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To read comments to this article, go here
SCO Files Motion to Dismiss Unresolved Claims with Prejudice (SCO v. Novell) - Updated
Monday, October 20 2008 @ 08:30 PM EDT

Finally, it's here:
561 - Filed & Entered: 10/20/2008
Notice of Voluntary Dismissal
Docket Text: NOTICE of Voluntary Dismissal of Its Unresolved Stayed Claims With Prejudice filed by Counter Defendant SCO Group (Attachments: # (1) Text of Proposed Order) (Normand, Edward)

562 - Filed & Entered: 10/20/2008
Reply Memorandum/Reply to Response to Motion
Docket Text: REPLY to Response to Motion re [554] MOTION for Entry of Judgment and in support of [561] NOTICE of Voluntary Dismissal of Its Unresolved Stayed Claims With Prejudice filed by Counter Defendant SCO Group. (Attachments: # (1) Text of Proposed Order Proposed Final Judgment)(Normand, Edward)

Whoa. Is SCO throwing in the towel on these claims?

Update: I knew there had to be a trick. If you read the Proposed Order, it's chock-o-block full of materials you don't find in the reply memorandum, and it looks to me like SCO is trying to dismiss with prejudice not only its own claims, but Novell's too. Huh? I have all the documents as text for you. See what you think when you read them.

Oh. I just noticed something else. They ask the court to rubber stamp their thought that execution of the court's orders in August of 2007 and this July should be stayed until the automatic stay is lifted by the bankruptcy court in Delaware! But ... sputter... choke...pass out with laughter... it was already lifted regarding this Utah business. Man, oh, man. They don't want to have to pay Novell. They'd rather spend their last dimes on an appeal, I guess. But the claims in arbitration are still stayed, so I don't get what they think they are doing. They never quit, the Boies Boyz.

Here's the opening paragraph from its Reply:

In order to expedite the resolution of this case and foreclose further disputes about finality, SCO will voluntarily dismiss with prejudice those portions of its severed and stayed claims that remain pending. While SCO believes that the position set forth in its initial motion is legally correct -- that its voluntary dismissal of pending claims with the right to pursue them upon remand perfects finality under controlling law -- it is more important for SCO to avoid extended litigation on this issue.
So, out go the claims about copyright infringement (with respect to Novell), breach of the APA and TLA and unfair competition re any copyrights SCO got post-1995.

All SCO's chips are now placed on the appeal. And so SCO's claims just got smaller, once again, or they would if the court agrees.

So you can keep track, here's SCO's original motion and Novell's opposition. As you'll recall, Novell is pointing out that the arbitration is not over, and those claims are still stayed by the bankruptcy court. SCO can't waive them on behalf of Novell or on behalf of the arbitration panel or the bankruptcy court, I don't think. Then there is the constructive trust issue, which SCO fought to get the bankruptcy court to retain as its own. How can SCO waive that in Utah? I confess, they have me spinning. Either that or they are.

Here's the actual wording Novell used when it asked to drop its 3rd claim back in September of 2007, a motion that was successful, despite SCO opposition:

II. NOVELL DOES NOT SEEK A GENERAL DISMISSAL WITHOUT PREJUDICE, ONLY A NARROW RIGHT TO RENEW THE CLAIM.

Though the Court is authorized to dismiss claims without prejudice under Rule 41 (and that is in fact the default), Novell seeks only considerably more narrow rights here. Pursuant to the terms of the dismissal described in the proposed order filed herewith, Novell shall only have the right to renew its Third Claim should there be any subsequent adjudication or trial in this action or any enlargement of the issues for trial beyond that contemplated by the parties' August 17, 2007 Joint Statement. Absent such a subsequent adjudication or enlargement, Novell would have no right to renew this Claim.

The part in red, Steve Martin points out in a comment, was left out by SCO. Here's SCO's language:
8. Pursuant to the parties' Joint Statement dated August 17, 2007, and Supplemental Joint Statement dated August 24, 2007, Novell's claims for Slander of Title (Count I), Breach of Contract (Count II), and Declaratory Relief (Count V) are voluntarily dismissed, with the right to pursue these claims only in this action, should there be a subsequent adjudication or trial in this action.

9. Pursuant to the Court's Order dated September 7, 2007, granting Novell's Motion to Voluntarily Dismiss Its Third Claim for Relief dated August 24, 2007, Novell's claims for Breach of Contract (Count III) are voluntarily dismissed, with the right to pursue these claims only in this action, should there be a subsequent adjudication or trial in this action.

10. Pursuant to the parties' Joint Statement dated August 17, 2007, Novell's claims for punitive damages under any claim are dismissed, with the right to seek such relief only in this action, should there be a subsequent adjudication or trial in this action.

Here's the August 17, 2007 joint status report, by the way. One of the things Novell reserved the right to pursue should there ever be any subsequent adjudication, trial or enlargement was punitive damages. And here's the August 24th joint status report [PDF] also referenced by SCO. It reads, in pertinent part, like this:
The parties report that they have agreed that Novell shall dismiss its Second and Fifth Claims for Relief without prejudice to renewing these claims should there be any subsequent adjudication or trial in this action or any enlargement of the issues for this trial beyond that contemplated by the August 17, 2007 Joint Statement.

Here's the September 7, 2007 court order and the language it used:

Novell's Third Claim for Relief is dismissed, with Novell having the right to renew such claim only in there event that there is any subsequent adjudication or trial in this action that retries its Fourth, Sixth, Seventh, or Eight Claims for Relief or there is any enlargement of the issues for trial beyond that contemplated by the August 17, 2007 Joint Statement.
Why did SCO leave that language out?

Here are all the documents as text, sequentially, 561 and then 562 and finally the proposed order as text:

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

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

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

Devan V. Padmanabhan (admitted pro hac vice)
DORSEY & WHITNEY LLP
[address, phone, fax]

Stephen N. Zack (pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]
Attorneys for Plaintiff The SCO Group, Inc.

Stuart Silver
BOIES SCHILLER & FLEXNER
[address, phone, fax]

Attorneys for Plaintiff, The SCO Group, Inc.

______________________________________

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
______________________________________

THE SCO GROUP, INC.,
a Delaware corporation,

Plaintiff/Counterclaim-Defendant,

vs.

NOVELL, INC.,
a Delaware corporation,

Defendant/Counterclaim-Plaintiff.

____________________________________

SCO'S MOTION TO VOLUNTARILY
DISMISS ITS UNRESOLVED STAYED
CLAIMS

Civil No.:2:04CV00139
Judge Dale A. Kimball
Magistrate Brooke C. Wells

___________________________________

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. ("SCO"), for the reasons set forth in SCO's Memorandum in Support of Its Motion For Entry of Final Judgment and Reply Memorandum in Support of Its Motion for Entry of Final Judgment, and pursuant to Rule 41 of the Federal Rules of Civil Procedure, respectfully moves this Court to voluntarily dismiss SCO's unresolved stayed claims with prejudice.

DATED this 20th day of October, 2008.

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

BOIES, SCHILLER & FLEXNER LLP
David Boies
Robert Silver
Stuart H. Singer
Edward Normand

DORSEY & WHITNEY LLP
Devan V. Padmanabhan

By: /s/ Edward Normand

2

CERTIFICATE OF SERVICE

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc., hereby certifies that on this 20th day of October, 2008, a true and correct copy of the foregoing SCO's Motion to Voluntarily Dismiss Its Unresolved Stayed Claims was electronically filed with the Clerk of Court and delivered by CM/ECF to:

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

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

By: /s/ Edward Normand

3

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

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

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

Devan V. Padmanabhan (admitted pro hac vice)
DORSEY & WHITNEY LLP
[address, phone, fax]

Stephen N. Zack (pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]
Attorneys for Plaintiff The SCO Group, Inc.

Stuart Silver
BOIES SCHILLER & FLEXNER
[address, phone, fax]

Attorneys for Plaintiff, The SCO Group, Inc.

______________________________________

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
______________________________________

THE SCO GROUP, INC.,
a Delaware corporation,

Plaintiff/Counterclaim-Defendant,

vs.

NOVELL, INC.,
a Delaware corporation,

Defendant/Counterclaim-Plaintiff.

____________________________________

SCO'S REPLY MEMORANDUM IN
SUPPORT OF ITS MOTION FOR
ENTRY OF FINAL JUDGMENT

Civil No.:2:04CV00139
Judge Dale A. Kimball
Magistrate Brooke C. Wells

___________________________________

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. ("SCO"), respectfully submits this Reply Memorandum in Support of its Motion for Entry of Final Judgment.

ARGUMENT

In order to expedite the resolution of this case and foreclose further disputes about finality, SCO will voluntarily dismiss with prejudice those portions of its severed and stayed claims that remain pending. While SCO believes that the position set forth in its initial motion is legally correct that its voluntary dismissal of pending claims with the right to pursue them upon remand perfects finality under controlling law it is more important for SCO to avoid extended litigation on this issue Accordingly, SCO has attached hereto a revised proposed form of Final Judgment that simply dismisses with prejudice those portions of the severed and stayed claims not resolved by this Court's summary judgment decision (that is, that part of the claims for copyright infringement, breach of the APA and TLA, and unfair competition that concern any SCO copyrights obtained after the Asset Purchase Agreement). As that is the sole substantive issue with respect to the entry of a Final Judgment, SCO respectfully submits that, with this Court's approval of the dismissal, there should be no question that a Final Judgment may now be entered.

The procedural issue Novell raises that these claims had been stayed pending arbitration by SuSE is easily disposed of. The stay of those claims obviously was entered to prevent their litigation, not to prevent their dismissal. In any event, SCO respectfully requests that the Court treat SCO's pending applications as a motion to vacate the stay to permit the dismissal with prejudice of those parts of these claims not resolved by the Court's summary judgment decision.

2

The requested dismissal will complete resolution of all claims in this case:

  • All of SCO's unstayed claims, as well as the portions of SCO's stayed claims based on pre-APA copyrights, were dismissed by the Summary Judgment Order.
  • Several of Novell's counterclaims were dismissed by motion or stipulation.
  • All of Novell's other counterclaims were resolved by the Summary Judgment and Trial Orders, except the issue of the amount of the constructive trust. Subsequently, the parties stipulated to that amount.
  • Therefore, the only claims that remain open are the stayed claims based on post-APA copyrights and other UNIX technology indisputably owned by SCO.1

The dismissal of SCO's pending claims with prejudice will thus resolve the only issues pending before the Court. If the motion for voluntary dismissal is granted, there will be nothing left for the Court to do but execute judgment. Accordingly, SCO respectfully requests expedited consideration of its Motion for Voluntary Dismissal of Its Unresolved Stayed Claims and Motion for Entry of Final Judgment.

CONCLUSION

For the foregoing reasons, SCO respectfully requests that the Court permit SCO voluntarily to dismiss its unresolved stayed claims with prejudice and moves the Court to enter Final Judgment in this action.

3

DATED this 20th day of October, 2008.

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

BOIES, SCHILLER & FLEXNER LLP
David Boies
Robert Silver
Stuart H. Singer
Edward Normand

DORSEY & WHITNEY LLP
Devan V. Padmanabhan

By: /s/ Edward Normand


1 Novell states (at 9, 10, and 13) that unresolved "aspects of the case" include "any issues still outstanding in Bankruptcy Court" which allegedly "remain to be resolved in Bankruptcy Court." These vague assertions contradict Novell's plain statements (in its responses to the Court's order to submit a proposed Final Judgment) that the only two matters that remained open were the unresolved stayed claims and the amount of the constructive trust. Both of those issues are now fully resolved: the first, by this motion, and the second, by stipulation.

4

CERTIFICATE OF SERVICE

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc., hereby certifies that on this 20th day of October, 2008, a true and correct copy of the foregoing Reply Memorandum in Support of SCO's Motion for Entry of Final Judgment was electronically filed with the Clerk of Court and delivered by CM/ECF to:

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

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

By: /s/ Edward Normand

5

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

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

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

Devan V. Padmanabhan (admitted pro hac vice)
DORSEY & WHITNEY LLP
[address, phone, fax]

Stephen N. Zack (pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]
Attorneys for Plaintiff The SCO Group, Inc.

Stuart Silver
BOIES SCHILLER & FLEXNER
[address, phone, fax]

Attorneys for Plaintiff, The SCO Group, Inc.

______________________________________

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
______________________________________

THE SCO GROUP, INC.,
a Delaware corporation,

Plaintiff/Counterclaim-Defendant,

vs.

NOVELL, INC.,
a Delaware corporation,

Defendant/Counterclaim-Plaintiff.

____________________________________

[PROPOSED] FINAL JUDGMENT

Civil No.:2:04CV00139
Judge Dale A. Kimball
Magistrate Brooke C. Wells

___________________________________

Whereas by Memorandum Decision and Order dated August 10, 2007, the Court having ruled on the parties' summary judgment motions, and the matter having come before the Court for trial on April 29 and 30 and May 1 and 2, 2008, and the Court having issued its Findings of Fact, Conclusions of Law, and Order dated July 16, 2008, and the parties having stipulated or moved to dismiss the claims remaining after the foregoing Orders, and the Court having considered the submissions of the parties concerning the entry of Final Judgment, and good cause appearing, it is ORDERED, ADJUDGED, AND DECREED that:

1. SCO's claims for Slander of Title (Count I) and Specific Performance (Count III) are dismissed pursuant to the Court's Memorandum Decision and Order dated August 10, 2007.

2. SCO's claims for Breach of Contract (Count II), Copyright Infringement (Count IV), and Unfair Competition (V) are dismissed pursuant to the Court's Memorandum Decision and Order dated August 10, 2007, insofar as these claims are based on ownership of pre-APA UNIX and UnixWare copyrights.

3. SCO's remaining claims, for Breach of Contract (Count II), Copyright Infringement (Count IV), and Unfair Competition (V), are voluntarily dismissed with prejudice.

4. With respect to Novell's claims for Declaratory Relief (Count IV), pursuant to the Court's Memorandum Decision and Order dated August 10, 2007, Novell is entitled to direct SCO to waive claims against IBM, Sequent, and other SVRX licensees; Novell is such claims on SCO's behalf; and SCO is obligated to recognize such a waiver. In addition, pursuant to the Court's Findings of Fact, Conclusions of Law, and Order dated July 16, 2008, SCO was not authorized under the APA to amend, in the 2003 Sun Agreement, the confidentiality provisions of Sun's 1994 SVRX buyout agreement with Novell, and SCO

2

needed to obtain Novell's approval before entering into the amendment; but SCO was fully authorized under the APA to enter into other parts of the 2003 Sun Agreement without any approval by Novell, and was also fully authorized under the APA to enter into the 2003 Microsoft Agreement and the SCOsource Agreements with Linux end-users without any approval by Novell. 5. With respect to Novell's claims for Constructive Trust/Restitution/Unjust Enrichment (Count VI), Breach of Fiduciary Duty (Count VII), and Conversion (Count VIII), pursuant to the Court's Findings of Fact, Conclusions of Law, and Order dated July 16, 2008, Judgment is hereby entered in favor of Novell for $2,547,817, for the revenues from the 2003 Sun Agreement attributable to the unauthorized amendment of the SVRX confidentiality provisions in Sun's 1994 SVRX buyout agreement with Novell. Pursuant to the parties' agreement reflected in Novell's Unopposed Submission Regarding Prejudgment Interest dated August 29, 2008, that award is increased by $918,122 in prejudgment interest through August 29, 2008, plus $489 per diem thereafter until the date of this Judgment.

6. Further with respect to Novell's claim for a Constructive Trust (Count VI), as reported in Novell's Submission Regarding the Entry of Final Judgment dated August 29, 2008, the parties have reached an agreement as to the amount of the constructive trust ($625,486.90), and the parties will be reporting that amount to the Bankruptcy Court in the related bankruptcy proceeding, if they have not already done so.

7. Novell's claims for Accounting (Count IX) are mooted by the Court's Memorandum Decision and Order dated August 10, 2007.

8. Pursuant to the parties' Joint Statement dated August 17, 2007, and Supplemental Joint

3

Statement dated August 24, 2007, Novell's claims for Slander of Title (Count I), Breach of Contract (Count II), and Declaratory Relief (Count V) are voluntarily dismissed, with the right to pursue these claims only in this action, should there be a subsequent adjudication or trial in this action.

9. Pursuant to the Court's Order dated September 7, 2007, granting Novell's Motion to Voluntarily Dismiss Its Third Claim for Relief dated August 24, 2007, Novell's claims for Breach of Contract (Count III) are voluntarily dismissed, with the right to pursue these claims only in this action, should there be a subsequent adjudication or trial in this action.

10. Pursuant to the parties' Joint Statement dated August 17, 2007, Novell's claims for punitive damages under any claim are dismissed, with the right to seek such relief only in this action, should there be a subsequent adjudication or trial in this action.

11. For the reasons set forth above and in the Court's Orders referenced above, this case is closed. Execution shall be stayed until relief from the automatic stay is obtained from the United States Bankruptcy Court for the District of Delaware in the case entitled In re: The SCO Group, Inc, Case No. 07-11337(KG).

DATED this ______ day of ________________, 2008.

BY THE COURT

Dale A. Kimball
United States District Court Judge

4


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