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SCO and Novell File Proposed Findings of Fact/Conclusions of Law
Tuesday, April 29 2008 @ 03:32 PM EDT

SCO and Novell have each now filed their Proposed Findings of Fact and Conclusions of Law. What's that? Well, when a judge reaches a decision and issues his or her decision, there is also a list of the facts he or she considers established at the trial, and the legal facts established. An example of the latter would be to find that the APA created an agency relationship between SCO and Novell regarding SVRX royalties. Judge Kimball asked the parties to file on the day the trial began, and so they have.

SCO's filing is 54 pages, with some cases attached. Novell's is 21. I'm sure you can figure out why SCO's is longer. The parties can file revised versions, of course, depending on what comes out in evidence at trial, but this gives the judge an overview of how each side thinks he should rule. It also helps us to get a taste of what is enfolding in the courtroom in Utah as we speak, because the filings are a map to what each side hopes to prove. And it will be a help to the appeals court later.

Here are all the filings:

528 - Filed & Entered: 04/29/2008
Proposed Findings of Fact
Docket Text: Proposed Findings of Fact by Novell, Inc.. (Sneddon, Heather)

529 - Filed & Entered: 04/29/2008
Proposed Findings of Fact
Docket Text: Proposed Findings of Fact by SCO Group. (Attachments: # (1) Exhibit A-C (Unpublished Cases))(Normand, Edward)

The Microsoft License

Sticking just to the Findings of Fact sections of both filings, we learn that the Microsoft license had three segments, so it was titled a "Release, License and Option Agreement." Section 1 was a release of claims, but SCO says no particular technology was mentioned. Just whatever SCO IP existed, Microsoft could use it in its products. Naturally, Novell claims at least some of that $1.5 million. Section 3 was about UnixWare, "Option to Purchase UnixWare License," which Microsoft eventually did license, so Novell isn't asking for any money from that $2 million plus later $5 million, although it believes it could argue the matter, if it thought it was worth it. Remember that older copyrights to UnixWare remained Novell's also. And a very valid question would be: what use did Microsoft have for UnixWare?

But Section 4 of the license, "Option to Purchase License to Other SCO Assets" lists 34 versions of UNIX, and at least 28 of them are identified in the 1995 APA as SVRX. Presumably the others are post-APA. Microsoft paid $250,000 for that option and $8 million when it exercised its option. SCO claims that the license was still for UnixWare, as per Exhibits A and B. Only Exhibit C mentions OpenServer and "older versions of UNIX". Supposedly this license gave Microsoft broader rights to UnixWare. Then, in an amendment, allegedly Microsoft obtained a license to "BSD Code" which SCO says does not include any SVRX releases. I say allegedly, because I can't think of any SCO right to license BSD code, unless SCO is talking about errno.h again. Don't tell me that Microsoft paid money for that!

The Sun License

And we finally get to learn what the Sun license was for. According to SCO, Sun had never had a UnixWare license, only a license to SVRX, and it was a buyout so it could open source Solaris. But then SCO starts to provide wording that is very odd indeed in a Findings of Fact. It says not that Sun did X or Y because of A or B. Instead it says that SCO perceived that Sun needed a license because of X or Y. I take it that means that SCO really will not call Sun as a witness and also that the agreement may not be so clear on its face.

According to SCO, it "perceived" that Sun had fallen behind the industry, being on Sparc only and not Intel, that Sun had tried to develop Intel compatibility for Solaris, but it had failed.

[ Update: Sun had Solaris for Intel at least from March of 1993, by the way. Just saying.]

According to SCO, that is what it needed UnixWare for. Say, what? How is a court supposed to find as a fact that SCO perceived such and so? Where is Sun? It should be the one to say what it wanted the license for.

Plus, where is the logic? First SCO argues that UnixWare is just the latest version of System V. Then it argues that Sun already had System V licenses. But it needed UnixWare to be Intel compatible? SCO told the court in the IBM litigation that IBM wanted *System V* in order to be Intel-compatible. So... what happened? Situational logic, I guess.

SCO says it doesn't market older versions of System V separately any more, according to them because "earlier versions do not take advantage of hardware enhancements made to new processors and peripherals adopted by computer manufacturers." It adds this:

The current version of UnixWare incluldes the important parts of the prior releases of System V coupled with modifications that take advantage of improvements made to computer systems by hardware manufacturers.

That may be so, but Sun didn't license "the current version" of UnixWare in 2003. That's because SCO did a major overhaul of UnixWare later in time. It announced an upgrade of System V also. So hopefully Novell is aware of what looks to me like an attempt to confuse the court, as this wording, truthful as it might be on its face, is misleading if the intent is to present to the court that this latest version is what Sun licensed. It can't be. Not in 2003. And as for older versions not being marketable, what about the newer ones? Can't they be marketed separately? Obviously, they can, since the SCO account lists at least five releases of System V which Sun licensed in 2003, along with the buyout of the 20-some versions it already had licensed, plus two versions of UnixWare, and SCO says three of the new versions of System V are not listed in the APA. So right there it gives the lie to any idea that System V isn't still being marketed. Sun also licensed some device drivers. SCO claims the terms require Sun to license the tech "for value".

Novell adds an interesting detail regarding the value of the System V versus the UnixWare licenses:

32. The evidence presented at trial established that the Sun SCOsource License conveyed substantial rights to the SVRX intellectual property retained by Novell.

33. SCO did not establish the separate value of any SCO UnixWare intellectual property rights conveyed by the Sun SCOsource License.

So that tells us what Novell plans to establish at trial.

Other SCOsource Licenses

Novell mentions that SCO entered into 22 other SCOsource licenses, in addition to the Sun and Microsoft ones:

34. SCO also entered into 22 additional SCOsource licenses ("Other SCOsource Licenses"):
  • Computer Associates Int'l; Everyone's Internet, Ltd.; HEB; Questar Corp.; CDM; Legget & Platt Inc.; Parkhead Systems; and Siemens AG (Oce Printing Sys.) executed written SCOsource licenses.

  • Denise Evans; Gotley Nix Evans Pty Ltd.; John Curtis; Jose Garcia Rodriguez; Kellogg Corporation; Robert Twigg; Sphinx CST Ltd.; and Stephen McManus executed electronic SCOsource licenses.

  • Cymphonix; DTR Business Systems, Inc.; IMCORP, Inc.; MPA Systems Pty Ltd.; Synnex Canada Ltd.; and Seneca Data Distributors Inc. each acted as a distributor for a SCOsource license.

I know. More than you thought. Who was it said there is a sucker born every minute? So now you know who they all were, the SCOsource licensees. SCO earned $1,156,110 from them. It gave Novell nothing. The terms, Novell says, were all pretty much like the EV1 license we already saw, a license for SCO IP, defined as SVRX rights:

40. As noted above, SCO's complaint about "companies' internal Linux usage" was in fact a complaint that those companies were using SVRX code that SCO claims is in Linux. SCO has never identified any unique SCO UnixWare code in Linux and therefore has never identified any SCO UnixWare infringement supposedly excused by the Other SCOsource Licenses.

Ergo, Novell feels it should get that money. That's as far as I've gotten so far, and we can read the rest together. The conclusions of law part likely will address a fundamental weakness on SCO's side: did it have the authority to enter into the SCOsource licenses at all? If not, the the wording of the agreements may not mean so much, if Novell decides not to ratify them. In that case, I guess Novell could argue that they aren't contracts at all, since they were never authorized, or that only parts of them were. Folks, we are entering some very complex waters now.

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