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More on What Happened at the Nov. 20th SCO Bankruptcy Hearing - Updated 2Xs
Sunday, November 22 2009 @ 10:33 PM EST

I've been listening to the audio of the November 20, 2009 hearing in the SCO bankruptcy, and I'd like to share with you more details and clarifications about what happened, as I said I would. This was the hearing principally about the Wayne Gray motion to lift the stay [PDF]. I thought it would be useful to put everything we have ever collected on Gray and on the UNIX and UnixWare trademarks, all in one place, so you can meaningfully follow the Gray arguments and the counterarguments.

When we purchased the audio, the court didn't mention any time embargo, unlike what happens with transcripts, so I hope I can share the audio shortly, and I will check with the court next week about that. It's fascinating, but they may want to give the parties time to ask for any privacy redactions first. I'll share it as soon as I can without causing problems. Meanwhile, I'll tell you what I heard.

Update: The answer from the court was a firm no, not now, not ever. It's for personal use only.

The hearing opens with Judge Gross saying good morning to Bonnie Glantz Fatell, representing SCO's Chapter 11 Trustee, Edward Cahn, saying that it's good to see her again. So I gather they already know each other. She sounds like she is a New Yorker, to me, and she has that quickness that I associate with New Yorkers. I don't know why it is, and maybe I am biased, but it is a noticeable difference in New Yorkers, in general, and the rest of the U.S. They talk faster, they walk faster, and in my view they think faster too. Maybe you have to be fast to survive in New York City, and so, wherever you are from, you speed up to avoid being mowed down.

Hers is an impressive performance, particularly when you consider she wasn't there for most of SCO's litigation history, although the judge, as is his wont, is fairly immune to lawyers and such, as it's all very mushy in bankruptcy court compared to regular civil court, to my eyes anyway. For example, there is a serious question as to whether or not Gray even has standing in bankruptcy court. The judge doesn't think so, but he lets Gray's lawyer, Thomas Steele, start to argue the merits anyway, which results in a bit of a mess, when you consider he's going to then rule on a matter where he simply doesn't have all the evidence before him. Another court has already ruled on the merits, after all. And that Florida court was clear that there is no merit in Gray's claims.

Fatell quickly suggests that rather than go into the merits, they look at the relief asked for first. It's so incredible, what Gray wants, she likely figures that will put it into perspective for the judge, but the judge is very laid back, and he expresses that Gray and his attorney traveled a long way, so he lets them speak, reserving his decision on standing for later.

Some of what he hears is hearsay, and inaccurate hearsay, in Ms. Fatell's view, and mine, incidentally, and some turns out to be about some things that she'd been given no notice would even come up. So it all seemed odd and not so very fair, but Judge Gross is a laid-back judge.

It's the first time I've heard his voice, and he sounds, well, adorable. No disrespect, but he sounds like a really nice, pleasant person. Some of the "after you, Alphonse" things that turned me off about him in reading the transcripts before sounded totally different to me listening to this audio. He sounds like the kind of guy people give testimonials about, after he passes, telling about all the humane, kind things he quietly and without fanfare did for them over the years, and some in the group testifying would be guys who parked his car or cleaned his office. But it still amazed me that he let Gray's attorney have so much leeway. But then, it may just be in character. Nice people generally do give others leeway. Scammers count on that, actually.

The hearing began with the Boies Schiller retention order, because Joseph McMahon, from the US Trustee's Office, wasn't yet there, being in another hearing. He is the one objecting to the sealing of the AutoZone settlement, and Fatell says that while they had hoped to get that settled, they haven't been able to do so.

So they begin with the other items on the list, like paying Berger Singerman. They have agreed with them to let them keep the retainer they had, to pay their bills, but not anything further at this time.

Then, she mentions the Boies retention order. The judge interrupts to say that he's signed it already. She then tells him about the mistake in the chart, which he didn't notice prior to signing it. The chart and the text about payment to Boies Schiller upon certain events contradict each other. She says the signed order is fine, that it's just a typo, but she wanted to make sure there was no confusion since the chart and the text conflict. The text has it right, but not the chart.

I think it's fairly obvious that there could be confusion down the line, had she not spoken up, and probably even after she did. I can just see how it will go, judging from what happened with the Novell-Santa Cruz 1995 APA, which you can find with all the amendments and schedules on Groklaw's Contracts page. Someday, new successors-in-interest could show up, claiming that it's the chart that is correct, not the text, and they'll march in with a bunch of ex-employees who were involved in drawing up the order, or who heard about it in the hallways, and they'll all swear on a Bible that the chart is what they meant, not the text. If they lose, on the basis of the transcript of this hearing, they'll appeal, and then the appellate court will ignore the transcript and say in effect, how can *we judges* know who's right? Send it to a jury.

You think I jest? Wait until you hear what happened with the Wayne Gray motion to lift the stay. The problem is that when lawyers tell fibs or seriously redacted stories, shall we politely say, to courts or government agencies, down the road some donkey will ride into court on their fibs, claiming it's the God's honest truth. It simply *must* be true, because the lawyers said so, and to a *government* agency.

Yes, friends, the Gray attorney tells the court that because SCO told the USPTO in August 3, 2005 that it owned the UNIX and UnixWare trademarks, it is *undisputed* that they do own them. Here is that letter, four pages as four PDFs, one per page:

Page 1
Page 2
Page 3
Page 4
Novell, according to Gray, transferred everything to Santa Cruz in the 1995 APA, and SCO never transferred the trademarks back to Novell after 1995, so it couldn't assign them to X/Open in 1998, as claimed, and so the judge should somehow make SCO go to Florida and fight for the trademarks.

Excuse me, sir, but did you forget to tell the judge that the marks were very much disputed and that in the end SCO didn't get the marks, despite telling the USPTO some very odd things, that I and the rest of planet Earth would view as inaccuracies or at least only part of the story? And did you fail to point out that the 1996 assignment was a three-way document referencing an earlier 1994 agreement promising the trademarks to X/Open, and that the 1998 document was one that SCO, Santa Cruz, itself signed? 1996 comes after 1995 in the Gregorian calendar, last I checked, so I believe this paragraph from page 3 of the 1996 document is pertinent:

5. This Agreement supersedes all prior agreements, arrangements and understandings among the parties and, together with any relevant portions of the 1994 Agreement that are not inconsistent with this Agreement, constitute the entire understanding among the parties relating to the subject matter of this Agreement. No addition to or modification of any provision of this Agreement shall be binding on the parties unless made by a written instrument signed by a duly authorized representative of each of the parties.
I read that as saying that this agreement, which Santa Cruz signed in 1996, is the one to go by, not the 1995 APA, with respect to the trademarks. You'll find the document and the 1998 Novell/X/Open confirmation referenced in Gray's attachments [PDF] to his motion to lift the stay, attachments 1 and 2.

You know what Gray claimed when he saw that document? That it was a forgery, backdated. But Fatell read at the hearing what the Florida court wrote on that point, that Gray submitted no evidence at all to support such a claim. From the agreement we learn that the 1995 APA conveyed Novell's "entire right, title and interest in and to the UNIX trademarks to SCO, subject to rights and obligations established in a May 14, 1994 Novell-X/Open Trademark Relicensing Agreement, as amended... with the exception of non-assignable agreements and any compensation received by Novell from X/Open pursuant to the 1994 Agreement". Well. That explains the language in the APA, doesn't it? There is no "whole kit and kaboodle" in this language. There were restrictions. But here's the kicker:

WHEREAS, pursuant to the 1994 Agreement, X/OPEN is entitled to receive, subject to certain conditions not relevant here, full ownership of the UNIX trademark as of May 14, 1997.
The parties go on to say they want to accelerate the vesting of title in X/Open and the assignment to SCO only of Novell's rights under the 1994 agreement. So Santa Cruz never got the trademarks, just Novell's lingering rights with respects to them during the transition to X/Open, which definitely was promised the complete ownership in 1997, if conditions were met, which evidently they were.

So the next paragraph makes clear that Novell is said in the language to be "considered the owner of legal title" for the purpose of the acceleration. It doesn't say Novell *is* the owner in 1996. Gray makes much of this language, but I don't think he understands it. This is a document to hurry up what was already agreed to, that's all, and so they are going back to the original agreement, so to speak, when Novell was the title holder, and redoing the agreement to hurry things along. Here's the actual language:

NOW, THEREFORE, for appropriate consideration, the adequacy and sufficiency of which are acknowledged, the parties agree as follows:

1. At the request of X/OPEN, NOVELL shall, as soon as possible after the date of execution of this Agreement, execute appropriate assignment document(s), to be prepared by X/OPEN, formally transferring to X/OPEN the legal title to the UNIX trademark. As among NOVELL, SCO and X/OPEN, and notwithstanding any prior understandings to the contrary, NOVELL shall for this purpose be considered the owner of legal title to the UNIX trademark and shall execute such assignment document(s) as assignor. SCO agrees that notwithstanding the fact that NOVELL will be executing such assignment document(s) after the Closing Date established by the APA, such assignment by Novell shall not be considered a breach of NOVELL's obligations under the APA. X/OPEN acknowledges and confirms that, as of the date of execution of such assignment document(s) ("Assignment Date"), it will be solely responsible for all expenses and fees incident to the protection and enforcement of the UNIX mark, including but not limited to expenses of seeking, obtaining and preserving registration of same, and the expenses of transferring existing registrations into the name of X/OPEN; provided, however, that with respect to any document that is required to be executed by SCO to perfect X/OPEN's title to such mark after such assignment, SCO shall execute such document without cost to X/OPEN.

Could it get any clearer who was to get title to the trademarks? So why is Gray persisting? Let's take a closer look. As it happens, Groklaw covered the trademarks disputes in some detail at the time, and since we are trying to create a complete history of SCO's litigations, let me put everything we know about those trademarks right here in one place. That won't stop future or present story tellers hoping to make a buck by confusing judges, but at least those who really are interested in the truth will be able to find a complete narrative of what really happened. It's long. Truth usually is shorter and simpler; convolution generally indicates there is magic in the air, and someone would like you to look at anything but what is up their sleeve. That's my impression, anyhow.

So, for historians someday, not to mention future successors-in-interest, let's put here all the links to documents filed by Wayne Gray so far in the various litigations. I'll be taking the material from our Timeline pages, which have all the documents we've obtained from PACER over the years in all the cases we have covered, and from our articles over the years. We only put on the Timeline pages documents from PACER unless otherwise marked. The latter is very rare, things from the earliest days, like as an example, Red Hat's complaint. We later got it from PACER also, and both are now on the Red Hat Timeline page. I mention this so any new people will know the care we've taken to make sure our collection is accurate.

Here is the link to the USPTO, so you can do your own searches and try to prove me wrong, if you feel like trying, or just want to verify for yourself. Verification is always a good thing, actually, which is why I always provide links to the data I have used to reach whatever conclusions I have, so you can decide for yourself. Here, then, are the filings, separated into the various litigations.

In the SCO v. Novell Appeal

If you recall, Gray tried to intervene in the appeal in SCO v. Novell, seeking permission to file an amicus brief, which was denied:

  • 9652158 - April 20, 2009 - Motion for leave to file an amicus brief filed by Movant Wayne R. Gray. Served on 20-Apr-2009. Manner of Service: email. [Groklaw article]
  • 9652159 - 20-Apr-2009 - Amicus brief received from Wayne R. Gray but not filed (pending ruling on motion to become amicus). Served on 20-Apr-2009. Manner of Service: email. [Groklaw article]
  • 9652345 - April 21, 2009 - Order filed by Clerk of the Court response to motion to become amicus. Response due on 05-May-2009 for SCO Group. Served on 21-Apr-2009. [Groklaw article]
  • 9654117 - April 23, 2009 - Appellant's reply brief filed by SCO Group. Original and 7 copies. Served on 23-Apr-2009. Manner of Service: email. [Groklaw article; text]
  • 9655340] - April 30, 2009 - Response filed by Novell, Inc. to Wayne R. Gray's Motion for Leave to File Amicus Brief. Served on 30-Apr-2009. Manner of Service: clerk. [Text]
  • 9655989 - May 04, 2009 - Response to Motion for leave to become amicus filed by SCO Group. Served on 04-May-2009. Manner of Service: email. [Groklaw article]
  • 9656977 - 06-May-2009 - Response filed by Wayne R. Gray to Appellee Novell, Inc.'s Opposition to Wayne R. Gray's Motion [9652158] for Leave to File Amicus Brief and Appellant's Response to Wayne R. Gray's Motion for Leave to File Amicus Brief in Support of Defendant/Appellee Novell, Inc.. Served on 06-May-2009. Manner of Service: email, clerk.
  • 9660271 - May 18, 2009 - Motion filed by Movant Wayne R. Gray for entry of order either releasing audio recording of oral argument or releasing a certified transcript of oral argument. Served on 18-May-2009. Manner of Service: US mail. filed by Wayne R. Gray. Original and. Served on 18-May-2009. Manner of Service: US mail. [Groklaw article]
  • 9660359 - May 19, 2009 - Order filed by Judges Lucero, Baldock and McConnell Denying Movant Wayne R. Gray's request for an order requiring release of the court's oral argument recording for this matter, or in the alternative Mr. Gray seeks release of a certified copy of the transcript. See 10th Cir. R. 34.1(E). Served on 19-May-2009. [Groklaw article]

There is more on the complete Timeline page, but these are the ones regarding Gray. You'll note that while the appellate court asked SCO to respond to the Wayne Gray motion for leave to file an amicus brief, and it did, as did Novell, with a reply from Gray, the court never ruled on the motion as far as the public can determine. So there's no amicus brief reflected on that docket, as Fatell pointed out at the hearing. Perhaps something was said at the oral argument in the appellate court, but we don't have that information, because that appeals court doesn't let you have the transcripts of hearings in the normal course. Weird. They were definitely on the fast track on SCO's request for speed, shall we say. So that string was not tied off.

Gray's attorney claimed at the hearing that in fact the court did allow Gray to file an amicus brief, which "it carried with it" throughout the proceedings and then ultimately denied. Look at the dates. Did you notice that Gray only filed his response to Novell on May 6? That is the date of oral argument in the appeals court. So did Gray really file an amicus brief that was carried along throughout? It's conceivable, but why isn't it on the docket then? I notice an entry that says that an item was removed from the docket on May 18, but I don't know what it was. What do you think really happened? Isn't the public supposed to have access to what courts are doing?

Gray's Florida Litigation, Gray v. Novell, Inc., The SCO Group, Inc. and X/Open Company Limited

Now here's what we have from the Florida litigation, in Florida Middle District Court, Tampa Division, Case No: 8:2006cv01950:
  • Justia's docket - free access
  • Order tossing out all 11 claims in Gray's complaint and denying Gray's summary judgment motion. [Text.]

The SCO Failed Attempt to Claim the Trademarks

Now, here's what we covered in the trademark dispute, and yes, there was a dispute, one that SCO lost:
  • SCO applies for the mark Unix System Laboratories in 2004.
  • A Trademark Tale, February 17, 2006, SCO's letter to the USPTO, claiming that that USL "is now part of the Applicant," meaning part of SCO, and that is why SCO deserves the trademarks, three of them, UNIX, UnixWare and USL. The article walks you through the real history, as the rest of the world but SCO knows it, in detail. It's significant, in that the very claim that Gray says "proves" SCO owns the marks UNIX and UnixWare is the same claim that didn't work out for SCO in trying to get the marks. They claimed ownership, but the USPTO disagreed.
  • The final denial of SCO's application [PDF] by the USPTO on September 12, 2005
  • The TARR page showing the chain of events, with links, leading to SCO's failure to respond timely to the letter of denial, thus making the USL mark abandoned. It had six months to do so, but it never responded at all. It's easy to make a claim. It's proving it that is hard.

SCO already fought for the marks and had to retreat under fire, giving up the field. By 2007, it knew it didn't own the marks, and that the USPTO had so ruled. Gray complained at the hearing that it was possible bankruptcy fraud for SCO not to put the trademarks on its bankruptcy schedules as assets. It would have been fraud maybe if it had included them, but not failure to do so, I wouldn't think.

The Gray attorney kept saying at the hearing that the 1998 Confirmation Agreement was no good because Novell had no rights to confirm, having given them away in the 1995 APA. But that isn't at all what the history showed, according to X/Open. I'll repeat here some of the material from our 2006 article, when this all came out:

Now, when the USPTO sent its final letter of denial, it referenced some trademarks they show as belonging to The Open Group, which I think SCO also had every reason to know about by August of 2005. And that brings us to an intriguing subplot and some answers to some mysteries.

4. The iNUX Trademark Opposition

You'll remember that when SCO first applied for the USL trademark we dug up a case between X/Open, now called The Open Group, and a guy in Tampa, FL, named Wayne Gray. Back in 2001, Gray wanted the trademark iNUX to use on a purportedly Linux-based operating system he said he wanted to sell. I say purportedly because I can't find any such operating system in existence, and even the website speaks of it in the future tense. The Open Group opposed his application, and for a while, it seemed to be a normal opposition process. Then, after SCO started claiming it owned UNIX in various courts, it got really interesting because this supposed "Linux" person vigorously used SCO's court claims to try to "prove" that SCO is the rightful owner of the UNIX trademark, not the Open Group. I wrote to him in 2004 to ask him what was up, but to date I have received no reply. I finally concluded that it's just another in a line of lone-gunman litigants who have shown up just happening to want precisely what SCO wants.

After SCO filed its claims against IBM and Novell, the fellow started using SCO's legal filings and SCO's arguments to buttress his own claims. And he started asking for an enormous amount of discovery. And here's the thing I found interesting: he subpoenaed not only The Open Group but Novell and SCO too. I found 284 pages of discovery requests for documents. He even asked for documents concerning the USL v. BSDi lawsuit.

For a while, it seemed to be helping him to file SCO's court claims as exhibits, and the USPTO tends to give lone litigants more than the usual patience anyway, I imagine. The most recent notation on the docket on the case is February of 2005, saying that proceedings were suspended pending a ruling on a motion which still has not been decided. They're probably doing what I've been doing, trying to understand this whole UNIX mess.

Gray is asking the USPTO to take the UNIX marks away from Open Group. Gray claims SCO got all the IP in the Novell to Santa Cruz and the SCO to Caldera transfers, and he used SCO's documents as "proof". Gray's other angle is that the Open Group doesn't deserve the trademark for a long list of reasons that are too off the point of this article to explain, even if they did receive them from Novell. You can just click on all his documents, and I do mean all, to get the whole picture. He's very long-winded. Here's the page listing everything that has been going on since 2001 in this weirdo Opposition action before the Trademark Trial and Appeal Board. (Here's the interlocutory attorney who is hearing the case.)

If you open number 41 on that list, on page 2, X/Open says this:

Novell granted X/Open an exclusive license to use the UNIX mark in an agreement dated May 10, 1994, and subsequently assigned the UNIX mark to X/Open pursuant to that agreement.

Then on page 8 of document 47 (X/Open's Motion for a Protective Order, the one that is hanging in the air), X/Open says there was "a May 10, 1994 agreement in which Novell granted X/Open an exclusive, perpetual, irrevocable license to use and sublicense the UNIX mark, and agreed to assign the Mark to X/Open." That will help us to understand the wording of the 1996 Amendment 2 of the 1995 APA, which said the Excluded Assets were: "All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies." Novell had already promised the UNIX trademark to X/Open in 1994. So, SCO got the UNIX source code, but not the trademark, X/Open says. On page 16, it says: "SCO never owned the UNIX mark and was not a party to the May 10, 1994 agreement between Novell and X/Open."

Then, in document 57, on page 5, the Open Group says something I never knew. It solves the mystery of the 1998 date. Open Group says there is a three-way agreement between X/Open, Novell, and SCO "dispositive of Gray's allegation that Novell transferred the UNIX mark to SCO and not to X/Open." And both sides reference a 1998 Deed of Assignment from Novell to X/Open, the document that officially transferred the mark, as per the promise in 1994. What stands out to me in this part of the story is that SCO, because it was involved in discovery in this trademark opposition, knows about that three-way agreement, but when it sent its letter to the USPTO, it never even mentioned it. I realize that Santa Cruz was a party to the agreement, but despite claiming to be Santa Cruz, SCO Group seems to be missing some paperwork you'd think a successor in interest would have, so I stress that even if they had never heard of the 1998 confirmation, they certainly know about it from the iNUX case.

Document 29 is a request to amend, and it has SCO's complaints in the IBM and Novell court cases attached, as well as the March 17, 2003 "Dear Fortune 1000 and Global 500 Customer" letter from SCO, on page 96.

And on page 109, you can see the Deed of Assignment from Novell to X/Open dated November 13, 1998 for the trademarks serial numbers 1392203, 1390593, 1780785, and if you look at page 110, you'll see that the marks that were transferred to Open Group were UNIX and UNIX SYSTEM LABORATORIES.

Yes. You read it right. UNIX SYSTEM LABORATORIES, the mark SCO told the USPTO should belong to them. Incredible, no?

You'll find on p. 114 the claims made by Gray. You see him asking for cancellation of the marks on page 119.

Here's the page of everything SCO has had assigned to it that are pertinent to Unix: SCO GROWS YOUR BUSINESS, serial number 76490790; SCO, #73801197; CALDERA VOLUTION, #76299429; OPEN LINUX, #75250949; and OPENDOS, #75283050.

That's it. No UNIX. No UNIX SYSTEM LABORATORIES. It also didn't get the mark UNIX SVR4.2, or at least not according to these USPTO records, which shows it still belonging to Novell, serial # 74288588, which it got from Unix System Laboratories, Inc.

But here's something odd. On this page, we find a UNIXWARE mark allegedly transferred to SCO. They evidently filed this paperwork themselves on December 17, 2002, and the document they filed to evidence their claim was dated August 1, 2000. That would almost certainly be the Santa Cruz Operation/ Caldera Holdings, Inc./Caldera, Inc. APA. If you examine the hops on the assignment page, that is the trajectory, in fact. The earlier hops are from Unix System Laboratories to Novell by merger. Then Novell, it says, transferred its entire interest to Santa Cruz, and then it says Santa Cruz assigned the mark to Caldera. There was no Santa Cruz Operation in existence in 2002. It was by then Tarantella, and the date is identical for the later Caldera hops, so it appears that in December of 2002, SCO filed this assignment of the mark to itself, based on the APA. As we've seen earlier, it has been cancelled as a Santa Cruz mark. The Open Group says it was transferred to them by SCO, and that three-way deal that surfaced in the iNUX case appears to be the document that did it. Clearly this alleged assignment from Santa Cruz to Caldera is very much in doubt, and yet SCO does not mention any cloud over this assignment.

All the USPTO evidence I can find indicates to me that SCO didn't get the UNIX mark, the UNIXWARE mark (except for the page SCO where SCO makes the claim itself), or the UNIX SYSTEM LABORATORIES mark. It also didn't get the mark UNIX SVR4.2.

One final thing I came across. In this Santa Cruz 10K talking about the then proposed sale of assets to Caldera, Santa Cruz (now Tarantella) records this detail:

Further, once this transaction is consummated, the ongoing operations of the company will be significantly altered. The Company's revenues will be derived from only two product lines - Tarantella products, which have only been recently introduced by the Company, and OpenServer products, which are mature products to be distributed on the Company's behalf by Caldera.

I didn't know that Caldera was originally supposed to be the distributor for Santa Cruz of OpenServer products. Did you? It sounds like something very much like what Novell arranged with Caldera, doesn't it? I realize there was a later deal but it's a piece I didn't know. It matches this wording in another 10K:

In August, 2000, SCO and Caldera Systems, Inc., (Nasdaq: CALD), entered into an agreement in which Caldera Systems would acquire assets from the SCO Server Software and Professional Services Divisions. The agreement is subject to the approval of regulatory agencies and The Santa Cruz Operation, Inc. and Caldera Systems, Inc. stockholders, and is expected to close in January 2001.

SCO will receive 28.6% ownership interest of Caldera, Inc., which is estimated to be an aggregate of approximately 18.4 million shares of Caldera stock and $7 million in cash. SCO will retain its Tarantella Division, and the SCO OpenServer revenue stream and intellectual properties.

Caldera will have exclusive distribution rights to SCO OpenServer and has agreed to service and support the SCO OpenServer customer base. Caldera will receive a sales commission and reimbursement for SCO OpenServer engineering and marketing expenses. SCO's operating profit for the SCO OpenServer products will be approximately 55% of future SCO OpenServer revenues.

So, here's my question. When SCO told the Utah court that it was all of its predecessors in interest, and that all assets transferred, and when it told the USPTO that USL was now part of SCO as a result, did it have available evidence to the contrary? If I found it, why couldn't they? They have a trademark attorney. (You will have noted that Boies Schiller is not the firm used for SCO's trademark work.)

And if they knew about all this, why didn't they mention it to the USPTO? Now it is possible there is an explanation. I confess that the more I dig, the more details I find and the less I feel I have the entire picture. But I have enough to know that the simplistic wording SCO offered to the USPTO was misleading in that it didn't present the whole story. Not by a mile.

See what I mean about the trouble it can cause when folks file information they ought to know is not accurate?

X/Open/Open Group's Trademarks

Here's the Open Group's trademark page on the UNIX trademark. X/Open merged with the Open Group at some point, so you can follow all the twists and turns in the narrative.

Wayne Gray's iNUX Trademark Battle

And here's the Wayne Gray iNUX trademark history, when he tried to get that mark, and X/Open, now the Open Group, opposed. You can find the entire history there. It's massive.

And here's the USPTO's assignment page regarding the UNIX mark. It shows AT&T to Unix System Laboratories to Novell to X/Open. Here you have Novell's assignments page on the USPTO website. Here's Santa Cruz Operations' page of assignments to it and by it. UnixWare info is here, REG#: 1845474 [Exec.Dt: 02/12/2004], and here, Reg #: 2241666 [Exec.Dt.: 02/12/2004], USL to Novell to Santa Cruz in -- notice the date: 1998, *not 1995* -- then to Caldera, after some hops in name changes to SCO, and lo and behold, in 2006, SCO assigned the entire interest to X/Open. That's called the Reality Principle. The USPTO had denied SCO's claim to the mark, see above, after X/Open disputed SCO's claim, and so here's the paperwork following up.

And yet, in walks Wayne Gray's attorney, stands before the judge in bankruptcy court in Delaware and tells the judge that SCO is "the undisputed owner" of the mark.

What can I say? The District Court went forward without SCO, after it filed for bankruptcy, and all Gray's claims failed. It's on appeal. But SCO isn't a party to the appeal, since there was a stay as to SCO due to the bankruptcy.

Gray claims that SCO got the entire kit and kaboodle from Novell, but here's the ruling from the bench [text] by Magistrate Judge Brooke Wells at the December 20, 2005 hearing [PDF] in the SCO v. IBM case:

THE COURT: Thank you. I'm prepared to rule on this matter at this time. First, I find that the Novell to Santa Cruz transaction did not transfer the entirety of the business, nor did the Santa Cruz to Caldera transaction.
For sure, SCO didn't get any patents.

[ Update: Maureen O'Gara recently wrote that the reason they didn't get any patents is because Novell didn't have any. However, that is not the case. If you take a look at page 84 of the complete Asset Purchase agreement [PDF], you will find Attachment D and that is where you will find the list of Novell's patents and patent applications. They didn't transfer for the simple reason that Novell didn't want them to. The point is, if Santa Cruz they didn't get the patents, they didn't get the entire kit and kaboodle, did they?]

Gray's attorney portrayed SCO as somehow neglecting to fight for these allegedly valuable trademarks, accusing SCO of bankruptcy fraud for not including the marks as assets on its schedules when SCO filed for bankruptcy protection in 2007. I guess that deserves some exclamation marks for unmitigated gall. !!!

Gray's attorney tells the judge at the hearing that in all litigation, there are witnesses telling some version, which they may or may not believe is the truth, to which I can only say, I sincerely hope not. But, be that as it may, he suggests instead of witnesses, the court should follow the documents. Since the court only has a minuscule portion of the documents one would need to actually understand all this, I am presenting this page, so any interested parties can do their own digging.

So what is Gray thinking? I don't know. Is he just hoping no one will notice all this evidence if his lawyer shows only cherry-picked documents out of context? His attorney said that SCO's August 2005 claims to the USPTO prove it is the undisputed owner of the marks, or later he modified it to say that there is at least a strong inference, but as you can see, it's the claims themselves that were disputed and SCO lost. The inference from that is that SCO doesn't own the trademarks, and SCO agreed years ago, when it gave up. He also claimed that Novell conceded that the marks went to SCO, but even the judge doesn't accept that, after Fatell objected to the characterization. But that exhibit, whatever it was, was allowed in. I seriously don't understand how.

At the hearing, Gray's attorney said about a judge in the Florida case that while the attorney couldn't read his mind, he had a sense of what the judge expected from Gray. So I'll use that same phraseology. I can't read Gray's mind, but I get a sense. And my sense is that if we could trace who is behind Mr. Gray, and I suspect there must be someone, although it's only a guess, so that we could trace where the money is coming from, we might just find pay dirt as to who is really trying to benefit from the SCO litigations and finally figure out what it's all been about.

Interestingly, I note that at the hearing, Gray's attorney said that Gray was a kind of a proxy for SCO in the trademark matter. The judge said he couldn't be. But he was talking legally. What if, just saying, there is some entity behind all the litigation, SCO's, Psystar, Daniel Wallace, and Wayne Gray? I mean, seriously, why would Gray fight so hard for a trademark, if he's just some guy wanting to set up a new business? He could just pick another name instead of spending all this money, don't you think, considering particularly that it's apparently a future business.

So the way to analyze what this has all been about, in my view, is to ask oneself: what if SCO had prevailed and so had Daniel Wallace and so had Psystar and so had Wayne Gray? Then what? At the hearing, if you recall our reporter's account, the judge asked if Gray was in competition with the transferee, and the lawyer for Gray said it could be, that "we're dealing with a potential competition issue here." So, what might that business be like?

If you recall, this is how Gray's iNUX website describes that future business:

iNUX inc. will be the leading provider of the next generation of powerful business and consumer desktop computer system software, enabling secure, continuous, and simultaneous enterprise access to traditional content and applications, and emerging Internet private network solutions.

Since the early days of the computer industry the three key issues of greatest concern continue to be Security, Compatibility, and Integration Time and Cost. These issues, along with privacy, will continue to grow in importance as existing and new Business Enterprise Solutions are increasingly deployed from remote servers.

Apple® and Microsoft® Windows® revolutionized the character-based computer by embracing and extending graphical application window functionality on a single-user desktop computer. The next evolution will result in powerful desktop computer software systems designed to specifically address the demands of enterprise solutions, communicating on an internal system “virtual private pipes” network.

This uniquely powerful computer software system will embrace and extend not just the traditional single-user desktop environment, but entire enterprise security, compatibility, and integration solutions, including Microsoft® Windows®.

Well, well. What does that sound like to you? They have big plans, to more or less replace everybody in the operating system market. That means Gray can't be some lone ranger, I don't think. There has to be some money behind this push, to even make such grandiose claims, unless we are dealing with an ego as big as the sky. But if it's the latter, the ego has enough money for lawyers for years and years and years. Perhaps Gray's attorney revealed the simple truth, that Gray is indeed a proxy. The site says to stay tuned for the iNUX company's "upcoming launch", by the way.

So, let's imagine something for a moment. What if everything went Gray's way. Let's say he showed up in bankruptcy court because he hopes that X/Open, now the Open Group, will lose the UNIX and UnixWare marks. Who gets them then? He says they belong to SCO. What if they did? Can you see any possible joint business venture between SCO and the iNUX business? Maybe add in the Pedrazas and the unXis folks? You think? Think it would help them out if the GPL was declared unConstitutional and Apple's EULA was declared void, so all that code was suddenly available to anyone to build a business with? Currently, virtualization requires a paid license on all the code or copyright permission. What if you didn't need any of that? As the Pedrazas told the court in California, it's hard to write your own operating system. Also expensive. If you could just grab other people's code, wouldn't that be easier and cheaper? And if the judge handling each piece of this complex litigation history only gets a little piece of the story, and so gets essentially tricked into ruling incorrectly, couldn't such a plan have worked?

On AutoZone

And the AutoZone sealing issue came up. IBM and Novell saw the settlement agreement under NDA, and they have no objections to the settlement issue. It was the U.S. Trustee's Office, Joseph McMahon, who objected.

By the way, Gray wanted him, or his office anyway, to investigate the trademarks, not Cahn. Gray attacked Cahn at the hearing for refusing to do what Gray wanted, charging them with ignoring documents he presented to them. Truthfully, that'd be fine with me, since Mr. McMahon has been on the SCO case a lot longer and has yet to be fooled or confused by anything SCO pulls. Gray alleged bankruptcy fraud, first by SCO in not listing the trademarks as assets, but also then by Cahn, a continued concealment by Cahn, so Gray doesn't want Cahn investigating bankruptcy fraud, which it seemed to Gray Cahn is a party to. I know. Incredible. And Gray says that he is a creditor, that the litigation is listed.

The judge at the end of the hearing told Gray he was not going to win on that fraud point, period. He said he'd review and think more upon the issues, but he doesn't think Gray will prevail, that he doesn't think there is any basis for alleging bankruptcy fraud in this case, or that he has standing, but he'll issue his brief decision soon.

And Mr. McMahon then appeared in the courtroom. So the AutoZone sealing conflict wasn't resolved. Fatell is to continue to discuss the issue with Mr. McMahon. But the judge says the settlement is fair and in the estate's best interest. So he was willing to sign off on the settlement right then, and let the sealing issue be handled later, but at the end, he asked if Fatell thought it would be better to hold off until it was all finally resolved, and they agreed he could sign it on certification of counsel. So we'll have to wait to find out about whether we get to read the terms of that settlement. One thing is clear. It's not IBM or Novell that the parties to the agreement wish to keep in the dark. It's us Linux end users.


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