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Novell Intends to Appeal to the US Supreme Court; Asks for 90-Day Stay to File Petition for Writ of Certiorari - Updated
Tuesday, October 27 2009 @ 09:15 PM EDT

Novell intends to file a petition for a writ of certiori, asking the Supreme Court to review the 10th Circuit Court of Appeal's ruling in SCO v. Novell, and it has filed a motion with the Appeals Court asking for a 90-day stay so it can file the cert petition with the Supreme Court:

10/27/2009 - Open Document - [9705604] Motion filed by Appellee Novell, Inc. for stay of the Mandate Pending the Filing of a Petition for a Writ of Certiorari in the Supreme Court of the United States. Served on: 10/27/2009. Manner of service: clerk.

A petition for certiorari means this:
A document which a losing party files with the Supreme Court asking the Supreme Court to review the decision of a lower court. It includes a list of the parties, a statement of the facts of the case, the legal questions presented for review, and arguments as to why the Court should grant the writ.
Here's an example of one [PDF], and another one in a patent case [PDF], so you'll know what they look like. The Supreme Court can grant it or deny it, but Novell says it believes there is a very good chance it will be granted. It is asking the Appeals Court to grant the 90-day stay, so it can prepare its petition, but technically speaking, it can file the cert writ no matter what the appeals court says about the stay. But it would be difficult to do that and go back to Utah for the trial simultaneously. It would be weird for the court to deny the stay, in that normally courts don't like to see issues getting set up so that divergent rulings are possible in the same litigation.

The Supreme Court receives many more cert petitions than it grants, but this one seems very possible, since the ruling is so different from and even conflicts with other copyright rulings. Here's how Novell puts it:

This Court’s decision constitutes a departure from decisions of other federal courts of appeals that have confronted the important question of copyright law at issue in this case.
A departure isn't a big enough word, frankly. SCO opposes the stay, natch.

The law firm Mayer Brown held a series of teleconferences on federal appellate practice early this year, and the mp3s are all available. Here's the one on amicus briefs, and here is the one on considerations when deciding whether or not to ask for Supreme Court review. The description:
Petitioning the US Supreme Court for a writ of certiorari can be a time-consuming and expensive process. The first step in deciding to embark on that course should be determining whether the Court is likely to hear the case at all. Ken and Tim discussed how to judge if a case is "certworthy," the mechanics of filing, the do's and don'ts of writing a petition for certiorari, and the ins and outs of opposing a certiorari petition.
To tell you the truth, I wish Groklaw could file an amicus brief. I'm very satisfied that Novell is taking this step. I didn't see how they could not do it, after reading the ruling and the subsequent denial of reconsideration. The issue is much bigger than just SCO v. Novell, and it needs to be resolved, so everyone knows what the law is, regardless of where in the US one resides. You really can't have one federal law that is interpreted in wildly different ways depending on which circuit you happen to live in.

Update: You will not believe it, but the two remaining judges who originally ruled on the appeal, Justices Lucero and Baldock, have immediately denied Novell's request. Might that explain why Novell feels it would be wise to get outside that court's radar? Denying a request like this is weird:

10/28/2009 - Open Document - [9705975] Order filed by Judges Lucero and Baldock denying Attorney motion for stay filed by Appellee Novell, Inc.. Served on 10/28/2009.

There is a footnote saying McConnell has resigned, he being the third judge, but the two "considered the motion". Like, for five minutes?

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

Appeal No. 08-4217

IN THE
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

________________

THE SCO GROUP, INC.,

Plaintiff-Appellant,

vs.

NOVELL, INC.,

Defendant-Appellee.

____________________

On Appeal from the United States District Court for the District of Utah
The Honorable Dale A. Kimball (Case No. 2:04-CV-00139-DAK)

________________

APPELLEE NOVELL, INC.'S MOTION TO STAY THE MANDATE
PENDING THE FILING OF A PETITION FOR A WRIT OF CERTIORARI
IN THE SUPREME COURT OF THE UNITED STATES

ANDERSON & KARRENBERG
Thomas R. Karrenberg
Heather M. Sneddon
[address, phone, fax]

MORRISON & FOERSTER LLP
Michael A. Jacobs
George C. Harris
Grant L. Kim
David E. Melaugh

Pursuant to Federal Rule of Appellate Procedure 41(d)(2) and Tenth Circuit Rule 41(B), appellee Novell, Inc. respectfully requests this Court to stay its mandate until January 18, 2010, which is 90 days after entry of this Court's October 20, 2009 order denying Novell's petition for rehearing and rehearing en banc. A stay will provide Novell with time to prepare and file a petition for a writ of certiorari in the Supreme Court of the United States, which would be due on January 18, 2010. See Sup. Ct. R. 13.1.

Rule 41(d)(2)(a) provides that a court of appeals may grant a stay of a mandate for a period not to exceed 90 days "pending the filing of a petition for a writ of certiorari in the Supreme Court," so long as the movant shows "the certiorari petition would present a substantial question and there is good cause for a stay." Fed. R. App. P. 41(d)(2)(a); see also 10th Cir. R. 41.1(B) (requiring "a substantial possibility that a petition for writ of certiorari would be granted"). Both of those conditions are met here. This case presents a fundamental question of copyright law on which the circuits are in disagreement: whether the written-transfer requirement of the Copyright Act, 17 U.S.C. § 204(a), requires a writing that identifies with reasonable certainty the specific subject matter and the essential terms of the copyright transfer. Because resolution of that threshold legal question could entirely foreclose the copyright and related tort claims, thus significantly

2

reducing the issues for trial in this case (as well as in two other cases), a stay of the mandate pending a petition for certiorari is warranted.

1. Statement of the Case: In a published opinion issued on August 24, 2009, this Court held that an ambiguous contractual provision that did not specify which particular copyrights were being transferred could nonetheless satisfy the written-transfer requirement of the Copyright Act See 17 U.S.C. § 204(a) ("Section 204(a)"). The Court held that Section 204(a) requires only that the written instrument demonstrate an intent to convey some copyrights "as opposed to other categories of rights" so that, "when it is clear that the parties contemplated that copyrights transfer, * * * a linguistic ambiguity concerning which particular copyrights transferred" does not preclude the conveyance. Slip Op. 21. In adopting that standard, this Court recognized that the "paramount goal" of Section 204(a) is designed to "enhance[] predictability and certainty of ownership." Id. at 18 (quoting Konigsberg Int'l Inc. v. Rice, 16 F.3d 355, 357 (9th Cir. 1994)). Nevertheless, the Court adopted a view of the written-transfer requirement that it acknowledged will require juries to determine, many years after the fact, what precise copyrights an ambiguous agreement conveys based upon the "self-serving testimony offered by partisan witnesses whose recollection is hazy from the passage of time and colored by their conflicting interests."

3

Id. at 26 (quoting Trident Center v. Connecticut Gen. Life Ins. Co., 847 F.2d 564, 569 (9th Cir. 1988)).

The Court also expressly recognized that "some courts," by contrast, "have found that a writing is insufficient to transfer copyrights unless (1) it reasonably identifies the subject matter of the agreement, (2) is sufficient to indicate that the parties have come to an agreement, and (3) states with reasonable certainty the essential terms of the agreement." Slip Op. 19.

On September 8, 2009, Novell filed a petition for rehearing and rehearing en banc of this Court's August 24, 2009 opinion. On September 17, 2009, this Court ordered plaintiff-appellant SCO Group, Inc. ("SCO") to file a response, which SCO filed on October 1, 2009. On October 20, 2009, this Court denied Novell's petition for rehearing and rehearing en banc. A petition for a writ of certiorari to the Supreme Court of the United States would be due for filing in that Court on January 18, 2010. See Sup. Ct. R. 13.1.

2. There Is More Than A "Substantial Possibility" That A Petition For A Writ Of Certiorari Would Be Granted: In this case, there is a significant likelihood that the Supreme Court will grant certiorari. This Court's decision constitutes a departure from decisions of other federal

4

courts of appeals that have confronted the important question of copyright law at issue in this case.

In contrast to the ruling by this Court, the Fifth and Ninth Circuits, in construing Section 204(a), have required significant specificity in the written conveyance. See, e.g., Lyrick Studios, Inc. v. Big Idea Prods., Inc., 420 F.3d 388 (5th Cir. 2005), cert. denied, 547 U.S. 1054 (2006); Konigsberg Int'l, Inc. v. Rice, 16 F.3d 355 (9th Cir. 1994). As both the Fifth and Ninth Circuits have explained, a written instrument must be specific enough to "force[] a party who wants to use the copyrighted work to negotiate with the creator to determine precisely what rights are being transferred." Lyrick Studios, 420 F.3d at 392 (quoting Effects Assocs. Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990)) (emphasis added); Konigsberg, 16 F.3d at 357 (quoting same). The writing must contain sufficient information to "serve as a guidepost for the parties to resolve their disputes" so that the "parties need only look to the writing that sets out their respective rights," rather than resorting to the courts to resolve the disagreement. Konigsberg, 16 F.3d at 357 (emphasis added). If the standard articulated by the Fifth and Ninth Circuits were applied to this case, SCO could not prevail, because the writings at issue lack the specificity required by those courts to be a valid instrument of conveyance.

5

Moreover, that this Court found support for its ruling in the decisions of the Second and Seventh Circuits (Slip Op. 23) bolsters the likelihood that the Supreme Court will grant certiorari review. As this Court explained, the Seventh Circuit has held that "a written asset transfer agreement may satisfy Section 204(a) even when it 'does not mention the word "copyright" itself.'" Ibid. (quoting Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 413 (7th Cir. 1992)). Likewise, this Court cited the Second Circuit decision in Jasper v. Bovina Music, Inc., 314 F.3d 42 (2d Cir. 2002), for the proposition that, so long as there is a writing, the question of what is conveyed is a matter of contract interpretation. Slip Op. 20 (citing Jasper, 314 F.3d at 47); but see Playboy Enters., Inc. v. Dumas, 53 F.3d 549, 564 (2d Cir. 1995) (holding that document purporting to recognize prior "assignment * * * of all right[s], title and interest" is insufficient to transfer copyrights under 17 U.S.C. § 204(a)), cert. denied, 516 U.S. 1010 (1995). If, as this Court believed, its decision is in accord with the decisions of those circuits, the Supreme Court will likely grant review to reconcile the divergent decisions of the five federal courts of appeals that have addressed the written instrument requirement of Section 204(a). See S. Ct. R. 10(a). Indeed, the Supreme Court of Indiana has recently noted this conflict in the circuits, observing that "the federal circuits do not yet agree on the nuances" of what

6

is required to satisfy Section 204(a). Conwell v. Gray Loon Outdoor Mktg. Group, Inc., 906 N.E.2d 805, 816 (Ind. 2009). 1

Finally, this case raises an issue of exceptional importance under the Copyright Act, which will likely interest the Supreme Court. The current duration of copyright protection is extraordinarily long: the author's lifetime plus a term of 70 years, 17 U.S.C. § 302(a), or, for pseudonymous works or for works made for hire, a term of 95 years from first publication or 120 years from the year of creation, whichever comes first, id. § 302(c). A uniform standard throughout the United States is thus vital to ensure that Section 204(a) promotes Congress' "paramount goal" of "enhancing predictability and certainty of copyright ownership." Community for Creative Non-Violence v. Reid, 490 U.S. 730, 749 (1989) (citing H.R. Rep. No. 94-1476, at 129 (1976)). That goal is best served by a standard that requires that any transfer of copyright ownership be specified in a document that will survive long after memories have faded and witnesses have become

7

unavailable. Indeed, the Supreme Court recognizes the importance of nationwide uniformity in the interpretation of the Copyright Act, as demonstrated by its review this very Term of an issue regarding the enforceability of unregistered copyrights. See Reed Elsevier, Inc. v. Muchnick, No. 08-103 (U.S.). 2

3. There Is Good Cause For Granting a Stay: If the mandate is not stayed, this case will return to the district court for trial, even though a legal issue that could resolve completely the copyright and related tort claims would be pending on a petition for a writ of certiorari in the Supreme Court. That would cause a waste of judicial resources and would force the parties to litigate in two courts simultaneously. Indeed, good cause particularly exists here because, as SCO has acknowledged, an adverse ruling for SCO in this case will ultimately affect how two other federal district court actions concerning the same copyrights will proceed. Thus, absent a stay of the mandate, there is a significant possibility that those issues would unnecessarily proceed to trials in three separate actions if the Supreme Court reviews and reverses the decision of this Court.

8

4. Appellant Opposes The Stay: Pursuant to Tenth Circuit Rule 27.3(C), counsel for Novell contacted counsel for SCO regarding this motion and SCO's counsel has stated that SCO objects to a stay of the mandate.

CONCLUSION

For the foregoing reasons, this Court should grant a stay of its mandate until January 18, 2010, so that appellee Novell is allowed adequate time to prepare and file a petition for a writ of certiorari in the Supreme Court.

Respectfully submitted,

/s Michael A. Jacobs
MORRISON & FOERSTER LLP
Michael A. Jacobs
George C. Harris
Grant L. Kim
David E. Melaugh
[address, phone, fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg
Heather M. Sneddon
[address, phone, fax]

Date: October 27, 2009

_________________

1 As a result of the circuit split over the proper interpretation of 17 U.S.C. § 204(a), federal district courts also are divided as to the specificity required for a written instrument to convey a copyright. Indeed, a number of district courts outside the five circuits that have addressed the issue have required significantly greater specificity under Section 204(a) than did the Court in this case. See, e.g., Forasté v. Brown Univ., 290 F. Supp. 2d 234, 239-240 (D.R.I. 2003); American Plastic Equip., Inc. v. Toytrackerz, LLC, No. 07-2253, 2009 U.S. Dist. LEXIS 27787, at *16-17 (D. Kan. Mar. 31, 2009); Morgan v. Hawthorne Homes, Inc., No. 04-1809, 2009 U.S. Dist. LEXIS 31456, at *47-50 (W.D. Pa. Apr. 14, 2009).

2 This Court's ruling has generated significant interest from a number of industry groups which depend upon UNIX or have interests in UNIX, and it is expected that many of those entities potentially affected by this Court's decision will file amicus briefs in support of Novell's petition, which will further increase the prospect for Supreme Court review.

9

CERTIFICATE OF SERVICE

I, Michael A. Jacobs, certify that on this 27th day of October, 2009, a true and correct copy of the foregoing APPELLEE NOVELL, INC.'S MOTION TO STAY THE MANDATE PENDING THE FILING OF A PETITION FOR A WRIT OF CERTIORARI IN THE SUPREME COURT OF THE UNITED STATES was served via electronic mail to the following recipients:

David Boies
Robert Silver
Edward Normand
BOIES, SCHILLER & FLEXNER LLP
[address]

Brent O. Hatch
Mark F. James
HATCH, JAMES & DODGE, PC
[address]

Stuart Singer
BOIES, SCHILLER & FLEXNER LLP
[address]

Devan V. Padmanabhan
DORSEY & WHITNEY LLP

Counsel for Plaintiff-Appellant
The SCO Group, Inc.

Dated: October 27, 2009

s/ Michael A. Jacobs
MORRISON & FOERSTER LLP
[address, phone, fax, email]

10

CERTIFICATE OF DIGITAL SUBMISSION I, Michael A. Jacobs, certify that no privacy redactions were necessary for this filing. This APPELLEE NOVELL, INC.'S MOTION TO STAY THE MANDATE PENDING THE FILING OF A PETITION FOR A WRIT OF CERTIORARI IN THE SUPREME COURT OF THE UNITED STATES submitted in digital form is an exact copy of the written document filed with the Clerk. This digital submission has been scanned for viruses with the most recent version of a commercial virus-scanning program (using Symantec AntiVirus v.10.1.4.4, last updated April 4, 2009) and, according to the program, is free of viruses.

Dated: October 27, 2009

s/ Michael A. Jacobs
MORRISON & FOERSTER LLP
[address, phone, fax, email]

11


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