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SCO Files Docketing Statement and We Find Out What Its Appeal Will Be About
Saturday, July 24 2010 @ 08:04 AM EDT

The SCO Group has filed their docketing statement [PDF] in their appeal from the jury's decision and Judge Ted Stewart's rulings and findings in SCO v. Novell. And thus we find out what the appeal is going to be about. The PDF is a honking 323 pages, mostly exhibits.

What does SCO want? What it has always wanted, the UNIX copyrights. It wants the appeals court to rule that Judge Stewart erred in ruling that Novell had the right to waive. After SCO lost the jury trial, it filed some motions, essentially asking Judge Stewart to overrule the jury and grant SCO judgment as a matter of law that the copyrights did transfer in 1995, despite the jury's ruling otherwise, or alternatively SCO wanted a new trial. The judge didn't do either, and SCO now wants the appeals court to rule that was error on his part. Finally, if all that fails, SCO wants the appeals court to rule that SCO is entitled to specific performance, compelling Novell to hand over the copyrights now.

In short, they want to win. They thought the jury "just got it wrong", they asked Stewart to fix that, and he didn't, so now SCO is asking the appeals court to help them win something, one way or another. Why? It wants to sue Linux folks, I presume, and it can't without the copyrights. And it wants to sue IBM, too, and unless it can get the appeals court to rule that Novell has no right to waive and get the copyrights, SCO can't sue IBM. I guess it would be more accurate to say SCO wants to not lose. It's in quite a pickle as things stand. Think of IBM's counterclaims for just a minute, and you'll understand why SCO probably feels it has nothing to lose by trying.

The docketing statement itself, which is a form they fill out, occupies just the first 11 pages of the PDF, but there are five exhibits attached:

Exhibit 1 is the District Court docket.

Exhibit 2 is the Final Judgment.

Exhibit 3 are the orders regarding the basis for the appeal:

  • Memorandum Decision and Order Denying Without Prejudice SCO's Motion in Limine No. 1 to Preclude Misleading Statements or Evidence Concerning Language in the APA Removed by Amendment No. 2

  • Memorandum Decision and Order Granting in Part and Denying in Part SCO's Motion in Limine No. 5 to Exclude Statements Made by Michael Anderer as an Independent Contractor for SCO

  • Memorandum Decision and Order Taking Under Advisement SCO's Motion in Limine No. 4 to Exclude Litigation Commentary (about Groklaw et al)

  • Memorandum Decision and Order on Novell's Motions in Limine 12 to 19 (about excluding various witnesses testimony)

  • Memorandum Decision and order Granting 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

  • Memorandum Decision and Order on Allocation of Issues for Bench and Jury Trial

  • Memorandum and Decision and Order Granting Novell's Motion to Determine that First Amendment Defenses Apply to Slander of Title and Require Proof of Constitutional Malice

  • Memorandum Decision and Order Limiting Use of Deposition Testimony During Opening Statements

  • Special Verdict Form

  • Findings of Fact and Conclusions of Law

  • Memorandum Decision and Order Denying SCO's Renewed Motion for Judgment As a Matter of Law or, in the Alternative, For a New Trial

  • Final Judgment
Exhibit 4 is the Rule 50(b) briefing and order, meaning the SCO motions after the jury's ruling trying to overturn it or get a new trial which Judge Stewart denied:
  • SCO's Renewed Motion for Judgment as a Matter or Law or, in the Alternative, for a New Trial

  • SCO's Memorandum in Support of its Renewed Motion for Judgment as a Matter of Law or, in the Alternative, For a New Trial

  • Novell's Opposition to SCO's Renewed Motion for Judgment as a Matter of Law or a New Trial

  • SCO's Reply Memorandum of Law in Support of its Renewed Motion for Judgment as a Matter of Law or, in the Alternative, For a New Trial

  • Memorandum Decision and Order Denying SCO's Renewed Motion for Judgment as a Matter of Law or, in the Alternative, For a New Trial
Exhibit 5 is the Notice of Appeal.
So there you have the materials from which SCO will craft its appeal brief. Groklaw has a chart showing all the motions in limine, the opposition to each, and how each motion in limine was eventually decided, so you can track everything that happened more fully. Text of the arguments in the motions in limine are here and oppositions here.

The final orders are what is being appealed, but you can get a clearer picture of what SCO is driving at by reading everything filed. For example, here's SCO's motion in limine 4 [PDF], the one about litigation commentary, meaning us at Groklaw, and Novell's opposition [PDF]. SCO asked that Groklaw and other "commentary" not be allowed to be mentioned by witnesses or anyone at trial:

Plaintiff, The SCO Group, Inc. (“SCO”), respectfully moves for an order in limine to preclude reference by the parties to the various sources which have been providing publicly available commentary on this and related SCO litigation.

ARGUMENT

There are a number of websites and publications which have followed this litigation and related litigation invoking SCO. Such websites and publications and the commentary to be found there are not relevant under Rule 401 of the Federal Rules of Evidence. Rule 401 defines “relevant evidence” as “evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Telum, Inc. v. E.F. Hutton Credit Corp., 859 F.2d 835 (10th Cir. 1988).

In addition, given the partisan nature of commentary, any probative value in such evidence would be substantially outweighed by the danger of unfair prejudice to SCO. Indeed, the nature of the claims at issue has led to highly polarized commentary. One example is the website Groklaw.com, on which a self-described former paralegal named Pamela Jones has published and continues to publish biased, anti-SCO coverage of all pleadings, hearings, and events relating to SCO’s pursuit of its claims and defenses. There are other similar sites and commentary, and the Court should not allow Novell or its counsel or witnesses to make any statements that might lead jurors to investigate such sources. (We do not suggest Novell’s counsel will intentionally do so, but witnesses should be so instructed. We understand Novell may not oppose this motion.)

Accordingly, SCO requests that the Court exercise its inherent power over the conduct of trials, and order Novell, its representatives, and its witnesses not to elicit or offer testimony respecting commentary on this case or related litigation, and not to make any references to such commentary or to the websites or publications devoted to such commentary.

So nasty. Novell did oppose, by the way:
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 (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.

II. CONCLUSION

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

The judge essentially ruled that he'd decide as the trial went along, and indeed Groklaw was mentioned when it came time to play the Maureen O'Gara deposition, where she talked about Groklaw and the questioning included a reference to the email from SCO's Brent Stowell to O'Gara asking her to send a jab my way. Here is the day Maureen O'Gara's deposition was entered into evidence, mentioning Groklaw, after the judge ruled it could be, subject to quite a few redactions. The funny part, to me, is that the judge asked SCO's lawyer Brent Hatch if he was happy with the eventual ruling, and Hatch said he was. He did go on to say he'd got a crumb, but he was happy with his crumb. Now, I gather SCO's not happy with that ruling after all.

SCO would, I gather, like to trash talk Groklaw some more, this time to the appeals court, in order to appeal Groklaw being allowed to be mentioned at all. I can't figure out why they bother. Every time they do this, they make Groklaw more prominent, although with their unpleasantly biased remarks attached. I can't believe that's worth much to them now, but maybe they are hoping they'll actually be granted a new trial, one where in their dreams the jury will never know Groklaw even exists. Or maybe it's in the context of the defense to the slander of title claim. We will find out when SCO files its appeal brief. SCO is asking for oral argument, and the Tenth Circuit doesn't provide transcripts of that, if you recall, so it's time to start planning on a volunteer attending, if possible, or those arguments will fall into a black hole and we'll never know what was said.

[ Update: The court has just announced a new policy (pdf) starting with the May 2010 oral argument term. We will be allowed to write to the court and ask for audio of the oral argument, telling the court what we want to use it for. They will then say yes or no, I guess. I don't think that harmonizes well with the fact that in the US, the public has the right to attend hearings, unless they are involving confidential matters. The default, though, is access. In a digital age, I would define access as access to the audio files. And if you wish to attend the hearing, you don't have to give a reason before they let you enter. The announcement includes where to write to the Clerk of the Court to provide any comments, if you should so desire. It's best, I think, to still send someone. We have one volunteer now, but we surely need a backup, if you can. I'd rather not rely on a permissions system.]

It's very puzzling to me, SCO's fixation on Groklaw. They surely knew journalists would write about their very public media campaign and highly PR'd litigation. It wants to quote from news articles they like and keep out any reporting they don't enjoy. In its opening statement, for example, SCO wanted to show the jury a Wall Street Journal article it liked, but when Novell said, fine, as long as it could mention articles of its choosing too, SCO balked. It didn't want Novell's choice to be shown to the jury, where it called SCO a cornered rat, the most hated tech company, etc. That wasn't a Groklaw article, by the way. And, as another example, SCO chose to put O'Gara's deposition into the trial as testimony, but tried to excise even a mention of the name Groklaw. The deposition included the name of her website. Was that excised? Was SCO not worried that the jury might look up O'Gara's very pro-SCO litigation commentary on her website? No? Only *Groklaw's* reporting on the litigation is a problem? See what I mean? Speaking of bias. I haven't heard that O'Gara has won any awards for her SCO litigation coverage. But Groklaw has won plenty of them for exactly that. So if you could only pick one to mention, which would you think would be the most helpful? The least biased, according to the world's judgment?

: )

I know. I'm making myself laugh. Logic isn't SCO's forte. That's just part of why it keeps losing.

It's like SCO wants to be the only one talking, the only one *allowed* to speak, perhaps because that's the only way it could possibly prevail. They even sued Novell for daring to say in public it owned the copyrights. They got sued for it, of all crazy things, for slander of title, and then the jury said Novell did in fact own the copyrights, just as Novell had claimed. Go figure. Like I say, SCO's way of thinking is bizarre to me.

I would point out that two judges and one jury so far have now confirmed Groklaw's analysis of essential issues. So where's the bias if the whole world sees it Groklaw's way? Maybe SCO is the one with the bias, and SCO is the one that needs to work on itself and adjust its singular world view.

Like that will happen.

But when reality keeps slapping you in the face, telling you you're wrong, it might be wise to consider that it means you actually are. All that commentary could have been a helpful cluebat to SCO, if they'd wanted to measure the boundaries of reality from the evidence available. I write as if SCO actually believes what it says, but that presumes facts not in evidence, as lawyers put it. Anyway, whatever. Here we go again, y'all, this time to the Tenth Circuit Court of Appeals.

Here's what SCO argued in its Motion in Limine No. 1, about the APA language:

Plaintiff, The SCO Group, Inc. (“SCO”), moves in limine to preclude misleading statements concerning language in the Asset Purchase Agreement (“APA”) that was changed by Amendment No. 2 to that Agreement.

ARGUMENT

The APA was amended by Amendment No. 2 to replace the language regarding the exclusion of “all copyrights.” The Tenth Circuit’s decision makes clear that the APA is to be interpreted together with Amendment No. 2. The Court expressly stated 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). Amendment No. 2 was not “meant to substantively change the intent of the APA,” but “merely clarified or affirmed the intent of the APA.” Id. at 1214 n.2. As the Court of Appeals further noted: “Even if we considered the language of the APA and Amendment No. 2 to be mutually antagonistic, California law still dictates that we construe them together, following Amendment No. 2 wherever its language contradicts the APA.” Id.

Novell previously made extensive arguments to the Court referring to the language excluding “all copyrights” that was replaced by Amendment No. 2. That language is no longer in the APA and it would be misleading for Novel to make arguments in the presence of the jury that suggest the APA in fact still contains such language. SCO recognizes that in presenting extrinsic evidence it may be necessary to refer to the language that existed before Amendment No. 2 was adopted. In doing so, however, the parties should be clear that this is not the current state of the contractual language that is to be considered by the jury.

I'd call that asking that reality be bent to suit SCO's purposes, myself. Here's what Novell argued:
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 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.

II. CONCLUSION

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

Do you see how we can discern what the appeal will be about by reading all of this?

SCO tells the history of the case, as it sees it, on page 4. I say as it sees it because it says that the jury ruled that the UNIX copyrights didn't transfer from Novell to SCO. But it has attached the verdict form, which clearly says that the jury ruled that both the UNIX and the UnixWare copyrights didn't transfer.

The questions on appeal can be found starting on page 5 of the PDF, so now we know what SCO is after. Here are the five questions, as SCO phrases them:

(1) Did the district court err in denying SCO’s motion and renewed motion for judgment as a matter of law on the question whether the copyrights to the UNIX operating system were transferred to SCO’s precedessor-in-interest in 1995?

(2) Did the district court err in denying SCO’s alternative motion for a new trial on the question whether the copyrights to the UNIX operating system were transferred to SCO’s precedessor-in-interest in 1995?

(3) Did the district court err in concluding that SCO was not entitled to specific performance, requiring transfer of those copyrights now, if they were not transferred to SCO’s predecessor-in-interest in 1995?

(4) Did the district court err in concluding that Novell is entitled to waive SCO’s rights under contracts concerning SVRX?

(5) Did the district court err in concluding that Novell properly waived SCO’s rights under contracts concerning SVRX?

Those are the big picture questions, but you can see from the exhibits to the docketing statement that we can expect many more subsidiary matters to come into this.

Here's an updated docket list (text) from the Tenth Circuit PACER site:

07/09/2010 - Open Document
100 pg, 551.37 KB [9777924] Civil case docketed. Preliminary record filed. DATE RECEIVED: 07/08/2010. Docketing statement due 07/23/2010 for SCO Group. Transcript order form due 07/23/2010 for Brent O. Hatch. Notice of appearance due on 07/23/2010 for Novell, Inc. and SCO Group.

07/21/2010 - [9781102] Notice of appearance submitted by Edward Normand for Appellant SCO Group for court review. Certificate of Interested Parties: Yes. Served on 07/21/2010. Manner of Service: email.--[Edited 07/21/2010 by LAB to remove PDF from entry as pleading has been filed as of 7/21/10]

07/21/2010 - [9781107] Notice of appearance submitted by Stuart H. Singer for Appellant SCO Group for court review. Certificate of Interested Parties: Yes. Served on 07/21/2010. Manner of Service: email.

07/21/2010 - [9781111] Notice of appearance submitted by Brent O. Hatch and Mark F. James for Appellant SCO Group for court review. Certificate of Interested Parties: Yes. - interested parties already listed.--[Edited 07/21/2010 by BV - To add the text - interested parties already liested] Served on 07/21/2010. Manner of Service: email.--[Edited 07/21/2010 by BV - To remove the PDF from the docket entry as pleading has been filed as of 7/21/2010.]

07/21/2010 - Open Document
3 pg, 20.88 KB [9781115] Notice filed that the transcript is already on file in the district court filed by Mr. Edward Normand, Esq. for SCO Group. Served on: 07/21/2010. Manner of Service: email.

07/21/2010 - Open Document
323 pg, 1.78 MB [9781125] Docketing statement filed by SCO Group. Served on 07/21/2010. Manner of Service: email.

07/21/2010 - [9781138] Minute order filed - Notice due that record is complete by 08/16/2010 for D. Mark Jones, Clerk of Court. (Text Only - No Attachment).

07/21/2010 - Open Document
4 pg, 22.07 KB [9781146] Notice of appearance filed by Mr. Edward Normand, Esq. for SCO Group. CERT. OF INTERESTED PARTIES: y. Served on 07/21/2010. Manner of Service: email.

07/21/2010 - Open Document
1 pg, 112.08 KB [9781155] Filed notice record is complete. Served on 07/21/2010. Appellant's brief and appendix due on 08/30/2010 for SCO Group.

07/21/2010 - Open Document
4 pg, 21.33 KB [9781158] Notice of appearance filed by Mr. Stuart H. Singer for SCO Group. CERT. OF INTERESTED PARTIES: y. Served on 07/21/2010. Manner of Service: email.

07/21/2010 - Open Document
4 pg, 23.81 KB [9781234] Notice of appearance filed by Mr. Brent O. Hatch and Mr. Mark F. James for SCO Group. CERT. OF INTERESTED PARTIES: y. - interested parties already listed as attorney and non parties. Served on 07/21/2010. Manner of Service: ECF/NDA

07/23/2010 - Open Document
3 pg, 227.33 KB [9782105] Notice of appearance submitted by Sterling A. Brennan, David R. Wright, L. Rex Sears, Cara J. Baldwin for Appellee Novell, Inc. for court review. Certificate of Interested Parties: Yes. Served on 07/23/2010. Manner of Service: ECF/NDA, US mail.

07/23/2010 - Open Document
4 pg, 228.75 KB [9782108] Notice of appearance submitted by Michael A. Jacobs, Deanne E. Maynard, Brian R. Matsui, Daniel P. Muino, Nathan B. Sabri for Appellee Novell, Inc. for court review. Certificate of Interested Parties: Yes. Served on 07/23/2010. Manner of Service: ECF/NDA, US mail.

So that's our cast of characters. All the usual suspects have been rounded up, I see. And SCO has until August 30th to file its appeal brief.

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