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Report from the June 4 Novell Hearing - Updated 2Xs - More, more, more
Wednesday, June 06 2007 @ 10:04 AM EDT

I know. You are saying, "At last!"

Matt, our eyewitness, attended a court hearing for the first time when he attended the Novell hearing on June 4, and since none of our regulars could get off work that day to attend, it took more time than usual to get the full report and try to verify everything. Matt was in town to attend a technical conference and so he's quite busy, but he took the time out to go to the hearing for us, and I really appreciate it, even if he is apologetic for not being expert in such things. We'll have the complete transcript in due time, and then we'll know every detail, but in the meantime, it's quite interesting to get his impressions.

He had posted his original report, which I know you read, but I asked him some follow-up questions.

First, highlights from his first report:

Attendance: reasonably full, but not packed. Maybe 20 or so in the public seats. One person, who appeared to be a lawyer, was directly behind the Novell trio. Approximately nine SCO lawyers/aides sat behind the SCO trio. Two of them later moved to the Novell side of the room as the SCO side was quite full. Darl and his wife(?) showed up, as well as a few other SCO-affiliated individuals. I'm not sure if any other Groklaw readers were there, but I saw two young individuals who weren't lawyers and didn't talk to the SCO people.

Jacobs argued everything for Novell, Singer for SCO. Jacobs seemed to be sharp and to the point, and he stood there with his laptop making his arguments. Singer was a little more dramatic (and fun to watch), and he had a stack of 10 or so poster boards that he kept swapping a subset of onto an easel; he would often point to and read key phrases on the boards to make his points.

What I remember from the copyright arguments (from memory, reader beware):

SCO: Novell's executives at the time of the APA say they understood the copyrights would be transferred, and other extrinsic evidence (argued here) supports this.

Novell: We have testimony from Novell's APA lawyers indicating that the copyrights were directly excluded from transfer, and more importantly we have a clear legal record (especially in last few weeks before agreement was finalized) directly indicating copyrights were excluded. Novell executives weren't involved in negotiation details.

Entertaining moments:

Mr. Singer: we paid $200 million for these rights - if we didn't get the copyrights, what did we get?

Mr. Jacobs: (something like:) Now it's $200 million? (Points to poster board) His board over there says $125 million. In fact, it was 6 million shares ... (continues)

Mr. Singer later repeats the $200 million argument without (I think) addressing Mr. Jacobs comment.

As Pacer indicates, Judge Kimball took the arguments under advisement.

Matt then filed a second report, and here are highlights from that:

Remarkably, Judge Kimball didn't speak much at all. Sometime during the first motion, after SCO finished an argument and Novell was about to respond, Judge Kimball said something like: "Now I assume Novell has a different view of this?"

At a later point, when Novell was about to respond, Judge Kimball asked Novell to address specific parts of the latter half of SCO's argument.

I believe the argument order went as follows:
Motion 1: Novell, SCO, Novell, SCO
Motion 2 (copyright ownership): SCO, Novell, SCO, Novell

As the hearing was ending, and Mr. Jacobs was still standing (he had already walked back to his seat and turned around), Judge Kimball thanked someone for such brilliant briefs (I didn't quite hear it all). It appeared he was thanking both parties.

So, he sent it to me also and that gave me a chance to get to know him a bit and ask some more questions. Here are my questions and his answers, minus one.

I thought it inappropriate to include details like information about a family member's appearance. Not that it was negative. But it felt private to me. And so I asked myself, if I were her, what would I want? The Golden Rule.

Here's what I decided, that there is a difference between the company and its policies and actions by executives and the individuals as private people. A wife should be able to show love and support to her husband by attending an important hearing with him, and there should be no penalty for that. So I ultimately decided it was more important to be respectful of a woman who is not involved in the litigation except that she had the courage to attend the hearing to stand by her man, so to speak, than to share gossipy details, and I'm sure she must have considered whether every little detail about her would be discussed on the Internet. I don't want to be party to anything unkind. To tell you the truth, I admire her for attending. Groklaw's policy from day one has been to focus on policies, not individuals. There is a difference.

I know some may point out that I have not always been shown that same courtesy, and that is true. But I don't belong to the tit-for-tat club and I don't want to. No matter what others may do, I want to stay who I am, who I'm desirous of being as a person, without regret or disappointment as to how I conducted myself. So, that's my decision, and I just wanted to let you know openly that this is what I did.

And with that, here's Matt. If you want to know anything I didn't think to ask, it's not too late, as he'll probably be filing one more additional bit in any case.


PJ: I enjoyed your account very much, and I'd like to ask you some questions:

1. Did Novell mention the Tor Braham, Allison Amadia declarations? All the people who actually wrote the APA and Amendment 2?

Matt: Yes, I do recall these names being mentioned by Novell. I recall that they often were referred to as something like "those directly involved with the APA and amendment 2." In other words, I didn't recall hearing their names often. However, I believe that they were at the center of the argument between Novell and SCO on the copyright motion. But I don't recall SCO devoting much time to attacking them. Mr. Singer did mention something like "Novell's people, except for some lawyers, which I'll get to in a moment, said it was their impression that the copyrights were transferred." I cannot recall what he said to discredit the lawyers. He seemed to spend more of his time on the Novell executives. (A little more on this is below...) Novell was basically short and sweet, repeating the documented negotiations and final agreements explicitly excluding copyright transfer. Novell also argued something like nothing in the amendments explicitly modified the copyright exclusion, so it still stands (I hope this doesn't sound strange, but I seem to recall an argument about what amendment 2 changed).

PJ: 2. How could Jacobs stand with his laptop? Was there a podium? Or like rms he has a strap?

Matt: Wow, I must be a geek, because I've seen RMS's picture with the laptop and I know exactly what you are talking about! Well, OK that doesn't make me a geek, but what does is that I thought it was a good idea! :-)

Yes, there was a podium, dead center in front of the judge, very close to the litigants. He put his laptop there.

PJ: 3. Can you recall what else you saw on the posters that Singer showed. Also, what does he look like?

Matt: I'm glad you asked, because I really soaked up the visual scene. Unfortunately, Mr. Singer had his easel facing only the front of the courtroom (and I mean *parallel* to the front of the judges bench) - only the judge and the courtroom staff could read it. On the back of one set of boards was written "Copyright X of 10" with X being a number. Another set (for the first motion) said "X of 10" - I'm not as sure of the total on this set, and I don't think there was a word in front. I'm pretty sure all 20 of them were not present, or his stack would have been much thicker. I caught glimpses of the posters as he was changing them, but I couldn't read them. They had a blue box on top with a page "topic" sentence (in white?) in the box, with text underneath (of which parts were highlighted with yellow highlighter). I saw one of the aides with a (presumably exhibit) binder open that had the same layout: blue title box on top. The aide may have been following along, but I didn't look closely.

Mr. Singer is somewhat short compared to Mr. Jacobs. I'll guess 5'8" but he could have been shorter - I should have paid attention when he was talking to Darl and others outside the hearing - I could have gauged his height better. He has a mid-to-higher-pitched voice. I'm not sure how to describe his build - average to stocky but not overweight. He is bald except for light-but-not-gray hair (brown, I think) around the sides and back of his head. I'm bad at guessing ages - maybe he was 40-50 years old.

Mr. Jacobs is tall (definitely over six feet) and thin, with dark hair and low-pitched voice. He is maybe 40-50 years old - neither of them looked particularly aged. I forgot to mention before that he corrected Mr. Singer at one point - Mr. Singer said IBM instead of Novell!

Since I know you are wondering after the above comments on Mr. Singer's height, I did catch a brief snippet of conversation after the hearing as I walked by Darl, Mr. Singer and others in the hallway. Darl liked Mr. Singer's arguments and/or thought the hearing went well. Mr. Singer didn't think one of Mr. Jacobs' arguments was good - something like "he hovered above the issue, swooped in, then went immediately back up". I didn't try to hear this. But it is a public hallway, and I couldn't *not* hear it as I walked by.

PJ: 4. What made you think the woman with Darl might be his wife?

Matt: Excellent question and I have an excellent answer - he walked in with her, right past the bench in front of me, and they were holding hands! Now, I could doubt whether I was sure it was him, but I've seen his picture before (I especially remember the one of him on his horse farm), and he has a unique look. Plus, he just had a different aura about him than the others - confident, maybe cocky. This visual impression fits with the impression I got based on his comments to the press.

Let me describe more of the courtroom and where they and others were: The courtroom is long and quite narrow. I recall two columns of three benches (each reasonable seating four) behind each party, and there were three short benches (two two-seaters and three-seater) up against the back wall and right behind the last row of longer benches. The U.S. Marshall security officer(? - he had a circled-star badge) sat on a chair next to the wall as well. The long benches really aren't long, they comfortably hold four. I was in the last long bench on the SCO side - it was by the door and I sat down before I could recall that the defense is on the judge's right. I decided to stay as the view was more interesting, as only SCO lawyers/aides were in front of me (seven, I believe).

The two that I previously mentioned moving to Novell's side started out next to me. An older man, over six feet tall, gray hair, maybe 60ish, in business casual attire wedged himself between me and the "side-flipping" two. He definitely was on the SCO side as he talked to at least one person in the SCO crowd (I don't remember if I saw him talk to Darl). I wondered if he was an (ex?) SCO exec. Now, more to the point, I didn't get to see much of Darl during the hearing, as he and his wife sat down out of my view. I did glance back once and notice he was on the middle, three-seater short bench with two "suits" - I didn't get a good look at him. His wife was sharing the two-seater with a young man in his twenties, shirt untucked (he is not one of the two young men I mentioned in the original post). I wondered if Darl had a son attending or something. This young man had arrived a good 5-10 minutes before Darl and his wife.

PJ: 5. Did the judge show any facial expressions? Could you get any flavor for how he might be thinking?

Matt: I looked at him initially, but I only caught him taking notes or possibly flipping through an exhibit binder. He was very straight-faced though. Early on I must have subconsciously decided that the litigants were where the action was at. Maybe Chris Brown noticed expressions before, but I left thinking Judge Kimball doesn't resort much to facial expressions. Plus he didn't speak much and I never heard him interrupt an argument.

PJ: 6. On the first motion, how did SCO get to speak a final time? That is most unusual.

Matt: This was set up in the beginning. Judge Kimball asked who was going first, both litigants agreed who would go first, then he indicated the back-and-forth responses. I know the second motion went that way, but now you are causing me to doubt my memory on the first one. I seem to remember that a cross-motion was being argued at the same time as Novell's PSJ motion. I'm sorry I'm not more intimately familiar with these motions.

PJ: 7. Are you sure SCO argued that Novell's executives at the time of the APA say the copyrights transferred, or Santa Cruz's?

Matt: No, it was definitely the Novell executives. Someone mentioned that during the deposition the Novell lawyer asked if it was possible that the copyrights didn't transfer (right after SCO asked if it was their impression that it did), and the executives said yes it is possible that they didn't. It may have been the SCO lawyer mentioning this to preemptively handle this statement.

PJ: 8. You mentioned two motions, but you only remarked on one. Can you recall any details from the second?

Matt: The motion I am remembering details from is the copyright motion that was argued after the break. I tried to recall summary details from the first, but by the time I posted comments I was kicking myself because I couldn't remember the first motion. (I had been exposed to many new ideas at this conference between the hearing and posting, so my brain was struggling to keep up.) I do recall that Mr. Singer was arguing that Novell transferred rights to SCO, and then Novell was improperly trying to tell SCO how to run its business. SCO argued that it was the owner of the code, not a licensee. Therefore it was in a different position than HP, IBM, etc. would be with Novell. Novell disagreed.

They argued about the distinction between source and binary rights being present in the agreements. They argued about what code/OSs were covered in the agreements. Mr. Jacobs carefully distinguished between Santa Cruz, Caldera and SCO.

PJ: 9. Did Darl walk up and chat in the middle of arguments? Or was that during the break?

Matt: It was during the arguments. I couldn't tell if he was stating something or asking a question, but he got a brief response and he sat back down.

How long do transcripts take, anyway? I'm a little nervous - I hope I didn't make any mistakes. This has been quite a lesson in being a witness and trusting what you observed.



PJ: Matt K. continues, after reading some of the legal briefs, and it gets more and more interesting:

Matt: I spent some time skimming a few documents based on the motions below, and some arguments seemed to have been taken straight from the documents. I assume this is typical and the skill is in selecting which portions to orally argue and respond with.

PJ: Exactly correct.

Matt: In Memorandum in Opposition to SCO's Motion for Partial Summary Judgment on SCO's First, Second, and Fifth Causes of Action:

Pages 3-4, introduction: I heard large parts of this.

Page 36: SCO Cannot Use Extrinsic Evidence About the Supposed Intent of the Parties to Rewrite the Plain Language of the APA

Page 42: Amendment No. 2 Did Not Transfer the UNIX and UnixWare Copyrights to Santa Cruz. (I seem to remember item 1 here about a signed instrument of conveyance).

Page 46: No Copyrights Are “Required” for Santa Cruz to Run the UNIX-Related Business Contemplated by the APA

In SCO's motion:

Page 2: Mr. Frankenberg's testimony (and other Novell employees referred to) on page 2 was a major point in SCO's argument.

Page 14: I recall hearing something extremely similar to Mr. Michels' testimony, about needing copyrights to do business. This may have been read off of one of the boards.

Page 27: paragraph on bill of sale transferring all copyrights. Also on same page, extrinsic confirmation of transfer by APA, but I think I've already mentioned that being present.

Something I haven't found yet in SCO's extrinsic-evidence argument is that they mentioned copyright registration documents being present in a warehouse in New Jersey. They argued if Novell thought they had the copyrights, why didn't they acquire these documents? Why were they left there?

-- to be continued --


Update 2:

Matt: Before I proceed with other briefs, I'd like to thank everyone for the kind and supporting comments - they played a big part in piecing together this admittedly unorthodox account.

In my original posting, as someone pointed out (I can't quickly find the comment back), I incorrectly said IBM instead of Novell. I guess I shouldn't be too hard on Mr. Singer when he made this mistake! :-)

For those who appreciated the visual scene, here is a global description of the court. The building is a traditional courthouse, having columns and a stone exterior. The long-and-narrow courtroom's ceiling is very high, maybe 40 feet high. The wall behind the judge's bench is entirely made of wood, all the way up. I believe there is a large, circular seal or emblem on the back wall. Two doors or openings are in that wall, one on each side of the judge's bench. From the litigant's perspective, the right wall is mostly plaster (with wood trim) and contains the entry to both the jury box (right wall as well) and the public area. The public entry consists of two narrow doors, each with a square window, in a single opening (I think the jury entry was similar). The left wall was mostly closely-spaced, wide columns of windows, all the way up, with wood blinds. The rest of the left wall is wood, I think. I can't clearly recall the back wall, it might be wood. Two small cameras, focused only on the public area, were mounted on each side wall near the litigants (black boxes, each with a green led). The windows overlook the courtyard, which is open to the sky and enclosed on all sides. The courtroom is on the second floor, but I think the courtyard's "ground level" might be the second floor. Overall, I had an enjoyable feeling similar to when I've been in some really old-but-grand University buildings.

The hearing started at 9 a.m., and the break was at 5 or 10 minutes before 10. Arguments on the second motion began at 10:15. I'm not sure of the exact end time - maybe a little after 11.

As for the arguments, I've tried to keep my increasing knowledge of case details from creating new memories - the transcripts will indicate whether I was successful...

For these briefs I used this article as a guide, so the numbers below reflect the organization present there.

This means the briefs previously mentioned come from 258, and I used SCO's page numbers in the PDF.

Here is what jumped out at me in more briefs:

171, Novell memo in support:

Page 10: (Paraphrase) Novell has sole discretion and direction to direct SCO on any SVRX license; Novell can take action on SCO's behalf if it doesn't act on SVRX licenses as directed by Novell.

Page 12, sections C and D: I remember a Novell argument about IBM having agreements with AT&T (possibly amendment X was mentioned too) that prevented SCO from terminating IBM's SVRX license

Pages 19-20, item 46: More of above - Novell has discretion and can direct; IBM's license can't be revoked due to amendment X. Here it mentions Novell wrote this to SCO in 2003 - I remember 200X dates being mentioned at various times, but I don't remember if this 2003 event was argued.

Pages 25+, section B: The Plain Language of Section 4.16(b) Grants Novell the Authority to Waive Rights Under Any SVRX License. Again, more of the above with some extra detail. Parts of subpoints 1-4 may have been present. California law and the parole evidence rule were mentioned - this is also present in Novell Evidentiary Objections.

171, redacted SCO memo in support:

Page 19: 2. Novell retained only the right to continue receiving residual binary royalties under the SVRX licenses. I remember binary licenses being argued, but the rest is hazy.

Page 21, item 47: More of above - mentioned Novell's remaining rights in SVRX licenses were only binary.

258 and 224, Novell Evidentiary Objections:

Page 1, item 1: Inadmissable parole evidence. Both litigants mentioned California law, and the parole evidence rule was mentioned.

Page 1, items 2-5: These were likely mentioned by Novell, especially personal knowledge and hearsay, when arguing against SCO's use of executive testimony.

224, SCO memo in opposition:

Page 10: More on binary royalties, "Novell only retained right to participate in buyouts of binary royalty interests"

Page 11: "Novell may not prevent SCO from exercising its rights with respect to SVRX source code..."

Page 12: "Novell is utterly silent on most" extrinsic evidence, "Novell fails to even acknowledge recent" extrinsic evidence.

275, Novell memo in support of SJ Motion on SCO's First Claim for Slander of Title and Third Claim for Specific Performance:

Pages 2-3: No instrument of conveyance, transferring copyright

Page 6, item 6: Novell retained right to license buyout

Page 12, section E: Bill of sale did not transfer copyrights

Page 13, section F: Amendment 2 did not transfer copyrights or specify which ones necessary for UNIX business

Page 14, section G: Amendment 2 negotiation history confirms no copyright transfer

Pages 16-17, list: I heard NetWare copyrights, parole evidence, bill of sale not adding additional asset transfers. It is highly likely the others were mentioned.

Page 19: Rule is strong against using extrinsic evidence that contradicts plain language

Page 33: More on bill of sale not transferring

Page 34, section B: Amendment 2 didn't claim to transfer copyrights or retroactively amend bill of sale. Items 1-4 are similar to previous points mentioned. Item 4 seems very familiar: Santa Cruz didn't require ownership for business, it already had license needed to implement APA.

271, Motion for Partial Summary Judgment on the Copyright Ownership Portions of SCO's Second Claim for Breach of Contract and Fifth Claim for Unfair Competition SCO (and possibly Novell) used these terms in their oral arguments:

misappropriation, unfair competition, and fair dealing.

Other global tidbits I recall:

Mr. Singer frequently portrayed Novell as improperly interfering with SCO's business, while Novell said it had the explicit right to direct SCO on certain matters.

In the copyright motion, Mr. Singer's final (or very near the end) argument included gesturing more than once, with both hands, to the Novell bench and saying something very close to that on 224, page 12: Novell is utterly silent, Novell fails to even acknowledge the extrinsic evidence...

When the transcripts arrive, I'll try to look for and comment on places where I remember activity.

Can those more familiar with the case piece these tidbits together into the likely arguments? I might even have a few more details that could be brought out by such a process.

If anyone has more questions about courtroom activity, I will try to respond.

Based on this experience and comments made, it would be very useful if multiple witnesses were present at future hearings, each with a different primary focus: visual vs. oral, or plaintiff visual and oral vs. defendant, etc. The variety and redundancy could be used to piece together a global account of the entire scene, as in open-source journalism.

Regrettably, it is extremely unlikely I will be in SLC for other SCO hearings; I would have enjoyed taking notes on more courtroom activity.

Thank you for the opportunity to share my account with Groklaw.

PJ: It's our place to thank *you*, Matt, for taking a day off to be our eyes and ears. I can't help but imagine what your coverage would have been like had you read the filings before you went instead of after. Then any little additions or changes or emphases would have leaped out at you, and those seemingly minor shifts are what trials are actually all about. This was great fun, and I know I speak for everyone in saying we are so glad you had a conference to go to in Salt Lake City that week.

Looking forward to the actual trial, we need to start thinking about coverage. Seriously. To pay for transcripts for daily trial transcripts is astronomical. And trials lasts for months, so we need to start thinking about this. Anybody know anyone who knows shorthand? I was thinking it might be cheaper to hire our own. I'd have to check with the court about whether it would be allowed, but I think it would be. It wouldn't be the official transcript, obviously, but it would be our eyes and ears there. If you have a better idea, sing out.

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