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Declaration of Jim Wilt
Saturday, February 05 2005 @ 04:07 PM EST

Here's the Declaration of Jim Wilt. This is another paper document that Frank Sorenson scanned for us, and our thanks go to bruzie, mko, and belzecue for transcribing it, doing the HTML, and proofreading it. I like the way they did the caption table.

This is a SCO declaration, one of several supporting their Memorandum in Opposition to IBM's Motion for Summary Judgment on Breach of Contract Claims. This is the first declaration we've seen that says it is offered in connection with both SCO v. IBM and SCO v. Novell. His testimony is that he was at oldSCO and negotiated the purchase from Novell of Unix and UnixWare, whatever that purchase ends up consisting of. He says that he thought he was buying the copyrights too, and he never heard anyone say any different. Unfortunately for his side, since copyright can only be transferred by a writing, it raises the question, if that was the intent, where is the writing? In paragraph 10, he also says that he doesn't think Novell had or has the right to waive anything.

His declaration is further weakened when it says that Ed Chatlos was the primary negotiator for Novell in the deal, and that he met with him from August to September of 1995. The Asset Purchase Agreement was dated September of 1995, but there is an Amendment 1 and the Technology License Agreement dated December of 1995, although made retroactively effective as of September of 1995, and an Amendment 2 dated October of 1996. Mr. Chatlos by then had already left the company, so although SCO and Mr. Wilt represent Chatlos as the primary negotiator, it doesn't appear that he can have been involved in the entire process.

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

Brent 0.Hatch (5715)
HATCH, JAMES & DODGE
[address, phone, fax]

Robert Silver (admitted pro hac vice)
BOIES. SCHILLER & FLEXNER LLP
[address, phone, fax]

Stephen N. Zack (admitted pro hac vice)
Mark J. Heise (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

THE SCO GROUP,

Plaintiff,
v.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant.

Case No. 2:03CV0294DAK

Hon. Dale A. Kimball
Magistrate Judge Brooke C. Wells

DECLARATION OF JIM WILT

I, JIM WILT: declare as follows:

1. I submit this Declaration in connection with the lawsuits entitled The SCO Group v. IBM and The SCO Group v. Novell, Inc.

I. EDUCATIONAL BACKGROUND

2. I received a Bachelor's Degree in Mathematics from Case Western Reserve University in 1966, and a Master's Degree in Computer Science from the University of Wisconsin in 1967. In 1968 I completed my course work towards a PhD in Computer Science at the University of Wisconsin.

II. WORK HISTORY

3. After leaving the University of Wisconsin, I worked as a software systems programmer and instructor at Vanderbilt University for a year. In 1969, I joined Xerox Corporation and worked for them (and subsequently Honeywell when they purchased Xerox's computer business) for nine years. My positions at Xerox/Honeywell included field systems analyst, systems analyst manager, and software product manager. In 1978, I joined Amdahl Corporation and worked in their software product planning department. After I left Amdahl, I did consulting to provide computer and business advice to smaller companies.

4. In 1983, I joined The Santa Cruz Operation, Inc. ("SCO"). Initially I worked in the marketing department and subsequently became the Vice President Marketing and Sales. While in that position I moved to the UK and opened SCO's European Office. I was based in Europe for five years. In 1989, I became the Vice President of Corporate Development, which included responsibility for mergers and acquisitions. While in that position I was responsible for acquiring two companies, and the UNIX intellectual property and UnixWare product business. I became the Senior Vice President Products in 1998 and was responsible for all product software development, product management and product support. In 2000, I became the President of the Professional Services Business Unit. I worked at SCO through May 2001, when Caldera acquired the Server Software and Professional Services Business Units.

III. NOVELL'S SALE OF UNIX TO SCO

5. In 1995, Novell, Inc. ("Novell"), through Mike DeFazio and Ed Chatlos, approached SCO about the possibility of selling Novell's entire UNIX and UnixWare business.

6. Doug Michels (SCO's Chief Executive Officer), Geoff Seabrook (an Executive Vice President), and I met with representatives of Novell. During the discussions, SCO made clear to Novell that SCO could not afford a direct purchase of the complete UNIX and UnixWare business, in light of the price being asked for the entire business. Mr. Michels proposed the idea of reducing the proposed purchase price by permitting Novell to retain certain binary royalty payments under certain UNIX licenses.

7. Mr. Seabrook and I were assigned the responsibility of negotiating and completing a deal with Novell along those lines. Mr. Seabrook and I thereafter became the lead negotiators for SCO and oversaw the day-to-day responsibility for the potential purchase. During the negotiations, I met regularly with Novell representatives, sometimes several times a week, from approximately August to September 1995. I met primarily with Ed Chatlos of Novell during those negotiations. I understood Mr. Chatlos to be Novell's chief negotiator during the negotiations.

8. It was my understanding and intent during those negotiations that SCO would acquire Novell's entire UNIX and UnixWare business including the copyrights. I do not recall, and do not believe that there ever was, any instance in which anyone at SCO or Novell ever stated or exhibited any contrary intent or understanding, to me or anyone else.

9. As a result of those negotiations, Novell and SCO entered into the Asset Purchase Agreement ("APA") dated as of September 19, 1995, through which Novell received shares of SCO common stock and other consideration, and received rights to certain binary product royalty payments to be collected by SCO. SCO acquired all right, title, and interest in and to the UNIX and UnixWare business, operating system, and source code. It was my intent on behalf of SCO to acquire through the APA Novell's entire UNIX and UnixWare business, including the UNIX and UnixWare source code and all associated copyrights, and I believed then (as now) that Novell's intent was to sell all of those assets and rights.

10. Paragraph 4.16 of the APA pertains to the binary royalty income stream that Novell retained through the APA. The parties agreed to the language in Paragraph 4.16(b) in order to allow Novell to manage that royalty stream within the operation of SCO's customer source code licenses - not at the expense of SCO's right to enforce its intellectual property protections under any such licenses. and not to permit Novell to waive any of those protections. I have reviewed Amendment No. 2 to the APA and believe that the language therein confirms that intent. In light of my intent, and based on my understanding of the parties' intent, I do not believe that Novell had or has any right to waive, or to direct or require SCO to waive, any of its intellectual property rights or protections.

11. By the time of the APA closing, SCO's business plan did not contemplate any significant additional sales of SVRX source-code licenses. The remaining interest in that particular part of the UNIX business consisted primarily in collecting binary royalties attributable to sublicensed object-code product. However, because the SVRX software included substantial intellectual property that SCO was using in later versions of its UNIX and UnixWare products, SCO had a strong continuing interest in protecting that property under the existing SVRX licenses.

12. I do not recall anyone on either side of the negotiations or transaction ever suggesting that Novell would retain any copyright relating to UNIX or UnixWare. I am not aware of any discussions, whether general or specific, during the negotiations that contradict my understanding of the transaction as set forth in this Declaration. None of my superiors at SCO or Mr. Seabrook ever even suggested that SCO was not acquiring the UNIX or UnixWare copyrights, nor did Novell ever communicate to me that it was not selling the UNIX or UnixWare copyrights.

13. At the time the transaction was signed and closed, I did not observe anyone at SCO or Novell stating or acting as if Novell had retained any UNIX or UnixWare copyrights. Any such statement or conduct would have been contrary to the intent and structure of the deal as I understood it and communicatcd it to Novell and within SCO. It has been my understanding and belief since the time the APA closed that Novell sold the UNIX and UnixWare copyrights to SCO as of the time of the closing in 1995.

14. In light of my central role for SCO in negotiations, I believe I would have known if the parties had agreed or ever discussed the possibility that Novell would retain any UNIX or UnixWare copyrights. Indeed, if I had thought that SCO was not acquiring all of the UNIX and UnixWare copyrights, I would not have agreed for SCO to proceed with the deal as priced.

15. I have reviewed Schedule 1.1(b) of the APA (the "Excluded Assets Schedule") with attention to the question of whether Novell was to retain any UNIX or UnixWare copyrights. In my view, Paragraph V.A does not refer, and was not intended to refer, to Novell copyrights relating to UNIX or UnixWare.

16. Pursuant to the APA, the parties also signed a Technology Licensing Agreement in early December 1995, in which Novell licensed source code rights from SCO. In my view, this licensing agreement was consistent with SCO's ownership of the UNIX and UnixWare copyrights following the closing of the APA.

17. I declare under penalty of perjury that the foregoing is true and correct.

Executed: 23 November 2004
Nashville, Tennessee

[signature of Jim Wilt]
Jim Wilt


  


Declaration of Jim Wilt | 123 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Is this guy a lawyer? No, Duh. Re: Declaration of Jim Wilt
Authored by: martimus on Saturday, February 05 2005 @ 05:39 PM EST

This guy is trying to speak to the language in the contracts, and to prove that the words written don't mean what they say. This is a practically useless declaration as far as I can tell. IANAL.

[ Reply to This | # ]

Off Topic Links and Discussion here
Authored by: martimus on Saturday, February 05 2005 @ 05:42 PM EST

Put all the goodies you've got here that aren't directly related to this topic.

[ Reply to This | # ]

Corrections here please.
Authored by: martimus on Saturday, February 05 2005 @ 05:44 PM EST
If required.

[ Reply to This | # ]

Declaration of Jim Wilt
Authored by: Anonymous on Saturday, February 05 2005 @ 06:45 PM EST

He says that he thought he was buying the copyrights too, and he never heard anyone say any different.

I guess, then, that he never read Schedule 1.1(b) in the original APA, where it explicitly excluded "all copyrights". "Never heard anyone say any different" indeed.

(Steve Martin, on the road)

[ Reply to This | # ]

Declaration of Jim Wilt
Authored by: Anonymous on Saturday, February 05 2005 @ 08:54 PM EST
6. ... During the discussions, SCO made clear to Novell that SCO could not afford a direct purchase of the complete UNIX and UnixWare business, in light of the price being asked for the entire business.
8. It was my understanding and intent during those negotiations that SCO would acquire Novell's entire UNIX and UnixWare business including the copyrights.
Is it just me, or do these statements directly contradict each other? SCO made clear to Novell that they couldn't afford to buy it all, yet Mr. Wilt's intent during the negotations is to buy it all. What gives?

[ Reply to This | # ]

Sale of copurights
Authored by: Jude on Saturday, February 05 2005 @ 09:01 PM EST
I'm pretty sure that SysV has a fair amount of code that is copyrighted by
people/companies other than AT&T, Novell or SCO. Ransom Love even admitted
that this was so when explaining why he couldn't release SysV code along with
the older versions that Caldera released.

If the above is true, then Novell couldn't possibly have sold SCO all of the
Unix copyrights, because at least some of them were not Novell's to sell. SCO's
claim that they purchased all of the copyrights couldn't possibly be true, and
Darl's predecessor admitted this was the case.

It's also hard to believe SCO's theory that the APA was the legally required
instrument of copyright transfer. Given the checkered ownership of SysV
copyrights, I'd think a rather hefty chunk of paperwork would have been needed
to adequately describe what was being sold.

The above difficulties disappear if Novell didn't sell the copyrights, which is
what the APA seems to say.

[ Reply to This | # ]

IMO, this is not a very convincing declaration
Authored by: unsubtle on Sunday, February 06 2005 @ 12:20 AM EST
i don't mean that intent isn't very important, since
  • the written contract generally overrides intent, unless the written contract is ambiguous.
  • a writing is specifically required to transfer a copyright.

i mean that he "doth protest too much".

for example:

8. It was my understanding and intent during those negotiations that SCO would acquire Novell's entire UNIX and UnixWare business including the copyrights. I do not recall, and do not believe that there ever was, any instance in which anyone at SCO or Novell ever stated or exhibited any contrary intent or understanding, to me or anyone else.

i've emphasized part of what he's saying, because i think it's a remarkably broad assertion. he's confident that something never happened even when he wasn't present. this is not totally absurd, because other people at SCO could well have reported back to him about discussions they'd had with novell, so he could have some idea about what was going on when he wasn't present. but he couldn't have complete knowledge.

13. At the time the transaction was signed and closed, I did not observe anyone at SCO or Novell stating or acting as if Novell had retained any UNIX or UnixWare copyrights.

how do you act as if you've retained a copyright? (other than by selling copyright licences, since this very declaration says that new SysV licences weren't being sold by this time.) mr wilt seems to have remarkable powers for deducing what other people are thinking from their behaviour.

14. ... Indeed, if I had thought that SCO was not acquiring all of the UNIX and UnixWare copyrights, I would not have agreed for SCO to proceed with the deal as priced.

why not? what was the monetaey value of the copyrights, given that SCO was planning to sell not unix (i.e. SysV) but updated versions of unixware, which would automatically have copyright protection because SCO would own the copyright on their own changes to the code? of course this claim could be true, but i don't see any logic behind it.

in short, i think this declaration started out with the definite idea -- perhaps perfectly sincerely held -- that the copyrights were transferred to SCO, and everything has been seen through that prism. mr witt's recall of events from years ago and his feats almost of mind-reading are just too good. i suspect that, for each point he makes, he was thinking: "i know that the copyrights were transferred, so this must be what i recall about what happened". this is much less persuasive than a declarant who tries to recall each point separately, without a guiding theory.

[ Reply to This | # ]

let's get this straight
Authored by: Anonymous on Sunday, February 06 2005 @ 01:04 AM EST
1) the guy couldnt have actually met with Ed because Ed wasn't there at the
time.
2) Ed couldnt have been the primary negotiator because he had left before the
end
3) he hadn't actually read the contracts he was supposedly the primary
negotiator for because they plainly state that copyrights were specifically
excluded
4) he contradicts himself in more than one place about certain very critical
information and facts.

does that about cover it?

[ Reply to This | # ]

Declaration of Jim Wilt
Authored by: jim Reiter on Sunday, February 06 2005 @ 01:30 AM EST

Who wrote the APA, as amended, since we have these people like Chatlos and Wilt
giving depositions saying the the "Contract Documents" do not reflect
their understanding of the negoitations?

Who do we believe, Ed Chatlos and Jim Wilt or our lying eyes when we read the
documents?

[ Reply to This | # ]

Wilt - by Tom Sharpe
Authored by: thorpie on Sunday, February 06 2005 @ 01:45 AM EST

if anyone has ever read this book you will understand when I say it must go with the name

---
The memories of a man in his old age are the deeds of a man in his prime - Floyd, Pink

[ Reply to This | # ]

Bridge for sale
Authored by: Anonymous on Sunday, February 06 2005 @ 05:35 AM EST
Yeah... I know what bridge in London you thought you were buying. Better luck next time.

[ Reply to This | # ]

Minor quibble with Mr. Wilt's educational background
Authored by: Anonymous on Sunday, February 06 2005 @ 08:27 AM EST

I'm not sure what to make of it, but there is something curious in Mr. Wilt's declaration of his educational background:

2. I received a Bachelor's Degree in Mathematics from Case Western Reserve University in 1966....

Case Western Reserve University was created on July 1, 1967 by the federation of Case Institute of Technology and Western Reserve University.

Things get odd when two large schools merge. I can't rule out that degrees issued in 1966 might have said "Case Western Reserve University", but that seems unlikely when federation was still a year away. It is likely that his degree was actually granted by either CIT or WRU and has that college's name and president's signature on it.

I would guess Mr. Wilt simply extrapolated and decided to name CWRU, forgetting that his degree named one of the forerunner schools. That kind of confusion is quite common when universities merge or rename themselves. I don't think such an error impeaches his credibility for the bulk of the declaration, but it is curious nonetheless.

It is kind of funny in context, considering the retroactive theme of SCO's contract arguments. :-)

[ Reply to This | # ]

Good Faith Negotiations
Authored by: arch_dude on Sunday, February 06 2005 @ 11:46 AM EST
Ever since I first read the APA (18 months ago?) here on Groklaw, it's struck me
as a strange document. My sense was that Novell was trying to sucker oldSCO, but
it's possible that the negotiation was actually in good faith and the problems
were discovered and corrected only at the end of the cycle as suggested in
comments above.

The scenario that best describes this wierd document is as follows:

Novell thought it owned UNIX, with a few inconsequential impediments. They
decided to sell it to oldSCO, and simply assumed that "we own UNIX"
was sufficiently correct for every-day usage. The contract was negotiated in
those terms, and Jim W's deposition is in good faith. End of APA discussion,
shake hands, send it to the lawyers to put in the fine print.

Novell's lawyers then discovered that the copyright situation is really murky,
so they worded the contract to exclude copyrights except for the ones that had
actually been registered by Novell or a predecessor in interest. This is the
only rational explanation for the strange list of conveyed copyrights in the
annex. They retained "all the other copyrights" not because they
wanted to, but because there were no other copyrights that they owned
unambiguously.

If this scenario is valid, oldSCO (or IBM or somone) should ask Novell for a
list of all material in UNIX that Novell thought it owned copyrights to at the
time of the APA.

[ Reply to This | # ]

204(a) writings and the lack thereof
Authored by: darthaggie on Sunday, February 06 2005 @ 03:37 PM EST
He says that he thought he was buying the copyrights too, and he never heard anyone say any different. Unfortunately for his side, since copyright can only be transferred by a writing, it raises the question, if that was the intent, where is the writing?

Oh, indeed.

The incident that got me to thinking about all the 204(a) writings in the UNIX(tm) tree was the SCOX v. Novell slander of title suit. I thought it was an odd thing to file, but it was SCOX, so who knew what they where thinking? Then Novell started filing their responses to the charge. One of their defenses is "there's no malice". Ok. But where's the "we own the copyrights to UNIX(tm)" defense?

That seems to be the issue that neither side wants to bring to the courts attention: who actually owns the copyrights.

What I'd like to see - and this is probably completely impossible to obtain - are the 204(a) writings transfering copyright from AT&T to USL, USL to Novell, Novell to SCO, and then SCO to Caldera/SCOX.

I wouldn't be overly surprised if the copyrights are still retained by AT&T, and that there are no valid 204(a) writings.

[ Reply to This | # ]

Declaration of Jim Wilt
Authored by: turambar386 on Monday, February 07 2005 @ 02:25 PM EST

I notice that Jim Wilt was slated to become the head of the a new Services Division at Caldera after the buy out. However, that does not appear to have happened. I wonder why.

I also note that he is now running a firm called The Lateral Group which advertises its abilities to recover lost password files. I wonder if maybe the lost password recovery industry is in a slump which might make Mr. Wilt consider taking some cash from his old buddies in exchange for a favourable deposition.

[ Reply to This | # ]

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