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Novell and SCO throw legal darts at each other's motions in limine
Friday, February 19 2010 @ 10:32 PM EST

It's a plot, I tell you! The parties in SCO v. Novell are trying to cause me to lose my beauty sleep. Before I can finish doing the text of one filing, they file 25 more. Literally. They have filed between them 25 memoranda in opposition to the others' motions in limine.

Say. They have finally hit on the way to shut Groklaw up. Just keep filing documents until I give up and go to sleep.

: D

I'm serious about the sleep part. What a week. So please help me out. Here are the 25 or so new memoranda in opposition to each others' motions in limine. Whatever you notice in your reading, tell the rest of us, as there is no way for me to read, transcribe, research, and then write about all of these. And if you can OCR or do HTML of any of them, please email your work to me or post it IF you carefully remove all addresses, phone numbers and email addressed first.

The filings:

02/19/2010 - 675 - MEMORANDUM in Opposition re 643 MOTION in Limine No. 1 to Preclude Misleading Statements or Evidence Concerning Language in APA Removed by Amendment No. 2 filed by Defendant Novell, Inc.. (Attachments: # 1 Exhibit 1A, # 2 Exhibit 1B, # 3 Exhibit 1C)(Brennan, Sterling) (Entered: 02/19/2010)

02/19/2010 - 676 - MEMORANDUM in Opposition re 645 MOTION in Limine No. 2 re Reversed Rulings filed by Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 02/19/2010)

02/19/2010 - 677 - MEMORANDUM in Opposition re 646 MOTION in Limine No. 3 re Novell's Monetary Judgment Against SCO filed by Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 02/19/2010)

02/19/2010 - 678 - MEMORANDUM in Opposition re 647 MOTION in Limine No. 4 to Exclude Reference to Litigation Commentary filed by Defendant Novell, Inc.. (Attachments: # 1 Exhibit 4A-Filed Under Seal, # 2 Exhibit 4B, # 3 Exhibit 4C-Filed Under Seal, # 4 Exhibit 4D-Filed Under Seal)(Brennan, Sterling) (Entered: 02/19/2010)

02/19/2010 - 679 - MEMORANDUM in Opposition re 649 MOTION in Limine No. 5 to Exclude Statements Made by Michael Anderer as an Independent Contractor for SCO filed by Defendant Novell, Inc.. (Attachments: # 1 Exhibit 5A-Filed Under Seal, # 2 Exhibit 5B-Filed Under Seal, # 3 Exhibit 5C-Filed Under Seal)(Brennan, Sterling) (Entered: 02/19/2010)

02/19/2010 - 680 - NOTICE OF CONVENTIONAL FILING of Exhibits 4A, 4C, and 4D to filed by Defendant Novell, Inc. re 678 Memorandum in Opposition to Motion, in Limine No. 4 (Brennan, Sterling) (Entered: 02/19/2010)

02/19/2010 - 681 - NOTICE OF CONVENTIONAL FILING of Exhibits 5A, 5B, and 5C filed by Defendant Novell, Inc. re 679 Memorandum in Opposition to Motion, in Limine No. 5 (Brennan, Sterling) (Entered: 02/19/2010)

02/19/2010 - 682 - MEMORANDUM in Opposition re 629 MOTION in Limine No. 2 to Determine that First Amendment Defenses Apply to Slander of Title filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit 1, # 2 Appendix of Unpublished Cases)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 683 - MEMORANDUM in Opposition re 630 MOTION in Limine No. 3 to Determine that SCO is a Limited Purpose Public Figure filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 684 - MEMORANDUM in Opposition re 631 MOTION in Limine No. 4 to Preclude SCO from Contesting that Novell had an Objectively Reasonable, Good Faith Basis for its Statements Regarding Copyright Ownership filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 685 - MEMORANDUM in Opposition re 632 MOTION in Limine No. 5 to Preclude SCO from Relying on Novell's June and August 2003 Statements as Factual Assertions of Copyright Ownership filed by Plaintiff SCO Group. (Attachments: # 1 Appendix of Unpublished Cases)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 686 - MEMORANDUM in Opposition re 651 MOTION in Limine No. 6 to Preclude Reliance on Statements in December 2003 and March 2004 that do not Constitute Factual Assertions of Copyright Ownership filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit 1, # 2 Appendix of Unpublished Cases)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 687 - MEMORANDUM in Opposition re 633 MOTION in Limine No. 7 to Determine that Common Law Privileges Apply to Allegedly Defamatory Publications filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 688 - MEMORANDUM in Opposition re 634 MOTION in Limine No. 8 to Preclude SCO from Relying on Novell's Applications for Copyright Registration filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 689 - MEMORANDUM in Opposition re 650 MOTION in Limine No. 9 to Preclude SCO from Contesting that Agreements that Post-Date the APA May Constitute SVRX Licenses filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 690 - MEMORANDUM in Opposition re 635 MOTION in Limine No. 10 to Preclude SCO from Presenting Argument Relating to Issues Stayed Pending Arbitration filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 691 - MEMORANDUM in Opposition re 636 MOTION in Limine No. 11 to Exclude Evidence of Substantial Performance filed by Plaintiff SCO Group. (Attachments: # 1 Appendix of Unpublished Cases)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 692 - MEMORANDUM in Opposition re 637 MOTION in Limine No. 12 to Exclude Certain Testimony from William Broderick for Lack of Personal Knowledge and Violation of Parol Evidence Rule filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 693 - MEMORANDUM in Opposition re 638 MOTION in Limine No. 13 to Exclude Certain Testimony From Lawrence Bouffard for Lack of Personal Knowledge and Violation of Parol Evidence Rule filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit 1 - FILED UNDER SEAL)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 694 - MEMORANDUM in Opposition re 639 MOTION in Limine No.14 to Exclude Certain Testimony from Jean Acheson for Lack of Personal Knowledge and Violation of Parol Evidence Rule filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit 1)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 695 - MEMORANDUM in Opposition re 640 MOTION in Limine No. 15 to Exclude Certain Testimony from Robert Frankenberg for Lack of Personal Knowledge and Violation of Parol Evidence Rule filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit 1)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 696 - MEMORANDUM in Opposition re 641 MOTION in Limine No. 16 to Exclude Certain Testimony from R. Duff Thompson for Lack of Personal Knowledge and Violation of Parol Evidence Rule filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(Hatch, Brent) (Entered: 02/19/2010)

02/19/2010 - 697 - MEMORANDUM in Opposition re 642 MOTION in Limine No. 17 to Exclude Certain Testimony from Ty Mattingly for Lack of Personal Knowledge and Violation of Parol Evidence Rule filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit 1)(Hatch, Brent) (Entered: 02/19/2010)

The silliest argument of the day, I'd say, is SCO's claim in #682 that because Novell's press releases about owning the copyrights included at the bottom the usual description of the company and a list of its trademarks, that it proves Novell's motive was commercial, that the press release was an advertisement:
Both press releases state that Novell “is a leading provider of information services” and specifically identify Novell’s “NsureTM”, “exteNdTM”, “NterpriseTM”, and “NgageTM” products. They address other subjects as well - indeed, the first press release contains a factual assertion of copyright ownership - but they were made with an economic motive, they refer to multiple products, and they seek to advertise their value and relevance to the subject matter otherwise addressed.
I mean... all press releases in my experience have such information, so journalists know how to refer to the sender of the press release and so they know what requires a trademark note. I get press releases from folks every day, and they are all like that. It's just copied and pasted at the bottom, I assume, like a template. I can't imagine a press release being viewed as an advertisement unless the body of the release is such. I think most on the jury listening to this slander of title claim argument will feel the way you and I do -- that it's really reaching, beyond all common sense, and crossing over into meanness, frankly. Meanness for money. What normal person would sue over something like this? Seriously. Would you? Would any member of the jury? I'm guessing they'll find it very weird. Or at least I do. It encapsulates everything ordinary people hate about lawyers.

As for SCO's arguments that all their witnesses should be allowed to testify, the problem they'll face even if they do is that they were not there for the finale or for Amendment 2. That's a big problem. Their witnesses can testify all day long for days and days that they all thought the intent was to transfer the copyrights under the APA, but Novell will simply show that at the last minute, after SCO's witnesses stopped being involved, it turned out SCO didn't have enough money to do the deal as originally contemplated, so the deal morphed, and Novell didn't transfer the copyrights after all. SCO has no witnesses about the finale that we've seen yet. Remember the notes from the board meeting at Novell the day before the APA was signed? Here they are [PDF], attached to a declaration Novell presented. It says, "Resolved... Novell will retain all of its patents, copyrights and trademarks (except for the trademarks UNIX and UnixWare), a royalty-free, perpetual, worldwide license back to UNIX and UnixWare for internal use and resale in bundled products, Tuxedo and other miscellaneous, unrelated technology." Anything ambiguous to you about that?

SCO also has the problem that they can't, apparently, make the the lawyer who represented Santa Cruz show up and testify for them. I wouldn't want to either, in that either he has to say the copyrights were supposed to transfer, but he forgot to say so and forgot to list what copyrights were to transfer, even though as a lawyer he knows that is a legal requirement, or he has to say all copyrights were excluded, which is what the APA does say. And who will speak for SCO's interpretation of Amendment 2? Novell says it will present Allison Amadia, who wrote it and kept the drafts and knows what her intent was and what the wording meant. Words that she wrote. No one else can testify as to her and her client's intent. Who will say any different, anyway, if none of SCO's witnesses were participating in that part of the deal? Even if they had been, like Steve Sabbath, how do you argue against what the series of drafts state in black and white?

Interestingly to me, the appeals court never mentioned her or Tor Braham or the drafts in their ruling. They wrote a lot about SCO's witnesses, but not Novell's. Yet Judge Dale Kimball, in his August 2007 order said this:

During negotiations on Amendment No. 2, SCO attempted to effectuate a transfer of the copyrights of UNIX and UnixWare, but Novell rejected the proposal. Decl. Allison Amadia at ¶ 6, 8, 10. During the summer of 1996, Steve Sabbath, Santa Cruz’s General Counsel, telephoned Allison Amadia, in-house counsel for Novell, about amending the APA. Id. ¶ 6. She testifies that Sabbath stated to her that the original APA explicitly excluded copyrights to UNIX and UnixWare and that Santa Cruz wanted to amend the original to give Santa Cruz those copyrights. Id.

Amadia had not been involved in the original deal. After her conversation with Sabbath, she reviewed the APA and contacted Novell’s outside counsel, Tor Braham, to gain his understanding of the transaction. Id. ¶ 7. Through these efforts, she learned that ownership of the UNIX and UnixWare copyrights did not transfer to Santa Cruz under the APA. Id.

Sabbath later sent Amadia a draft proposal revising Schedule 1.1(b) of the APA to read: “All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of this Amendment No.2, which pertain to the UNIX and UnixWare technologies and which SCO has acquired hereunder. . . .” Id. ¶ 8, Ex. 1. Novell rejected the proposed amendment.Id. ¶ 10. Amadia told Sabbath that while Novell was willing to affirm that Santa Cruz had a license under the APA to use Novell’s UNIX and UnixWare copyrighted works in its business, Novell would not transfer ownership of any copyrights. Id.

How do you argue against that compelling evidence? Here's her declaration, by the way, to give you an idea of what her testimony will be. And here's Tor Braham's. And here's Steven Sabbath's, from the IBM litigation days. He inexplicably says that "Amendment No. 2, however, was intended to confirm, among other things, the parties' intent that SCO would obtain ownership of the UNIX copyrights under the APA..." 'Would obtain' isn't the same thing as 'did obtain', is it? The appeals court said this:
We take no position on which party ultimately owns the Unix copyrights or which copyrights were required for Santa Cruz to exercise its rights under the agreement. Such matters are for the finder of fact on remand.
That was a mystery to me, given the evidence before them. SCO now is acting like the appeals court found that they should have the copyrights, but they explicitly did not, saying that it was for a jury to decide, based on Amendment 2 being, they thought, ambiguous. How ambiguous is it, though, if you have the two lawyers for Novell testifying with paper proof as to the intended meaning, and no one on SCO's side to say anything substantially different? What is there for a jury to decide? The appeals court already said that the APA clearly excluded copyrights, so all the testimony from SCO's witnesses about the APA is to no purpose, in that they said the opposite. SCO's witnesses swore up and down that this wasn't the intent. But that is what was written. And they have no one to speak to Amendment 2 who actually was involved in drafting it except Steve Sabbath, and what will he say about the drafts? What can he say, with his hand on the Bible and all?

Moving on to Ty Mattingly, there are some interesting details. First, since SCO's expert, Dr. Gary Pisano, mentioned over and over how Santa Cruz had 80% of the Intel market, Mattingly quantifies that in a way that reveals that it was indeed still a very small part of the overall market. In his deposition, attached as Exhibit A, he says this on the very last page of the snip:

Q: And what do you recall about what the merged product was?

A: Well, I think it's important to understand that SCO, when I say that they were the leading Unix on Intel provider, my memory might be a little off here, but the leader was only selling 200,000 servers a year, you know, every year, year -- every year in and year out. You know, to contrast that, I mean Novell, we were probably in the, you know, 4 million plus servers out there.

That should provide some perspective on Pisano's testimony on damages, I'd think. But far more interesting to me that he claims the following about the copyrights:
A: Well, my firm belief is that we sold the Unix business to SCO, and that is why SCO paid us roughly 125 million dollars at that point because they bought the Unix business fromus basically in its entirety... Yeah. I mean absolutely. I believe that when they bought the business, when they paid us $125 million dollars, that the negotiations that we were involved with there was about selling them the entire business, the software, which would have included the copyrights.
He doesn't explain the huge disparity between what Novell paid USL for the Unix business and the much lesser amount SCO paid Novell just a few years later. On page 28:
A: Yeah. Clearly Novell owned the copyrights. We bought Unix Systems Labs from AT&T for some 300 plus million dollars. So yeah, we owned the Unix business, lock, stock and barrel, and it was the Unix business that we divested to SCO.
Hmm. Quite a bargain, then, to get it for $125 million, instead of $300 million. And if they didn't transfer the patents, and SCO has acknowledged they didn't, was it lock, stock and barrel? Did Mattingly forget that part?

Here's what Judge Kimball said about Mattingly:

Ty Mattingly testified that Thompson was "not really involved in the details of the Novell, Santa Cruz transaction." Mattingly Dep. at 70-71. He stated that Thompson was "checked out" during the drafting of the APA and was "not in the office that often." Id. at 71-72. He also testified that he relied on Tor Braham and his team for the detail drafting of the agreement. Id. at 30-31. Braham confirmed that Thompson "was not involved in negotiating or drafting the APA contract language." Decl. Tor Braham ¶ 24. However, Thompson testified that if Novell had intended to retain the copyrights, it would have said "you get all the business except the copyrights." Thompson Dep. at 133.

Ty Mattingly, Novell's Vice President for Strategic Relations at the time of the APA, testified in his deposition that it was his belief that Novell sold the Unix business to SCO, and that SCO paid roughly 125 million dollars because it bought the UNIX business from Novell "basically in its entirety." Decl. Mark James Ex. 9 ("Mattingly Dep.") at 10. He further explained that his view was that "[t]he only things that did not go with that was a kind of an agent relationship whereby SCO was collecting the SVRX royalties from existing OEMs at the time we sold that business and then giving the bulk of those moneys back to Novell." Id. at 29- 32. Mattingly, however, also testified that his role "related only to high level business strategy" and he was "not involved in the details of the legal document." Id. at 66. He admitted that he was involved "very superficially" in the "last two or three weeks before the contract was executed," which was "when the back and forth concerning the legal provisions was taking place." Id. at 68-69.

And when asked if copyrights were ever discussed, he says he doesn't remember any such discussions, while saying that he attended every single meeting about the APA:
Q: And can you recall considering specifically the issue of Unix copyrights during the course of the APA negotiations? When I say you, I mean you personally.

A: You know, I, personally do not recall sitting there saying, yes. The Unix copyrights are part of this lock-stock-and-barrel Unix business that we are selling. But once again, I think it's important to understand that at the high level, that's where I was involved.

I think he's forgetting something, to put it in the kindest possible way. Mr. Mattingly is listed as being in attendance at the board meeting at Novell the day they decided the copyrights would *not* transfer. I know. He went to the men's room at the crucial moment?

He also doesn't mention his Vultus connection when giving his bio at the opening. Here's an article from Groklaw in 2003 that will fill you in on Vultus. Here's Frank Hayes' article, SCO's Shell Game, about SCO's announcement that it was buying Vultus:

Trying to make sense of The SCO Group's threat last week to sue any Linux user who doesn't buy a Unix license? Forget the threat. Instead, look at the announcement SCO made the following day -- the one in which SCO said it's now in the Web services business thanks to its acquisition of Vultus Inc.

And how did SCO buy Vultus? With newly issued SCO stock, of course -- stock whose price gets a boost every time the company makes yet another wild claim about who it will sue next....

But every time SCO makes a new, wilder set of legal threats, speculators bid up the price of SCO stock - starting in March, with the IBM lawsuit, then in May, when the threatening letters were sent, then again in June, when SCO tried to make IBM users pull the plug, and again last week. SCO's stock price is now about 10 times what it was six months ago....

That brings us back to Vultus, which was majority-owned by The Canopy Group, former Novell boss Ray Noorda's personal investment fund. And Canopy -- surprise! -- also controls SCO, as well as some 30 other small companies. Last week, SCO didn't disclose much information about the deal. But in fact, the details were already on the record in SCO's recent filings with the SEC. It turns out SCO didn't simply use stock to buy another company. SCO printed up about $3 million in new stock. Then, in the complicated deal in which SCO acquired Vultus, the stock was cashed out, with most of the proceeds going to Canopy.

Some went to Canopy as a Vultus shareholder; the rest went to Canopy as compensation for taking on Vultus' debt, some of which was presumably owed to Canopy.

Got all that? If it sounds like a shell game, well, that's the way Canopy likes to move its companies around. But in effect, Canopy used SCO's stock price, boosted by SCO's Linux threats, to rake in a couple of million dollars in cash behind the scenes.

Mattingly was at Vultus. Here's the picture showing Vultus and SCO, side by side. Ralph Yarro was on the Vultus board, and so was Ty Mattingly. So, I'd call him a deep insider.

In July of 2003, SCO told the SEC that the Vultus deal involved no significant assets:

No current assets or tangible assets of significant value were acquired. Based on the nature and status of the research and development projects at the date of acquisition, none of the purchase price has been allocated to in-process research and development.
Later, the company told the SEC they'd never get any cash flow from the Vultus assets:
We performed an impairment analysis as of April 30, 2004 in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets" and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," and determined that the goodwill and intangible assets related to the Vultus technology, which we acquired from Vultus, Inc. ("Vultus") in June 2003, had been impaired. We concluded that an impairment-triggering event occurred during the second quarter of fiscal year 2004 as an impending partnership that would solidify the Vultus revenue and cash flow opportunities did not materialize. Additionally, we had a reduction in force that impacted our ability to move the Vultus initiative forward on a stand-alone basis. Consequently, we have concluded that no significant future cash flows related to its Vultus assets would be realized. As a result of these analyses, we wrote-down the carrying value of our goodwill related to the Vultus acquisition from $1,166,000 to $0 and wrote-down intangible assets related to our Vultus acquisition from $973,000 to $0.
But the same deal regarding allegedly insignificant assets also had a stock aspect. Here's what SCO's registration statement in July of 2003 said:
The following table provides information, as of the date of this prospectus, concerning the selling stockholders. This information has been provided by the selling stockholders. We are not a party to any agreement, arrangement, or understanding regarding the sale of any of the shares, other than agreements requiring us to file and seek the effectiveness of the registration statement of which this prospectus forms a part, and which require Vultus, Inc. to distribute the shares of our common stock that it owns to its shareholders in connection with the voluntary dissolution of Vultus. Vultus received the shares of our common stock being offered by this prospectus in connection with our acquisition of certain assets from Vultus. The Canopy Group, Inc., which owns in excess of 40% of our outstanding common stock, was a shareholder of Vultus and held a significant portion of its debt. As such, it received the shares being offered by it pursuant to this prospectus. During fiscal year 2002, the Company entered into an operating lease agreement with The Canopy Group for office space for its headquarters in Utah that continues through December 2007. The Company pays Canopy approximately $46,000 per month for this office space. Additionally, Ralph J. Yarro III, and Darcy Mott, The Canopy Group's Chief Executive Officer and Chief Financial Officer, respectively, are both members of our board of directors. Except for these transactions and relationships, and the ownership of shares by The Canopy Group, neither Vultus nor its shareholders have had a material relationship with us in the past three years.
Somebody, I gather, got something out of it, even if the company said it didn't. Later, as you can see if you read all the links, Me Inc was spawned from Vultus. Ty Mattingly was listed as wanting to sell his 9,500 or so SCO shares. Did he sell them all? If not, is he still a SCO shareholder? In November of 2003, he was called a "close friend" of Darl McBride. This is a very tight little circle, is it not?

Here the memoranda are as text, bit by bit, as we get them transcribed, minus the headers, to conserve space and save time:

675:

NOVELL, INC.’S OPPOSITION TO SCO’S MOTION IN LIMINE NO. 1 TO PRECLUDE MISLEADING STATEMENTS OR EVIDENCE CONCERNING LANGUAGE IN APA REMOVED BY AMENDMENT NO. 2

SCO’s request for an order in limine precluding “misleading statements” concerning the copyright exclusion language in the APA should be denied. Although the copyright exclusion language of the APA was subsequently amended, SCO cannot dispute the obvious relevance of the original language to understanding the intent behind the amendment. Novell’s percipient witnesses will testify that the APA excluded UNIX copyrights from the assets sold to SCO and that Amendment No. 2 was not intended to reverse that exclusion. This story cannot be told without reference to the language of the APA itself—this includes both the original language of the APA and Amendment No. 2.

I. ARGUMENT

“Amendment No. 2 must be considered together with the APA. . . .” SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1211 (10th Cir. 2009). The Tenth Circuit acknowledged that the copyright exclusion language of the original APA was perfectly clear, but found that the language of Amendment No. 2 was ambiguous. Id. at 1210. Based on this, the court held that “extrinsic evidence regarding the parties’ intent is relevant to [the] interpretation of the combined instrument.” Id. at 1211. Because, as the Tenth Circuit stated, Amendment No. 2 “merely clarified or affirmed the original intent of the transaction” (id. at 1214, n.2), the presentation of evidence will by necessity refer to the original language of the APA.

SCO does not contest that it “may be necessary” for Novell to refer to the copyright exclusion language in the APA in the course of presenting its evidence. (Mot. at 1.) Novell’s witnesses will necessarily reference the APA in explaining their understanding of the original deal and the intent behind Amendment No. 2. For example, Novell plans to present the testimony of Allison Amadia to explain the negotiation and drafting of Amendment No. 2. Ms. Amadia was Novell’s legal representative in the negotiations with Santa Cruz that led to Amendment No. 2. (Decl. of Allison Amadia ¶ 4, Dkt. No. 278.) She will testify that when she was approached by Santa Cruz with a proposal to amend the APA to give Santa Cruz rights to

1

copyrights in UNIX and UnixWare, she first read the language of the APA to confirm that it contained a copyright exclusion. (Id. at ¶ 7.) She will further testify that “Amendment No. 2 was not intended to alter the Original APA’s copyright ownership exclusion,” but rather “affirmed that Santa Cruz had a license under the Original APA to use Novell’s UNIX and UnixWare copyrighted works in its business.” (Id. at ¶ 14.) The copyright exclusion language in the APA therefore is central to Ms. Amadia’s testimony[1]. Similar testimony will be offered by other Novell witnesses. There is no basis for excluding or limiting any of this highly relevant testimony.

The original language of the APA is also relevant to Novell’s defense against SCO’s slander of title claim, specifically to show that Novell had a reasonable basis for its May 28, 2003 statement challenging SCO’s claim of ownership. (Ex. 1A (Novell Trial Ex. J15) at 2.) Novell’s interpretation at that time was based on its reading of the copyright exclusion language in the original APA. (Ex. 1B (Novell Trial Ex. Y15) at 2.) Novell’s subsequent press releases must also be understood by reference to the original language of the APA. For example, Novell’s letter of August 4, 2003, first sets forth the general exclusion of copyright from the transferred assets, and then discusses the exception in Amendment No. 2. (Ex. 1C (Novell Trial Ex. D18.) Argument and testimony about the original language in the APA should be admitted for this purpose.

SCO contends the jury would be misled by statements that suggest that the APA still contains its original copyright exclusion language. (Mot. at 1.) But SCO fails to identify precisely what statements it would like the Court to preclude. If by its motion SCO seeks to prohibit arguments or testimony that Amendment No. 2 never occurred, Novell and its witnesses will acknowledge at trial that the APA has been amended. However, given the undisputed relevance of the original language of the APA, SCO’s request for an order precluding some undefined category of “misleading statements” should be denied.

2

II. CONCLUSION

SCO’s request to preclude “misleading statements” concerning the copyright exclusion language of the original APA should therefore be denied.

DATED: February 19, 2010

Respectfully submitted,

By: /s/ Sterling A. Brennan
WORKMAN NYDEGGER

MORRISON & FOERSTER LLP

Attorneys for Defendant and Counterclaim-Plaintiff Novell, Inc.

3

676:
NOVELL’S OPPOSITION TO SCO’S MOTION IN LIMINE NO. 2 RE REVERSED RULINGS

SCO’s motion in limine no. 2 (“Motion,” Dkt. No. 645) seeks to preclude Novell from referencing certain summary judgment rulings. According to SCO, those determinations are moot in light of the Tenth Circuit’s reversal, and therefore irrelevant and potentially misleading to the jury. However, the fact that those rulings were made at all is directly relevant to Novell’s defenses to SCO’s claims, and SCO has not identified any potential prejudice substantially outweighing that relevance. Thus SCO’s Motion should be denied.

I. JUDGE KIMBALL’S PREVIOUS RULINGS ARE RELEVANT TO NOVELL’S GOOD FAITH

The specific rulings targeted by SCO’s Motion are that Novell (1) owns the copyrights and (2) has the right to waive (or direct SCO to waive) certain claims against IBM. (Motion at 1.) The Motion does not identify any other rulings sought to be excluded. According to SCO, “that the District Court previously made such rulings” is irrelevant “because they were reversed by the Court of Appeals.” (Id.)

But the fact that Judge Kimball made those rulings is relevant, notwithstanding the Tenth Circuit’s reversal. SCO still is asserting that Novell (1) slandered its supposed title to the copyrights, by asserting ownership; and (2) breached the covenant of good faith and fair dealing, by “purporting to waive and revoke SCO’s rights and claims against IBM.” (Second Am. Compl., Dkt. No. 96, at ¶ 99(c).) One of Novell’s primary defenses to both claims is that it acted in good faith and had probable cause for engaging in the conduct on which those claims are based.1 And the fact that Judge Kimball once granted summary judgment on SCO’s claims, even though those rulings were reversed, is probative of Novell’s good faith and probable cause.2

1

II. SCO HAS NOT DEMONSTRATED PREJUDICE

SCO alleges that introduction of Judge Kimball’s rulings “could only serve to mislead the jury.” (Motion at 1.) But if the summary judgment rulings to which SCO’s motion is directed come in, then so too — in all probability — will the Tenth Circuit’s reversal (to explain why the issues are still live). There is thus no risk of the jury being misled.

If there were such a risk, it would be more properly addressed by measures other than exclusion. Cf. Fed. R. Evid. 403 advisory comm. note (“In reaching a decision whether to exclude on grounds of unfair prejudice, consideration should be given to the probable effectiveness ... of a limiting instruction”). For example, “a court may ... take judicial notice, whether requested or not of its own records and files,” St. Louis Baptist Temple v. F.D.I.C., 605 F.2d 1169, 1172 (10th Cir. 1979) (citation omitted); and having taken notice, can then “instruct the jury to accept as conclusive any fact judicially noticed,” Fed. R. Evid. 201(g). If the Court discerns a risk of the jury being misled then the Court can use the tools of judicial notice and jury instruction to clarify matters and thus avoid confusion.

“The exclusion of relevant evidence under Rule 403 is 'an extraordinary remedy to be used sparingly.’” K-B Trucking Co. v. Riss Int’l Corp., 763 F.2d 1148, 1155 (10th Cir. 1985) (citation omitted). Here, the circumstances do not justify the extraordinary remedy SCO seeks.

III. CONCLUSION

SCO’s Motion should be denied because Judge Kimball’s summary judgment rulings are relevant to Novell’s good faith and probable cause, and there is no real risk of the jury being misled.

2

DATED: February 19, 2010
Respectfully submitted,
By: /s/ Sterling A. Brennan
WORKMAN NYDEGGER

MORRISON & FOERSTER LLP

Attorneys for Defendant and Counterclaim-Plaintiff Novell, Inc.

__________

1 Carma Developers (Cal.), Inc. v. Marathon Dev. Cal., Inc., 2 Cal. 4th 342, 373, 826 P.2d 710 (1992) (“the covenant of good faith can be breached for objectively unreasonable conduct”); Weaver v. Stafford, 134 Idaho 691, 701, 8 P.3d 1234 (2000) (“An action will not lie where a statement in slander of title ... was made in good faith with probable cause” [emphasis added]).

2See, e.g., Harris Custom Builders Inc. v. Hoffmeyer, 834 F. Supp. 256, 261-62 (N.D. Ill. 1993) (“An action that is well enough grounded, factually and legally, to survive a motion for summary judgment is sufficiently meritorious to lead a reasonable litigant to conclude that they had some chance of success on the merits”).

3

677:

NOVELL’S OPPOSITION TO SCO’S MOTION IN LIMINE NO. 3 RE NOVELL’S MONETARY JUDGMENT AGAINST SCO

SCO’s motion in limine no. 3 (“Motion,” Dkt. No. 646) seeks to preclude Novell from referencing a $2.5 million dollar judgment entered against SCO by Judge Kimball; which is now, having been affirmed by the Tenth Circuit, final in every respect. SCO argues that reference to the judgment should not be allowed because the judgment is irrelevant and prejudicial.

SCO’s Motion is the converse of Novell’s own motion in limine no. 11. (Dkt. No. 636.) As explained in that motion and hereinbelow, the judgment is relevant because it goes to whether SCO performed its own obligations under the contract it is now attempting to enforce against Novell. Because the judgment is directly relevant, and SCO has not identified any prejudice substantially outweighing that relevance, SCO’s Motion should be denied.

I. NOVELL’S $2.5 MILLION DOLLAR JUDGMENT IS RELEVANT TO SCO’S FAILURE TO COMPLY WITH ITS OBLIGATIONS UNDER THE APA

As SCO recognizes, evidence is relevant if it has “any tendency to make the existence of any fact ... of consequence ... more probable or less probable.” (Motion at 1.) Here, the judgment SCO seeks to exclude bears directly on facts material to SCO’s own contract claims. Specifically, SCO maintains that it still has viable claims against Novell for (1) specific performance of, and (2) breach of the covenant of good faith and fair dealing inhering in, the APA. To prevail on either claim, SCO must prove that it performed its own obligations under the contract. Cal. Civ. Code § 3392 (specific performance); Judicial Council of Cal. Civ. Jury Instr. 303 (breach).1 Novell’s judgment against SCO establishes that SCO breached the APA — by modifying a legacy licensing agreement with Sun Microsystems without first consulting or even notifying Novell — before Novell committed any of the acts by which Novell allegedly breached.

1

II. SCO FAILS TO DEMONSTRATE PREJUDICE OUTWEIGHING THE PROBATIVE VALUE OF THE JUDGMENT

Relevant evidence “may be excluded if its probative value issubstantially outweighed by the danger of unfair prejudice.” Fed. R. Evid. 403 (emphasis added). “‘Unfair prejudice,’ as used in Rule 403, does not mean the damage ... that results from the legitimate probative force of the evidence; rather, it refers to evidence which tends to suggest decision on an improper basis.” United States v. Mendez-Ortiz, 810 F.2d 76, 79 (6th Cir. 1986). “In performing the 403 balancing, the court should give the evidence its maximum reasonable probative force and its minimum reasonable prejudicial value.” Deters v. Equifax Credit Info. Servs. Inc., 202 F.3d 1262, 1274 (10th Cir. 2000) (internal quotations omitted). “The exclusion of relevant evidence under Rule 403 is ‘an extraordinary remedy to be used sparingly.’” K-B Trucking Co. v. Riss Int’l Corp., 763 F.2d 1148, 1155 (10th Cir. 1985) (citation omitted). The only prejudice SCO alleges is speculation that the jury might be “improperly prejudice[d]” by the mere fact “that Novell has obtained the judgment.” (Motion at 1.) That speculative risk is not enough to outweigh the clear and direct relevance of key evidence that is central to Novell’s defense against SCO’s contract claims. See also United States v. Boulware, 384 F.3d 794, 808 (9th Cir. 2004) (“Any danger that the jury would have given undue weight to the ... judgment could have been dealt with by a cautionary instruction”); Fed. R. Evid. 403 advisory comm. note (“In reaching a decision whether to exclude on grounds of unfair prejudice, consideration should be given to the probable effectiveness ... of a limiting instruction”).

III. CONCLUSION

Because Novell’s judgment against SCO is directly relevant to whether SCO performed its own obligations under the contract it is asserting against Novell, and SCO has not identified any risk of prejudice substantially outweighing that clear and direct relevance, SCO’s Motion should be denied.

2

DATED: February 19, 2010

Respectfully submitted,

By: /s/ Sterling A. Brennan
WORKMAN NYDEGGER

MORRISON & FOERSTER LLP

Attorneys for Defendant and Counterclaim-Plaintiff Novell, Inc.

_____________

1 Section 9.8 of the APA chooses California law. The cited statute and jury instruction are reproduced in Exhibit 11A to Novell’s motion in limine no. 11, Dkt. No. 636.

3

678:
NOVELL, INC.’S OPPOSITION TO SCO’S MOTION IN LIMINE NO. 4 TO EXCLUDE REFERENCE TO LITIGATION COMMENTARY

SCO’s request for an order precluding all references to “commentary on this case or related litigation,” including the Groklaw website, should be denied. Novell agrees that it would be improper for the jury to consult Groklaw or any other external sources during the trial. But SCO’s motion seeks to conceal from the jury a broad and largely undefined category of litigation commentary, much of which is directly relevant to Novell’s defense to SCO’s slander of title claim. Any prejudice SCO identifies can be prevented by instructing the jury not to investigate any external sources during the trial.

I. ARGUMENT

SCO’s assertion that litigation commentary, including the Groklaw website, is not relevant is simple wrong. SCO alleges that Novell has slandered its title to the UNIX copyrights, and that SCO has incurred damages as a result. (Second Am. Compl. ¶¶ 91-93, Dkt. No. 96.) The commentary relating to SCO’s dispute on Groklaw and other sources is relevant to Novell’s defense to SCO’s slander of title claim, including rebutting SCO’s damages theory.

In order to prove the special damages element of its slander of title claim, SCO must show that harm “resulted from” Novell’s statements, “not from other factors.” Macia v. Microsoft Corp., 152 F. Supp. 2d 535, 541 (D. Vt. 2001) (internal quotations omitted). Novell’s evidence against SCO’s causation theory includes information that was published on Groklaw and references to Groklaw. Indeed, SCO’s CEO, Darl McBride, cited Groklaw itself as a cause for the poor performance of the SCOsource initiative. (Ex. 4A (Novell Trial Ex. C30) at 3 [Mr. McBride is quoted as saying that Groklaw is “having a dampening effect” on SCOSource].) In addition, when Mr. McBride wrote an open letter to Linux users claiming license fees were owed, the open source community used Groklaw to respond that it would “not accept your attempt to charge us a second time for a product that we have already bought and paid for,” suggesting that Novell’s statements were not the sole cause of SCOsource’s failure. (Ex. 4B

1

(Novell Trial Ex. Q20) at 3.) It will, therefore, be necessary for Novell to reference Groklaw in defending against SCO’s damages claim.

Other litigation commentary, including publicity surrounding SCO’s suit against IBM, is also necessary for the same reason. The SCOsource licensing program, launched in January 2003, generated a great deal of negative publicity that was in part responsible for the poor performance of SCOsource. (See generally Mem. ISO Novell’s Motion for Summary Judgment on SCO’s First Claim for Slander of Title Based on Failure to Establish Special Damages ¶¶ 14- 19, Dkt. No. 288 (under seal).) Some of this publicity involved commentary on the IBM litigation, including recommendations that Linux users not purchase a SCOsource license. (See, e.g. Ex. 4C (Novell Trial Ex. T44) at 1 (“There is real doubt as to whether end users should purchase a license from SCO.”); Ex. 4D (Novell Trial Ex. D30) at 4 (advising Linux users not to contract or negotiate with SCO during the litigation process with IBM).) This evidence shows that other factors contributed to the poor performance of SCOsource; such evidence is directly relevant to disproving SCO’s causation theory.

SCO’s motion seeks to preclude all testimony about, and reference to, litigation commentary. The motion refers to “a number of websites and publications which have followed this litigation and related litigation” (Mot. at 1), but SCO presents no argument why this broad and largely undefined category of evidence should be precluded. The prejudice SCO identifies relates only to SCO’s narrower request that the Court should “not allow Novell or its counsel or witnesses to make any statements that might lead jurors to investigate” sources such as Groklaw. (Mot. at 1.) Novell agrees that it would be improper for either party to direct jurors to public sources of commentary on this litigation. However, because SCO’s request to preclude all references to litigation commentary would risk the exclusion of highly relevant evidence, SCO’s concern is properly addressed by instructing the jury not to investigate external sources of information.

2

II. CONCLUSION

SCO’s request to preclude all testimony about, and reference to, litigation commentary should therefore be denied.

DATED: February 19, 2010

Respectfully submitted,

By: /s/ Sterling A. Brennan

WORKMAN NYDEGGER

MORRISON & FOERSTER LLP

Attorneys for Defendant and Counterclaim-Plaintiff Novell, Inc.

3

679:
NOVELL, INC.'S OPPOSITION TO SCO'S MOTION IN LIMINE NO. 5 TO EXCLUDE STATEMENTS MADE BY MICHAEL ANDERER AS AN INDEPENDENT CONTRACTOR FOR SCO

SCO's motion to exclude statements made by Michael Anderer as purportedly inadmissible hearsay should be denied because Mr. Anderer's statements are not being offered for the truth of the matter asserted. At SCO's request, Mr. Anderer examined the APA and reported to SCO's CEO, Darl McBride, that SCO had not obtained all of the UNIX intellectual property under the APA. Contrary to SCO's assumption, Novell does not intend to offer Mr. Anderer's statements to establish that the UNIX copyrights did not transfer under the APA, but rather to establish Mr. McBride's state of mind when he was communicating with Novell in 2002 and 2003 regarding the UNIX copyrights. This evidence is highly relevant to Novell's defenses.

I. ARGUMENT

SCO mistakenly assumes that any reference at trial to Mr. Anderer's statements concerning the APA would be hearsay, admissible only if Rule 801(d)(2)(D) applies. However, Novell does not plan to offer Mr. Anderer's statements to prove the truth of the matter asserted, so they are not hearsay. See Fed. R. Evid. 801(c)(defining hearsay as an out-of-court statement "offered in evidence to provide the truth of the matter asserted"); United States v. McIntyre, 997 F.2d 687, 704 (10th Cir. 1993)(documents not hearsay where not offered for the truth of the assertions contained therein). SCO's motion should therefore be denied.

Mr. Anderer's statements, including statements concerning the APA made in a January 4, 2003 email to Darl McBride, will be offered to show Mr. McBride's state of mind when he contacted Novell requesting transfer of its UNIX copyrights. Mr. Anderer was retained by SCO in 2003 as an outside contractor, in which capacity he reviewed and offered remarks regarding the APA. For example, after reviewing the APA, Mr. Anderer advised Mr. McBride that the agreement "indicates Novell transferred substantially less" of the UNIX intellectual property than it owned. (Ex. 5A (Novell Trial Ex. C12).) Mr. Anderer noted that the APA excluded "all patents, copyrights and just about everything else," and concluded with the following warning to Mr. McBride: "We really need to be clear on what we can license. It may be a lot less than we think." (Id.)

Subsequently, on February 4, 2003, Mr. McBride contacted Christopher Stone, Vice Chairman of Novell, and state that he wanted Novell to "amend" the APA to give SCO the "copyrights to UNIX." (Ex. 5B (Novell Trial Ex. E32) at 1.) On February 25, 2003, Mr. McBride contacted Novell again, asserting that SCO "needs the copyrights." (Ex. 5C (Novell Trial Ex. W12).) Because Novell plans to offer Mr. Anderer's statements to show their effect on Mr. McBride's state of mind when he contacted Novell in early 2003, not for the truth of Mr. Anderer's interpretation of the APA, they are not hearsay. Howard Den Hartog v. Wasatch Academy, 909 F. Supp. 1393, 1396 n. 1 (D. Utah 1995) (denying motion in limine in part because the evidence objected to as hearsay was "not hearsay because it is offered to show its affect on or state of mind of Defendants and not for the truth of the matter asserted."); United States v. Hanson, 994 F.2d 403, 406 (7th Cir. 1993) ("An out of court statement that is offered to show its effect on the hearer's state of mind is not hearsay.") (citation omitted). The statements, therefore, are admissible.

Even if the statements were hearsay, Novell may still offer Mr. Anderer's statements to impeach Mr. McBride at trial. See United States v. Crouch, 731 F.2d 621, 623 (9th Cir. 1984) (hearsay statements may be admissible to impeach a declarant who subsequently testifies at trial).

II. CONCLUSION

For the foregoing reason, SCO's motion to exclude Mr. Anderer's statements should be denied.

DATED: February 19, 2010

Respectfully submitted,

By: /s/ Sterling A. Brennan

WORKMAN NYDEGGER

MORRISON & FOERSTER LLP

Attorneys for Defendant and Counterclaim-Plaintiff Novell, Inc.

682:
SCO’S OPPOSITION TO “NOVELL’S MOTION IN LIMINE NO. 2 TO DETERMINE THAT FIRST AMENDMENT DEFENSES APPLY TO SLANDER OF TITLE”

Novell argues that the First Amendment defenses that may apply to claims for defamation should apply to SCO’s claim for slander of title, because that claim is essentially the same as a claim for defamation.1 As an initial matter, this motion is properly a request for a jury instruction, not a motion in limine, and may be denied for that reason. Novell’s argument also should be rejected on its merits. In addition, as also discussed in response to Novell’s Motion in Limine No. 3, the Court, in an abundance of caution, could address Novell’s concerns with a special question on the verdict form.

1. A claim for slander of title is different from a claim for defamation. Novell admits that it has found no case applying the First Amendment in a slander of title case, yet it asks this Court in the context of an evidentiary motion with limited briefing to break new ground. The reality is that federal courts have never applied First Amendment defenses to a claim for slander of title. In Mueller v. Abdnor, 972 F.2d 931 (8th Cir. 1992), the court expressly declined to apply the First Amendment to a claim for slander of title, reasoning that the case involved “defamation of the ownership of land, not defamation of an individual’s reputation.” Id. at 937. In an analogous line of cases, the Supreme Court declined to apply a First Amendment defense to a claim for misappropriation of property, with respect to the broadcast of a videotape of the plaintiff’s public entertainment act. Zacchani v. Scripps-Howard Broadcasting Co., 433 U.S. 562 (1977). The “interest protected” in a defamation claim is “permitting recovery for placing the plaintiff in a false light,” whereas the interest in permitting a right to the fruits of one’s property “is in protecting the proprietary interest of the individual in his act in part to encourage such entertainment.” Id. at 572-73. The interest is thus “closely analogous to the goals of patent and copyright law, focusing on the right of the individual to reap the reward of his endeavors and having little to do with protecting feelings or reputation.” Id. at 573 (emphasis

1

added); see also Hustler Magazine v. Falwell, 485 U.S. 46, 53 (1988) (reaffirming the ruling in Zaccahani “that the ‘actual malice’ standard does not apply to the tort of appropriation of a right of publicity”). This analysis compels the same result here.

2. The nature of Novell’s speech does not warrant a First Amendment instruction.2 In any event, it is well established that commercial speech occupies a “subordinate position in the scale of First Amendment values.” Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 456 (1978). Accordingly, where a defendant’s defamatory statements constitute “commercial speech,” the statements are not entitled to the First Amendment protection necessary to require proof that the defendant acted with “actual malice.” New York Times Co. v. Sullivan, 376 U.S. 254, 265-66 (1964) (making threshold determination that speech at issue was “editorial” rather than “commercial”); Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 547-59 (5th Cir. 2001) (declining to apply “actual malice” standard concerning commercial speech); U.S. Healthcare, Inc. v. Blue Cross, 898 F.2d 914, 928-39 (3d Cir. 1990) (same).

The main factors are whether the speech was contained in an advertisement, referred to a product, and was made with an economic motive. Bolger, 463 U.S. at 66; accord Proctor & Gamble Co. v. Haugen, 222 F.3d 1262, 1274 (10th Cir. 2000). A statement containing those elements, even if it also contains “discussions of important public issues,” is commercial speech. Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 67-68 (1983); accord Haugen, 222 F.3d at 1275. A press release may constitute an “advertisement.” Neuralstem, Inc. v. StemCells, Inc., 2009 WL 2412126, at *5 (D. Md. Aug. 4, 2009).

2

The Novell press releases of May 28 and June 6, 2006, which Novell acknowledges should be considered together, were advertisements and commercial speech. Novell admits that it issued the press releases to “gain credibility with the OpenSource community.” (Ex. 1 at 67.) It begins the first press release by explaining that it is “[d]efending its interests in developing services to operate on the Linux platform,” and as a “leading proponent of open source” states that Novell had made “recent announcements to support Linux with NetWare services,” a Novell product. Both press releases state that Novell “is a leading provider of information services” and specifically identify Novell’s “NsureTM”, “exteNdTM”, “NterpriseTM”, and “NgageTM” products. They address other subjects as well - indeed, the first press release contains a factual assertion of copyright ownership - but they were made with an economic motive, they refer to multiple products, and they seek to advertise their value and relevance to the subject matter otherwise addressed.

3. The verdict form can be appropriately structured. Novell’s motion is really a request for a jury instruction, and question on the verdict form, and not a request for a pretrial evidentiary ruling. Even while denying Novell’s motion for the above reasons, the Court could propound a jury question on the verdict form to separately ask whether Novell has acted with “actual malice” and/or “common law malice.” One advantage of this approach is that even if an appellate court were later to find that the First Amendment applied, there would not be a need for a new trial. Similarly, by denying Novell’s motion and having the jury consider damages even if they did not find “actual malice,” the Court also avoids the prospect of a retrial in the event an appellate court holds that the First Amendment does not require heightened intent on this slander of title case.

3

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell’s “Motion in Limine No. 2,” but without prejudice to consideration of the issue with respect to jury instructions and the verdict form.

DATED this 19th 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.

______________

1 This is the “first half” to Novell’s Motion in Limine concerning the First Amendment.

2 The Supreme Court has declined to determine whether First Amendment defenses apply to a claim other than defamation where resolution of that issue was not necessary. See Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 513 (1984) (taking no position on whether such an analysis “should be applied to a claim of product disparagement”).

5

683:

SCO'S OPPOSITION TO "NOVELL'S MOTION IN LIMINE NO. 3 TO DETERMINE THAT SCO IS A LIMITED PURPOSE PUBLIC FIGURE"

Novell argues that SCO must prove that Novell has acted with "actual malice" because SCO was a "limited purpose public figure" when Novell made its statements at issue.1 SCO has shown in opposition to Novell's "Motion in Limine No. 2" that First Amendment standards should not apply to SCO's claim for slander of title. If the First Amendment is found to apply to a slander of title claim and Novell's statements qualify for heightened protection notwithstanding their commercial nature, the appropriate course would be to provide a special question on the verdict form. (See SCO Response to Motion in Limine No. 2.)

SCO will present at trial an abundance of evidence from which the jury can find that Novell acted with "actual" or "constitutional malice," meaning knowledge that the statement was false or with reckless disregard for its truth.1 This evidence includes Novell not having duly investigated or considered Amendment No. 2 to the Asset Purchase Agreement before making its initial slander, retracting its retraction after having undisputed knowledge of Amendment No. 2, and continuing on a campaign of slander through false copyright registrations, speeches and statements on its website that continue to the present day. The knowing falsity of Novell's claim to have kept the copyrights will further be underscored by its delivery of the registrations to SCO, its letters to third parties stating the entire ownership interest of the UNIX business had been sold, its press release at the time of the sale saying its intellectual property rights had been transferred, and a pattern of conduct after the sale which reflected knowledge and understanding that the copyrights had been sold to SCO.

If the First Amendment is found to apply to a slander of title claim and that Novell's speech is not "commercial" in nature (see SCO's Response to Motion in Limine No. 2), the verdict form can be appropriately structured with a question concerning "constitutional malice." Indeed, even while denying Novell's motion, the Court may protect against the possibility of appellate reversal on this issue by having a special question on the verdict form asking whether the jury has found by clear and convincing evidence that Novell has acted either with actual knowledge of the falsity of their statements or with reckless disregard for their truth.

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's "Motion in Limine No. 3," but without prejudice to consideration of the issue with respect to jury instructions and the verdict form.

DATED this 19th 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. ______

1 This is the "second half" to Novell's Motion in Limine, concerning the First Amendment.

2 If Novell's motion means to suggest that SCO cannot present evidence of Novell's common law malice, the law is that "common law malice does provide supporting evidence of constitutional actual malice in many ways," such that "almost any evidence of common law malice may be relevant and admissible evidence on the constitutional actual malice issue." D. Elder, Defamation: A Lawyer's Guide § 7:3 (2009) (collecting extensive authority).

684:

SCO'S OPPOSITION TO "NOVELL'S MOTION IN LIMINE NO. 4 TO PRECLUDE SCO FROM CONTESTING THAT NOVELL HAD AN OBJECTIVELY REASONABLE, GOOD FAITH BASIS FOR ITS STATEMENTS REGARDING COPYRIGHT OWNERSHIP"

Novell's Motion in Limine No. 4 argues that the law of the case doctrine precludes litigation of SCO's claims for unfair competition and for breach of the implied duty of good faith and fair dealing insofar as those claims relate to Novell's claims of copyright ownership. With respect to unfair competition, SCO has conceded that there are independent grounds in Judge Kimball's decision that Novell's assertion of copyright ownership cannot constitute unfair competition under Utah law, and accordingly, SCO will not seek to pursue that claim. (Docket No. 669 at 2 n.2.) On the other hand, for the reasons that follow, SCO's claim for breach of the implied covenant should proceed to trial.

Novell argues that despite the Tenth Circuit's reversal of Judge Kimball's conclusions regarding ownership of the copyrights and construction of the Amended Asset Purchase Agreement ("APA"), the Court should preclude SCO from proving its claim for breach of the covenant of good faith at trial because Judge Kimball has already determined that Novell's assertion of copyright ownership was not "objectively unreasonable." Novell's argument is that Judge Kimball based that conclusion on grounds that were "independent" of his construction of the amended APA and conclusions regarding copyright ownership. That is wrong.

An examination of Novell's motion for summary judgment on the implied covenant claim shows that Novell made two arguments: first, that a party's denial of ownership cannot constitute a breach of the implied covenant, which serves to fill gaps in contracts and "should not be extended to prohibit statements about rights conferred by a contract" (Docket No. 272 at 9; Docket No. 332 at 12-16); and second, that for the same reasons as set forth in Novell's motion for summary judgment on copyright ownership, SCO "cannot establish that Novell's statements were false" (Docket No. 272 at 10; Docket No. 332 at 16). The first of these arguments thus would constitute an independent ground for dismissal of SCO's implied covenant claim (as was

the case with Novell's independent argument regarding the scope of Utah unfair competition law); the second would not.

Judge Kimball's decision on the implied covenant does not rest on the first ground above. The Court did not hold that California law does not recognize a claim for breach of the implied covenant that arises from even a bad-faith denial of ownership rights. Instead, the Court states that breach of the covenant requires "objectively unreasonable conduct" and then concludes that there is "no evidence to demonstrate that Novell's position was contrary to its own understanding of the contractual language or objectively unreasonable given the history of the dispute between the parties." (Docket No. 377 at 65).

Judge Kimball's opinion that Novell's reading of the APA was not "objectively unreasonable," however, was predicated on the now reversed conclusions (at 46-62) that (i) the APA can and should be read independent of Amendment No. 2, (ii) extrinsic evidence cannot be considered, and (iii) the APA merely gives SCO an "implied license." SCO appealed all three of those issues, and the Tenth Circuit rejected all three of Judge Kimball's conclusions. SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1210-11, 1214 n.2, 1216 (10th Cir. 2009). It follows that Judge Kimball's basis for saying there was no breach of the implied covenant of good faith and fair dealing was, in fact, dependent on his analysis of the APA. Novell cites Judge Kimball's statement that he would have reached his conclusion even if he had "ruled in SCO's favor on the copyright issue," but the Court did not say that Novell's reading was objectively reasonable even if (i) the APA had to be read together with Amendment No. 2, (ii) extrinsic evidence needed to be considered, or (iii) the APA could not be read as an implied license – the three conclusions that the Tenth Circuit has now established as law of the case on remand.

Since the Tenth Circuit's mandate includes all of the "issues that were necessarily implied" by its

2

mandate, including claims that "part of the mandate might plausibly be read to have restored," SCO's claim for breach of the implied covenant of good faith should proceed to trial. Procter & Gamble Co. v. Haugen, 317 F.3d 1121, 1126 (10th Cir. 2003). In sum, because the prior decision did not rest on independent grounds, the claim for breach of the implied covenant based on Novell's assertions of copyright ownership should be tried.

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's "Motion in Limine No. 4."

DATED this 19th 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.

685:

SCO'S OPPOSITION TO "NOVELL'S MOTION IN LIMINE NO. 5 TO PRECLUDE SCO FROM RELYING ON NOVELL'S JUNE AND AUGUST 2003 STATEMENTS AS FACTUAL ASSERTIONS OF COPYRIGHT OWNERSHIP"

Novell argues that as matter of law certain statements it made in June and August 2003, and published to the world, cannot be a basis for SCO's claim for slander of title because they do not constitute "factual assertions of copyright ownership."1

The Supreme Court long ago rejected the argument that a party can insulate itself from liability for a defamatory or slanderous statement simply by using the words "I think" or "in my opinion" in making the statement. The Court held that "expressions of 'opinion' may often imply an assertion of objective fact." Milkovich v. Lorain Journal Co., 497 U.S. 1, 11-19 (1990); accord Russell v. Thomson Newspapers, Inc., 842 P.2d 896, 902 (Utah 1992). The question is whether a "reasonable factfinder" could conclude that the statement at issue contains such a factual assertion. Milkovich, 497 U.S. at 21; see, e.g., Warren v. City of Junction City, 207 F. Supp. 2d 1216, 1220-21 (D. Kan. 2002); Computerized Thermal Imaging, Inc. v. Bloomberg, L.P., No. 1:00-CV98K, 2001 WL 670927, at *2 (D. Utah. Mar. 26, 2001).2 In addition, as Novell acknowledges, its statements cannot be assessed in a vacuum. All of Novell's statements after May 28, 2003, must be considered against the backdrop that on that date, Novell indisputably did assert its ownership over the copyrights.

June 6, 2003. Novell publishes a press release admitting, as Novell itself emphasizes (at 2), that Amendment No. 2 "appears to support SCO's claim that ownership of certain copyrights

for UNIX did transfer to SCO in 1996." SCO does not assert that this statement constitutes slander of title. The June 6, 2003 press release, however, together with the entire chain of Novell publications, are independently relevant to show Novell's intent and recklessness in a making its initial assertion of copyright ownership on May 28, 2003, and then "retracting the retraction" after the June 6, 2003 press release. Novell made the claim of ownership, then retracted it several days later, then privately retracted its retraction, then later published its retraction of its retraction. The jury is more than entitled to infer Novell's capriciousness and actual knowledge of falsity from these facts.

Novell's June 6 letter is also relevant. Novell made the letter public in December 2003. Novell's June 6 letter responds to a letter that SCO had sent the same day. At the outset of its letter, SCO asserted: "As you know, your accusation that SCO does not own the UNIX copyrights was false and was without a good faith basis for belief." (Novell Ex. B.) In its brief letter in response, Novell asserted: "Your letter contains absurd and unfounded accusations against Novell and others." (Novell Ex. A.) Novell now argues that it did not mean to say that SCO's claim to own the UNIX copyrights was "absurd and unfounded," but that is not the question. The relevant question is: Could a reasonable factfinder conclude that Novell was saying that SCO's ownership claim was "absurd and unfounded"? Yes. Novell did not seek to limit its assertion in any way, or contend that only some of SCO's statements in its letter were false, or in any other way rule out that it was contending that SCO's claim to own the copyrights was unfounded. These are issues for the jury to resolve.

June 26, 2003. In its letter to SCO dated June 26, 2003, which Novell also published in December 2003, Novell addresses certain statements that SCO had made. In particular, Novell took issue with SCO's statements it "owns 'all rights to the UNIX and UnixWare technology,'"

2

and SCO's statement on its website that "SCO owns 'the patents, copyrights and core technology associated with the UNIX System.'" (Novell Ex. C.) After quoting SCO's foregoing statements, Novell then asserted: "SCO's statements are simply wrong." This is the relevant question: Could a reasonable factfinder conclude that Novell was saying that SCO was "simply wrong" in claiming to own the copyrights? Yes. Novell now argues that it qualified its assertion by acknowledging its earlier admission in its June 6 press release, yet Novell's argument has always been that its admission is not really an admission, but rather just a statement what Amendment No. 2 merely "appears" to do. Similarly, Novell points to its statement that Amendment No. 2 "raises as many questions about copyright transfers as it answers," but Novell's argument has been that the lack of clarity in Amendment No. 2 must mean that SCO cannot own the copyrights. These, too, are issues for the jury.

August 4, 2003. In this letter to SCO, Novell states: "We dispute SCO's claim to ownership of these copyrights." (Novell Ex. D.) This statement alone is the equivalent of claiming that SCO does not own the copyrights, and Novell's argument to the contrary is inexplicable. Novell also goes on to state that as of the time of the letter, "SCO's claim to ownership of any copyrights in UNIX technologies must be rejected, and ownership of such rights instead remains with Novell." (Id.) Novell tries to argue that it qualified these statements by acknowledging that its view was contingent on SCO making some showing of need, but this argument is disingenuous. Novell makes the unequivocal statement that "ownership of such rights instead remains with Novell" - necessarily meaning that, as of that time, Novell had been and continued to be the owner of the copyrights. In sum, a reasonable factfinder again could easily conclude from Novell's statements that it was claiming to be the owner of the copyrights.

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's "Motion in Limine No. 5."

DATED this 19th 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. ____________

1 This motion is the first part, with motion no. 6, of Novell's two-part motion. The motions address the same subject matter and apply the same law, they just address different statements. Insofar as Novell's motions seek a ruling that certain of the slanderous statements are not actionable, that is a motion for partial summary judgment that was required to have been brought - like Novell's other summary judgment motions - by April 20, 2007, the deadline for dispositive motions.

2 Novell argues for the proposition that whether a statement is "reasonably capable of a wrongful meaning" is a question of law for the Court, but the cited cases address the discrete and particular question of whether "a statement is capable of sustaining a defamatory meaning," which is a term of art that means a statement "impeaches an individual's honesty, integrity, virtue or reputation and thereby exposes the individual to public hatred, contempt, or ridicule." West v. Thomson Newspapers, 872 P.2d 999, 1008 (Utah 1994). Those questions are not at issue here.

686:

SCO'S OPPOSITION TO "NOVELL'S MOTION IN LIMINE NO. 6 TO PRECLUDE RELIANCE ON STATEMENTS IN DECEMBER 2003 AND MARCH 2004 THAT DO NOT CONSTITUTE FACTUAL ASSERTIONS OF COPYRIGHT OWNERSHIP"

Novell argues that as matter of law certain statements it made public in December 2003 and March 2004 cannot be a basis for SCO's claim for slander of title, because they do not constitute "factual assertions of copyright ownership."1

The Supreme Court long ago rejected the argument that a party can insulate itself from liability for a defamatory or slanderous statement simply by using the words "I think" or "in my opinion" in making the statement. The Court held that "expressions of 'opinion' may often imply an assertion of objective fact." Milkovich v. Lorain Journal Co., 497 U.S. 1, 11-19 (1990); accord Russell v. Thomson Newspapers, Inc., 842 P.2d 896, 902 (Utah 1992). The question is whether a "reasonable factfinder" could conclude that the statement at issue contains such a factual assertion. Milkovich, 497 U.S. at 21; see, e.g., Warren v. City of Junction City, 207 F. Supp. 2d 1216, 1220-21 (D. Kan. 2002); Computerized Thermal Imaging, Inc. v. Bloomberg, L.P., No. 1:00-CV98K, 2001 WL 670927, at *2 (D. Utah. Mar. 26, 2001).2 In addition, as Novell acknowledges, its statements cannot be assessed in a vacuum. All of Novell's statements after May 28, 2003, must be considered against the backdrop that on that date, Novell indisputably did assert its ownership over the copyrights.

December 22, 2003. Novell issues a press release that itself makes certain statements and that attaches and cross-references prior correspondence that Novell had sent to SCO. The press release thus publishes the following statements concerning the issue of copyright ownership:
  • "Novell believes it owns the copyrights in UNIX, and has applied for and received copyright registrations pertaining to UNIX consistent with that position."
  • "Novell detailed the basis for its ownership position in correspondence with SCO. Copies of our correspondence, and SCO's reply, are available here."
  • "Novell continues to assert ownership of the UNIX copyrights."
  • With respect to SCO's letter claiming ownership, Novell had written that SCO's "letter contains absurd and unfounded accusations against Novell and others." (See also SCO's Opposition to Novell's Motion in Limine No. 5.)
  • With respect to SCO's statements that it "owns 'all rights to the UNIX and UnixWare technology,'" and SCO's statement on its website that "SCO owns 'the patents, copyrights and core technology associated with the UNIX System,'" Novell had written: "SCO's statements are simply wrong." (See also SCO's Opposition to Novell's Motion in Limine No. 5.)
  • Novell had further written: "We dispute SCO's claim to ownership of these copyrights," and "SCO's claim to ownership of any copyrights in UNIX technologies must be rejected, and ownership of such rights instead remains with Novell." (See also SCO's Opposition to Novell's Motion in Limine No. 5.)

This is the relevant question: Could a reasonable factfinder conclude from the foregoing statements, taking them either separately or in the aggregate, that Novell was making the factual assertion that it owns the UNIX and UnixWare copyrights? The obvious answer is yes. Indeed, it is hard to conceive of a more repeated and definitive set of slanders to SCO's ownership of the copyrights than those above. Novell's wafer-thin arguments to the contrary not only ignore the obvious import of the foregoing statements and conduct - how does a party apply for copyright registrations on copyrights that it is not factually claiming to own? - but runs directly counter to Novell's simultaneous invocation of qualified privileges such as the "rival claim" privilege. The

2

very premise of Novell's reliance on such legal arguments is that it was "claiming" to own the UNIX and UnixWare copyrights. (See Novell Motion in Limine No. 7.)

March 16, 2004. Novell Vice Chairman Chris Stone gives the keynote address at the March 2004 Open Source Business Conference and, in front of hundreds of people, says of Novell: "We still own UNIX." The statement is widely published. Mr. Stone claims that with respect to this statement, and others, he was being "sarcastic." (Ex. 1 at 62-66.) This is the relevant question: Could a reasonable factfinder conclude from the foregoing statement that Novell was making the factual assertion that it owns the UNIX and UnixWare copyrights? The obvious answer, again, is yes.

Indeed, Mr. Stone's own testimony was that he was claiming to own the copyrights when he made the statement. (Id. at 66.) Novell's claim that Mr. Stone merely was "repeating Novell's subjective view that it owned the copyrights for the reasons in its letters" makes a hash of both the facts and the law, where Mr. Stone neither couched his statement in the form of an opinion - which would not suffice to preclude a claim for slander anyway - nor cross-referenced any pending litigation or arguments therein. Nor does Novell's "subjective" argument make any sense when considered against Mr. Stone's testimony. If he was being "sarcastic," what was he being "sarcastic" about? He plainly meant to assert that Novell owns the copyrights - he says so. (Id. at 66.) So if he was being "sarcastic" only about the extent to which Novell has an ownership interest in UNIX, then by definition the literal meaning of his words were that Novell was claiming a broad ownership interest in UNIX. It follows that a reasonable factfinder could - would have to - conclude from the words he used that he was claiming Novell owns, at least, the copyrights. In fact Mr. Stone could not have made a flatter factual assertion: "We still own UNIX." The jury can decide if, and if so the extent to which, Mr. Stone was being "sarcastic."

3

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's "Motion in Limine No. 6."

DATED this 19th day of February, 2010.
________________

1 This motion is the second part, with motion no. 5, of Novell's two-part motion. The motions address the same subject matter and apply the same law, they just address different statements. Insofar as Novell's motions seek a ruling that certain of the slanderous statements are not actionable, that is a motion for partial summary judgment that was required to have been brought - like Novell's other summary judgment motions - by April 20, 2007, the deadline for dispositive motions.

2 Novell argues for the proposition that whether a statement is "reasonably capable of a wrongful meaning" is a question of law for the Court, but the cited cases address the discrete and particular question of whether "a statement is capable of sustaining a defamatory meaning," which is a term of art that means a statement "impeaches an individual's honesty, integrity, virtue or reputation and thereby exposes the individual to public hatred, contempt, or ridicule." West v. Thomson Newspapers, 872 P.2d 999, 1008 (Utah 1994). Those questions are not at issue here.

DATED this 19th 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.

687:

SCO'S OPPOSITION TO "NOVELL'S MOTION IN LIMINE NO. 7 TODETERMINE THAT COMMON LAW PRIVILEGES APPLY TO ALLEGEDLY DEFAMATORY PUBLICATIONS"

Novell asks the Court to rule that certain common-law privileges apply to Novell's claims of copyright ownership that are the subject of SCO's claim for slander of title.

1. Novell's motion should be denied without prejudice to request appropriate jury instructions. The subject of this motion would more appropriately be addressed in the context of jury instructions.1 Novell does not discuss in its motion Judge Kimball's prior rulings with respect to the applicability of privileges. Novell sought to have the slander of title claim dismissed on the basis of privilege. The Court denied the motion in June 2005. (Docket No. 75.) With the
exception of the "absolute privilege," Novell argued then for application of the same privileges it asks the Court to apply now. In denying the motion, the Court noted that SCO may establish that the asserted privileges do not apply or prove that Novell acted with an intent or through conduct that removes the privilege:

  • Where "'the disparaging matter was published maliciously,'" the defendant has published the matter "'without privilege to do so.'" Id. at 11 (quoting Dowse v. Doris Trust Co., 208 P.2d 956, 958 (Utah 1949)).
  • The qualified or conditional privileges that Novell invokes do not apply if "'the scope of the qualified privilege has been transcended or the defendant acted with malice.'" Id. (quoting Brehany v. Nordstrom, Inc., 812 P.2d 49, 57 (Utah 1991)).
  • The plaintiff may prove 'that the wrong was done with an intent to injure, vex or annoy,' or 'because of hatred, spite or ill will.' Or, 'malice may be implied where a party knowingly and wrongfully records or publishes something untrue or spurious or which gives a false or misleading impression adverse to one's title under circumstances that it should reasonably foresee might result in damage to the owner of the property.'" Id. at 12 (quoting First Sec. Bank of Utah v. Banberry Crossing, 780 P.2d 1253, 1257 (Utah 1989)).

  • "'Statements that are otherwise privileged lose their privilege if they are excessively published, that is, published to more persons that the scope of the privilege requires to effectuate its purpose.'" Id. at 15 (quoting Krouse v. Bower, 20 P.3d 895, 900 (Utah 2001)). "The issue of whether there has been an excessive publication is a question of fact." Id. (citing Brehany, 812 P.2d at 58).

SCO does not dispute that jury instructions may be appropriate with respect to certain applicable privileges, and their limitations. On the "legitimate interest" qualified privilege, for example, the defendant must be under "a legal duty" to the recipient to publish the statement. O'Connor v. Burningham, 165 P.3d 1214, 1224 (Utah 2007). Novell owed no "legal duty" to the public to make its statements.2

2. The issue of "excessive publication" is for the jury to determine. The Court's prior
rulings defeat Novell's instant request for a legal ruling that SCO cannot show "excessive publication." That is an issue for the jury. Indeed, where the very notion of a qualified privilege precludes "widespread or unrestricted communication," Spencer v. Spencer, 479 N.W.2d 293, 297 (Iowa 1991), a "defense of qualified privilege does not extend to a publication to the general public." Knudsen v. Kan. Gas and Elec. Co., 807 P.2d 71, 79 (Kan. 1991).

3. Novell is not entitled to any "in limine" relief. The question of excessive publication therefore is for the jury, and if Novell acted with malice, no qualified privilege applies. Even if SCO were to be required "actual malice," as Novell seeks to require in Motions in Limine Nos. 2 and 3, evidence of common law malice will be admissible at trial. D. Elder, Defamation: A Lawyer's Guide § 7:3 (2009).

4. Novell's claim of "absolute privilege" fails under the relevant law. The absolute privilege for litigation generally applies to a "party to a private litigation." Hansen v. Kohler, 550

2

P.2d 186, 189-90 (Utah 1976); see also O'Connor v. Burningham, 165 P.3d 1214, 122-23 (Utah 2007). The purpose of the privilege is to "promote candid and honest communication between the parties and their counsel in order to resolve disputes." Krouse v. Bower, 20 P.3d 895 900 (Utah 2001). In certain limited situations, pre-litigation correspondence such as cease-and-desist letters may qualify for the privilege. It is an open factual question, however, whether Novell's letters are consistent with any such purpose. In addition, those letters were later published to the world - which is clearly not consistent with the privilege. Contrary to Novell's suggestion, moreover, excessive publication (such as publication to the public) is a defense to this privilege as well. Id. That question, again, is for the jury to resolve.

Conclusion

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's "Motion in Limine No. 7," without prejudice to Novell's right to request appropriate jury instructions on privileges.

DATED this 19th 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.

_______________

1 Insofar as part of Novell's motion seeks a ruling that certain of the slanderous statements are not
actionable because of an absolute litigation privilege, that is a motion for partial summary judgment that
was required to have been brought - like Novell's other summary judgment motions - by April 20, 2007,
the deadline for dispositive motions.

2 Likewise, financially motivated public claims of copyright ownership do not fall within the alternate "decent conduct" standard.

689:

SCO’S OPPOSITION TO NOVELL’S MOTION IN LIMINE NO. 9 TO PRECLUDE SCO FROM CONTESTING THAT AGREEMENTS THAT POST-DATE THE APA MAY CONSTITUTE SVRX LICENSES

Novell’s Motion in Limine No. 9 seeks to preclude SCO from contesting that agreements that post-date the APA may constitute SVRX licenses. SCO does not intend to dispute at trial that it is possible for an agreement that post-dates the APA to constitute an SVRX License. However, insofar as Novell seeks to argue that SCOsource licensing agreements entered after the APA (or that would have been executed after the APA but for Novell’s slander of title) are SVRX licenses, SCO not only strongly disagrees, but objects to Novell’s argument.1 In that event, the Court should grant the motion in part and deny it in part, as discussed below.

It has already been determined that SCOsource licenses are not SVRX royalty-bearing licenses. In the Findings of Fact and Conclusions of Law entered after the 2008 trial, Judge Kimball ruled that – notwithstanding his prior conclusion on summary judgment that a post-APA agreement may constitute an SVRX License – SCOsource agreements were not royalty-bearing “SVRX Licenses” under the APA, even though they were entered into after the APA. (Docket No. 542 at 28-35.) Judge Kimball specifically ruled that, except with respect to a unique provision in the 2003 Sun Agreement, SCO was entitled to all proceeds from the SCOsource agreements, because they were not SVRX Licenses in their entirety or merely licensed SVRX technology incidentally.2 Novell did not appeal that ruling.

Conclusion

The Court should grant the motion to the extent that Novell argues that agreements post-dating the APA may constitute SVRX Licenses, but deny the motion insofar as Novell seeks to relitigate the issue of whether SCOsource agreements (including those that would have been executed after the APA but for Novell’s slander of title) are SVRX Licenses.

DATED this 19th 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.

____________

1 Novell’s counsel in fact has informed SCO’s counsel that this motion is intended to facilitate just such an argument.

2 Novell also states (at 2) that “under the Tenth Circuit’s limited mandate, the only issue to be resolved regarding ‘SVRX Licenses’ is whether that term refers to all three types of agreements bearing upon the licensing of SVRX technology – software agreements, sublicensing agreements, and product supplement agreements (or Product Schedule Licenses) – or just to product supplement agreements.” (Internal marks omitted.) The Tenth Circuit made clear that the scope of Novell’s rights under Section 4.16(b) of the amended APA with respect to Novell’s purported waiver of SCO’s rights under contracts with IBM is a matter for trial. SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1224, 1227 (10th Cir. 2009). It is SCO’s understanding that this motion does not seek to limit the evidence on that issue.

690:
SCO’S OPPOSITION TO “NOVELL’S MOTION IN LIMINE NO. 10 TO PRECLUDE SCO FROM PRESENTING ARGUMENT RELATING TO ISSUES STAYED PENDING ARBITRATION”

Consistent with the stay previously ordered, SCO agrees that neither party should introduce evidence or make arguments at trial relating to the stayed claims that Novell has violated the APA or TLA by distributing SUSE Linux, that Novell’s distribution of SUSE Linux infringes on SCO’s copyrights, or that Novell has misappropriated SCO’s UNIX technology in SUSE Linux. In addition, neither party should refer to the SuSE arbitration proceeding as to which the above claims have been stayed. SCO submits that any order issued to this affect should specifically apply to both parties.

Insofar as Novell’s motion suggests otherwise, however, SCO does not agree that neither party may introduce evidence or make arguments regarding the meaning and interpretation of the TLA (independent of whether Novell has breached it), because that meaning and interpretation is relevant to the meaning and interpretation of the amended APA.

Conclusion

SCO submits that the Court should order both parties (i) that they may not introduce evidence or make arguments at trial relating to the stayed claims that Novell has violated the APA or TLA by distributing SUSE Linux, that Novell’s distribution of SUSE Linux infringes on SCO’s copyrights, or that Novell has misappropriated SCO’s UNIX technology in SUSE Linux. In addition; and (ii) that neither party should refer to the SuSE arbitration proceeding as to which the above claims have been stayed. The Court should further order, to the extent it deems necessary, that the parties may introduce evidence and make arguments regarding the meaning and interpretation of the TLA (independent of whether Novell has breached it).

DATED this 19th 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.

692:
SCO’S OPPOSITION TO NOVELL’S MOTION IN LIMINE NO. 12 TO EXCLUDE CERTAIN TESTIMONY FROM WILLIAM BRODERICK FOR LACK OF PERSONAL KNOWLEDGE AND VIOLATION OF PAROL EVIDENCE RULE

Novell’s Motion in Limine No. 12, as well as Motions Nos. 13 to 19, which are based on the same premise, are flatly in the face of the Tenth Circuit’s decision in this case.1

1. Under the Tenth Circuit Decision, Testimony Regarding the Intent of the Parties Clearly Is Relevant. The witnesses are trial are entitled to speak to the parties’ intent as to the transaction memorialized by the APA and Amendment No. 2, which includes the parties’ intent in 1995. The Tenth Circuit held that “Amendment No. 2 must be considered together with the APA as a unified document.” SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1211 (10th Cir. 2009). The Tenth Circuit explained that “because we cannot exclude the possibility that Amendment No. 2 was designed to restore the language of the transaction to the parties’ actual intent during the business negotiations over the deal, such testimony is not irrelevant.” SCO, 578 F.3d at 1217. “SCO’s extrinsic evidence of the business negotiators’ intent concerning the transaction ought to be admissible,” id. at 1210-11, concerning the “interpretation of the combined instrument.” Id. at 1211. The Court cited testimony from several of SCO’s witness, emphasizing that two of the witnesses, Robert Frankenberg and Ed Chatlos, were “from Novell’s leadership.” Id. at 1206, 1216-17. The Court quoted Mr. Chatlos’s testimony at length. Id. at 1206. The Court also quoted and relied upon Mr. Frankenberg’s testimony even though he did not draft the APA and did not negotiate the specific terms of Amendment No. 2.

The Tenth Circuit further held that “course of performance evidence may be used to interpret an ambiguous contractual provision,” quoting the California law that “practical construction placed by the parties upon the instrument is the best evidence of their intention.” Id. at 1217 (quotations, citations, and brackets omitted). The Court cited as relevant examples of such evidence “Novell’s modification of copyright notices on certain UnixWare source code,"

1

“certain statements related to the transfer of intellectual property within transition documents following the deal,” and “the publication of a press release in 1995 stating that ‘SCO will acquire Novell’s UnixWare business and UNIX intellectual property.’” Id. 2

Novell’s argument against “parole evidence” is predicated on excluding testimony that contradicts language of the APA that was changed by Amendment No. 2. Amendment No. 2 was needed precisely because the unamended APA may not have properly reflected the parties’ intent, as the Tenth Circuit expressly recognized. SCO, 578 F.3d at 1217. In sum, in contending that SCO’s witnesses cannot offer testimony that “contradicts” the language of the original APA isolated from Amendment No. 2, Novell has it exactly backwards.

2. William Broderick Is Competent to Testify Regarding the Parties’ Intent and Performance Under the Contract. The witness at issue, William Broderick, clearly possesses personal knowledge of relevant facts and issues. He has personal knowledge of facts that concern “the business negotiators’ intent concerning the transaction” or the parties’ “course of performance,” which includes facts from which the jury can infer such intent or performance. 3 Mr. Broderick was a contract manager in the UNIX licensing group at Novell and Santa Cruz (Ex. 1 at ¶¶ 6-7), and remains the contract manager with SCO to this day. He was also a member of the Novell APA Transition Team charged with implementing the contract between the parties following the execution of the APA. (Id. ¶ 10.) He testified:

2

My understanding of the sale of the UNIX assets from Novell to Santa Cruz was that the UNIX copyrights were transferred. To the best of my knowledge, from the time of the closing of the APA in 1995 until after SCO asserted legal claims concerning its Linux- related rights in 2003, Novell never contested SCO’s ownership of the UNIX copyrights.
(Id. ¶ 7 (emphasis added).) Mr. Broderick’s understanding is based on (among other things) Novell’s explanation of the transaction during “company-wide meetings” during which senior executives announced that Novell was divesting itself of the UNIX business and retaining only a residual interest in certain royalties, as well as discussions in the “contracts transition team,” including discussion about “changing the copyright notices in the source code to Santa Cruz Operation, Inc.” (Ex. 2 at 48-51.)

Finally, Mr. Broderick may testify to the parties performance, which is relevant to determination of intent. On the question of what copyrights might be “required” for SCO to operate the UNIX and UnixWare business it indisputably had acquired, the Tenth Circuit specifically acknowledged the relevance of the “actions of the transition team” as to the meaning of the APA, as amended by Amendment No. 2. SCO, 578 F.3d at 1218. The Court also stated that “we think it is a commonsense proposition that intellectual property at least may be required,” citing the example of how SCO would “protect the underlying assets in SCO software business should, for instance, a UNIX licensee have attempted to resell technology licensed from SCO.” Id. at 1218. As both a participant in the transition team and the longtime contract manager of the UNIX licenses at both Novell and SCO, Mr. Broderick can and would offer testimony of relevant facts on those issues. The latter issue in particular is his bailiwick. Mr. Broderick can certainly offer testimony relevant to and expanding upon the “commonsense proposition” that the Tenth Circuit acknowledged as a proper subject for trial testimony.

3

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell’s Motion in Limine No. 12.

DATED this 19th 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. ________

1 Novell’s motion is the first of eight similar motions (Motions Nos. 12-19) regarding witness testimony. In the interests of economy, SCO addresses the relevant witness testimony in its memoranda in opposition to those motions, but cross-references the controlling law set forth herein.

2 The relevant extrinsic evidence includes “the circumstances surrounding the making of the agreement, including the object, nature and subject matter of the writing, and the preliminary negotiations between the parties.” Universal Sales Corp., Ltd. v. Cal. Press Mfg. Co., 20 Cal. 2d 751, 761 (1942); Cal. Civ. Code § 1647. All such extrinsic evidence is relevant. Halicki Films, LLC v. Sanderson Sales and Mktg., 547 F.3d 1213, 1223 (9th Cir. 2008); Morey v. Vannuci, 64 Cal. App. 4th 904, 912 (1998).

3 “It is hornbook law that the definition of ‘relevant evidence’ in Rule 401 is broad and the hurdle presented by it exceedingly low.” In re A.H. Robbins Co. “Dalkon Shield” IUD Prods. Liab. Litig., 575 F. Supp. 718, 723 (D. Kan. 1983).

693:
SCO’S OPPOSITION TO NOVELL’S MOTION IN LIMINE NO. 13 TO EXCLUDE CERTAIN TESTIMONY FROM LAWRENCE BOUFFARD FOR LACK OF PERSONAL KNOWLEDGE AND VIOLATION OF PAROL EVIDENCE RULE

Novell seeks to preclude SCO from offering certain testimony of Larry Bouffard on the grounds that Mr. Bouffard did not participate in negotiating the APA or Amendment No. 2. Novell’s interpretation is contrary to the Tenth Circuit’s determination that this is an ambiguous contract, as amended, and that extrinsic evidence is relevant for the purpose of determining the intent to transfer the copyrights.1

Mr. Bouffard worked in sales for Novell during the transition period in which Novell transferred the entire UNIX and UnixWare business to Santa Cruz. In the course of that process, he acquired an understanding of the parties’ intent under the APA, including through company meetings and through his own effort to interpret and apply the APA during 1996. Mr. Bouffard explained to his co-workers in a contemporaneous e-mail, from early 1996, that Novell had sold the UNIX and UnixWare business “lock, stock and barrel.” He confirmed at deposition that his understanding at that time was that “the intellectual property for UNIX had been transferred to SCO.” (Ex. 1 at 141-42.) He acknowledged that as of today, as a legal matter, he does not know whether Novell sold all of its UNIX and UnixWare assets. (Id. at 84.)

Mr. Bouffard’s e-mail and testimony are admissible. Mr. Bouffard has personal knowledge of the parties’ course of performance. He need not have personally negotiated the terms of the APA or Amendment No. 2 to give admissible testimony of the parties’ intent. His testimony constitutes relevant extrinsic evidence of the parties’ course of performance under the APA, which the Tenth Circuit has specifically identified as a relevant – perhaps even the best – evidence of the parties’ intent. Consistent with well-established California law, the Tenth Circuit has necessarily rejected the argument that only the testimony of the individuals who negotiated

the language of the APA or Amendment No. 2 is relevant. SCO will not present any testimony from Mr. Bouffard in which he presently reads or interprets the language of the APA or Amendment No. 2. SCO intends to designate portions of Mr. Bouffard’s deposition testimony to be played at trial, and Novell is entitled to offer counter-designations and/or to object to such designations as it deems appropriate. Novell’s arguments go to the weight of Mr. Bouffard’s testimony, not its relevance.

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell’s Motion in Limine No. 13.

DATED this 19th 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.

_____________ 1 This the second of Novell’s eight similar motions (Motions in Limine Nos. 12-19) regarding witness testimony. SCO sets forth the controlling law governing the admissibility of such testimony in its Memorandum in Opposition to Novell’s Motion in Limine No. 12, and hereby incorporates that discussion.

694:

SCO’S OPPOSITION TO NOVELL’S MOTION IN LIMINE NO. 14 TO EXCLUDE CERTAIN TESTIMONY FROM JEAN ACHESON FOR LACK OF PERSONAL KNOWLEDGE AND VIOLATION OF PAROL EVIDENCE RULE

Novell seeks to preclude SCO from offering certain testimony of Jean Acheson on the grounds that Ms. Acheson did not participate in negotiating the APA or Amendment No. 2. Novell adopts an unduly restrictive interpretation of the law and of the nature of Ms. Acheson’s experience and testimony.1

Ms. Acheson was a revenue manager for Novell in 1995 and participated in the transition in which Novell worked to transfer the entire UNIX and UnixWare business to Santa Cruz. In the course of that process, she acquired an understanding of the parties’ intent under the APA, including through company meetings and through her own effort to interpret and apply the APA. Ms. Acheson concluded from that process that Novell had transferred its intellectual property to SCO. (Ex. 1 at 270, 274.)

Such testimony is admissible. Ms. Acheson has personal knowledge of the parties’ course of performance. Ms. Acheson need not have personally negotiated the terms of the APA or Amendment No. 2 in order to give admissible testimony of the parties’ intent. SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1211, 1217 (10th Cir. 2009). Her testimony constitutes relevant, extrinsic evidence of the parties’ course of performance under the APA, which the Tenth Circuit has specifically identified as a relevant – perhaps even the best – evidence of the parties’ intent. Consistent with well-established California law, the Tenth Circuit has necessarily rejected the argument that only the testimony of the individuals who negotiated the language of the APA or Amendment No. 2 is relevant. SCO will not present any testimony from Ms. Acheson in which she presently reads or interprets the language of the APA or Amendment No. 2. Novell’s arguments go to the weight of Ms. Acheson’s testimony, not its relevance.

1

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell’s Motion in Limine No. 14.

DATED this 19th 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.

______________

1 This is the third of Novell’s eight similar motions (Motions in Limine Nos. 12-19) regarding witness testimony. SCO sets forth the controlling law governing the admissibility of such testimony in its Memorandum in Opposition to Novell’s Motion in Limine No. 12, and hereby incorporates that discussion.

2

[EXHIBIT 1 pp. 270 - 274 of the transcript of the videotaped deposition of Jean Acheson, March 20, 2007.]
695:
SCO’S OPPOSITION TO NOVELL’S MOTION IN LIMINE NO. 15 TO EXCLUDE CERTAIN TESTIMONY FROM ROBERT FRANKENBERG FOR LACK OF PERSONAL KNOWLEDGE AND VIOLATION OF PAROL EVIDENCE RULE

Novell seeks to preclude SCO from offering certain testimony of Robert Frankenberg on the grounds that Mr. Frankenberg did not participate in negotiating the APA or Amendment No. 2. Novell adopts an unduly restrictive interpretation of the law and of the nature of Mr. Frankenberg’s experience and testimony.1

Mr. Frankenberg was the President and CEO of Novell at the time of the APA. (Ex. 1 at 7.) He decided in late 1994 or early 1995 to sell the UNIX and UnixWare business, in its entirety. (Id. at 9-11.) He testified that it was always his intent “that Novell would transfer copyrights to UNIX and UnixWare technology to Santa Cruz” (Id. at 135), and he never contradicted that testimony. Mr. Frankenberg specifically understood that the APA’s sale of all rights and ownership included the copyrights. (Id. at 19.) He identified reasons for why he had and has that understanding. (Id. at 66, 105-06.) In recounting the extrinsic evidence relevant to the issue of the transfer of copyright ownership, the Tenth Circuit specifically cited Mr. Frankenberg’s testimony. SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1206 (10th Cir. 2009).

Such testimony is admissible. Mr. Frankenberg has personal knowledge of the business negotiators’ intent concerning the transaction, because he participated in the negotiations. His testimony constitutes relevant extrinsic evidence of the circumstances in which the APA was drafted; of the negotiations that occurred leading up to the execution of the APA; of the object, nature, and subject matter of the APA; and of circumstances helping to explain the execution and meaning of Amendment No. 2. His testimony is integral to helping the factfinder place itself in the same situation in which the parties found themselves in negotiating and executing the APA.

1

His prospective testimony concerning his actions and statements in 1996 also goes to the parties’ course of performance under the APA, which the Tenth Circuit has specifically identified as a relevant – perhaps even the best – evidence of the parties’ intent. Consistent with well established California law, the Tenth Circuit has necessarily rejected the argument that only the testimony of the individuals who negotiated the language of the APA or Amendment No. 2 is relevant. Novell’s arguments go to the weight of Mr. Frankenberg’s testimony, not its relevance.

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell’s Motion in Limine No. 15.

DATED this 19th 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.

______________

1This is the fourth of Novell’s eight similar motions (Motions in Limine Nos. 12-19) regarding witness testimony. SCO sets forth the controlling law governing the admissibility of such testimony in its Memorandum in Opposition to Novell’s Motion in Limine No. 12, and hereby incorporates that discussion.

2

[Certificate of Service]

3

696:
SCO'S OPPOSITION TO NOVELL'S MOTION IN LIMINE NO. 16 TO EXCLUDE CERTAIN TESTIMONY FROM R. DUFF THOMPSON FOR LACK OF PERSONAL KNOWLEDGE AND VIOLATION OF PAROL EVIDENCE RULE

Novell seeks to preclude SCO from offering certain testimony of R. Duff Thompson on the grounds that Mr. Thompson did not participate in negotiating the APA or Amendment No. 2. Novell adopts an unduly restrictive interpretation of the law and of the nature of Mr. Thompson's experience and testimony.1

Under the direction of Novell CEO Robert Frankenberg, Mr. Thompson was the Novell executive responsible for the sale of the UNIX and UnixWare business. (Ex. 1 pp 4.) After the transaction closed, Novell appointed Mr. Thompson to serve as its representative on the Santa Cruz Board of Directors. (Id. pp 6.) Novell's instructions to Mr. Thompson were clear: "sell everything, from Bob Frankenberg to me, and sell UnixWare. So sell UNIX, sell UnixWare."; (Ex. 2 at 24-25.) He formed the Novell deal team and was personally involved in face-to-face negotiations with Santa Cruz officials Alok Mohan, Steve Sabbath, Jim Wilt, Geoff Seabrook, and Kim Madsen. (Ex. 1 pp 5.) Mr. Thompson testified to his understanding and belief at the time of the transaction in 1995 that the assets transferred "included the bundle of the copyrights". (Ex. 2 at 132-33.)

Such testimony is admissible. Mr. Thompson has personal knowledge of the business negotiators' intent concerning the transaction, because he participated in the negotiations. His testimony constitutes relevant extrinsic evidence of the circumstances in which the APA was drafted; of the negotiations that occurred leading up to the execution of the APA; of the object, nature, and subject matter of the APA; and of circumstances helping to explain the execution and meaning of Amendment No. 2. SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1211, 1217 (10th Cir. 2009). His testimony is integral

to helping the factfinder place itself in the same situation in which the parties found themselves in negotiating and executing the APA. Consistent with well-established California law, the Tenth Circuit has necessarily rejected the argument that only the testimony of the individuals who negotiated the language of the APA or Amendment No. 2 is relevant. Novell's arguments go to the weight of Mr. Thompson's testimony, not its relevance.

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's Motion in Limine No. 16.

___________________

1This is the fifth of Novell's eight similar motions (Motions in Limine Nos. 12-19) regarding witness testimony. SCO sets forth the controlling law governing the admissibility of such testimony in its Memorandum in Opposition to Novell's Motion in Limine No. 12, and hereby incorporates that discussion.

2

4

697:
SCO'S OPPOSITION TO NOVELL'S MOTION IN LIMINE NO. 17 TO EXCLUDE CERTAIN TESTIMONY FROM TY MATTINGLY FOR LACK OF PERSONAL KNOWLEDGE AND VIOLATION OF PAROL EVIDENCE RULE

Novell seeks to preclude SCO from offering certain testimony of Ty Mattingly on the grounds that Mr. Mattingly did not participate in negotiating the APA or Amendment No. 2. Novell adopts an unduly restrictive interpretation of the law and of the nature of Mr. Mattingly's experience and testimony.1

Mr. Mattingly was the Vice President for Strategic Relations at Novell at the time of the APA. (Ex. 1 at 10-11.) He also participated in the APA negotiations, as the personal liaison of Novell CEO Robert Frankenberg with the Novell negotiating team. (Id.) In the summer of 1995, Mr. Mattingly and the rest of the Novell deal team met with Santa Cruz representatives, including Jim Wilt and Geoff Seabrook, for a series of meetings lasting "probably a month and a half to two months." (Id. at 20.) He "was very heavily involved" in the negotiation of the APA, "interfacing between Bob Frankenberg and the SCO team and participating in the meetings that we would have at times with Alok Mohan and Doug Michels." (Id. at 22-23.) Mr. Mattingly testified to his "firm belief" and intent that SCO had acquired the UNIX business "lock-stock- and-barrel," including the software, and including the copyrights. (Id. at 29- 32.)

Such testimony is admissible. Mr. Mattingly has personal knowledge of the business negotiators' intent concerning the transaction, because he participated in the negotiations. His testimony constitutes relevant extrinsic evidence of the circumstances in which the APA was drafted; of the negotiations that occurred leading up to the execution of the APA; of the object, nature, and subject matter of the APA; and of circumstances helping to explain the execution and meaning of Amendment No. 2. SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1211, 1217 (10th Cir. 2009).

1

His testimony is integral to helping the factfinder place itself in the same situation in which the parties found themselves in negotiating and executing the APA. Consistent with well-established California law, the Tenth Circuit has necessarily rejected the argument that only the testimony of the individuals who negotiated the language of the APA or Amendment No. 2 is relevant. Novell's arguments go to the weight of Mr. Mattingly's testimony, not its relevance.

CONCLUSION

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's Motion in Limine No. 17.

DATED this 19th 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.

_____________

1This is the sixth of Novell's eight similar motions (Motions in Limine Nos. 12-19) regarding witness testimony. SCO sets forth the controlling law governing the admissibility of such testimony in its Memorandum in Opposition to Novell's Motion in Limine No. 12, and hereby incorporates that discussion.

2

EXHIBIT 1

[pp. 10-13 and 18-33 of the transcript of the videotaped deposition of Ty Matttingly, January 19, 2007]


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