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Novell's Trial Brief, Jury Instructions, and Objections to SCO's Rule 26(a)(3) Pretrial Disclosures - Updated 2Xs: SCO's too.
Tuesday, March 02 2010 @ 10:57 AM EST

Novell's trial brief and proposed jury instructions have been filed in SCO v. Novell. Of course, the parties were asked to try to file the latter jointly, and they have done so a little bit on two instructions, but on others, they couldn't agree so they tell the court they will file separately the rest of the proposed jury instructions. Novell has done so. When SCO does the same, I'll add it to this article. And Novell has filed Amended Objections to SCO's Second Amended Supplemental Rule 26(a)(3) Pretrial Disclosures. What, you are asking, is that?

Update: SCO's have now shown up on PACER, so I've added them to the article.

Here are the filings:

03/01/2010 - 736 - OBJECTIONS to 625 Exhibit List(Proposed) Second Amended Supplemental Rule 26(a)(3) Disclosures filed by Defendant Novell, Inc.. (Attachments: # 1 Exhibit A)(Brennan, Sterling) (Entered: 03/01/2010)

03/01/2010 - 737 - Proposed Jury Verdict by Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 03/01/2010)

03/01/2010 - 738 - TRIAL BRIEF by Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 03/01/2010)

03/01/2010 - 739 - Proposed Jury Instructions by SCO Group, Novell, Inc.. (Brennan, Sterling) (Entered: 03/01/2010)

03/01/2010 - 740 - Proposed Jury Instructions by Novell, Inc.. (Brennan, Sterling) (Entered: 03/01/2010)

03/01/2010 - 741 - Proposed Jury Verdict by Plaintiff SCO Group. (Hatch, Brent) (Entered: 03/01/2010)

03/01/2010 - 742 - TRIAL BRIEF by Plaintiff SCO Group. (Attachments: # 1 Appendix A, # 2 Appendix of Unpublished Cases)(Hatch, Brent) (Entered: 03/01/2010)

03/01/2010 - 743 - Proposed Jury Instructions by SCO Group. (Hatch, Brent) (Entered: 03/01/2010)

03/02/2010 - 744 - OBJECTIONS to Novell's Rule 26(a)(3) Disclosures filed by Plaintiff SCO Group. (Attachments: # 1 Exhibit A)(Hatch, Brent) (Entered: 03/02/2010)

Joint Proposed Jury Instructions

In the joint list, they list the slander of title claims that each party has brought against the other, also listing the four necessary elements of such a claim and explaining what each element means. They also explain how to interpret related contracts, such as with the APA and its amendments, specifically telling the jury that contracts that are part of "substantially one transaction" are to be taken together, and that they don't need to have been executed on the same day.

That's all they could agree about, so they tell the court that they will each file separately the rest of their proposed jury instructions, and Novell has done so already, and I expect SCO's will turn up later today.

Novell's Proposed Trial Brief

Novell's trial brief lays out the facts of the case, each party's claims and the applicable law, along with a list of witnesses Novell plans to call and what each will testify about. SCO's claims are slander of title, specific performance, and breach of the implied covenant of good faith and fair dealing. That last is about Novell's directing SCO to waive its claims against IBM. Novell's claims are slander of title and declaratory relief. There are more Novell counterclaims, of course, that got sent to arbitration, but I gather that is supposed to be our little secret and the jury isn't supposed to know about that. Almost everything has been set up to favor SCO, frankly. If it can't win with this much tilt, it can't win, period.

Novell adds information about what the court and the appeals court decided were established as facts, and then it lists the claims at issue in more detail. I don't know if the information about already decided findings of fact will survive, in that the question of whether that can be told to the jury, as I understand it, is now to be briefed.

And there is a footnote, #4, where Novell again states that it is Novell's position that under the mandate rule, "SCO should be precluded from presenting evidence or argument on its slander of title claim at trial." That's not for this judge, I don't think, in that he already denied their motion in limine number one on that point. That is for the appeal, should one be necessary, unless there is to be more briefing to come. I see in a number of places that Novell mentions issues still to be briefed.

Another footnote, #6, says that SCO has already admitted that Novell's June 6, 2003 press release about SCO's paralegal finding Amendment 2 "cannot constitute slander of title," a claim that depends for one thing on making a statement that can be proven either true or false, Novell explains. And at that point in time, obviously, that was impossible for SCO to prove. It's still trying to get that established, and so far, how're they doing, would you say? In contrast, knowing that standard, Novell is going forward with a claim of slander of title, and since they don't play games or assert unreasonable claims, so far, I'd say that must indicate they intend to prove that SCO knew its copyright claims were false in 2003. I could be reading too much into this, but that's how it looks to me. In fact, Novell later mentions unclean hands, writing that SCO should not prevail on its claims because it has unclean hands. It then explains:

SCO has unclean hands if it (1) acted unconscientiously, or in bad faith, or unfairly, and (2) the bad conduct was connected with the subject matter of the lawsuit....Novell will show that, even if, arguendo, SCO owns the copyrights, it misused them by trying to collect royalties from companies that might not infringe the copyrights, and by refusing to give those companies the information they needed to either decide if they infringe the copyrights or change their code so they would not infringe.
Finally! Novell has said what we've been thinking, what the whole world was thinking, when SCO began SCOsource, that it was like the Mafia making an offer you couldn't refuse. It smacked of such unfairness, and it's not what normally happens with copyrights. You don't get to force people to infringe your copyrights just so you can charge them for infringement. It's not how it works.

Here's the most interesting part:

The jury will decide what the parties intended at the time the contract was created. Although this intention should be inferred, if possible, from the written provisions of the contract, the Tenth Circuit has ruled that the jury may also consider extrinsic evidence of the negotiators' intent concerning the APA and its amendments to interpret ambiguous terms.
I read that as saying that the jury can do exactly the same thing that Judge Dale Kimball did, look at the contract and the amendments and decide they are all unambiguous, in which case witness testimony is not needed.

Then Novell lists its witnesses and what each will testify to. Jack Messman will testify, I see, and so will Chris Stone, and we find out who some of the others on the list are. Terry Musika is Novell's damages expert. Some of you were commenting that SCO had experts and Novell didn't, but Novell does have an expert who will testify about his review of the expert reports by SCO's experts Christine A. Botosan and Gary Pisano. That should be fun.

SCO's Trial Brief:

Of course SCO tells the tale that we have heard quite often, about how Amendment 2 merely "clarified" the APA so as to transfer the copyrights. It claims that, to date, Novell has received over $200 million "in consideration for the transaction."

"All of the business negotiators on both sides of the transaction," SCO alleges, "including Novell's senior executives and chief negotiator, agree both that SCO acquired the copyrights and that Novell's waiver rights do not remotely include the rights Novell has purported to exercise against SCO."

Sigh. If you are tempted to believe that assertion, go look at the list of witnesses Novell will be putting on the stand, and what you will find is a long list of negotiators that do not say that. SCO's use of the word "business" in the phrase "business negotiators" is the key. They don't explain that, of course, and I expect that is because they hope you won't notice. At least two of their "business negotiators" seem to have had their memories wiped as to the board meeting at Novell the day before the deal closed, where Novell's corporate board meeting notes state that it was decided that the copyrights would be retained. And where are the SCO lawyers who drafted the agreement? They seem to have gone walkabout. All the lawyers seem to be on Novell's side.

SCO is relying on the parties' "course of performance", what they did and how they acted after the deal. That only matters of course if the jury decides that evidence outside the four walls of the contract are needed, something Judge Dale Kimball thought wasn't needed. He actually went further in stating that even if he considered all the witnesses and all the external evidence, he'd still rule that Novell retained the copyrights. The jury can do the same.

SCO then goes on to claim that Novell's slander of title was malicious and reckless, in that they claim there is "evidence that Novell disregarded Amendment No. 2, which was in its own files." Then, despite Novell saying that SCO has conceded the point that the June 6, 2003 press release does not constitute slander of title, SCO here writes, "Novell sought to retract their slander on June 6, 2003, only to turn around and then retract the retraction..." By "that slander", it refers to the March 2003 press release, I assume.

That's not how I remember it, though, and it doesn't match what I still find in news reports and on Groklaw. Here's what I remember. It was Darl McBride who said in public that Novell had backed off of its claim to the copyright, but that turned out not to be true, which we found out from reading Novell-SCO correspondence that we got to read in December of 2003.

As long as SCO is accusing Novell of overpublication by making the SCO-Novell correspondence public, I should probably remind the world that Novell only did that after Groklaw did some investigative reporting and published the news that Novell had filed for copyrights on the UNIX and UnixWare code in dispute. Novell reacted to that public news story and to public statements that SCO made about it. The media was contacting Novell, after we published the news of the registrations. You can verify that here. For example, here's what SCO said at the time, on December 22, 2003 as reported by the New York Times on December 24 and republished in the Salt Lake Tribune:

SCO reacted on Monday to Novell's decision to register for the Unix copyrights by calling the move a backdoor act to claim code that is rightfully SCO's.

"We see this as a fraudulent attempt by Novell to get something they don't have," said Darl McBride, president and chief executive of SCO. "It's fraudulent to now go and say they have these" copyright registrations.

McBride contended that Novell was acting as a stalking horse for IBM, the biggest seller of Linux to corporations. "It's not just Novell," McBride said. "It's an attack by IBM."

So, the publication of the letters was in that context, where Novell was publicly being accused of fraud. Here's another example of what SCO was telling the media about Novell, in an interview by Peter Williams, June 30, 2003:
Q: Why do you think IBM hasn't pounced to buy you already?

Darl McBride: I think it is trying to throw some shots at us. It threw Novell out in front of the bus a couple of weeks ago and Novell got run over.

It's a unique situation when a company as powerful as IBM has somebody coming at it with such strong claims as we have in a very public forum. So maybe its supercomputers haven't spat out an algorithm yet on how to respond to this kind of situation. I don't know.

In January of 2004, SCO again publicly claimed Novell didn't own the copyrights, and on the 20th it put out a press release that it was filing a lawsuit for slander of title, and accusing Novell of all of these things:
The SCO Group, Inc. (Nasdaq: SCOX), the owner of the UNIX® operating system and a leading provider of UNIX-based solutions, today filed suit against Novell (Nasdaq: NOVL) for its alleged bad faith effort to interfere with SCO's rights with respect to UNIX and UnixWare®. Among the allegations in the suit:
  • Novell has improperly filed copyright registrations in the United States Copyright Office for UNIX technology covered by SCO's copyrights.

  • Novell has made false and misleading public claims that it, and not SCO, owns the UNIX and UnixWare copyrights.

  • Novell has made false statements with the intent to cause customers and potential customers to not do business with SCO.

  • Novell has attempted, in bad faith, to block SCO's ability to enforce its copyrights.

  • Novell's false and misleading representations that it owns the UNIX and UnixWare copyrights has caused SCO irreparable harm to its copyrights, its business, and its reputation.
This was in a press release, not just in the complaint filed with the court, speaking of overpublication.

So that's what was happening. Here's what Novell said on December 22, 2003 in the midst of all this, but only after Groklaw reported that it had registered the copyrights:

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 [PDF]. Contrary to SCO's public statements, as demonstrated by this correspondence, SCO has been well aware that Novell continues to assert ownership of the UNIX copyrights."
In short, there is a context to the publication. It was in response to questions from the media, prompted by our accurate report, and it was also in response to SCO falsely claiming that Novell had withdrawn its claim.

That then started me thinking, as you can see in this article, pointing out that SCO had not told the SEC that Novell was still holding to its opposing copyright claims. Groklaw pointed out that SCO had failed to list Novell's competing claim in its Risks section in its SEC filings, listing all the SEC filings that had been made after June of 2003, when Novell first made its claim up to December of 2003, when we found out at last that Novell had not retracted its claim after all. It was SCO telling us it had, but the letters demonstrated otherwise. Look at the dates. Here is what SCO's Darl McBride told the world in July of 2003:

Yeah well, the Novell thing. They came out and made a claim that held up for maybe four days and then we put that to bed. If you go back and talk to Novell I guarantee what they'll say, which is they don't have a claim on those copyrights any more.
Was that true? Did he think it was true? Check the letters for yourself. Incidentally, on that same Groklaw page about SCO's SEC filings, you'll find Brian Skiba of Deutsche Bank in November of 2003, despite Novell's June 2003 press release, still claiming that SCO's claim was valid and worth a $45 prediction of stock value. Obviously, then, SCO's claim that the June press release destroyed SCO's stock value is not telling the whole story, as I remember it. Speaking of memories, here's what SCO's Darl McBride said on August 18, 2003 to eWeek about Novell's awareness of Amendment 2, and you'll see once again he told the world that Novell had backed off of its copyright claim:
In regard to Novell's recent claim that it still owns the copyright to Unix, McBride said it took SCO just four days to press the eject button on that claim.

"After attacking us, Novell's CEO [Jack Messman] was then irate that we had not told him there was an amendment to the contract between us that clarified our copyright ownership of Unix. He seemed to believe that we knew about it but weren't telling them so they could attack us and look foolish. Go figure," he said.

Did SCO know about Amendment 2 all along? Is that what he's saying Messman thought? If so, they told the world rather a big fib about discovering it. And deeper, does that remark from McBride sound to you like SCO thought Novell knew about Amendment 2, that it knew it was in its files? Or does it confirm Novell's story at the time, that at first it didn't know or apparently even believe there was any such amendment? We don't have to guess. Here's what McBride said about Novell in public on June 16, 2003:
Was Novell's involvement a surprise? What do you think prompted that?

McBride: What we've found here over the last couple of days is that Novell and IBM have been working together on some things relating to this case. So our suspicion is that some kind of deal they have going on with IBM is what motivated it.

Were we surprised? Yes. It's like you're sitting there fighting a battle; you have this David-and-Goliath battle going on. And then from the side, you get hit by this other force, this other army's attacking you. At first, you're surprised by it. But then you realize there appears to be some linkage to the Goliath, so then I guess it's not so surprising.

Even though we didn't have any copyright claims in our case with IBM, this shot came in. We stopped our battle with IBM for basically four days; we stamped out the Novell attack and put that one behind us. Now we're back on what our original focus was, which is resolving the issues we have with IBM.

Q: So the whole thing with Novell was about unclear contract language?

McBride: The final problem is that Novell didn't dig to the bottom of their file drawer and find the second amendment to the contract. Once we exerted our second amendment rights, if you will, Novell basically took their ball and went home.

Is that true? Did Novell take its ball and go home? And does it sound like Novell knew it had Amendment 2 in its file cabinet or that it had no idea and had to dig to even find it, after SCO made its public claims?

Here's what Darl said about Novell in 2004:

"[T]he ownership with Novell has absolutely been legally decided. We've got all the documents in front of us. Anybody who has any legal sense here says 'I don't get it, can Novell not read the English language?'" McBride said.
Would you call that malicious? Is that statement true? Or did the Honorable Dale Kimball rule that Novell was correct and it was SCO that had it wrong? The jury can't hear about that, maybe, but we know. So if anyone slandered anyone, who slandered who? That was in the Salt Lake Tribune on January 1, 2004, by the way, if you want to find it. You'll have to pay them, I believe, to access their archives. Or you can try Internet Archive.

Here's what SCO's Darl McBride said about Novell at SCO's December 22, 2003 teleconference:

McBride: OK. I would like to ask one more question that is on the mind of some people out there. I know because they have called in separately, and it didn't come up here now, so I take that one head on.

That is the question about Novell and a recent action that they have taken. We found out over the last couple of weeks that Novell snuck into the copyright office and tried to file some copyrights that would be basically on top of the claims ... the copyright registrations that we have made.

You know, the acts that Novell is going through here seem to be desperate. I know they are tied in very closely with IBM, and I know IBM and those guys are working very closely to try and win this battle against us.

As we found out two quarters ago on the day of our earnings release, when Novell came out and said, "We own the copyrights", and then we had produced amendment 2, that basically said, "Well no actually those copyrights have now been transferred over to us". We find it very interesting behavior on their part, that they are still trying to play some games here.

Let me be real clear with anybody who has any questions about some of the legal rights, that SCO acquired in its transaction with Novell. In the contract that we received from them, on the included assets it says "We have all rights and ownership of Unix and UnixWare". That was later amended with Amendment 2 to include all copyrights for Unix and UnixWare.

Turn the page, we have the right to all claims that arise after the closing date. So if there is any claim with respect to copyright violation, it says in our contract that those claims are all owned by SCO.

So that's another key point there to understand.

If you go look at the press release that was issued the day that SCO and Novell did their deal, very clearly said that the intellectual property rights to Unix were transferring over to SCO.

I found that ... I've heard that Novell had actually pulled that press release off from their web site. I guess that they don't like that floating around out there.

I think in Novell's case, very clearly they're getting money funded to them from IBM right now. We get a lot of communications that come from Novell where they cc IBM, and these guys are obviously working closely together.

If you turn the clock back exactly a year ago when I first brought the issues up around our intellectual property rights being violated with IBM, they came back and said, "Well, you know, we've looked at the asset purchase agreement, and you didn't appear to get any of the intellectual property rights." So that's been the defense they used all the way up to May 28, when we produced amendment 2.

When that happened, it was a bad day on that side. We see them taking desperate steps at this point to try and grasp for something that doesn't appear to be there.

So, they're trying to force some kind of issue here. We'll be glad to take the necessary legal steps to remedy that. We see this as a fraudulent filing of copyright notices on their side, and we'll take the appropriate measures as necessary with our legal team.

In summary, I see the Novell case as being one of tall hat and no cattle.

Compare what Novell said, that it believed it retained the copyrights, with the offensive things SCO said about Novell, and then ask yourself, who slandered who in this picture? If anyone wins a slander of title claim, which party should it be in a fair universe, do you think?

I could do this to every one of SCO's claims in its brief, I expect, but I need to take a break. It makes me sick to my stomach to read it. I'll try to swing back by after I recover.

Novell's Proposed Jury Verdict Form

Finally, Novell has submitted a proposed jury verdict form, which is a list of questions they can answer. An example:

1. Did the Asset Purchase Agreement ("APA") transfer the UNIX copyrights from Novell to SCO?

Yes___ No ____

That way, the jury can go down the list and make sure they've touched all the bases, and this also keeps them from inventing things to decide that they are not supposed to decide. And it lets them know who has the burden of proving something. An example of that:
2. Did SCO prove that it acted conscientiously, in good faith, and fairly in connection with the subject matter of this lawsuit?

Yes ___ No _____

See how it's phrased? That's because it's Novell's position that SCO bears the burden of proving that it did so; it's not Novell's burden to prove that it didn't. It's almost the same thing, logically, but legally it makes a big difference.

Keep in mind that we have yet to hear from SCO or from the judge. He will be the one to determine the final jury instructions, subject to appellate review, of course.

Novell's Objections to SCO's Rule 26(a)(3) Pretrial Disclosures

Here's Rule 26, and it's the list of witnesses and exhibits that it may present at trial other than for impeachment. What's impeachment? It's not the political definition, like impeaching a president. It has its own legal meaning, and it means "(1) The process of calling something into question, as in "impeaching the testimony of a witness." So if someone says something false on the stand, and you have either some document or someone who can testify to demonstrate its falsity, that's impeachment. If someone said something totally different in a deposition, for example, the lawyer can present it to let the jury know there's something off in this picture.

By the way, the fact that they list objections now doesn't necessarily mean that Novell will object to them at trial. They might think that something a witness will testify to is going to be hearsay, for example, but until the actual testimony is given, you don't know for sure. This article, Trial Basics:Using Exhibits, explains that you have to object to hearsay at this stage or you will be deemed to have waived hearsay objections, so you object as often as you can in your objections to the other side's Rule 26(a)(3) pretrial disclosures, just in case.

There are more articles published by the Utah Bar's website, if you are interested. For example, there are several articles on voir dire, I noticed. And here's one on a lawyer's responsibility to be civil, The Bar’s Proscription Against Engaging in Offensive Personality [PDF] and another on Abstaining From Offensive Personality [PDF]. I think you will see from the articles why I tell you that snarkiness in court is counterproductive.

And here's one [PDF] you'll like, three judges who handled family law cases in Utah talk about lawyers:

I think that a lawyer who simply does what the client asks, regardless of the reasonableness, quickly loses that credibility, or at least among us, and I believe among all judges as well, and it severely handicaps that lawyer in the future in every case that lawyer is involved [in]. We remember who lies to us, we remember who takes very unreasonable positions, and it is hard not to have that affect us the next time around.

Q: Do Commissioners [judges] talk among themselves as to who these problem lawyers are?

A: Not weekly, not daily, but hourly! I think it is imperative for the attorney to understand that, yes, we all practice, yes, we understand that we are serving our clients, but we are also counselors at law. I get extremely irritated when it is clear to me [that] an attorney wants me to give the client the bad news. They know how it is going to come out; it is clear how it is going to come out. Case law dictates the result, [but] they take a totally different position than they know is ever going to win, so I look like the bad guy. I don't mind looking like the bad guy, but I think they are not doing their duty as counselors to look at these clients and say, "no, I am not going to lose credibility with the court to make this argument for you, and if you want someone to do that, go find someone who doesn't care as much about their reputation as I do." I did that a lot when I was in practice. I would say, "Go find some bozo who is going to make that stupid argument to the court and lose their reputation. I am not going to." I did not have a client say, "Well, I am going to take my work elsewhere, then." They all said, "if you don't think that is a good idea, let's not do it." That is an attorney's duty, and they're not following through with that duty. They are making the legal system look very bad because it is the court that looks unreasonable, when in fact the attorney is taking an unreasonable position. The attorneys credibility with the Court is at stake.

At best, I'd say that is what we've been watching. At best.

SCO's Objections to Novell's Rule 26(a)(3) Pretrial Disclosures:

SCO claims that it can't find some of Novell's exhibits and it reserves the right to amend because of Novell's alleged method of identifying its disclosures "through inconsistent Bates ranges and Bates numbering that does not correspond to production documents." Any asterisk on SCO's list is an exhibit it can't find and reserves the right to object to.

A cynic might imagine that this would be an excellent way to preserve the right to object to things the party has no actual right to object to. It allows the objection to be heard by the jury, in a cynic's perfect world, instead of being resolved in advance.

Update: Here, then, are SCO's proposed jury instructions, minus the header, to save time, and you'll notice that it is asking the court to instruct the jury on a topic we've never seen a bit of evidence on yet, the definition of what an implied license has to always mean. They also want the jury to be told that a false statement would be anything about copyright ownership taking into consideration both the APA and Amendment 2, but at the time Novell first spoke out, it didn't have any proof there even was an Amendment 2, as opposed to some trick by SCO. And get a load of this instruction they'd like the judge to give the jury:

The contractual language of Amendment No. 2 is ambiguous. Accordingly, what is called the "extrinsic evidence" of the parties' intent is relevant to interpreting the combined APA and Amendment No. 2.
But I believe that is precisely what has not yet been determined by this jury, whether they think the language is ambiguous or not. If not, they don't have to consider extrinsic evidence. Here's another of SCO's amazing proposed instructions:
Another type of relevant extrinsic evidence is the customs or practices within a particular field or industry. You may consider the testimony of either laypersons or experts in assessing any such customs or practices.
Like Davis, I assume they mean, and their collection of interested employees and ex-employees. Lordy. Well, here they all are:

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

SCO'S PROPOSED JURY INSTRUCTIONS

Defendant/Counterclaim-Plaintiff. Plaintiff-counterclaim/defendant, The SCO Group, Inc. (SCO), by and through the Chapter 11 Trustee in Bankruptcy, Edward N. Cahn, respectfully submits the following proposed jury instructions. Novell is submitting competing instructions. SCO indicates the corresponding instruction, if any, at the bottom of each of its proposed instructions.

DATED this 1st day of March, 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.


SCO's PROPOSED INSTRUCTION NO. 1
The Element of a False Statement

The first element of a claim for slander of title is that the defendant has made a false statement claiming to own the property at issue. There are several statements at issue that the plaintiff contends are false statements.

Among the conduct that you are entitled to regard as "statements" are the parties' filing of copyright registrations. The filing of such registrations does not mean that the filing party actually owns the copyrights identified in the registrations.

You must determine whether, in the various statements at issue in this case, and taken in context, the defendant intended to convey the message that it owns the UNIX and UnixWare copyrights.

You may determine that the plaintiff intended to convey that message even if the defendant has couched its statements in the form of an opinion, such as by conveying its "opinion" or "belief." That is because an expression of opinion or belief may often imply an assertion of objective fact.

You must also determine whether the defendant's statements were false.

"False" means that the statement is either directly untrue or that an untrue inference can be drawn from the statement. You are to determine the truth or falsity of the statement according to the facts as they existed at the time defendant made the statements.

The statement, to be true, must be substantially true. A statement is considered to be true if it is substantially true or the gist of the statement is true.

3

Milkovich v. Lorain Journal Co., 497 U.S. 1, 11-19 (1990)

Russell v. Thomson Newspapers, Inc., 842 P.2d 896, 902 (Utah 1992)

Model Utah Jury Instructions - Civil § 10.4

Novell's Competing Instructions: 1 & 2

4

SCO'S PROPOSED INSTRUCTION NO. 2:
The Element of Copyright Ownership: Amended Asset Purchase Agreement

The element of a false statement concerns who owns the property at issue. On that issue, you should consider the Asset Purchase Agreement, as amended.

The parties to the amended Asset Purchase Agreement were Santa Cruz and Novell, but SCO now stands in the shoes of Santa Cruz. That is because several years ago SCO acquired from Santa Cruz all of the UNIX and UnixWare assets that Santa Cruz had acquired from Novell.

You should be guided by the following legal principles in interpreting the amended Asset Purchase Agreement.

Amendment No. 2 must be considered together with the Asset Purchase Agreement as a single document.

The language of Amendment No. 2 controls wherever its language contradicts the Asset Purchase Agreement.

The contractual language of Amendment No. 2 is ambiguous. Accordingly, what is called the "extrinsic evidence" of the parties' intent is relevant to interpreting the combined APA and Amendment No. 2.

I will explain to you in a few minutes the kind of evidence that constitutes relevant "extrinsic evidence."

SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1210-11, 1214 n.2 (10th Cir. 2010)

Novell's Competing Instruction: None

5

SCO'S PROPOSED INSTRUCTION NO. 3:
The Element of Copyright Ownership: Prima Facie Evidence

With respect to who owns the property at issue, copyright registrations are called "prima facie" evidence that the party who possesses the registrations owns the copyrights, and that the copyrights are valid. "Prima facie" means that on first examination, a matter appears to be self-evident from the facts.

La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1202-03 (10th Cir. 2005)

Novell, Inc. v. Network Trade Ctr., Inc., 25 F. Supp. 2d 1218, 1229 (D. Utah 1997)

Motorola, Inc. v. Pick, 2005 WL 5918849, at *3 (C.D. Cal. May 26, 2005)

Scanlon v. Kessler, 11 F. Supp. 2d 44, 447 (S.D.N.Y. 1998)

Novell's Competing Instruction: None

6

SCO'S PROPOSED INSTRUCTION NO. 4:
The Element of Copyright Ownership: Interpretation of Contractual Terms

With respect to your consideration of the amended Asset Purchase Agreement, and other agreements at issue here, where contract terms are clear, they should be given their plain and ordinary meanings.

You should interpret a contract to give meaning to all of its provisions, instead of leaving a portion of the writing useless or inexplicable. You should not interpret a contract to render one of its terms meaningless.

You should interpret a contract as a whole, with each clause helping to interpret the other.

SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1210-11, 1223 (10th Cir. 2010)

Kavruck v. Blue Cross of Cal., 134 Cal. Rptr. 2d 152, 159 (Cal. App. 2003)

Cooper v. Mart Assocs., 225 Cal. App. 2d 108, 114-16 (1964)

Heidlebaugh v. Miller, 271 P.2d 557, 559 (Cal. Ct. App. 1954)

Novell's Competing Instruction: 7

7

SCO'S PROPOSED INSTRUCTION NO. 5:
The Element of Copyright Ownership: Extrinsic Evidence

With respect to who owns the property at issue, you should consider what is called the "extrinsic evidence" of the intent of the parties to the amended Asset Purchase Agreement. The "extrinsic evidence" is the evidence of what parties to a contract intended apart from the language they used in the contract.

Extrinsic evidence can aid you in determining the circumstances under which the parties negotiated a contract.

The evidence of the business negotiators' intent concerning the Asset Purchase Agreement and Amendment No. 2 is relevant. Such evidence may take the form of witness testimony or documentary evidence of what they said or did or understood at the time of the transaction.

Another type of extrinsic evidence is called the parties' "course of performance." Course of performance is how, as a practical matter, the parties' interpreted and applied the terms of the contract in the years after the contract was signed.

Indeed, the practical construction the parties placed upon the combined Asset Purchase Agreement and Amendment No. 2 is the best evidence of their intention. That is because parties are far less likely to have been mistaken as to the intention of their contract during the period while harmonious and practical construction reflects that intention, than they are when subsequent differences have impelled them to resort to law, and when one of them then seeks a construction at variance with the practical construction they have placed upon it.

8

Another type of relevant extrinsic evidence is the customs or practices within a particular field or industry. You may consider the testimony of either laypersons or experts in assessing any such customs or practices.

SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1210-11, 1217 (10th Cir. 2010) Cal. Civ. Code § 1647

Universal Sales Corp., Ltd. v. Cal. Press Mfg. Co., 128 P.2d 6765, 671-72 (Cal. 1942)

Novell's Competing Instructions: 7& 8

9

SCO'S PROPOSED INSTRUCTION NO. 6:
The Element of Copyright Ownership: Relevance of Copyright Ownership

With respect to who owns the property at issue, and your consideration of the amended Asset Purchase Agreement, you should consider the nature of a copyright.

Copyright is the exclusive right to copy. The owner of a copyright has the exclusive right to make and distribute copies of the copyrighted work, to display publicly the copyrighted work, and to license the right to use the copyrighted work to other people. The owner of a copyright also has the exclusive right to bring claims in court to enforce the copyright against people who are infringing on the copyright. The owner can also license that right to someone else, but only through an express, exclusive license.

You therefore should also consider the issue of a "license" to use copyrighted material. There are different types of licenses. One distinction is between "express" and "implied" licenses.

An "express" license is found in a contract that clearly states that one party to the contract has a "license."

An "implied" license is found in a contract that does not use the word "license," but from whose terms you can conclude that one party has the right to use the copyrighted material.

Implied licenses usually are found where one party has created a work at the other's request and handed it over, intending that the other copy and distribute it.

Another distinction, which is related to the difference between an "express" and

10

an "implied" license, is the difference between an "exclusive" and a "non-exclusive" license to use copyrighted material.

An exclusive license means that only the exclusive licensee can use the copyrighted material, whereas an implied license means that several licensees can use the copyrighted material.

The distinction between an "exclusive" and a "non-exclusive" license to use copyrighted material is relevant for two mains reasons.

First, an implied license can only be non-exclusive.

Second, an implied licensee, because he is a non-exclusive licensee, cannot bring lawsuits to enforce the copyrights against people who may be violating them.

Gillespie v. AST Sportswear, Inc., 2001 WL 180147, at *7 (S.D.N.Y. Feb. 22, 2001)

SHL Imaging, Inc. v. Artisan House, Inc., 117 F. Supp. 2d 301, 316 (S.D.N.Y. 2000)

Schiller v. Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 413 (7th Cir. 1992)

SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharms., Inc., 211 F.3d 21, 25 (2d Cir. 2000)

R. Ready Prods., Inc. v. Cantrell, 85 F. supp. 2d 672, 684 n.1 (S.D. Tex. 2000)

Novell's Competing Instructions: 10-12

11

SCO'S PROPOSED INSTRUCTION NO. 7:
The Element of Malice

The third element of a claim for slander of title is that the defendant must have made its false statements with malice.

A defendant has acted with malice when it published its statement with an intent to injure, vex, or annoy the plaintiff.

A defendant has acted with malice when it published its statement because of hatred, spite, or ill will toward the plaintiff.

You may infer that a defendant has acted with malice when the defendant knowingly and wrongfully records or publishes something untrue or spurious or which gives a false or misleading impression adverse to the plaintiff's title under circumstances that it should reasonably foresee might result in damage to the plaintiff.

Court's Memorandum Decision and Order dated June 27, 2005, at 12 (citing authority) New York Times Co. v. Sullivan, 376 U.S. 254 (1964)

Model Utah Jury Instructions - Civil § 10.7

Novell's Competing Instruction: 3

12

SCO'S PROPOSED INSTRUCTION NO. 7.1:
Optional Instruction If Court Charges on First Amendment Issue

I will also ask you to determine whether the plaintiff has shown by clear and convincing evidence that the defendant has acted with what is called "actual malice."

A defendant has acted with actual malice when it published its statement either knowing that the statement was false or else was acting in reckless disregard of whether its statement was false, which means that the defendant acted with a high degree of awareness of the probable falsity of the statement, or that, at the time the statement was made, the defendant had serious doubts that the statement was true.

New York Times Co. v. Sullivan, 376 U.S. 254 (1964)

Model Utah Jury Instructions - Civil § 10.7

Novell's Competing Instruction: 3

13

SCO'S PROPOSED INSTRUCTION NO. 8:
The Defense of Privileges

A defendant to a claim for slander of title may assert what are called "privileges" to have made the statements at issue. The defendant has the burden of proving that a privilege applies.

That is, a publisher of statements may have what is called a "conditional" or "qualified" privilege to make those statements. There are several privileges which may be applicable.

The first privilege is the absolute privilege for litigation.

The purpose of this privilege is to promote candid and honest communication between the parties and their counsel in order to resolve disputes. Accordingly, the privilege generally applies to a party to a private litigation. In order to find that this privilege applies, you must conclude that a party made its statements as part of candid and honest communication in order to resolve a potential or pending lawsuit between the parties.

The second privilege is the "legitimate interest" privilege.

The purpose of this privilege is to permit a party to publish a statement where the recipient of the statement is one to whom the publisher is under a legal duty to publish the matter or is a person to whom its publication is otherwise within the generally accepted standards of decent conduct. In order to find that this privilege applies, you must conclude that a party was under a legal duty to publish its statements to the public or conclude that its publications of its statement to the public was within the generally

14

accepted standards of decent conduct.

The third privilege is the "rival claim" privilege.

The purpose of that privilege is to permit a rival claimant to disparage another's property by asserting an inconsistent legally protected interest in itself. The statement must be made honestly and in good faith.

Court's Memorandum Decision and Order dated June 27, 2005, at 10-12 (citing authority)

Hansen v. Kohler, 550 P.2d 186, 189-90 (Utah 1976)

O'Connor v. Burningham, 165 P.3d 1214, 122-23 (Utah 2007)

Krouse v. Bower, 20 P.3d 895 900 (Utah 2001)

Novell's Competing Instruction: 5

15

SCO'S PROPOSED INSTRUCTION NO. 9:
Abuse of Privileges

Although you may find that the foregoing privileges exist, where the disparaging statement was published maliciously or in bad faith, the defendant has published the matter without privilege to do so.

That is, no privilege applies if a party acted with malice or otherwise transcended the scope of the privilege.

A defendant transcends the scope of the privilege if it excessively publishes the statement at issue or acts inconsistent with the purpose of the privilege. A statement is excessively published if it is published to more persons than the scope of the privilege requires to effectuate its purpose.

Court's Memorandum Decision and Order dated June 27, 2005, at 11-15 (citing authority)

Novell's Competing Instruction: 5

16

SCO'S PROPOSED INSTRUCTION NO. 10:
The Element of Damages on Slander of Title

The final element of a claim for slander of title is that the defendant's statements have caused the plaintiff to suffer "special damages."

A defendant's conduct has "caused" the plaintiff's damages where the defendant's conduct was a substantial factor in causing such damages.

The special damage rule requires the plaintiff to establish pecuniary loss that has been realized or liquidated, as in the case of specific lost sales. Damages are ordinarily proved in a slander of title action by evidence of a lost sale or the loss of some other pecuniary advantage. Absent a specific monetary loss flowing from a slander affecting the saleability or use of the property, there is no damage.

Plaintiff's pecuniary loss may be established by proof that the loss has resulted from the conduct of a number of persons whom it is impossible specifically to identify.

Court's Memorandum and Decision dated January 28, 2010, at 11 (citing authority)

Restatement (Second) of Torts §§ 632, 633

Dowse v. Doris Trust Co., 208 P.2d 956 (Utah 1949)

Novell's Competing Instructions: 4 & 6

17

SCO'S PROPOSED INSTRUCTION NO. 11:
Punitive Damages

You are also entitled to award the plaintiff "punitive damages" if you deem them to be appropriate.

Before any award of punitive damages can be considered, the plaintiff must prove by clear and convincing evidence that the defendant published a false statement knowing it was false or in reckless disregard of whether it was true or false, and that the defendant acted with hatred or ill will towards the plaintiff, or with an intent to injure the plaintiff, or acted willfully or maliciously toward the plaintiff.

If you find that plaintiff has presented such proof, you may deem it proper for punitive damages to be awarded, in which case you should specify the amount. In determining the amount, you may award such sum as in your judgment would be reasonable and proper as a punishment to the defendant for its wrongs, and as a warning to others not to commit similar wrongs.

Model Utah Jury Instructions - Civil § 10.12

Novell's Competing Instruction: None

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