Here is our eyewitness account of what happened at today's appeals court hearing in the SCO v. Novell appeal, thanks to Groklaw member Clocks, who traveled to Denver, to the
U.S. Tenth Circuit Court of Appeals to attend. Thank you, Clocks. Here's a picture of what the courtrooms there look like, to give you an idea. The hearing was in Courtroom II.
I must caution, as he does, that you can almost never get a definite idea of how a court will rule just from the hearing, and he explains why. I have to say, though, that from his report, it sounds encouraging to me.
Stuart Singer of Boies Schiller argued for SCO, and I gather he did a fabulous job with very little to work with. Considering that Boies Schiller claims it is "way into the red" on SCO, it's interesting that they still sent one of their very best, a partner in the firm. Michael Jacobs of Morrison & Foerster argued for Novell, and he is consistently excellent. Both attorneys, Clocks says, were spectacular to watch.
I know you are dying to know how it went. I'd say from this report that it went very well indeed. Here's the only possible sticky wicket that I see in the report:
McConnell stated something to the effect that the language for the exclusion in Amendment 2 includes all copyrights and trademarks other than the ones "that are required". He also said that he has no problem with the premise that they have not shown what is required and the appeals court likely will not rule on that, but he didn't see how that would not be an issue for trial. Clocks found some biographical information about the three appeals court justices for us, and I'll put that after his account, after a double row of stars. He also checked today to find out what all those boxes of exhibits Novell filed with the court were, so we could find out if we need them or if we have them already. He says they are the record from the District Court, which heaven only knows we have here on Groklaw in detail.
Here is the docket entry regarding today's hearing:
05/06/2009 -  -
Case argued by Stuart Singer for appellant and Michael Jacobs for
appellee and submitted to Judges Lucero, Baldock and McConnell.
The full report from Clocks:
It's really important to understand that the format of an appeals oral
argument is quite different from trial or some motion hearings. The judges
are really an active presence here. Basically each side has 15 minutes on
the clock in which to make their argument. There is little to no
monologuing but rather, right from the start, the judges ask the attorneys
questions during their time to probe for information that they need. The
judges have already read all of the paperwork before them before walking
into the room. They also come to the bench with some things they would like
to see come out during oral argument, points of clarification or the
attorney's position on a specific subject they are thinking about.
Oh, and remember that the appeals are generally focused on procedure and
propriety of action, NOT the facts. Those are the domain of the court of
first instance. The appeals court is looking more narrowly at the basic
subject of "Should this case go back to the district court with some order
to do something different this time?"
When you see the transcript, you will see what I'm talking about. There is
a lot of back and forth between the judges and the attorneys. The judges
have intelligence (generally) and a measure of wit as well, which comes out
during questioning. In a case earlier in the day, there was a real gem
where counsel for an immigration petitioner indicated that there was no way
for her client to accurately provide an affidavit reflecting testimony from
5 months prior. She noted that any such statement from her client would "be
likely to be self-serving." Justice Lucero responded "By all means, that's what the
appeals court is all about; parties being self-serving.' [General laughter
in the court room.]
I will also warn the folks reading this from generally reading too much into
it. You are getting my notes on the questions that were asked and answers
given. The judges are asking clarification around specific points that they
would like to see more information on, or are looking to see what counsel
are thinking about something the judge has already thought of. So let's say
the court was leaning one way or another, they may still be asking hard
questions around the edges of their leanings on the filed briefs which may
be difficult for a party to answer -- even if the judges are leaning in that
The case was brought before Carlos Lucero (first Hispanic judge on the 10th,
by the way, and has served as president of the Colorado bar association
among other posts), Senior Judge Bobby Baldock, and Judge Michael McConnell
(for whom this was one of his last days on the bench for argument as he is
resigning later this year to take a position at Stanford).
My impression was that Judge Baldock was largely silent, Lucero was coming from
the perspective of trying to make the point that much of SCO's argument about
getting to parol evidence relies on FIRST finding ambiguity in the
contract, and McConnell spent much of his time in a back and forth with the
parties over the specific relationship of Amendment 2 to the APA and was
trying to find out exactly what amendment 2 did if "copyrights required for"
the UNIX business was "a null set" and if that were the case, why does
amendment 2 even exist?
Stuart Singer argued for SCO. Singer is amazing, and if he is
put in front of a jury, there is no doubt in my mind that we would see some
For those interested, the difference between mediocrity and the class of
attorney we had here is shown in the coherence, flexibility, preparation,
and articulation of both side's attorneys. They were both coherent and smooth, even
on direct examination by the judges. Singer in particular seemed
unflappable even when the judges repeatedly interrupted him early on from
going down the path of discussing the strength of his client's parol
evidence as moot until they determine that there is sufficient ambiguity to
address it. Both attorneys felt polished, prepared, and likely had a
number of prepared arguments in anticipation of probable questions, with the
applicable statutes and cases memorized to support
their arguments. They didn't get bogged down trying to
make their point even under direct. Also, Singer did a good job with his
last couple of minutes weaving in excerpts (out-of-context, to my ears) from
Jacobs' argument that made it sound like Novell's position suited SCO's own. Great
** THESE NOTES ARE NOT COMPLETE (People talk way too fast for that) **
Lucero started, when calling the case, with a note of irony / muted sarcasm,
calling the case and docket number and noting that "fortunately, this is not
a contentious case." [Laughter in courtroom.]
Singer started for SCO.
Singer stated that the district court's error was in disregarding the ten
strong witnesses they had to provide evidence around the business intent and
was in the middle of making a statement to the effect that an opposing side
usually has difficulty finding one witness from the other side that supports
their position and that SCO has ten.
Baldock or McConnell (I didn't write down which) interrupted to note that we
hadn't gotten that far yet. The court needs to find ambiguity to get to
parol evidence and to look at the strength of your parol evidence; the APA
has a plain exclusion for copyrights. Baldock jumped in with "I'm with
Judge McConnell, it's pretty clear on this to me."
Singer restated the number of witnesses and was starting a statement around
the business evidence that doesn't support that being the intent.
Court (didn't write down which judge said this) said that they "didn't want
to get there yet".
SCO stated that "when you look at the APA with amendments it creates
ambiguity". Asserted that Amendment 2 transferred the copyrights and the
district court did not make their decision within Amendment 2 making any
inferences with the reading most lenient to SCO in making summary judgment
The court, McConnell in particular, asked about the chronology of the
agreements and some of the work that Novell did to specifically add a clause
that stated the effective date of Amendment 2. They asked Singer whether
that had any impact on the issue here. Singer stated that it did not and that it
is their client's decision that the dating of Amendment 2 within the
document is irrelevant. McConnell came back with "I find it mysterious that
they would insist on language which you say makes no difference at all."
SCO said that the amendment date does not change how it modifies the APA and
that all of the causes of action related to this case are after Amendment 2
was signed anyway. He reiterated SCO's position that Amendment 2's date is
McConnell asked SCO about the differences in language between Amendment 2
and the representations that were made in SCO's brief. The difference of
versus "pertains to". "I think we can all agree that required for is
narrower than pertains to".
Singer stated that he thought that was arguable and was going to go on and
McConnell stated something to the effect of "yet you seem to be making your
case based on the 'pertains to' argument when the language is 'required for'"
SCO finished its time saying that they are asking for remand to a jury to
appropriately put the issues of whether the contract was clear and whether
the copyright transferred before a jury.
Michael Jacobs for Novell then took the podium and stated that there is a chronology to making
these kinds of agreements. There are business negotiations that happen that
form the basic intent of what they want to do with a legal document. Then
there are the legal negotiations where a different team takes over and
implements the technical parts to make sure that each party is properly
protected in whatever instrument is created to execute the business intent.
Bringing in the negotiators from the business portions of the agreement
process is irrelevant, and they would be unqualified to provide evidence as
they are not competent on the legal mechanisms required to implement the
Also stated that when you look at the amendment on top of the APA, it's an
integrated whole -- it's not a separate agreement that could create ambiguity
between the two.
Lucero asked about whether or not Amendment 2 created ambiguity in a
document that was on its face apparently clear in the form of the APA and
Jacobs said to look at it as the "entire package" and that the judge should
not have to look at the extrinsic evidence to make a determination on the
McConnell said that the amendment was a clarification to the APA and if that
is a clarification and if the legal language is inconsistent between the
agreement and the amendment, does it create an inconsistency?
Jacobs replied to the effect that the amendment is controlling because in
the chronology it specifically states that it is amending the terms of the
McConnell stated something to the effect that the language for the exclusion in
Amendment 2 includes all copyrights and trademarks other than the ones "that
are required". He also said that he has no problem with the premise that
they have not shown what is required and the appeals court likely will not
rule on that, but he didn't see how that would not be an issue for trial.
Jacobs indicated that 204(a) has to be met and there plainly needs to be an
instrument of transfer.
Lucero asked how Novell would characterize the sale.
Jacobs stated that SCO purchased the developers, the business licenses, the
sales streams -- much like some of the other business deals. Without the
copyrights, they get rights and didn't need ownership of the copyrights to
carry on that business.
The court (I didn't note which judge) stated that Jacobs was making it sound
like SCO was another licensee when it is the impression of the judges that
the deal with Santa Cruz was more expansive than that. Jacobs clarified
the way that SCO purchased the business and explained that what they
purchased was the right to take over the revenue stream and act as Novell's
SCO took the podium with just another minute or two of time (including a
small extension because Novell went over slightly).
Before SCO said anything, McConnell commented that "I hope you will address
the 204(a) issue."
Singer stated that he believed that the contracts satisfy 204(a) as 204(a)
even lists a memorandum as a means of conveyance for contracts.
McConnell asked, if the first transfer used a bill of sale then how does
Amendment 2 relate to that first bill of sale, when there is no other bill
of sale for further asset transfer?
SCO replied that they felt that Amendment 2 is like a curative deed in that
it was retroactively correcting the bill of sale through a contract to
address a loophole that had come up in a dispute with IBM before Amendment 2
had been signed.
McConnell said something about he didn't entirely accept that line of
reasoning and treating the contract amendment like a curative deed and
Lucero indicated SCO was out of time at that point and made his speech about
the appeal being fully briefed.
Senior Judge Bobby R. Baldock
Federal Judicial Service:
U. S. District Court, District of New Mexico
Nominated by Ronald Reagan on May 2, 1983, to a seat vacated by Edwin L.
Mechem; Confirmed by the Senate on June 6, 1983, and received commission on
June 7, 1983. Service terminated on January 24, 1986, due to appointment to
another judicial position.
U. S. Court of Appeals for the Tenth Circuit
Nominated by Ronald Reagan on October 7, 1985, to a seat vacated by Oliver
Seth; Confirmed by the Senate on December 16, 1985, and received commission
on December 17, 1985. Assumed senior status on January 26, 2001.
New Mexico Military Institute, 1956
University of Arizona College of Law, J.D., 1960
Captain, Adjutant General Staff, New Mexico National Guard, 1960-1970
Private practice, Roswell, New Mexico, 1960-1983
Adjunct professor, Eastern New Mexico University, Roswell Campus, 1962-1981
Judge Carlos F Lucero
Judge Carlos F. Lucero was appointed to the United States Court of Appeals
for the Tenth Circuit by President Clinton June 30, 1995.
Judge Lucero was born November 23, 1940, in Antonito, Colorado. He received
a B.A. degree from Adams State College, where he was student body president
and the editor of The South Coloradan, and a J.D. degree from the George
Washington University Law School in 1964.
Judge Lucero clerked for Judge William E. Doyle, United States District
Court for the District of Colorado, during the 1964-1965 term. Prior to his
clerkship, he was a staff aide for the United States Senate Judiciary
Subcommittee on Administrative Practice and Procedure. He entered private
practice in Alamosa, Colorado where he became senior partner of the law firm
of Lucero, Lester and Sigmund. He specialized in civil litigation, including
water and natural resource matters. He served as president of the Colorado
Bar Association in 1977-1978.
Judge Lucero is married to Dorothy Stuart Lucero. He is a member of the
American Bar Association, the Colorado Bar Association, of which he was
president, the San Luis Valley Bar Association, of which he was president,
and the Colorado and National Hispanic Bar Associations. He is a fellow of
the American College of Trial Lawyers, International Academy of Trial
Lawyers, International Society of Barristers, American Bar Foundation, and
the Colorado Bar Foundation, of which he was president.
While in private practice, Judge Lucero served on the Colorado Supreme Court
Board of Law Examiners, the ABA Action Commission to Reduce Court Cost and
Delay, the advisory board to the ABA Journal, the ABA Committee on the
Availability of Legal Services, the Board of Directors of Colorado Rural
Legal Services and the CBA Ethics Committee. He served on President Carter's
Presidential Panel on Western State Water Policy, and on the Board of
Directors of Colorado Rural Legal Services, the Colorado Historical Society,
and the Santa Fe Opera Association of New Mexico.
During his years of law practice, Judge Lucero made time available to teach
an annual undergraduate level course on Pre-Law Studies for students from
diverse backgrounds, as an Adjunct Professor at Adams State College in
Judge Lucero's chambers are in Denver, Colorado.
Judge Michael W. McConnell
Federal Judicial Service
U. S. Court of Appeals for the Tenth Circuit
Nominated by George W. Bush on September 4, 2001, to a seat vacated by
Stephen H. Anderson;
Confirmed by the Senate on November 15, 2002, and received commission on
November 26, 2002.
Michigan State University, B.A., 1976
University of Chicago Law School, J.D., 1979
Law clerk, Hon. J. Skelly Wright, U.S. Court of Appeals for the District of
Columbia Circuit, 1979-1980
Law clerk, Associate Justice William J. Brennan, Supreme Court of the United
Assistant general counsel, Office of Management and Budget, 1981-1983
Assistant to the solicitor general, U.S. Department of Justice, 1983-1985
Professor, University of Chicago Law School, 1985-1996
Professor, University of Utah College of Law, 1997-2002