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Novell Memo in Support of Motion For a More Definite Statement & Brakebill Declaration, as text
Wednesday, April 26 2006 @ 06:25 AM EDT

Here's Novell's Memorandum in Support of Novell's Motion for a More Definite Statement of SCO's Unfair Competition Cause of Action [PDF] as text.

It's asking for a more definite statement regarding SCO's unfair competition cause of action in SCO's Second Amended Complaint, which is also attached as an exhibit to the Declaration of Kenneth W. Brakebill in Support of Novell's Motion for a More Definite Statement [PDF]. There are some other exhibits, too, some email and faxed letters between the lawyers for the parties.

I have to share with you that the OCR I was sent mangled Edward Normand's address, as OCR applications can sometimes do, and it listed his address as Annoy, NY instead of Armonk, NY. It made me smile.

But what really made my hair stand on end when transcribing these documents is I think I see a tie-in to Yarro's Law, as I call it. Believe it or not, the Unfair Competition statute that Yarro sponsored and that was passed in Utah in 2004 may turn out to be the statute SCO seeks to use against Novell for its unfair competition claim. Novell suspects that, and it tried to get SCO to tell if that was the statute SCO is relying on, but SCO won't say, so Novell is asking the court to force SCO to tell.

The conversation we see in the emails and faxes begins with a Dear Ted letter from Novell's Kenneth Brakebill to SCO's Edward Normand:

We cannot tell from SCO's newest complaint what unfair competition law SCO is asserting against Novell. Paragraph 126, for example, simply references "the applicable unfair- competition law." Could you please clarify this so that Novell can avoid seeking such clarification through court briefing? Thanks.

He doesn't get an answer, so he asks again. Finally, nearly a month later, Normand sends him an amusing answer. Follow the bouncing ball:

Ken --

With respect to your question regarding choice of law, generally SCO had in mind the common law and statutory law of Utah with respect to unfair competition in its Second Amended Complaint, but in SCO's view the decision of which jurisdiction's law applies is a legal question for the Court to resolve, and therefore I cannot say that SCO has taken a position on the issue. If you are asking me now which jurisdiction's law of unfair competition SCO believes "should" apply to the claim, that is a different question and one the parties would address in any briefing in which the issue arises. If you are asking me your question in consideration of Novell's Answer, SCO's view is that Novell need not take a position in its Answer with respect to which jurisdiction's law applies. If Novell wants to take such a position, moreover, it can do so independent of any views SCO has on the issue. Please call me to discuss if you would like.

Is that clear? No? Here's my translation: "We don't want to tell you. You'll have to make us."

I gather Novell has been observing SCO's funny little discovery ways in the SCO v. IBM case, and it isn't interested in playing the same Ring Around the Rosy games with SCO, and so it intends to make them. That is the purpose of this motion. And there is a real issue here, namely, which state's unfair competition law is SCO claiming Novell broke? And to fine tune it even more, what part of which state's unfair competition law? Novell asks the court to force SCO to tell them with specificity. After all, SCO is asking for punitive damages against Novell, based on this law, whatever it is.

Oh, la de da, here we go again, trying to get SCO to tell us what it thinks the other side in litigation has done with specificity. SCO, typically, won't exactly tell Novell which law it has in mind, just mentioning probably they have in mind Utah common law and statutory law. Whatever that means. It wouldn't be Yarro's law, by any chance?

Novell does reference it:

Here, numerous unfair competition laws from several jurisdictions might be brought to bear, and they are significantly different from one another. Compare UTAH CODE ANN 13-5a-102(4)(ii) (defining unfair competition as one of the following: cyber-terrorism; patent, trademark and trade name infringement; software license violation; predatory hiring practices) to CAL. BUS. & PROF. CODE 17200 (defining unfair competition as: "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [BUS. & PROF. CODE 17500 et seq. (False Advertising)]"). Compared to the counterclaims in MTV Networks, SCO's claims involve an even broader range of defenses and greater potential for unexpected claims. Yet SCO refuses to identify what law it is claiming Novell infringed or where and when the unfair competition took place. Thus, there is even more reason here to grant a motion for a more definite statement.

You remember Yarro's law. Remember his bio for a talk he was going to give told us about it:

Mr. Yarro has been an avid developer, acquirer, and defender of intellectual property, which he believes must be fostered and protected to create a fertile, and stable high tech environment. In 2003, he sponsored a bill (S.B. 239), which passed in 2004, to improve the IP laws in the state of Utah.

If you go to read the final bill, you'll find out that, as I live and breathe, this is the very same Unfair Competition Act Normand refers to, 13-5a-101 through 13-5a-103. So, let me get this straight. Yarro sponsored a bill to his taste, the very year that it started to file litigation, and now SCO can use it against Novell? And handily enough, the bill allows for punitive damages. And even better, it's such a vague law, covering such things as "cyber-terrorism", trademark violations, hiring practices, and what not, that even if SCO did cough up a confession that this is the law, it still wouldn't tell you precisely what you did. There is no bull's eye. SCO will simply have to tell Novell or Novell won't know what the charge is. Sound familiar?

This is all SCO says about which law it means:

126. SCO is entitled to and seeks restitutionary, injunctive, and other remedies as may be available under the applicable unfair-competition law.

Emphasis added. This is so, so odd. SCO won't tell the statute. I can't tell you how weird that is in a complaint. Something is definitely up.

But I'm not sure SCO can use this statute. Let me tell you why. A little history. This bill was introduced in the Utah legislature in January of 2004. That is the same month that MyDoom occurred, the attack that Kaspersky Labs said that month they'd traced to professional spammer gangs in Russia, using Windows, by the way, despite SCO's attempt at first to pretend the Linux community might be responsible. Do you suppose Yarro told the legislators that the Linux community was responsible for the MyDoom attack, and they needed protection, hence the "cyberterrorism" angle in the bill? Darl McBride talked about MyDoom in his speech at Harvard in February of 2004, and he had a chart behind him that said, "The Age of Cyber-terrorism". And the Yarro bill spells it that way too, with a hyphen.

In any case, the bill was passed. But I see one little problem. SCO filed its litigation against Novell on January 20, 2004. Yarro's law was introduced in January of 2004, then it went through several iterations, the Governor vetoed it, and then the Senate and then the House overrode the veto and finally it passed at the end of April of 2004. Was it retroactive? Can it actually cover anything that Novell did prior to April of 2004? I see no retroactive language in the bill.

On the other hand, SCO, in their 2nd Amended Complaint, is alleging an ongoing pattern or campaign of harm by Novell. You can't put a stop on copyright infringement, for example. Is that covered by Yarro's Law? If SCO can use Yarro's very vague law, and fit the alleged harm into that mold as an ongoing harm, might it work? Could that be part of SCO's reluctance to be specific and why they say the court is going to have to rule on which jurisdiction applies, because they know this is a sticky wicket that will have to be addressed? In any case, Novell wants to know, is this the bill you intend to use? Frankly, I expect the court will make them tell.

You have to admit, these guys are never boring.

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

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.
MEMORANDUM IN SUPPORT OF NOVELL'S
NOVELL, INC.'S MOTION FOR A
MORE DEFINITE STATEMENT OF
SCO'S UNFAIR COMPETITION
CAUSE OF ACTION

Case No. 2:04-CV-00139

Judge Dale A. Kimball

Defendant and Counterclaimant Novell, Inc. ("Novell") respectfully submits this Memorandum in Support of Novell, Inc.'s Motion for a More Definite Statement of SCO's Unfair Competition Cause of Action in the Second Amended Complaint.

PRELIMINARY STATEMENT

SCO's Second Amended Complaint ("Complaint"), the third complaint it has filed in this nearly two-year litigation, asserts an unfair competition cause of action, but fails to provide Novell with proper notice of the unfair competition laws asserted against it. Because SCO's Complaint recites actions spanning the country, the Complaint potentially implicates numerous state unfair competition laws, as well as the Federal unfair competition law, each with its own array of elements and defenses. Yet the Complaint does not provide Novell with information on what laws Novell allegedly has violated. Instead, SCO makes the vague and ambiguous statement that it seeks all remedies "available under the applicable unfair-competition law." (Declaration of Kenneth W. Brakebill in Support of Novell, Inc.'s Motion for a More Definite Statement ("Brakebill Decl.") Ex. 1, Compl., 126.) Without specifying what the "applicable" law might be, Novell cannot reasonably frame a response to SCO's allegations.

Despite Novell's requests for clarification, SCO refuses to take a position on what unfair competition law it is asserting against Novell. Novell therefore asks this Court to require SCO to amend its Complaint to provide Novell with proper notice of the unfair competition laws that Novell has allegedly violated.

STATEMENT OF FACTS

As the Court is aware, this case arises from an Asset Purchase Agreement ("APA" entered into on September 19, 1995 between Novell, a Delaware corporation with a principal place of business in Massachusetts, and a company called The Santa Cruz Operation, Inc. ("Santa Cruz"), a California corporation. SCO, a Delaware corporation with a principal place of business in Utah, allegedly acquired all rights under the APA through a subsequent acquisition of Santa Cruz assets. (Brakebill Decl. Ex. 1, Compl., at 1.) The language of the APA specifically

2

excluded all copyrights from the assets transferred to Santa Cruz. Nevertheless, SCO's Second Amended Complaint alleges that SCO "acquired all rights, title and interest in and to the Unix and UnixWare business, operating system, source code, license agreements and copyrights." (Id.) Novell denies that any copyright transfer has taken place. (Novell, Inc.'s Answer and Countercls., filed concurrently herewith, at 1.)

SCO requested leave to file its Second Amended Complaint on December 30, 2005. (Pl.'s Motion for Leave to File Second Am. Compl.) At that time, the litigation between the parties had been ongoing for nearly two years. SCO's Complaint was ultimately filed on February 3, 2006.

SCO's Fifth Claim for Relief (the Unfair Competition Claim) alleges that SCO is entitled to remedies under "the applicable unfair-competition law." (Brakebill Decl. Ex. 1, Compl., at 126.) In support of this claim for relief, SCO alleges that Novell has engaged in unfair competition by making false claims of ownership over Unix and Unixware copyrights. (Id., at 37 & 122.) These allegedly disparaging statements were published "in several newspapers and other publications" and over the internet. (Id.) SCO further alleges that Novell made false or disparaging statements at a business conference held in San Francisco and to the U.S. Copyright office. (Id. SCO has not limited itself to the statements identified in its Complaint. (Id.) As a result, SCO's claims could involve additional statements made through various media across the country.

SCO also bases its Fifth Claim for Relief on allegations that its technology was misappropriated, that it was forced to compete in the marketplace against its own technology, and that there was confusion in the marketplace. (Id., at 122-23.) Given the national (and international) scope of Novell's business, the actionable conduct underlying these portions of SCO's Fifth Claim for Relief may have taken place in numerous states. SCO's allegations fail to provide necessary information to give Novell notice of what unfair competition law applies. For instance, SCO does not state where and when the alleged misappropriation took place or what

3

law applies to this part of its Unfair Competition claim. SCO also does not identify who has been confused by Novell's purported conduct, and when and where this confusion has taken place.

As a result of these ambiguities, there are numerous potentially "applicable" unfair competition laws, each with their own set of elements, rules, standards and affirmative defenses. Yet SCO's Complaint provides no clue as to what the "applicable" law is.

After SCO filed its motion to amend its Complaint, Novell requested SCO's clarification of the applicable law. (Brakebill Decl. Ex. 2, Letter from Kenneth Brakebill to Edward Normand dated Jan. 24, 2006.) When SCO ignored this request, Novell again asked for clarification. (Brakebill Decl. Ex. 3, Letter from Kenneth Brakebill to Edward Normand dated Feb. 8, 2006.) Two weeks later, SCO responded with an evasive answer. Although SCO "generally" "had in mind" Utah law, SCO had not "taken a position on the issue" of "choice of law" and the question of "which jurisdiction's law of unfair competition SCO believes 'should' apply to the claim" should be addressed "in any briefing in which the issue arises." (Brakebill Decl. Ex. 4, E-mail message from Edward Normand to Kenneth Brakebill dated Feb. 19, 2006.) This circuitous response leaves Novell in the same position as no response at all. SCO has had several months to provide Novell with adequate notice of the laws it is seeking to use against Novell. By all appeaerances, SCO would like Novell to guess what unfair competition laws it has violated and to frame a response accordingly. As a result, Novell is left with no choice but to ask this court for an order requiring a more definite statement.

LEGAL STANDARD

"If a pleading to which a responsive pleading is permitted is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading, the party may move for a more definite statement before interposing a responsive pleading." Fed. R. Civ. P. 23(e). Thus, even under the notice-pleading standard of the Federal Rules, a complaint must reasonably allow a defendant to adequately frame a responsive pleading. Venta, Inc. v. Frontier Oil & Ref.

4

Co., 827 F. Supp. 1526, 1530 (D. Colo. 1993) ("if an opposing party cannot formulate a response because the factual allegations are so sparse, it is entitled to a more definite statement") (granting Rule 12(e) motion); MTV Networks v. Curry, 867 F. Supp. 202, 208 (S.D.N.Y. 1994) (although some courts disfavor Rule 12(e) motions, "the opposing party must be given sufficient notice to frame a responsive pleading").

ARGUMENT

SCO's Complaint does not provide Novell with a sufficiently definite statement of its unfair competition claims. The Complaint seeks all remedies available under "applicable unfair-competition law" (see Brakebill Decl. Ex. 1, Comp., at 126), but does not specify which of the many unfair competition laws Novell has allegedly violated. Specifically, SCO has failed to allege whether Novell has violated Federal statutory law, such as the Lanham Act, or state law. SCO has also failed to state whether, if Novell has allegedly violated state law, whether that law is the unfair competition law of Utah, California, Massachusetts, Delaware or some other state where actionable conduct may have occurred. SCO has also not stated whether its allegations are based on state common law or state statutory law.

Without knowing the answer to these questions, Novell cannot determine whether SCO's Complaint fails to state a claim upon which relief can be granted, whether SCO's claim is untimely, what facts support or oppose SCO's claims, or what affirmative defenses Novell can assert. Courts faced with similarly deficient complaints, including cases where unfair competition claims are asserted, have required complainants to specify the applicable law. See MTV Networks, 867 F. Supp. at 208 (motion for more definite statement granted for unfair competition claim); Kveragas v. Scottish Inns, Inc., 96 F.R.D. 425 (E.D. Tenn. 1983)(Rule 12(e) motion granted when plaintiff claimed that defendant had violated "the provisions of the applicable Statute of the State of Tennessee.").

In MTV Networks, for instance, the court recognized the "amorphous" nature of unfair competition law in New York and held that MTV was entitled to a clarification of defendant's

5

unfair competition counter-claim because of "the broad range of defenses involved in opposing these claims and the potential for unexpected claims at trial." MTV Networks, 867 F. Supp. at 208. There, it was clear that New York unfair competition law applied. Here, numerous unfair competition laws from several jurisdictions might be brought to bear, and they are significantly different from one another. Compare UTAH CODE ANN 13-5a-102(4)(ii) (defining unfair competition as one of the following: cyber-terrorism; patent, trademark and trade name infringement; software license violation; predatory hiring practices) to CAL. BUS. & PROF. CODE 17200 (defining unfair competition as: "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [BUS. & PROF. CODE 17500 et seq. (False Advertising)]"). Compared to the counterclaims in MTV Networks, SCO's claims involve an even broader range of defenses and greater potential for unexpected claims. Yet SCO refuses to identify what law it is claiming Novell infringed or where and when the unfair competition took place. Thus, there is even more reason here to grant a motion for a more definite statement.

SCO would not be burdened by having to provide this information. Courts have denied motions seeking more definite statements when they amounted to mere fishing expeditions for additional facts. See United States v. Gustin-Bacon Div., Certainteed Prods. Corp., 426 F.2d 539, 543 (10th Cir. 1970) ("Under the circumstances of this case, appellee's motion for more definite statement is in reality but an attempt to discover evidentiary matters.") ("Gustin-Bacon"); 65 F.R.D. 599, 605 (D. Del. 1974) (distinguishing Gustin-Bacon and granting a Rule 12(e) motion because the defendant had not alleged what acts and practices constituted discrimination). In Gustin-Bacon, the court found that, under the applicable Federal discrimination statute, it would be overly burdensome to require plaintiff to advance factual details reflecting a pattern and practice of racial discrimination at an early stage in the proceedings.

6

Here, SCO has not identified what the applicable law is. Novell is not asking to discover evidentiary matters but simply wants SCO to identify what unfair competition law applies. It should not be hard for SCO to provide Novell with notice of the unfair competition laws that SCO believes Novell has violated.

CONCLUSION

For the foregoing reasons, Novell respectfully requests this Court to require SCO to amend its Complaint to state the specific unfair competition laws that SCO alleges Novell has violated.

DATED: April 10, 2006

ANDERSON & KARRENBERG

___[signature]___
Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon

- and -

MORRISON & FOERSTER LLP
Michael A. Jacobs (pro hac vice)
Kenneth W. Brakebill (pro hac vice)

Attorneys for Novell, Inc.

7

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 10th day of April, 2006, I caused a true and correct copy of the foregoing MEMORANDUM IN SUPPORT OF NOVELL, INC.'S MOTION FOR A MORE DEFINITE STATEMENT OF SCO'S UNFAIR COMPETITION CAUSE OF ACTION 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]____

8



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

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 KENNETH W.
BRAKEBILL IN SUPPORT OF
NOVELL'S MOTION FOR A
MORE DEFINITE STATEMENT


Case No. 2:04-CV-00139

Judge Dale A. Kimball

1

Kenneth W. Brakebill, under penalty of perjury, declares the following:

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 February 10, 2004 order. I submit this declaration in support of Novell's Motion for a More Definite Statement.

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

(a) Exhibit 1 is a true and correct copy of SCO's Second Amended Complaint filed on February 3, 2006 by Plaintiff and Counterclaim-Defendant 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 a letter from Kenneth Brakebill to Edward Normand dated January 24, 2006.

(c) Exhibit 3 is a true and correct copy of a letter from Kenneth Brakebill to Edward Normand dated February 8, 2006.

(d) Exhibit 4 is a true and correct copy of an e-mail message from Edward Normand to Kenneth Brakebill dated February 19, 2006.

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

Executed on this 10th day of April, 2006 in San Francisco, California.

____[signature]____
Kenneth W. Brakebill

2

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 KENNETH W. BRAKEBILL IN SUPPORT OF NOVELL, INC.'S MOTION FOR A MORE DEFINITE STATEMENT 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]____

3

EXHIBIT 1

4

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

Stuart 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, CENTRAL DIVISION


THE SCO GROUP, INC.,

Plaintiff,

v.

NOVELL, INC.,

Defendant.

SECOND AMENDED COMPLAINT

(Jury Trial Demanded)

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

5

Plaintiff, The SCO Group, Inc. ("SCO"), sues Defendant, Novell, Inc. ("Novell"), and alleges as follows:

I. NATURE OF THIS ACTION

1. Through an Asset Purchase Agreement between Novell and The Santa Cruz Operation ("Santa Cruz") dated September 19, 1995, as amended (the "APA"), and SCO's subsequent acquisition of two divisions from Santa Cruz through a transaction closing on or about May 7, 2001, SCO acquired all right, title, and interest in and to the UNIX and UnixWare business, operating system, source code, license agreements, and copyrights, as well as the right to bring actions for infringement or other violations relating to said assets (collectively, the "business" or the "UNIX and UnixWare business").

2. The intent of the parties to the APA and the purpose of the APA, as well as the intent and purpose of the subsequent Santa Cruz-to-SCO transaction, were to transfer the UNIX and UnixWare business to SCO, including the copyrights in UNIX, UnixWare, and supporting materials (the "copyrights").

3. This lawsuit stems from Novell's willful infringement of the copyrights and from its false and bad-faith claims that it owns the copyrights and UNIX itself and that it has the authority under the APA to destroy the value of the business by waiving, revoking, or otherwise controlling SCO's rights and claims related to the business.

4. In consideration for its sale of the business under the APA, Novell received, among other consideration. 6.1 million shares of Santa Cruz common stock, in a transaction valued at the time at over $100 million, as well as an equitable interest in 95% of certain binary royalties as described below.

6

5. In Attachment E of Novell's' Disclosure Schedule to the APA, Novell provided a list of approximately 106 copyright registrations (encompassing eight pages) covering products relating to the business transferred to SCO.

6. In the course of exercising its rights with respect to UNIX and UnixWare, SCO has filed for copyright protection with the United States Copyright Office.

7. In an effort to interfere with SCO's exercise of its rights with respect to UNIX and UnixWare technologies, Novell has, in disregard of its obligations under the APA, filed for copyright protection in the same UNIX technology covered by SCO's copyrights.

8. Novell has falsely and repeatedly claimed in public that it, and not SCO, owns the copyrights.

9. Novell has made such statements with the intent to cause customers and potential customers of SCO to refrain from doing business with SCO; to slander and impugn SCO's ownership rights in UNIX and UnixWare; and to attempt, in bad faith, to block SCO's ability to enforce the copyrights and its rights under UNIX licenses.

10. Novell's false and misleading representations that it owns the copyrights have directly caused and continue to cause significant irreparable harm to SCO's valuable UNIX and UnixWare copyrights, its business, and its reputation, and has caused third parties to refuse to enter into license agreements with SCO relating to SCO's UNIX and UnixWare business.

11. In connection with the closing of the transaction set forth in the APA, Novell and Santa Cruz entered into a Technology License Agreement (the "TLA"), which licensed back to

7

Novell all technology included in the transferred assets, including all modifications of that technology, for certain limited purposes.

12. The APA and TLA each contained a non-compete provision, whereby Novell covenanted not to distribute the licensed-back technology in (a) any operating system in competition with SCO's core server products or (b) in any product in which that technology constitutes a primary portion of the value of the product.

13. In 2003, Novell became a distributor of the Linux operating system by purchasing SuSE Linux. As SCO has alleged in its suit against International Business Machines ("IBM") pending in this Court, IBM has wrongfully contributed SCO's UNIX technology to Linux, and that technology constitutes a primary portion of the value of Linux. Consequently, by distributing Linux in competition with SCO's core products, Novell has materially breached the non-compete provisions of the APA and TLA.

14. Furthermore, Novell has infringed and continues to infringe SCO's copyrights by copying, reproducing, modifying, sublicensing, and/or distributing the licensed-back technology, contrary to the express terms of the TLA. In addition, through its Linux business, Novell has also infringed and continues to infringe SCO's copyrights in UNIX, by copying, reproducing, modifying, sublicensing, and/or distributing UNIX intellectual property without authority to do so.

15. Under Section 4.16 of the APA, Novell retained the right to continue receiving certain product royalties that Santa Cruz collected from then-existing SVRX licensees for their distribution of binary-only versions of System V pursuant to sublicensing agreements. Under Sections 4.16, 1.2(b), and 1.2(f) of the APA, Novell also retained the right to

8

direct or take certain actions to protect those SVRX royalties. Novell has erroneously and in bad faith attempted to extend those rights to matters unrelated to Novell's protected binary royalty stream. In particular, Novell has purported, among other things, to waive SCO's rights and claims against IBM for its wrongful contributions to Linux, even though those rights and claims were transferred to SCO under the APA and the Santa Cruz-to-SCO transaction.

16. Under the APA, Novell did not retain the rights to take or direct any actions with respect to any source-code licenses or fees, other SVRX royalties, or any claims arising after the closing date against any parties relating to any right, property, or asset included in the business. The APA intended and did transfer such rights exclusively to SCO.

17. Novell's retaining such rights would have subverted the stated purpose of the APA and rendered Santa Cruz's ownership of the UNIX and UnixWare business illusory. Similarly, Novell's retaining the copyrights would have made Santa Cruz's ownership of UNIX and UnixWare technologies without value or meaning.

18. Novell's newly concocted claims that Santa Cruz intended and did pay over $100 million for intellectual property without the copyrights to protect and exploit it, all while abdicating to Novell the right to control and destroy the value of that property, defies commercial reason and common sense and contradicts conduct during the years that followed that APA.

19. Novell has interfered with SCO's UNIX license agreements with IBM and Silicon Graphics, Inc. ("SGI"), by asserting falsely and in bad faith that Novell owns the

9

copyrights and by purporting in bad faith to waive and revoke SCO's claims against IBM and SGI that arose after the closing date and are related to those agreements.

20. Several provisions of the APA require the parties to take the actions necessary to effectuate the purposes of the APA and consummate the transactions contemplated therein. If it were true (contrary to the intent of the parties to the APA) that Novell retained the copyrights and SCO received mere phantom rights to the business, then Novell has breached those provisions by failing to take the actions necessary to convey the business to SCO as contemplated by the APA.

21. Through this action against Novell, SCO seeks the following:

a) a preliminary and permanent injunction (i) requiring Novell to assign to SCO all copyrights that Novell has improperly registered in UNIX and UnixWare following Novell's transfer of all right, title, and interest in and to the UNIX and UnixWare business, operating system, source code, license agreements, and all copyrights related thereto to SCO pursuant to the APA; (ii) preventing Novell from representing in any forum that it has any ownership interest whatsoever in the copyrights or UNIX itself; (iii) requiring Novell to retract or withdraw all its representations of its purported ownership of the copyrights;

b) a preliminary and permanent injunction preventing Novell from copying, reproducing, modifying, sublicensing, and distributing SCO's copyrighted UNIX and UnixWare technology, except as provided by the TLA;

c) actual, special, enhanced, statutory, and punitive damages in amounts to be proved at trial; and

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d) as an alternative claim, an order directing Novell specifically to perform its obligations under the APA by taking the actions necessary to transfer to SCO the UNIX and UnixWare business, including the copyrights.

II. PARTIES, JURISDICTION, AND VENUE

22. Plaintiff SCO is a Delaware corporation with its principal place of business in Utah County, Utah.

23. Defendant Novell is a Delaware corporation with its executive offices and headquarters in Waltham, Massachusetts, that does business in Utah.

24. This Court has concluded that it has subject matter jurisdiction over SCO's slander-of-title claim pursuant to 28 U.S.C. 1331 and 1338(a).

25. The Court has jurisdiction over SCO's copyright claim pursuant to 28 U.S.C. 1331 and 1338(a).

26. Based on its jurisdiction over the slander-of-title and copyright claims, the Court also has supplemental jurisdiction over SCO's state-law claims.

27. This court has personal jurisdiction over Novell because Novell transacts substantial business in the State of Utah.

28. Venue is proper in this Court pursuant to 28 U.S.C. 1391(b).

III. FACTUAL BACKGROUND

A. The APA's Transfer of the Copyrights in UNIX and UnixWare

29. Schedule 1.1(a) to the APA provides that SCO, through its predecessor in interest, acquired from Novell:

I. All rights and ownership of UNIX and UnixWare, including but not limited to all versions of UNIX and UnixWare and all

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copies of UNIX and UnixWare (including revisions and updates in process), and all technical, design, development, installation, operation and maintenance information concerning UNIX and UnixWare, including source code, source documentation, source listings and annotations, appropriate engineering notebooks, test data and test results, as well as all reference manuals and support materials normally distributed by [Novell] to end-users and potential end-users in connection with the distribution of UNIX and UnixWare....

II. All of [Novell's] claims arising after the Closing Date against any parties relating to any right, property, or asset included in the Business.

30. On December 19, 1995 ("the closing date"), the parties closed the transaction set forth in the APA. In connection with the closing, the parties executed the TLA and a Bill of Sale.

31. The TLA was originally called for by Section 1.6 of the APA, which provides in part:

1.6. License Back of Assets. Concurrent with the Closing Buyer [SCO] shall execute a license agreement under which it shall grant to Seller [Novell] a royalty-free, perpetual, worldwide license to (i) all of the technology included in the Assets and (ii) all derivatives of the technology included in the Assets, including the "Eiger" product release (such licensed back technology to be referred to collectively as "Licensed Technology").

Through the TLA, Santa Cruz granted to Novell the license specified in Section 1.6, with certain modifications.

32. As of the closing date, both Novell and SCO, including executives for both parties who negotiated and closed the transaction, intended and believed that the copyrights had been transferred to SCO. Because Novell would not have required a license-back had it retained the copyrights, the TLA evidences the parties' shared intent and belief that, as of the closing date, SCO owned the copyrights.

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33. In Amendment No. 2 to the APA, Novell and SCO reiterated and clarified that SCO owned all "copyrights and trademarks owned by Novell as of the date of the [APA] required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies," and that Novell would no longer be liable should any third party bring a claim against SCO "pertaining to said copyrights and trademarks."

B. Novell's Slander of SCO's Title to the Copyrights in UNIX and UnixWare

34. Software technology is valuable only insofar as the intellectual property contained therein is protected from unlawful misappropriation. Copyrights provide critical protection against misappropriation as established by the United States Congress under the Copyright Act. SCO requires the full copyright protection it purchased from Novell to enforce its rights in its proprietary UNIX and UnixWare source code and related technology against infringing third parties. A transfer of source code without the associated copyrights is for all intents and purposes meaningless and worthless.

35. Based on the APA and Amendment No. 2, SCO is the sole and exclusive owner of all copyrights related to the UNIX and UnixWare source code and all documentation and peripheral code and systems related thereto.

36. Novell, with full knowledge of SCO's exclusive ownership of the copyrights related to UNIX and UnixWare, has embarked on a malicious campaign to damage SCO's ability to protect its valuable copyrights in UNIX and UnixWare. In particular, Novell has wrongfully asserted ownership over UNIX and UnixWare technologies by filing for copyright protection in its own name, and has made numerous false and misleading

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public representations disparaging SCO's ownership of the copyrights and claiming that it, and not SCO, owns the copyrights.

37. Novell's false oaths and misleading public representations and wrongful assertions of ownership rights in UNIX and/or UnixWare include, but are not limited to, the following:

a) On May 28, 2003, Novell's Chairman, President, and CEO Jack Messman based at Novell's headquarters in Waltham, Massachusetts, publicly claimed that Novell did not transfer the UNIX and UnixWare copyrights to SCO and that "SCO is not the owner of the UNIX copyrights." Mr. Messman's statement was published in several newspapers and other publications, and he and Novell timed the statement to be released on the eve of SCO's positive quarterly earnings announcement. As a result of Novell's announcement, SCO's stock price dropped over twenty percent.

b) In a letter dated June 6, 2003, directed from SCO to Novell, SCO brought to Novell's attention Amendment No. 2 to the APA.

c) Following Novell's receipt of SCO's letter dated June 6, 2003, Novell issued a press release dated that same date which recanted Mr. Messman's prior statement claiming Novell owned UNIX copyrights, stating "[t]he amendment [to the Asset Purchase Agreement] appears to support SCO's claim that ownership of certain copyrights for UNIX did transfer to SCO in 1996."

d) In a letter of the same day, June 6, 2003, directed to SCO, Joseph Lasala, Novell's General Counsel, continued to call SCO's claims of copyright ownership "absurd" and "unsubstantiated."

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e) In a letter dated June 26, 2003, from Mr. Lasala to SCO, Novell acknowledged that Amendment No. 2 "appears to support a claim" by SCO to "some copyrights," but at the same time, Novell called SCO's claim of ownership of UNIX and UnixWare "simply wrong" and declared "that we do not agree with SCO's public statements on this matter."

f) In a letter from Mr. Lasala dated August 4, 2003, Novell responded to SCO's registration of UNIX System V copyrights with the United States Copyright Office and explicitly "dispute[d] SCO's claim to ownership of these copyrights."

g) Despite Amendment No. 2, Novell continued with its unfounded and malicious campaign to slander SCO's ownership of the copyrights. In fact, Novell again falsely asserted ownership of UNIX copyrights by submitting twelve certifications beginning on September 22, 2003, through October 14, 2003, to the United States Copyright Office. In these certifications, Novell publicly claimed to be the copyright owner of several versions of UNIX, including the following: (1) UNIX System V/386 Release 4 Version 3; (2) UNIX System V/386 Release 4 2; (3) UNIX System V/386 Release 4 Version 4; (4) UNIX System V/386 Release 3.2; (5) UNIX System V/386 Release 3.0; (6) UNIX System V/386 Release 4.0; (7) UNIX System V/386 Release 4.1ES; (8) UNIX System V Release 3.2/386; (9) UNIX System V Release 3/386; (10) UNIX System V Release 4.2MP; (11) UNIX System V Release 2; and (12) UNIX System V Release 4.1ES/386. Novell published its false certifications to the world by placing them online at Novell's website.

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h) Also on October 10, 2003, Novell publicly filed under oath with the United States Copyright Office four different iterations of a "Declaration Regarding Ownership" of UNIX copyrights TXU-510-028, TXU-511-236, TXU-516-704, and TXU-516-705. In each of these sworn documents, Novell declared "that it retains all or substantially all of the ownership of the copyrights in UNIX, including the U.S. Copyright Registration referenced above."

i) In a press release dated December 22, 2003, Novell, despite its June 2003 statement that SCO owns the copyrights, stated that "it owns the copyrights in UNIX, and has applied for and received copyright registrations pertaining to UNIX consistent with that position."

j) In a press release dated January 13, 2004, Novell again knowingly and wrongfully made the false claim that "it retained ownership of [UNIX] copyrights."

k) At the March 2004 Open Source Business Conference in San Francisco, Novell's Vice Chairman Chris Stone proclaimed during his keynote address that Novell "still own[s] UNIX."

38. Novell's false oaths and wrongful claims of copyrights and ownership in UNIX and UnixWare were made in bad faith and constitute a knowing and intentional disregard for the truth.

39. Novell's wrongful claims of copyrights and ownership in UNIX and UnixWare have caused and continue to cause damage to SCO in the following particulars:

a) Customers and potential customers of SCO are unable to ascertain the truth of ownership in UNIX and UnixWare, and make decisions based thereon;

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b) Potential customers have informed SCO that they will not enter into agreements to license SCO's UNIX technologies because of the cloud surrounding SCO's ownership of UNIX created by Novell's false public representations that it, and not SCO, owns UNIX.

c) SCO's efforts to protect its ownership of UNIX and UnixWare, and copyrights therein, are subject to a false cloud of ownership created by Novell. At the present time, SCO is pursuing claims against third parties for infringement of SCO's intellectual property and contractual rights in UNIX. Defendants in those cases have relied on Novell's claims of ownership in UNIX as a defense to SCO's claims, thereby hindering SCO's ability to protect its copyrights and other rights and causing SCO to incur significant additional attorneys' fees and costs litigating issues resulting from the cloud Novell has placed on SCO's title to UNIX and UnixWare.

C. Novell's Unauthorized Use of SCO's Technology

40. At the time of the execution of the APA, Novell was a leading networking software company. Because it had developed its flagship networking product, Netware, to work on the UNIX operating system, Novell needed and requested the right to distribute trivial portions of the UNIX source code embedded in Netware.

41. Accordingly, with the sole intent of accommodating these requests by Novell, the parties to the APA agreed that Santa Cruz would license back to Novell "all the technology included in the Assets" transferred by the APA, as well as "all derivatives of the

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technology included in the Assets" (collectively, "the Licensed Technology"), subject to certain broad limitations.

42. To protect the value to Santa Cruz of the transferred UNIX and UnixWare assets, the APA and TLA each contained a non-compete provision, whereby Novell covenanted not to use the Licensed Technology to compete with SCO's core operating-system products.

43. Section 1.6 of the APA provides in part:

Seller agrees that it shall use the Licensed Technology only (i) for internal purposes without restriction or (ii) for resale in bundled or integrated products sold by Seller which are not directly competitive with the core products of Buyer and in which the Licensed Technology does not constitute a primary portion of the value of the total bundled or integrated product.

44. Similarly, under Section II.A.(2) of the TLA, Novell is permitted to distribute and sublicense "such Licensed Technology and modifications thereof," provided that

(i) such technology and modifications may be sublicensed and/or distributed by NOVELL solely as part of a bundled or integrated offering ("Composite Offering"); (ii) such Composite Offering shall not be directly competitive with core application server offerings of SCO, and (iii) the Licensed Technology shall not constitute a primary portion of the value of such Composite Offering.

45. The "core products" and "core application server offerings" referenced in the APA and TLA, respectively, refer to the UNIX and UnixWare operating systems owned by Santa Cruz upon the closing date. Even before acquiring the UNIX source code, Santa Cruz had been primarily involved in the business of distributing UNIX in binary form, so that with the acquisition of the UNIX and UnixWare source code and copyrights, the UNIX and UnixWare operating systems undoubtedly represented Santa Cruz's "core products."

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In addition, as of the closing date, Santa Cruz had no "application server offering" other than UNIX and UnixWare operating systems.

46. On November 4, 2003, Novell announced its acquisition of SuSE Linux, one of the world's leading distributors of Linux. Since that time, Novell began distributing Linux worldwide.

47. On December 22, 2005, SCO filed with the Court in the SCO v. IBM case a compilation of 293 disclosures of technology which IBM has made to enhance Linux (in violation of its agreements with SCO) with the stated objective of making Linux a more enterprise-hardened operating system.

48. Linux contains SCO's UNIX technology, including unauthorized UNIX System V source code, derivatives and modifications, methods and concepts contributed to Linux by IBM in violation of its license agreements with SCO. Thus, Linux contains the Licensed Technology which, pursuant to Section 1.6 of the APA and Section II.A.(2) of the TLA, Novell covenanted not to distribute in an operating system.

49. As a general-purpose operating system, Linux is "directly competitive" with SCO's core application server offerings.

50. Furthermore, the measure of UNIX technology in Linux far exceeds the trivial portions that the parties intended Novell was authorized to use, in Netware, pursuant to the TLA. Whereas UNIX became enterprise-ready after decades of development, Linux matured into a powerful enterprise-ready operating system in a few years, due primarily to the UNIX technology wrongly contributed by IBM into Linux.

50. Novell therefore breached Section 1.6 of the APA and Section II.A.(2) of the TLA.

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52. Novell has also infringed and continues to infringe SCO's copyrights in UNIX by copying, reproducing, modifying, sublicensing, and/or distributing UNIX intellectual property as part of its Linux business.

D. Novell's Wrongful Attempts to Expand Its Rights Under the APA

53. Under Section 4.16 of the APA, Novell retained the right to continue receiving royalties that SCO collected from then-existing SVRX licensees for their distribution of binary-code versions of System V products pursuant to sublicensing agreements. Novell also retained the right to direct SCO to take certain actions, or in the event it failed to take those actions, to take those actions on its behalf, for the sole purpose of protecting that same binary royalty stream. Since 1996 until 2003, Novell operated in accordance with this procedure and understanding.

54. Under Sections 1.2(b) and 1.2(f) of the APA, Novell also retained the right to conduct audits to protect the same binary royalties.

55. Under the APA, however, Novell did not retain any right to conduct audits, direct SCO to take any actions, or take actions on SCO's behalf with respect to matters other than the SVRX binary royalty stream.

56. On information and belief, IBM invested $50 million in Novell stock to help finance Novell's purchase of SuSE, and Novell and IBM have continued and expanded product and marketing arrangements that existed between IBM and SuSE. As Mr. Messman declared in a letter to SCO dated, May 28, 2003, "Novell is an ardent supporter of Linux and the open source community." Novell is one of IBM's major Linux partners. Both companies were acknowledged members of the so-called Chicago 7,

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which was formed at least in part to address and/or oppose SCO's efforts to protect its intellectual property.

57. In an effort, among other things, to protect its Linux partnership with IBM, Novell has erroneously and in bad faith attempted to extend its rights under Sections 4.16, 1.2(b), and 1.2(f) to agreements and matters not subject to those provisions.

58. On June 9, 2003, for example, Novell purported to direct SCO to waive its right to terminate its Software License Agreement with IBM, even though that source-code agreement by definition was not for binary royalties and therefore did not come under the purview of Sections 4.16, 1.2(b), and 1.2(f), and even though Novell had no ongoing royalty stream from IBM that it needed to protect. On June 12, 2003, Novell invoked its purported right under Section 4.16(b) to waive and revoke SCO's proper termination of IBM's UNIX license agreements.

59. Similarly, on October 10, 2003, Novell purported to waive and revoke for SCO its claims against IBM for breach of its Sequent Software License Agreement with SCO.

60.

Novell has alleged that its rights under Sections 4.16, 1.2(b), and 1.2(f) extend to SCO's 2003 agreements with Sun and Microsoft, as well as SCO's SCOsource intellectual property agreements, even though those agreements did not involve the SVRX binary royalty stream and were not even in existence at the time the APA was executed.

61. Such actions by Novell are contrary to its agreements with SCO and were calculated to interfere with SCO's agreements with IBM and others, block SCO's efforts to enforce its claims and rights related to UNIX, and misrepresent to the marketplace that Novell, and not SCO, owns UNIX.

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62. Novell's wrongful conduct is also willful and in bad faith in light of its previous attempt to expand its rights under Section 4.16 in collaboration with IBM.

63. On April 26, 1996, without the consent of Santa Cruz, Novell attempted to enlarge IBM's rights to the UNIX source code and grant IBM a buyout of its SVRX binary royalty obligations, by entering with IBM into a purported amendment to the IBM UNIX license agreements transferred to SCO by the APA.

64. In a letter to Novell dated April 23, 1996, SCO intervened by explaining, among other things, that the APA and related agreements provided SCO "ownership and exclusive rights to license the UNIX source code."

65. After SCO further disputed Novell's authority to grant IBM the buyout, the parties entered into Amendment X to IBM's software and sublicensing agreements in UNIX. As compared with Novell's thwarted amendment, Amendment X, among other things:

a) replaced Novell with SCO as the party to the bargained-for exchange with IBM; b) more than quadrupled the monetary consideration, from $2,375,000 to $10,125,000; c) contracted IBM's source-code rights; and d) set forth SCO's exclusive right to audit IBM's compliance with the restrictions on its use of the licensed source code.

66. In addition, Amendment X voided Novell's unauthorized amendment, by providing: "The Amendment dated April 26, 1996 between IBM, and Novell, on behalf of itself, and SCO, is hereby replaced in its entirety."

67. Had Novell owned the copyrights or possessed the authority to waive, revoke, or otherwise control the rights to source code, it would have stood by its April 26, 1996

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purported amendment; SCO would have had no right to, in effect, veto that unauthorized amendment; and IBM would not have acquiesced to that veto.

68. Amendment X is thus contemporaneous evidence that Novell considered Santa Cruz the sole and exclusive owner of the copyrights and source code and that Novell recognized that it lacked the authority to waive, revoke, or otherwise control claims or rights related to the UNIX source code, generally and with regard to IBM specifically.

69. To prevent a recurrence of the events leading to Amendment X, the parties decided to clarify Section 4.16 of the APA by entering into Amendment No. 2 to the APA on the same date they executed Amendment X. Paragraph B..5 of Amendment No. 2 provides:

This Amendment does not give Novell the right to increase any SVRX licensee's rights to SVRX source code, nor does it give Novell the right to grant new SVRX source code licenses. In addition, Novell may not prevent SCO from exercising its rights with respect to SVRX source code in accordance with the [APA].

70. Thus, Amendment No. 2 made it redundantly clear that Novell had retained no rights to control SCO's sole exclusive ownership of the source code and associated license agreements. In fact, Amendment No. 2 made clear that Novell could not unilaterally agree to a buyout even of SVRX royalties. Even with respect to its interests in the binary royalty stream, therefore, Novell lacked the authority to waste or forego the royalties, or to grant a licensee a buyout of its relationship with SCO.

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

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F. Novell's Prior Conduct Belies Claims

72. During the years between the signing of the APA (in September 1995) and about May 2003, the parties' dealings and course of conduct evidenced their understanding that the APA had transferred the business to Santa Cruz, including the copyrights.

73. As stated, Novell and Santa Cruz entered into the TLA, which licensed back to Novell the UNIX and UnixWare technology transferred under the APA. Had Novell retained the copyrights under the APA, it would have been irrational for Novell to execute a license-back agreement for technology already covered by the copyrights it purportedly owned. Thus, the TLA, without more, evidences Novell's understanding that the APA had transferred the copyrights to SCO.

74. Though, at the time they executed Amendment No. 2, the parties shared the understanding that APA intended to and did transfer the copyrights to Santa Cruz, they decided to take advantage of the opportunity afforded them by Amendment No. 2 to further clarify the APA by reiterating the transfer of copyrights.

75. Amendment No. 2 made clear that Novell had transferred to SCO the "copyrights and trademarks owned by Novell as of the date of the [APA] required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies," and that Novell would no longer be liable to any party bringing a claim "pertaining to said copyrights and trademarks."

76. During the seven-plus years between the signing of the APA and about May 2003, Novell also did not question, much less challenge, SCO's open and public conduct as the sole and exclusive owner of the UNIX and UnixWare business, including the copyrights.

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77. As an obvious example, SCO distributed its UNIX and UnixWare source-code and binary products widely, with copyright notices in its name. During those years, Novell did not allege that SCO's use and distribution of those products infringed Novell's copyrights. Nor did Novell dispute SCO's public claims of copyright ownership in any way.

78. In a reported transaction consummated in 2001, Santa Cruz transferred the UNIX and Unixware business to SCO (then operating as Caldera). Despite the public nature of that transaction, Novell again did not dispute Santa Cruz's claim of ownership, or transfer, of the business, including the copyrights.

79. During those years, Novell conducted one audit pursuant to Section 1.2(b) of the APA. Novell limited that audit to a review of SCO's administration of the SVRX binary royalty stream. Novell did not request or receive other information concerning the UNIX and UnixWare business, including any accounting of source-code licenses or fees.

80. As a result of these and other examples of the parties' shared understanding of the meaning and intent of the APA, it was widely known in the software industry (including by IBM) that SCO owned and freely exercised its copyrights in UNIX and UnixWare.

81. Indeed, the law firms that represented Novell and Santa Cruz in negotiating and executing the APA, Wilson, Sonsini, Goodrich & Rosati ("WSGR") and Brobeck, Phleger & Harrison LLP ("Brobeck"), respectively, also represented Santa Cruz and Caldera, respectively, during the subsequent transfer of the business to Caldera.

82. It was not until about May 2003 (only weeks after SCO filed its lawsuit against IBM and just months before Novell announced its Linux partnership with IBM) that Novell suddenly reversed its conduct of seven-plus years.

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

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

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

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

(c) Taking of Necessary Action: Further Action. If, at any time after the Closing Date, any further action is necessary or desirable to carry out the purposes of this Agreement the parties agree to take, and will take, all such lawful and necessary and/or desirable action.

86. Section 4.9 of the APA provides in part:

4.9 Commercially Reasonable Efforts. Subject to the terms and conditions provided in this Agreement, each of the parties hereto shall use its commercially reasonable efforts to take promptly, or cause to be taken all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated hereby ....

87. Section 4.12 of the APA provides:

4.12 Additional Documents and Further Assurances. Each party hereto, at the request of another party hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the consummation of this Agreement and the transactions contemplated herein.

88. The parties to the APA intended for the APA to transfer the business, including the copyrights, to Santa Cruz. As the successor-in-interest to Santa Cruz, SCO alleges that it

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is the current owner of the business, including the copyrights. In the alternative, if it is determined that the APA did not effectuate the transfer intended by the parties to the APA, Novell must take the actions necessary to effectuate that transaction in order to comply with Sections 1.7(c), 4.9, and 4.12 of the APA.

IV. CLAIMS FOR RELIEF

FIRST CLAIM FOR RELIEF
(Slander of Title)

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

90. SCO is the sole and exclusive owner of all copyrights related to UNIX and UnixWare source code and all documentation and peripheral code and systems related thereto.

91. Novell has slandered SCO's title and rights to its UNIX and UnixWare copyrights and damaged SCO's business reputation and potential contractual relationships with potential customers by making false oaths of ownership to public officials, and by repeatedly representing both to the public in general and directly to several of SCO's customers and potential customers that Novell, and not SCO, owns UNIX and UnixWare and the copyrights.

92. Novell's representations regarding its purported ownership of UNIX and UnixWare copyrights are patently false, and Novell made such representations intentionally, maliciously, and with the utter disregard for the truthfulness thereof.

93. As a consequence of Novell's conduct as alleged herein, SCO has incurred actual and special damages in an amount to be proven at trial.

94. SCO has also incurred significant attorneys' fees and costs in attempting to remove the cloud Novell has placed on SCO's title to UNIX and UnixWare, including but not limited

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to attorneys' fees incurred in researching and reviewing Novell's improper copyright registrations; attempting to mitigate damages by correcting and responding to Novell's false representations made to third parties; and in prosecuting this and other actions to protect SCO's title to UNIX and UnixWare and related rights.

95. Novell's conduct as alleged herein was intentionally and maliciously designed to destroy SCO's valuable rights to the UNIX and UnixWare copyrights and further destroy SCO's business livelihood and damage its shareholders. As such, this Court should impose an award of punitive damages against Novell in an amount to be proven at trial.

SECOND CLAIM FOR RELIEF
(Breach of the APA and TLA)

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

97. Novell has materially breached Section 1.6 of the APA and Section II.A.(2) of the TLA by distributing the Licensed Technology as part of a product (Linux) that is directly competitive with SCO's core server operating systems.

98. Novell has materially breached Section 1.6 of the APA and Section II.A.(2) of the TLA by distributing the Licensed Technology as part of a product (Linux) wherein that technology constitutes a primary portion of the value of that product.

99. Novell has also breached the covenant of good faith and fair dealing under the APA and TLA by affirmatively seeking to deprive SCO of the benefits to which it is entitled under those agreements, through numerous acts of bad faith, including without limitation: (a) making false and misleading statements denying SCO's ownership of the copyrights in UNIX and UnixWare; (b) undermining the business that it sold to SCO by distributing

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UNIX technology in Linux, in violation of the APA's and TLA's non-compete provisions; and (c) purporting to waive and revoke SCO's rights and claims against IBM.

100. Novell's breaches of the APA and TLA have caused SCO damage in an amount to be proved at trial. Those breaches have also caused SCO special damages, including without limitation the costs of prosecuting this action.

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

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

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

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

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

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

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

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

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

FOURTH CLAIM FOR RELIEF
(Copyright Infringement)

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

110. The APA transferred all right, title, and interest to and in the copyrights in UNIX, UnixWare, and various supporting documents to SCO, through its predecessor in interest.

111. SCO is the sole and exclusive owner of the copyrights in UNIX, UnixWare, and the associated supporting materials.

112. As shown on Exhibit A, SCO and its predecessors properly registered, at a minimum, copyrights in UNIX, UnixWare, and the associated supporting materials describing the UNIX system.

113. Pursuant to 17 U.S.C. 410(c), SCO's certificates of copyright registrations constitute prima facie evidence of the validity of the copyrights and the facts stated in the certificates. SCO's registrations of its copyrights in UNIX and UnixWare are entitled to that statutory presumption.

30

114. SCO and its predecessors created and developed the intellectual property covered by the copyrights as original works of authorship, and as such, those materials automatically became subject to copyright protection under 17 U.S.C. 102(a) when they were fixed in a tangible medium of expression.

115. Copyright protection under 17 U.S.C. 106 extends to derivative works, which are defined in 17 U.S.C. 101 to include works based on the original work and any other form in which the original work may be recast, transformed, modified, or adapted.

116. 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.

117. 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.

118. In addition, under the specific terms and conditions set forth in the TLA and for the limited purpose of the TLA, SCO granted Novell a non-exclusive license to the technologies covered by SCO's copyrights in UNIX and UnixWare. Novell expressly covenanted not to use those technologies in a general-purpose operating system that competes with SCO's core application server products or in a product wherein that intellectual property constitutes a primary portion of the value of the product. Novell has infringed and is infringing SCO's copyrights by using, copying, reproducing, modifying,

31

sublicensing, and distributing SCO's copyrighted intellectual property outside of the limited license provided by the TLA.

119. As a result of Novell's infringing acts, SCO has been damaged and is entitled to actual damages and Novell's profits resulting from those acts, pursuant to 17 U.S.C. 504(a); statutory damages, pursuant to 17 U.S.C. 504(b); and enhanced damages, costs, and attorney's fees pursuant to 17 U.S.C. 505.

120. In addition, because Novell's conduct has caused, and if not enjoined, will continue to cause irreparable harm to SCO without an adequate remedy at law, SCO is entitled to injunctive relief pursuant to 17 U.S.C. 502.

FIFTH CLAIM FOR RELIEF
(Unfair Competition)

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

122. Novell has knowingly, intentionally, and in bad faith engaged in a pattern of conduct aimed at depriving SCO of the value of its UNIX technology. Among other things, Novell has falsely claimed ownership of SCO's copyrights in UNIX and UnixWare, misappropriated SCO's UNIX technology in Linux and forced SCO to compete in the marketplace against its own intellectual property, and has wrongfully attempted to thwart SCO's rights and efforts to bring legal claims in defense of its UNIX intellectual property.

123. Novell's misconduct is likely to result in confusion, and in fact has resulted in confusion in the marketplace concerning UNIX, Linux, and other products.

124. As a direct result of Novell's unfair competition, SCO has and will continue to suffer damage to its business, reputation, and goodwill in an amount to be proved at trial.

32

125. Because Novell's misconduct is intentionally and maliciously designed to destroy SCO's valuable rights to the copyrights and further destroy SCO's business livelihood, this Court should impose punitive damages against Novell in an amount to be determined at trial.

126. SCO is entitled to and seeks restitutionary, injunctive, and other remedies as may be available under the applicable unfair-competition law.

V. PRAYER FOR RELIEF

WHEREFORE, Plaintiff SCO prays this Court enter judgment for SCO and against Novell:

  1. awarding SCO actual, special, enhanced, and statutory damages;

  2. awarding punitive damages for Novell's malicious and willful conduct as alleged herein;

  3. granting preliminary and permanent injunctive relief (a) requiring Novell to assign to SCO any and all copyrights Novell improperly registered in UNIX and UnixWare following the Asset Purchase Agreement; (b) preventing Novell from representing in any forum that it has any ownership interest whatsoever in those copyrights; and (c) requiring Novell to retract or withdraw all representations it has made regarding its purported ownership of the copyrights;

  4. granting preliminary and permanent injunctive relief preventing Novell from copying, reproducing, modifying, sublicensing, and/or distributing SCO's UNIX and UnixWare technology except as expressly provided by the TLA;

    33

  5. ordering Novell, as an alternative, to specifically perform its obligations under the APA by taking the actions necessary to effectuate the purposes of the APA and consummate the transactions contemplated therein;

  6. awarding attorneys' fees, costs, and pre- and post-judgment interest; and

  7. granting all other legal and equitable relief deemed just and proper by this Court.

VI. JURY TRIAL DEMAND

SCO demands trial by jury on all issues so triable.

DATED this 30th day of December, 2005.

Respectfully submitted,

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

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

By (signature of Edward Normand)
Counsel for The SCO Group, Inc.

34

CERTIFICATE OF SERVICE

Plaintiff, The SCO Group, Inc., hereby certifies that on the 30th day of December, 2005, a true and correct copy of the foregoing Second Amended Complaint was served on Defendant Novell, Inc. by U.S. Mail to:

Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon
ANDERSON & KERRENBERG
[address]

Michael A. Jacobs
Matthew I. Kreeger
MORRISON & FOERSTER
[address]

35

EXHIBIT A

TITLEREGISTRATION NO.
UNIX TXU-510-028
UNIX Version 6 TXu-511-236
UNIX V32 TXu-516-704
UNIX Version 7TXU-516-705
UNIXWARE 7.1.3TX 5-787-679
UNIX SYSTEM V RELEASE 3.0TX 5-750-270
UNIX SYSTEM V RELEASE 3.1TX 5-750-269
UNIX SYSTEM V RELEASE 3.2TX 5-750-271
UNIX SYSTEM V RELEASE 3.2 TX 5-750-268
UNIX SYSTEM V RELEASE 4.0TX 5-776-217
UNIX SYSTEM V RELEASE 4.1ESTX 5-705-356
UNIX SYSTEM V RELEASE 4.2TX 5-762-235
UNIX SYSTEM V RELEASE 4.1TX 5-762-234
UNIX SYSTEM V RELEASE 4 Integrated Software
Development Guide
TX 2 931-646
UNIX SYSTEM V RELEASE 4 Reference Manual For
Intel Processor commands m-z
TX 3 221-656
UNIX SYSTEM V RELEASE 4 Reference Manual for
Intel Processors Commands a-l
TX 3 227-639
UNIX SYSTEM V RELEASE 4 Device Driver
Interface/Driver Kernel Interface reference Manual for
Intel Processors
TX 3 232-578
UNIX SYSTEM V RELEASE 4 Programmer's Guide:
Streams for Intel Processors
TX 3 218-286
UNIX SYSTEM V RELEASE 4 Device Driver
Interface/Driver Kernel Interface Reference Manual for
Motorola Processors
TX 220-500
UNIX SYSTEM V RELEASE 4 Reference Manual for
Motorola Processors Commands a-l
TX 3 220-331
UNIX SYSTEM V RELEASE 4 PROGRAMMER'S
GUIDE
TX 2 120-502
UNIX SYSTEM V/386 RELEASE 4 Transport
Application Interface Guide
TX 2 881-542
UNIX SYSTEM V/386 RELEASE 4 Device
Interface/Driver Kernel Interface (DDI/DKI) reference
Manual
TX 2 883-235
UNIX SYSTEM V/386 RELEASE 4 Programmer's
Guide: SCSI Driver Interface
TX 2 902-863
UNIX SYSTEM V/386 RELEASE 4 System
Administrator's Reference Manual
TX 2 881-543

36

UNIX SYSTEM V/386 RELEASE 4 Programmer's
Reference Manual
TX 2 853-760
UNIX SYSTEM V/386 RELEASE 4 User's Reference
Manual
TX 2 890-471
UNIX SYSTEM V/386 RELEASE 4 User's Reference
Manual
TX 2 890-791
UNIX SYSTEM V/386 RELEASE 4 Device Driver
Interface/Driver Kernel Interface (DDI/DKI) Reference
Manual
TX 3 820-792
UNIX SYSTEM V RELEASE 4 Programmer's Guide:
Streams
TX 2 833-114
UNIX SYSTEM V RELEASE 4 Programmer's
Reference Manual
TX 2 832-009
UNIX SYSTEM V RELEASE 4 System Administrator's
Reference Manual
TX 2 830-989
UNIX SYSTEM V/386 Programmer's Guide Vol. IITX 2 454-884
UNIX SYSTEM V/386 RELEASE 3.2 Programmer's
Reference Manual
TX 2 494-658
UNIX SYSTEM V/386 Programmer's Reference ManualTX 2 373-759
UNIX SYSTEM V/386 System Administrator's
Reference Manual
TX 2 371-952
UNIX SYSTEM V/386 Streams Programmer's GuideTX 2 367-657
UNIX SYSTEM V/386 Streams PrimerTX 2 366-532
UNIX SYSTEM V RELEASE 3.2 System
Administrator's Reference Manual
TX 2 611-860
UNIX SYSTEM V RELEASE 3.2 Programmer's
Reference Manual
TX 2 605-292
UNIX SYSTEM V Documentor's Workbench Reference
Manual
TX 2 986-119
UNIX SYSTEM V RELEASE 4 User's Reference
Manual/System Administrator's Reference Manual for
Motorola Processors Commands m-z
TX 3 218-267
UNIX SYSTEM V RELEASE 4 System Files and
Devices reference manual for Motorola Processors
TX 3 221-654

37

EXHIBIT B

Novell's unauthorized copying in its use and distribution of SuSE Linux includes but is not limited to the appropriation of the following data structures and algorithms contained in or derived from SCO's copyrighted material:

1. SuSE's implementation of the "Read/Copy/Update" algorithm
2. SuSE's implementation of NUMA Aware Locks
3. SuSE's implementation of the distributed lock manager
4. SuSE's implementation of reference counters
5. SuSE's implementation of asynchronous I/O
6. SuSE's implementation of the kmalloc data structure
7. SuSE's implementation of the console subsystem
8. SuSE's implementation of IRQs
9. SuSE's implementation of shared memory locking
10. SuSE's implementation of semaphores
11. SuSE's implementation of virtual memory
12. SuSE's implementation of IPC's
13. SuSE's implementation of load balancing
14. SuSE's implementation of PIDs
15. SuSE's implementation of numerous kernel internals and APIs
16. SuSE's implementation of ELF
17. SuSE's implementation of STREAMS
18. SuSE's implementation of dynamic linking
19. SuSE's implementation of kernel pre-emption
20. SuSE's implementation of memory mapping
21. SuSE's implementation of ESR
22. SuSE's implementation of buffer structures
23. SuSE's implementation of process blocking
24. SuSE's implementation of numerous header files

38

EXHIBIT 2

39

[MORRISON | FOERSTER logo]

January 24, 2006

By Facsimile

Edward J. Normand, Esq.
Boies, Schiller & Flexner LLP
[address]

Re: The SCO Group, Inc. v. Novell, Inc.,
Case No. 2:04 CV 00139 DAK

Dear Ted:

We cannot tell from SCO's newest complaint what unfair competition law SCO is asserting against Novell. Paragraph 126, for example, simply references "the applicable unfair- competition law." Could you please clarify this so that Novell can avoid seeking such clarification through court briefing? Thanks.

Sincerely,

____[signature]___

Kenneth W. Brakebill

cc: Brent O. Hatch, Esq.

40

FAX COVER SHEET

TO: Edward J. Normand

CC: Brent O. Hatch FROM: Kenneth W. Brakebill

DATE: January 24, 2006

CAUTION - CONFIDENTIAL

This facsimile contains oonfldential information which may also be privileged. Unless you are the addressee (or authorized to receive for the addressee), you may not copy, use, or distribute it. If you have received it in error, please advise Morrison & Foerster LLP immediately by telephone or facsimile and return it promptly by mail.

Comments:

41

FAX COVER SHEET

To: Edward J. Normand

CC: Brent O. Hatch

FROM: Kenneth W. Brakebill

DATE: January 24, 2006

CAUTION - CONFIDENTIAL This facsimile contains oonfldential information which may also be privileged. Unless you are the addressee (or authorized to receive for the addressee), you may not copy, use, or distribute it. If you have received it in error, please advise Morrison & Foerster LLP immediately by telephone or facsimile and return it promptly by mail.

Comments:

42

x x x TRANSMISSION RESULT REPORT (IMMEDIATE TX) ( JAN, 24.2006 6:16PM) x x x DATE TIME ADDRESS MODE TIME PAGE RESULT PERSONAL NAME FILE ------------------------------------------------------------------------- JAN. 24. 6.17PM BSFLLP 03ES 0'34" P. 2 OK 5619

43

EXHIBIT 3

44

[MORRISON| FOERSTER logo]

February 8, 2006

By Facsimile

Edward J. Normand, Esq.
Boies, Schiller & Flexner LLP
[address]

Re: The SCO Group, Inc. v Novell, Inc.,
Case No. 2:04 CV 00139 DAK

Dear Ted:

This is a follow-up to my January 24th letter to you (attached) concerning SCO's unfair competition claim in its Second Amended Complaint. We cannot tell what unfair competition law SCO is asserting against Novell and request that you clarify this as soon as possible so that we do not have to seek such clarification through briefing.

Thanks.

Sincerely,

[signature]
Kenneth W. Brakebill

cc: Brent O. Hatch, Esq.

Enclosure

45

MORRISON | FOERSTER logo

Edward J. Normand
February 8, 2006
Page Two

bcc: Morrison & Foerster Novell team (via e-mail) Anderson & Karrenberg (via e-mail)

46

[MORRISON | FOERSTER logo]

January 24, 2006

By Facsimile

Edward J. Normand, Esq.
Boies, Schiller & Flexner LLP
[address]

Re: The SCO Group, Inc. v. Novell, Inc.,
Case No. 2:04 CV 00139 DAK

Dear Ted:

We cannot tell from SCO's newest complaint what unfair competition law SCO is asserting against Novell. Paragraph 126, for example, simply references "the applicable unfair- competition law." Could you please clarify this so that Novell can avoid seeking such clarification through court briefing? Thanks.

Sincerely,

____[signature]___

Kenneth W. Brakebill

cc: Brent O. Hatch, Esq.

47

M O R R I S O N | F O E R S T E R To:

NAME: - FACSIMILE: - TELEPHONE:

Edward J. Normand - fax no. phone no.
Boies, Schiller & Flexner LLP
___________________________

CC: - FACSIMILE: - TELEPHONE:

Brent O. Hatch - fax no. - phone no.
Hatch, James & Dodge, P.C.

FROM: Kenneth W. Brakebill Date: February 8, 2006

Number of pages with cover page: 3

Preparer of this slip has confirmed that facsimile number given is correct:

CAUTION - CONFIDENTIAL

This facsimile contains confidential information which may also be privileged. Unless you are the addressee (or authorized to receive for the addressee), you may not copy, use, or distribute it. If you have received it in error, please advise Morrison & Foerster LLP immediately by telephone or facsimile and return it promptly by mail.

Comments:

[MORRISON | FOERSTER logo]

January 24, 2006

By Facsimile

Edward J. Normand, Esq.
Boies, Schiller & Flexner LLP
[address]

Re: The SCO Group, Inc. v. Novell, Inc.,
Case No. 2:04 CV 00139 DAK

Dear Ted:

We cannot tell from SCO's newest complaint what unfair competition law SCO is asserting against Novell. Paragraph 126, for example, simply references "the applicable unfair- competition law." Could you please clarify this so that Novell can avoid seeking such clarification through court briefing? Thanks.

Sincerely,

____[signature]___

Kenneth W. Brakebill

cc: Brent O. Hatch, Esq.

48

EXHIBIT 4

[MORRISON | FOERSTER logo]

January 24, 2006

By Facsimile

Edward J. Normand, Esq.
Boies, Schiller & Flexner LLP
[address]

Re: The SCO Group, Inc. v. Novell, Inc.,
Case No. 2:04 CV 00139 DAK

Dear Ted:

We cannot tell from SCO's newest complaint what unfair competition law SCO is asserting against Novell. Paragraph 126, for example, simply references "the applicable unfair- competition law." Could you please clarify this so that Novell can avoid seeking such clarification through court briefing? Thanks.

Sincerely,

____[signature]___

Kenneth W. Brakebill

cc: Brent O. Hatch, Esq.

49

Page 1 of 1

Nazzal, Sandra B.
__________________________________________________________

From: Ted Normand [email address]
Sent: February 19, 2006 9:35 AM
To: Brakebill, Ken W.

Ken -- With respect to your question regarding choice of law, generally SCO had in mind the common law and statutory law of Utah with respect to unfair competition in its Second Amended Complaint, but in SCO's view the decision of which jurisdiction's law applies is a legal question for the Court to resolve, and therefore I cannot say that SCO has taken a position on the issue. If you are asking me now which jurisdiction's law of unfair competition SCO believes "should" apply to the claim, that is a different question and one the parties would address in any briefing in which the issue arises. If you are asking me your question in consideration of Novell's Answer, SCO's view is that Novell need not take a position in its Answer with respect to which jurisdiction's law applies. If Novell wants to take such a position, moreover, it can do so independent of any views SCO has on the issue. Please call me to discuss if you would like.

Regards,

Ted

50


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