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SCO gets more time to file appeal brief regarding its loss to Novell
Wednesday, September 01 2010 @ 03:07 AM EDT

SCO filed a motion asking for more time to file its appeal brief with the Tenth Circuit Court of Appeals. They needed 10 more days, and Novell agreed to it, so the clerk signed off on it the same day the motion was filed, and the new date for SCO to file its brief will be September 9.

SCO's argument asking for more time is interesting, because we learn that Novell asked to -- and SCO agreed they could -- attach 60 more documents to the Appendix. And Stuart Singer, who takes credit in his bio on Boies Schiller's website for representing SCO as lead counsel at this same court of appeals the last time SCO appealed, is busy with another case, working on a preliminary injunction proceeding. Well. Almost. It doesn't say the "SCO" word:

Won appellate decision from Tenth Circuit (August 2009) regarding ownership of copyrights and contract rights for the UNIX operating system.
Heh heh. They are incorrigible. Not exactly the whole story, eh? What he won was a jury trial to *determine* the ownership of UNIX and UnixWare copyrights and contract rights, but the jury at the trial said Novell retained ownership of the copyrights for UNIX and UnixWare in 1995-6, and the judge ruled that Novell had the right to waive contractual violations, so SCO lost completely, despite the Court of Appeals granting SCO that extra bite of the apple with a jury trial. Which, I must point out, reached exactly the same conclusion that the first judge had on summary judgment way back in August of 2007. Singer's bio makes it sound like SCO prevailed. No wonder Bloomberg got it so wrong today [see News Picks]. That's the trouble with fibs and spin. They detach your mind from reality. Over time, that can't be good for anybody's mental health.

Preliminary injunctions are very, very hard to win, because one of the things you have to demonstrate early in the case, meaning before you've done discovery, is that you probably will win in the end, so it's a legitimate excuse this time. But what might those extra 60 documents be, I wonder?

Because the News Picks items scroll off the page quickly, I'll repeat here my corrections to Bloomberg's account about the sale of assets in SCO's bankruptcy. Bloomberg's words are in regular text, and mine are in blue:

At a hearing last week, the bankruptcy judge in Delaware approved sale procedures where bids are due Oct. 15.

The procedure approved at the recent hearing included the order[PDF], which says bids are due Oct. 5. And from Groklaw's report on the hearing:

"Item 2. Motion to sell the business - Ms. Fatell began by asking that the judge approve the procedures. She spoke briefly about how the judgment had gone against them in both the jury trial and the rulings from the judge afterward. She pointed out that an appeal had already been filed. Judge Gross nodded and mentioned he was aware of the rulings."

No buyer is yet under contract. The hearing for approval of the sale will take place Nov. 8.

The bankruptcy judge called for a Chapter 11 trustee in August 2009, about one month before the U.S. Court of Appeals in Denver ruled in the company’s favor after six years of litigation with Waltham, Massachusetts-based Novell Inc.

Actually, the Chapter 11 trustee was appointed more or less at the same time. He was appointed on August 25th; the Court of Appeals ruling was on August 24. [Update: Since Bloomberg wrote that a trustee was "called for", a reader points out that it is true that the judge issued an order saying that there would be a Chapter 11 trustee appointed, and that order was dated August 5. That's almost a month, speaking loosely.]

The appeals court ruled partly in SCO's favor, in that it decided that a jury trial was required on copyright issues; however it upheld the lower court on the damages owed to Novell regarding the Sun license. And it specifically stated that it was not ruling in SCO's favor with regard to ownership of the copyrights. It took no stand on that at all, except to say that Novell had strong arguments, which later, of course, resulted in Novell's victory.

Here's one paragraph from the appeals court ruling:

This case, involving a complicated, multi-million dollar business transaction involving ambiguous language about which the parties offer dramatically different explanations, is particularly ill-suited to summary judgment. We recognize that Novell has powerful arguments to support its version of the transaction, and that, as the district court suggested, there may be reasons to discount the credibility, relevance, or persuasiveness of the extrinsic evidence that SCO presents. Moreover, we appreciate the difficulties that follow when the resolution of ambiguous language in a ten-year-old contract is left to trial. At trial in a case like this, the intention of the parties often 'must be divined from self-serving testimony offered by partisan witnesses whose recollection is hazy from passage of time and colored by their conflicting interests.'..

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.

The case went back to the district court, where the judge and jury further clarified SCO’s rights in certain Unix software incorporated in software for network systems.

That's one way to put it, if you mean clarified them downward. What the jury did was decide SCO didn't own any of the copyrights in dispute and the judge ruled Novell had the right to waive any actions SCO might wish to take against IBM or others regarding contract violations.

With the property interest clarified, the trustee is now selling the assets.

That actually depends on what happens at the sale hearing. SCO has the right to look for bidders at the auction, and to choose one, but then there will be a hearing where any objections to the particular sale will be argued.

After bankruptcy in September 2007, SCO and an affiliate filed schedules listing combined assets of $14.2 million and debt totaling $5.2 million.

Close but no cigar. It listed assets at $14,800,000 and debts at $7,500,000. You can find their latest Monthly Operating Reports, not that they are current, here, and to my reading, they are totally broke. They spent everything while in bankruptcy protection, sold off their "mobility assets" to Darl McBride, took out a $2 million loan recently from Ralph Yarro and friends, which was approved by the bankruptcy court with some later-filed changes, and it hasn't been paid back, it seems, although you can't be sure without more recent MORS or an SEC filing on the finances of this public company, but it must be repaid or the assets go pretty much to the folks who made the loan, as I read the terms. SCO also has not paid the creditors. So that's a more current view than the assets and liabilities in September of 2007.

*Now* aren't you glad there is a Groklaw?

Here's the motion and then the order granting it:

08/27/2010 - Open Document - [9792495] Motion filed by Appellant SCO Group to extend time to file appellant/petitioner's brief until 09/09/2010. Served on: 08/27/2010. Manner of service: ECF/NDA.

08/27/2010 - Open Document - [9792523] Order filed by Clerk of the Court granting Attorney motion to extend time to file apet brief. Appellant's brief and appendix due on 09/09/2010 for SCO Group. Served on 08/27/2010.

Here is SCO's motion, minus certificate of service for the sake of time:


No. 10-4122







On Appeal from the United States District Court for the District of Utah
Hon. Ted Stewart, Presiding
No. 2:04-CV-00139-TS



Brent O. Hatch (5715)
Mark F. James (5295)
[address, phone, fax]

Edward Normand
[address, phone, fax]

Stuart Singer
[address, phone, fax]

Appellant The SCO Group Inc. (“SCO”), pursuant to Fed. R. App. P. 27 and 10th Cir R. 27.4, hereby moves for an enlargement of ten days time in which to file its Opening Brief, and states in support the following:

1. This is an appeal from a final judgment, following a lengthy jury trial and non-jury determinations. The notice of appeal was timely filed on July 7, 2010. Appellants brief is currently due to be filed on Monday, August 30th. No prior enlargement of time has been sought.

2. A brief 10-day extension of time is required for the following reasons:

A. Lead counsel for Appellants, Stuart Singer, has been involved in a preliminary injunction proceeding over the past thirty days, including the submission of proposed findings of fact and conclusions of law on Wednesday, August 25, 2010.

B. Appellee Novell, Inc. requested on August 25, 2010, to include over 60 additional documents in the Appendix. SCO does not oppose the request, but consideration of the additional documents and proper citation to such materials, as required, will require additional time.

3. Because the work required on the aforementioned preliminary injunction and the request to enlarge the appendix arose within the last week, SCO respectfully requests to be excused for not having provided five days notice to this request.

4. Counsel for Novell, Inc. has represented that it does not oppose this request. SCO therefore moves for a 10-day enlargement of time for filing its Opening Brief from August 30, 2010 to September 9, 2010.

DATED this 27th day of August, 2010.

By: /s/ Edward Normand
Stuart H. Singer
Edward Normand

Brent O. Hatch
Mark F. James

Counsel for Plaintiff-Appellant
The SCO Group, Inc

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