. And when you read this document, ask yourself, don't they deserve to?

***************************

MORRISON & FOERSTER LLP
Michael A. Jacobs (pro hac vice)
Kenneth W. Brakebill (pro hac vice)
[address]
[phone]
[fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
[address]
[phone]
[fax]

Attorneys for Novell, Inc.

_______________________________

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION

THE SCO GROUP, INC., a Delaware
corporation,
Plaintiff and Counterclaim-Defendant,
vs.

NOVELL, INC., a Delaware corporation,
Defendant and Counterclaim-Plaintiff.
DECLARATION OF MICHAEL A.
JACOBS IN SUPPORT OF NOVELL'S
MOTION TO STAY

[REDACTED pursuant to this Court's
April 10, 2006 Order]


Case No. 2:04-CV-00139

Judge Dale A. Kimball

I, Michael A. Jacobs, declare as follows:

1. I am an attorney duly licensed to practice law in the State of California and a partner in the law firm of Morrison & Foerster LLP, counsel of record for Defendant and Counterclaim-Plaintiff Novell, Inc. ("Novell") in this action. I was admitted to practice before this Court pro hac vice by this Court's Order of February 10, 2004. I submit this declaration in support of Novell's Motion to Stay. The statements made herein are based on my personal knowledge.

2. As discussed below, some of the exhibits attached hereto include information that may be subject to a confidentiality clause. Accordingly, the complete version of this declaration, which includes full and unredacted copies of all exhibits, is being submitted under seal. A public version of this declaration, which deletes or redacts confidential documents and information, is also being submitted.

3. Attached hereto are true and correct copies of the following documents:

(a) Exhibit I is a true and correct copy of the Second Amended Complaint filed on February 3, 2006 by Plaintiff SCO in this action, The SCO Group, .Inc. v. Novell, Case No. 2:04-CV-0139, United States District Court for the District of Utah.

(b) Exhibit 2 is a true and correct copy of the executed Master Transaction Agreement for the UnitedLinux project, dated May 29, 2002, received from Novell. This Exhibit is being filed under seal due to a confidentiality clause in the Master Transaction Agreement. Thus, the public version of this declaration does not include this document.

(c) Exhibit 3 is a true and correct copy of the executed UnitedLinux Joint Development Contract, dated May 29, 2002, received from Novell. This Exhibit is being filed under seal due to a confidentiality clause in the Joint Development Agreement. Thus, the public version of this declaration does not include this document.

(d) Exhibit 4 is a true and correct copy of relevant excerpts of Novell's Answer and Counterclaims (specifically, pages 1, 17, and 45), filed in this action on July 29, 2005.

2

(e) Exhibit 5 is a true and correct copy of relevant excerpts from SCO's Answer to Novell's Counterclaims (specifically, pages 1, 6, and 25), filed in this action on September 12, 2005.

(f) Exhibit 6 is a true and correct copy of the Request for Arbitration filed on April 10, 2006 by SuSE Linux, GmbH with The Secretariat of the ICC International Court of Arbitration, [address]. The Request for Arbitration is being been filed under seal because it contains quotations of the terms of the Master Transaction Agreement and the Joint Development Agreement, which have confidentiality clauses. The public version of this declaration contains a redacted version of this Exhibit, which deletes quotations of the contents of the Master Transaction Agreement and the Joint Development Agreement. Exhibit 6 does not include a complete set of the exhibits submitted to the ICC with the Request for Arbitration. However, most of the other documents attached hereto (specifically, Exhibits 1, 2, 3, and 7 to 13) have been submitted to the ICC as exhibits to the Request for Arbitration.

(g) Exhibit 7 is a true and correct copy of the UnitedLinux press release titled "Caldera, Conectiva, SuSE, Turbolinux Partner to Create UnitedLinux and Produce a Uniform Version of Linux For Business" dated May 30, 2002, available at http://www.unitedlinux.com/en/press/pr053002.html.

(h) Exhibit 8 hereto is a true and correct copy of the UnitedLinux press release titled "United Linux Releases Version 1.0" dated November 19, 2002, available at http://www. unitedlinux.com/en/press/pr111902.html.

(i) Exhibit 9 hereto is a true and correct copy of the SCO press release titled "SCO Unveils SCO Linux 4, Powered by UnitedLinux" dated November 19, 2002, available at http://ir.sco.com/releasedetail.cfm?ReleaseID=95573.

3

(j) Exhibit 10 is a true and correct copy of the SuSE press release titled "SUSE LINUX Unveils the Next Generation of SUSE Linux Enterprise Server" dated November 19, 2002, available at http://www.novell.com/news/press/archive/2002/suse_archive/sles_8.html.

(k) Exhibit 11 is a true and correct copy of a letter from Darl McBride to Jack Messman dated May 12, 2003.

(l) Exhibit 12 is a true and correct copy an article by S. Shankland titled "SuSE Sheltered by SCO Pact" dated May 5, 2003, available at http://news.com.com/SuSE+sheltered+by+SCO+pact/2100-1016_3-999620.html.

(m) Exhibit 13 is a true and correct copy of an article by John Blau titled "Q&A: SCO's Chris Sontag on how Unix plus Linux equals trouble" dated May 13, 2003, available at http://www.computerworld.com/printthis/2003/0,4814,81191,00.html.

I declare under penalty of perjury of the laws of the United States that the foregoing is true and correct.

Executed on this 7th day of April, 2006 in San Francisco, California.

___[Signature of Michael A. Jacobs]____

4

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 10th day of April, 2006, I caused a true and correct copy of the foregoing DECLARATION OF MICHAEL A. JACOBS IN SUPPORT OF NOVELL'S MOTION TO STAY [REDACTED pursuant to this Court's April 10, 2006 Order] to be served via first class mail, postage prepaid, to the following:

Brent O. Hatch
Mark F. James
Mark R. Clements
HATCH JAMES & DODGE, P.C.
[address]

Kevin P. McBride
[address]

Stephen N. Zack
Mark J. Heise
BOIES, SCHILLER & FLEXNER LLP
[address]

Robert Silver
Edward J. Normand
BOIES, SCHILLER & FLEXNER LLP
[address]

___[signature]____

5

EXHIBIT 1

6

SCO's 2nd Amended Complaint
and Exhibit A, copyright registrations by SCO,
and Exhibit B, list of Novell's alleged unauthorized copying in its use and distribution of SUSE Linux. [pages 7-40 of the PDF]

40

EXHIBIT 2
[FILED UNDER SEAL pursuant to this Court's
April 10, 2006 Order]

41

EXHIBIT 3
[FILED UNDER SEAL pursuant to this Court's
April 10, 2006 Order]

42

EXHIBIT 4

43

MORRISON & FOERSTER LLP
Michael A. Jacobs (pro hac vice)
Kenneth W. Brakebill (pro hac vice)
[Address]
[Phone]
[Fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
[Address]
[Phone]
[Fax]

Attorneys for Defendant Novell, Inc.

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION

THE SCO GROUP, INC., a Delaware corporation,

Plaintiff,

vs.

NOVELL, INC., a Delaware corporation,

Defendant.

NOVELL, INC.'S ANSWER AND COUNTERCLAIMS

(Jury Trial Demanded)

Case No. 2:04CV00139

Judge Dale A. Kimball

44

ANSWER

In response to Plaintiff The SCO Group, Inc.'s ("SCO") Amended Complaint filed July 9, 2004, Defendant Novell, Inc. ("Novell") pleads as follows:

1. Novell admits that it entered into an Asset Purchase Agreement with SCO's alleged predecessor in interest dated September 19, 1995. Each and every other allegation in paragraph 1 is denied.

2. Novell admits that Attachment E to the Asset Purchase Agreement provided a list of approximately 106 copyright registrations. Novell denies that Attachment E, alone or in connection with the Asset Purchase Agreement, transferred any UNIX or UnixWare copyrights to SCO. Each and every other allegation in paragraph 2 is denied.

3. Novell admits that SCO has registered a claim to UNIX and UnixWare copyrights with the United States Copyright Office. Each and every other allegation in paragraph 3 is denied.

4. Novell admits that Novell has registered its claim to UNIX and UnixWare copyrights with the United States Copyright Office. Each and every other allegation in paragraph 4 is denied.

5. Novell admits that it has, in good faith, publicly stated its belief that it owns UNIX and UnixWare copyrights. Each and every other allegation in paragraph 5 is denied.

6. Denied.

7. Denied.

8. Novell denies that SCO is entitled to any relief under its Amended Complaint, and in each and every allegation in paragraph 8 is therefore denied.

9. Admitted.

45

Caldera's total revenue at the end of fiscal year 2001 and 95% of Caldera's total revenue at the end of fiscal year 2002. But Caldera's revenue from the sale of UNIX-based products declined in the fiscal quarters following the acquisition. Caldera experienced significant decreases in actual and forecasted revenue of the acquired Santa Cruz operations.

33. Caldera incurred significant financial losses during its fiscal years 2000, 2001 and 2002. Caldera suffered losses from operations totaling $32 million in 2000, $133 million in 2001 and $24 million in 2002.

34. In June 2002, Caldera hired Darl McBride as its President and Chief Executive Officer. Mr. McBride was responsible for the company's strategic direction and planning.

35. On our about the time of Mr. McBride's arrival at Caldera, Caldera began to pursue a new business strategy for the company, launching a rebranding effort of its products and services as well as its corporate image.

36. On August 26, 2002, Caldera announced that it would change its name to The SCO Group, Inc. ("SCO"), pending shareholder approval. On or about that time, Caldera then began doing business as SCO. Caldera soon thereafter changed its trading symbol on the NASDAQ Stock Exchange from "CALD" to "SCOX." Caldera's name change was formalized on May 16, 2003, when Caldera's shareholders approved an amendment to Caldera's certificate of incorporation that changed the company's name to SCO.

37. As part of Caldera's rebranding efforts and shift in business strategy, Caldera purportedly initiated a review of its intellectual property rights. This effort culminated in the launching of a licensing initiative, which it called SCOsource, in January 2003. SCOsource, as described in further detail below, was an effort by Caldera to expand the revenue base of a company that had never before been profitable.

46

JURY TRIAL DEMAND

Counterclaim-plaintiff Novell here by demands a trial by jury of any and all issues triable by a jury.

DATED: July 29, 2005.

 

ANDERSON & KARRENBERG
[signature]
Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon

MORRISON & FOERSTER LLP
[signature]
Michael A. Jacobs
Kenneth W. Brakebill

47

EXHIBIT 5

48

Brent 0 . Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE
[address]
[phone]
[fax]

Stuart H. Singer (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Robert Silver (admitted pro hac vice)
Edward Normand (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Stephen N. Zack (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Attorneys for The SCO Group, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC.,

Plaintiff,

v.

NOVELL, INC.,

Defendant.

SCO'S ANSWER TO NOVELL'S
COUNTERCLAIMS

Case No. 2:04CV00139
Honorable Dale A. Kimball

49

30. Admits the allegations of ¶30.

F. Caldera's Financial Position and Business Strategy

31. Admits that Caldera (like, on information and belief, Novell and nearly all other companies) did not produce a profitable Linux business; and admits the other allegations of ¶31.

32. Admits that, after Caldera's acquisition of Santa Cruz's Server Software and Professional Services divisions, most of Caldera's revenue came from UNIX products and services, including approximately 90% of its total revenues at the end of fiscal year 2001 and 95% of its total revenues at the end of fiscal year 2002; admits that (at least in part because of the unauthorized use of SCO's proprietary UNIX code and other protected materials in Linux) Caldera's actual and forecasted revenues from the sale of UNIX-based products declined in the fiscal quarters following the acquisition; but denies each and every other allegation of ¶32.

33. Admits the allegations of ¶33.

34. Admits that Caldera hired Darl McBride as its President and Chief Executive Officer in June 2002 and that Mr. McBride was responsible for Caldera's strategic direction, with input from other executives of the company; but denies each and every other allegation of ¶34.

35. Admits the allegations of ¶35.

36. Admits the allegations of ¶36.

37. Admits that SCO launched the SCOsource initiative to review, enforce, and defend SCO's ownership of its UNIX intellectual property (including copyrights); admits that

50

WHEREFORE, plaintiff and counterclaim-defendant SCO demands judgment dismissing Novell's counterclaims with prejudice, along with such other and further relief as the Court deems just and proper.

DATED this 12th day of September, 2005.

Respectfully submitted, HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark F. James

BOIES, SCHILLER & FLEXNER LLP
Stephen N. Zack
Robert Silver
Stuart H. Singer
Edward Normand

By ___[signature]
Counsel for The SCO Group, Inc.

51

EXHIBIT 6
[REDACTED pursuant to this Court's
April 10, 2006 Order]

52

HOMBURGER

BY FAX AND COURIER | FIVE COPIES

The Secretariat of the
ICC International Court of Arbitration
[address]

April 10, 2006 DAF | RAG | ROD | LUE
309729 | RAG | 000015.doc

Request for Arbitration

Ladies and Gentlemen

in the matter of

SUSE Linux GmbH
[address]
Claimant

represented by Michael A. Jacobs and|or Grant L. Kim and|or Kenneth W. Brakebill, Morrison & Foerster LLP, [address], USA, and|or

Georg Rauber and|or Felix Dasser and|or David Rosenthal, Homburger Rechtsanwälte, [address]

vs.

The SCO Group, Inc.
[address]
Respondent

53

In the name and on behalf of Claimant the undersigned respectfully submit this

Request for Arbitration

pursuant to Article 4 of the ICC Rules of International Arbitration (the ICC Rules) and request the Arbitral Tribunal to grant the following

Prayers for Relief:

  1. Declare that Respondent is precluded under the Master Transaction Agreement (MTA) and the UnitedLinux Joint Development Contract (JDC) from asserting any copyright infringement claims related to SUSE Linux;

  2. Declare, in particular, that the MTA and JDC divest Respondent of ownership of any alleged intellectual property rights in any part of software included in the UnitedLinux Software (other than Pre-Existing Technology and Enhancements);

  3. Order Respondent to refrain from alleging publicly or against third parties that the use and distribution of SUSE Linux infringes upon Claimant's copyrights, as precluded by the MTA and JDC;

  4. Order Respondent to pay damages in an amount to be determined for breach of the MTA and JDC by improperly asserting claims against Claimant and its licensees, and by attacking and withdrawing support for the UnitedLinux project;

  5. Order Respondent to bear all costs of the arbitration proceeding, including the costs and expenses of the ICC and of the arbitrators, as well as attorneys' fees, cost of lost executive time and expert's costs, if any; and

  6. Award any further relief that the Tribunal deems necessary to effectuate the relief requested above.

54

Table of Contents:
1. Introduction 4
II. Procedural Issues 6
A. Preliminary Remarks 5
B. Jurisdiction and Place of Arbitration 5
C. Law Applicable to the Merits 6
D. Appointment of Arbitrator 7
E. Language of the Proceedings 7
F. Amount In Dispute 7
G. Scope of Present Submission 7
III. The Parties 8
A. Claimant 8
B. Respondent 9
IV. Summary Statement of Facts 10
A. The Linux Operating System and the "Open Source" General Public
License
10
B. The Contracts at Issue 13
C. The Development and Release of UnitedLinux 1.0 16
D. Respondent's Support for UnitedLinux and Release of SCO Linux 4.0,
"Powered by United Linux"
17
E. Respondent's Sudden Change in Position and Assertion of Claims Against
Linux
19
F. Respondent's Threats Against Claimant and Copyright Infringement Claim
Based on Novell's Distribution of SUSE Linux
21
V. Prayers for Relief 24

55

I. Introduction

1. The present dispute arises from the "UnitedLinux" project of Claimant, Respondent and two other vendors of the Linux computer operating system. The purpose of the project was to jointly develop and promote, through a jointly held Limited Liability Company, a version of Linux called UnitedLinux (including future enhancements and amendments thereto), with a view to encourage the widespread adoption of UnitedLinux as a standard for the information technology industry.

2. Consistent with this purpose, the UnitedLinux members agreed that each member would have the right to commercialize the UnitedLinux technology independently, free from claims that the other members had any proprietary rights to such technology. In particular, the UnitedLinux members agreed that each member would have broad licenses to exploit and distribute Linux products that include UnitedLinux technology. Consequently, in November 2002, Respondent and Claimant both announced the release of UnitedLinux-based products, called "SCO Linux" and "SUSE Linux", respectively. Respondent actively promoted SCO Linux as "powered by UnitedLinux".

3. However, shortly thereafter, Respondent fundamentally changed its business strategy to the detriment of the agreements to which it is a party. Respondent abandoned its Linux business and is now attempting to undermine the very business that it had promised to promote. Contrary to its commitments in the agreements in place, Respondent is now asserting that it has proprietary rights to the technology in UnitedLinux that are not licensed to its partners. Respondent publicly claimed that SUSE Linux infringes copyrights allegedly owned by Respondent, it sent threatening letters to numerous Linux users and it also initiated lawsuits against alleged infringers of Respondent's supposed proprietary rights.

4. In particular, Respondent recently filed a claim in the United States District Court for the District of Utah against Claimant's parent and licensee, Novell, alleging that Novell's distribution of SUSE Linux Infringes Respondent's supposed copyrights. Respondent's infringement claim against Novell threatens the Linux

56

business of Claimant. Claimant has initiated the present arbitration to protect its interests and to hold Respondent to the promises in the agreements that Respondent has willfully chosen to ignore.

II. Procedural Issues

A. Preliminary Remarks

5. The advance payment on administrative expenses required by Article 4.4 of the ICC Rules and Article 1.1 of Appendix III to the ICC Rules has been transferred by wire to the International Court of Arbitration as of today.

6. The undersigned are duly authorized to act on behalf of Claimant.

Evidence:

Powers of attorney Exhibit C-1 a|b

7. All evidence presented by Claimant in the course of the present arbitration proceedings will be identified as "Exhibit C-#" and numbered consecutively throughout all briefs of Claimant.

8. A glossary of special terms and abbreviations used in this Request for Arbitration is set forth in Exhibit C-2, which will be amended in the further course of the proceedings from time to time.

Enclosure:

Glossary of Special Terms And Abbreviations Exhibit C-2

B. Jurisdiction and Place of Arbitration

9. This arbitration arises from. the agreement of Claimant, Respondent, and two other companies to jointly develop and promote, through the jointly held United Linux LLC, a standard version of the Linux computer operating system, referred to as UnitedLinux. As further discussed below, the arbitration concerns the rights and obligations of Claimant and Respondent under two contracts related to the UnitedLinux project:

57

-- Master Transaction Agreement (MTA) by and between Respondent (then known as Caldera International, Inc.), Claimant (then known as SuSE Linux AG), Conectiva Inc., and Turbolinux, Inc., dated May 29, 2002;

-- UnitedLinux Joint Development Contract (JDC) by and between the same parties and, in addition, UnitedLinux, LLC, dated May 29, 2002.

Evidence:

--Master Transaction Agreement, dated May 29, 2002 Exhibit C-3
-- UnitedLinux Joint Development Contract, dated May 29, 2002 Exhibit C-4

10. REDACTED

11. Respondent has already filed claims in a U.S. court against the licensee of Claimant directed against Claimant's SUSE Linux product and has, thus, decidedly moved beyond the stage of attempting to resolve any dispute concerning copyrights to Linux amicably. As discussed below, Respondent's claims are completely inconsistent with, and precluded by, the terms of the MTA and JDC. Therefore, this dispute should be resolved by ICC arbitration as laid out in the arbitration clause in said contracts.

12. REDACTED

C. Law Applicable to the Merits

13. REDACTED

58

D. Appointment of Arbitrator

14. REDACTED Pursuant to Articles 4.3 and 8.4 of the ICC Rules, each party shall nominate an arbitrator. Claimant hereby nominates the following arbitrator as a member of the three person Arbitral Tribunal:

Dr. Roberto Dallafior
Hess Dallafior Rechtsanwälte
[address]
Switzerland

[phone]
[fax]

[email]

E. Language of the Proceedings

15.REDACTED

F. Amount In Dispute

16. For the purpose of determining the applicable ICC fees, Claimant believes that it would be appropriate to assign a value to this arbitration of between USD 50 million and 100 million.

G. Scope of Present Submission

17. The present submission is limited to the essential facts, statement of claims and exhibits as required by Article 4.3 of the ICC Rules. Claimant expressly reserves the right to further substantiate its factual and legal statements and to bring new or amended claims related to the matter in dispute and to provide supporting evidence at a later stage of the proceedings.

59

Ill. The Parties

A. Claimant

18. Claimant SUSE Linux GmbH is a German corporation specializing in the Linux operating system business. It is the legal successor of the signatory SUSE Linux AG to the MTA and JDC. The terms SUSE Linux GmbH and Claimant are used herein to refer to both companies, as appropriate.

Evidence:

Excerpts of Commercial Register for SUSE Linux GmbH, dated October 19 and December 20, 2004, the latter with General Assembly's resolution attached Exhibit C-5 a|b

19. Claimant is an indirectly owned subsidiary of Novell, Inc. (Novell), a Delaware corporation headquartered in Massachusetts, USA. Novell became the owner of Claimant in January 2004.

20. Claimant is represented in this arbitration by the following counsel:

Michael A. Jacobs, Grant L. Kim, Kenneth W. Brakebill
Morrison & Foerster LLP
[address]

[phone]
[fax]

[email addresses]

and|or

Georg Rauber, Felix Dasser, David Rosenthal
Homburger Rechtsanwälte
[address]
Switzerland

60

[phone]
[fax]

[email addresses]

B. Respondent

21. Respondent The SCO Group, Inc. is a Delaware corporation, based in Utah. Respondent's address, as specified in the MTA and JDC for the purpose of giving notices, is as follows:

[address]
Attention: Mr. Benoy Tamang

[phone]
[fax]

[email]

Respondent later notified Claimant that Mr. Tamang had left the company and that Mr. Andy Nagle had assumed responsibility for the UnitedLinux project. Accordingly, Claimant suggests that the ICC send any notices to Mr. Andy Nagle at the address above, with a copy to Mr. Darl McBride, Respondent's current CEO.

22. Respondent is the legal successor to Caldera International, Inc,, which signed the MTA and JDC. The terms The SCO Group, Inc. and Respondent are used herein to refer to both companies, as appropriate.

Evidence:

Respondent's Press Release, Caldera to Change Name to The SCO Group, August 26, 2002 Exhibit C-6

61

IV. Summary Statement of Facts

A. The Linux Operating System and the "Open Source" General Public License

23. Linux is a computer operating system. An operating system is computer software that controls basic operations of the computer. An operating system works together with application programs that provide additional functions, such as word processing, e-mail, and accounting.

24. Unlike proprietary operating systems such as Microsoft Windows, Linux has been released as open source, meaning that the source code for Linux is available to the general public.

25. Source code refers to the series of instructions in which a computer program is written, which can be read, understood, and modified by an experienced programmer. Source code is subsequently converted into object code, which is a series of bytes (symbols) that are required to run the program, but which are effectively unintelligible to anyone other than the computer.

26. Because proprietary operating systems such as Windows are normally distributed as object code only, users cannot read or modify the source code for proprietary operating systems. Moreover, proprietary operating systems are normally distributed with restrictive licenses that prohibit users from modifying the code.

27. Linus Torvalds, a student at the University of Helsinki, developed the earliest version of the Linux kernel in 1991. The kernel provides certain core functions of an operating system related to control and management of the Central Processing Unit or CPU (the chip at the heart of the computer) and other computer hardware (e.g., disk drives, monitor, keyboard, and printers); control and management of computer memory (RAM); and control and management of files used by the computer.

28. In addition to the kernel, a computer operating system generally includes software related to other functions, such as the Installation, testing, and use of the operating system. The Linux kernel has been combined with other software to create what is commonly referred to as the Linux operating system.

62

29. All versions of the Linux kernel have been released under the General Public License (the GPL) for at least the past 13 years. The GPL is a widely used open source license published by the GNU Project, whose principal sponsor is the Free Software Foundation. A copy of the General Public License that is included with the Linux kernel is submitted herewith as Exhibit C-7.

Evidence:

GNU General Public License, Version 2 Exhibit C-7

30. As explained in the preamble, the GPL takes a very different approach than that of restrictive, proprietary licenses:

"The licenses for most software are designed to take away your freedom to share and change it. By contrast, the GNU General Public License is intended to guarantee your freedom to share and change free software -- to make sure that the software is free for all Its users."
(Exhibit C-7, Preamble, page 1)

31. The GPL authorizes any third party to distribute modified versions of a computer program subject to the GPL, but only if such modified program is "licensed as a whole at no charge to all third parties under the terms of this License" (Section 2(b)). In addition, the GPL requires the source code for any modified program to be made available to the public, "for a charge no more than [the] cost of physically performing source distribution" (Section 3(b)).

32. Publication of the Linux kernel under the GPL effectively laid the foundation for the worldwide success of Linux, as it allowed anyone to use and modify the source code, but only on the condition that any distributed modifications were made freely available under the same conditions.

33. Numerous individuals and companies around the world have contributed code to the Linux operating system as open source under the GPL. As a result, Linux has evolved into a viable alternative to proprietary operating systems such as Microsoft Windows.

34. The Linux open source model offers several important benefits to users. First, the existence of competitive open source alternatives to proprietary operating

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systems gives users more options, and hence more bargaining leverage in dealing with vendors.

35. Second, because the GPL requires any published modifications to be made freely available to the public, no individual or company has exclusive, proprietary rights to the Linux kernel or to other Linux software that is covered by the GPL. Thus, unlike proprietary operating systems, Linux is not under the control of a single company or individual.

36. Third, the open source policy empowers the user, by enabling the user to read and modify the source code. This is particularly important for users such as governments, who can check open source software for possible security flaws and modify the software without the permission or involvement of the software vendor.

Evidence:

The Economist, Microsoft at the power point, September 11, 2003 Exhibit C-8

37. Fourth, because the Linux source code is freely available, patches that enhance or add features are frequently created by developers around the world and then made available to the public through the Internet.

38. Several companies have built businesses around the development, distribution and support of Linux and associated programs. One such company is Claimant, which was founded in 1993 and acquired by Novell in 2004. Linux vendors focus on providing services that go beyond the publicly available Linux operating system, such as additional software and technical support,

39. Although all versions of Linux include certain common functions and features, the Linux product (also called "distribution") provided by one company may vary from another company's distribution. For example, a particular distribution may include additional language support, other additional functions, and additional application programs that are packaged with the operating system. Linux distributions thus come in different flavors. This lack of standardization was perceived as one hindrance to the broader adoption of Linux.

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B. The Contracts at Issue

40. To promote the adoption of Linux, Claimant, Respondent and two other Linux vendors (Conectiva, Inc. and Turbolinux, Inc.) agreed in May 2002 to develop a standard version of Linux called "UnitedLinux". The four UnitedLinux members were based in four different countries from four different continents, thus providing global coverage: Germany (SUSE), the U.S. (SCO), Brazil (Conectiva), and Japan (Turbolinux).

41. The purpose of the UnitedLinux project was

(i) to develop a standard version of Linux containing those Linux components and features set forth in the JDC;

(ii) to encourage each member to include UnitedLinux technology In their own Linux products, to be promoted under the common UnitedLinux brand;

(iii) to encourage widespread adoption of UnitedLinux as the standard for the information technology industry, through the jointly formed and controlled UnitedLinux LLC (the LLC); and

(iv) to have the LLC own and license to the members all IP rights the members may have in the UnitedLinux technology for the members' independent inclusion in, and marketing of, their own Linux products.

42. The Preamble of the MTA describes this purpose as follows:

REDACTED

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REDACTED

43. Pursuant to this agreed purpose, each of the members was free to use the UnitedLinux technology in its own Linux products, which would hopefully gain widespread industry acceptance through the successful, though independent, exploitation of the jointly developed software by each of the members.

44. Thus, the UnitedLinux members agreed to pool their resources for the mutual benefit of all members. This was particularly important because at that time, in 2002, the Linux market was dominated by Red Hat, a U.S. based Linux vendor that was not a member of UnitedLinux. By combining their respective expertise, intellectual property, and other resources to jointly develop and promote UnitedLinux, the UnitedLinux members sought to achieve greater market recognition than they could obtain through separate marketing of their separate Linux distributions.

45. Consistent with this purpose, the MTA and JDC made clear that each member was entitled to distribute its own Linux products free from claims that any of the other members had any proprietary rights in the UnitedLinux Software as used in the members' Linux products.

46. In particular, the UnitedLinux members agreed that each member would have an irrevocable, perpetual, and worldwide license to use and unlimitedly exploit any intellectual property rights of the other members in the UnitedLinux Software, which would be transferred to the LLC for this very purpose. Thus, the MTA and JDC contain identical provisions in Sections 3.2.2 and 8.2, respectively, stating that:

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47. REDACTED

48. REDACTED

49. REDACTED

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50. REDACTED

51. REDACTED

52. REDACTED

C. The Development and Release of UnitedLinux 1.0

53. REDACTED

54. REDACTED

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55. REDACTED

56. REDACTED

57. The UnitedLinux project proceeded on schedule. UnitedLinux Version 1.0 was released to the public in November 2002, or less than six months after the contracts were signed in May 2002. The UnitedLinux press release stated:

"UnitedLinux is the result of an industry initiative to streamline Linux development and certification around a global, uniform distribution of Linux. Founding companies of UnitedLinux are Linux industry leaders Conectiva S.A., The SCO Group (NASDAQ: SCOX), SuSE Linux AG, and Turbolinux, Inc. UnitedLinux Version 1.0 is the engine that powers products to be sold by the four companies, each with its own local language support, value-add[ed] features, and pricing. "

Evidence:

UnitedLinux Press Release, UnitedLinux Releases Version 1.0, November 19, 2002 Exhibit C-9

D. Respondent's Support for UnitedLinux and Release of SCO Linux 4.0, "Powered by United Linux"

Respondent was initially a strong supporter of UnitedLinux and the open source model associated therewith. For example, Ransom Love, then the Chairman and CEO of Respondent (then called "Caldera" announced in May 2002 that:

"Caldera sees the formation of UnitedLinux as a tremendous benefit to the industry, to our customers, to our 16,000-member reseller

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channel, and to our IHV and ISV partners. Linux and Open Source have already changed the way software Is developed in the new online world. UnitedLinux now offers a viable business model and creates a unified environment that will attract many more global business solutions to Linux enabling far greater adoption and use. Caldera plans to make Linux not just an alternative OS, but the dominant choice for businesses worldwide who are wanting to take advantage of the benefits of online services."

Evidence:

UnitedLinux Press Release, Caldera, Conectiva, SuSE, Turbolinux Partner To Create UnitedLinux, And Produce A Uniform Version Of Linux For Business, May 30, 2002 Exhibit C-10

59. Darl McBride, Respondent's current CEO, confirmed upon his appointment in June 2002 that "UnitedLinux will be critical to the success of [Respondent]" and that Respondent sought to make "UnitedLinux a standard in our industry".

Evidence:

Respondent's Press Release, Caldera Names Darl McBride as New CEO, June 27, 2002 Exhibit C-11

60. In November 2002, Respondent proudly announced the release of SCO Linux 4.0, "powered by UnitedLinux". Respondent emphasized that:

"SCO Linux 4.0 is based on UnitedLinux 1.0, the core standards-based Linux operating system co-developed in an industry initiative to streamline Linux development and certification around a global, uniform distribution of Linux."

Respondent further stated that UnitedLinux is

"an enterprise-class, industry standard Linux operating system", which "provides a Single, Uniform Platform for application development, certification and deployment, and allows Linux vendors, Independent Software Vendors (ISVs) and Independent Hardware Vendors (IHVs) to support a single Linux offering rather than many different versions" (emphasis in the original).

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Evidence:

Respondent's Press Release, SCO Unveils SCO Linux 4, Powered by UnitedLinux, November 19, 2002 Exhibit C-12

61. UnitedLinux 1.0 included a modified form of Linux kernel version 2.4.19, which was subject to the GPL. Thus, Respondent's November 2002 release of its product "powered by UnitedLinux 1.0" triggered Respondent's obligation under the MTA and JDC to make the source code for the modified Linux kernel freely available to the public under the terms of the GPL.

62. Also in November 2002, Claimant announced its release of SUSE Linux, "[b]ased on the joint industry standard, UnitedLinux 1.0".

Evidence:

Claimant's Press Release, SUSE LINUX Unveils the Next Generation of SUSE Linux Enterprise Server, November 19, 2002 Exhibit C-13

E. Respondent's Sudden Change in Position and Assertion of Claims Against Linux

63. Although Respondent continued to distribute its Linux product for a number of months, Respondent suddenly changed its position and began attacking the Linux operating system and the UnitedLinux project.

64. In March 2003, Respondent filed a lawsuit in the U.S. against IBM, alleging that (a) Respondent owned proprietary rights to the UNIX operating system; and (b) IBM had infringed on these rights by contributing UNIX code, methods, and concepts to the Linux operating system. Respondent initially asserted claims for misappropriation of trade secrets and unfair competition (as well as other theories), and later added a claim for copyright infringement. Respondent has demanded over USD 1 billion in damages.

65. Even after suing IBM in March 2003, Respondent continued to market and distribute SCO Linux 4.0, "powered by UnitedLinux". Indeed, in April 2003, Respondent announced the release of SCO Linux Server 4.0 for the Intel Itanium 64-bit processor, which included the base UnitedLinux operating system.

Evidence:

Respondent's Press Release, SCO Ships SCO Linux Server 4.0 for the Itanium Processor Family, April 15, 2003 Exhibit C-14

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66. However, in May 2003, Respondent announced that it would cease distribution of Linux. Respondent asserted that it had only recently discovered that Linux included code that infringed on Respondent's alleged proprietary rights, even though Respondent had been distributing Linux since 2001, and had participated in the development of UnitedLinux in 2002.

Evidence:

Respondent's Press Release, SCO Suspends Distribution of Linux Pending Intellectual Property Clarification; Announces Greater Focus on UNIX and SCOx Strategy, May 14, 2003 Exhibit C-15

67. Also In May 2003, Respondent sent letters to about 1'500 major corporations, asserting that portions of the UNIX operating system had been improperly copied into Linux, and that the use of Linux infringed Respondent's alleged intellectual property rights in UNIX.

Evidence:

Respondent's Letter to Novell of May 12, 2003 Exhibit C-16

68. At the same time that it threatened Linux users, Respondent stated that it would grant licenses to Respondent's alleged intellectual property rights in return for payment of royalties, under a licensing program called "SCOSource". Respondent sought to undermine confidence in Linux and to persuade users to take intellectual property licenses from Respondent through a widely-reported campaign of threats and lawsuits against both Linux users and vendors.

69. In addition to its USD 1 billion lawsuit against IBM and its demand letters to 1'500 Linux users, Respondent took the following actions:

-- Respondent filed a lawsuit against a U.S automobile parts company, Autozone, in Nevada, asserting that Autozone's adoption of Linux to run its computer systems infringed Respondent's alleged copyrights.

-- Respondent filed a lawsuit against DaimlerChrysler, in Michigan, alleging that DaimlerChrysler had not complied with certification requirements in its UNIX license when it adopted Linux.

-- Respondent repeatedly asserted in software and information technology industry magazines and conferences that Respondent would prevail in its

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lawsuits and that companies that deployed Linux without taking SCOSource licenses did so at their legal peril.

70. Respondent's allegations have been vigorously disputed. IBM denied that any copyrightable UNIX code was included in Linux. Linux developers made similar denials and called on Respondent to specify the technical basis for its claims, including the specific Linux code at issue.

71. Despite widespread requests to identify the specific technical basis for its claims, Respondent failed to publicly identify the specific Linux code at issue. Respondent's failure to provide support for its claims led to litigation in Germany that resulted in Respondent being enjoined from asserting that Linux violated Respondent's intellectual property rights.

Evidence:

Computerworld Article, SCO fined USD 10,800 in Germany for Linux claims, September 3, 2003 Exhibit C-17

F. Respondent's Threats Against Claimant and Copyright Infringement Claim Based on Novell's Distribution of SUSE Linux

72. Respondent's campaign targeted at Linux was a direct threat to Claimant, whose business was based on Linux. Claimant responded by stating that Claimant and its customers were protected against Respondent's intellectual property claims by virtue of the licenses granted in the MTA and JDC.

Evidence:

CNET News.com Article, SuSE sheltered by SCO pact, May 5, 2003 Exhibit C-18

73. Respondent publicly disputed Claimant's position regarding the contracts. Chris Sontag, Senior Vice President and General Manager of Respondent's "SCOSource" licensing program, stated:

"Regarding contracts we have with SuSE and UnitedLinux, I would unequivocally state that there is nothing in those contracts that provides them with any protection or shelter in the way they are

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characterizing this in the press. If I were them, I would not be making those kinds of statements."

Evidence:

John Blau Interview with Chris Sontag in Computerworld, May 13, 2003 Exhibit C-19

74. In the same interview, Respondent's Chris Sontag stated that Respondent had no legal action planned against Claimant "at this time", but might take action in the future (Exhibit C-19).

75. On January 13, 2004, Novell purchased 100% of the shares of Claimant. At the same time, Claimant granted an exclusive license to Novell to all of Claimant's Intellectual property rights, including any rights under agreements and licenses with other parties. Claimant's license to Novell included Claimant's rights under the MTA and JDC,

REDACTED

76. One week after Novell completed its acquisition of Claimant, Respondent filed a lawsuit against Novell in Utah state court. Several weeks later, Novell removed the Respondent lawsuit to the U.S. District Court for the District of Utah, which is the same court in which Respondent's lawsuit against IBM is pending.

77. Respondent's claims against Novell initially focused on whether Novell had "slandered" Respondent's alleged title to the UNIX copyrights by asserting that Novell had not transferred such copyrights to Respondent. Novell has denied and continues to deny that it transferred any copyrights to Respondent. Nevertheless, Respondent recently amended its complaint to add a claim that the distribution of SUSE Linux infringes Respondent's alleged UNIX copyrights.

Evidence:

Respondent's Second Amended Complaint, February 3, 2006 Exhibit C-20

78. The Second Amended Complaint of Respondent (Exhibit C-20) alleges that:

-- "On November 4, 2003, Novell announced its acquisition of SuSE Linux, one of the world's leading distributors of Linux. Since that time, Novell

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began distributing Linux worldwide." (cf. Respondent's Second Amended Complaint, para. 46);

-- "Novell has infringed and continues to infringe SCO's copyrights by copying, reproducing, modifying, sublicensing, and/or distributing Linux products containing unauthorized contributions of SCO's copyrighted intellectual property." (cf. Respondent's Second Amended Complaint, para. 116); and

-- "Novell's unauthorized copying in its use and distribution of SuSE Linux includes but is not limited to the appropriation of numerous data structures and algorithms contained in or derived from SCO's copyrighted material. A partial listing of these data structures and algorithms is provided at Exhibit B." (cf. Respondent's Second Amended Complaint, para. 117).

79. Respondent is requesting an award of damages related to Novell's distribution of SUSE Linux, as well as an injunction prohibiting Novell from continuing to distribute SUSE Linux.

80. Respondent has remained vague about the specific portions of SUSE Linux that supposedly infringe Respondent's copyrights. However, all or virtually all of the allegedly infringing items identified in Exhibit B to Respondent's Second Amended Complaint (Exhibit C-20) appear to be part of the Linux kernel that was included with UnitedLinux. Indeed, Respondent has asserted that the allegedly improper code is included in any product that includes the Linux Kernel 2.4 or above.

81. As noted above, the Pre-Existing Technology contributed by Respondent to UnitedLinux does not involve the Linux kernel. In contrast, Respondent's infringement claim appears to be limited to certain items in the Linux kernel included in both UnitedLinux and SUSE Linux.

82. The MTA and JDC preclude Respondent from asserting infringement claims against any technology included in the UnitedLinux kernel for multiple reasons, including: (a) the MTA and JDC divest Respondent of ownership of any copyrights it may have claimed in any technology included in the UnitedLinux Software (except for Pre-Existing Technology, which is not at issue); (b) Claimant has a broad royalty-free license to use any intellectual property rights associated

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with the UnitedLinux technology, including the right to sublicense such rights to Novell and to end-users; and (c) the MTA and JDC require the source code for the UnitedLinux kernel to be made available for free use and distribution under the GPL license terms.

83. Respondent's new claim in its Second Amended Complaint has created an actual controversy between Respondent and Claimant, as the developer of SUSE Linux and licensor of this product to Novell. On the one hand, Respondent alleges that Novell's distribution of SUSE Linux infringes Respondent's alleged copyrights. On the other hand, Claimant's position is that the MTA and JDC bar Respondent from asserting any copyright infringement claims based on the distribution of SUSE Linux.

84. Respondent's improper assertion of infringement claims against SUSE Linux is a breach of the MTA and JDC. Respondent also breached the MTA by publicly attacking the Linux operating system shortly after UnitedLinux was released and by withdrawing support for the UnitedLinux project. By doing so, Respondent impeded the very purpose of the common UnitedLinux project. Instead of advancing the enhancement and distribution of Linux as open source software and joining Claimant and the other partners in increasing their market shares for the benefit of all the partners and the open source community at large, Respondent turned against Claimant and the other partners and is now on a campaign to destroy the formerly common business.

85. Respondent's claim against Claimant and its exclusive licensee Novell has caused considerable damage and threatens to cause further and irreparable damage to Claimant to be further substantiated.

V. Prayers for Relief

86. It is, therefore, of utmost importance for Claimant that Respondent is found in breach of the MTA and JDC and, amongst others, prevented from further interfering with the distribution of SUSE Linux and that this is done before the Linux business and the open source project has been damaged even more seriously.

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87. Claimant has a legal interest In declaratory judgment by the Arbitral Tribunal and in an order preventing Respondent from further directly or indirectly interfering with Claimant's business.

88. Claimant is also entitled to damages in an amount to be determined.

89. Accordingly, Claimant requests that the Arbitral Tribunal award the following relief:

  1. Declare that Respondent is precluded under the Master Transaction Agreement (MTA) and the UnitedLinux Joint Development Contract (JDC) from asserting any copyright infringement claims related to SUSE Linux;

  2. Declare, in particular, that the MTA and JDC divest Respondent of ownership of any alleged intellectual property rights in any part of software included in the UnitedLinux Software (other than Pre-Existing Technology and Enhancements);

  3. Order Respondent to refrain from alleging publicly or against third parties that the use and distribution of SUSE Linux infringes upon Claimant's copyrights, as precluded by the MTA and JDC;

  4. Order Respondent to pay damages in an amount to be determined for breach of the MTA and JDC by improperly asserting claims against Claimant and its licensees, and by attacking and withdrawing support for the UnitedLinux project;

  5. Order Respondent to bear all costs of the arbitration proceeding, including the costs and expenses of the ICC and of the arbitrators, as well as attorneys' fees, cost of lost executive time and expert's costs, if any; and

  6. Award any further relief that the Tribunal deems necessary to effectuate the relief requested above.

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For facts and reasons set out above, we kindly request the Arbitral Tribunal to uphold Claimant's Prayers for Relief.

Respectfully submitted,

(Signatures of Michael A. Jacobs, Grant L. Kim, Kenneth W. Brakebill, Georg Rauber, Felix Dasser, and David Rosenthal)

Exhibits as per separate list

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List of Claimant's Exhibits

In the Arbitration Proceeding of

SuSE Linux GmbH
vs.
The SCO Group, Inc.


Exhibits filed with Respondent's Request for Arbitration
of April 10, 2006

Exhibit C-1 - Power of Attorney, dated April 7, 2006
Power of Attorney, dated April 6, 2006

Exhibit C-2 - Glossary of Special Terms And Abbreviations

Exhibit C-3 - Master Transaction Agreement, dated May 29, 2002

Exhibit C-4 - UnitedLinux Joint Development Contract, dated May 29, 2002

Exhibit C-5 - Excerpts of Commercial Register for SUSE Linux GmbH, dated October 19 and December 20, 2004, the latter with General Assembly's resolution attached

Exhibit C-6 - Respondent's Press Release, Caldera to Change Name to The SCO Group, August 26, 2002

Exhibit C-7 - GNU General Public License, Version 2

Exhibit C-8 - The Economist, Microsoft at the power point, September 11, 2003

Exhibit C-9 - UnitedLinux Press Release, UnitedLinux Releases Version 1.0, November 19, 2002

Exhibit C-10 - UnitedLinux Press Release, Caldera, Conectiva, SuSE, Turbolinux Partner To Create UnitedLinux, And Produce A Uniform Version Of Linux For Business, May 30, 2002

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Exhibit C-11 - Respondent's Press Release, Caldera Names Darl McBride as New CEO, June 27, 2002

Exhibit C-12 - Respondent's Press Release, SCO Unveils SCO Linux 4, Powered by UnitedLinux, November 19, 2002

Exhibit C-13 - Claimant's Press Release, SUSE LINUX Unveils the Next Generation of SUSE Linux Enterprise Server, November 19, 2002

Exhibit C-14 - Respondent's Press Release, SCO Ships SCO Linux Server 4.0 for the Itanium Processor Family, April 15, 2003

Exhibit C-15 - Respondent's Press Release, SCO Suspends Distribution of Linux Pending Intellectual Property Clarification; Announces Greater Focus on UNIX and SCOx Strategy, May 14, 2003

Exhibit C-16 - Respondent's Letter to Novell of May 12, 2003

Exhibit C-17 - Computerworld Article, SCO fined USD 10,800 in Germany for Linux claims, September 3, 2003

Exhibit C-18 - CNET News.com Article, SuSE sheltered by SCO pact, May 5, 2003

Exhibit C-19 - John Blau Interview with Chris Sontag in Computerworld, May 13, 2003

Exhibit C-20 - Respondent's Second Amended Complaint, February 3, 2006

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EXHIBIT 7

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[UNITEDLINUX logo]

FOR IMMEDIATE RELEASE

For additional information:
UnitedLinux
Margot Rodger
[email address]
[phone]

Caldera, Conectiva, SuSE, Turbolinux Partner To Create UnitedLinux, And Produce A Uniform Version Of Linux For Business;

Majority of enterprise system and software vendors including AMD, Borland Software Corporation, Computer Associates, Fujitsu Siemens, Fujitsu Japan, Hewlett-Packard, IBM, Intel, NEC, Progress Software, and SAP, support effort to create standard Linux platform.

LINDON, Utah; CURITIBA, Brazil; NUREMBERG, Germany; & BRISBANE, Calif.; May 30, 2002 -- Linux Industry leaders Caldera International, Inc. (Nasdaq:CALD), Conectiva S.A., SuSE Linux AG, and Turbolinux, Inc., today announced the organization of UnitedLinux, a new initiative that will streamline Linux development and certification around a global, uniform distribution of Linux designed for business. UnitedLinux addresses enterprise customers' need for a standard, business-focused Linux distribution that is certified to work across hardware and software platforms, accelerating the adoption of Linux in the enterprise. Under terms of the agreement, the four companies will collaborate on the development of one common core Linux operating environment, called UnitedLinux software. The four partners will each bundle value added products and services with the UnitedLinux operating system and the resulting offering will be marketed and sold by each of the four partners under their own brands.

Nearly every vendor supplying a piece of the technology infrastructure used by businesses has expressed support for UnitedLinux, including systems and software vendors AMD, Borland Software Corporation, Computer Associates, Fujitsu Siemens, Fujitsu Japan, Hewlett-Packard, IBM, Intel, NEC, Progress Software, and SAP. Independent hardware and software vendors spend considerable effort certifying their products and services on individual Linux distributions to ensure product compatibility for their customers. UnitedLinux will significantly diminish the number of distributions that vendors are asked to certify and will provide a true standards-based Linux operating environment.

Customers Benefit Through Unity

According to research firm IDC, a 2001 survey of 800 North American and Western European companies found that 40% of the respondents were either using or testing Linux in their organizations. UnitedLinux will help further speed enterprise adoption of Linux by providing businesses with a greater choice in the number of applications and hardware certified to work on the uniform version of Linux. Customers will also benefit from the global sales, localization, education, support and services that all four UnitedLinux vendors will collectively provide.

The collaboration of the four leading Linux companies will result in an enterprise Linux offering, which is truly global by virtue of the companies' ability to provide local language support, training and professional services, in addition to the support of strategic partners. UnitedLinux will provide one unified Linux code base for IBM's complete eServer product line, AMD's current 32-bit and forthcoming 64-bit AMD Athlon(TM) and AMD Opteron(TM) processor-based platforms, and Intel's x86 32-bit and Itanium(TM) processor family platforms. UnitedLinux supports LSB, Li18nux, and GB18030 standards, as well as enabling installations in English, German, French, Italian, Japanese, Korean, Portuguese, Spanish, Simplified Chinese and Traditional Chinese languages.

In addition, UnitedLinux unleashes a massive research and development organization for Linux in the enterprise. Effectively, the four companies involved in this process will shift dollars and resources once allocated to creating and maintaining custom Linux operating environments and divert them to new R&D on Linux enterprise software. UnitedLinux is dedicated to bolstering the enterprise readiness of the platform, but in the same collaborative spirit from which Linux was founded and continues to flourish.

http://www.unitedlinux.com/en/press/pr053002.html

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Participation and Availability

While today's announcement outlines the founding members of UnitedLinux, the initiative is open for additional Linux companies to participate. The four partners currently plan to each offer their own server products based on UnitedLinux by the end of 2002. For additional information on UnitedLinux, contact Caldera, Conectiva, SuSE or Turbolinux or go to www.unitedlinux.com.

About UnitedLinux
UnitedLinux is a standards-based, worldwide Linux solution targeted at the business user and developed by Caldera, Conectiva, SuSE, and Turbolinux. Designed to be an enterprise-class, industry-standard Linux operating system, UnitedLinux provides a single stable, uniform platform for application development, certification, and deployment, and allows Linux vendors, Independent Software Vendors, Independent Hardware Vendors, and Original Equipment Makers to support a single high value Linux offering. For more information, go to www.unitedlinux.com.

ADDENDUM

AMD
AMD looks forward to working with UnitedLinux. Innovating within open standards is a basic tenet at both AMD and UnitedLinux. The combination of an enterprise-ready standard Linux, and high-volume, industry standard 32-bit and 64-bit server platforms from AMD will provide shared customers with a high-performance platform for enterprise computing.
  — Rich Heye, Vice President Platform and Infrastructure, AMD

Borland
As a leading provider of Linux development environments, Borland supports the efforts around UnitedLinux. This organization should help in making it easier for Borland to offer our technology running on Linux from more vendors and help to open up new opportunities and channels for Borland.
  — Simon Thornhill, VP and General Manager of rapid application solutions at Borland

Caldera
Caldera sees the formation of UnitedLinux as a tremendous benefit to the industry, to our customers, to our 16,000-member reseller channel, and to our IHV and ISV partners. Linux and Open Source have already changed the way software is developed in the new online world. UnitedLinux now offers a viable business model and creates a unified environment that will attract many more global business solutions to Linux enabling far greater adoption and use. Caldera plans to make Linux not just an alternative OS, but the dominant choice for businesses worldwide who are wanting to take advantage of the benefits of online services.
  — Ransom Love, Chairman and CEO, Caldera International

Computer Associates
As a company that has demonstrated unmatched commitment to Linux as an enterprise-computing platform, CA is extremely supportive of the UnitedLinux initiative. We believe that this broad-based cooperative effort will further accelerate the embrace of Linux by customers across all market segments and will enable them to realize the significant technical and business benefits that Linux offers in their distributed and mainframe implementations.
  — John Pincomb, VP of Marketing at Computer Associates

Conectiva
UnitedLinux represents the addition of the best qualification of each of these companies. As they are in different places, they can add qualifications that each one has developed in order to answer to the challenges of the local markets, creating a product that increases the number of answers to the technical demand. It would be very difficult for an individual company to get such a wide coverage in so many aspects. In addition, the organization model we are adopting, an alliance with the cooperation and contribution of best practices, is in accordance with the cooperative spirit Linux has wrought.
  — Jaques Rosenzvaig, CEO of Conectiva

Free Standards Group
UnitedLinux's commitment to LSB certification is a natural. I look forward to the further growth of the Linux market acceptance of open source methodologies and wider certification of Linux products.

http://www.unitedlinux.com/en/press/pr053002.html

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  — Scott McNeil, Executive Director of the Free Standards Group

Fujitsu
Linux is one of the most important strategic platforms for Fujitsu, and we have been actively developing hardware and software products, services and solutions based on Linux. We welcome UnitedLinux and commend its efforts to create a common and stable Linux distribution environment for system vendors like Fujitsu and business customers as well. Fujitsu is pleased to lend its fullest support to UnitedLinux's activities.
  — Masaharu Kitaoka, General Manager of Linux Division, Fujitsu Limited.

Fujitsu Siemens Computers
UnitedLinux transforms Linux into a business operating system par excellence. The level of performance, scalability and availability will be extraordinary. Combined with our PRIMERGY servers, UnitedLinux will provide a platform for business-critical computing solutions.
  — Dr. Joseph Reger, Chief Technology Officer Fujitsu Siemens Computers

HP
As the #1 vendor of Linux solutions and the leading proponent of standards-based computing, HP believes UnitedLinux represents an important milestone that will accelerate the use of Linux by enterprises around the world. Businesses of all sizes that are deploying Linux now have the additional benefit of this unified platform.
  — Martin Fink, general manager, HP Linux Systems Division

IBM
The formation of UnitedLinux offers multiple benefits to the industry, proving yet again that cooperation on standards simplifies application development and deployment for vendors thereby providing our mutual customers with new applications more quickly. Ultimately, UnitedLinux will accelerate Linux adoption in the industry.
  — Steve Solazzo, General Manager, Linux, IBM.

Linux International
Open Source licensing leads to each vendor having the same functionality in the base system over time. This effort shows forethought in making that effort a planned, cooperative event. Rather than spend their money re-engineering the basic underlying functionalities of reliability, scalability and availability, these vendors will be able to build a common platform with which to innovate new features that their customers desire. I wish the old Unix vendors had learned that lesson.

For many years the analysts have been saying that the marketplace could not support so many distributions of Linux, hinting that only one or two might survive. Once again the Linux community has come back with a unique answer that may prove the analysts both right and wrong. This bold step should give a strong base distribution that will satisfy the needs of the software vendor for consistency and the hardware vendor for support, yet allow differentiation at the upper levels to meet the needs of diverse customers.
  — Jon "maddog" Hall, Executive Director of Linux International.

Open Forum Europe
OpenForum Europe was formed to accelerate and broaden the use of Linux and Open Source Software in business, breaking down the perceived business blockers that our research has shown may slow down its adoption by business. The announcement of UnitedLinux is very welcome, tackling potential duplication of effort and via the partner collaboration will boost confidence of CIOs in selecting Linux. UnitedLinux is a future-oriented step that has the full support of OpenForum Europe.
  — Graham Taylor, Programme Director, OpenForum Europe

NEC
NEC believes that any activities of the UnitedLinux will be useful for all of us -- Linux users, developers and system integrators -- related to the enterprise systems. NEC welcomes such activities and will contribute development of future Linux market for enterprise.
  — Chieko Takahashi, Senior Manager of Open Source Software Solution Center, NEC Solutions, NEC

Progress Software
We are encouraged by the announcement of a UnitedLinux Operating System and look forward to its first release. We see the collaboration between Caldera, SuSE, Turbolinux and Conectiva as being a most effective way of integrating several Linux distributions into one standard based Linux Operating System that is specifically targeted

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for business implementations. This is an essential step in the evolution of the Linux OS, which will provide notable economical and technological benefits to business customers and software companies like Progress.
  — Maggie Alexander, Vice President of Product Planning at Progress Software

SAP
UnitedLinux will assist SAP in extending our Linux reach while maintaining the clear and simple structure of the distributions and databases supported by SAP solutions. Throughout the world, UnitedLinux will help to make SAP solutions on Linux an even more compelling offering with respect to service, support, reliability and performance to price ratio.
  — SAP AG, Karl-Heinz Hess, Member of the Extended Executive Board

SuSE Linux AG
UnitedLinux provides our customers a business Linux that can truly be called the "best of the best". Global accounts will especially welcome the worldwide availability of one unified product combined with a set of services delivered either by a local Linux player or an international acting partner like IBM Global Services.
  — Gerhard Burtscher, CEO SuSE Linux AG

Turbolinux
Asia Pacific is one of the fastest growing markets for Linux and UnitedLinux will only accelerate that rapid growth. Turbolinux has market leadership in Asia Pacific with major enterprise customers, hardware and software partners throughout the region, as well as aiding in China's massive undertaking to select a technology infrastructure for the entire country. UnitedLinux will benefit these customers, especially those in the largest enterprises that use Linux across their global infrastructures. With today's announcement, there are no credible arguments left against Linux in the enterprise. Linux will take its deserved place alongside every other enterprise operating environment.
  — Ly-Huong Pham, CEO of Turbolinux

[logos of Conectiva S.A., The SCO Group, SuSE Linux AG, and Turbolinux, Inc.] http://www.unitedlinux.com/en/press/pr053002.html

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EXHIBIT 8

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[UNITEDLINUX logo]

FOR IMMEDIATE RELEASE

For additional information:
UnitedLinux
Margot Benoit
[email address]
[phone]

UnitedLinux Releases Version 1.0

Industry Leading Technology Providers Sponsor Launch Event

LAS VEGAS - Nov. 19, 2002 - Today the UnitedLinux group announced the release of Version 1.0 of its UnitedLinux product, a standards-based Linux operating system targeted at the business user. UnitedLinux is the result of an industry initiative to streamline Linux development and certification around a global, uniform distribution of Linux. Founding companies of UnitedLinux are Linux industry leaders Conectiva S.A., The SCO Group (NASDAQ:SCOX), SuSE Linux AG, and Turbolinux, Inc. UnitedLinux Version 1.0 is the engine that powers products to be sold by the four companies, each with its own local language support, value-add features, and pricing.

Sponsors of the UnitedLinux 1.0 launch event are HP (NYSE:HPQ) and IBM (NYSE:IBM). Today's announcement was made during the UnitedLinux press conference at the COMDEX event in Las Vegas.

"UnitedLinux has successfully reached its first major milestone by delivering Version 1.0 according to the schedule laid out last spring when the group was formed," said Paula Hunter, general manager of UnitedLinux. "Today's launch of UnitedLinux Version 1.0 is a tribute to the collaborative skills and technical expertise of the four founding companies, as well as to the vision that brought the UnitedLinux organization into being."

Built on top of a solid and tested foundation, UnitedLinux 1.0 is an enterprise-class operating system with exceptional stability, scalability and reliability, and its high level of quality has been previously available only in expensive proprietary operating systems. Distributed virtually everywhere in the world and supported by leading global ISVs and IHVs, UnitedLinux Version 1.0 will initially be available in English, Japanese, Simplified Chinese, Korean, Portuguese, Spanish, Italian, German, French and Hungarian. UnitedLinux Version 1.0 will have local language and local time zone support for customers around the world, with access to a channel of more than

http://www.unitedlinux.com/en/press/pr111902.html

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16,000 resellers and a global pre- and post-sales support team. Details of global training and certification programs will be made public in the near future.

"As the leading provider of industry-standard Linux hardware and a long time proponent of open-source computing, HP believes in offering our customers the choice to deploy Linux across the platforms that best meet their individual computing needs," said Rick Becker, HP Vice President, Software CTO, Industry Standard Servers. "With the delivery of UnitedLinux Version 1.0 we are able to offer our customers, across the world, additional choice and flexibility, enabling them to deploy the best Linux solution for their business."

"Customers want to rapidly deploy Linux-based applications to realize business value, and ISVs want a common, reliable, standards based platform upon which to build their applications," said Steve Solazzo, General Manager, Linux, IBM. "Today's delivery of UnitedLinux Version 1.0, right on schedule, simplifies the tasks for application providers and customers alike, allowing them to more rapidly deploy Linux solutions with confidence."

UnitedLinux Version 1.0 incorporates a wide range of features that enhance its usefulness for enterprise environments. Details are contained in a UnitedLinux white paper at www.unitedlinux.com.

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EXHIBIT 9

91

SCO Unveils SCO Linux 4, Powered by UnitedLinux

Stable, Reliable Linux Platform Backed with Guaranteed Support from Trusted Operating System Vendor

LAS VEGAS — Comdex — November 19, 2002 — The SCO® Group (SCO)(Nasdaq: SCOX), in coordination with the UnitedLinux 1.0 launch at Comdex, today announced the release of SCO Linux 4.0, powered by UnitedLinux. SCO Linux 4.0 is a high-quality Linux operating system designed for mission-critical business applications, with guaranteed stability, security and worldwide support from SCO. SCO Linux 4.0 is based on UnitedLinux 1.0, the core standards-based Linux operating system co-developed in an industry initiative to streamline Linux development and certification around a global, uniform distribution of Linux. SCO Linux 4.0, powered by UnitedLinux provides customers with the base UnitedLinux operating system as well as the additional software, support and services from SCO that customers need to successfully run Linux in business environments.

"SCO understands that for any operating system to be commercially viable, especially Linux, it needs a well-defined roadmap from a trusted supplier, who is committed to and capable of supporting it," said Andy Nagle, director of SCO Linux products. "SCO is uniquely qualified to make the UnitedLinux platform viable for business because of its proven track record in successfully building, deploying and supporting stable operating platforms for more than 23 years. SCO Linux 4.0 is built upon SCO's traditional combination of top OS platform technology, and support and service features that customers can rely on to support critical business environments."

"Because Linux is built on ideas and components from so many parties and is so widely distributed, the issue of support and reliability is still a key concern of customer and vendors," said Judy Chavis, worldwide Linux director, HP industry standard servers. "Built on a secure set of unified LSB compliant standards by UnitedLinux and with full support offerings from SCO, SCO 4.0 offers our customers another strong Linux platform choice for their worldwide Linux deployments."

"For hardware and software vendors, it has become an increasingly difficult task to certify their products across the many distributions of Linux. SCO Linux 4.0, powered by UnitedLinux can help vendors overcome that obstacle by providing widespread application support across the base of UnitedLinux distributions," said Bill Claybrook, Research Director for Linux and Unix at Aberdeen Group. "This in turn benefits IT departments by providing them with greater choice and support as they deploy Linux."

SCO Linux 4.0 is an ideal platform to support small to medium businesses and replicated branch sites such as retail store operations, hotel chains and banks. In these environments, operational efficiency and flexibility to respond to new customer demands are essential. SCO Linux 4.0 provides these qualities with the support and experience of a trusted supplier.

SCO Linux 4.0 Features and Support
SCO Linux 4.0, powered by UnitedLinux adds several features and support services:

  • As an enterprise-class, industry-standard Linux operating system, UnitedLinux provides a Single, Uniform Platform for application development, certification and deployment, and allows Linux vendors, Independent Software Vendors (ISVs) and Independent Hardware Vendors (IHVs) to support a single Linux offering rather than many different versions. SCO offers certification services that will be accepted as support across all distributions of the "powered by UnitedLinux" family.

  • Stability with SCO's commitment to operating system quality and continuous operating system uptime, worldwide support and 12-18 month release cycles. This stable, predictable maintenance and support schedule makes SCO Linux 4.0 a smart choice for business IT needs.

  • Award-winning Support Services are available from SCO for tasks including install, configuration support and 24x7 emergency response. SCO has a presence in more than 82 countries and can provide local language support worldwide. SCO's dedicated engineering services organization provides experienced support for UNIX, all other Linux platforms powered by UnitedLinux, as well as all RPM-based Linux distributions.

  • Maintenance is guaranteed with every copy of SCO Linux 4.0. Each release of SCO Linux will be maintained

    92

    for a minimum of two years, and SCO has a dedicated team of escalations engineers to work on fixes for the UnitedLinux platform. Maintenance includes notification of security patches and other critical upgrade information.

  • Customized Linux Solutions are available through SCO's channel of more than 16,000 resellers. SCO's partners and resellers are willing to partner with OEMs to sell SCO-based solutions. SCO can incorporate the support of UnitedLinux into existing Engineering Services agreements providing a one-stop-shop for OEM customers requiring representation with SCO and the UnitedLinux development teams.

  • Certified Training on UnitedLinux is available from SCO and SCO authorized education partners using award-winning SCO education materials.

To read what the industry is saying about SCO Linux, please visit www.sco.com/company/press/quotes/scolinux.html.

Pricing and Availability
SCO Linux 4.0 is available today in four different editions:

SCO Linux 4.0 Server, powered by UnitedLinux Base Edition--$599

  • Includes SCO Update maintenance service

SCO Linux 4.0 Server, powered by UnitedLinux Classic Edition--$699

  • Includes unlimited installation and configuration technical support incidents via phone, Web or email for one year; SCO Update Service; five business hour response; designated technical support contacts; and Online Service Manager which includes access to current product technical articles and patches, ability to submit service requests online, and online support activity and status

SCO Linux 4.0 Server, powered by UnitedLinux Business Edition--$1249

  • Includes unlimited technical support incidents via phone, Web or email for one year; SCO Update Service; three business hour response; designated technical support contacts; Online Service Manager (same access as Classic Edition)

SCO Linux 4.0 Server, powered by UnitedLinux Enterprise Edition--$2199

  • Includes unlimited technical support incidents via phone, Web or email for one year; SCO Update Service; one business hour response during regular business hours; designated technical support contacts; 24x7 after-hours emergency service telephone support; Administrative Account Manager; Office Service Manager (same access as Classic Edition)

About SCO
The SCO Group (Nasdaq: SCOX), formerly called Caldera International, provides "Powerful Choices" for businesses through its UNIX, Linux and Volution product lines and services. Based in Lindon, UT, SCO has representation in 82 countries and 16,000+ resellers worldwide. SCO Global Services provides reliable localized support and services to partners and customers. For more information on SCO products and services, visit http://www.sco.com.

SCO and the associated SCO logo are trademarks or registered trademarks of Caldera International, Inc. in the U.S. and other countries. UNIX and UnixWare, used under an exclusive license, are registered trademarks of The Open Group in the United States and other countries. Linux is a registered trademark of Linus Torvalds. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

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EXHIBIT 10

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BW0432 NOV 19,2002 13:05 PACIFIC 16:05 EASTERN

( BW)(CA-SUSE-LINUX) SuSE Linux Unveils the Next Generation of SuSE Linux Enterprise Server

Business Editors/High-Tech Writers

OAKLAND, Calif.--(BUSINESS WIRE)--Nov. 19, 2002--

Powered by UnitedLinux, SuSE Linux Enterprise Server 8 Delivers
Efficient, Secure, and Reliable Future-proof Operating System
Available Across All Significant Platforms

SuSE Linux, the international Open Source technology leader and solutions provider, today announced the next generation of SuSE Linux Enterprise Server.

Based on the joint industry standard, UnitedLinux 1.0, SuSE Enterprise Server 8 delivers increased security, scalability, reliability, standard-compliance, software maintenance, and support. Available in December, SuSE Linux Enterprise Server 8 combines maximum reliability and performance with an unprecedented scalability across all significant hardware borders. SuSE Linux Enterprise Server is also certified and validated for central enterprise applications such as mySAP.com and IBM DB2.

"IT experts worldwide aim to reduce costs as well as increase the performance, security and flexibility of their IT infrastructure," said Boris Nalbach, CTO of SuSE Linux. "SuSE Linux Enterprise Server is the product of choice for corporate deployment. It offers decision makers financial planning security and eases administrators' duties through its technical maturity and continuous maintenance."

"SuSE has broken new ground with this continuum of enterprise offerings," said Bob Butler, Business Unit Executive, Linux Distributors, IBM. "Using a common Linux source code, applications can quickly span heterogeneous environments -- from micro to mainframe, small business to Fortune 500. Coupled with full IBM middleware certification and worldwide IBM Global Services support, SuSE Linux Enterprise Server 8 will offer customers a compelling value proposition."

"Based on unified LSB-compliant standards by UnitedLinux, SuSE Enterprise Server 8 enables HP to offer our customers another strong Linux platform choice for their enterprise-level Linux deployments," said Judy Chavis, Worldwide Linux Director, HP Industry Standard Servers. "Running on industry-standard HP ProLiant servers or our Itanium 2-based server family, SuSE Linux Enterprise Server 8 offers customers a secure, reliable, and well supported Linux platform."

Only Server with Complete Cross-Platform Availability

SuSE Linux Enterprise Server 8 is the only server system worldwide that boasts a uniform code basis for all significant hardware platforms. SuSE Linux Enterprise Server 8 is available on industry-standard HP ProLiant servers and HP Itanium 2-based servers for 32-bit and 64-bit Intel platforms, respectively. In addition, SuSE Linux Enterprise is available on AMD 32-bit and 64-bit processors, Fujitsu Siemens Primergy servers and the entire IBM eServer series (xSeries, iSeries, pSeries, zSeries), making it the perfect platform for consolidating heterogeneous server structures and providing significantly reduced system administration costs.

SuSE Linux Enterprise Server 8 delivers powerful and mature tools for all mission-critical server applications, such as file, print, Web, and security services. In addition, it is highly suitable as a server for applications and middleware solutions such as databases, e-commerce, and storage, as well as for clustering and ThinClient systems.

Unique: The SuSE Linux Maintenance Program Expands

95

A new expanded portfolio of system maintenance and support services ensures that businesses get qualified assistance from SuSE for the running system. Installation support is now valid for the entire maintenance term. In the SuSE Linux Maintenance Web, users can access well-documented fixes, patches, and updates, ensuring optimum system availability. Various support services specifically designed for SuSE Linux Enterprise Server 8 are available at fixed rates, with guaranteed turnaround times, and around the clock.

Maximum Convenience: Easy Installation and System Configuration

SuSE Linux Enterprise Server 8 also improves administration and configuration efficiency with the new installation tool AutoYaST. AutoYaST enables automated installation of a user-defined SuSE Linux Enterprise Server configuration in a distributed network, greatly reducing installation time and administration costs and guaranteeing a global quality-assured software rollout. Using the graphical YaST2 frontend in SuSE Linux Enterprise Server 8, hardware components and server services can comfortably be configured in the running system. YaST's remote administration by way of a secure encrypted connection provides security and efficiency.

Globally Standardized Base Technology: UnitedLinux 1.0

SuSE Linux Enterprise Server 8 is based on the uniform global Linux business infrastructure, UnitedLinux 1.0. Jointly developed by Conectiva, SuSE, The SCO Group, and Turbolinux, and supported by leading hardware and software providers, UnitedLinux 1.0 provides multiple language support and compliance with the main Linux standards (LSB, FHS, OpenI18N).

Product Scope and Availability

SuSE Linux Enterprise Server 8 for x86 will be available in December from SuSE Linux resellers. In addition, other versions of SuSE Linux Enterprise Server 8 for S/390 and zSeries (31-bit and 64-bit), iSeries, pSeries and for Itanium 2-based servers will be available in December. SuSE Linux Enterprise Server 8 will also support AMD's x86 64-bit architecture, which will be available beginning 2003.

The recommended retail price of US$ 749.00 for SuSE Linux Enterprise Server 8 for x86 includes four CDs, detailed manuals, and the SuSE Linux Maintenance Program for one server for 12 months. For the benefit of users of SuSE Linux Enterprise Server 7 who participate in the Maintenance Program, SuSE offers an upgrade to SuSE Linux Enterprise Server 8 together with the documentation at the price of US$ 129.00.

For further information, please visit www.suse.com/sles/

About SuSE

SuSE Linux is the international technology leader and solutions provider in Open Source operating system software. SuSE's unique expertise in Linux and its largest development team worldwide dedicated to Open Source software has contributed to the recognition of SuSE as the most complete Linux solution available today. SuSE Linux is a privately held company focused entirely on supporting the Linux community and Open Source development. For more information, please visit www.suse.com.

Note to Editors: SuSE is a registered trademark of SuSE Linux AG. Linux is a registered trademark of Linus Torvalds. All other trademarks mentioned herein are the property of their respective owners.

--30--kt/sf*

CONTACT: The Terpin Group (for SuSE Linux)
Eunice Kim and Xenia von Wedel, [phone]
[email]

KEYWORD: CALIFORNIA

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INDUSTRY KEYWORD: SOFTWARE HARDWARE COMPUTERS/ELECTRONICS
SOURCE: SuSE Linux

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EXHIBIT 11

98

(SCO Letterhead)

May 12, 2003

Mr. Jack L. Messman
Chairman & CEO
Novell, Inc.
[address]

Dear Jack:

SCO holds the rights to the UNIX operating system software originally licensed by AT&T to approximately 6,000 companies and institutions worldwide (the "UNIX Licenses"). The vast majority of UNIX software used in enterprise applications today is a derivative work of the software originally distributed under our UNIX Licenses. Like you, we have an obligation to our shareholders to protect our intellectual property and other valuable rights.

In recent years, a UNIX-like operating system has emerged and has been distributed in the enterprise marketplace by various software vendors. This system is called Linux. We believe that Linux is, in material part, an unauthorized derivative of UNIX.

As you may know, the development process for Linux has differed substantially from the development process for other enterprise operating systems. Commercial software is built by carefully selected and screened teams of programmers working to build proprietary, secure software. This process is designed to monitor the security and ownership of intellectual property rights associated with the code.

By contrast, much of Linux has been built from contributions by numerous unrelated and unknown software developers, each contributing a small section of code. There is no mechanism inherent in the Linux development process to assure that intellectual property rights, confidentiality or security are protected. The Linux process does not prevent inclusion of code that has been stolen outright, or developed by improper use of proprietary methods and concepts.

Many Linux contributors were originally UNIX developers who had access to UNIX source code distributed by AT&T and were subject to confidentiality agreements, including confidentiality of the methods and concepts involved in software design. We have evidence that portions of UNIX System V software code have been copied into Linux and that additional other portions of UNIX System V software code have been modified and copied into Linux, seemingly for the purposes of obfuscating their original source.

99

As a consequence of Linux's unrestricted authoring process, it is not surprising that Linux distributors do not warrant the legal integrity of the Linux code providers to customers. Therefore legal liability that may arise from the Linux development process may also rest with the end user,

We believe that Linux infringes on our UNIX intellectual property and other rights. We intend to aggressively protect and enforce these rights. Consistent with this effort, on March 7, we initiated legal action against IBM For alleged unfair competition and breach of contract with respect to our UNIX rights. This case is pending in Utah Federal District Court. As you are aware, this case has been widely reported and commented upon in the press. If you would like additional information, a copy of the complaint and response may be viewed at our web site at www.sco.com/scosource.

For the reasons explained above, we have also announced the suspension of our own Linux-related activities until the issues surrounding Linux intellectual property and the attendant risks are better understood and properly resolved.

Similar to analogous efforts underway in the music industry, we are prepared to take all actions necessary to stop the ongoing violation of our intellectual property or other rights.

SCO's actions may prove unpopular with those who wish to advance or otherwise benefit from Linux as a free software system for use in enterprise applications. However, our property and contract rights are important and valuable, not only to us, but to every individual and every company whose livelihood depends on the continued viability of intellectual and intangible property rights in a digital age.

Yours truly,

THE SCO GROUP

By: (signature of Darl McBride)
Darl McBride
President and CEO

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EXHIBIT 12

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SuSE sheltered by SCO pact

By Stephen Shankland

103

EXHIBIT 13

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ComputerWorld: Q&A: SCO's Chris Sontag on how Unix plus Linux equals trouble

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