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To read comments to this article, go here
Chris Sontag's Trial Testimony in SCO v. Novell (April 29 & 30, 2008)
Monday, June 09 2008 @ 03:57 PM EDT

I thought it would be fun to look at Chris Sontag's testimony as a whole, instead of just covering the SCO v. Novell trial according to the particular day. Sontag was called by Novell on the first day, April 29, 2008. They didn't finish so he was back on the stand on the 30th, so I've cobbled together the relevant sections from the two day's transcripts to show you the complete performance, stage front and center.

Two things stand out from his testimony: the attempt to assert that UnixWare and Unix are the same thing, which contradicts what SCOfolks used to say, not to mention reality, and his description of the Sun 2003 agreement.

As for UnixWare being what SCOsource and SCO's claims of infringement were all about, because allegedly UNIX System V means UnixWare, I give you a snip from page 4 of a Sontag Declaration from April of 2004, from early in the IBM litigation:

6. As to item 3, the kernels of AIX and Dynix/ptx in their entirety are modifications and derivative works based on UNIX System V. Nonetheless, SCO had its engineers and/or consultants identify all of the files in AIX and Dynix/ptx that have attributions to AT&T, SCO's predecessor in interest and the creator of UNIX.

AT&T is Unix System V, not UnixWare. UnixWare was Univel, a joint venture between Novell and USL. Duh. This declaration was before the Utah court told SCO that Novell retained the pre-APA (1995) copyrights to UNIX. And Sontag didn't mean UnixWare in this instance, since Sontag specifies AT&T copyrights. So the SCO story keeps morphing.

And with regard to what Sun was interested in, why they did the deal with SCO, Sontag says they met in 2002 to see if there were any business opportunities they could work on together, which raises some obvious questions, and Sontag later opines, when asked what code Sun was interested in, meaning, I gather, UnixWare or System V, that Sun was only interested in the latest and greatest, not legacy code. That is the opposite of what Scott McNealy told us, once Sun started to fess up to what Sun had done. In fact, one of the pieces Sun was interested in was Xenix, or so we were told, which was important to be able to open source Solaris. Xenix is as old as you get in SCO Unixland, pretty much, and there was an EU Commission complaint that eventually allowed Santa Cruz to remove it from its Unix products, despite Microsoft's desires, so clearly Sun wasn't interested *only* in the latest and greatest code in 2003. Besides, Sun is known for maintaining backward compatibility, so Sontag's description of what Sun wanted is puzzling.

As for the Sun license, according to Sontag, Sun under the 2003 liberalization of the earlier terms in Sun's 1994 license could open source Solaris, so long as they didn't use the GPL:

As part of the negotiations related to the latest IP license from -- we entered into with Sun, one of their desires of that license was the ability to have a broader IP license where they could to an extent open source Solaris with restrictions that it could not be open sourced into Linux or other open source licenses that did not protect copyright ownership.

That flies in the face of everything we've been told. How he can say it in the face of subsequent events is a bit hard to figure out, since Sun publicly said it's considering at least dual-licensing OpenSolaris, with the GPL being one of the two licenses. If what Sontag said were true, there'd be no way Sun could consider the GPL at all, let alone announce it publicly. And did SCO complain when Sun made the announcement? Or is this foreshadowing? I can't explain it, and without seeing the license, it's hard to have much of an opinion, but from all I do know, from all my sources, I don't think this is accurate.

But that is what Sontag says.

Sontag is a very difficult witness, but Novell's attorney, Eric Acker, simply compels him to admit certain things. When Sontag persists in saying that nobody paid for SysV, that it was thrown in as a freebie with UnixWare as a standard process, Acker shows him several agreements, one after another, where that didn't happen, and I found it funny. Here's a snip to show you how Acker pins Sontag to the wall, after Sontag tries to distinguish the Microsoft and Sun licenses from the other SCOsource licenses, and on the matter of UnixWare just being System V. SCO's position is that the other SCOsource licenses are not SVRX licenses, and the court has ruled that the Microsoft and Sun licenses are, at least in part:

Q. But they were all SCOsource licenses; right?

A. They were all under the SCOsource division.

Q. Now, regarding the Sun agreement, if we could put up Exhibit 187, Attachment 1, please. Mr. Sontag, we put up on the screen Attachment 1 to the 2003 Sun agreement. The first page of Attachment 1. And you've testified that all of this software license, the 2003 license, was included in this attachment and licensed Sun simply as legacy software or older versions of SVRX software that was licensed along with the most recent version of UnixWare.

A. Correct. And they already had a license to most of this, anyways.

Q. And that was my next question. It's true, isn't it, that Sun already had a license to all of this software on the first page of Attachment 1 of 2002 license; right?

A. Yes. And that is -- again, that license for the previous versions was just a standard practice. So, again, licensing the latest version of UnixWare and incidentally licensing all the previous versions.

Q. But because -- and that previous license, the 1994 Sun license to this exact same 30 versions of software was fully paid up; correct?

A. Yes.

Q. And so Sun didn't need -- there was no need for Sun to obtain a license. They didn't need a license, a re-license to this additional 30 pieces of legacy software in 2004 except that they wanted to expand their rights to distribute the software; correct?

A. Again, this was all included just because it was a standard practice of licensing the UnixWare source code.

Q. But Sun already had a license for this software; right?

A. Yes.

Q. And what they wanted in the 2003 agreement was to expand or, in your words, to soften the confidentiality provisions relating to this software; correct?

A. Primarily, they wanted a license to the latest version of UnixWare for their Intel work that they were doing.

Q. And with respect to this 30 versions of legacy SVRX, they wanted to soften the confidentiality provisions relating to the software; correct?

A. It was a minor part of the agreement.

Q. That's what Sun wanted; right?

A. Yes.

Q. And that's what SCO gave to them; correct?

A. Yes. It's all part of the agreement.

Q. Now, it's true, isn't it, that not all of this pre-APA SVRX software is in the current version of UnixWare? Correct?

A. Probably not. But I would suspect, you know, anything that is valuable and important would still be in the current version of UnixWare.

Q. But you've never done a line-by-line comparison to determine what portions of this software, the legacy SVRX software, is actually in the current version of UnixWare; correct?

A. I have not.

Q. And you're not aware of anyone else having done that analysis; correct?

A. I'm not aware of that analysis.

Q. And Sun didn't do that analysis, as far as you know; correct?

A. Not that I know.

Q. And you're not aware of any expert for SCO doing that analysis?

A. I'm not aware.

Q. And you're not aware of any technician or technical person or engineer of SCO doing this analysis; correct?

A. No, I'm not.

Novell in its opening statement already explained that when older versions of SVRX were attached without payment, it was because the company had already paid for those versions earlier. Anyway, I think you can see from this interchange how Acker demolishes SCO's position that UnixWare is just the latest version of UNIX System V, that SVRX code when it transferred was simply incidental to UnixWare, and that whole blah blah blah. You can see how Acker uses this testimony, with that from others, in his closing statement, but here's just a snip:

Reason 5. Sun already had a license to all of the legacy software. There was no reason for that to be included in the legacy list or for them to get an additional list that included that software but for one reason, because they wanted to expand the confidentiality agreement, Your Honor. That's what the Sun 2003 license was about.

Reason number 6. In this very action in this Court, SCO has claimed that it suffered hundreds of millions of dollars of damages due to Novell's challenge to the ownership of the copyrights, the pre-APA copyrights. And yet, what they would have you believe now is that it's worthless. They come into Court and they say: You have challenged our title to those copyrights. We've been damaged hundreds of millions of dollars. You have stopped our SCOsource program.

That was the guts of this entire case, until now, when they have to explain why they're licensing SVRX revenue to Sun and Microsoft that all of a sudden -- and then they say, oh, no, no, no. No value, none. Negligible. Incidental.

You can match each witness's testimony with the two sides' closing statements, to see why the lawyers asked the questions they did and how they use the answers. This is just one small example.

A couple of points I should probably explain so you'll understand some things that happened. First, you'll see in several places the lawyers for Novell objecting to leading questions. Here's what that is:

a question phrased in such a way as to suggest the desired answer; a lawyer may ask leading questions on cross-examination

Cross examination is when you get to ask questions of the other side's witness. Judge Kimball mildly restricts SCO, but not much. There is no jury, so he can be more relaxed about such things.

At the end, you'll see quite a flurry of cross, redirect, recross. That tells you something important in the eyes of the lawyers happened. You might not see what it was on the surface, just like in chess a move by a knight might not immediately show what the strategy behind the move is. But a good chess player figures out the array of possibilities immediately and takes action. Indeed that is what happened here. Sontag was asked to compare the two licenses with respect to UnixWare rights, Microsoft's and Sun's, and he said they were about equal.

Up pops Eric Acker for Novell immediately for redirect. I see it says "Time lapse" immediately after he indicates a desire to question Sontag on redirect. I'm guessing either someone on the team, like Michael Jacobs, for example, may have tugged on Acker's sleeve and they were in a huddle for a bit, or Acker himself was looking through documents and notes to prepare to question after this odd answer by Sontag. But you'll see that SCO's lawyer, Ted Normand, also gets into it, telling me neither side liked what Sontag said. They are in a duel that Sontag can't even see. Initially, Normand tries to establish the value of Microsoft's Section 4, which is where you find the long list of SVRX releases, as opposed to Section 3 which was about limited UnixWare rights, so he's trying to limit the value of Section 4, just in case SCO loses the argument that there was zero value to SVRX:

Q. Mr. Sontag, who was the principal negotiator for SCO in the 2003 Sun and Microsoft agreements?

A. I was.

Q. Did either Microsoft or Sun have any UnixWare license prior to entering into those 2003 agreements?

A. No, they did not.

Q. How much did Microsoft pay for its limited UnixWare license in Section 3?

A. In Section 3?

Q. Including the option to exercise section.

A. About $8 million, I believe.

Q. If I told you 7 million, would that --

A. That's, yeah.

Q. Now, as between Microsoft's limited license to UnixWare in Section 3 and Sun UnixWare license, who had the broader license?

A. Can you repeat the question?

Q. As between Microsoft's Section 3 UnixWare license and the UnixWare license that Sun obtained under its 2003 agreement, who had the broader license?

A. Sun did.

Q. In your view, did Microsoft obtain any additional UnixWare rights under Section 4 of its agreement?

A. Yes.

Q. In your view, did Microsoft pay additional money for its additional UnixWare rights under Section 4 on top of the 7 million in Section 3?

A. Yes, it did. I mean, it was significantly broadened, as I testified before.

Q. As between Microsoft's full UnixWare license under Sections 3 and 4 and Sun's license, who had the broader license?

A. I would view them as being equal.

Q. And how much did Sun pay under its 2003 agreement?

A. About $10 million.

MR. NORMAND: No further questions, Your Honor.

THE COURT: Thank you, Mr. Normand. Anything else of this witness?

MR. ACKER: Just a second, Your Honor.

(Time lapse.)

MR. ACKER: One question.

REDIRECT EXAMINATION BY MR. ACKER: Q. You just testified in response to counsel that you viewed the rights that Microsoft obtained under Section 4 of its license as being equal to what Sun obtained; is that right?

A. Effectively, yes.

Q. Do you believe that Microsoft had [the right to] open source UnixWare under Section 4?

A. No, I don't.

MR. ACKER: Nothing else, Your Honor.

THE COURT: Thank you. I guess you meant two questions.

MR. ACKER: I did. I apologize.

THE COURT: Mr. Normand? That's all right.

RECROSS-EXAMINATION BY MR. NORMAND: Q. Mr. Sontag, having considered the question that was just asked of you, in your view as between the full UnixWare license that Microsoft had under Sections 3 and 4 and Sun's UnixWare license, who had the broader UnixWare license?

A. Specifically to UnixWare, I view that they were about equal. I mean, you also have to take into account, which I don't think I fully explained with the previous question, that Sun had significantly more rights in terms of sublicensing and software distribution rights for their UNIX technologies. So they're way further ahead in many ways. But in terms of just distribution of UnixWare, they were effectively comparable.

Q. All right. Would it be accurate to say that Sun had broader rights with respect to UnixWare as to what counsel described as open sourcing?

A. Modestly. I think I'm not an attorney, so it would be difficult for me to be able to determine the differences in terms of those agreements.

Q. Thank you.

THE COURT: Thank you. Anything else?

MR. ACKER: No, Your Honor.

THE COURT: Thank you. You may step down, Mr. Sontag.

Sontag may have been trying to help SCO's argument that Sun got nothing special when it got the right to open source, certainly not anything worth money, because that is SCO's whole thread on that, that the open sourcing wasn't worth money, so they don't owe Novell money for that. SCO also argues that the 2003 license wasn't an amendment to the 1994 license, that no substantive new rights were added. But he gets into a tangled wood by what he says, that the two licenses are equal with respect to UnixWare rights, and Novell lawyer sees it, even if Sontag doesn't.

First, there's the money angle. If Microsoft paid $7 million for Section 3, and that didn't give them parity with Sun, which is Sontag's testimony, and it did get parity for another $3 million, the implication might be that the value of open sourcing Solaris was at least $3 million. Or if you flip it over, what he says might implicate the value of the SVRX code listed in Section 4.

But there are other thoughts that flood my mind. For example, if the two licenses really were equal with respect to UnixWare, then either Microsoft can open source UnixWare, and I gather from the testimony that isn't true, although Sontag never fully answers that question, or Sun *can't* open source UnixWare, only older System V, and SCO is trying to say the two are the same thing, so that doesn't help SCO.

Sontag's answer raises questions about who paid for what? It impacts, conceivably, on what SCO owes Novell. Was it all just a cover? That would be one question. If not, you need to parse it out and break it down, not that SCO ever bothered. You can see how Novell breaks it down, based in part on this testimony, in the Acker closing statement:

Your Honor, Novell here seeks for the Sun license, $9,143,809. That was the amount that was paid of the $10 million total.

For the Microsoft, we seek the revenues that were paid in Section 2 and Section 4, $9,750,000.

And for the other license, we ask for all of that money because there has been simply no breakdown between UnixWare and SVRX licenses. And that's $1,156,110.

So, the total that we are asking for from this Court is $19,979,561.

Sontag's answer raises questions in my mind about Sontag's entire testimony, if one piece is so obviously wrong, which is perhaps why Normand helped him correct it. Sontag's painted as the chief negotiator, yet he gets some facts garbled. It raises another question: why didn't SCO call Sun or Microsoft to the stand to tell us what the deals were about, in support of SCO's story? It's a big hole, and leads to questions about whether they might not support SCO's story. Personally, I'd love to see a Sun representative on the stand under oath agreeing with SCO that System V and UnixWare are the same thing. And then why it needed to license UnixWare. Snark.

That's why witnesses should just tell the truth on the stand, by the way, without trying to "help" any side. You won't see what the lawyers and the judge see, and you will mess up more often than not, if you try to put any spin on the ball. There's the ethics of it too, of course, but I'm just saying it pays to tell the truth, if you need another motive.

I've left the pagination as it is in the transcripts, so of course it doesn't start with page 1. Here are the two PDFs where you'll find this testimony: Day 1, Part 2, Day 1, Part 3 and Day 2, Part 1, all PDFs.

And here's a link to the end of the transcript. ******************************

Salt Lake City, Utah, Wednesday, April 29, 2008


1 THE COURT: You may call your next witness.
2 MR. ACKER: Thank you, Your Honor. Novell
3 will call Chris Sontag.
4 For the Court's convenience, there are exhibits
5 that I may refer to in binders that I left with your clerk
6 there.
7 THE COURT: Okay.
8 THE CLERK: And you're the witness. Okay. Please
9 raise right hand.
10 CHRISTOPHER S. SONTAG,
11 called as a witness at the request of Novell,
12 having been first duly sworn, was examined
13 and testified as follows:
14 THE WITNESS: I do.
15 THE CLERK: Thank you. Please take the witness
16 stand.
17 Please state your name and spell it for the record.
18 THE WITNESS: Christopher S. Sontag.
19 C-H-R-I-S-T-O-P-H-E-R. Sontag, S-O-N-T-A-G.
20 DIRECT EXAMINATION
21 BY MR. ACKER:
22 Q. Good morning, Mr. Sontag.
23 A. Good morning.
24 Q. You were formally employed at SCO; right?
25 A. That is correct.

77


1 Q. And you joined SCO in 2002; right?
2 A. That's correct.
3 Q. Now, when you joined the company in 2002, the
4 company was not profitable; is that right?
5 A. No, it was not.
6 Q. In fact, SCO had a net loss for the fiscal year
7 ending October 31, 2002, of more than $24 million; is that
8 right?
9 A. Sounds about right.
10 Q. And the company told the investing public at the
11 end of fiscal -- of that year ending October 31st, 2002, that
12 if SCO did not achieve positive cash flow from operation it
13 would not be able to implement its business plan without
14 additional funding; isn't that true?
15 A. I suspect that's the case.
16 Q. And the SCOsource program was just getting started
17 when you joined; right?
18 A. I don't know if it really had been started. I
19 think some initial thoughts of looking at all the assets
20 across SCO were being considered. Among them were the UNIX
21 assets the company had. But anything and any form related to
22 a SCOsource program had not been initiated when I started.
23 Q. That review was being done about the time you
24 started; is that right?
25 A. It was just started.

78


1 Q. And after you joined the company in October of
2 2002, you were placed at the head of what was then called
3 SCO Tech; correct?
4 A. Yes.
5 Q. And SCO Tech eventually became SCOsource; right?
6 A. I had a number of roles that I was responsible for.
7 I mean, I was responsible as the senior vice-president over
8 the operating system division, and I also had responsibility
9 for some elements of strategy as well as looking at what could
10 be done with the UNIX assets within the company.
11 Q. But you were ahead of SCOsource from its inception;
12 right?
13 A. Yes.
14 Q. And you and others hoped that the SCOsource
15 campaign would become an important revenue generator for the
16 company; correct?
17 A. Of course.
18 Q. In fact, you thought it would generate billions;
19 right?
20 A. We viewed the UNIX assets held by SCO to be a very
21 valuable asset and had potential to generate significant
22 revenues.
23 Q. That included billions; right?
24 A. Potentially, yes.
25 Q. Now, let me show you what we have marked as and has

79


1 been admitted as Exhibit 147.
2 If I may approach, Your Honor?
3 THE COURT: You may.
4 MR. ACKER: Bring that up, please.
5 Q. BY MR. ACKER: I'm going to hand you what we've
6 marked, Mr. Sontag, as Exhibit 147.
7 Have you had a chance to look at that, sir?
8 A. I have.
9 Q. And Exhibit 147 is a draft press release prepared
10 on or about October 22nd of 2002 regarding what was then
11 referred to as the SCO Tech program; correct?
12 A. Yes.
13 Q. And you're quoted in the press release; right?
14 A. Yes.
15 Q. And you had a chance to read that quote just now?
16 A. Yes.
17 Q. Is it accurate?
18 A. Yes.
19 Q. Okay. And what you said back in October of 2002
20 about SCO Tech was, this is your quote:
21 As one of the earlier developers of the UNIX
22 operating system, SCO owns several patents,
23 copyrights and much of the intellectual property
24 around UNIX including the SVR4 and OSR5 software
25 libraries.

80


1 Correct?
2 A. Yes.
3 Q. So the only -- in this quote when you're talking
4 about SCO Tech in October of 2002, the only version of SVRX
5 you referred to was Version 4; right?
6 A. Well, UnixWare is an SVR4 version of the UNIX
7 operating system.
8 Q. But it's not a version created by SCO; right?
9 A. That would be a hard thing to pars. The creation
10 of UnixWare was derived out of previous versions of UNIX. And
11 so, you know, it's a constant development process that's
12 occurred.
13 Q. But SVR4 Version 4 was in existence before the APA;
14 correct?
15 A. I think 4.0 was in existence before the AP A.
16 4.2 was the basis of UnixWare 1.
17 Q. And was in existence before the APA; correct?
18 A. I don't know the exact time frame. All I know is,
19 I remember the first version of UnixWare was based on
20 SVR4.2.
21 Q. And isn't it true that both Version 4.0 and 4.2 are
22 listed in the assets for which royalties have to flow back to
23 Novell in the APA?
24 A. I don't know that I can characterize it that way
25 because a significant portion of UnixWare is based on, you

81


1 know, SVR4 and predecessors. And it is a significant basis
2 for what was licensed with UnixWare going forward in the
3 future.
4 Q. And my question was very simple.
5 Isn't it true that SVR4.0 and SVR4.2 are listed in
6 the assets in the APA for which royalties must flow back to
7 Novell?
8 A. That's not exactly my understanding. My
9 understanding was there was royalties for specific licensees
10 called the SVRX licensees that needed to be paid to Novell.
11 MR. ACKER: Can we bring up Exhibit 1, please.
12 Q. BY MR. ACKER: Let me hand you a copy of that,
13 Mr. Sontag. Let me hand you a copy of the APA, Mr. Sontag.
14 And I want to direct your attention to Schedule 1.1(a)
15 Section VI. If you would bring that up. It's SCO 85952.
16 A. 952?
17 Q. Yes. If we could highlight the section of the
18 bottom, please.
19 A. Schedule 1.1(a)?
20 Q. Yes, sir.
21 A. Okay.
22 Q. Do you have that?
23 A. I do.
24 Q. And you understand, don't you, that Schedule 1.1(a)
25 in the APA lists:

82


1 All contracts relating to SVRX licenses
2 listed below for which royalties must flow back
3 to the Novell in the APA.
4 Correct?
5 A. These are listed in the contracts that are part of
6 the assets that are transferred to SCO.
7 Q. Well, you know, don't you, that this Court has
8 determined that all royalties flowing from these contracts
9 flow back to Novell? You know that; correct?
10 A. My understanding is that the contracts specified by
11 the agreement the royalties went back to SCO. I don't know if
12 it's necessarily this listing or if it's another listing that
13 specifies the SVRX contracts specifically have royalties that
14 flow back to Novell. But we honored those obligations.
15 Q. But you see in Schedule 1.1(a)VI that UNIX System
16 Release 4.2 MP is listed; correct?
17 A. As an asset that was transferred.
18 Q. And System 4.2 MP International Edition was also
19 listed; correct?
20 A. Again, as an asset transferred to SCO.
21 Q. And also 4.1; correct?
22 A. Again, yes.
23 Q. And if you turn to the next page, you see the
24 UNIX System V Release 4.0 also listed; correct?
25 A. You're on Page 4 now?

83


1 Q. The following page.
2 A. Yes.
3 Q. And you see on the following page of
4 Schedule 1.1(a) of the APA, UNIX System V Release 4.0 is
5 listed; correct?
6 A. Again, as an asset that was transferred to SCO.
7 Q. And that was the release that you are referring to
8 that is SVR4 when you drafted your press release in October of
9 2002; correct?
10 A. Again, going back to that press release, it was a
11 draft press release. And we often use different labels to
12 mean the same thing. We'd often use System V to refer to all
13 of our UNIX intellectual property. We would use SVR4 to
14 describe UnixWare in some cases. I mean, we were considering
15 renaming UnixWare and renaming it System V or possibly
16 System VI.
17 And so at different times different labels apply to
18 things in draft documents or in press releases that were put
19 out. But in the end, what we were talking about is SCO's UNIX
20 intellectual property assets.
21 MR. ACKER: Go back to 147, Mr. Sontag's quote.
22 Q. BY MR. ACKER: You say it's a draft press release.
23 Do you now think that the press release was inaccurate or
24 something is inaccurate in it?
25 A. No. All I'm saying is that I don't know if this is

84


1 the press release that was released or if we actually ended up
2 releasing this press release.
3 Q. When you prepared it in October of 2002, you were
4 talking about the SCO Tech program; correct?
5 A. We were talking about the SCO Tech program that we
6 actually changed the name of or just barely starting to
7 initiate at this time frame.
8 Q. And when you were talking about the SCO Tech
9 program, you were talking about the SVRX releases you were
10 planning to release under the SCO Tech program; correct?
11 A. To me, SVR4 could be easily replaced with UnixWare,
12 and it means the same thing to me.
13 Q. But you didn't say UnixWare; right?
14 A. It means the same thing.
15 Q. And you didn't say SVR5; correct?
16 A. No. In this case, we said SVR4.
17 Q. Okay. Let me show you what has been admitted as
18 Exhibit 143. If you could take a look at that, sir.
19 A. Okay.
20 Q. Exhibit 143 is an analyst briefing that was
21 prepared for Mr. McBride on or about October 22nd, 2002;
22 correct?
23 A. Yes.
24 Q. And it was an analyst briefing regarding the
25 announcement of the SCO Tech program; correct?

85


1 A. Yes.
2 Q. If we could take a look at the third page in. It
3 announces you, Chris Sontag, joins the executive team;
4 correct?
5 A. Yes.
6 Q. It announces that you will be the senior VP of
7 operating systems with responsibilities for operating systems,
8 SCO Tech and corporate marketing; correct?
9 A. Yes.
10 Q. And that was all true; right?
11 A. Yes.
12 Q. You go to the next page, I believe it's 4. On the
13 bottom of that page, there's a slide "Why SCO Tech?" Correct?
14 A. Yes.
15 Q. And what SCO said back in October of 2002 when
16 SCO Tech was starting is:
17 Partners and customers wish to license our
18 technology.
19 Correct?
20 A. Yes.
21 Q. And then you referred to specific technology;
22 right?
23 A. Yes.
24 Q. And the only release of SVRX that you referred to
25 was SVR4?

86


1 A. Again, this is the same thing as saying UnixWare.
2 UnixWare was basically SVR4 operating system.
3 Q. SVR4 was not UnixWare that was created by SCO;
4 correct?
5 A. You have dot releases. It basically would be
6 considered SVR4.3 or 4. -- I mean 4.3 or 4.4 or 4.5. I mean,
7 it was an SVR4-based operating system. It is the latest
8 version of UNIX System V.
9 Q. SVR 4 --
10 A. It is the referenced version that has had many
11 precedents.
12 Q. And SVR4, that version of UnixWare was created
13 before the APA; correct?
14 A. The first version of SVR4 was created before the
15 AP A. Subsequent versions of SVR4 including UnixWare 1, 2, you
16 know, up to 7.1.4 are all versions of SVR4.
17 Q. But each of those versions of UnixWare created
18 after the APA don't carry the SVRX Version 4 monitor; correct?
19 A. No. A lot of times we've used SVR4 to refer to the
20 UnixWare code.
21 Q. Let me show you what we've marked as Exhibit 159.
22 Bring up 159.
23 This has also been admitted, Your Honor.
24 THE COURT: Yes.
25 Q. BY MR. ACKER: This is another draft press release

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1 that was prepared regarding SCOsource on December 11th, 2002;
2 correct?
3 A. Yes.
4 Q. And if we could bring up the next highlight.
5 Down at the bottom, there's a description of what
6 SCOsource is; correct?
7 A. Yes.
8 Q. And what SCO wrote in December of 2002 was that:
9 SCO's patents, copyrights and core technology
10 date back to 1969 when Bell Laboratories created
11 the original UNIX source code.
12 Correct?
13 A. Yes.
14 Q. SCOsource, a new division within SCO, will
15 address the licensing of this software technology.
16 Correct?
17 A. Yes. Now, a couple things I would say on this.
18 SCO had a number of patents that are referred to in this that
19 could be licensed by SCOsource that were not related to the
20 core UNIX technology.
21 Q. Well, when you said, this software technology that
22 you're going to license under SCOsource, you were talking
23 about technology that dated back to 1969 when
24 Bell Laboratories created the original source code; correct?
25 A. That was part of the UNIX tree that SCO had

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1 purchased and acquired and was responsible for continuing and
2 continuing to license and to enforce the contracts with the
3 licensees.
4 Q. And this UNIX tree that SCO had purchased, that was
5 what SCOsource sought to license; correct?
6 A. In part.
7 Q. And that tree dated back to technology back to
8 Bell Laboratories; right?
9 A. Yes.
10 Q. Let me show you what we've marked and has been
11 admitted as 173.
12 Mr. Sontag, let me show you what we've marked and
13 had been admitted as Exhibit 173. If you could read that,
14 please.
15 A. I don't know if you want me to read the whole
16 thing.
17 Q. Well, I'm going to direct you to a certain portion.
18 I'm sure you're familiar with this document; correct?
19 A. Most likely. Okay.
20 Q. And this is the announcement in January of 2002 of
21 the SCO, you've written the first portion or first version of
22 SCO Tech; correct?
23 A. I think we made some level of an announcement that
24 we're further announcing, you know, what we're doing with
25 SCOsource program in January of 2003.

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1 Q. And unlike the prior releases, this press release,
2 Exhibit 173, was actually released to the public; right?
3 A. I don't recall if the previous one had also been
4 released or not. I know we briefed analysts and so on about
5 the concepts in the previous release, but I know that this
6 press release was released.
7 Q. And we can take a look at the highlighted portion
8 in the middle under the highlighted SCOsource.
9 Again, when SCO announced the SCOsource program to
10 the public in January of 2002, you again told the public what
11 it was; right?
12 A. January of 2003?
13 Q. Excuse me. January 2003. You told the public what
14 it was; right?
15 A. Yes.
16 Q. And what you said was, again:
17 SCO's patents, copyrights and core technology
18 date back to 1969 when Bell Laboratories created
19 the original UNIX source code. SCOsource
20 will manage the licensing of this software
21 technology.
22 Correct?
23 A. Yes. And basically we're saying we're providing
24 licenses of SCO's intellectual property including our UNIX
25 intellectual property as well as other patents that SCO had

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1 related to other technologies within the company.
2 Q. And that technology dates back to Bell Laboratories
3 in 1969; correct?
4 A. Not all of the technology.
5 Q. But some of it does; correct?
6 A. Yes.
7 Q. And that was with SCOsource?
8 A. Yes.
9 Q. And that's what SCOsource sought to license in
10 SCOsource program; correct?
11 A. Well, in general we were licensing the most recent
12 versions of SCO's intellectual property mostly in the form of
13 UnixWare licenses, source code UnixWare licenses as well as
14 developing an intellectual property licensing program related
15 to customers who were concerned about intellectual property
16 issues with their use of Linux, such as the runtime libraries
17 and OpenServer UNIX.
18 Q. But you wanted to mine this entire body of
19 intellectual property; right? That was the plan.
20 A. That was my understanding of the intellectual
21 property body that we had rights to license.
22 Q. Going back to 1969; right?
23 A. Correct.
24 Q. And this was what you hoped you would make millions
25 of dollars licensing; correct?

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1 A. Well, mostly around the latest versions of the
2 intellectual property. But the whole body at work is part of
3 the buildup and legacy of that intellectual property and
4 library.
5 Q. Now, if you take a look -- let me go back, I'm
6 sorry, to Exhibit 173.
7 Take a look down at the bottom, if you would, sir,
8 173. Under the SCO System V for Linux. Do you see that?
9 A. Yes.
10 Q. And we have it up on the screen now.
11 SCO told the public you were announcing this in
12 January of 2003:
13 In the past SCO's UnixWare and OpenServer
14 license agreements did not allow these UNIX
15 libraries to be used outside of SCO's operating
16 systems.
17 Correct?
18 A. Yes.
19 Q. With this announcement, customers can now run
20 these libraries from SCO for use with Linux without
21 having to license the entire SCO operating system.
22 Correct?
23 A. Yes.
24 Q. So that means you get access to this core UNIX
25 technology that SCO believed it owned without having to

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1 license the latest version in the entire operating system;
2 correct?
3 A. Let me say that a different way.
4 Q. Well, could you answer that question? Isn't that
5 right?
6 A. Well, to best answer your question I can't just
7 answer yes or no. We were licensing the libraries to the
8 latest versions of OpenServer and UnixWare to these customers
9 who wanted to apply them to a version of Linux to allow them
10 to run OpenServer or UnixWare applications on top of Linux.
11 That is what we were licensing.
12 Q. But as you said in your press release in 2003, it
13 didn't require the licensee to license the entire operating
14 system; correct?
15 A. Right. They were licensing a portion of the
16 operating system, which were the runtime libraries.
17 Q. And that was the core UNIX technology that was a
18 part of the SCOsource program; correct?
19 A. I wouldn't call that the core. I would call it a
20 part of the UNIX operating system technology. The libraries
21 are just one piece of an entire operating system.
22 Q. But in the SCOsource program, like if they didn't
23 have to license the entire operating system, they could simply
24 license the libraries; right?
25 A. If they needed to be able to run UnixWare or

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1 OpenServer application on top of Linux, they would need to be
2 able to gain access to the runtime libraries to install them
3 into their Linux product to allow them to run those
4 applications.
5 Part of that license was also a license to all of
6 SCO's intellectual property or a release from issues within
7 any of SCO's overall IP rights. So we were giving them rights
8 to any IP that SCO had ownership of. And if they needed the
9 runtime libraries, they could obtain those, as well. That was
10 the basis for the SCOsource, you know, licensing program at
11 this time.
12 Q. Any IP that SCO had or believed it owned dating
13 back to AT&T; right?
14 A. Any of SCO's intellectual property was provided to
15 any of those customers in a release or in a license.
16 Q. That was SCOsource; right?
17 A. That was SCOsource. The runtime or right to use
18 license that was part of SCOsource.
19 Q. Now, after the initial announcement of these
20 library licenses under SCO Tech or SCOsource, there was a
21 second phase to the program; correct?
22 A. No. It was continuously evolving. It was -- the
23 names were even changing as we, you know, continued with the
24 program.
25 Q. And the second phase or the evolvement or the

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1 evolution of this program was this right to license or right
2 to use program that you just mentioned; correct?
3 A. Could you repeat the question?
4 Q. Sure. Let me show you an exhibit. Exhibit 194.
5 Let me show you what's been marked and admitted as
6 Exhibit 194. If you could take a look at that, Mr. Sontag.
7 A. Okay.
8 Q. And Exhibit 194 is a letter that Mr. McBride sent
9 on May 12th, 2003, to the Fortune 1000 companies regarding
10 this SCOsource program; correct?
11 A. Yes.
12 Q. And if we could take a look at the first sentence
13 of the letter that Mr. McBride wrote, he wrote:
14 SCO holds the rights to the UNIX operating
15 system originally licensed by AT&T to
16 approximately 6,000 companies and institutions
17 worldwide, the UNIX licensees.
18 Correct?
19 A. Yes.
20 Q. And that was the core technology that was at the
21 heart of SCOsource; right?
22 A. No. That was just a portion of what was under
23 SCOsource. Those licenses were contracts for which we had the
24 responsibility of enforcing. In addition to that, there was
25 all the source code and the latest versions of source code for

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1 UnixWare and OpenServer and other SCO products.
2 Q. And it's your testimony that all of that was the
3 core technology that SCO sought to monetize in the SCOsource
4 program?
5 A. Yes. Any intellectual property inside of the SCO
6 was potentially licensable IP within the SCOsource program.
7 Q. And if we could take a look at Paragraph 5 of the
8 letter Mr. McBride wrote:
9 Many Linux contributors were originally UNIX
10 developers who had access to UNIX source code
11 distributed to AT&T and were subject to
12 confidentiality agreements, including
13 confidentiality of the methods and concepts
14 involved in software design.
15 Correct?
16 A. Yes.
17 Q. And what SCO says is:
18 We have evidence that portions of UNIX
19 System V software code have been copied into
20 Linux.
21 Right?
22 A. We claimed that we had, you know, different
23 intellectual property violations that we felt had been applied
24 into Linux, some in the form of, you know, literally
25 copyrighted code; others in the form of methods and concepts;

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1 others in the form of derivative works; and other IP issues
2 that we felt may be at issue with Linux.
3 Q. But in the letter that Mr. McBride wrote on
4 May 12th of 2003, he's talking about software IP that dates
5 back to AT&T and the developers of AT&T; correct?
6 A. I think he was -- you know, we're not trying to be
7 specific about every last area of intellectual property or
8 methods of intellectual property from patents to copyrights to
9 contracts to derivative works and otherwise. It was simply us
10 just trying to say that we have a broad base of intellectual
11 property that we believe is valuable that we are making
12 available and licensing. The specifics of -- you know, if we
13 say, UNIX System V and not also saying OpenServer or UnixWare,
14 it doesn't mean when we say UNIX System V or we are talking
15 about UNIX, we're not also referring to them.
16 It's just like, I'll give an analogy to ice cream.
17 I may say ice cream to my kids. Would you like some ice
18 cream? I don't have to be specific every time and say, would
19 you like chocolate ice cream or vanilla ice cream? I might
20 just ask them first, would you like ice cream? And I'm
21 referring to any possible choice that might reside under that.
22 Q. What Mr. McBride referred to specifically in his
23 letter in May of 2003 was source code distributed by AT&T;
24 right?
25 A. Again, I believe what is really being referred to

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1 in this letter is SCO's broad intellectual property portfolio,
2 not just specific versions of early UNIX originally developed
3 by AT&T. But I view that as part of that portfolio.
4 Q. The only specific reference that Mr. McBride makes
5 in the letter is to source code distributed by AT&T; correct?
6 A. In this particular paragraph, that's what he is
7 referring to. But, again, the intent was to talk about the
8 entire portfolio of SCO's intellectual property.
9 Q. And Mr. McBride sent this letter to 1,000 different
10 companies asking them to take a license under the SCOsource
11 program; correct?
12 A. Yes. Or at least consider it, get themselves
13 educated, find out if they should have concerns or issues or
14 not.
15 Q. Take a look at the first paragraph on the next
16 page.
17 Mr. McBride also wrote:
18 We believe that Linux infringes our UNIX
19 intellectual property and other rights. We intend
20 to aggressively protect and enforce these rights.
21 Consistent with this effort, on March 7, we
22 initiated legal action against IBM for alleged
23 unfair competition and breach of contract with
24 respect to our UNIX rights.
25 Correct?

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1 A. Yes.
2 Q. And you understood, didn't you, that the basis for
3 this letter going out to these 1,0000 different companies
4 across the United States was the same basis for which SCO
5 brought action against IBM; correct?
6 A. And again, when we're talking about SCO's UNIX
7 rights, I view that we're referring to all of SCO's
8 intellectual property portfolio related to UNIX.
9 Q. All of it from time to memorial; correct?
10 A. All that is under the purview of SCO, yes. Why
11 would you only enforce a portion of your rights if you have a
12 broader portfolio of rights?
13 Q. But it was the same basis that there was some
14 portion of SCO's intellectual property that was in Linux that
15 caused Mr. McBride to write this letter. It was also for the
16 basis for the action against IBM; correct?
17 A. We believe in part some of the actions that we
18 undertook against IBM were a significant portion of the IP
19 that we were concerned about within Linux.
20 Q. Okay. And it's true, isn't it, that the only UNIX
21 code that SCO's experts in the IBM case found in IBM's version
22 of Linux was UNIX System V Version 4.2? Isn't that true?
23 A. I couldn't characterize what specifically was found
24 by our experts. That would have to be presented by them.
25 Q. Let me show you what we've marked as Exhibit 428.

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1 A. I assume you don't want me to read all of this
2 right now.
3 Q. No, I don't.
4 If you could take a look at -- first of all,
5 Exhibit 428 is a report of Dr. Thomas Cargill of The
6 Infringement of Unix System V Release 4 Operating System By
7 the Linux Operating System.
8 Do you see that title?
9 A. Right. And I believe this is just one of many
10 reports.
11 Q. Well, I'm going to ask you about that. But take a
12 look at Page 3, if you would, the summary of opinions.
13 You see in Paragraph A, summary of opinions,
14 Dr. Cargill wrote:
15 It is my opinion that Linux 2.4 and Linux 2.6
16 are substantially similar to the UNIX System V
17 Release 4 operating system in satisfaction of that
18 element of copyright infringement.
19 Do you see that?
20 A. Okay.
21 Q. And then if you go down, you see, he wrote:
22 Overall, Linux is a substantial copy of the
23 UNIX System V Version 4 operating system.
24 Do you see that?
25 A. Yes.

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1 Q. And if you take a look at the next page --
2 A. For which I would view UnixWare is the latest
3 version of that.
4 Q. I understand that's your position. But take a look
5 at the next page. You'll see the last part of Dr. Cargill's
6 opinion. He writes:
7 Instead, it is my opinion that significant
8 design choices and code incorporated in Linux were
9 copied from UNIX System V Version 4.
10 Correct?
11 A. Yes.
12 Q. And it's true, isn't it, that no other expert in
13 the IBM case ever came to the conclusion that anything else
14 other than SVR4 was allegedly in IBM's version of Linux?
15 Isn't that true?
16 A. I can't characterize specifically what the rest of
17 the expert testimony and reports -- I don't -- I did not read
18 them, so I can't characterize that one way or another.
19 Q. Are you ware -- are you aware of any expert in the
20 IBM case retained by SCO finding any code in IBM's version of
21 the Linux other than System V Version 4?
22 A. Again, since I did not read any of the expert
23 reports I couldn't characterize it one way or another.
24 Q. Well, you made some public disclosures with respect
25 to what code SCO believed was in IBM's version of Linux;

101


1 correct?
2 A. Yes.
3 Q. And you made those disclosures both publicly and
4 under nondisclosure agreements; correct?
5 A. Yes.
6 Q. And let me show you what we've marked as
7 Exhibit -- SCO Exhibit 379.
8 Now, SCO Exhibit 379 is a PowerPoint presentation
9 that you gave at a SCO forum in 2003; correct?
10 A. Yes.
11 Q. And you gave it along with your lawyers; right?
12 A. Yes.
13 Q. And the purpose of it was to tell the public what
14 portions of SCO's core intellectual property SCO believed was
15 in IBM's version of Linux; right?
16 A. I don't know if I characterize it that way. I
17 viewed it as a presentation intended to provide a high-level
18 education as to SCO's position.
19 Q. And if you could take a look at Novell document --
20 Novell Bate Number 12733, this is part of the presentation
21 where you and your lawyers actually laid out what you believed
22 was the infringing code; correct?
23 A. No. Not laid out the infringing code. We laid out
24 one example, one very small example.
25 Q. And this example is the Malloc example; right?

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1 A. I don't have a file name on here, so I can't be
2 sure if this happens to be the Malloc code. But certainly
3 that was one example that we did show.
4 Q. And it's true, isn't it, that this forum when you
5 told the public what it is that you believe was in IBM's
6 version of Linux that infringed your core IP, all of the
7 examples you gave and the only examples you provided were for
8 System V Release 4; correct?
9 A. No. The most important point that I tried to
10 stress in this presentation would be actually the slide on
11 Page 8, which would be Novell 12731. And this is the slide
12 where I would present -- show that there's different forms of
13 intellectual property protection. Literal copying; literal
14 copyright infringement, which is word by word the same, being
15 copied by somebody; nonliteral, which would be some amount of
16 munging and changing the code or obfuscating the code;
17 derivative works, which the point I was trying to make was the
18 most important area, which was to contractually protect any
19 areas specifically around derivative works code being
20 contributed into Linux from UNIX by companies such as IBM.
21 That was the most important point. And if you had
22 been sitting in on this presentation, that was the big point
23 that I tried to make of this whole presentation was that right
24 there.
25 Q. But the only examples of literal copying that you

103


1 showed was of System V Version 4; correct?
2 A. I could have put up a version showing an example of
3 UnixWare 7.1.3 in the Malloc code versus Linux, you know, the
4 latest release of Linux, and you would receive substantially
5 the same copied code, because that same code in Malloc was
6 substantially similar between UnixWare 7.1.3 and previous
7 versions of UNIX, such as UNIX, you know, 4.2 DS.
8 Q. But the only versions of the literal copying that
9 you showed at the SCOsource -- or SCO forum of 2003 was the
10 Malloc example; correct?
11 A. It was the only example that we intended to show.
12 Q. And that example was a System V Release 4 code;
13 correct?
14 A. I believe it was System V Release 4.2 DS.
15 Q. And isn't it true that you are not aware of any
16 other expert at any point ever coming to the determination
17 that there was literal copying of any code beyond System V
18 Version 4.2; correct?
19 A. Again, I have not read any of the expert reports,
20 so I'm not aware of if there are examples or not.
21 Q. Let me show you what we marked as Exhibit 274.
22 Exhibit 274 is a letter written to the chairman of
23 Lehman Brothers by general counsel SCO Mr. Ryan Tibbits on
24 December 19, 2003; correct?
25 A. Yes.

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1 Q. And in it he is essentially accusing
2 Lehman Brothers of violating SCO's core intellectual property;
3 correct?
4 A. I don't know if I would characterize it that way.
5 Q. Well, in the first sentence he wrote:
6 In May 2003, SCO warned about enterprise use
7 of the Linux operating system in violation of its
8 intellectual property rights in UNIX technology.
9 Without exhausting or explaining all potential
10 claims, this letter addresses one specific area in
11 which certain versions of Linux violate SCO's
12 rights in UNIX.
13 Right?
14 A. Yes.
15 Q. And in the second page of the letter, he gives,
16 provides Mr. Fuld with a list of code; correct?
17 A. Yes.
18 Q. And down below that Mr. Tibbits wrote:
19 The only code identified -- the code
20 identified above was also part of a settlement
21 agreement entered between the University of
22 California at Berkeley and Berkeley Systems
23 Development, collectively BSDI, regarding alleged
24 violations by BSDI and USL's right to UNIX system
25 technology.

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1 Right?
2 A. Yes.
3 Q. And it's true that that settlement was reached
4 between Berkeley and BSDI in February in 1994; right?
5 A. Yes.
6 Q. And so the code that we're talking about here is
7 code that existed long before the APA; correct?
8 A. The one example that is given here. Again, I'd go
9 back to the first paragraph, though, as one of potentially
10 many is this example.
11 Q. Isn't it true, Mr. Sontag, that neither you or
12 anyone at SCO ever said that there has been taking of code
13 from UnixWare intellectual property by Linux users? Isn't
14 that right?
15 A. Again, I think we also referred to SCO's
16 intellectual property which is all inclusive of all of SCO's
17 intellectual property portfolio including UnixWare, including
18 OpenServer, including preceding versions of UNIX, as well.
19 Q. Isn't it true that neither you or anyone at SCO
20 ever said that there has been a taking of code from UnixWare
21 intellectual property by Linux users? Isn't that an accurate
22 statement?
23 A. Again, I think it's a mischaracterization.
24 Q. You testified under oath in deposition on
25 March 17th -- excuse me -- April 30th of 2007; correct?

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1 A. I had several depositions.
2 MR. ACKER: And, counsel, this is at Line 45 --
3 Page 45 Line 21, Page 46 Line 9. If we could play that clip,
4 please.
5 THE COURT: You want that deposition published, I
6 believe.
7 MR. ACKER: Yes, sir.
8 THE COURT: The deposition is published.
9 (A portion of the deposition was played.)
10 Q. BY MR. ACKER: So it's true, isn't it, sir, that
11 either you or as far as you know anyone at SCO has never said
12 that there has been a taking of code from UnixWare
13 intellectual property by Linux users; right?
14 A. Again, whenever we're referring to UNIX
15 intellectual property, as far as when I was saying that, I was
16 speaking of all of SCO's UNIX intellectual property, UnixWare,
17 OpenServer and otherwise. So specifically mentioning UnixWare
18 or OpenServer I didn't feel was necessary if I was talking
19 about SCO's UNIX intellectual property because those were
20 included as part of that.
21 Q. But neither you nor anyone at SCO has ever said to
22 a Linux user, you're infringing UnixWare; right?
23 A. Simply because -- I think you're splitting semantic
24 hairs. We're saying, you've been, you know, violating SCO's
25 UNIX intellectual property rights which include UnixWare and

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1 OpenServer. We didn't necessarily have to list out all of our
2 products every time we were talking to somebody.
3 Q. But never at any point have you listed out UnixWare
4 and said, Linux user, you're violating UnixWare; right?
5 A. Again, if we were saying SCO's intellectual
6 property rights, that includes UnixWare, that includes
7 OpenServer, that includes all of SCO's intellectual property
8 rights.
9 Q. But you never told the Linux community, you're
10 violating UnixWare; right?
11 A. Don't know why that would be necessary if we're
12 saying, you're violating our UNIX intellectual property
13 rights. That includes all of our UNIX intellectual property
14 rights.
15 Q. But we can agree, can't we, that you or no one at
16 SCO has said that, that you, Linux user, are violating
17 UnixWare; right?
18 A. I'm not aware that I specifically said UnixWare. I
19 know I often said UNIX intellectual property rights.
20 Q. And you're not aware of anyone at SCO saying, Linux
21 users, you're violating UnixWare; right?
22 A. I'm not aware one way or the other.
23 Q. Let me show you the Sun license agreement what's
24 been admitted as Exhibit 187.
25 You're familiar with that document, I assume, sir?

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1 A. Yes, I am.
2 Q. And Exhibit 187 is the license that was entered
3 into between SCO and Sun on February 25th of 2003; correct?
4 A. Yes.
5 Q. You were one of the principal negotiators for SCO;
6 is that right?
7 A. Yes.
8 Q. You actually signed this document for SCO?
9 A. Yes.
10 Q. And you would agree that the Sun license is a
11 SCOsource license; correct?
12 A. It's a SCO intellectual property license executed
13 by the SCOsource division.
14 Q. Part of the SCOsource program; correct?
15 A. The overall SCOsource program.
16 Q. And if we take a look at the first three clauses,
17 the "whereas" clauses of the document, please.
18 The recitals of the document are accurate; correct?
19 A. I'm not an attorney, but I assume those are
20 accurate.
21 Q. And what those say is that:
22 Whereas, Sun and UNIX System Laboratories or
23 Novell are parties to a software license and
24 distribution agreement dated January 1st, 1994,
25 the original agreement.

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1 And then, whereas, Novell has transferred
2 and assigned the original agreement to SCO.
3 And, whereas, Sun and SCO desire to amend
4 and restate the original agreement by the
5 execution of this agreement.
6 Correct?
7 A. That's what it says.
8 Q. And that was what this agreement did, is it amended
9 and restated the original 1994 agreement between Novell and
10 Sun; correct?
11 A. Well, I don't know if I necessarily characterize it
12 that way. I view that the majority of the document was
13 dealing with a UnixWare license. It was only portions that
14 dealt with I think anything related to the older agreement.
15 Q. But you would agree, wouldn't you, that the
16 statement is accurate, that this agreement, 187, the 2003 Sun
17 agreement, amended and restated the earlier agreement between
18 Novell and Sun?
19 A. In part.
20 Q. No doubt about that; right?
21 A. Again, in part.
22 Q. Let me show you Exhibit 5, which was the original
23 agreement. Novell Exhibit 5, which has been admitted into
24 evidence, is the original 1994 agreement between Novell and
25 Sun; correct?

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1 A. Yes, I believe so.
2 Q. And you're familiar with this document; correct?
3 A. To a certain extent.
4 Q. And in the original agreement Sun paid 82.5 million
5 in order to obtain a license that included UNIX System 5
6 software; right?
7 A. Yes.
8 Q. And Attachment 1 of the original agreement lists
9 that UNIX System V software that Sun licensed in 1994;
10 correct?
11 A. Yes.
12 Q. And we have that up on the screen. Do you see
13 that?
14 A. I do.
15 Q. And then if we go back to 187, Attachment 1 of the
16 2003 Sun license lists the software licensed to Sun in the
17 amended and restated 2003 license; correct?
18 A. Did it have a listing?
19 Q. Sure. It's SCO 1287218. It's the Attachment 1 to
20 the 2003 agreement.
21 A. Okay.
22 Q. Now, if we take a look at Attachment 1 to the 1994
23 agreement here on the left and we compare it to the first page
24 of Attachment 1 -- there we go, and we compare it to the first
25 page of Attachment 1 of the later agreement, you'd agree with

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1 me that those listing of 30 items of software, 30 pieces of
2 code are identical.
3 A. They appear to be very similar. I would take much
4 longer to be able to say that definitively they were
5 identical. But they look very similar.
6 Q. So other than this asterisk and "not currently
7 licensed by Sun but considered to be by the parties as a
8 licensed product," other than that language they are
9 photocopies, aren't they?
10 A. Again, they are substantially similar.
11 Q. They're identical, aren't they?
12 A. If you want me to look letter by letter to say
13 they're absolutely identical, I can do that.
14 Q. Well, you negotiated the 2003 deal; right?
15 A. Yes.
16 Q. And you know what happened was in the 2003 deal for
17 the first page of Attachment 1, you simply took the old
18 Attachment 1 from the earlier deal and made a copy of it;
19 right?
20 A. I suspect that's the case. I wasn't involved in
21 drafting that page of the contract.
22 Q. And what's on the left is a list of what was
23 licensed in 1994 by Novell to Sun; correct?
24 A. Yes.
25 Q. And what is on the right, with an exception that

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1 we're going to get to on the second page of this attachment in
2 a second, is what was licensed to Sun by SCO in 2003; right?
3 A. Well, it's a listing of technologies much of which
4 Sun had already licensed. So I view that as belt and
5 suspenders.
6 Q. You view that as belt and suspenders.
7 Now, the 2003 Sun license also granted license to
8 seven additional versions of software; correct?
9 A. Yes. I believe that to be the case.
10 Q. This is Page 2 of the attachment to the 2003 Sun
11 license. This is what in addition to the 30 identical pieces
12 of software that had been part of the earlier agreement, these
13 seven pieces of software that we have on the board now are
14 what the additional software was that Sun got in the later
15 agreement in 2003; correct?
16 A. Yes.
17 Q. And of those seven pieces of software, five of them
18 are System V Release 4.2 or earlier; correct?
19 A. Yes.
20 Q. And the only two pieces of software that came into
21 existence after the APA that were licensed to Sun in 2003 are
22 these last two, System V Release 5 and Open UNIX 8; correct?
23 A. Yes. And the primary license product was the
24 UnixWare 7.1.3 product.
25 Q. So just to be clear for the Court, if we drew a

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1 line right here above System V Release 5, that's -- from a
2 time standpoint, that's when the APA was executed; right?
3 A. I believe that to be the case.
4 Q. And these UNIX 4, the UNIX 4.1 grant that SCO
5 provided to Sun in 2003, that was expressly omitted from the
6 earlier license to Sun; correct?
7 A. Well, my understanding was those weren't yet in
8 existence at the time of the prior Sun agreement.
9 Q. Why don't we take a look at the earlier agreement,
10 Exhibit 5. If we could go to Attachment 2.
11 System V -- are you there, sir?
12 A. Attachment 2?
13 Q. Yes.
14 A. Yes.
15 Q. So you see there's a section there in the early
16 agreement that refers to deliberately omitted software; right?
17 A. Yes.
18 Q. So back in 1994 when Novell and Sun entered into an
19 agreement, Novell expressly did not license to Sun
20 System V Release 4.1; right?
21 A. Yes.
22 Q. But SCO granted a license to that software to Sun
23 in 2003; correct?
24 A. Yes. For the purpose of them having a complete set
25 of all the versions. And again, that was primarily -- those

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1 prior versions were all intended to just be used for source
2 comparison. The latest version we provided to them,
3 UnixWare 7.1.3, was the version that was primarily intended
4 and licensed to them for development.
5 Q. Now, Section 3 of the original Sun license of
6 Exhibit 5 sets out what rights were granted to Sun in 1994 for
7 the technology; correct? If you turn to Section 3 of the
8 earlier license.
9 A. Section 3?
10 Q. Yes.
11 A. Okay.
12 Q. And it was a worldwide, royalty-free, paid-up
13 license to the UNIX System V software in the Attachment 1 that
14 we looked at; right?
15 A. Yes.
16 Q. And what those rights granted in the original 1994
17 agreement do not grant to Sun the right to publicly display
18 the source code and object code of the license UNIX 5
19 software; right?
20 A. Where are you reading that?
21 Q. Well, you know, don't you, that the early agreement
22 did not allow Sun to publicly display the software that was
23 licensed in 1993?
24 A. I know that they had -- the whole agreement allowed
25 them to broadly distribute the source code to their licensees

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1 who in turn could distribute the, you know, Solaris source
2 code to sublicensees. So Sun had very broad rights with this,
3 you know, '94 agreement to effectively license the source code
4 extremely broadly to a large customer base.
5 Q. Isn't it true that they couldn't open source that,
6 Sun could not open source that software code under the early
7 agreement?
8 A. It depends on what your definition of open source
9 is.
10 Q. Well, why don't we take a look at
11 paragraph 3.2 (A)(b) of the earlier license.
12 A. 3.2?
13 Q. Yes, sir. Do you see that? And what that required
14 was:
15 The Sun source sublicensees will protect the
16 licensed products contained in their derivative
17 works, and Novell's trade secrets and other
18 intellectual property embodied in such licensed
19 products, to at least the degree to which Sun
20 protect its own most valuable proprietary source
21 code.
22 Correct?
23 A. Yes.
24 Q. And if we take a look at 3.2(B), this was another
25 requirement in the earlier license.

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1 In the event that Sun becomes aware, whether
2 through notification by Novell or otherwise, that
3 a Sun source sublicensee is not complying with its
4 obligations under the applicable Sun source code
5 license agreement, including obligations to
6 protect the confidentiality of the source code of
7 licensed products, to the extent that such
8 obligation impacts licensed products contained in
9 derivative works, Sun agrees to take appropriate
10 steps to rectify such noncompliance.
11 Correct?
12 A. Yes.
13 Q. And Sun made it clear during the negotiations that
14 they wanted a broader license so Sun could open source
15 Solaris; correct?
16 A. Actually, Sun believed that they had almost all the
17 rights they needed or had all the rights they needed. Now,
18 that was their posturing and positioning going into the
19 negotiations, that they did not need anymore rights to be able
20 to do a form of open sourcing and be in compliance with this
21 agreement. Now, that was their position coming into the
22 negotiations.
23 Q. Isn't it true that Sun made it clear during
24 negotiations that they wanted a broader license so Sun could
25 open source Solaris? Isn't that accurate?

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1 A. I don't know that I necessarily would say that it
2 was -- you know, it was a part of what they asked for. But
3 the most important thing they were asking for was the ability
4 to quickly take the Solaris product and make it available on
5 an Intel compatible platform, which they would be able to do
6 with the UnixWare 7.1.3 source code license and the software
7 drivers for UnixWare.
8 Q. Now, you gave a number of depositions in this case
9 and in the IBM litigation including a deposition on
10 December 21st, 2005; correct?
11 A. Yes.
12 MR. ACKER: And, counsel, I'm going to publish
13 Page 144 Lines 13 to 22 from that testimony.
14 Q. BY MR. ACKER: It's true, sir, that when you
15 testified on December 21st of 2005, you wrote:
16 When did SCO become aware of the facts that
17 Sun had open sourced -- or the Solaris system.
18 As part of the negotiations related to the
19 latest IP license from -- we entered into with
20 Sun, one of their desires of that license was the
21 ability to have a broader IP license where they
22 could to an extent open source Solaris with
23 restrictions that it could not be open sourced
24 into Linux or other open source licenses that did
25 not protect copyright ownership.

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1 Is the testimony accurate?
2 A. Yes. I would also add to that they basically had
3 the rights necessary to do that, anyways.
4 Q. But that's what they wanted in the negotiations,
5 broader confidentiality provisions; correct?
6 A. Yes. I don't believe that was an important part to
7 them.
8 Q. But it's part of what they wanted and part of what
9 they paid for; correct?
10 A. Yes.
11 Q. And Sun Solaris operating system is a derivative
12 work of UNIX System V; right?
13 A. Yes.
14 Q. Why don't we take a look at Exhibit 187.
15 But it's also true, isn't it, that it's SCO's
16 position that Sun was entitled to open source Solaris as a
17 result of the 2003 agreement with SCO? Correct?
18 A. I would view that -- well, open source as in --
19 with the limitations set forth in the agreement.
20 Q. So you would agree with me that as a result of the
21 2003 agreement, Sun was able to open source open Solaris?
22 A. Again, with the caveat that I just mentioned.
23 Q. Yes. They were able to do that as a result of the
24 agreement?
25 A. Yes.

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1 Q. Now, if we could take a look at Exhibit 187 and
2 specifically Paragraph 3.1.
3 Now, in addition to being able to having broader
4 confidentiality rights with respect to that software, you
5 actually delivered copies of the software to Sun; right?
6 A. Yes. Primarily UnixWare 7.1.3.
7 Q. But you didn't just deliver that version. You
8 delivered all of it; right?
9 A. We delivered at least a number of other source
10 takes or previous versions. But the primary one that was of
11 importance to Sun was the 7.1.3 source and the source for the
12 hardware drivers for UnixWare.
13 Q. But Sun didn't say to you, we're not interested in
14 that other code. Don't bother delivering it to us. Just give
15 us the latest version and the drivers; right? Sun didn't say
16 that to you?
17 A. No, I don't believe they did; nor did we ask them.
18 We were just delivering on our obligations under the contract.
19 Q. And the obligations under the contract were to
20 provide copies of all of the software; right?
21 A. Yes.
22 Q. And that's what SCO did; correct?
23 A. Yes.
24 Q. And SCO was paid just under $10 million by Sun for
25 this license; right?

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1 A. Yes.
2 Q. And not a single penny of that was paid to Novell;
3 correct?
4 A. No.
5 Q. And before entering into the 2003 Sun license, SCO
6 did not obtain permission from Novell to do the deal; right?
7 A. We did not believe we needed their permission.
8 Q. In fact, you didn't even inform them about the deal
9 before it was done; correct?
10 A. No. Again, this was primarily a UnixWare license.
11 Q. But it's true, isn't it, that SCO understood that
12 the APA requires prior written approval from Novell for all
13 new agreements or changes to current agreements relating to
14 UNIX System V? Correct?
15 A. Again, this agreement was primarily about -- and
16 the value of this agreement was primarily about UnixWare. And
17 since Sun already had a buyout to, you know, the previous
18 System V technologies, there was no need to have Novell
19 involved in a primarily UnixWare license.
20 Q. But isn't it true that SCO understood that the APA
21 requires prior written approval from Novell for any new
22 agreements or changes to current agreements relating to UNIX
23 System V that you understood that at the time you did the deal
24 with Sun?
25 A. Yes. And again this was not a System V license.

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1 This was a UnixWare license.
2 Q. There's over 35 versions of System V software that
3 was licensed to Sun; correct?
4 A. Those were ancillary products. The primary product
5 being licensed was UnixWare.
6 Q. Is there anywhere in the APA that says you only
7 have to obtain permission for licensing the primary product
8 and not the other 38 UNIX System V versions that you give --
9 you license?
10 A. Since Sun had a buyout of any royalty obligations,
11 I would not believe that would be necessary because there was
12 no revenue impact for Novell.
13 Q. So that was just a unilateral decision that Sun
14 made that, because we believe that the primary portion of this
15 agreement is the latest version of the software even though it
16 includes the earlier versions, we're not going to ask for
17 Sun Novell's permission?
18 A. We did not believe we needed Novell's permission.
19 Q. Let me show you what we've marked as Exhibit 27.
20 I show you Exhibit 27.
21 A. Okay.
22 Q. Exhibit 27 is a letter from senior contracts
23 manager or John Luehs of SCO to Miss Cynthia Lamont of Novell
24 dated May 20th, 1996; do you see that?
25 A. Yes.

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1 Q. In the first paragraph of that letter, Mr. Luehs
2 wrote to Novell on behalf of SCO:
3 The agreement between the Santa Cruz
4 Operations, SCO, and Novell, Inc., Novell,
5 requires prior written approval from Novell for
6 all new agreements or changes to current
7 agreements relating to UNIX System V.
8 Correct?
9 A. Yes.
10 Q. And you would agree with me, wouldn't you, that Sun
11 2003 is an agreement relating to UNIX System V? Wouldn't you?
12 A. Yes and no. Yes, that UNIX System V was a portion
13 of that and that UnixWare in my view, we would describe under
14 UNIX System V. But --
15 Q. Because --
16 A. But the primary -- primarily that agreement was
17 related to a UnixWare source code license.
18 Q. And because the 2003 agreement with Sun was an
19 agreement relating to UNIX System V, SCO needed Novell's
20 approval before they did the deal; isn't that true?
21 A. I do not agree with that statement.
22 Q. So you disagree with the senior contracts manager,
23 what a senior contracts manager of SCO wrote in 1996; is that
24 right?
25 A. If it was a SVRX older license, that's how I would

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1 view that. This was a UnixWare license primarily with Sun,
2 which is different.
3 Q. Let me show you what we've marked as Exhibit 30.
4 (Time lapse.)
5 Have you had a chance to read Exhibit 30, sir?
6 A. I scanned it.
7 Q. Exhibit 30 is a letter from the management, law and
8 corporate affairs, Mr. Broderick of SCO on May 26, 1996, to
9 Novell; correct?
10 A. Yes.
11 Q. And you know who Mr. Broderick is; correct?
12 A. Yes, I do.
13 Q. What his current position at SCO?
14 A. Very similar position. He's in the --
15 Q. Management, law and corporate affairs --
16 A. Yes.
17 Q. -- currently of the company?
18 A. Yes.
19 Q. And going to testify in this trial?
20 A. Yes.
21 Q. And let's take a look at what Mr. Broderick wrote
22 on May 26, 1996, to Novell. Take a look at that first
23 sentence. Again, he wrote:
24 The agreement between Santa Cruz Operations,
25 Inc., SCO, and Novell, Inc., Novell, require prior

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1 written approval from Novell for all new
2 agreements or changes to current agreements
3 relating to UNIX System V.
4 Correct?
5 A. Yes.
6 Q. And you don't have any reason to doubt
7 Mr. Broderick's understanding of the APA; correct?
8 A. No.
9 Q. And you have no reason to doubt the statement that
10 Mr. Broderick made back in May of 1996; correct?
11 A. No. And I would add that --
12 Q. Let me ask --
13 A. -- Mr. Broderick would view that UNIX System V in
14 this context is referring to older System V licenses and
15 source codes. And if we were doing a UnixWare code license,
16 there was no permission required from Novell.
17 Q. And I'm sure Mr. Broderick can speak for himself,
18 and I'm sure he will.
19 A. All right.
20 Q. Let me show you what we marked as Exhibit 189.
21 THE COURT: You didn't offer 27 or 30.
22 MR. ACKER: Yes. I move for their admission.
23 THE COURT: I don't know if they object.
24 MR. NORMAND: No objection, Your Honor.
25 THE COURT: 27 and 30 are received.

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1 MR. ACKER: Thank you, Your Honor.
2 (Whereupon, Novel Exhibits 27 and 30 were received.)
3 Q. BY MR. ACKER: I show you what's been marked and
4 admitted as Exhibit 189.
5 A. All right.
6 Q. Now, Exhibit 189 is the Microsoft license entered
7 into between SCO and Microsoft in April of 2003; right?
8 A. Yes.
9 Q. And you were the principal or one of the
10 negotiators in this agreement, as well?
11 A. Yes.
12 Q. And prior to the execution of the agreement, there
13 were term sheets that were exchanged; correct?
14 A. Yes.
15 Q. And let me show you what we have marked and has
16 been admitted at Exhibit 171.
17 Exhibit 171, you'll see there's an e-mail chain at
18 the top where an e-mail was sent to you from a Mike Anderer on
19 January 15th, 2003; correct?
20 A. Yes.
21 Q. And he wrote:
22 Mike, here is the first cut at the TS to MS.
23 Feel free to mark up. And we will see you in
24 Lindon tomorrow afternoon. Regards, Chris.
25 Do you see that?

126


1 A. Yes.
2 Q. And down below is a proposed term sheet of the
3 Microsoft deal with SCO; right?
4 A. Yes.
5 Q. And in Paragraph 3 of that, you set out what the
6 license code would be; correct?
7 A. I view this as a kind of an al a carte list of
8 various areas and things that we could discuss with Microsoft.
9 Q. And on the top of the list is UNIX System V; right?
10 A. Yes.
11 Q. And in January of 2003 when you're going into these
12 negotiations, you understood that UNIX System V was part of
13 what was going to be licensed to Microsoft if the deal
14 happens; right?
15 A. It was an area that could be licensed. Again, I'm
16 almost being redundant in saying UNIX System V and UnixWare.
17 But in order to have more items on the list to potentially
18 discuss, that was -- those were all items placed on the list.
19 Q. Well, you separately culled it out here, didn't
20 you?
21 A. Yes. But in a lot of cases, we're referring to the
22 same thing. If they're taking a UNIX or a license they're
23 gaining access to a majority of the System V source code that
24 preceded it.
25 Q. But in the same OU, you didn't just say UnixWare

127


1 and OpenServer; right?
2 A. No. We're trying to provide as many possible areas
3 of discussion for deal points as we can.
4 Q. And one of those areas of discussions and deal
5 points was UNIX System V; correct?
6 A. Yes.
7 Q. Take a look at the next page. Paragraph 5.
8 It's written:
9 SCO will recognize a retroactive license in
10 favor of Microsoft against any present or previous
11 violations of SCO's UNIX IP rights, as follows.
12 Correct?
13 A. Yes.
14 Q. And this is eventually what matured into Section 2
15 of the Microsoft deal; right?
16 A. To an extent, that release.
17 Q. And that release is what you call the retroactive
18 license in favor of Microsoft includes other System V UNIX
19 technologies.
20 Right?
21 A. Yes. And to me in this case, that would refer to
22 UnixWare, potentially OpenServer and prior releases.
23 Q. And prior releases; correct?
24 A. Yes.
25 Q. And so Microsoft was concerned that there might be

128


1 some of SCO's intellectual property in their products; right?
2 A. Yes, potentially.
3 Q. So in Section 2, they wanted a release that
4 included releases for all of SCO's IP and all of Microsoft's
5 products; right?
6 A. Yes.
7 Q. And during negotiations, they expressed concern
8 that they may have inadvertently used SCO's IP in their
9 products, including SVRX code; right?
10 A. Potentially yes.
11 Q. And Microsoft's concerns about having SCO's IP in
12 its product would not have been assuaged if the license in
13 Section 2 had granted rights merely to the current UnixWare
14 technology; right?
15 A. I don't know if I would characterize it that way.
16 This ended up not being an area that we discussed. But the
17 vast majority of the active and important code, you know,
18 significant percentage was available in the UnixWare product.
19 Q. Okay. You testified on March 14th, 2007, at your
20 deposition --
21 And, counsel, this is Lines 162-24 to 163-5.
22 -- you were asked the following questions and gave
23 the following answers.
24 (A portion of the deposition was played.)
25 Q. BY MR. ACKER: But Microsoft's --

129


1 MR. NORMAND: Your Honor, to complete this, I would
2 like to publish the remaining testimony from that portion of
3 the deposition.
4 MR. ACKER: Well, he certainly will have that
5 opportunity.
6 MR. NORMAND: I'm not sure of Your Honor's
7 practice. On occasion to save time, we play it at the time of
8 the playing of the deposition.
9 THE COURT: You prefer that he do it when he does
10 his examination?
11 MR. ACKER: Yes. Absolutely.
12 MR. NORMAND: Thank you, Your Honor.
13 THE COURT: You can do it then.
14 Q. BY MR. ACKER: But Microsoft's concerns about
15 having SCO's IP in its products wouldn't have been taken care
16 of, wouldn't have been assuaged in Section 2 had they only
17 gotten rights to UnixWare; right?
18 A. That's a hypothetical because we never had that
19 discussion.
20 Q. All right. Why don't we play your deposition at
21 Page 163 Lines 16 to 20.
22 (A portion of the deposition was played.)
23 Q. BY MR. ACKER: So that was true; right?
24 A. I don't know. I mean, possibly not. But I think
25 if that had been an issue, we could have likely convinced

130


1 Microsoft that the, you know, the vast preponderance of the
2 code of UnixWare was all they needed to provide the IP
3 protection they needed. But we didn't at that time consider
4 that an issue in view that we had the rights to license them
5 the entire portfolio.
6 Q. But wasn't it your understanding that Microsoft
7 also needed the rights to the older UNIX technology to address
8 its concerns?
9 A. Again, we never specifically had a discussion of
10 this. It was our standard practice and SCO's predecessor's
11 when licensing UNIX technology to also always license the
12 preceding versions of the UNIX code, as well. That's what we
13 were doing in this case.
14 Q. Why don't we take a look at your deposition on
15 March 14, 2007, at Page 64 Lines 10 to 14.
16 (A portion of the deposition was played.)
17 Q. BY MR. ACKER: That testimony was accurate, wasn't
18 it?
19 A. Again, I don't view that in conflict with what I'm
20 saying right now.
21 Q. So part of what Microsoft wanted in negotiation
22 around Section 2 was a license that protected them against
23 potential claims relating both to UnixWare and to older SVRX
24 technology; right?
25 A. That was the license that was provided to them.

131


1 Q. So the license that was provided to them included
2 both protection against violation of UnixWare and also older
3 UnixWare technology; right?
4 A. Older UnixWare technology, yes.
5 Q. And for this release in license, Microsoft paid
6 $1 1/2 million; right?
7 A. Yes.
8 Q. And none of that money was provided to Novell;
9 correct?
10 A. No, it was not.
11 Q. And you never sought Novell's permission before
12 entering into that portion of the deal; correct?
13 A. No. Again, this was a UnixWare license. And the
14 standard matter of course was to provide a license to all
15 preceding versions of UNIX. That was, you know, the standard
16 practice that had always been performed.
17 Q. Let me turn to Section 4 of the Microsoft
18 agreement.
19 Now, in order to be entitled to take the license in
20 Section 4 of the agreement, Microsoft first had to pay
21 $7 million for the license in Section 3; correct?
22 A. Correct.
23 Q. And Section 3 of the Microsoft agreement is titled,
24 if we could bring that up, "Option to Purchase UnixWare
25 License." Correct?

132


1 A. Yes.
2 Q. So they have paid $7 million in this section,
3 Section 3 in order to both take an option to get the UnixWare
4 license and to actually get the license; correct?
5 A. That option for that UnixWare license had
6 significant limitations to it.
7 Q. And the Section 3 provides for licenses of software
8 in Exhibits A and B of the agreement; right?
9 A. Yes.
10 Q. And the license in Section 4 licensed the software
11 listed in Exhibits A, B and C; right?
12 A. Now, the primary component of Section 4 was an
13 expansion of that UnixWare license.
14 Q. I didn't ask you that. What I asked you was, in
15 Section 4, isn't it true that the license that was granted was
16 to Exhibits A, B and C of the agreement?
17 A. Yes.
18 Q. And Exhibit C of the agreement contains UNIX
19 System V Versions 1 through 4.2; correct?
20 A. Yes.
21 Q. So if we look up on the screen, here's Exhibit C.
22 Everything that is highlighted that was granted as part of the
23 Section 4 license is UNIX System V Version 4.2 or earlier
24 software; right?
25 A. Yes.

133


1 Q. And not only did Microsoft purchase a license to
2 all of this software, that is, the versions that we've
3 highlighted, but you also delivered actual copies of the code
4 to Microsoft; right?
5 A. As many as we possibly could.
6 Q. So they not only got a license to use it, but they
7 also got physical possession of the software?
8 A. Yes. And those older versions, by the way, were,
9 the sole intent for them was for a source analysis repository.
10 Q. And before this license was signed, the 2003 deal
11 with Microsoft, Microsoft did not have a preexisting license
12 for any of this code that we've highlighted that is UNIX
13 System V code Versions 1 to 4.2; right?
14 A. They at a previous time had a license, but I think
15 that license had been revoked or discontinued. So at this
16 time, they did not have a license.
17 Q. So at this time when they entered in 2003, they
18 didn't have a license to any of this code; correct?
19 A. Correct.
20 Q. And you gave them a license to this code; correct?
21 A. As part of a broader UnixWare source code license,
22 yes.
23 Q. And that code includes UNIX System V Versions 1 to
24 4.2; right?
25 A. Yes.

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1 Q. And in order to obtain this license in Section 4,
2 Microsoft paid, initially paid an option amount of $250,000;
3 right?
4 A. Yes.
5 Q. And then they paid another $8 million; right?
6 A. Yes.
7 Q. So this license in Section 4 cost Microsoft
8 $8 1/4 million?
9 A. Yes. Now, again, the majority of the value of that
10 $8 million was for an expansion of the UnixWare distribution
11 lines.
12 Q. And they already paid $7 million in Section 3 for
13 UnixWare license; right?
14 A. For UnixWare source code license that was limited
15 to a very limited set of Microsoft products called Services
16 for UNIX and Connectix. And with the Section 4, they were
17 allowed to use the UnixWare source code across their entire
18 product line, which is a significant increase in their rights.
19 And that was where the value was.
20 Q. Do you know of Microsoft ever distributing copies
21 of UnixWare with their products?
22 A. I don't know if they have or not.
23 Q. You don't know if they've ever done that; right?
24 A. (Witness indicates by shaking head side to side.)
25 Q. You have to answer yes or no.

135


1 A. I do not know.
2 Q. Let me show you a chart of -- a list of SCOsource
3 revenue licenses. It's Exhibit 383.
4 What I've handed to you and what's been admitted
5 into evidence is Exhibit 383, which is, SCO's Supplemental
6 Responses and Objections to Novell's Second and Third Set of
7 Interrogatories. And I want to direct your attention to a
8 chart that's at NOVTR, and the page is 4238.
9 A. All right.
10 Q. And can you make out that chart on your screen?
11 A. I'll look at it on the screen as opposed to
12 potentially having a big mess with a loose set of papers.
13 Q. Now, this is a listing, is it not, provided by your
14 lawyers of all of the licenses that were entered in the
15 SCOsource program? Correct?
16 A. Yes.
17 Q. And the total amount that Novell -- or SCO
18 collected as a result of the SCOsource program and these
19 licenses was $26,956,260.14; correct?
20 A. Yes.
21 Q. And the largest portions of that were the Microsoft
22 deal at $16,680,000; correct?
23 A. Yes.
24 Q. And then the Sun deal at $9,143,450.63; correct?
25 A. Yes.

136


1 Q. And if my math is correct, what we have left is a
2 series of licenses to smaller entities for 1.1 million -- or
3 $1,132,809.51; correct?
4 A. Yes.
5 Q. And those licenses that you entered into, those
6 other licenses Sun and Microsoft that you entered into as part
7 of the SCOsource program were done in a variety of ways; fair?
8 A. They were intended to be effectively the same
9 license, but the license I think evolved over time.
10 Q. And sometimes the licenses were done by what was
11 called a click-through on the SCO website; right?
12 A. Yes.
13 Q. Let me show you what we've marked as Exhibit 422.
14 Again, this has been admitted, Your Honor.
15 (Time lapse.)
16 THE WITNESS: Okay.
17 Q. BY MR. ACKER: Exhibit 422, the second page that
18 we'll bring up on the screen is a screen shot of the SCO
19 website regarding this SCO intellectual property license;
20 correct?
21 A. Yes.
22 Q. And if you take a look, there's definitions that
23 are provided on the SCO website as to what is being licensed
24 if one comes on line and enters into one of these agreements
25 with SCO; right?

137


1 A. Yes.
2 Q. And the first line says:
3 The agreement is the agreement between you and
4 the SCO Group, Inc., relating to rights acquired
5 by you.
6 Correct?
7 A. Yes.
8 Q. And then there's a definition of SCO IP. It says:
9 SCO IP shall mean the SCO intellectual
10 property included in its UNIX based code in object
11 code format licensed by SCO under SCO's standard
12 commercial license.
13 Correct?
14 A. Yes.
15 Q. And then you define for potential licensees what
16 UNIX based code shall mean; right?
17 A. Yes.
18 Q. And you define it by saying:
19 It is both UNIX System V and UnixWare.
20 Correct?
21 A. It says UNIX System V or UnixWare.
22 Q. It's both of those things; correct?
23 A. Yes.
24 Q. So when someone comes on line and clicks through
25 and gets one of these license, they're obtaining a license to

138


1 UnixWare System V and UnixWare; right?
2 A. Yes.
3 Q. You know how many of these licenses you entered
4 into, the online click method?
5 A. A handful. Less than 20 or 30.
6 Q. Let me show you -- I'm going to show you a series
7 of documents.
8 (Time lapse.)
9 I'll hand you these as a group. But I'm going to
10 hand you -- I'll put them upside down so you can flip them
11 back over. But Exhibit 257, which has been admitted;
12 Exhibit 237, also been admitted; Exhibit 426, also been
13 admitted; Exhibit 301, which has also been admitted;
14 Exhibit 310, which has also been admitted; Exhibit 312, which
15 has also been admitted; Exhibit 322, also been admitted;
16 Exhibit 286, also been admitted; Exhibit 423, which has also
17 been admitted.
18 If we could start with Exhibit 257, sir.
19 A. Okay.
20 Q. Exhibit 257, if you could bring that up, if we
21 could go to the next page, the invoice.
22 You see there on the second page of Exhibit 257
23 there's an invoice where an entity CDM purchased one of these
24 SCO source licenses and paid SCO a total of $9,865.45;
25 correct?

139


1 A. Yes.
2 Q. And this was done as part of the SCOsource
3 licensing program?
4 A. Yes.
5 Q. The click-through program; right?
6 A. Yes.
7 Q. And you didn't ask permission of Novell before
8 entering into that agreement; correct?
9 A. No.
10 Q. And you didn't remit any of those -- any of that
11 $9,865 to Novell; correct?
12 A. No.
13 Q. Take a look at Exhibit 237.
14 Exhibit 237 is a license agreement between Computer
15 Associates International, Inc., and the SCO Group; correct?
16 A. Yes.
17 Q. And this one is a written agreement; correct?
18 A. Yes.
19 Q. Signed by you?
20 A. I believe so.
21 Q. And if you take a look at the definition section,
22 Paragraph 1.11, you define that you're granting a license to
23 software products commonly known as UNIX System V and/or,
24 and/or UnixWare; right?
25 A. Yes.

140


1 Q. That was the license that you were granting to
2 Computer Associates; right?
3 A. Yes.
4 Q. And for that license, Computer Associates paid
5 you -- paid SCO $20,000; right?
6 A. Yes.
7 Q. And you didn't ask Novell's permission before
8 entering into this license; correct?
9 A. No.
10 Q. And didn't remit any of those funds to Novell;
11 correct?
12 A. No.
13 Q. Take a look at Exhibit 426. This is another
14 written agreement that was entered into between SCO and an
15 entity referred to as Cymphonix; correct?
16 A. Yes.
17 Q. And again, we have a written agreement; right?
18 A. Yes.
19 Q. And it looks like there was as part of a
20 development agreement between Cymphonix and SCO, Cymphonix
21 also entered into one of the SCO intellectual property
22 agreements; right?
23 A. I believe that to be the case.
24 Q. And if you take a look at that Exhibit A of this
25 license, which is the intellectual property agreement --

141


1 A. Yes.
2 Q. -- and specifically the next page and look at the
3 definitions, what was licensed to SCO under the -- license to
4 Cymphonix under the intellectual property agreement was
5 SCO UNIX based code; right?
6 A. Yes.
7 Q. And the definition of SCO UNIX based code was
8 UNIX System V or UnixWare; right?
9 A. Yes.
10 Q. And Cymphonix paid Novell $8,112 for this license;
11 right?
12 A. I believe that would be the case.
13 Q. And none of that money -- paid SCO $8,112; correct?
14 A. Yes.
15 Q. And none of that money went to Novell; right?
16 A. I believe that to be the case.
17 Q. And you didn't ask Novell's permission before
18 entering into that agreement; correct?
19 A. No.
20 Q. Take a look at Exhibit 301.
21 301 is another intellectual property license under
22 the SCOsource program between SCO and an entity called
23 Everyones Internet; right?
24 A. Yes.
25 Q. And again, you signed the agreement on behalf of

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1 SCO?
2 A. Yes.
3 Q. And if we go to the definitions, we can again see
4 what it was that was licensed; correct?
5 A. Yes.
6 Q. And what was licensed was SCO UNIX based code;
7 correct?
8 A. Well, UNIX System V or UnixWare.
9 Q. Okay. Well, SCO UNIX based code is the definition
10 of what the license is being granted for, but the definition
11 of UNIX based code is UNIX System V or UnixWare; correct?
12 A. Yes.
13 Q. And for getting this license, Everyones Internet
14 paid SCO $534,444; correct?
15 A. Yes.
16 Q. None of that money went to Novell; right?
17 A. No.
18 Q. And you didn't ask permission of Novell before
19 entering into that agreement; correct?
20 A. No.
21 Q. Why don't we take a look at Exhibit 310.
22 Exhibit 310 is another intellectual property
23 agreement that you signed on behalf of SCO with an entity
24 called HEB or HEB. HEB Grocery Company LP; right?
25 A. Yes.

143


1 Q. And this is a similar license. If we take a look
2 at the definitions -- well, what was licensed was something
3 called SCO IP; right?
4 A. Yes.
5 Q. And the definition of SCO IP is SCO UNIX based
6 code; right?
7 A. Yes.
8 Q. And that means UNIX System V or UnixWare; right?
9 A. Yes.
10 Q. And HEB paid SCO a half million dollars, $500,000
11 for this license; correct?
12 A. Yes.
13 Q. And none of that money went to Novell?
14 A. No.
15 Q. And you didn't ask Novell's permission before
16 entering that that agreement; correct?
17 A. No.
18 Q. Why don't we take a look at Exhibit 312.
19 THE COURT: Unless you're about done with this
20 witness, let's take our second break.
21 MR. ACKER: Very well, Your Honor.
22 THE COURT: Are you about done?
23 MR. ACKER: 15 minutes.
24 THE COURT: Let's take our second break.
25 15 minutes.

144


1 (Short recess)
2 THE COURT: You may proceed.
3 MR. ACKER: Thank you, Your Honor.
4 Q. Mr. Sontag, before the break, I believe we left
5 off with Exhibit 312. If you would look at that, please.
6 This is another intellectual property agreement between
7 the SCO Group and Lane Furniture, correct?
8 A. Yes.
9 Q. And, again, if you take a look at the
10 definitions -- if you would go to the next one, please --
11 what's being licensed here is SCO IP, and, again, the
12 definition is SCO UNIX-based code in Section -- in
13 paragraph 1.7, and then the definition of what that is is
14 UNIX System V or UnixWare, correct?
15 A. Yes.
16 Q. Did Lane Furniture pay SCO any money for this
17 license?
18 A. I believe so.
19 Q. Do you know how much?
20 A. I do not.
21 Q. Were any of those funds remitted to Novell?
22 A. No.
23 Q. Did you ask permission before entering into
24 this agreement with Lane Furniture?
25 A. No.

145


1 Q. Would you take a look at Exhibit 332. This is
2 another SCOsource IP license, this time between OCE
3 printing and SCO, correct?
4 A. Yes.
5 Q. And if you would take a look at the
6 definitions, if you go to the second page, please, again,
7 it's the same definition. SCO IP means SCO UNIX-based
8 code, correct?
9 A. Yes.
10 Q. And the definition of what that is, SCO
11 UNIX-based code, is UNIX SCO System V or UnixWare,
12 correct?
13 A. Yes.
14 Q. And you were paid -- or SCO was paid $49,500
15 actually by Siemens for this license, correct? Does that
16 sound right?
17 A. I believe that to be the case.
18 Q. And, again, none of that money was remitted to
19 Novell, correct?
20 A. No.
21 Q. And you didn't seek permission before entering
22 into this agreement, correct?
23 A. No.
24 Q. Take a look at the Exhibit 286. This is
25 another SCO group intellectual property license, correct?

146


1 A. Yes.
2 Q. And this time it's entered into with Questar,
3 correct?
4 A. Yes.
5 Q. And why don't we take a look at the definition
6 section of this agreement. Here the definition was a
7 little different as to what SCO IP rights were, correct?
8 A. Yes.
9 Q. And what was licensed to Questar was SCO IP
10 rights, which shall mean SCO's intellectual property
11 rights in any and all past, current or future versions
12 of -- or portions of SCO's software products commonly
13 known as UNIX System V and/or UnixWare correct?
14 A. Yes.
15 Q. That's what the license grant was, correct?
16 A. Yes.
17 Q. And if you take a look at paragraph 114 -- I'm
18 sorry, 2.1 -- well, let's go back to -- if we could
19 highlight 114.
20 And, again, the definition of UNIX-based code
21 there includes both UNIX System V or UnixWare, right?
22 A. Yes.
23 Q. And Questar paid SCO $19,125 for this license,
24 correct?
25 A. Yes.

147


1 Q. And none of that money was remitted to Novell,
2 correct?
3 A. No.
4 Q. And you didn't seek Novell's permission before
5 entering into that license, right?
6 A. No.
7 Q. One last exhibit to show you. Let me show you
8 what we've marked as Exhibit 227, Novell 227. And,
9 Mr. Sontag, please feel free to look at any part of the
10 exhibit, but I'm going to ask you about the e-mail on the
11 second page in the middle of the page.
12 A. Okay. Just a moment.
13 Q. Sure.
14 A. Okay.
15 Q. Now, if you could take a look at that e-mail on
16 the second page, in the middle of the page, it's an
17 e-mail from Jeff Hunsaker at SCO to yourself, Mr. McBride
18 and others at SCO. And it's sent on July 31, 2003,
19 correct?
20 A. Yes.
21 Q. And what was Mr. Hunsaker's position -- his
22 position at SCO was Senior Vice President of Worldwide
23 Sales and Marketing, right?
24 A. I believe that to be the case.
25 Q. And Mr. Hunsaker currently is the president and

148


1 CEO of SCO, right?
2 A. I think at least the president of SCO
3 Operations or something like that. I'm not sure what his
4 exact title is now.
5 Q. And what he said in the middle of 2003, this
6 e-mail followed a conference call about this SCOsource
7 licensing program, right?
8 A. Yes.
9 Q. And the subject line there is: SCOsource
10 issues and buyoff, correct?
11 A. Yes.
12 Q. And he wrote Darl, Chris, Kim and Kevin,
13 correct?
14 A. Yes.
15 Q. And then he wrote:
16 During our SCOsource con call today, we
17 discussed and would like to propose the following. The
18 official name of this program will be the SCO UNIX IP
19 Compliance License Program.
20 Correct?
21 A. Yes.
22 Q. And that's the name that was eventually used
23 for this program of these contracts that we have
24 just been through, right?
25 A. Yes, at least for a period of time.

149


1 Q. And then he wrote:
2 This is not a Unixware 7.13 SKU, right?
3 A. Yes.
4 Q. And then he wrote:
5 The license is called a SCO UNIX IP license for
6 Linux. The only rights that this license provide is for
7 Linux binary runtime copies. When we are ready to issue
8 a similar license for AIX, it will be called the SCO UNIX
9 license for AIX.
10 Correct?
11 A. Yes.
12 Q. Then he followed up with these words:
13 There is no connection between UnixWare,
14 OpenServer and the SCO UNIX IP license whatsoever.
15 Right?
16 A. Well, I wouldn't agree with that
17 characterization. These licenses are based on the same
18 underlying IP that is in UnixWare and OpenServer.
19 Q. He is the current president of SCO,
20 Mr. Hunsaker, right?
21 A. Yes.
22 Q. And what he wrote, at the time this program was
23 taking off, in July of 2003, is:
24 There is no connection between UnixWare,
25 OpenServer and the SCO UNIX IP license whatsoever.

150


1 Right?
2 A. I disagree with that characterization.
3 Q. And then he continued:
4 They are independent.
5 Correct?
6 A. Yes. That's what he put.
7 Q. And in 2003, that's what the Senior V.P. of
8 Worldwide Sales and Marketing of SCO, how he
9 characterized the SCOsource program, right?
10 A. They are not the same product, but they are --
11 the SCOsource license is IP based upon the UnixWare and
12 OpenServer products.
13 MR. JACOBS: I don't have anything further,
14 Your Honor.
15 THE COURT: Thank you.
16 Mr. Normand, you may examine.
17 MR. NORMAND: Thank you, Your Honor.
18 CROSS EXAMINATION
19 BY MR. NORMAND:
20 Q. Good afternoon, Mr. Sontag.
21 A. Good afternoon.
22 Q. Is it fair to say that, during your tenure at
23 SCO, you used the terms UnixWare and System V
24 interchangeably from time to time?
25 A. Yes.

151


1 Q. Why did you do that?
2 A. One of the primary reasons is that we were
3 thinking about possibly renaming UnixWare to be System V,
4 and that was under serious consideration until we
5 determined there would be a lot of certification and a
6 substantial amount of costs in renaming UnixWare, and so
7 we determined that that was not possible. But, in terms
8 of describing UnixWare, OpenServer, all of that, we would
9 often use UNIX System V as the overall umbrella name for
10 all of SCO's UNIX technologies.
11 Q. What was the point of using the phrase System V
12 as an umbrella or a short name for all that technology?
13 A. It was just short for saying UNIX System V.
14 Q. Were you always careful to draw distinctions
15 between the UnixWare trade name for the latest release
16 and other uses of System V?
17 A. No.
18 Q. I want to start, Mr. Sontag, where Mr. Acker
19 started, with Novell Exhibit 147. This was a document
20 that referred to SVR 4 software libraries. Do you recall
21 looking at that document?
22 A. Yes.
23 Q. This was the draft press release that you went
24 through. Do you recall that?
25 A. Yes.

152


1 Q. Now, do you know what libraries are?
2 A. Libraries are a portion of an operating system
3 that are used for applications to communicate with
4 operating system.
5 Q. Do you know whether there are SVR 4 libraries
6 in UnixWare?
7 A. I suspect that may be very well what those
8 libraries are called. I don't specifically remember, but
9 those libraries are referring to the UnixWare runtime
10 libraries.
11 Q. Are libraries the same as releases of a
12 software product?
13 A. No. Libraries are just a portion of an
14 operating system release.
15 Q. OSR 5 libraries you refer to in this document
16 as well. Do you know what that's a reference to?
17 A. I believe that's referring to the OpenServer
18 Version 5 runtime libraries.
19 Q. And what was OpenServer?
20 A. OpenServer was a version of UNIX developed by
21 Santa Cruz that was based on UNIX System V, Release 3.
22 Q. Let me take a step back, Mr. Sontag. When did
23 you join SCO?
24 A. October of 2002.
25 Q. And with whom did you deal in acquiring an

153


1 understanding of the subject matter that has been
2 discussed?
3 A. Of a lot of individuals inside of SCO, Bill
4 Broderick, John Maciaszek, the attorneys, Jeff Hunsaker,
5 a whole host of people.
6 Q. Had you worked at Novell previously?
7 A. Yes, I have.
8 Q. Turn to Novell 159.
9 THE COURT: What number?
10 MR. NORMAND: 159.
11 Q. This is the document, Mr. Sontag, in which SCO
12 makes the statement that it is the developer and owner of
13 SCO UnixWare and SCO OpenServer, both based on UNIX
14 System V technology. Do you recall reading the
15 document?
16 A. Yes.
17 Q. And do you recall Mr. Acker referring to the
18 tree of a software system?
19 A. Yes.
20 Q. And what did you understand him to mean?
21 A. Well, what I understand it to mean is: When
22 software is developed, you build a version. You build a
23 release and then usually, if you're going to create a
24 subsequent release of that software, you create a new
25 branch of software, start again, and make modifications

154


1 to that version of software and so on and so on, just
2 like when you're developing a document, a legal document,
3 maybe, in a legal environment with a number of
4 colleagues, you may create a first version of a document,
5 circulate that, make modifications, you know, get the
6 responses back, publish a new revision of that document
7 and so on and so on.
8 Q. Now, you testified earlier about your
9 understanding of the relationship between SVR 4 and UNIX
10 System V, Release 4 and Unixware. Do you recall that
11 testimony?
12 A. UnixWare is based on SVR 4. It's developed out
13 of SVR 4 and actually the first version of UnixWare is
14 based on SVR, I think, 4.1.
15 Q. Mr. Sontag, this is attachment 1 to the Sun
16 agreement. Do you recall viewing this earlier today?
17 A. Yes.
18 Q. And do you see Section 2, a description of
19 technology, additional technology?
20 A. Yes.
21 Q. And do you see the fourth line there, System V,
22 Release 4.2 and products?
23 A. Yes.
24 Q. And then do you see the parenthetical there?
25 A. Yes. UnixWare 1, UnixWare 1.1, UnixWare

155


1 1.1.1.
2 Q. You took part in negotiating this agreement,
3 correct?
4 A. Correct.
5 Q. What did you understand that reference in
6 attachment 1 to mean, that parenthetical reference?
7 A. Well, that was previous releases of UnixWare.
8 Q. What is your understanding of when UnixWare was
9 developed?
10 A. UnixWare was developed in the early '90's,
11 primarily when Novell was -- had ownership for the UNIX
12 intellectual property.
13 Q. And do you see the next line in this
14 attachment, System V, Release 4.2 MP and products?
15 A. Yes.
16 Q. I take it your intent was the same, by using
17 that parenthetical?
18 A. Yes.
19 Q. Okay.
20 Will you pull up Novell Exhibit 173, and at the
21 bottom of the third page.
22 This is the document, Mr. Sontag, that the
23 first paragraph at the top in the blowup, it says:
24 In the past SCO's UnixWare and OpenServer
25 license agreements did not allow these UNIX libraries to

156


1 be used outside of SCO's operating systems.
2 Do you see that language?
3 A. Yes, I do.
4 Q. Do you know whether a Unixware license relates
5 to technology that goes back to the days of AT&T?
6 A. Yes.
7 Q. Do you know whether SCO ever paid Novell any
8 money for the technology going back to AT&T that was part
9 of the UnixWare license?
10 A. No, I don't believe they did.
11 Q. Do you have a view as to whether the UnixWare
12 license allowed the licensee to use the SVR 4
13 libraries?
14 A. I believe they would.
15 Q. And what's the basis for that understanding?
16 A. That was the libraries that were included with
17 UnixWare.
18 Q. Now, at the time of the SCOsource agreements
19 that you reviewed in some detail, were you concerned
20 about the use of UnixWare and OpenServer technology with
21 Linux?
22 A. Yes.
23 Q. In what way?
24 A. That any of that IP had been misappropriated in
25 any form or fashion into Linux.

157


1 Q. Okay.
2 Will you pull up SCO Exhibit 402.
3 Mr. Sontag, SCO Exhibit 402 is SCO System V for
4 Linux sales guide, internal use only. Are you roughly
5 familiar with this document?
6 A. Yes.
7 Q. Could we go to the first page. And this is the
8 executive summary of the document. I take it you've seen
9 this before?
10 A. Yes.
11 Q. Who is Jay Peterson?
12 A. Jay Peterson was an employee of the SCOsource
13 division. He worked for me.
14 Q. Do you see in the middle of the paragraph, it
15 says:
16 The first product is called SCO System V for
17 Linux Release 1.0, SCO UNIX runtime libraries.
18 A. Yes.
19 Q. And the next sentence:
20 It licenses the SCO OpenServer COFF static
21 shared libraries.
22 Do you see that?
23 A. Yes.
24 Q. What was your understanding of what that
25 meant?

158


1 A. That the primary product of that first release
2 of the SCOsource runtime library was the OpenServer COFF
3 runtime libraries.
4 Q. And what is your basis for that understanding?
5 A. Because that's what I understood it to be at
6 the time.
7 MR. NORMAND: Would you go to page 8 and blow
8 up the top part of that.
9 Q. This paragraph, the first one in the section
10 called SCO UNIX Applications, has the following sentence:
11 ELF is the newer and current System V format
12 and is used in UnixWare.
13 A. Yes.
14 Q. What does that reference mean?
15 A. That's referring to that the primary runtime
16 libraries in UnixWare are also called ELF.
17 Q. Now, if you look at page 11, the bottom
18 paragraph.
19 If you would pull that up.
20 The following language appears:
21 Some of our existing OpenServer UnixWare
22 customers may be considering a migration to Linux. If
23 they are, the SSVL product may be attractive to them,
24 since it can enable them to run existing OpenServer or
25 UnixWare applications on Linux.

159


1 What does that language signify?
2 A. It's just saying, you know, that kind of a
3 basis for actually starting this program was that we had
4 some of our existing customers that came to us and said:
5 Hey, we would like to be able to run our UNIX
6 applications either for OpenServer or UnixWare on Linux.
7 Can you help us, you know, come up with a method to be
8 able to do that?
9 And that was the basis for starting SCOsource.
10 And the first product that was released was intended to
11 provide that solution for those customers.
12 Q. One more snippet from this document. The next
13 page, second full paragraph, contains the following
14 statement:
15 In some cases we believe they may be using our
16 libraries already to run OpenServer or UnixWare
17 applications.
18 Do you see that language?
19 A. Yes.
20 Q. Is this reflective of a view that at the
21 beginning of the SCOsource program, you were concerned
22 about the use of OpenServer in UnixWare technology?
23 A. Well, we had customers that came to us and said
24 that they were doing this very thing. They were using
25 the runtime libraries on Linux, and their review of the

160


1 end user license agreement for OpenServer or UnixWare
2 made them come to, I believe, the correct conclusion that
3 that was not appropriate. They wanted to be able to
4 accomplish that in an appropriate manner, and so they
5 came to SCO asking for us to provide a method for them to
6 license those libraries to use with Linux.
7 Q. And the date of this document is February,
8 2003, right?
9 A. I believe so, yes.
10 Q. Is it fairly early in the SCO program process?
11 A. Yes, it is.
12 Q. Novell Exhibit 194. This is a document you
13 were asked about earlier, a letter to Fortune 1000
14 companies?
15 A. Yes.
16 Q. Do you recall going over this document? And
17 this document contains a statement that there had been,
18 in SCO's view, System V code copied into Linux. Do you
19 recall that?
20 A. Yes.
21 Q. Was it your view, at the time, that the System
22 V code that had been copied into Linux was part of
23 UnixWare?
24 A. It very well could be. I mean, the vast
25 majority of the code is, you know, identical to what is

161


1 in UnixWare, that we had concerns with.
2 Q. We have in the second paragraph from the
3 bottom, the statement that we have evidence that portions
4 of UNIX System V software code have been copied into
5 Linux and that additional other portions of UNIX System V
6 software code have been modified and copied into Linux.
7 Do you see that statement?
8 A. Yes.
9 Q. Are there methods and concepts, in your view,
10 that were developed by AT&T that are in UnixWare?
11 A. Yes.
12 Q. In your view, is there code developed by AT&T
13 that is in UnixWare?
14 A. Yes.
15 Q. And, in your view, did you have the right to
16 license that material to customers without submitting any
17 payment for those rights to Novell?
18 A. Yes.
19 Q. Next page, top. You say:
20 Consistent with this effort, on March 7 we
21 initiated legal action against IBM for alleged unfair
22 competition and breach of contract with respect to our
23 UNIX rights.
24 Do you see that sentence?
25 A. Yes.

162


1 Q. In your agreements with Microsoft, Sun
2 SCOsource agreements, did you ever purport to license
3 anything other than SCO's IP rights?
4 A. No.
5 Q. You were asked about Mr. -- or Dr. Cargill's
6 expert report. Do you recall that?
7 A. Yes.
8 Q. 428, page 3.
9 And if you would blow up that bottom paragraph.
10 Dr. Cargill states in this report:
11 Overall, Linux is a substantial copy of the
12 UNIX SVR 4 operating system.
13 Do you see that language?
14 A. Yes.
15 MR. NORMAND: And can you side-by-side that
16 with page 12 of the Sun agreement?
17 Q. We went over, Mr. Sontag, this language in the
18 bottom of the divided documents. System V, Release 4.2
19 and products, and then the parenthetical in UnixWare?
20 A. Yes.
21 Q. And Dr. Cargill is concluding that Linux is a
22 substantial copy of the SVR 4 operating system. Do you
23 see that?
24 A. Yes.
25 Q. You were told in your examination that

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1 Dr. Cargill had concluded that Linux is substantially
2 similar to SVR 4. Do you recall that?
3 A. Yes.
4 Q. Is it fair to say that one could equally
5 accurately say that Linux is substantially similar to
6 UnixWare?
7 A. Yes.
8 Q. Had you had occasion to read this report --
9 A. I had not.
10 Q. -- before it was presented or given to you
11 today?
12 A. No, I had not.
13 Q. You're familiar with Malloc code?
14 A. Yes, I am.
15 Q. And how did your -- or SCO's reliance on Malloc
16 code come to unfold?
17 A. I think it was in February or March or April of
18 2003, that we became aware of the Malloc code example
19 of -- you know, kind of some fairly obvious and
20 easy-to-see literal copyright infringement that had
21 occurred, was code that was in a Silicon Graphics set of
22 open source software that was part of Linux that was
23 substantially the same as the UNIX System V, Release 4.2
24 ES code that it had licensed to Silicon Graphics.
25 And it was very plain and apparent to see that

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1 there was a substantial amount of direct, literal copying
2 that had occurred, which was actually surprising to me
3 that it would be so obvious and not munged up more than
4 it was.
5 Q. The Malloc code is from UNIX System V, Release
6 3, is that correct?
7 A. The Malloc code is in many previous releases of
8 UNIX and small modifications or additions made to that
9 code with each additional release, but it's been
10 substantially similar for many UNIX releases, and the
11 code is substantially similar between UnixWare and many
12 previous, you know, releases, at least through the last
13 10 or 20 years and.
14 Q. And in your view, when you were with SCO, did a
15 license to UnixWare permit the licensee to use the Malloc
16 code?
17 A. Yes.
18 Q. Novell 274. You were shown this letter from
19 Mr. McBride to Lehman Brothers. Do you recall briefly
20 reviewing this document?
21 A. Yes.
22 Q. And in the document, Mr. McBride makes
23 reference to, quote, SCO's rights in UNIX.
24 Do you recall that?
25 A. Yes.

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1 Q. Again, in all these agreements we are talking
2 about, did SCO purport to release or license any
3 technology other than the ones that it thought it had
4 rights to?
5 A. No.
6 Q. Page 2, towards the bottom. Do you recall
7 looking at that long list of files and going through this
8 language?
9 A. Yes.
10 Q. Is there ABI code in UnixWare?
11 A. Yes, there is.
12 Q. How do you know that?
13 A. I have been made aware of that through the
14 course of our investigations, and so I was aware that
15 there was ABI code in UnixWare.
16 Q. Let's look at Novell 57. Maybe SCO 57.
17 Do you recall going over the Sun agreement with
18 Mr. Acker?
19 A. Yes, I do.
20 Q. Can you take a step back and tell me how it
21 came to be that there was a 2003 Sun agreement?
22 A. Back in the late fall of 2002, we had a
23 business and engineering meeting with Sun; some of Sun's
24 executives, some of SCO's executives, some our engineers,
25 their engineers, trying to determine if there was, you

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1 know, business opportunities working together, and I
2 think at that time, we had told them that we had, you
3 know, additional SCO intellectual property that we would
4 be willing to discuss with them and license; that we were
5 also interested in potential joint marketing
6 opportunities and otherwise.
7 And in early 2003, we started having
8 discussions with Sun about licensing UnixWare into their
9 products. Sun was -- had a substantial UNIX business in
10 the form of Solaris that, at the time, only ran on a
11 specialized version of a processor called a spark
12 processor. They had a desire to be able to run their
13 Solaris operating system software on a more general
14 PC-type, Intel-compatible processors, which is the
15 primary capability of SCO's UnixWare releases and all of
16 the software drivers that we had available with UnixWare.
17 So they became interested in taking a license
18 for the UnixWare source code and the drivers in order to
19 develop an Intel-compatible version of Solaris, and that
20 was the primary motivation for the discussions and the
21 ultimate license agreement that was entered into in 2003.
22 Q. You referred to drivers. What are drivers?
23 A. Drivers are additional pieces of code that
24 allow peripherals, a network card, a keyboard, different
25 components or portions of the computer hardware to be

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1 able to interact and operate with the operating system.
2 They are an important piece that if you don't have a
3 broad array of software drivers available, that operating
4 system will not work with a wide variety of hardware
5 that's available out there, limiting your potential
6 customer base.
7 Q. And did Sun get drivers?
8 A. Yes, they did.
9 Q. In the 2003 agreement?
10 A. Yeah. It was very important for them.
11 Q. Drivers for what?
12 A. For UnixWare.
13 Q. Did they get drivers for the older System V
14 technology?
15 A. No, they did not.
16 Q. Do you think they could use the older System V
17 releases as a stand-alone product without the drivers for
18 them?
19 MR. ACKER: Objection. Calls for
20 speculation.
21 THE COURT: I'll let him testify as to his
22 understanding of that.
23 THE WITNESS: It wouldn't make sense. If
24 you're developing a software product, you want to use the
25 latest version of the source code of that software to

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1 develop that product because it would have the latest bug
2 fixes and features and capabilities. Same with being
3 necessarily compatible with the hardware drivers that
4 would be associated with that operating system product.
5 Q. You went through a couple of attachments to the
6 1994 Sun agreement and then the 2003 Sun agreement.
7 Could we pull those up side-by-side? It's
8 Novell 187 and Novell 5. And at 187, go to page 11, and
9 in 5, would you pull up page 19.
10 Do you recall going through these attachments,
11 Mr. Sontag?
12 A. Yes, I do.
13 Q. And I think, although you haven't had time to
14 pore over it, these are the same list of products,
15 correct?
16 A. Yes. They appear to be basically the same.
17 Q. Now, as of 2003, Sun already had rights to all
18 of these products, correct?
19 A. Yes. I believe so.
20 Q. And this will be a little bit redundant to what
21 you've testified to, but in general, what did you
22 understand those rights to be as of 2003?
23 A. As of 2003, Sun had the most substantial rights
24 of any UNIX licensee. They had source code for, you
25 know -- they had source sublicensing rights, very broad

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1 source sublicensing rights that no other UNIX licensee
2 had, which is why they had paid a substantial amount of
3 money because they had the ability, without any
4 involvement of Novell or SCO or whoever was in control of
5 the UNIX contracts, to be able to license the Solaris
6 source code to their customers who, in turn, could also
7 sublicense the software. That was a substantial right.
8 Q. Sun had paid 82 1/2 million dollars for those
9 rights, correct?
10 A. Correct.
11 Q. Could Sun, under that 1994 agreement,
12 distribute its Solaris product to as many as a hundred
13 licensees?
14 A. Yes.
15 Q. A thousand?
16 A. A thousand. A million. They, in turn, could
17 sublicense that source code to their customers, so, it
18 could -- Solaris could be very broadly distributed very
19 easily, with the rights that Sun had in the 1994
20 agreement.
21 Q. Now, what do you recall discussing with Sun
22 about whether there were confidentiality restrictions in
23 the 1994 agreement?
24 A. I had raised that there were confidentiality
25 provisions. They, as part of the negotiating, tit for

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1 tat, kind of strongly stated that they believed that most
2 of those confidentiality provisions had been undermined
3 or waived by disclosures of the UNIX code over the years.
4 They gave examples of the Lion's Book and some other
5 examples to make their point. I, in doing my job, tried
6 to press back and emphasize that I thought it was
7 important that they, you know, had confidentiality
8 provisions.
9 Their position was that, with their broad
10 licensing rights and what they were intending to do, they
11 felt that they had the right to basically, in a, you
12 know, Sun's sort of style, release an open source version
13 of Solaris with the rights they had in 1994.
14 Q. And do you think that position by Sun bore on
15 the price that was negotiated for the agreement?
16 A. For the 1994 agreement?
17 Q. The 2003.
18 MR. ACKER: Objection. That calls for
19 speculation. He can't possibly know what's in Sun's
20 mind.
21 MR. NORMAND: Mr. Sontag negotiated the
22 agreement. He can recall parts of negotiations,
23 inferences, and can make conclusions from what Sun was
24 telling them how much they might be willing to pay.
25 THE COURT: Overruled. Go ahead.

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1 THE WITNESS: Certainly Sun felt like they
2 already had substantial rights and they had already paid
3 a substantial amount of money for their -- you know, the
4 UNIX rights that they already had in the 1994 agreement.
5 Their primary interest was in being able to enable a
6 Solaris-on-Intel version, and their primary interest was
7 then the UnixWare rights that we would be licensing to
8 them. And that was, I believe, where they viewed the
9 preponderance of the value to lie.
10 Q. Would it be fair to say that, as of the 2003
11 agreement, Sun was already in the business of
12 commercially licensing its derivative work, Solaris?
13 A. Yes.
14 Q. And the SVRX material therein?
15 A. Yes.
16 Q. Now, you mentioned, in response to one of
17 Mr. Acker's questions, that there was an important
18 restriction on what was described to you as open source
19 rights in the 2003 agreement. Can you expand on that a
20 little?
21 A. Well, this was one area that they wanted to be
22 able to make sure they -- you know, that the open
23 sourcing that they intended to do, which they believed
24 they already had rights to do, that they had complete
25 coverage for. So this is another kind of

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1 belt-and-suspenders sort of addition they wanted in the
2 agreement was to broaden the confidentiality provision to
3 allow them to, you know, under a -- you know, a specific
4 version of an open source license that was not Linux,
5 that valued the software, they could, you know, with the
6 addition of the 2003 agreement, open source in a manner
7 that was, you know, defined by the 2004 agreement.
8 Q. This is the for-value language that you're
9 talking about?
10 A. The for-value language, that it was intended
11 that they could not release Solaris under the Linux GPL
12 open source license that would not pass muster with the
13 for-value provision in the 2004 agreement.
14 Q. And, again, a little redundant, but why did
15 that matter to you, that restriction?
16 A. Well, we wanted to make sure that Solaris was
17 not just, wholesale, dumped into Linux, that that would
18 be a problem, but we felt that Sun had substantial rights
19 and that if they were doing another version of open
20 source that met with the requirements in the agreement,
21 that they had the rights to do so.
22 MR. NORMAND: Would you pull up Novell Exhibit
23 5 at page 20 -- let's do Novell 187.
24 Q. This is, when we get to it, the second page of
25 the attachment to the Sun agreement that goes over the

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1 technology that was licensed to them.
2 Do you recall going over that?
3 A. Yes.
4 Q. And there were various SVR 4.1 and 4.2 releases
5 listed on that second page. Do you recall that?
6 A. Yes.
7 Q. And do you recall being asked about releases
8 identified in a schedule to the APA?
9 A. Yes.
10 Q. I take it you had occasion to review the APA
11 during your tenure at SCO?
12 A. I did review it a number of times.
13 Q. And you were asked about the schedule that
14 identified what you called products. Do you recall that?
15 A. Yes.
16 Q. And I wanted to ask you some questions about
17 the similarity between that list of products and this
18 list of products in attachment 2, page 2 of the Sun
19 agreement. Page 2 of the Sun agreement -- I'll just read
20 to you until we get this up -- lists the following two
21 products as -- may I approach, Your Honor?
22 THE COURT: You may.
23 Q. As the most recent two new releases to which
24 Sun gained rights under the 2003 agreement. Do you see
25 that?

174


1 A. Yes.
2 Q. And could you read what those two releases are?
3 A. Open UNIX 8, also known as UnixWare 7.1.2, and
4 System V, Release 5 and, parenthetically, UnixWare 7.0,
5 7.01, 7.1, 7.11, 7.1.1 plus LKP.
6 Q. At the top of the page are there SVR releases
7 listed?
8 A. Yes.
9 Q. And what are those releases?
10 A. System V, Release 4.1 ES, 3B2; System V,
11 Release 4.1 C2, 3B2; System V, Release 4.1 ES; System V,
12 Release 4.2 and products; UnixWare 1.0, 1.1 and 1.1.1;
13 and System V, Release 4.2 MP and products; UnixWare 2.0,
14 2.1 and 2.12.
15 Q. And what is the MP?
16 A. Multiprocessor.
17 Q. And what can you tell me about how that release
18 of System V came about?
19 A. Different versions of UnixWare were released,
20 some that would support a single computer processor,
21 other versions that allowed for the software to be run
22 across multiple processors at the same time, to allow
23 more work to be accomplished at the same time, allowing
24 the processing to occur more quickly.
25 MR. NORMAND: May I approach, Your Honor?

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1 THE COURT: You may.
2 Q. I'm handing you, Mr. Sontag, a copy of the APA.
3 Turn to the schedule that you were asked about earlier.
4 A. Schedule 1.1A?
5 Q. Yes.
6 A. Assets?
7 Q. Yes.
8 And if you would blow up the bottom line, item
9 66.
10 Now, with reference to attachment 1 to the Sun
11 agreement that we were looking at earlier --
12 A. Yes.
13 Q. -- the most recent releases of System V that
14 were included in the attachment to the Sun agreement,
15 System V 4.1 ES/3B2, is that product included in the list
16 in the APA?
17 A. Yes, it is.
18 Q. 4.1 C2/3B2, is that included in the list in the
19 APA?
20 A. Yes.
21 Q. Do you see an ES/3B2 product listed?
22 A. I'm assuming that's it right there, but maybe
23 I'm reading it wrong.
24 Q. Does that say ES/3B2?
25 A. No, it does not.

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1 Q. Does it say ES/C23B2?
2 A. No.
3 Q. So those two most recent System V releases in
4 the Sun agreement aren't listed in the APA as products,
5 are they?
6 A. No.
7 Q. What have you understood the term "open source"
8 to mean during your tenure at SCO?
9 A. Well, it varies. There's different open source
10 licenses, but, in general, the high level, it is making
11 the source code available to various parties, your
12 customers or others, that they can then view or modify
13 that source code. In some cases, there are requirements
14 on returning the modifications back or making the
15 modifications available to others.
16 Q. And your understanding of the 2003 Sun
17 agreement is that such rights, at least in full, were not
18 given to Sun; is that correct?
19 A. Prior to the 2003 agreement?
20 Q. In the 2003 agreement.
21 A. The 2003 agreement gave them limited open
22 source rights. There were restrictions to what they
23 could do in terms of open sourcing in the 2003
24 agreement.
25 Q. You were asked, Mr. Sontag, whether you knew

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1 why two System V releases in the 1994 Sun agreement had
2 been described as deliberately omitted. Do you recall
3 those questions?
4 A. Yes.
5 Q. And do you recall what your answer was?
6 A. I do not.
7 Q. Do you know whether Sun had already had a
8 license to those releases of System V before the 1994
9 agreement?
10 A. I do not know.
11 Q. Do you know whether they had already had a
12 license and terminated the license?
13 A. Sun?
14 Q. Yes.
15 A. I do not know.
16 Q. Who, at SCO, might know the answer to that?
17 A. I suspect Bill Broderick, John Maciaszek would
18 be the ones that most likely would know that answer.
19 Q. Now, to state the obvious, at the time of the
20 2003 Sun agreement, Sun was an existing licensee of UNIX;
21 is that right?
22 A. Yes.
23 Q. And I think you testified earlier that part of
24 what Sun obtained under the 2003 agreement was the right
25 to obtain copies of the older versions of System V; is

178


1 that right?
2 A. Yes.
3 Q. This is from amendment number 1 to the APA. I
4 take it you had occasion to review that amendment during
5 your tenure at SCO?
6 A. Yes.
7 Q. This amends part of the APA to state as
8 follows, paraphrasing of course: Buyer, Santa Cruz,
9 shall be entitled to retain 100 percent of the following
10 categories of SVRX royalties. And Rule 2 says that
11 source code right-to-use fees under existing SVRX
12 licenses and the licensing of additional CPU's, and from
13 the distribution by buyer of additional source code
14 copies.
15 Do you see that language?
16 A. Yes.
17 Q. As of the 2003 agreement, Sun already had
18 source code copies to all of the System V releases that
19 were listed in the 1994 agreement, correct?
20 A. Yes.
21 Q. And when you were shown earlier, by Mr. Acker
22 and by myself, the similarity of System V releases
23 between the 2003 agreement and the 1994 agreement, what
24 Sun is obtaining is additional copies of those same
25 releases, correct?

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1 A. Yes.
2 Q. You were asked by Mr. Acker, paraphrasing,
3 whether, to your understanding, SCO had the right to
4 license the prior System V products with the UnixWare
5 license. Do you recall that question?
6 A. Yes.
7 Q. Mr. Sontag, I want to show you language from,
8 again, amendment 1 to the APA, which provides as follows:
9 Buyer, Santa Cruz, shall have the right to
10 enter into amendments of the SVRX licenses as may be
11 incidentally involved through its rights to sell and
12 license UnixWare software.
13 Do you see that?
14 A. Yes.
15 Q. And then, at the bottom, it says:
16 Buyer shall not enter into new SVRX licenses
17 except in the situation specified in little "i."
18 Do you recall reviewing this language during
19 your tenure at SCO?
20 A. Yes.
21 Q. Do you recall forming a view as to what it
22 meant for SCO to have the right to license SVRX material
23 incidentally to licensing UnixWare?
24 A. That was the basis of my belief that SCO had
25 that right.

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1 Q. You were shown this language earlier,
2 Mr. Sontag -- well, the first paragraph, the letter in
3 which Mr. Luehs, I think it is, says that the agreement
4 between Santa Cruz and Novell requires prior written
5 approval from Novell for all new agreements or changes to
6 current agreements relating to System V.
7 Do you see that language?
8 A. Yes.
9 Q. Is it your understanding that if Santa Cruz was
10 executing a Unixware license that it didn't need to get
11 Novell's approval to license SVRX material with that
12 UnixWare license?
13 A. That was my understanding.
14 Q. Now, this document is dated May 20, 1996,
15 correct?
16 A. Yes.
17 Q. This is a letter from Novell three days later,
18 May 23, 1996, in which Novell says that it has
19 transferred to SCO Novell's existing ownership interest
20 in UNIX system-based offerings and related products. Do
21 you see that language?
22 A. Yes.
23 Q. Was it your understanding, during your tenure
24 at SCO, that SCO could license UnixWare however it
25 wanted?

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1 A. Yes. That was my understanding.
2 Q. And was it your understanding that SCO could
3 license System V products with UnixWare? Was that your
4 understanding?
5 A. Yes.
6 Q. You were asked about the Microsoft agreement.
7 Do you recall that?
8 A. Yes.
9 Q. And, again, in summary, can you tell me how it
10 came to be that you ended up in negotiations with
11 Microsoft regarding that agreement?
12 A. In early 2003, we came in contact with
13 Microsoft representatives who were interested in pursuing
14 a possible license to UnixWare technologies to use in
15 some of their, what they called UNIX-compatibility
16 products within Microsoft Windows. It started a set of
17 negotiations that occurred through the early part of 2003
18 culminating in the UnixWare license agreement with
19 Microsoft.
20 Q. Now, in the time leading up to the beginning of
21 those negotiations, had SCO made any public statements or
22 assertions that there was any SCO IP in any Microsoft
23 products?
24 A. I believe there had been some, you know, broad
25 discussion that there might be IP issues, and not only in

182


1 Linux but other operating systems, including possibly
2 Windows.
3 Q. And was that a focus of your discussions with
4 Microsoft or was it more collateral?
5 A. It certainly was a portion of the discussion
6 because they certainly wanted to have, you know,
7 appropriate IP coverage for their products.
8 Q. Now, in Section 2 of the Microsoft agreement,
9 SCO releases any claims it might have against Microsoft;
10 is that right?
11 A. Yes.
12 Q. In that agreement, Section 2, did SCO purport
13 to release any of Novell's claims that it might have
14 against Microsoft?
15 A. No.
16 Q. Did SCO claim to have the right to release
17 claims for IP that it didn't own?
18 A. No.
19 Q. Section 2.2 of the Microsoft agreement which
20 you spoke about earlier is a license for Microsoft
21 products.
22 A. Yes.
23 Q. Does that section pertain to any particular
24 technology?
25 A. It pertains to UnixWare.

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1 Q. Did you purport to license to Microsoft any
2 intellectual property that you didn't have rights in?
3 A. No.
4 Q. This is the term sheet that was shown to you
5 earlier. Can you tell me a little bit about how this
6 came to be created?
7 A. I think there was a desire to -- that Microsoft
8 wanted to know what we could possibly have available to
9 license to them. They had, you know, certain things that
10 they were interested in. And I, you know, with the help
11 of others, put together a list of possible topic areas
12 that could be of interest to Microsoft that was the basis
13 for starting a discussion.
14 Q. Is that list of products in paragraph 3 in any
15 particular order?
16 A. No, they are not.
17 Q. The System V term that you assumed Microsoft
18 would be familiar with?
19 A. I think they would be.
20 Q. Perhaps even more so than UnixWare?
21 A. Yes.
22 Q. Section 3 of the Microsoft agreement was a
23 Unixware license, correct?
24 A. Yes, it was.
25 Q. Was it a full UnixWare license?

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1 A. It was a limited UnixWare license to only a
2 limited set of Microsoft products.
3 Q. Your understanding of this Court's August '07
4 order is that Novell owns the SVRX copyrights that are in
5 UnixWare. Is that fair to say?
6 A. I do understand that.
7 Q. So, when you licensed Microsoft UnixWare, you
8 were licensing the right to use Novell copyrighted
9 material under the Court's order; is that right?
10 A. That would be a determination that you could
11 come to.
12 Q. Did you pay Novell any money for that Section 3
13 UnixWare license?
14 A. No, we did not.
15 Q. Do you know if Novell is seeking any money from
16 that Section 3 license?
17 A. I don't believe they are.
18 Q. Section 4 of the Microsoft agreement. Could
19 you describe your discussions with Microsoft regarding
20 that section.
21 A. Microsoft was interested in having a couple of
22 options when they undertook the source code license for
23 UnixWare. They wanted to be able to first evaluate the
24 source code and determine if it would be useful to them.
25 So that was provided to them under the initial agreement.

185


1 They wanted to have the option to be able to use the
2 technology in a set of products, which was the first
3 option or Section 3 of the agreement. And then they also
4 wanted to have the rights to use the UnixWare source code
5 and derivative products in all of their products, broadly
6 across all of Microsoft products. And that was the
7 primary component of Section 4. So that was a second
8 option that they could obtain.
9 Q. In your discussions with Microsoft regarding
10 this agreement, what did you say to them about the
11 subject matter of the expanding UnixWare license in
12 Section 4? What do you recall discussing with them?
13 A. That it was a significant expansion of their
14 rights for how they could utilize that UnixWare source
15 code, that it wasn't just a limited set of products that
16 had a fairly small, you know, distribution footprint, but
17 it was all of Microsoft's products and millions and
18 millions of products. And that was a substantial
19 expansion in how they could use that UnixWare
20 technology.
21 Q. Now, in Section 4 you also licensed Microsoft
22 OpenServer source code; is that right?
23 A. Yes.
24 Q. What do you recall discussing with Microsoft
25 about the utility of that license?

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1 A. That allowed Microsoft to also have the ability
2 to have compatibility with a, you know, broad range of
3 OpenServer applications that were out there for which it
4 was a large installed base and large customer base of
5 OpenServer so that it was another very big and
6 substantial part of that, you know, Section 4 agreement
7 was an OpenServer source code agreement.
8 I do not believe there is anybody else that has
9 ever been able to license the OpenServer source code.
10 Q. SCO had never licensed the OpenServer source
11 code?
12 A. No. It was contemplated, I think, with a few
13 possible customers but was never executed with any
14 licensee. So OpenServer had never been licensed in
15 source code before.
16 Q. OpenServer was the more profitable of the two
17 main products at SCO, correct?
18 A. It was 2/3 of the business.
19 Q. Openserver had a larger installed base than
20 UnixWare did, correct?
21 A. That's correct.
22 MR. ACKER: Objection. Leading.
23 THE COURT: Sustained. It is leading.
24 Q. When you were negotiating the 2003 Microsoft
25 agreement, did you have a view as to the value of the

187


1 OpenServer license relative to the value of the expanded
2 UnixWare license in Section 4?
3 A. I would view them both as, you know,
4 substantial portions of the value of Section 4. How I
5 would split between them, I'm not sure. I mean, the
6 expansion of UnixWare distribution was significant. The
7 source code, you know, license for OpenServer on its own
8 was significant.
9 Q. And, in your view at the time, why was it
10 relevant to Microsoft's business, for us lay people, that
11 there was a large installed base of OpenServer users?
12 A. It provided Microsoft with potential
13 opportunities to sell products to that large installed
14 base of OpenServer customers, and so, in some cases, for
15 the first time Microsoft Windows-based products to a set
16 of customers that they may have never dealt with
17 before.
18 Q. Now, having exercised the options in Section 3
19 and Section 4, and with the Section 4 license, Microsoft
20 now had a full UnixWare license, correct?
21 A. That is correct.
22 Q. And Section 4 is also a license to older System
23 V releases; is that right?
24 MR. ACKER: Your Honor, it's still leading, the
25 last two questions. Every question ends with "correct"

188


1 or "is that right?" It's his witness.
2 MR. NORMAND: This is a cross examination, but
3 if we want to do a hard and fast rule, I'll ask only
4 open-ended questions.
5 THE COURT: It sort of is and sort of isn't.
6 MR. ACKER: I understand that, but, given the
7 relationship between counsel and the witness, I think
8 it's appropriate to be a non-leading question.
9 THE COURT: Try not to lead. I'll sustain the
10 objection. Where are you?
11 MR. SONTAG: You're asking where I am with the
12 witness?
13 THE COURT: No, just on this last series of
14 questions.
15 MR. SONTAG: As to the Microsoft agreement?
16 Probably five minutes.
17 THE COURT: Just the last couple of questions.
18 MR. SONTAG: Do you want me to start over?
19 THE COURT: Just the last couple of questions.
20 I don't know that he answered them. We got a leading
21 objection.
22 MR. SONTAG: I'm sorry. I understand.
23 Q. By Mr. Sontag: I guess the question was: Why
24 were you willing to enter into a license to prior
25 releases of System V in Section 4 of the Microsoft

189


1 agreement?
2 A. Well, it was typical with a, you know, UnixWare
3 and preceeding UNIX source code licenses, to provide a
4 license to the prior products. The fact we broke it up
5 and put it into the second release was just, in some ways
6 a convenient place to put it. But it was not
7 something -- the prior products was not something that
8 Microsoft was viewing as highly valuable. I mean, we did
9 not provide all the versions that -- of prior product.
10 And we had told them that we may not be able to
11 provide them all because they are very old, you know,
12 source tapes that, in some cases, had turned to dust.
13 But there was no objection on the part of Microsoft that
14 they didn't receive all the versions that were listed on
15 that schedule. We provided them with the ones that we
16 were able to get, and that was sufficient for them, and
17 there was no desire or need on Microsoft's part to alter
18 the value of, you know, that agreement based on that.
19 Q. Did you have any understanding, at the time of
20 the execution of the agreement, as to whether Microsoft
21 was going to use those prior releases of System V as
22 stand-alone products?
23 A. No. We had no expectation that they would use
24 it. If you are developing a software product, again, as
25 I've said a number of times previously today, you would

190


1 want to utilize the latest version of the source code for
2 the development of a new product. And especially with a
3 UNIX-based operating system product that has built into
4 it a high degree of backward compatibility, you would
5 want to use the latest to take advantage of all the new
6 features and bug fixes, and you would still have that
7 backward compatibility. There is no need to go to a
8 prior release.
9 Q. Do you recall entering into an amendment 3 to
10 the Microsoft agreement?
11 A. Yes.
12 Q. And can you recall --
13 Actually, can you bring it up? And blow up
14 that paragraph B.
15 Do you recall discussing and negotiating this
16 paragraph in the agreement?
17 A. Yes.
18 Q. It says, and I understand it's hard to read:
19 The parties recognize that, A, parts of the
20 software, excluding material portions of the kernel,
21 may be distributed by Microsoft by default in the
22 majority of the editions.
23 This is in section 3, right?
24 A. yes.
25 Q. Section 3 is a license for UnixWare, correct?

191


1 A. Yes.
2 MR. ACKER: Same objection, Your Honor.
3 Leading.
4 MR. NORMAND: We are talking about the text of
5 an agreement. We can take five minutes and walk through
6 it.
7 THE COURT: You can answer that, which you did.
8 THE WITNESS: Yes.
9 Q. What is your understanding as to what rights
10 Microsoft gained in this paragraph B of amendment 3?
11 A. That they would be able to license the UnixWare
12 software into a majority of their, you know, Windows
13 products.
14 Q. Did you have any view, at the time of the
15 execution of the agreement or its amendments, as to
16 whether Microsoft had any intention to use the older
17 System V releases in its Windows products?
18 A. My understanding is they had no intention of
19 using the older UNIX versions for anything other than a
20 source analysis project that they were contemplating.
21 Q. Now, I asked you a similar question earlier as
22 about Sun, as to whether you had a view as to whether
23 they intended to use the older System V releases as a
24 stand-alone product. Do you recall my asking you that
25 question?

192


1 A. I kind of recall that.
2 Q. We discussed drivers. Do you recall that?
3 A. Yes.
4 Q. Did there come a time when you entered into a
5 clarification agreement as to the Sun 2003 agreement
6 regarding the subject matter of drivers?
7 A. Yes. There was an amendment to the agreement
8 that was related to the drivers, binary and source code
9 drivers for UnixWare.
10 Q. This is SCO Exhibit 189. I think you might
11 have objected to it. Let me ask one foundational
12 question. Were the drivers sent?
13 A. The drivers were --
14 Q. The drivers addressed in this agreement, were
15 they sent to Sun?
16 A. Yes, they were.
17 MR. NORMAND: I would like to move the document
18 into evidence, Your Honor.
19 MR. ACKER: No objection.
20 THE COURT: SCO 189 is received.
21 (SCO Exhibit 189 received in evidence.)
22 Q. And can you quickly summarize for me how this
23 came about?
24 A. I don't recall the specifics, but I think it
25 was very important to Sun that they receive all the

193


1 drivers that they possibly could to UnixWare that -- for
2 which there were not restrictions that we could not
3 provide them to them, and this amendment was just for
4 them to ensure that they were receiving all of the
5 drivers for UnixWare that we could provide them. And we
6 did, in turn, provide those UnixWare drivers to them.
7 Q. Do you know whether Sun received the rights to
8 OpenServer drivers?
9 A. I believe we provided those drivers to them as
10 well.
11 Q. Do you know whether Sun received any rights
12 under this clarification to drivers to older System V
13 releases?
14 A. No. I believe they did not.
15 MR. NORMAND: Novell 422, if you could blow
16 that up.
17 Q. Do you recall reviewing this document,
18 Mr. Sontag, with Mr. Acker?
19 A. Yes, I do.
20 Q. And do you recall a reference -- I think it's
21 on page 2. This is a reference to SCO IP. Do you see
22 that reference?
23 A. Yes.
24 Q. And do you see, in the second line in the top
25 paragraph, SCO's intellectual property ownership or

194


1 rights?
2 A. Yes, I do.
3 Q. In this agreement, did you purport to release
4 or license anything other than SCO's intellectual
5 property rights?
6 A. No, we not.
7 Q. Did you pruport to release or license any of
8 Novell's rights?
9 A. No, we did not.
10 Q. There's a reference, I believe, in that
11 agreement to UNIX-based code. Do you recall that?
12 A. Yes.
13 Q. Is UnixWare UNIX-based code?
14 A. Yes, it is.
15 Q. Is OpenServer UNIX-based code?
16 A. Yes, it is.
17 Q. To the best of your knowledge, did you ever pay
18 Novell anything for the System V code or old SVRX code in
19 any release of UnixWare or OpenServer?
20 A. No, we did not.
21 Q. There is a reference in Novell Exhibit 422 to,
22 quote, SCO's standard commercial license. Do you recall
23 that phrase?
24 A. Yes.
25 Q. Do you have an understanding as to whether,

195


1 under its standard commercial license for UnixWare,
2 whether SCO licensed prior System V products?
3 A. I know that in the UnixWare source code
4 agreement that was provided, up until the most recent
5 versions of the UnixWare source code agreement, that the
6 prior versions were specifically listed. In the most
7 recent version of the UnixWare license, that was omitted
8 only for the purpose of reducing the size of the
9 agreement, but my understanding is that it was still
10 provided to a customer if they requested it, and it was
11 implicitly included.
12 Q. Do you have an understanding as to why that
13 was?
14 A. Because that was the standard practice of SCO
15 and its predecessors in terms of licensing the UNIX
16 software, that source code licensees of different
17 versions could interact with each other or share code in
18 certain cases, if they were of a similar licensing level,
19 and that was enabled by the fact that they would be
20 licensed to all prior versions, depending on the version
21 they licensed at that point.
22 So, that was a standard practice that had been
23 used by SCO, by Novell, by AT&T, USL and part of the
24 licensing of the UNIX code, and it continued with
25 UnixWare.

196


1 Q. You were shown a series of agreements towards
2 the end of Mr. Acker's questions, and I think we can
3 safely lump those together and call them SCOsource
4 agreements. Do you recall doing that?
5 A. Yes.
6 Q. How did you come about arriving at a price for
7 these SCOsource agreements?
8 A. I -- we determined that we wanted to price it
9 basically at the same price as UnixWare, so a comparable
10 capability of UnixWare, if it was a 1-CPU system, was
11 priced at, you know, $1400, which was the same price for
12 UnixWare.
13 Q. And who did you speak with on that issue?
14 A. Oh, I had gotten input from John Maciaszek and
15 also from Jeff Hunsaker, who were more familiar with the
16 UnixWare price list than I was.
17 Q. Now, was there any source code given to a
18 licensee under a SCOsource license?
19 A. No, there was not.
20 Q. Could you describe, to the best of your view,
21 what the license was in the SCOsource license?
22 A. It was primarily a release, aspects of a
23 covenant not to sue and a Unixware license and SCO IP
24 license.
25 Q. Now, you were shown the phrase in several of

197


1 the agreements, quote, SCO's IP rights. Do you recall
2 that?
3 A. Yes.
4 Q. In these SCOsource agreements, did SCO purport
5 to release anything other than its rights?
6 A. No, we did not.
7 Q. Did SCO purport to license anything other than
8 its rights?
9 A. No.
10 Q. You were shown Novell Exhibit 227. This is the
11 Jeff Hunsaker e-mail. Do you recall that?
12 A. Yes.
13 Q. And in that e-mail, Mr. Hunsaker's says that
14 this is not a Unixware 7.13 SKU. Do you recall that?
15 A. Yes.
16 Q. Do you know what SKU is?
17 A. Stock-keeping unit or -- a box of UnixWare
18 software, in this case.
19 Q. Were these SCOsource agreements simply UnixWare
20 licenses for purposes of stock keeping?
21 A. No. They were a separate package and agreement
22 and separate SKU.
23 Q. Now, you were asked further about
24 Mr. Hunsaker's statement that --
25 If we could pull it up.

198


1 Mr. Hunsaker's says:
2 There is no connection between a UnixWare
3 OpenServer and the SCO UNIX IPC license whatsoever.
4 Do you see that statement?
5 A. Yes.
6 Q. Now, taking it alone, just pulled out of that
7 document, do you agree with it?
8 A. There is no similarity of the license? Yes.
9 The licenses are not the same.
10 Q. Now, did Mr. Hunsaker negotiate these
11 agreements, by the way?
12 A. No, he not.
13 Q. Who did?
14 A. I was involved in that, along with our
15 attorneys.
16 Q. What was Mr. Hunsaker's position at the time
17 that he made this statement?
18 A. I believe he was over worldwide sales for the
19 UNIX business. He did not have responsibility for
20 primary sales for SCOsource-related products. That was
21 done by me through my own sales group.
22 Q. Did you ever speak with Mr. Hunsaker in
23 conjunction with your negotiation of the SCOsource
24 agreements?
25 A. No.

199


1 Q. Did you have discussions, Mr. Sontag, with
2 Novell in late 2002?
3 A. Yes, we did.
4 Q. Can you describe the nature of those
5 discussions?
6 A. We had a number of back and forth discussions
7 between representatives from Novell and myself and, in
8 some cases, with Darl McBride. In our case, we were
9 interested in clarifying the language of the Asset
10 Purchase Agreement related to excluded assets. In the
11 case of Novell, they were interested in finding out or
12 interested in SCO's involvement with United Linux. That
13 was the overall nature of the conversations in late
14 2002.
15 Q. Can you recall who you had discussions with?
16 A. I had a number of conversations with Gregg
17 Jones and at least one conversation with another
18 gentleman from Novell, whom I can't remember his name at
19 this moment.
20 Q. And did you have occasion to speak with
21 Mr. McBride about his discussions with Novell?
22 A. I did.
23 Q. And what was the general nature of those
24 discussions?
25 MR. ACKER: Objection. Hearsay, Your Honor, if

200


1 he's going to relate what Mr. McBride told him.
2 MR. NORMAND: This goes to state of mind, but
3 we can cut it short if there are concerns, Your Honor.
4 THE COURT: He can answer the question asked,
5 the general nature, without saying what somebody else
6 said. So, talk about the general nature.
7 THE WITNESS: His discussions, as I understood
8 it from Mr. McBride, were very similar to my discussions
9 that I had primarily with Gregg Jones.
10 Q. Did you, in your discussions with Novell, ever
11 ask Novell to partner in the SCOsource program that you
12 were contemplating?
13 A. No, I did not.
14 Q. Did you, when you were speaking with Novell,
15 ever ask Novell to participate in the SCOsource
16 program?
17 A. No, I did not.
18 Q. Did you have a view, at the time of these
19 discussions, as to whether Novell would have any right to
20 any monies you might receive under the SCOsource
21 program?
22 A. No. I did not believe they would have any
23 rights.
24 Q. Did anyone from Novell suggest to you that they
25 thought they had some right to the monies you might

201


1 receive under this program?
2 A. No.
3 Q. Did you have a view, at the time of these
4 discussions, as to whether SCO had the authority to
5 execute the SCOsource agreements it was contemplating?
6 A. I believed we had those rights.
7 Q. Did anyone, in your discussions with Novell,
8 ever suggest to you that they thought they could limit
9 your authority to execute these agreements that you were
10 contemplating?
11 A. No.
12 Q. Did you ever have discussions with Novell
13 about -- before the execution of the agreement -- your
14 authority to excute the 2003 Sun agreement?
15 A. No, we did not.
16 Q. Did you have any trepidation about whether SCO
17 had the authority to execute that agreement?
18 A. No. I had no concern.
19 Q. Now, the 1994 Sun agreement, that concerned a
20 buyout; is that right?
21 A. Yes, it did.
22 Q. In what sense?
23 A. It was a buyout for Sun of their binary
24 distribution of Solaris, so they would not have to make
25 payment for every copy of Solaris that they sold.

202


1 Q. Do you know whether, at the time of the 1994
2 agreement, Sun was paying binary royalties?
3 A. Prior to the 1994 --
4 Q. Yes.
5 A. -- time frame? I believe they likely were
6 making royalty payments.
7 Q. Do you know whether, as of the 2003 agreement,
8 Sun was paying any binary royalties?
9 A. No. They would not be.
10 Q. How come?
11 A. Because they already had a buyout in the 1994
12 agreement.
13 Q. In the 2003 agreement, did you amend or change
14 that 1994 buyout?
15 A. No, we did not.
16 Q. Can you explain what you mean?
17 A. The buyout related to -- you know, to Solaris
18 for SVR code binary distribution and was taken care of by
19 the '94 agreement.
20 Q. And did you have any understanding, as of the
21 2003 agreement, as to whether Sun was intending to use
22 the UnixWare technology and license?
23 A. It was my understanding they were intending to
24 use the UnixWare technology.
25 Q. Did you have an understanding, at the time of

203


1 that 2003 agreement, as to whether any of the code that
2 was in Solaris was also in UnixWare?
3 A. There would be substantial portions that would
4 be very much the same because Solaris was, you know,
5 based on, you know, a previous version of UNIX System V,
6 similar to UnixWare.
7 Q. Did you have a view, as of the time of the 2003
8 agreement, as to whether Sun would have paid UnixWare
9 royalties for its distribution of Solaris if not for the
10 terms of the 2003 agreement?
11 MR. ACKER: It calls for speculation and
12 hearsay, Your Honor.
13 MR. NORMAND: It does call for speculation. I
14 don't know that that's necessarily a basis for precluding
15 him from answering.
16 THE COURT: I'll let him answer.
17 Go ahead.
18 THE WITNESS: No. I don't believe Sun would
19 have to be paying a UnixWare royalty for what they were
20 doing with Solaris prior to the 2003 agreement.
21 Q. Now, what about what they would do with Solaris
22 after the 2003, if all they had gotten was a Unixware
23 license and if there was code in UnixWare that was also
24 in Solaris? What kind of royalties would Sun be
25 paying?

204


1 A. Similar to the royalties that we would have
2 other UnixWare source code licensees pay.
3 Q. And can you explain what kind of royalties
4 those were?
5 A. It would vary, but it would be on the order of
6 tens to hundreds of dollars per unit shipped on an
7 ongoing royalty basis.
8 Q. Now, at the time of the execution of the
9 Microsoft agreement, what was your view as to the
10 relative value of the SVRX component of that agreement?
11 A. Insignificant. It was licensed as a matter of
12 course. I don't believe that Sun -- or Microsoft was
13 valuing it at all. What they were valuing was the
14 UnixWare source code, the UnixWare binary distribution
15 rights and broad binary distribution rights and
16 OpenServer source code distribution rights.
17 Q. And at the time of the 2003 Sun agreement, what
18 was your view as to the relative value of the new
19 SVRX-related rights that Sun had acquired?
20 A. They had almost all of those rights already.
21 What they acquired were new rights to UnixWare, which is
22 what they needed to develop their, you know,
23 Solaris-on-Intel product offerings.
24 MR. NORMAND: No further questions, Your
25 Honor.

205


1 THE COURT: Thank you. I assume your redirect
2 will be more than three to five minutes?
3 MR. ACKER: Yes. That's a good assumption,
4 Your Honor.
5 THE COURT: My hearing starts at 2:30 so we
6 will take up again at 8:30 in the morning. If you want
7 to leave stuff here, if you just push it aside a little,
8 nobody is going steal it. I don't think they would want
9 it. We'll see you at 8:30 in the morning.
10 And you get to come back, Mr. Sontag.
11 MR. NORMAND: Thank you, Your Honor.
12
13
14
15
16
17
18
19
20
21
22
23
24
25 (Whereupon the proceedings were concluded.)

206

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

1 Salt Lake City, Utah, Wednesday, April 30, 2008
2 * * * * *
3 THE COURT: You may resume the stand, Mr. Sontag.
4 You may proceed, Mr. Acker.
5 Good morning, everyone.
6 MR. ACKER: Good morning, Your Honor. Thank you.
7 CHRISTOPHER S. SONTAG,
8 called as a witness at the request of Novell,
9 having been previously duly sworn, was examined
10 and testified further as follows:
11
REDIRECT EXAMINATION
12 BY MR. ACKER:
13 Q. Good morning, Mr. Sontag.
14 A. Good morning.
15 Q. You testified yesterday in response to questions of
16 counsel that the price for the SCO intellectual property
17 licenses, that series of licenses we looked at yesterday
18 afternoon, those prices were set as the price equal to the
19 most current version of UnixWare; is that right?
20 A. The most current and applicable version of
21 UnixWare. So single CPU or multi CPU version of UnixWare.
22 Q. So if a potential licensee was using an older
23 version of SVRX, say an older version of 1992 or 1994, and
24 wanted to take one of these licenses, under the SCOsource
25 program, SCO would still charge that licensee the same price

210

1 they would pay for the most current version of UnixWare;
2 correct?
3 A. That is correct.
4 Q. And that was true for all of the SCOsource IP
5 licenses; correct?
6 A. Yes.
7 Q. Counsel asked you a very direct question yesterday
8 regarding whether or not there is any UnixWare code in Linux.
9 And I wrote down your answer, and you said that there very
10 well could be; correct?
11 A. Yes.
12 Q. But the bottom line is that you simply do not know
13 if there was any unique UnixWare code in Linux; right?
14 A. I believe your question was about uniquely UnixWare
15 code. Given that UnixWare has developed out of, you know,
16 many versions of the UNIX, you know, development tree, much of
17 that code is uncommon. And to uniquely parse out something
18 that's different with UnixWare versus previous releases, I've
19 never done that analysis, never seen this analysis.
20 Q. Do you know if that analysis has ever been done,
21 that is, someone has sat down and parsed out what is unique to
22 the most recent version of UnixWare as opposed to what exists
23 in pre APA SVRX?
24 A. I don't know if that has been done.
25 Q. But the bottom line is that given that testimony,

211

1 you simply don't know if there's any code that is unique to
2 UnixWare that is in Linux; correct?
3 A. I do not.
4 Q. Counsel also asked you a series of questions about
5 the first phase of the SCOsource program that was referred to
6 initially in late 2002 and early 2003 as the SCO Tech program;
7 correct?
8 A. Yes.
9 Q. And you answered his questions regarding the
10 licensing of libraries of UNIX code; correct? Do you recall
11 that testimony?
12 A. Yes.
13 Q. Now, no licenses were ever issued under that
14 program, that is, the first phase of the program in which it
15 was contemplated that the libraries would be licensed; isn't
16 that right?
17 A. I do not believe there was any specific licenses
18 under that first release of the SCO Tech or early SCOsource
19 license.
20 Q. So the SCO Tech or the SCOsource licenses that
21 actually were issued were the Sun and the Microsoft license as
22 well as the series of additional licenses that we looked at
23 yesterday; correct?
24 A. Yeah. And I would separate out the Sun and the
25 Microsoft licenses from the series that you speak of. They're

212

1 separate types of licenses.
2 Q. But they were all SCOsource licenses; right?
3 A. They were all under the SCOsource division.
4 Q. Now, regarding the Sun agreement, if we could put
5 up Exhibit 187, Attachment 1, please.
6 Mr. Sontag, we put up on the screen Attachment 1 to
7 the 2003 Sun agreement. The first page of Attachment 1. And
8 you've testified that all of this software license, the 2003
9 license, was included in this attachment and licensed Sun
10 simply as legacy software or older versions of SVRX software
11 that was licensed along with the most recent version of
12 UnixWare.
13 A. Correct. And they already had a license to most of
14 this, anyways.
15 Q. And that was my next question. It's true, isn't
16 it, that Sun already had a license to all of this software on
17 the first page of Attachment 1 of 2002 license; right?
18 A. Yes. And that is -- again, that license for the
19 previous versions was just a standard practice. So, again,
20 licensing the latest version of UnixWare and incidentally
21 licensing all the previous versions.
22 Q. But because -- and that previous license, the 1994
23 Sun license to this exact same 30 versions of software was
24 fully paid up; correct?
25 A. Yes.

213

1 Q. And so Sun didn't need -- there was no need for Sun
2 to obtain a license. They didn't need a license, a re-license
3 to this additional 30 pieces of legacy software in 2004 except
4 that they wanted to expand their rights to distribute the
5 software; correct?
6 A. Again, this was all included just because it was a
7 standard practice of licensing the UnixWare source code.
8 Q. But Sun already had a license for this software;
9 right?
10 A. Yes.
11 Q. And what they wanted in the 2003 agreement was to
12 expand or, in your words, to soften the confidentiality
13 provisions relating to this software; correct?
14 A. Primarily, they wanted a license to the latest
15 version of UnixWare for their Intel work that they were doing.
16 Q. And with respect to this 30 versions of legacy
17 SVRX, they wanted to soften the confidentiality provisions
18 relating to the software; correct?
19 A. It was a minor part of the agreement.
20 Q. That's what Sun wanted; right?
21 A. Yes.
22 Q. And that's what SCO gave to them; correct?
23 A. Yes. It's all part of the agreement.
24 Q. Now, it's true, isn't it, that not all of this
25 pre-APA SVRX software is in the current version of UnixWare?

214

1 Correct?
2 A. Probably not. But I would suspect, you know,
3 anything that is valuable and important would still be in the
4 current version of UnixWare.
5 Q. But you've never done a line-by-line comparison to
6 determine what portions of this software, the legacy SVRX
7 software, is actually in the current version of UnixWare;
8 correct?
9 A. I have not.
10 Q. And you're not aware of anyone else having done
11 that analysis; correct?
12 A. I'm not aware of that analysis.
13 Q. And Sun didn't do that analysis, as far as you
14 know; correct?
15 A. Not that I know.
16 Q. And you're not aware of any expert for SCO doing
17 that analysis?
18 A. I'm not aware.
19 Q. And you're not aware of any technician or technical
20 person or engineer of SCO doing this analysis; correct?
21 A. No, I'm not.
22 Q. Now, you testified yesterday and you've already
23 testified today that SCO has a history of including older
24 versions of software when it licenses the most recent versions
25 of software; correct?

215

1 A. Yes. And SCO's predecessors in the UNIX business
2 did the same thing.
3 Q. But you also testified in answer to your questions
4 to counsel that you'd seen older licenses in which the legacy
5 software was routinely licensed, but recently there had been
6 contracts in which that hadn't been done; correct?
7 A. My understanding was in the most recent release,
8 most versions of the UnixWare source license, they removed the
9 long listings and prior products solely for the purpose of
10 reducing the size of the contract, though the older versions
11 were still implicitly included in those contracts.
12 Q. Well, when you say most recent, what time frame are
13 we talking about?
14 A. I think the chain was made with 7.1.3 versions of
15 the UnixWare source agreements.
16 Q. And what time frame was that?
17 A. That would be within the last, you know, five to
18 seven years. Prior versions 7.1.2, 7.1.1, my understanding is
19 that they did include the listings of all of the prior
20 releases.
21 Q. When you say listings, they would have that long
22 laundry list of the prior SVRX software?
23 A. That's correct.
24 Q. If I could show what we've marked and been admitted
25 as Exhibit 69.

216

1 (Time lapse.)
2 THE WITNESS: Okay.
3 Q. BY MR. ACKER: Exhibit 69 is a SCO license with a
4 company called CyberGuard; correct?
5 A. Yes.
6 Q. And what is being licensed with CyberGuard is
7 UnixWare 7.0; correct?
8 A. Yes.
9 Q. And this agreement was entered into 10 years ago;
10 right? 1998? Look at the bottom of the first page. See on
11 the signature page?
12 A. Yes.
13 Q. Mr. Broderick signed the license March of '98?
14 A. Yes.
15 Q. And if we take a look at -- we go back to SCO,
16 SCO 0978321. It's Paragraph 4.7 in the attachment.
17 A. 4.7?
18 Q. Yes.
19 A. Okay.
20 Q. See there's a heading there, Prior Products;
21 correct?
22 A. Yes.
23 Q. And the only prior products listed there are
24 UnixWare; correct?
25 A. Yes.

217

1 Q. And so there is no -- in this contract 10 years
2 old, there is no list of all the prior legacy software;
3 correct?
4 A. It appears to not be the case.
5 Q. So your testimony or your understanding about SCO's
6 practices isn't that always all the legacy software is
7 licensed is not accurate; right?
8 A. It appears in this case for this one particular
9 license. However, my understanding on this practice comes
10 from Bill Broderick who is the one who signed this contract.
11 Q. Kind of curious, isn't it?
12 A. And what he had told me was even if they did not
13 include it, if somebody asked for it, they would provide them
14 with a supplement that did include it.
15 Q. Let me show you what we've marked and admitted as
16 Exhibit 70. Will you take a look at that?
17 A. Okay.
18 Q. Exhibit 70 is another license. And this time it's
19 on behalf of Santa Cruz' predecessor to SCO, an entity called
20 DASCOM, Inc.; correct?
21 A. Yes.
22 Q. And again, this license was entered into 10 years
23 ago; correct?
24 A. Yes.
25 Q. And what was licensed was UnixWare operating

218

1 system; correct?
2 A. 7 operating system.
3 Q. And then if you go to the attachment,
4 paragraph 4.7, which is on SCO 1043328 --
5 A. Yes.
6 Q. -- do you have that? We have it on the screen.
7 Again, the only prior products listed are SCO UnixWare
8 Release 2.1 and 2.0; correct?
9 A. Those are the only ones listed.
10 Q. And again, we don't have a laundry list of all the
11 prior SVRX product; correct?
12 A. Not in this case.
13 Q. So this is another example that is inconsistent
14 with your understanding of what you've been told about SCO's
15 historical licensing practices; corrects?
16 A. Again, I was told that it was removed at some point
17 to simplify the contract. However, it was provided to any
18 customer that requested those prior releases.
19 Q. Let me show you what we've marked and has been --
20 of what SCO has marked and been admitted as SCO Exhibit 369.
21 A. Okay.
22 Q. SCO Exhibit 369 is a license between a Japanese
23 subsidiary of SCO and an entity called Alps Electric Company;
24 correct?
25 A. Yes.

219

1 Q. It's dated March 29th, 1996; right?
2 A. Yes.
3 Q. And if you take a look at SCO 1042588, you see --
4 we have it on the screen. This is a license for UNIX
5 Release 2.0. Do you see that?
6 A. Yes.
7 Q. And then if you go back to SCO 1042612, and the
8 attachment here is actually a listing of these prior products,
9 and this exhibit was intentionally left blank. So there was
10 no legacy software included in this license in 1996; correct?
11 A. In this particular license, no.
12 Q. Is it fair to say what we have here in Exhibits 69,
13 70 and 369 are examples that are inconsistent with your
14 understanding of SCO's historical licensing practices?
15 Correct?
16 A. Yes.
17 Q. And you weren't at SCO until 1992; correct?
18 A. At SCO?
19 Q. I mean you weren't at SCO until 2002; correct?
20 A. That is correct.
21 Q. So anything that you've learned about historical
22 licensing practices of the company were simply as a result of
23 something that's been told to you; correct?
24 A. That is correct.
25 Q. In questioning by counsel yesterday, you were asked

220

1 about -- I want to turn your attention to Section 2.2 of the
2 Microsoft agreement. In response to questions from counsel
3 you testified yesterday that the release and license in
4 Section 2 pertained to UnixWare. Do you recall that
5 testimony?
6 A. Yes.
7 Q. But it's true, isn't it, that Microsoft -- that
8 release and license didn't pertain just to UnixWare, it also
9 pertained to prior SR VX products because Microsoft's concerns
10 about those products being in their products would not have
11 assuaged unless they got released from the earlier products?
12 A. Actually I think the release was for all of SCO's
13 intellectual property rights.
14 Q. And when it includes all of SCO's intellectual
15 property rights that means both UnixWare and prior SVRX
16 products; correct?
17 A. And OpenServer and all of SCO's units and
18 intellectual property rights.
19 Q. And you also testified yesterday that Section 4 of
20 the Microsoft agreement, in that section Microsoft wanted to
21 use UnixWare and other System 4 products in their products;
22 right? Excuse me. They wanted to use UnixWare and other
23 System V products in their products, which is why they took
24 out the license in Section 4 in the Microsoft agreement?
25 A. They took out the license in Section 4 to expand

221

1 their rights for UNIX to a broader set of products.
2 Q. But your testimony yesterday was Microsoft was
3 considering including in their products both UnixWare and
4 other System V products; right?
5 A. No. The only thing that I would expect that they
6 were intending to include in their products was the latest
7 version of UnixWare. They also might possibly have included
8 some of the OpenServer source code software that we licensed
9 to them. The prior versions would not make sense to include
10 in new products.
11 Q. But it's true you're not aware of Microsoft ever
12 including any of either OpenServer, UnixWare or prior SVRX
13 products in their products; correct?
14 A. I do not know what they have done.
15 MR. ACKER: That's all I have, Your Honor.
16 THE COURT: Thank you, Mr. Acker.
17 Mr. Normand?
18
RECROSS-EXAMINATION
19 BY MR. NORMAND:
20 Q. Good morning, Mr. Sontag.
21 A. Good morning.
22 Q. Could you pull up Novell 187? Attachment 1.
23 Mr. Sontag, do you recall being asked about this
24 attachment this morning?
25 A. Yes.

222

1 Q. This is a list of System V prior products you said
2 earlier?
3 A. Yes.
4 Q. Do you know whether under the 1994 agreement with
5 Sun, Sun had already obtained copies to these System V
6 releases?
7 A. Source tapes or just rights to them?
8 Q. Either.
9 A. My understanding was that they had rights to all
10 these previous releases. I do not know if they had source
11 tapes for any of these previous versions.
12 Q. They had rights to use these -- do you have a view
13 as to whether or not they had rights to use these releases on
14 their CPUs?
15 A. Yes.
16 Q. You were asked about what was described as softened
17 confidentiality restrictions in the 2003 Sun agreement. Do
18 you recall that?
19 A. Yes.
20 Q. Were the confidentiality restrictions that
21 pertained to the older System V technology the same as the
22 confidentiality restrictions that pertained to UnixWare in the
23 2003 agreement?
24 A. I don't necessarily know. My understanding is
25 applied to all the new confidentiality provision in the 2003

223

1 agreement. My understanding is it applied to all the
2 versions.
3 Q. In your view, was there any difference in the way
4 that Sun could deal with the UnixWare source code as opposed
5 to the older System V releases?
6 A. No.
7 MR. NORMAND: Would you pull up Novell 369.
8 MR. ERIC WHEELER: 369?
9 MR. NORMAND: Yes.
10 THE COURT: SCO 369?
11 MR. NORMAND: Yes, Your Honor.
12 Q. BY MR. NORMAND: Do you recall being shown this
13 document by counsel?
14 A. Yes.
15 Q. This is the Alps agreement, the Nihon Alps
16 agreement?
17 A. Yes.
18 Q. Do you know whether Alps ever told Santa Cruz in
19 the negotiations of this agreement that they had no interest
20 in listing the prior products?
21 A. I do not know.
22 Q. That's not something that you ever discussed with
23 Mr. Broderick?
24 A. No.
25 Q. Pull up the bottom half.

224

1 What is the date of this agreement, Mr. Sontag?
2 A. March 29th, 1996.
3 MR. NORMAND: Could you pull up SCO 141. Go to the
4 next page. Blow up the bottom half.
5 Q. BY MR. NORMAND: What is the date of this document,
6 Mr. Sontag?
7 A. March 31st, 1997.
8 MR. NORMAND: And could you blow up the top half.
9 Q. BY MR. NORMAND: What do you understand this
10 document to be?
11 A. This is a supplement.
12 Q. Which company is it with?
13 A. With NCR. And I'm not sure what specifically it
14 would be related to.
15 Q. BY MR. NORMAND: Are you able to recognize now what
16 this document pertains to?
17 A. This looks like a UnixWare Release 2.1
18 International Edition right to use sublicensing-type fees and
19 agreement.
20 MR. NORMAND: Would you go to Page 24. Can you
21 blow up the top two thirds.
22 Q. BY MR. NORMAND: And do you recognize what this
23 represents on this page, Mr. Sontag?
24 A. A list of prior products.
25 Q. Now, this document is dated after the Alps license;

225

1 correct?
2 A. That is correct.
3 Q. And is this document dated after the APA?
4 A. No, it is not.
5 Q. Is it dated after the asset purchase agreement?
6 A. I'm sorry. Yes, it is. Yes, it is.
7 Q. Do you have any idea as to of all the UnixWare
8 licenses that were executed how many of them list the earlier
9 releases of System V?
10 A. I don't specifically, no. But my impression was it
11 was the majority.
12 Q. Who would be the person at SCO who would know that?
13 A. Bill Broderick is the person who would know.
14 Q. Mr. Sontag, who was the principal negotiator for
15 SCO in the 2003 Sun and Microsoft agreements?
16 A. I was.
17 Q. Did either Microsoft or Sun have any UnixWare
18 license prior to entering into those 2003 agreements?
19 A. No, they did not.
20 Q. How much did Microsoft pay for its limited UnixWare
21 license in Section 3?
22 A. In Section 3?
23 Q. Including the option to exercise section.
24 A. About $8 million, I believe.
25 Q. If I told you 7 million, would that --

226

1 A. That's, yeah.
2 Q. Now, as between Microsoft's limited license to
3 UnixWare in Section 3 and Sun UnixWare license, who had the
4 broader license?
5 A. Can you repeat the question?
6 Q. As between Microsoft's Section 3 UnixWare license
7 and the UnixWare license that Sun obtained under its 2003
8 agreement, who had the broader license?
9 A. Sun did.
10 Q. In your view, did Microsoft obtain any additional
11 UnixWare rights under Section 4 of its agreement?
12 A. Yes.
13 Q. In your view, did Microsoft pay additional money
14 for its additional UnixWare rights under Section 4 on top of
15 the 7 million in Section 3?
16 A. Yes, it did. I mean, it was significantly
17 broadened, as I testified before.
18 Q. As between Microsoft's full UnixWare license under
19 Sections 3 and 4 and Sun's license, who had the broader
20 license?
21 A. I would view them as being equal.
22 Q. And how much did Sun pay under its 2003 agreement?
23 A. About $10 million.
24 MR. NORMAND: No further questions, Your Honor.
25 THE COURT: Thank you, Mr. Normand.

227

1 Anything else of this witness?
2 MR. ACKER: Just a second, Your Honor.
3 (Time lapse.)
4 MR. ACKER: One question.
5
REDIRECT EXAMINATION
6 BY MR. ACKER:
7 Q. You just testified in response to counsel that you
8 viewed the rights that Microsoft obtained under Section 4 of
9 its license as being equal to what Sun obtained; is that
10 right?
11 A. Effectively, yes.
12 Q. Do you believe that Microsoft had open source
13 UnixWare under Section 4?
14 A. No, I don't.
15 MR. ACKER: Nothing else, Your Honor.
16 THE COURT: Thank you. I guess you meant two
17 questions.
18 MR. ACKER: I did. I apologize.
19 THE COURT: Mr. Normand?
20 That's all right.
21
RECROSS-EXAMINATION
22 BY MR. NORMAND:
23 Q. Mr. Sontag, having considered the question that was
24 just asked of you, in your view as between the full UnixWare
25 license that Microsoft had under Sections 3 and 4 and Sun's

228

1 UnixWare license, who had the broader UnixWare license?
2 A. Specifically to UnixWare, I view that they were
3 about equal. I mean, you also have to take into account,
4 which I don't think I fully explained with the previous
5 question, that Sun had significantly more rights in terms of
6 sublicensing and software distribution rights for their UNIX
7 technologies. So they're way further ahead in many ways. But
8 in terms of just distribution of UnixWare, they were
9 effectively comparable.
10 Q. All right. Would it be accurate to say that Sun
11 had broader rights with respect to UnixWare as to what counsel
12 described as open sourcing?
13 A. Modestly. I think I'm not an attorney, so it would
14 be difficult for me to be able to determine the differences in
15 terms of those agreements.
16 Q. Thank you.
17 THE COURT: Thank you.
18 Anything else?
19 MR. ACKER: No, Your Honor.
20 THE COURT: Thank you.
21 You may step down, Mr. Sontag.
22 I assume this witness may be excused?
23 MR. ACKER: Yes, Your Honor.
24 THE COURT: You can stay or go as you choose,
25 Mr. Sontag.

229


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