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SCO's Opposition to Novell's Motion in Limine No. 1: Hey! No Fair, You Guys! - Updated
Friday, February 12 2010 @ 11:48 PM EST

SCO has filed its response to Novell's Motion in Limine No. 1. And Novell has added another lawyer to the team, Daniel P. Muino.

SCO's opposition in essence says, "No fair, Novell! We appealed the copyright ownership issue, and the slander of title is sort of related, and so that should be enough."

Here's what I don't see SCO saying: "We *did* appeal the slander of title decision."

They can't say that, because it isn't listed. It would like us all to infer it. Maybe the judge will, but I find that argument a stretch, given that there are rules and all. Oh, that. Anyway, SCO argues, Novell used to say that slander of title was back on the table, so now it's changing. Like SCO never has done that. I recall it saying one thing in the AutoZone courtroom, another in the IBM courtroom and another in Red Hat, pretty much all at the same time. Isn't that your memory too? But in any case, Novell agrees that it has changed. It told Judge Ted Stewart that it thought a number of claims were back on the table, until it read Judge Ted Stewart's words in denying Novell's 60(b) motion, stating that the 10th Circuit Court of Appeals mandated what items could be considered and no others.

Here's what Judge Stewart quoted from the appeals court:

For the foregoing reasons, we AFFIRM the district court's judgment with regards to the royalties due Novell under the 2003 Sun-SCO Agreement, but REVERSE the district court's entry of summary judgment on (1) the ownership of the UNIX and UnixWare copyrights; (2) SCO's claim seeking specific performance; (3) the scope of Novell's rights under Section 4.16 of the APA; (4) the application of the covenant of good faith and fair dealing to Novell's rights under Section 4.16 of the APA. On these issues, we REMAND for trial.
See slander of title? Neither does Novell.

SCO also argues that the only basis for Judge Kimball rejecting SCO's slander of title claim was "because SCO cannot demonstrate that Novell's assertions of copyright ownership are false." But SCO is silent on the part where Kimball also said that even if SCO owned the copyrights, he'd still deny SCO's claim of slander of title.

SCO then argues that anything related to or affected by the copyright ownership ought to be a do-over:

The mandate calls for a trial on the issue of copyright ownership, and it follows that all of SCO's legal claims whose resolution turned on that precise issue of copyright ownership are part of that mandate.
Maybe. But that's exactly what Novell argued with regard to its desire to redo the issue of the SCOsource licenses, and the court told them it was too bad they didn't appeal the issue in a contingency context, and so it's too late now. SCO has thought about that, realizes it points right at SCO also, and it argues for distinguishing itself from Novell's fate like this:
Finally, Novell seeks to analogize its position to the Court's denial of Novell's Rule 60(b) motion. The difference between the two issues is the difference between the party who did appeal and the party who did not. The Court denied Novell's motion where "the argument raised by Defendant in its Motion could have, and should have, been raised on appeal." (Ex. E at 4.) Novell filed no appeal at all. SCO did appeal, and raised the issue of copyright ownership, and thus the claims the District Court dismissed based on its disposition of that issue are properly now set for trial.
Now, hold on there, cowboy. SCO did appeal, but it raised the issue of *copyright ownership*, not slander of title, as I read its brief. So that's the sticky wicket. They'd like, as I view it, to casually shove the ball with their foot just enough to make it through, but technically, you are only supposed to hit the ball properly with the mallet. And the mallet is: listing the slander of title claim in its appeal, which it didn't do. Here it's saying it didn't specifically list it, but that it did appeal copyright and that should cover anything related to the copyright claim. But couldn't Novell just point out that SCO could have specifically appealed slander of title, and just failed to?

I know. This is hilarious. See now why I say we'll find out when we get the ruling whether we're watching a battle on a fair playing field or not?

But here's the one argument SCO makes that isn't just so much creamed spinach:

Because the copyright ownership issue concerned whether SCO already owned the copyrights in question, the claim for specific performance would be reached only if SCO did not have present ownership of the copyrights, but had a valid legal right to compel their transfer. To say the only claim for trial is this second, alternative count for specific performance is to make a mockery of the Tenth Circuit's decision.
Personally, I think the items the court listed make very little sense, and I'd say that about the appeals ruling in general, frankly. The more you parse it, the less sense it makes to me. But that argument by SCO at least deserves a response, which I have no doubt Novell will provide next. Maybe the answer is that the ruling makes no sense, but the mandate rule has been chosen, and we can't rewrite what they wrote, despite SCO pointing out it makes no sense. The thing is, though, it's not Novell making a mockery of the ruling. It's the ruling itself that makes no sense.

And I'm not predicting Judge Stewart doesn't like creamed spinach, by the way. For all I know, it's his favorite vegetable.

Here are the filings:

02/12/2010 - 668 - ORDER granting 667 Motion for Admission Pro Hac Vice of Daniel P. Muino for Novell, Inc.. Attorneys admitted Pro Hac Vice may download a copy of the District of Utahs local rules from the courts web site at http://www.utd.uscourts.gov . Signed by Judge Ted Stewart on 02/11/2010. (asp) (Entered: 02/12/2010)

02/12/2010 - 669 - MEMORANDUM in Opposition re 627 MOTION in Limine No. 1 to Exclude Evidence and Argument Concerning Claims Not Included in SCO's Appeal or the Tenth Circuit's Limited Mandate filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(Hatch, Brent) (Entered: 02/12/2010)

Update: Groklaw's mattflaschen noticed first that Novell's Second Request for More Time to Petition for Cert is Exhibit G:
I may be mistaken, but I think Exhibit G to the Opposition is the first time we've seen either of Novell's requests for more time to petition for cert. Both requests are included (the initial one as an attachment). They say pretty much what you'd expect, This is important, we're really busy, and we need more time to review the cases. To show the circuit split, they cite Konigsberg Intl. v Rice ("parties need only look to the writing that sets out their respective rights") (9th. Cir. 1994), Lyrick Studios v. Big Ideas Prods. (5th Cir. 2005), Effects Assocs. Inc. v. Cohen (9th. Cir. 1990), and a Supreme Court of Indiana case, Conwell v. Gray Loon Outdoor Mktg. Group ("the federal courts do not yet agree on the nuances") (Ind. 2009).

Both requests were granted the day after being filed.

Thanks! And they also say that they are working on amicus briefs in other cases and that they need to do time-consuming research to make sure they present the court with a complete picture of the division between the circuits on the issue of what is required to demonstrate a copyright transfer:
1. As set forth in the initial application for an extension of time, this case involves an important question upon which there is a division within the federal courts concerning the degree of particularity required for a writing to meet the standards of the Copyright Act so as to constitute a valid copyright transfer. See 17 U.S.C. 204(a).

2.Additional time is required to more fully evaluate court decisions of other circuits to ensure that the petition will inform this Court fully about the varying positions taken by those courts. Moreover, preparation of the petition involves time-consuming and comprehensive legislative and historical research concerning the provision at issue and the varying effects that these divergent rulings have on copyright law across the country.

Counsel also request additional time to research and prepare the petition due to other obligations before this Court and other federal and state courts. Counsel expects to file an amicus brief on February 26, 2010, in support of respondents in Morrison v. National Australia Bank Ltd., No. 08-1191 (U.S.). Counsel also has a number of ongoing obligations for other active matters in the federal courts of appeals, including filing an opening brief in the United States Court of Appeals for the D.C. Circuit in Alaska v. FERC, No. 08-1221, on February 1, 2010, a reply brief in the Federal Circuit in Lazare Kaplan International, Inc. v. Photoscribe Technologies, Inc., NO. 2009-1251, on February 18, 2010, and a reply brief in Samsung v. ITC, No. 2009-1520, on February 19, 2010.

You know how I always tell you that in litigation you don't need to speculate, because sooner or later you will find out? This is yet another example. Some of you were wondering why they needed more time, but all the speculation was internal to the SCO v. Novell case, and what do we now find out? That that is part of it, that they need time to do more extensive research. But they are also very busy with other cases.

If you are curious about the other cases Morrison & Foerster are busy working on, here's the case before the US Supreme Court, Morrison v. National Australia Bank, LTD. The ABA has all the merits briefs for cases before the court, listed alphabetically. These are cases the court has agreed to hear. There are thousands more cases hopefully filed every year that the court doesn't have time to hear or doesn't want to. It's for that reason the a law firm would want to be sure that the research makes the case so solidly and in a way that can establish guidelines for the country as a whole.

As you probably noticed, part of that research is to look at the legislative history of a statute. Sometimes that gives you a clearer picture of what the wording means, because in the notes you sometimes see the why of it, what the legislators were trying to achieve. As a random example, here are some Notes to Federal Rules of Civil Procedure Rule 3 on Cornell's Legal Information Institute's website. But I'm sure Morrison & Foerster will be doing a lot more than that. The paid services like Westlaw and LEXIS provide tons of information that can be helpful, and in this case, they'll be looking at all the circuits, meaning all the appeals courts' rulings and history. The poor man's version is here on LEXIS where you can search for free (registration required though) for cases from the last ten years. Here's the page where you can search by year, by keyword, by citation. See now why Morrison & Foerster need more time?

There are 11 circuits at the appellate level (here's a map), plus the D.C. circuit and the Federal Circuit, the one that handles patents. Here's a page that should give you at least a feel for just how large this research project is. Scroll down to the heading United States Courts of Appeals Decisions, and the Regular Decisions (meaning not bankruptcy) has a drop-down, where you can pick what circuit you want, and then go there. If you have a PACER account, then you can access the complete list of filings and the docket history of any case you wish. The US federal courts include the Supreme Court, the courts of appeals, the district courts, like the one in Utah where SCO v. Novell is currently happening, plus the bankruptcy courts and special courts. Special courts would be courts like Tax Court and FISA court. here's a list that will take you to all of them, if you prefer to see it all at once instead of just using a drop down, and it explains about special courts. Just scroll down, and it also tells you which districts are in each circuit.

Why do so much research? Because there could be 10,000 applications to the US Supreme Court every year, and they can only hear at most a couple of hundred. So law firms want their case to be one of the few happy ones chosen, and your odds get better if the case has facts and elements that will make it possible for the court to speak on a subject with clarity on a type of issue that the district courts don't agree on. When there are divisions like that, it's the Supreme Court that decides which way to go. After they rule, everyone gets into line their way. So here, where the issue is what is required to demonstrate a copyright transfer, some courts say one thing, others say another. It's a federal law, so it should be consistent. Is this the case that will establish what the standard should be? The numerical odds are against Novell, so they want to research to make their best possible presentation, because they are hoping that this case will be meaningful in establishing clearly what is required.

Why might it matter? Because if copyright transfer is in doubt, and all it takes is a group of folks swearing on a stack of Bibles that it was so intended, even if there is no writing or the writing says something else, all it takes is a group of people willing to lie after the fact, and someone's copyright can be snatched away. That's not a desirable outcome, I'm sure you'd agree, and so does Novell, to whom it's a vital matter. They believe they never transferred the copyrights at issue to Santa Cruz, and they don't want some people who, they point out, were not directly involved, swearing that the copyrights did transfer when they have writings saying that it was not their intention to transfer them and that they didn't transfer them. If such a writing can be overcome by witnesses like this, in other words, from Novell's point of view, the issue becomes: how safe if *your* copyright, or anyone's?

Here's SCO's Memorandum in Opposition:

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

Mark F. James (5295)
HATCH, JAMES & DODGE, PC
[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]

Stuart Singer (admitted pro hac vice)
Sashi Bach Boruchow (admitted pro hac vice)
BOIES SCHILLER & FLEXNER LLP
[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., by and through the
Chapter 11 Trustee in Bankruptcy, Edward N.
Cahn,

Plaintiff/Counterclaim-Defendant,

vs.

NOVELL, INC., a Delaware corporation,

Defendant/Counterclaim-Plaintiff.

____________________________

SCO'S OPPOSITION TO "NOVELL'S
MOTION IN LIMINE NO. 1 TO
EXCLUDE EVIDENCE AND
ARGUMENT CONCERNING CLAIMS
NOT INCLUDED IN SCO'S APPEAL OR
THE TENTH CIRCUIT'S LIMITED
MANDATE"

Civil No. 2:04 CV-00139

Judge Ted Stewart

___________________________

Novell's motion is not a proper motion in limine,1 it incorrectly characterizes the Tenth Circuit's decision, and it is inconsistent with Novell's own statements regarding the Tenth Circuit's decision.

In December 2009, Novell asked this Court to dismiss the remanded slander of title claim by resolving Novell's motion for summary judgment on special damages. Novell thus had concluded that the Tenth Circuit had remanded for trial of the slander of title claim. Novell also specifically represented to the Bankruptcy Court in December 2009 that the trial in this Court concerns whether "Novell slandered SCO's title." (Ex. A at 2.) In addition, this Court has previously stated that "the issue of ownership of title and slander of title will be decided in this action." (Ex. B at 15.) The Court's statement and Novell's prior statements are correct, and Novell's new position in this motion is not.

1. The remand on copyright ownership requires a trial on SCO's claims which had been erroneously dismissed solely on the basis of the court's copyright ownership ruling. The very motion for summary judgment that Judge Kimball ruled upon, that SCO appealed, and that the Tenth Circuit reversed was a motion expressly on SCO's claims for slander of title and specific performance. Judge Kimball ruled that "Novell is entitled to summary judgment on SCO's first claim for relief for slander of title because SCO cannot demonstrate that Novell's assertions of copyright ownership are false." SCO Group, Inc. v. Novell, Inc., Civil No. 2:04CV139DAK, 2007 WL 2327587, at *62 (D. Utah Aug. 10, 2007). That was the one and only basis for dismissal of the slander of title count.

The final judgment specifically incorporated this summary judgment opinion as the basis for dismissal of the slander of title claim, as well as other claims.2 (Ex. C.) Thus, where SCO appealed the final judgment and successfully argued that the determination of copyright ownership was in error, adjudication is required of the claims that rested solely on that summary judgment decision. As the Tenth Circuit expressly recognized, the slander of title claim turned on the ownership issue. SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1207 (10th Cir. 2009). The mandate calls for a trial on the issue of copyright ownership, and it follows that all of SCO's legal claims whose resolution turned on that precise issue of copyright ownership are part of that mandate. See Procter & Gamble Co. v. Haugen, 317 F.3d 1121, 1129, 1132 (10th Cir. 2003) (district court properly resolved "issues that were necessarily implied" by the mandate, including claim that "part of the mandate might plausibly be read to have restored").

2. The Tenth Circuit's decision cannot be read as solely remanding on SCO's claim for specific performance. Novell asserts that the "Tenth Circuit remanded for trial on copyright ownership in connection with SCO's claim for specific performance and not in connection with any other claim." This assertion, the lynchpin of its motion, is not supported by any statement in the Tenth Circuit's opinion, or any statement in the appellate briefs. On the contrary, the Tenth Circuit remanded for trial on "(1) the ownership of the UNIX and UnixWare copyrights" and "(2) SCO's claim seeking specific performance." Novell's reading makes the first part of the remand a nullity.

2

In addition, SCO made perfectly clear that the appeal was not limited to the claim for specific performance, describing it on appeal "as an alternative count, relevant only if the copyrights had not already transferred." (Ex. D at 19 (emphasis added).)3 Because the copyright ownership issue concerned whether SCO already owned the copyrights in question, the claim for specific performance would be reached only if SCO did not have present ownership of the copyrights, but had a valid legal right to compel their transfer. To say the only claim for trial is this second, alternative count for specific performance is to make a mockery of the Tenth Circuit's decision.4

3. There is no inconsistency with this Court's rejection of Novell's Rule 60(b) motion. Finally, Novell seeks to analogize its position to the Court's denial of Novell's Rule 60(b) motion. The difference between the two issues is the difference between the party who did appeal and the party who did not. The Court denied Novell's motion where "the argument raised by Defendant in its Motion could have, and should have, been raised on appeal." (Ex. E at 4.) Novell filed no appeal at all. SCO did appeal, and raised the issue of copyright ownership, and thus the claims the District Court dismissed based on its disposition of that issue are properly now set for trial.

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's "Motion in Limine No. 1."

3

DATED this 12th day of February, 2010.

By: ___/s/ Brent O. Hatch______
HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark F. James

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

Counsel for The SCO Group, Inc.

4

CERTIFICATE OF SERVICE

I, Brent O. Hatch, hereby certify that on this 12th day of February, 2010, a true and correct copy of the foregoing SCO'S OPPOSITION TO "NOVELL'S MOTION IN LIMINE NO. 1" was filed with the Court and served via electronic mail to the following recipients:

Sterling A. Brennan
David R. Wright
Kirk R. Harris
Cara J. Baldwin
WORKMAN | NYDEGGER
[address]

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

Michael A. Jacobs
Eric M. Aker
Grant L. Kim
MORRISON & FOERSTER
[address]

Counsel for Defendant and Counterclaim-Plaintiff Novell, Inc.

By: ___/s/ Brent O. Hatch______
Brent O. Hatch
HATCH, JAMES & DODGE, P.C.
[address]

5

1 A motion in limine seeks an advance ruling on the admissibility of evidence, whereas this motion seeks the equivalent of a summary judgment but was not brought within the various procedural requirements of Fed. R. Civ. P. 56.

2 SCO will not pursue its claim for unfair competition as it relates to assertions of copyright ownership, because there were independent grounds for dismissal of that claim not appealed. SCO also agrees that its claims for copyright infringement and breach of the Technology Licensing Agreement are severed and not part of this trial. (See Novell Motion in Limine No. 10.) As discussed in response to Novell's Motion in Limine No. 4, the count for breach of the implied duty of good faith and fair dealing is not resolved.

3 In its opening brief on appeal, SCO explained that this District Court had rejected Novell's initial attempts to dismiss SCO's claim for slander of title on a motion to dismiss, and that Novell's conduct in fact had constituted a "slander of title." (Ex. F at 4, 11.) After discussing in text the factual basis for the slander of title claim (id. at 11-12), SCO proceeded to devote the bulk of its brief precisely to the issue of whether the District Court erred in finding as a matter of law that the copyrights had not transferred.

4 Indeed, in its recent filing with the United States Supreme Court for an extension of time within which to file a petition for a writ of certiorari, Novell stated that the Tenth Circuit's reversal concerns "which if any copyrights were transferred" -- an issue indisputably separate from the question of specific performance. (Ex. G at 6a 3 (emphasis added).)


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