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More Pretrial Briefs in SCO v. Novell - Updated: letter re Brainshare
Wednesday, March 03 2010 @ 10:25 AM EST

Both SCO and Novell have begun to file their additional pretrial briefs, stemming from the discussion at the most recent hearing. Novell has filed a Request for Judicial Notice of Prior Factual Findings and the parties jointly submit a Submission Addressing Allocation of Issues for Bench and Jury Trial. SCO has filed a Brief Regarding Issues to be Tried in Equity by the Court.

What do the parties want?

Here they are, first:

03/02/2010 - 749 - BRIEF re 733 Pretrial Conference - Final,,,, 729 Request for Judicial Notice of Prior Factual Findings filed by Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 03/02/2010)

03/02/2010 - 750 - Submission Addressing Allocation of Issues for Bench and Jury Trial BRIEF re 733 Pretrial Conference - Final,,,, filed by Plaintiff SCO Group, Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 03/02/2010)

03/02/2010 - 751 - BRIEF REGARDING ISSUES TO BE TRIED IN EQUITY BY THE COURT filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 03/02/2010)

Update: There is also a letter from Novell, letting the judge know that Novell's Brainshare conference will be going on during the trial:

03/02/2010 - 752 - DOCUMENTS LODGED consisting of Letter from Sterling A. Brennan. (asp) (Entered: 03/03/2010)

The letter says SCO has been notified also. I'm not sure why this matters.

What does SCO want?

For one thing, it doesn't want to be accused of unclean hands. I don't know. I thought they earned that one, personally. More seriously and more accurately, it doesn't want Novell to be able to assert unclean hands as as defense. SCO says it will argue the issue more fully, unless directed otherwise by the court, in a brief it plans to file on March 4th, SCO writes, and then it will be argued on March 5th, I gather, in its objections to Novell's proposed jury instructions. [ Update: I misread. Let me show it to you to make it clear:

As to "unclean hands," SCO disputes that either the Court or jury should consider that issue and contends that it is not properly an issue in this case. SCO will explain the basis for its argument on March 5, 2010, in its objections to Novell's proposed jury instructions. As to any advisory verdict, SCO opposes that request as well. Novell has agreed that the claim of specific performance is one for the Court alone to resolve. The trial will already be sufficiently complex that it would be unduly burdensome and unreasonable to ask the jury to consider an issue that is not their province to resolve, and it would prejudice the jury's deliberations concerning the other issues before it. Unless otherwise directed, SCO would plan to put in briefing on this issue in its submission due by 5 p.m. on March 4, 2010.
- End update.] SCO wants the court to decide, not the jury, three claims, its claim for specific performance regarding the copyrights, Novell's claim for declaratory relief regarding its waiver of SCO's claims against IBM, and SCO's claim that the waiver, even if authorized, violates the implied duty of good faith and fair dealing. That last, believe it or not, is asking that the contract be deemed unfair, even if it said Novell could waive. SCO wants the judge to rewrite the contract if SCO loses the waiver claim. Can you guarantee he won't?

What does Novell want?

Novell's brief is the one the judge asked for in its February 25th order, supporting its request for judicial notice of seven factual findings by Judge Dale Kimball, five of them affirmed by the appeals court and two not appealed by SCO. Novell provides the legal basis for its request, essentially relying on the law of the case, issue preclusion, and the mandate rule.

All of that just means Novell shouldn't have to win them all over again, and the jury has a right to know about them. Issue preclusion means if you win on an issue in connection with a claim, the decision may preclude relitigating it on another cause of action.

A key one is the Kimball ruling that Novell was entitled to summary judgment on SCO's unfair competition and covenant of good faith claims on because there was no evidence that Novell lacked an objectively reasonable, good faith basis for saying it owned the copyrights. As you saw already, SCO is trying to get a redo on that one. This judge, Novell points out, already found that the good faith issue was no longer part of this case, and it's relevant to SCO's slander of title claim, in that SCO has to prove "malice".

The other biggie for Novell is the Kimball ruling, affirmed by the appeals court, that SCO failed to remit royalties and amended the Sun agreement without authority, thus breaching the contract it now seeks to enforce. This is important to Novell because SCO "continues to assert two claims against Novell for breach of the APA, one for specific performance and the other for breach of the implied covenant of good faith and fair dealing."

In short, Novell is asking the court to make the playing field a little more fair to Novell. It ought to be able to defend itself against SCO's claims without having to relitigate matters it already prevailed on. This also has come up before, and Novell is also asking the court to think about the matter a little more deeply, in light of the general requirement that a plaintiff asserting breach of contract must plead that it itself either performed fully or has a good excuse for nonperformance.

Novell here isn't asking for SCO's claims to be barred, saying "that will come later." For now, Novell says, it is "seeking judicial notice only of previously adjudicated facts relevant to that determination." Why? Because if notice is not taken, then "Novell will have to put on the underlying evidence to prove those facts -- again -- at trial." Since this judge is on record as saying he doesn't want things retried, I wonder how he'll be able to find a reason to say no. If he does, I can't see how the trial wouldn't have to take more than 15 days.

Joint Submission Addressing Allocation of Issues for Bench and Jury Trial

The parties agree on the following:

1. The parties' slander of title claim and counterclaim should be decided by the jury.

2. The judge should decide SCO's breach of the covenant of good faith and fair dealing, Novell's claim for declaratory judgment regarding the waiver, and SCO's claim for specific performance. Footnote 1 indicates the parties dispute what is left to be tried by anybody on the good faith claim.

3. If Novell's unclean hands defense is tried, that it be by the judge, not the jury. As you saw, SCO's position is that it shouldn't be tried at all.

Here's what they don't agree on:
1. Novell's requests that the Court take advisory verdicts from the jury with respect to specific performance and unclean hands.

2. SCO has an alternative theory, that even if the APA didn't transfer the copyrights, the APA nevertheless requires Novell to transfer them. Novell isn't asking for a jury trial of the claim, for it is asking the court to "take an advisory verdict with respect to whether the APA, as amended, requires Novell to convey the copyrights to SCO".

3. They absolutely disagree about Novell's unclean hands defense to all of SCO's claims. Under California law, it "provides a complete defense to both legal and equitable causes of action." (Mendoza v. Ruesga, 169 Cal. App. 4th 270, 279...; Unilogic, Inc. v. Burroughs Corp. 10 Cal. App. 4th 612, 619. But the submission states, Novell can't find Utah authority on this issue, whether it is a defense or not. So they argue that the court can "consider California law as at least persuasive authority on general principles" and if it sees a conflict between Utah and California law, "it should follow California law" since the APA chose California law as governing the agreement. So, although it's an equitable defence, Novell requests that the court take an advisory verdict from the jury on this defense. This would be helpful and proper, the joint submission says, because "the hands of the litigant are rendered unclean by conduct which is "condemned and pronounced wrongful by honest and fairminded men", referencing 19 Am.Jur Section 476, p. 330 and Katz v. Karlsson, 84 Cal. App. 2d 469.

I think you can see what Novell is driving at. The whole world, except for enablers like Microsoft, condemned SCOsource at its very announcement. Footnote 4 lists again the proposed jury instruction Novell would like on unclean hands, that SCO acted unfairly by seeking to collect royalties form companies that might not be infringing and by refusing to identify the allegedly infringing code, precluding others from either using unprotected elements or designing around the elements of the work by writing noninfringing code that performs the same function.

Remember maddog telling SCO to please identify the code because "we surely do not want it?" Others did the same, including Groklaw. Novell argues, or more accurately would like to argue, that by its refusal to identify the code, SCO has unclean hands because it deliberately prevented companies from avoiding infringement or even knowing if it was in fact occurring. Since when does copyright law work like that?

What Novell specifically asks for is a verdict form asking the jury to decide if SCO met its burden to prove its hands are clean: "Did SCO prove that it acted conscientiously, in good faith, and fairly in connection with the subject matter of this lawsuit?" Personally, I wish it all could be decided by the jury. That, by the way, is an example of an advisory verdict from the jury, where the judge still finally decides but seeks and gets advice from the jury on a claim by asking the jury to answer a question like this one.

What do you think an honest and fairminded jury will say? What would you say? What *did* the world say?


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