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Declaration of Ed Chatlos - PDF and text |
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Monday, October 25 2004 @ 07:36 PM EDT
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In SCO's
Memorandum in Opposition to Novell's Motion to Dismiss, they quoted from a declaration of Ed Chatlos, attached as Exhibit 4. Here it is in full [PDF]. This is a paper exhibit, hand-scanned, so I hope you can read it. It confirms points raised in an earlier article on the Chatlos declaration, as you can see in paragraphs 7 and 8. In paragraph 7, he indicates that he negotiated until September of 1995. Then what happened? Paragraph 8 tells us, "SCO and Novell thereafter negotiated the Asset Purchase Agreement ('APA') dated September 19, 1995." So right there, he appears to be acknowledging that he wasn't involved in the final stage of the negotiations, in which case his not knowing about Novell retaining copyrights is not, to me, significant. I also note that in paragraph 13, he says he does not believe "Novell has any right to waive, or to direct or require SCO to waive, any of SCO's source code rights. . ." Unfortunately for Mr. Chatlos, we just read Exhibit 13, the April 1996 agreement between IBM, Novell, and Santa Cruz, in which Novell actually signed on behalf of SCO, so clearly they had some kind of rights to speak for SCO. Of course, by then, Mr. Chatlos had left Novell's employ. You might also find it useful to compare this declaration with that of his co-worker, Michael J. Defazio. Here is the text of the Chatlos Declaration.
*******************************
I, ED CHATLOS, declare as follows:
1. I submit this Declaration in connection with the lawsuits entitled The SCO Group v. Novell, Inc. and The SCO Group v. International Business Machines Corporation.
I. WORK HISTORY
2. Following my graduation from college, in 1980, I went to work for Western Electric, an AT&T subsidiary. After taking time off to obtain a Master's Degree in Computer Science in 1981, I resumed working that year at Western Electric on product management. In approximately 1984, I joined the Computer System Division of AT&T, the UNIX group working on international business development. I worked in that division through 1986.
3. In February 1987, I transferred to London and worked on licensing UNIX to European users. In 1988, I became Acting International Managing Director in Europe. In 1989, I transferred back to the United States and began working on business planning and development on UNIX issues. The UNIX business was transferred to UNIX System Laboratories, Inc. ("USL") by 1991, and I continued working on strategic business issues for UNIX.
4. After Novell, Inc. ("Novell") purchased USL in 1993, I went to work for Novell on UNIX Strategic Partnerships and Business Development issues within the Strategic Relations and Mergers and Acquisitions organization. My title at Novell was Senior Director. I voluntarily left Novell in early 1996.
II. NOVELL'S SALE OF UNIX TO THE SANTA CRUZ OPERATION, INC. ("SCO")
5. In 1995, I learned that Bob Frankenberg, Novell's Chief Executive Officer, had determined that Novell should explore selling the entire UNIX business which Novell had purchased from USL. Under the direction of Duff Thompson, Senior Vice President of Corporate Development, and Mike DeFazio, Executive Vice President of the UNIX System Group, Novell considered several potential purchasers. Novell thereafter began serious discussion with SCO.
6. I was assigned the responsibliity of negotiating and completing the deal to sell UNIX and its business to SCO. In or about June 1995, I became the lead negotiator for Novell in the negotiations with SCO and headed the day-to-day responsibility for the potential deal. I was principal interface with SCO on the business negotiations for Novell.
7. During these negotiations, I met regularly with SCO representatives, sometimes several times a week from June to September 1995. Early in our discussions, it became apparent that SCO could not pay the full purchase price as contemplated by Novell. To bridge the price gap, it was ultimately agreed that Novell would retain certain binary royalty payments under UNIX licenses. It was my understanding -- and intent, on behalf of Novell -- that the complete UNIX business would be transferred to SCO. I am not aware of any instance in which anyone at Novell or SCO ever stated or exhibited any contrary intent or understanding, to me or anyone else.
8. SCO and Novell thereafter negotiated the Asset Purchase Agreeement ("APA") dated September 19, 1995. Under the APA, Novell received shares of SCO common stock and other consideration, and retained rights to certain binary product royalty payments. SCO acquired all right, title, and interest in and to the UNIX and UnixWare business, operating system, and source code. In the transaction, it was my intent -- and to my understanding was Novell's intent -- to sell the entire UNIX business to SCO, including the UNIX source code and all associated copyrights.
9. The above described proposal was for Novell to transfer the entire UNIX business to SCO except for certain binary product royalties that would be remitted to Novell. It was always my understanding and intent, on behalf of Novell, that the UNIX source code and its copyright were part of the assets SCO purchased. I do not recall anyone else ever suggesting that Novell would retain any copyright relating to UNIX, nor was I present for any discussion, general or specific, during the negotiations that contradicted my understanding of the transaction described herein. None of my superiors at Novell ever informed me that Novell was not transferring the UNIX copyright to SCO. Likewise, I never communicated to SCO in any way that the UNIX copyrights were not being sold to SCO. Nor am I aware of any instance in which anyone from Novell ever informed SCO in any way that the UNIX copyrights were not being sold to SCO as part of this transaction.
10. Given my central role in the negotiations, I believe I would have known if the parties had agreed that Novell would retain any UNIX copyrights. My intent and understanding as the lead negotiator for Novell was that Novell was transferring the copyrights to SCO in the APA. At the time the transaction was signed and closed, I did not observe anyone at Novell or SCO stating or acting as if Novell had retained any UNIX copyrights. If they had, it would have been contrary to the intent and structure of the deal as I understood it and communicated with SCO. In fact, from the time the APA transaction closed in 1995 until this day, it has been my understanding and belief that Novell sold the UNIX copyrights to SCO as of the time of the closing in 1995.
11. I have reviewed Schedule 1.1(b), Excluded Assets of the APA (the "Excluded Assets Schedule") with attention to the question of whether Novell was to retain any UNIX copyrights. In my opinion the word "copyrights" in Paragraph V.A. refers -- and was intended by the parties to refer -- to Novell copyrights other than those relating to UNIX and UnixWare, including the NetWare assets specifically referenced in Paragraphs I, II, and IV of the Excluded Assets Schedule.
12. Pursuant to a Technology Licensing Agreement signed by the parties in early December 1995, Novell licensed from SCO the use of the UNIX source code. I believe this licensing arrangement was consistant with SCO's ownership of the copyrights upon the closing of the APA.
13. Paragraph 4.16 of the APA was specifically designed and intended to protect Novell's retained binary product royalty stream. Based on the foregoing, including my understanding of the parties' intent, I do not believe Novell has any right to waive, or to direct or require SCO to waive, any of SCO's source code rights, including under customer source code licenses.
14. I declare under penalty of perjury that the foregoing is true and correct.
Executed: 10/1/04
New York, New York
______[Signature]_____
Ed Chatlos
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Authored by: Anonymous on Monday, October 25 2004 @ 08:09 PM EDT |
n/t [ Reply to This | # ]
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Authored by: aweraw on Monday, October 25 2004 @ 08:16 PM EDT |
n/t
---
Give me ambiguity, or give me something else![ Reply to This | # ]
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Authored by: Anonymous on Monday, October 25 2004 @ 08:17 PM EDT |
Best as I can figure out, Novell has until Nov. 8 to file a support
memorandum. Any schedule beyond that?
[ Reply to This | # ]
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Authored by: whoever57 on Monday, October 25 2004 @ 08:28 PM EDT |
This statement by Mr. Chatlos looks very strange. Firstly, why does he talk
about "binary product royalty"? Surely most (or all) of the SysV
licenses were source code licenses.
Secondly, he claims that Novell had not rights to waive SCO's rights, when the
plain language of the APA contradicts him. [ Reply to This | # ]
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Authored by: Anonymous on Monday, October 25 2004 @ 08:28 PM EDT |
Please nice to the trolls. [ Reply to This | # ]
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Authored by: Anonymous on Monday, October 25 2004 @ 08:32 PM EDT |
I would opine that this might explain Mr Chatlos lack of knowledge of 4.16(b),
and the copyrights not being
transfered...
Emphasis
added...
42. Ed Chatlos and I were
responsible for negotiating the sale of Novell's
Unix businesses
to Santa Cruz. Novell had two principal
Unix businesses. The first was
the USL legacy
business of
licensing Unix System V source
code to other Unix system vendors, who may
use, modify and
distribute the software under the terms of the
license agreements. The
second was the UnixWare business,
which developed, manufactured and
distributed to
end users
(either directly or through third
parties), in object code format, products
derived
from Unix
System V under the brand name
"UnixWare."
43.
Initially, Santa Cruz expressed
an interest in purchasing both of these
businesses.
However, the royalty stream associated with the
Unix System V source code
licensing
business led to a total
valuation for both
businesses that Santa Cruz stated it could not
afford.
Therefore, Santa Cruz proposed that Novell retain the legacy Unix
System V
source
code licensing business and Santa Cruz
purchase only
the UnixWare business. Under this
proposal, Santa Cruz
would administer the collection of royalties under the Unix
System V
source code license agreements and pass through
these royalties to
Novell for a fee.
44. Novell
accepted the
proposal, and the Asset Purchase Agreement was drafted to
reflect the parties' understanding. To that end, Section 4.16(a) of
the Asset
Purchase
Agreement provides that Novell generally
receives
any royalties payable under the Unix
System V
source code
license agreements, including the IBM Related Agreements and the
Sequent Related Agreements, and Novell pays Santa Cruz a 5%
administrative
fee for its
services in collecting
such
royalties.
[ Reply to This | # ]
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Authored by: Anonymous on Monday, October 25 2004 @ 08:51 PM EDT |
transcribed and sent to PJ. [ Reply to This | # ]
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Authored by: Anonymous on Monday, October 25 2004 @ 09:13 PM EDT |
"Novell actually signed on behalf of SCO, so clearly they had some kind
of rights to speak for SCO"
Wouldn't it be more accurate to say that Novell thought they had the right, and
represented to IBM that they had the right?
Novell can write up a bill of sale for the Brooklyn bridge, but the courts will
decide very quickly that they didn't own it to start with!
Not that I think Novell didn't have the right, you understand. I'm just not sure
this qualifies as proof.[ Reply to This | # ]
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Authored by: AMc on Monday, October 25 2004 @ 09:17 PM EDT |
I don't know how far his beliefs would get. The clause allowing Novell to speak
for SCO is a simple business protection clause. The licensee's who purchased
'perpetual, irrevokable, fully paid' contracts would need to be protected from a
successor in interest coming back and demanding another payout. I suspect that
if old SCO would not have been willing to accept that clause, the APA would have
explicitly stated that the perpetual licenses were not included in the selling
of the Unix licensing business. IBM, HP, Sun, and the others would have
demanded it.
That's always been something that I found odd. If SCOG was successful in
rolling back IBM's license, if would automatically call into question the rest.
I can't see that others would be terribly comfortable with that happening. It
rapidly turns into a 'what's bad for my enemy is bad for me' situation.[ Reply to This | # ]
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Authored by: rsteinmetz70112 on Monday, October 25 2004 @ 09:28 PM EDT |
Where did he go after he left Novell?
I think he went back to ATT and later was(is) President of Group Intelligence,
Inc., some kind of consulting company, which seems somehow involved in websphere
development.
Had he stayed he likely would have been transfered to SCO or let go.
This statement,like all of the statements from SCOG is very carefully worded.
One thought might be that at some point Mr. Chatlos gave notice and was removed
from direct negotiations.
It's a little odd that the lead negotiator, relies not on what he negotiated but
on what other people failed to tell him to draw his conclusions about what is
actually in the agreement. He never makes a direct statement about what he
agreed to in the negotiations.
I wonder what his counterparts at SCO thought they were buying? That certainly
would be of much more value in this context, because it affects what SCO thought
they had to sell to Caldera and what they may have represented to Caldera. The
possibility exists the SCO sold Caldera something they didn't own.
I imagine at some point those individuals will be deposed. That will be
interesting, they may think, like Caldera the IBM doublecrossed them. Or they
may think SCOG is a nutty as we do.
---
Rsteinmetz
"I could be wrong now, but I don't think so."[ Reply to This | # ]
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Authored by: SilverWave on Monday, October 25 2004 @ 10:05 PM EDT |
For everyone with Hide Anonymous turned on
"Therefore we at
LinuxWorld.com (the Web site) and LinuxWorld Magazine (the print magazine),
would like to make it clear that we do not approve, contract, or employ Maureen
O'Gara. We have no association with Maureen O'Gara of any kind. This obviously
means that we are unable to approve or veto any of the stories that Maureen
O'Gara has written, irrespective of their source." --- Linux used ideas
from MINIX
MINIX|UNIX
UNIX|MULTICS
MULTICS|CTSS
CTSS|FMS
In science, all work is based on what came before it.
Andy Tanenbaum, 6June04 [ Reply to This | # ]
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Authored by: Mark Grosskopf on Monday, October 25 2004 @ 10:23 PM EDT |
Did you ever notice that SCOX's "proof" always kind of
"hints" around the point?
And IBM's "proof" is like a sledge hammer?
I love seeing SCO knee-capped...
MG[ Reply to This | # ]
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Authored by: Anonymous on Monday, October 25 2004 @ 11:32 PM EDT |
5. In 1995, I learned that Bob Frankenberg, Novell's Chief
Executive Officer, had
determined that Novell should
explore selling the entire UNIX business which Novell had
purchased from USL. Under the direction of Duff Thompson, Senior Vice
President of
Corporate Development, and Mike DeFazio,
Executive Vice President of the UNIX System
Group, Novell
considered several potential purchasers. Novell thereafter began serious
discussion with SCO.
I understand Duff Thompson
works for The SCO Group, Inc.
Any ideas why there isn't a declaration
from Mr Thompson?[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, October 26 2004 @ 01:03 AM EDT |
http://www.sys-con.com/author/?id=4922
SYS-CON Author Pamela Jones
Bio
Known to millions of online readers as "PJ," Pamela Jones is the
editor and moderator of Groklaw. They also know her as the heart
of the open-source community's legal battle against litigation
aimed at the Linux kernel and other free and open-source
software.
[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, October 26 2004 @ 03:08 AM EDT |
13. Paragraph 4.16 of the APA was specifically designed and
intended to protect Novell's retained binary product royalty stream. Based on
the foregoing, including my understanding of the parties' intent, I do not
believe Novell has any right to waive, or to direct or require SCO to waive, any
of SCO's source code rights, including under customer source code
licenses.
If you read it to the letter, Ed Chatlos is
right. Novell doesn't have the right to waive any of SCO's source code rights.
What is SCOs is SCOs. The issue is that SCO didn't get the
source code rights in the end, because they couldn't affort it.
H@ns [ Reply to This | # ]
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- paragraph 13 - Authored by: Anonymous on Tuesday, October 26 2004 @ 03:34 AM EDT
- paragraph 13 - Authored by: Anonymous on Tuesday, October 26 2004 @ 04:37 AM EDT
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Authored by: spuluka on Tuesday, October 26 2004 @ 08:09 AM EDT |
What is the standard for having an actual controversy that must be decided by a
jury instead of a judge during summary judgement?
1-we have the written agreement. On party says it transfers copyright the other
says it does not. The agreement appears to support the non-transfer.
2-we have statements from the participants that say no copyright transfer
happens.
3-we have Mr. Chatlos saying the intent is to transfer copyright.
Does the existence of two and three make an actual controversy?
What constitutes "plain language" in the agreement so you don't have
access to testimony in two and three?
Will this declaration defeat the PSJ and take this to trial?
---
Steve Puluka
Pittsburgh, PA[ Reply to This | # ]
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Authored by: belzecue on Tuesday, October 26 2004 @ 09:39 AM EDT |
According to their latest PR,
SCO thinks is can make some serious money from open
source...
"Initial projects that are available at SCO
Marketplace include the development of device drivers and the porting of various
Open Source applications to SCO UNIX platforms. Developers who submit winning
bids for various development projects will be contacted by the SCO engineering
team."
[ Reply to This | # ]
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Authored by: inode_buddha on Tuesday, October 26 2004 @ 12:32 PM EDT |
I cannot understand what weight Ed Chatlos could possibly have, if the best he
can do is "seems to recall" and he was out of the picture by the time the
agreements were signed anyway. On an unrelated note, re-posted from an earlier
post: I've been following the O'Gara thing, and one thing struck me as odd:
the LW editors say that she is working to unseal the records. I just can't see
how this is possible, do you know a way? Is it even desirable? --- "When
we speak of free software, we are referring to freedom, not price." -- Richard
M. Stallman [ Reply to This | # ]
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Authored by: Anonymous on Tuesday, October 26 2004 @ 01:16 PM EDT |
He implies that Novell owned the copyrights because he thinks they could sell
them to SCO. Since the question of Novell's ownership of the copyrights has
been buzzing around for a while, you might think that he should comment on that.
He started at AT&T and stayed with the division as it went to Novell but he
makes no reference to that deal.
It seems to me that someone negotiating to sell something would have a clear
idea of what exactly he was selling. Yet nowhere does he say that Novell
actually owned the copyrights. Or, did I (as I frequently do) miss something?[ Reply to This | # ]
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