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Chart of SCO's Answer to Novell's Counterclaims
Thursday, September 15 2005 @ 07:43 PM EDT

Here's the chart I promised, so you can really dig in to SCO's Answer to the Novell Counterclaims. Novell is on the left, and SCO on the right. I'll put up the SCO Answer to Novell's Counterclaims as text by itself next, with my thoughts on what I notice. But I didn't want to keep you waiting, since I know some of you wait for the chart, when you know it's coming. It also helps me not to miss any details when I do a chart.

These are not the complete documents, just the section on counterclaims by Novell and SCO's answers to them, which is another reason I will be putting up the SCO Answer on its own next. SCO has ten affirmative defenses listed as well, for example, and they both have Wherefore clauses and prayers for relief, and that kind of thing. But this presents the claims/counterclaims side by side, so it's easy to see what SCO is denying and admitting.

You might like to take a look at Matt Whipp's article in PC Pro today (registration required) on the SCO v. Novell documents. He interviewed Blake Stowell, who says this:

"When AT&T and Novell owned the UNIX business, they licensed UNIX to thousands of entities. Some of these entities chose to pay an up front one-time fee, while others chose to pay a quarterly royalty fee over time.

"At the time that the Santa Cruz Operation purchased the UNIX business from Novell, they weren't in a position to pay Novell multiple hundreds of millions of dollars. Novell a few years previously had paid AT&T more than a billion dollars for the UNIX business, so in order to make it possible for the Santa Cruz Operation to acquire the business, both parties (Novell and the Santa Cruz Operation) agreed that any companies that had entered into licensing agreements to that point (the end of 1995) and had agreed to pay quarterly royalty fees rather than a lump sum payment, that the Santa Cruz Operation would agree to pass those quarterly royalties on to Novell and keep a 5 per cent processing fee. Any licensing agreements that the Santa Cruz Operation entered into after the UNIX property was fully acquired would be the property of the Santa Cruz Operation and would not be subject to quarterly royalty fees. . . .

"When Caldera purchased the Santa Cruz Operation and renamed itself SCO, the company acquired all right, title, and interest in the UNIX business. Among other things that transferred were all of the UNIX licensing agreements, including the one that IBM entered into with AT&T in 1985. In our court filings, we've made a claim of copyright infringement because IBM has continued shipping AIX after the company terminated its rights to continue distributing SVRX derivative code."

This doesn't match Novell's story, which you can read in paragraphs 14-19.

We have Frank Sorenson to thank for the text of SCO's Answer, and that is what made it possible to do the chart for you. That and his template on how to do a chart. Enjoy.

# Novell's Counterclaims SCO Answer To Novell's Counterclaims
1 Counterclaim-plaintiff Novell, Inc. ("Novell") is a Delaware corporation that was incorporated in 1983. Its headquarters and principal executive offices are located in Waltham, Massachusetts. Novell's principal product development facility is located in Provo, Utah. Novell also has offices in numerous cities worldwide. Admits the allegations of ¶ 1, except denies knowledge sufficient to form a belief as to the truth of the allegations of the third sentence of ¶ 1.
2 Counterclaim-defendant The SCO Group, Inc. ("SCO) is a Delaware corporation with its principal place of business in Utah County, State of Utah. Admits the allegations of ¶ 2.
3 This Court has original jurisdiction over SCO's Amended Complaint pursuant to 28 U.S.C. §§ 1331 and 1338(a). Admits, based on the Court's Order dated June 9, 2004, that the Court has jurisdiction over SCO's Amended Complaint.
4 This Court has jurisdiction over Novell's counterclaims pursuant to 28 U.S.C. § 1331 (federal question), 28 U.S.C. § 1338(a) (arising under the Federal Copyright Act), 28 U.S.C. § 1367(a) (supplemental jurisdiction) and 28 U.S.C. §§ 2201(a) and 2202 (declaratory judgment). Novell's slander of title claim involves questions of, and arises under, federal law. This Court has supplemental jurisdiction over Novell's state law claims of breach of contract, accounting, restitution and slander of title. Admits, based on the Court's Order dated June 9, 2004, that the Court has jurisdiction over Novell's counterclaims.
5 Venue is proper in this judicial district pursuant to 28 U.S.C. §§ 1391(b), 1391(c) and 1400(a), in that SCO resides or may be found in this district and is subject to personal jurisdiction in this district. Admits the allegations of ¶ 5.
6 UNIX is the name of a computer operating system originally developed beginning in the late 1960s by a group of software engineers at AT&T's Bell Laboratories. Over time, AT&T licensed its UNIX family of operating systems to universities, corporations, other entities and individuals. Admits the allegations of ¶ 6.
7 In 1993 AT&T sold its UNIX assets, held by its subsidiary UNIX System Laboratories ("USL"), to Novell. This transfer of assets to Novell included UNIX copyrights, trademarks and all active UNIX licensing agreements, including contracts relating to the most recent version of the UNIX operating system called UNIX System V. At the time there had been several major releases of System V, including Releases 1, 2, 3 and 4, also referred to as SVR1, SVR2, SVR3 and SVR4, or generically as SVRX. Admits the allegations of ¶ 7, except denies the allegation that AT&T transferred to Novell only "active" UNIX licensing agreements.
8 Linux is the name of a computer operating system, originally developed beginning in the early 1990s when Linus Torvalds, an undergraduate student at the University of Helsinki, began writing the Linux kernel, or the core of the Linux operating system. He released the first version of the Linux kernel on the Internet in 1991. Since then, thousands of software programmers around the world have engaged in a collaborative effort to further develop Linux. Admits that Linus Torvalds purportedly developed the Linux operating system by consulting and referring to other materials; admits that numerous other parties have also contributed to Linux, including parties who wrongfully contributed SCO's UNIX intellectual property; but denies information or knowledge sufficient to form a belief as to the truth of each and every other allegation of ¶8.
9 Linux was developed as open-source software and has become a popular alternative to proprietary operating systems. Unlike with other major operating systems, the underlying source code of Linux is available to the public. Admits the allegations of the first sentence of ¶9, but denies the second sentence of ¶9 to the extent it alleges that SCO intellectual property in Linux is legally and properly available to the public.
10 In 1995, Novell and a company called The Santa Cruz Operation, Inc. ("Santa Cruz") entered into negotiations over the sale of certain business assets of Novell relating to its UNIX and UnixWare software products. Admits that in 1995, Novell ("Seller") and The Santa Cruz Operation, Inc. ("Santa Cruz") entered into negotiations resulting in the transfer to Santa Cruz of "all of Seller's right, title and interest in and to the assets and properties of Seller relating to the [UNIX and Unixware] Business," including the copyrights in UNIX and Unixware; but denies each and every other allegation of ¶10.
11 Santa Cruz was a California corporation that was incorporated in 1979. It was founded as a UNIX system porting and consulting company and began to ship its first product, a packaged version of the UNIX operating system, in 1983. In 1993 Santa Cruz completed an initial public offering and became a publicly-listed company on the NASDAQ Stock Exchange. Admits that Santa Cruz was founded and operated as a UNIX development, porting, distribution, support, and consulting company; and admits the other allegations of ¶11.
12 On September 19, 1995, Novell and Santa Cruz executed an Asset Purchase Agreement ("MA"). The APA provided each party with certain rights and obligations. Admits the allegations of ¶12.
13 The parties entered into two Amendments to the APA. On December 6, 1995, Novell and Santa Cruz executed "Amendment No. 1 ." Novell and Santa Cruz subsequently executed "Amendment No. 2" on. October 16, 1996. Admits the allegations of ¶13.
14 Under the APA and its Amendments, and subject to various conditions and exclusions set forth therein, Santa Cruz obtained a variety of assets, including assignment of tens of thousands of contracts and licenses, various trademarks, source code and binaries to UNIX and UnixWare products, and physical assets such as furniture and personal computers. The obtained assets also included the right for Santa Cruz to develop a "Merged Product." Admits that the APA transferred to Santa Cruz "all of Seller's right, title and interest in and to the assets and properties of Seller relating to the [UNIX and Unixware] Business," including (among other things) the copyrights in UNIX and Unixware, the assignment of thousands of contracts and licenses, and the other assets listed in ¶14.
15 Santa Cruz did not have the financial capacity to pay the purchase price contemplated by Novell for these acquired assets and rights. In order to bridge the price gap and consummate the transaction, Novell and Santa Cruz agreed that Novell would receive Santa Cruz stock and retain certain rights as protection. For example (and as discussed further below), Novell retained the right to receive royalty payments under SVRX licenses, prior approval rights relating to new SVRX licenses and amended SVRX licenses, the right to direct Santa Cruz to take certain actions relating to SVRX licenses and the right to conduct audits of the SVRX license program. Santa Cruz assumed several related obligations. Admits that, to help bridge the gap between the purchase price of the UNIX business and the price Santa Cruz could afford, the parties agreed to a narrow exception to the complete transfer of the UNIX business; that pursuant to this exception Novell retained the right to continue receiving royalties that SCO collected from then-existing SVRX licensees for their distribution of binary (object) code versions of System V products pursuant to sublicensing agreements; and that Novell retained the right to conduct audits, and direct Santa Cruz to take certain actions, to protect that future binary royalty stream. SCO, however, denies each and every other allegation of ¶15; and to the extent ¶15 purports to state a legal conclusion, states that no response is required.
16 One such obligation that Santa Cruz assumed under the APA was responsibility for administering the collection of royalty payments from SVRX licenses. The APA provided that Santa Cruz shall collect and pass through to Novell 100% of the SVRX royalties. In return, Novell agreed to pay Santa Cruz an administrative fee of 5% of those royalty amounts. Santa Cruz also agreed to pay additional royalties relating to other products. Admits the allegations of the first three sentences of ¶16 to the extent those allegations refer only to the SVRX binary royalty stream (as described in ¶15, above); and admits the allegations of the last sentence of ¶16.
17 Novell retained certain assets under the APA. Schedule 1.1 (b), which lists "Excluded Assets" under the agreement, specifies that Novell retained "all copyrights and trademarks, except for the trademarks UNIX and UnixWare," "all patents," and "all right, title and interest to the SVRX Royalties, less the 5% fee for administering the collection thereof." Admits the allegations of ¶17, except denies the allegation that Novell retained, or that the parties to the APA intended for Novell to retain, the copyrights in UNIX and Unixware under Schedule l.l(b) or any other schedule or provision of the APA.
18 Novell also retained rights to supervise Santa Cruz's administration of SVRX licenses. Novell retained the "sole discretion" to direct Santa Cruz to amend, supplement, modify, waive or assign any rights under or to the SVRX licenses; if Santa Cruz fails to take any such action, the APA specifically granted Novell the right to take these actions on behalf of Santa Cruz. Novell retained the right to veto Santa Cruz's attempts to amend SVRX licenses, subject to two exceptions, as noted below. Novell also retained the right to veto Santa Cruz's' attempts to enter into new SVRX licenses, subject to one exception, as noted below. Admits that Novell retained certain rights to audit Santa Cruz's administration of the SVRX binary royalty stream; denies each and every other allegation of ¶18; and to the extent ¶18 purports to state a legal conclusion, states that no response is required.
19 The APA gave Novell the right to confirm Santa Cruz's compliance with its contractual obligations under the SVRX licensing program. The APA explicitly provided that Novell "shall be entitled to conduct periodic audits" of Santa Cruz "concerning all royalties and payments due to Seller hereunder or under the SVRX Licenses." The APA required Santa Cruz to "diligently seek to collect all such royalties, funds and other amounts when due" and to "investigate and perform appropriate auditing and enforcement." The APA also required Santa Cruz to provide Novell monthly reports detailing the SVRX royalties it received. Admits the allegations of ¶19 only to the extent they refer to the rights and obligations of the parties with respect to the SVRX binary royalty stream (as described in ¶15, above).
20 Novell and Santa Cruz were the only parties to the APA and its Amendments. SCO was not a party to the APA or its Amendments. SCO was originally incorporated on August 21, 1998 as a company called Caldera Systems, a developer and provider of Linux-based business solutions. SCO purports to be the successor in interest to Santa Cruz under the APA and its Amendments. This dispute is about Novell's rights under the APA and whether SCO breached its obligations as the alleged successor of Santa Cruz. Admits the allegations of the first three sentences of ¶20, but denies each and every other allegation of ¶20.
21 The APA transferred certain assets from Novell to Santa Cruz. However, as specified by Section V.A of Schedule 1.1 (b) to the APA, certain assets were excluded from the transfer. Among the "Excluded Assets" from the APA asset transfer were "[a]ll copyrights and trademarks, except for the trademarks UNIX and UnixWare." Admits that the APA transferred to Santa Cruz all of Novell's right, title, and interest in and to Novell's assets and properties relating to the UNIX and Unixware business; admits that certain limited assets were excluded from the transfer; but denies each and every other allegation of ¶21, including the allegation that the APA did not transfer to Santa Cruz the copyrights in UNIX and Unixware.
22 The APA as executed on September 19, 1995 therefore does not transfer any copyrights. Denies the allegations of ¶22; and to the extent ¶22 purports to state a legal conclusion, states that no response is required.
23 Novell and Santa Cruz later executed Amendment No. 2 to the APA. Amendment No, 2 modifies Section V.A of Schedule 1.1 (b) to provide that Excluded Assets include:
All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies.
Admits that Novel1 and Santa Cruz executed Amendment No. 2 to the APA; and to the extent ¶23 purports to state a legal conclusion, states that no response is required.
24 Neither Amendment No. 2 nor the APA as modified by Amendment No. 2 were intended to, nor do they actually, transfer ownership of the UNIX or UnixWare copyrights owned by Novell at the time of the APA and its Amendments ("UNIX Copyrights"). Denies the allegations of ¶24; and to extent ¶24 purports to state a legal conclusion, states that no response is required.
25 Neither Amendment No. 2 nor the APA as modified by Amendment No. 2 qualify as "an instrument of conveyance, or a note or memorandum of the transfer" under 17 U.S.C. § 204(a) for at least the following reasons:

a. Amendment No. 2 merely amends the schedule of excluded assets and therefore does not, itself, constitute a transfer of any asset.

b. Neither Amendment No. 2 nor the modified APA identifies "the copyrights and trademarks owned by Novell] as of the date of the Agreement required for Santa Cruz to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies."

c. Neither Amendment No. 2 nor the modified APA contains any language suggesting a contemporaneous transfer of any copyright. To the contrary, the APA provides only that certain assets "will" be transferred.

d. Neither Amendment No. 2 nor the modified APA provides a date for any purported transfer of copyrights.

Denies the allegations of ¶25 (including subparagraphs a-d); and to the extent ¶25 (including subparagraphs a-d) purports to state a legal conclusion, states that no response is required.
26 Title to the UNIX Copyrights therefore remains with Novell. Denies the allegations of ¶26; and to the extent ¶26 purports to state a legal conclusion, states that no response is required.
27 By and during early 2003, SCO repeatedly asked Novell to transfer the UNIX Copyrights to SCO. In doing so, SCO conceded that title to the UNIX Copyrights remains exclusively with Novell. Novell rejected all of SCO's requests. Denies the allegations of ¶27.
28 During the second quarter of its fiscal year 2000, Santa Cruz restructured its business into three divisions: the Server Software division, the Professional Services division and the Tarantella division. The Server Software division included Santa Cruz's UNIX-related business. Admits the allegations of ¶28.
29 On August 1, 2000, Santa Cruz entered into an agreement with Caldera Systems, under which Caldera Systems acquired Santa Cruz's Server Software and Professional Services divisions. With the acquisition, Caldera Systems planned to add Santa Cruz's UNIX server solutions and services to its Linux business. Admits the allegations of the first sentence of ¶29, but denies each and every other allegation of ¶29.
30 On May 7, 2001, pursuant to an amendment to the agreement between Santa Cruz and Caldera Systems, Caldera International ("Caldera") was formed as a holding company to own Caldera Systems, including the assets, liabilities and operations of Santa Cruz's Server Software and Professional Services divisions. Admits the allegations of ¶30.
31 Prior to Caldera's acquisition of Santa Cruz's Server Software and Professional Services divisions, substantially all of Caldera's revenue was derived from sales of Linux products and services. However, Caldera had been unsuccessful in creating a profitable Linux business. Admits that Caldera (like, on information and belief, Novell and nearly all other companies) did not produce a profitable Linux business; and admits the other allegations of ¶31.
32 After the acquisition of Santa Cruz's Server Software and Professional Services divisions, most of Caldera's revenue came from UNIX products and services, including 90% of Caldera's total revenue at the end of fiscal year 2001 and 95% of Caldera's total revenue at the end of fiscal year 2002. But Caldera's revenue from the sale of UNIX-based products declined in the fiscal quarters following the acquisition. Caldera experienced significant decreases in actual and forecasted revenue of the acquired Santa Cruz operations. Admits that, after Caldera's acquisition of Santa Cruz's Server Software and Professional Services divisions, most of Caldera's revenue came from UNIX products and services, including approximately 90% of its total revenues at the end of fiscal year 2001 and 95% of its total revenues at the end of fiscal year 2002; admits that (at least in part because of the unauthorized use of SCO's proprietary UNIX code and other protected materials in Linux) Caldera's actual and forecasted revenues from the sale of UNIX-based products declined in the fiscal quarters following the acquisition; but denies each and every other allegation of ¶32.
33 Caldera incurred significant financial losses during its fiscal years 2000, 2001 and 2002. Caldera suffered losses from operations totaling $32 million in 2000, $133 million in 2001 and $24 million in 2002. Admits the allegations of ¶33.
34 In June 2002, Caldera hired Darl McBride as its President and Chief Executive Officer. Mr. McBride was responsible for the company's strategic direction and planning. Admits that Caldera hired Darl McBride as its President and Chief Executive Officer in June 2002 and that Mr. McBride was responsible for Caldera's strategic direction, with input from other executives of the company; but denies each and every other allegation of ¶34.
35 On our about the time of Mr. McBride's arrival at Caldera, Caldera began to pursue a new business strategy for the company, launching a rebranding effort of its products and services as well as its corporate image. Admits the allegations of ¶35.
36 On August 26, 2002, Caldera announced that it would change its name to The SCO Group, Inc. ("SCO"), pending shareholder approval. On or about that time, Caldera then began doing business as SCO. Caldera soon thereafter changed its trading symbol on the NASDAQ Stock Exchange from "CALD" to "SCOX." Caldera's name change was formalized on May 16, 2003, when Caldera's shareholders approved an amendment to Caldera's certificate of incorporation that changed the company's name to SCO. Admits the allegations of ¶36.
37 As part of Caldera's rebranding efforts and shift in business strategy, Caldera purportedly initiated a review of its intellectual property rights. This effort culminated in the launching of a licensing initiative, which it called SCOsource, in January 2003. SCOsource, as described in further detail below, was an effort by Caldera to expand the revenue base of a company that had never before been profitable. Admits that SCO launched the SCOsource initiative to review, enforce, and defend SCO's ownership of its UNIX intellectual property (including copyrights); admits that SCO announced that initiative in January 2003 but did not enter into a SCOsource agreement until August 2003; and denies each and every other allegation of ¶37.
38 In late 2002, SCO repeatedly contacted Novell in connection with SCO's soon-to-be- announced SCOsource campaign. SCO requested copies of certain documentation concerning rights to UNIX, including the agreement between Novell and Santa Cruz. SCO also expressed its interest in a campaign to assert UNIX infringement claims against users of Linux. SCO asked Novell to assist SCO in a Linux licensing program, under which SCO contemplated extracting a license fee from Linux end users to use the UNIX intellectual property purportedly contained in Linux. Novell refused to participate. Admits that in late 2002, as part of the review of its intellectual property, SCO contacted Novell to confirm SCO's understanding that the UNIX and Unixware copyrights had been transferred under the APA and to ask if Novell had documents concerning the APA; admits that Novell counsel and other employees repeatedly and successively asked SCO to call again at a later time after Novell had had the opportunity to research the matter; admits that in early 2003, Novell counsel agreed to sign a letter stating that the APA transferred all right, title, and interest in and to the copyrights associated with the AT&T SVRX software agreements; admits that SCO sent Novell counsel a draft of that letter but Novell responded that it was no longer interested in UNIX and would not sign; admits that Novell did not sign the letter and ceased communications with SCO; further admits that during the aforementioned conversations Novell never asserted its purported, or challenged SCO's, ownership of the UNIX and Unixware copyrights; but denies each and every other allegation of ¶38.
39 In aid of its scheme, SCO requested that Novell transfer its UNIX Copyrights to SCO and thereby acknowledged that it did not own the UNIX Copyrights. SCO contacted Novell on multiple occasions by and during early 2003. For example, SCO's CEO, Darl McBride, repeatedly contacted Novell and asked Novell to amend the Novell-Santa Cruz agreement to give SCO the UNIX Copyrights. Novell rejected all of these requests. Admits that (at Novell's request, as described in ¶38 above) SCO contacted Novell on multiple occasions in early 2003; but denies each and every other allegation of ¶39.
40 Notwithstanding Novell's rejections, SCO embarked on an aggressive campaign in which it falsely asserted ownership over these same copyrights via public statements, a series of letters to Linux end users, several lawsuits against Linux distributors and end users, and a licensing program purporting to offer SCO's Intellectual Property Licenses for Linux. Denies the allegations of ¶40.
41 SCO's misleading and wrongful public assertions of ownership include the following:

a. On March 7, 2003, SCO stated in a press release, "In 1995, SCO purchased the rights and ownership of UNIX and UnixWare that had been originally owned by AT&T. This included source code, source documentation, software development contracts, licenses and other intellectual property that pertained to UNIX-related business. . . . 'SCO is in the enviable position of owning the UNIX operating. system,' said Darl McBride, president and CEO, SCO."

b. On May 14, 2003, SCO stated in a press release, "[SCO], the owner of the UNIX operating system, today warned that Linux is an unauthorized derivative of UNIX and that legal liability for the use of Linux may extend to commercial users."

c. On June 6, 2003, SCO stated in a press release, "[SCO], the owner of the UNIX© operating system, today confirmed its previously stated ownership of UNIX copyrights. As SCO has consistently maintained, all rights to the UNIX and Unix-Ware technology, including the copyrights, were transferred to SCO as part of the Asset Purchase Agreement between Novell and SCO dated September 19, 1995. Any question of whether the UNIX copyrights were transferred to SCO under the Asset Purchase Agreement was clarified in Amendment No. 2 to the Asset Purchase Agreement dated October 16, 1996.

'This amendment simply confirms SCO's long stated position that it owns all copyrights associated with the UNIX and UnixWare businesses,' said Chris Sontag, senior vice president and general manager, SCOsource intellectual property division, SCO. . . . 'SCO is the owner of the UNIX operating system, as well as all of the UNIX contracts, claims and copyrights necessary to conduct that business,' said Sontag. 'None of the litigation we are currently involved with asserts claims based on copyrights. Because others have called into question SCO's ownership of the UNIX and UnixWare copyrights, we are satisfied that we have now proven without a doubt that SCO owns those copyrights. "'

d. During at least June and July, 2003, SCO wrongfully registered copyrights in UNIX and UnixWare releases owned by Novell. These registrations related to UNIX System V release 3.0, UNIX System V release 3.1, UNIX System V release 3.2, UNIX System V release 3.21386, UNIX System V release 4.0, UNIX System V release 4.1, UNIX System V release 4.lES, UNIX System V release 4.2, UNIX System V release 4.2MP, and UnixWare 7.1.3.

e. On January 13, 2004, SCO stated, "[SCO] today reiterated its ownership of UNIX intellectual property, source code, claims and copyrights and has made all of the documents surrounding the companies' ownership of UNIX and UnixWare available for public viewing at www.sco.com/novell."

f. On January 28, 2004, in its Form 10-K filed with the United States Securities and Exchange Commission, SCO stated, "We own the UNIX operating system and are a provider of UNIX-based products and services. . . . We acquired our rights to the UNIX source code and derivative works and other intellectual property rights when we purchased substantially all of the assets and operations of the server and professional services groups of The Santa Cruz Operation, Inc., in May 2001. The Santa Cruz Operation (now known as Tarantella, Inc.) had previously acquired such UNIX source code and other intellectual property rights from Novell in September 1995, which were initially developed by AT&T Bell Labs. Through this process, we acquired all UNIX source code, source code license agreements with thousands of UNIX vendors, all UNIX copyrights, all claims for violation of the above mentioned UNIX licenses and copyrights and other claims, and the control over UNIX derivative works . . . ."

Denies the allegations of the introductory sentence of ¶41.

a. Admits the allegations of subparagraph 41(a).

b. Admits the allegations of subparagraph 41(b).

c. Admits the allegations of subparagraph 41(c).

d. Admits that in 2003 and 2004, SCO properly registered its copyrights in UNIX and Unixware, including its copyrights in the UNIX and Unixware releases listed in subparagraph 41(d); denies each and every other allegation of subparagraph 41(d); and to the extent subparagraph 41(d) purports to state a legal conclusion, states that no response is required.

e. Admits the allegations of subparagraph 41(e).

f. Admits the allegations of subparagraph 41(f).

42 As part of SCO's scheme to claim ownership of the UNIX copyrights, SCO has falsely claimed that Novell acquiesced to SCO's claims. For example, on July 21, 2003, Darl McBride stated in a public interview:

Interviewer: Well, Novell would say that you actually don't own those copyrights fully.
McBride: Yeah, well, the Novell thing, they, they came out and made a claim that held up for about four days and then we put that one to bed. If you go talk to Novell today, I'll guarantee you what they'll say, which is they don't have a claim on those copyrights.

Admits that on or about July 21,2003, Darl McBride made the statement quoted in part in ¶42; but denies each and every other allegation of ¶42.
43 Novell has not acquiesced to SCO's claims, as recited in SCO's own Amended Complaint. (Amended Complaint ¶ 19(d)-(e).) To the contrary, Novell was vigorously contesting those claims in private correspondence with SCO at the very same time SCO was publicly claiming otherwise. For example:

a. On May 12, 2003, SCO's CEO Darl McBride sent Novell a letter asserting that it owned the UNIX copyrights and that Linux end users were infringing those copyrights.

b. On May 28, 2003, Novell's CEO, Jack Messman, responded by letter, asserting in no uncertain terms that "SCO is not the owner of the UNIX copyrights."

c. After SCO registered its claim to the UNIX copyrights with the U.S. Copyright Office, Novell's General Counsel, Joseph LaSala wrote to SCO, again disputing its claim to ownership of the copyrights. In his August 4, 2003, letter, LaSala stated, "We dispute SCO's claim to ownership of these copyrights."

Denies that Novell did not acquiesce to SCO's ownership claims during the years between the execution of the APA (in September 1995) and about May 2003; further denies, as described below in SCO's response to subparagraph 43(b), that Novell did not acquiesce to SCO's ownership claims in June 2003.

a. Admits that on May 12, 2003, Darl McBride sent Novell a letter setting forth the statements therein.

b. Admits that, in response to Mr. McBride's May 2003 letter, Novell CEO Jack Messman sent SCO a May 28, 2003 letter (published in several newspapers and other publications) stating that "SCO is not the owner of the UNIX copyrights" a statement that Novell recanted in a June 6, 2003 press release stating that Amendment No. 2 to the APA "appears to support SCO's claim that ownership of certain copyrights for UNIX did transfer to SCO in 1996."

c. Admits the allegations of ¶43(c), including the fact that Mr. LaSala's August 4, 2003 letter to SCO purported to recant the recantation in Novell's June 6, 2003 press release.

44 In September and October 2003, Novell attempted to protect its rightful ownership of the UNIX Copyrights, and to correct SCO's erroneous registrations claiming ownership, by filing its own copyright registrations. Admits that in September and October 2003, Novel1 (wrongfully) obtained copyright registrations for UNIX-related products; denies each and every other allegation and the characterizations in ¶ 44; and to the extent ¶ 44 purports to state a legal conclusion, states that no response is required.
45 A significant aspect of SCO's rebranding efforts and new business strategy was its adoption of a scheme to extract "licenses" from the UNIX and Linux communities based on claims to own intellectual property specifically reserved to Novell, i.e., the UNIX Copyrights. SCO proceeded on its own in this scheme after Novell rebuffed SCO's overtures to participate. Denies the allegations of ¶45; and to the extent ¶45 purports to state a legal conclusion, states that no response is required.
46 On January 22, 2003, SCO publicly announced its licensing scheme as part of its "SCOsource" program. In connection with this announcement, SCO's CEO, Darl McBride, commented that "SCO owns much of the core UNIX intellectual property, and has full rights to license this technology and enforce the associated patents and copyrights." Admits that SCO announced its SCOsource initiative on January 22, 2003, and that in connection with that announcement, Darl McBride made the statement quoted in part in ¶46; but denies each and every other allegation and the characterizations in ¶46.
47 Under the SCOsource licensing program, SCO seeks to enter into license agreements with UNIX vendors and offers Intellectual Property Licenses to Linux end users ("Intellectual Property Licenses"). The purported purpose of these licenses is to allow UNIX vendors to use SCO's UNIX intellectual property and to permit Linux end users to "properly compensate us for our UNIX intellectual property as currently found in Linux." One term of SCO's Intellectual Property Licenses for Linux is that licensees "will be held harmless against past and future copyright violations based on their use of SCO's intellectual property . . . in Linux distributions . . . ." Admits that the SCOsource licensing program allows Linux end-users to enter into intellectual property agreements that properly compensate SCO for its UNIX intellectual property found in Linux; admits that the terms of the SCOsource agreements are as stated therein; but denies each and every other allegation of ¶47.
48 SCO charges a sizeable licensing fee for SCO's Intellectual Property Licenses for Linux. For example, for a server with 8 CPUs, the initial licensing fee is $4,999, with $1,079 payable every year after that. Admits that SCO charges market price (including appropriate discounts) for its intellectual property licenses. but denies each and every other allegation and the characterization in ¶48.
49 As part of its SCOsource initiative, SCO filed a lawsuit against IBM on March 7, 2003, asserting, among other things, UNIX Copyrights that SCO does not own. SCO has alleged that it owns the UNIX Copyrights and that IBM's contributions to Linux and use of Linux infringe these copyrights. Admits that on March 7, 2003, SCO filed a lawsuit against IBM based on the allegations set forth in SCO's pleadings in that lawsuit; denies each and every other allegation of ¶49; and to the extent ¶49 purports to state a legal conclusion, states that no response is required.
50 As part of the SCOsource program, SCO entered into at least two license agreements. These licenses related to the use of UNIX technology by the licensees. The first of these licenses was with Sun Microsystems, Inc. ("Sun"). The second license was with Microsoft Corporation ("Microsoft") and purportedly covers Microsoft's UNIX compatibility products. On information and belief, through these licenses SCO broadened the rights of Sun and Microsoft to use SVRX code. Admits that SCO, through its SCOsource division, entered into agreements related to UNIX and Unixware with Sun Microsystems, Inc., and Microsoft Corporation (in that order) and that the Microsoft agreement covered UNIX compatibility products; but denies each and every other allegation of ¶50, including the allegation that the Sun and Microsoft agreements were part of the SCOsource licensing program.
51 The Sun and Microsoft licenses resulted in significant revenue for SCO and produced the first profitable quarter in SCO's history. During the fiscal quarter ended April 30, 2003, SCO recognized $8,250,000 in revenue from these two new licenses. In addition, these licenses accounted for $25,846,000 of SCO's revenue in fiscal year 2003. Admits that the Sun and Microsoft agreements in part produced the profitable quarter; admits the allegations of the second sentence of ¶ 51; but denies each and every other allegation and the characterizations in ¶ 51.
52 As part of the SCOsource program, in May 2003, SCO sent letters to 1,500 of the world's largest corporations threatening suit based on its alleged ownership of the UNIX Copyrights ("End User Letters"). On May 12, 2003, SCO sent one of these letters to IBM, and sent another letter to Novell. On information and belief, all of the End User Letters were nearly identical in content to the IBM and Novell letters. Admits that in May 2003, SCO sent 1,500 end-user corporations (including IBM and Novell) a letter setting forth the statements therein; denies each and every other allegation of ¶52; and to the extent ¶52 purports to state a legal conclusion, states that no response is required.
53 In the End User Letters, SCO made the false and misleading statement that "SCO holds the rights to the UNIX operating system software originally licensed by AT&T to approximately 6,000 companies and institutions worldwide (the 'UNIX Licenses')." Admits that SCO made statements (correctly quoted in part in ¶53) in the May 2003 letters; denies each and every other allegation of ¶53; and to the extent ¶53 purports to state a legal conclusion, states that no response is required.
54 In the End User Letters, SCO also made the unsupported assertion that "We [SCO] have evidence that portions of UNIX System V software code have been copied into Linux and that additional other portions of UNIX System V software code have been modified and copied into Linux, seemingly for the purposes of obfuscating their original source." Admits that SCO made statements (correctly quoted in part in ¶54) in the May 2003 letters; denies each and every other allegation of ¶54; and to the extent ¶54 purports to state a legal conclusion, states that no response is required.
55 After setting forth these alleged facts in the End User Letters, SCO erroneously concluded that "Linux infringes on our UNIX intellectual property and other rights." According to SCO, end users of Linux were liable for this alleged infringement whether-or not they participated in any contribution of UNIX System V software code into Linux. Admits that SCO made statements (correctly quoted in part in ¶55) in its May 2003 letters to end-users; denies each and every other allegation and the characterizations in ¶55; and to the extent ¶55 purports to state a legal conclusion, states that no response is required.
56 As set forth in detail above, besides sending the End User Letters, SCO has made numerous public statements that it owns the UNIX Copyrights and that end users of Linux are liable for infringement of those copyrights. For instance, contrary to the express terms of the APA, SCO has stated on its website that "only SCO is in a position to license the use of this infringing intellectual property." The Court itself has noted SCO's "barrage of public statements about pursuing alleged infringers of its alleged intellectual property." The SCO Group Inc. v. Int'l Bus. Machs., Case No. 2:03CV294 DAK, Memorandum Decision and Order at 5 (Feb. 9, 2004). . Admits that SCO has publicly stated that it owns the UNIX copyrights and that Linux end-users may be liable for infringement of those copyrights; admits that it has stated on its website that "only SCO is in a position to license the use of this infringing intellectual property"; admits that the Court's February 8, 2005 Order in the IBM case sets forth the statements therein; denies each and every other allegation and the characterizations in ¶56; and to the extent ¶56 purports to state a legal conclusion, states that no response is required.
57 Shortly after the inception of its letter writing campaign, SCO brought suit against Autozone and Daimler Chrysler, both Linux end users. In these lawsuits, SCO has made substantially the same allegations as set forth in its letters. In the Autozone lawsuit, SCO has alleged that [Autozone] uses one or more versions of the Linux operating system that infringe on SCO's exclusive rights in its proprietary UNIX System V operating system technology." In the Daimler-Chrysler lawsuit, SCO has alleged that Daimler-Chrysler's use of the Linux operating system violates the UNIX license between Daimler-Chrysler and SCO. Admits that SCO has filed lawsuits against Autozone, Inc., and Daimler Chrysler Corporation, based on the allegations set forth in its pleadings in those lawsuits; but denies each and every other allegation and the characterizations in ¶57.
58 Novell has established a Linux Indemnification Program under which it offers indemnification for copyright infringement claims made by third parties against qualifying, registered Novell customers of the SUSE LINUX Enterprise Server 8, SUSE LINUX Enterprise Server 9, SUSE LINUX Retail Solution, and Novell Linux Desktop products." Admits that Novell has established an indemnification program with numerous restrictions (including, for example, the requirement that the Linux customer buy a new upgrade) and limitations (including, for example, on the dollar amount of the indemnification); but denies information or knowledge sufficient to form a belief as to the truth of the other allegations of ¶58.
59 SCO has continued to pursue its SCO source initiative with other industry participants that it believes will lead to additional licensing agreements. On information and belief, via this campaign, SCO has convinced several Linux end users to participate in its licensing program, obtain purported licenses to use "SCO's intellectual property contained in Linux," and thereby avoid suit by SCO. In fiscal years 2004 and 2005, SCO generated additional revenue from sales of its SCOsource Intellectual Property Licenses. Admits that, in an effort to protect its UNIX copyrights, SCO has negotiated and continues to negotiate intellectual property agreements with Linux end-users; admits that such agreements generated revenue in fiscal years 2004 and 2005; and denies each and every other allegation and the characterizations in ¶59.
60 SCO's misguided campaign has led SCO, as the alleged successor of Santa Cruz, to breach its obligations under the APA and its Amendments. Denies the allegations of ¶60; and to the extent ¶60 purports to state a legal conclusion, states that no response is required.
61 Novell has performed its obligations under the APA and its Amendments. Denies the allegations of ¶61; and to the extent ¶61 purports to state a legal conclusion, states that no response is required.
62 SCO or Santa Cruz has received adequate consideration for its duties under the APA and its Amendments. Denies the allegations of ¶62; and to the extent ¶62 purports to state a legal conclusion, states that no response is required.
63 Section 1.2(b) of the APA gives Novell broad audit rights relating to the administration of the SVRX licensing program. It reads in pertinent part:

[Novell] shall be entitled to conduct periodic audits of [SCO] concerning all royalties and payments due to [Novell] hereunder or under the SVRX Licenses, provided that [Novell] shall conduct such audits after reasonable notice to [SCO] and during normal business hours and shall not be entitled to more than two (2) such audits per year.

Admits that Section 1.2(h) of the APA provides in part:

Seller shall be entitled to conduct periodic audits of Buyer concerning all royalties and payment due to Seller hereunder or under the SVRX Licenses, provided that Seller shall conduct such audits after reasonable notice to Buyer and during normal business hours and shall not be entitled to more than two (2) such audits per year.

SCO denies each and every other allegation and the characterization in ¶63, including that under the APA, Novell had audit rights other than with respect to the administration of the SVRX binary royalty stream; and to the extent ¶63 purports to state a legal conclusion, states that no response is required.

64 Further, section 1.2(f) of the APA obligates SCO to provide Novell monthly reports detailing the SVRX royalties that SCO received. Admits that Section 1.2(f) of the APA provides in part:

Within one (1) calendar month following each calendar month in which SVRX Royalties [and royalties from Royalty-Bearing Products as contemplated in Schedule 1.2(b) hereof] are received by Buyer, Buyer shall provide to Seller, in electronic file format, a report detailing all such royalties.

SCO denies each and every other allegation of ¶64.

65 On July 11, 2003 Novell notified SCO that it intended to conduct an audit beginning on August 18, 2003 covering the period beginning January 1, 1998 through June 30. Admits the allegations of ¶65.
66 By reply correspondence dated July 17, 2003, SCO accepted Novell's right to an audit. Novell's audit began during the week of August 25, 2003. Admits the allegations of ¶66.
67 As part of Novell's aforementioned audit rights, on November 21, 2003, Novell sought information and documentation relating to:

a. Any amendments and modifications to SVRX licenses, and in particular the amendments to the Sun and Microsoft SVRX licenses. Novell specifically requested (1) "copies of the Sun and Microsoft amendments to verify SCO's compliance" with the APA and (2) "a detailed explanation of SCO's position" if SCO contends that either of the two exceptions to the prohibition on unilateral amendments by SCO were applicable.

b. Any buy-out of SVRX licenses, and in particular any information concerning any buy-out of Sun's and Microsoft's royalty obligations under their SVRX licenses. Novell specifically requested that SCO identify any potential buy-out transactions so that Novell could verify SCO's compliance with the APA.

c. Any new SVRX licenses, and in particular SCO's Intellectual Property Licenses for Linux. Novell specifically requested (1) "copies of all SCO Intellectual Property Licenses for Linux, and any other agreements connected with attempts by SCO to enter into new SVRX Licenses, so Novell can verify SCO's compliance" with the APA and (2) "a detailed explanation of SCO's position" if SCO contends that the exception to the prohibition on new SVRX licenses by SCO was applicable.

d. Any SVRX to UnixWare Conversions. Novell specifically requested that SCO (1) identify and provide documentation for any allegedly valid conversions and (2) "explain in detail" how the alleged conversion complies with the APA and (3) provide "a detailed explanation of SCO's position" if SCO contends that any exception to the prohibition on conversion by SCO was applicable.

Admits that Novell sent SCO a November 21, 2003 letter (correctly quoted in part in ¶67) requesting the information set forth therein; denies each and every other allegation of ¶67 (including subparagraphs a-d); and to the extent ¶67 (including subparagraphs a-d) purports to state a legal conclusion, states that no response is required.
68 Novell renewed its November 21, 2003 demand on December 29, 2003 and again on February 4, 2004. Admits that Novell sent letters to SCO on December 29, 2003, and on February 4, 2004, referencing Novell's November 21, 2003 letter.
69 On February 5, 2004, SCO conveyed its refusal to provide at least the information identified in subparagraphs a, b and c of Paragraph 67, above. Admits that SCO responded to Novell's letters as set forth in SCO's letter dated February 5, 2004; but denies each and every other allegation of ¶69.
70 On March 1, 2004, Novell again contacted SCO for the above categories of information: "In order to complete our audit, we need the Sun, Microsoft and any other Intellectual Property Licenses for Linux. Stated more categorically, we need all agreements in which SCO purported to grant rights with respect to Unix System V." Novell noted that SCO's Intellectual Property Licenses for Linux appeared to be SVRX Licenses since they purported to grant rights relating to UNIX System V or Unix-Ware. Admits that Novell sent SCO a March 1, 2004 letter (correctly quoted in part in ¶70), requesting the information set forth therein; denies each and every other allegation of ¶70; and to the extent ¶70 purports to state a legal conclusion, states that no response is required.
71 Novell again sent a letter to SCO on April 2, 2004 urging a response. Admits that Novell sent a letter to SCO on April 2, 2004, requesting the information set forth therein.
72 On November 17, 2004, Novell contacted SCO yet again:

We have communicated with SCO several times about our concerns with SCO's handling of UNIX licenses, including the license with Sun. In these communications, we have noted that our audit rights under the Asset Purchase Agreement require SCO to provide Novell with copies of any UNIX agreements (including amendments) SCO has reached with Sun. We have sent you letters twice on this issue (in March and April 2004), and have not received an adequate response. . . . Accordingly, we must once again insist that you provide us with copies of any agreements with Sun (including amendments) that relate to UNIX. We would appreciate a response by Friday, December 3, 2004.

Admits that Novell sent SCO a November 17, 2004 letter (correctly quoted in part in ¶72) requesting the information set forth therein.
73 Despite Novell's repeated requests, SCO has never provided copies of the Sun and Microsoft licenses, or amendments, or copies of SCO's Intellectual Property Licenses for Linux or other agreements connected with attempts by SCO to enter into new or amended SVRX licenses. SCO also never provided any explanation why SCO was not obligated under the APA to seek Novell's consent to amend or otherwise enter into new SVRX agreements. As a result, Novell has been unable to verify SCO's compliance with the APA, as Novell is entitled under the APA. Admits that SCO responded to Novell as set forth in SCO's letters; but denies each and every other allegation and the characterizations in ¶73; and to the extent ¶73 purports to state a legal conclusion, states that no response is required.
74 Sections 1.2(b) and 4.16(a) of the APA obligate SCO to remit 100% of "all royalties, fees and other amounts due under all SVRX Licenses" to Novell. "SVRX Licenses" are in turn defined to include "[a]ll contracts relating to" the various UNIX System releases and auxiliary products enumerated at Schedule 1.1(a)(VI) and Attachment A to Amendment No. 1. Under the APA, Novell has "all right, title and interest to the SVRX Royalties, less the 5% fee for administering the collection thereof." Admits that SCO was obligated to remit "all royalties, fees and other amounts due under all SVRX Licenses (as listed in detail under item VI of Schedule l.l(a) hereof and referred to herein as 'SVRX Royalties')"; admits that the term "SVRX Licenses" is not listed in a "Definitions" or "Recitals" section of the APA. SCO denies each and every other allegation of ¶74, including any attempt by Novell to define the term "SVRX Licenses" to include anything other than royalties that SCO collected from then-existing SVRX licensees for their distribution of binary-code versions of System V products pursuant to sublicensing agreements.
75 SCO has failed to remit to Novell all royalties owed under §§ 1.2(b) and 4.16(a) of the APA. Denies the allegations of ¶75; and to the extent ¶75 purports to state a legal conclusion, states that no response is required.
76 As SCO admitted in its February 5, 2004 letter to Novell, SCO has entered into "new" agreements with Sun and Microsoft. Admits that SCO entered into agreements with Sun and Microsoft, but denies each and every other allegation and the characterizations in ¶76.
77 On information and belief, these new agreements are "contracts relating to" the various UNIX System releases and auxiliary products enumerated at Schedule 1.1 (a)(VI) and Attachment A to Amendment No. 1. The new agreements are therefore SVRX Licenses under the APA. Denies the allegations of ¶77; and to the extent ¶77 purports to state a legal conclusion, states that no response is required.
78 SCO has not remitted any royalties from its new SVRX Licenses with Sun or Microsoft. Admits that SCO has not remitted royalties from its licenses with Sun and Microsoft; denies each and every other allegation of ¶78, including the allegation that SCO entered into "SVRX Licenses" with Sun or Microsoft; and to the extent ¶78 purports to state a legal conclusion, states that no response is required.
79 In addition, SCO has entered into Intellectual Property Licenses with a variety of parties. For example, on March 1, 2004, SCO announced an intellectual property licensing agreement with "EV1Servers.Net" that purportedly grants that company a site license to use SCO's intellectual property on all Linux servers managed by EV1Servers.Net in its hosting facilities. Admits that SCO has entered into intellectual property agreements, the terms of which are set forth therein; but denies each and every other allegation of ¶79.
80 On information and belief, SCO's Intellectual Property Licenses are "contracts relating to" the various UNIX System releases and auxiliary products enumerated at Schedule 1.1 (a)(VI) and Attachment A to Amendment No. 1. The Intellectual Property Licenses are therefore SVRX Licenses under the APA. SCO has not remitted any royalties from these SVRX Licenses. Denies the allegations of ¶80; and to the extent ¶80 purports to state a legal conclusion, states that no response is required.
81 Among other changes to the APA, Amendment No. 1 added Section 1.2(e), which provides that SCO has a right to retain all "source code right to use fees attributable to new SVRX Licenses approved by [Novell] pursuant to Section 4.16(b)." Admits that Amendment No. 1 to the APA added Section 1.2(e) (correctly quoted in part in ¶81); but denies each and every other allegation of ¶81; and to the extent ¶81 purports to state a legal conclusion, states that no response is required.
82 SCO has neither sought nor obtained Novell's approval to enter into any new SVRX license. Therefore, none of SCO's new SVRX Licenses fall within Section 1.2(e)'s exception to SCO's general duty to remit 100% of SVRX royalties to Novell Admits the allegations of the first sentence of ¶82; but denies the second sentence of ¶82 to the extent it alleges that the intellectual property licenses and Sun and Microsoft agreements required Novell's prior approval or were "SVRX Licenses"; and to the extent ¶82 purports to state a legal conclusion, states that no response is required.
83 Section 4.16(b) of the APA reads in pertinent part:

In addition, at [Novell's] sole discretion and direction, [SCO] shall amend, supplement, modify or waive any rights under, or shall assign any rights to, any SVRX License to the extent so directed in any manner or respect by [Novell].

Admits that Novell correctly quotes in part Section 4.16(b) of the APA, but denies that this is the only pertinent part of that section.
84 SCO has threatened to cancel or terminate various parties' SVRX licenses and has purported to cancel or terminate certain parties' SVRX licenses. For example, on March 6, 2003, SCO sent a letter to IBM threatening to cancel or terminate IBM's SVRX license. On May 29, 2003, SCO sent a similar letter to Sequent Computer Systems ("Sequent"). Admits that SCO sent letters to various companies, including IBM and Sequent, setting forth the statements therein; but denies each and every other allegation in ¶84, including the allegation that the licenses referenced in those agreements were "SVRX Licenses."
85 SCO subsequently purported to cancel or terminate IBM's SVRX licenses as of June 13, 2003. On August 11, 2003, SCO sent a letter to Sequent similarly purporting to terminate Sequent's SVRX licenses. Admits that SCO terminated its software license agreements with IBM and Sequent; admits that it sent Sequent an August 11, 2003 letter of termination; but denies each and every other allegation in ¶85, including especially the allegation that the terminated licenses were "SVRX Licenses."
86 SCO did not obtain Novell's prior written consent to cancel or terminate either SVRX license. Accordingly, on June 9, 2003, and again on October 7, 2003, Novell directed SCO to waive any purported right SCO claimed to have to terminate IBM's SVRX licenses. On February 6, 2004, Novell similarly directed SCO to waive certain of its purported rights under the IBM and Sequent SVRX licenses. Admits that SCO did not seek Novell's prior written consent to terminate the IBM and Sequent licenses; admits that Novell sent letters to SCO on June 9, 2003 and October 7, 2003, setting forth the statements therein; but denies each and every other allegation of ¶86, including especially the allegation that the terminated licenses were "SVRX Licenses."
87 Following SCO's failure to take the actions identified in the preceding paragraphs, Novell elected to take actions on SCO's behalf, as Novell is empowered to do by § 4.16(b). Section 4.16(b) of the APA provides in pertinent part:

In the event that [SCO] shall fail to take any such action concerning the SVRX Licenses as required herein, [Novell] shall be authorized, and hereby is granted, the rights to take any action on [SCO's] own behalf.

Admits that Novell correctly quotes in part Section 4.16(b) of the APA, but denies that this is the only pertinent part of that section; denies each and every other allegation of ¶87; and to the extent ¶87 purports to state a legal conclusion, states that no response is required.
88 After SCO conveyed its refusal on February 11, 2004 to waive its purported rights against Sequent, Novell on the same day waived SCO's purported right to revoke any rights under Sequent's SVRX licenses. Similarly, on October 11, 2003, Novell waived certain of SCO's purported rights under IBM's SVRX licenses. Denies the allegations of ¶88; and to the extent ¶88 purports to state a legal conclusion, states that no response is required.
89 SCO refuses to acknowledge Novell's right to take such actions on SCO's behalf. Admits that SCO refuses to acknowledge Novell's purported right to take certain actions on behalf of SCO; denies the allegation that Novell has that right; and to the extent ¶89 purports to state a legal conclusion, states that no response is required.
90 Under Section 4.16(b) of the APA, SCO shall not amend or modify any SVRX license "without the prior written consent of [Novell] ." As modified by Amendment 1, Section 4.16(b) of the APA provides further that:

Notwithstanding the foregoing, [SCO] shall have the right to enter into amendments of the SVRX Licenses (i) as may be incidentally involved through its rights to sell and license UnixWare software or the Merged Product .. or future versions of the Merged Product, or (ii) to allow a licensee under a particular SVRX License to use the source code of the relevant SVRX product(s) on additional CPU's or to receive an additional distribution, from [SCO], of such source code.

In addition, [SCO] shall not, and shall have no right to, enter into new SVRX Licenses except in the situation specified in (i) of the preceding sentence as otherwise approved in writing in advance by [Novell] on a case by case basis.

Admits that Section 4.16(b) of the APA (correctly quoted in part in ¶90) sets forth the terms therein; but denies each and every allegation of ¶90, including any attempt by Novell to define the term "SVRX Licenses" to include anything other than royalties that SCO collected from then-existing SVRX licensees for their distribution of binary-code versions of System V products pursuant to sublicensing agreements.
91 On information and belief, SCO has entered into new SVRX Licenses with Sun, Microsoft and others (through, for example, SCO's Intellectual Property Licenses with Linux end users or UNIX vendors), or otherwise amended the Sun and Microsoft SVRX licenses. Admits that SCO entered into agreements with Linux end-users, Sun, Microsoft, and others; but denies each and every other allegation in ¶91, including the allegation that those agreements are "SVRX Licenses."
92 SCO never sought advance approval from Novell to enter into these new SVRX Licenses or amendments thereof. SCO also never explained why under the APA it was not obligated to obtain Novell's advance approval. Admits that SCO never sought approval from Novell to enter into the intellectual property licenses or Sun and Microsoft agreements; denies each and every other allegation of ¶92; and to the extent ¶92 purports to state a legal conclusion, states that no response is required.
93 Under the APA, SCO also had no authority to enter into the Sun and Microsoft SVRX Licenses, or the Intellectual Property Licenses with Linux end users and UNIX vendors. Denies the allegations of ¶93; and to the extent ¶93 purports to state a legal conclusion, states that no response is required.
1st CFR FIRST CLAIM FOR RELIEF
(Slander of Title)
FIRST CLAIM FOR RELIEF
94 Novell incorporates by reference all prior paragraphs as if they were set forth here in full. Repeats and re-alleges its answers to the allegations of ¶¶1-93 as if fully set forth herein.
95 SCO made its public statements claiming ownership of the UNIX Copyrights, and improperly registered its claim to UNIX Copyrights, with knowledge that title to these copyrights remains with Novell. Denies the allegations of ¶95; and to the extent ¶95 purports to state a legal conclusion, states that no response is required.
96 SCO made such statements maliciously, in bad faith, and with intentional disregard for the truth. Denies the allegations of ¶96; and to the extent ¶96 purports to state a legal conclusion, states that no response is required.
97 SCO made such statements with the intent to cause customers and potential customers of Novell not to do business with Novell, to slander and impugn the ownership rights of Novell in UNIX and UnixWare, and to attempt, in bad faith, to block Novell's ability to exercise its copyrights therein. Denies the allegations of ¶97; and to the extent ¶97 purports to state a legal conclusion, states that no response is required.
98 SCO's slander of Novell's title has resulted in special damages including, inter alia, Novell's costs and fees in preparing and filing copyright registrations and declarations correcting SCO's erroneous registrations claiming ownership of Novell's intellectual property and in prosecuting this action. Denies the allegations of ¶98; and to the extent ¶98 purports to state a legal conclusion, states that no response is required.
2nd CFR SECOND CLAIM FOR RELIEF
(Breach of Contract: §§ 1.2(b) and 1.2(f) of the Asset Purchase Agreement)
SECOND CLAIM FOR RELIEF
99 Novell incorporates by reference all prior paragraphs as if they were set forth here in full. Repeats and re-alleges its answers to all prior paragraphs as if those answers were fully set forth herein.
100 Pursuant to its audit rights under the APA, Novell requested certain information from SCO to verify SCO's compliance with the APA, including:

a. Any amendments and modifications to SVRX licenses, and in particular the amendments to the Sun and Microsoft SVRX licenses, including a copy of these amendments and a detailed explanation of SCO's position if SCO contends that either of the two exceptions to the prohibition on unilateral amendments by SCO was applicable;

b. Any buy-out or potential buy-out of SVRX licenses, and in particular any information concerning any buy-out of Sun and Microsoft's royalty obligations under their SVRX licenses;

c. Any new SVRX licenses, and in particular SCO's new SVRX agreements with Sun and Microsoft and SCO's Intellectual Property Licenses with Linux end users or UNIX vendors, including copies of these agreements and a detailed explanation of SCO's position if SCO contends that the exception to the prohibition on new SVRX Licenses by SCO was applicable; and

d. Any SVRX to UnixWare Conversions, including documentation for any allegedly valid conversions, a detailed explanation of how the alleged conversion complies with the APA and a detailed explanation of SCO's position if SCO contends that any of the exceptions to the prohibition on conversion by SCO were triggered.

Admits that Novell sent SCO a November 21, 2003 letter requesting the information set forth therein, but denies each and every other allegation in ¶100 (including subparagraphs a-d).
101 Under the APA, SCO was obligated to provide all this information to Novell. SCO substantially and materially breached §§ 1.2(b) and 1.2(f) of the APA by refusing to do so. Denies the allegations of ¶101; and to the extent ¶101 purports to state a legal conclusion, states that no response is required.
102 On information and belief, SCO's breaches of §§ 1.2(b) and 1.2(f) of the APA have caused Novell damage in an amount to be later proven. In addition, these breaches have caused Novell special damages, including, inter alia, the costs associated with making repeated requests for information necessary to confirm SCO's compliance with its contractual obligations to administer SVRX licensing program, conducting further reviews of the limited information provided by SCO, attempting to estimate royalties owing based upon incomplete information provided, and prosecuting this action. Denies the allegations of ¶102; and to the extent ¶102 purports to state a legal conclusion, states that no response is required.
103 The legal remedies available to Novell for future failures by SCO to comply with its audit obligations under §§ 1.2(b) and 1.2(f) of the APA may be inadequate. Therefore, Novell seeks an order from this Court compelling SCO's specific performance of its aforementioned audit obligations under §§ 1.2(b) and 1.2(f). Denies the allegations of ¶103; to the extent ¶103 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶103.
3rd CFRTHIRD CLAIM FOR RELIEF
(Breach of Contract: §§ 1.2(b) & 4.16(a) of the Asset Purchase Agreement)
THIRD CLAIM FOR RELIEF
104 Novell incorporates by reference all prior paragraphs as if they were set forth here in full. Repeats and re-alleges its answers to all prior paragraphs as if those answers were fully set forth herein.
105 SCO has substantially and materially breached §§ 1.2(b) and 4.16(a) of the APA by failing to remit all royalties owed to Novell, including any royalties SCO obtained from its new SVRX Licenses with Sun or Microsoft or from its Intellectual Property Licenses with Linux end users or UNIX vendors. Denies the allegations of ¶105; and to the extent ¶105 purports to state a legal conclusion, states that no response is required.
106 On information and belief, SCO's breaches of §§ 1.2(b) & 4.16(a) of the APA have caused Novell damage in an amount to be later proven. These breaches have caused Novell special damages, including, inter alia, the costs associated with attempting to ascertain from SCO the royalty amounts due to Novell, and with prosecuting this action. Denies the allegations of ¶106; and to the extent ¶106 purports to state a legal conclusion, states that no response is required.
107 The legal remedies available to Novell for future failures by SCO to comply with its royalty obligations under §§ 1.2(b) & 4.16(a) of the APA may be inadequate. Therefore, Novell seeks an order from this Court compelling SCO's specific performance of its remittance obligations under §§ 1.2(b) & 4.16(a) of the APA. Denies the allegations of ¶107; to the extent ¶107 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶107.
108 In addition, Novell seeks an order from the Court imposing a constructive trust on revenues received by SCO from its new SVRX Licenses with Sun and Microsoft and from its Intellectual Property Licenses with Linux end users and UNIX vendors. Creation of this trust is necessary to protect Novell from SCO's wrongful retention of monies owing Novell due to SCO's failure to perform its remittance obligations under §§ 1.2(b) & 4.16(a) of the APA. As set forth above, Novell owns "all right, title and interest" to these royalties, less SCO's 5% administrative fee. Denies the allegations of ¶108; to the extent ¶108 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶108.
109 This constructive trust should be imposed for the additional reason that SCO is quickly dissipating its assets. On information and belief, SCO's revenues are declining, its operational losses are increasing and its cash is dwindling quickly. SCO expects to have only $11 million in cash remaining for its business operations as of October 31, 2005, just a fraction of the revenue it purportedly generated as a result of its new SVRX Licenses with Sun and Microsoft. Admits that SCO expects to have at least $11 million in cash designated for its business operations in 2006; denies each and every other allegation in ¶109; to the extent ¶109 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶109.
110 Novell also seeks an order from the Court attaching SCO's assets pending adjudication of this claim because SCO is quickly dissipating its assets. Denies the allegations of ¶110; to the extent ¶110 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶110.
4th CFR FOURTH CLAIM FOR RELIEF
(Declaratory Relief: Rights and Duties under § 4.16(b) of the Asset Purchase Agreement)
FOURTH CLAIM FOR RELIEF
111 Novell incorporates by reference all prior paragraphs as if they were set forth here in full. Repeats and re-alleges its answers to all prior paragraphs as if those answers were fully set forth herein.
112 Under § 4.16(b) of the APA, Novell has the right, at its sole discretion, to direct SCO to waive any rights under any SVRX Licenses. In the event that SCO fails to take any such action at Novell's direction, § 4.16(b) gives Novell the right to take any action on SCO's own behalf. SCO refused to perform its corresponding duties under 54.16(b) and substantially and materially breached § 4.16(b) by:

a. Purporting to cancel or terminate SVRX licenses, including the IBM and Sequent SVRX licenses, and then refusing to waive these purported rights as directed by Novell; and

b. Refusing to recognize actions taken by Novell on SCO's behalf pursuant to § 4.16(b), including Novell's waiver of SCO's purported claims against IBM and Sequent.

Denies the allegations of ¶112; and to the extent ¶112 purports to state a legal conclusion, states that no response is required.
113 Novell seeks a declaration pursuant to 28 U.S.C. § 2201 that:

a. Under § 4.16(b) of the APA, Novell is entitled, at its sole discretion, to direct SCO to waive its purported claims against IBM, Sequent and other SVRX licensees;

b. Under § 4.16(b) of the APA, Novell is entitled to waive on SCO's behalf SCO's purported claims against IBM, Sequent and other SVRX licensees, when SCO refuses to act as directed by Novell; and

c. SCO is obligated to recognize Novell's waiver of SCO's purported claims against IBM and Sequent.

Denies the allegations of ¶113; to the extent ¶113 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶113.
114 Under § 4.16(b) of the APA, SCO is obligated to seek Novell's prior approval to enter into new SVRX Licenses or amendments of SVRX Licenses, subject to limited exception. SCO did not perform its corresponding duties under § 4.16(b) and substantially and materially breached § 4.16(b) by:

a. Purporting to enter into new SVRX licenses without Novell's prior approval, including agreements with Sun, Microsoft and other licensees of SCO's Intellectual Property Licenses, without demonstrating that a limited exception to the prohibition against new licenses by SCO was applicable; and

b. Purporting to enter into amendments of SVRX Licenses without Novell's prior approval, including agreements with Sun, Microsoft and other licensees of SCO's Intellectual Property Licenses, without demonstrating that a limited exception to the prohibition against amendments by SCO was applicable.

Denies the allegations of ¶114; and to the extent ¶114 purports to state a legal conclusion, states that no response is required.
115 Novell seeks a declaration pursuant to 28 U.S.C. § 2201 that:

a. Under § 4.16(b) of the APA, SCO was obligated to seek Novell's prior approval to enter into new SVRX licenses or amendments to SVRX licenses, including SCO's agreements with Sun, Microsoft and other licensees of SCO's Intellectual Property Licenses; and

b. Under § 4.16(b) of the APA, SCO is obligated to seek Novell's prior approval to enter into new SVRX licenses or amendments to SVRX licenses, unless SCO can demonstrate to Novell that an exception to the prohibitions against new licenses and amendments by SCO is applicable.

Denies the allegations of ¶115; to the extent ¶115 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶115.
116 Novell pleads in the alternative for a declaration pursuant to 28 U.S.C. § 2201 that SCO had no authority to enter into the Sun and Microsoft SVRX Licenses, as well as the Intellectual Property Licenses with Linux end users and UNIX vendors. Denies the allegations of ¶116; to the extent ¶116 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶116.
5th CFR FIFTH CLAIM FOR RELIEF
(Declaratory Relief: Rights and Obligations Under APA's Covenant of Good Faith and Fair Dealing)
FIFTH CLAIM FOR RELIEF
117 Novell incorporates by reference all prior paragraphs as if they were set forth here in full. Repeats and re-alleges its answers to all prior paragraphs as if those answers were fully set forth herein.
118 The APA incorporates a covenant of good faith and fair dealing whereby each party agrees to work with the other to fulfill the purposes of the contract. Admits the allegation of ¶118.
119 The APA granted Novell broad audit rights to verify SCO's compliance with the APA, as well as rights to approve (subject to limited exception) new SVRX licenses and amendments to SVRX licenses. The APA also granted Novell the right to direct SCO to amend, supplement, modify or waive any rights under any SVRX license, and to act on SCO's behalf if SCO fails to take such direction. Denies the allegations of ¶119; and to the extent ¶119 purports to state a legal conclusion, states that no response is required.
120 Under the APA, SCO was obligated to administer the SVRX License Program, subject to the additional duties provided in §§ 1.2(b), 1.2(f) and 4.16. SCO failed to abide by these obligations under the APA and therefore substantially and materially breached the APA's covenant of good faith and fair dealing. Admits that, under the APA, SCO was obligated to administer the intended binary royalty stream described in ¶15, above; denies each and every other allegation of ¶ 120; and to the extent ¶120 purports to state a legal conclusion, states that no response is required.
121 Novell seeks a declaration pursuant to 28 U.S.C. § 2201 that SCO is obligated under the APA to:

a. Comply with Novell's exercise of its audit rights under §§ 1.2(b) and 1.2(f) by providing information requested concerning new SVRX licenses and amendments to SVRX licenses;

b. Seek Novell's prior approval before entering into new SVRX licenses or amendments to SVRX licenses, or otherwise demonstrate to Novell that an exception to the prohibition against new licenses or amendments by SCO is applicable;

c. Amend, supplement, modify or waive any rights under any SVRX License to the extent so directed in any manner or respect by Novell in its sole discretion; and

d. Accept actions taken by Novell on SCO's behalf when SCO fails to take such action in subparagraph c, above, as directed by Novell.

Denies the allegations of ¶121; to the extent ¶121 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶121.
6th CFR SIXTH CLAIM FOR RELIEF
(Restitution/Unjust Enrichment)
SIXTH CLAIM FOR RELIEF
122 Novell incorporates by reference all prior paragraphs as if they were set forth here in full. Repeats and re-alleges its answers to all prior paragraphs as if those answers were fully set forth herein.
123 SCO has been unjustly enriched by retaining in part or in full portions of all SVRX Royalties to which Novell was entitled under the APA. Denies the allegations of ¶123; and to the extent ¶123 purports to state a legal conclusion, states that no response is required.
124 In addition, SCO has been unjustly enriched by retaining a 5% administrative fee for administering the SVRX License Program but having failed to fulfill its administrative auditing duties under the APA. Denies the allegations of ¶124; and to the extent ¶124 purports to state a legal conclusion, states that no response is required.
125 Novell seeks restitution of all monies constituting SCO's unjust enrichment. To the extent ¶125 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶125.
126 Novell also seeks an order from the Court imposing a constructive trust on revenues SCO unjustly received by failing to perform its administrative auditing and remittance obligations under the APA. Denies the allegations of ¶126; to the extent ¶126 purports to state a legal conclusion, states that no response is required; and states that Novell is not entitled to the relief it seeks in ¶126.
7th CFR SEVENTH CLAIM FOR RELIEF
(Accounting)
SEVENTH CLAIM FOR RELIEF
127 Novell incorporates by reference all prior paragraphs as if they were set forth here in full. Repeats and re-alleges its answers to all prior paragraphs as if those answers were fully set forth herein.
128 Under the APA, Novell and SCO shared the stream of revenues from the SVRX licenses. In particular, SCO agreed to collect and pass through to Novell 100% of the SVRX royalties as defined and described in Section 4.16 hereof, while Novell agreed to pay an administrative fee of 5% of the SVRX Royalties. SCO was also responsible for making additional royalties and payments to Novell. Admits that, under Section 4.16 of the APA, SCO agreed to collect and pass through to Novell 100% of the royalties paid by then-existing SVRX licensees for their distribution of binary-code versions of System V products pursuant to sublicensing agreements; admits that, under Section 4.16, Novell agreed to pay SCO 5% of such binary royalties as an administrative fee; admits that SCO was responsible for making additional payments to Novell for products unrelated to the SVRX licenses and this litigation; denies each and every other allegation of ¶128; and to the extent ¶128 purports to state a legal conclusion, states that no response is required.
129 Under section 1.2(b) of the APA, Novell was entitled to "periodic audits" of SCO concerning "all royalties and payments due to [Novell] . . . ." Under section 4.16(a), SCO was required to "diligently seek to collect all [SVRX] royalties . . . and [to] investigate and perform appropriate auditing and enforcement under [the SVRX] licenses." SCO was also required to provide regular audit reports to Novell regarding the SVRX royalties and the other royalties under section 1.2(f) of the APA. Admits the allegations of ¶129 to the extent the terms "SVRX royalties" or "SVRX licenses" refer only to the intended binary royalty stream described in ¶15 and ¶128, above; and to the extent ¶129 purports to state a legal conclusion, states that no response is required.
130 Under the APA, the amounts due Novell were determined and verified on the basis of the audits required under the APA. The right to an accounting of the royalties and payments due to Novell under the SVRX licenses and other provisions of the APA was inherent in the APA. Admits the allegations of the first sentence of ¶130 to the extent they refer to the intended binary royalty stream described in ¶15 and ¶128, above, and to payments for products unrelated to the SVRX licenses and this litigation; denies each and every other allegation of ¶130; and to the extent ¶130 purports to state a legal conclusion, states that no response is required.
131 SCO has failed to fulfill its duties under the audit provisions of the APA, and substantially and materially breached those provisions. Denies the allegations of ¶131; and to the extent ¶131 purports to state a legal conclusion, states that no response is required.
132 Between the time the APA was concluded and the present, there have been hundreds of customers responsible for making royalty payments to SCO under the SVRX Licenses or under other agreements relating to royalty bearing products. SCO was obligated under the APA to receive and administer these royalty payments and share them with Novell. Admits the allegations of ¶132 only to the extent the phrase "royalty payments to SCO under the SVRX Licenses" is limited to the binary royalties described in ¶128, above.
133 Under the APA, royalty payments under the SVRX licenses or other agreements relating to royalty bearing products were to be paid to Novell through SCO. The amount of royalties was calculated through a specified formula. Admits the allegations of ¶133 only to the extent the phrase "royalty payments under the SVRX licenses" refers only to the binary royalty stream described in ¶¶15 and 128, above.
134 On information and belief, SCO has entered into new and/or amendments of the SVRX licenses with Sun and Microsoft, as well as with Linux end users under SCO's Intellectual Property Licenses. SCO failed to seek approval to enter into these licenses, and failed to explain why it was not obligated to obtain Novell's advance approval. Despite repeated requests by Novell to SCO to obtain the underlying information and documentation to verify SCO's APA compliance as part of the audit, SCO failed to report these licenses. This failure to report constitutes a substantial and material breach of the APA. Admits that SCO did not seek Novell's approval before entering into the intellectual property agreements or Sun and Microsoft agreements; admits that SCO did not report those agreements to Novell because they are not "SVRX Licenses" as intended under the APA; denies each and every other allegation and the characterizations in ¶134; and to the extent ¶134 purports to state a legal conclusion, states that no response is required.
135 On information and belief, SCO has received royalties under the SVRX licenses which it consummated with Sun and Microsoft, as well as from Linux end users under SCO's Intellectual Property Licenses. SCO has not passed on to Novell the required 100% of the royalties it has received under these licenses. This failure to pay royalties also constitutes a substantial and material breach of the APA. Denies the allegations of ¶135; and to the extent ¶135 purports to state a legal conclusion, states that no response is required.
136 Because SCO has refused to provide Novell with a copy of these licenses, Novell is unable to allege with particularity the precise payment terms of the licenses or the corresponding amounts payable to Novell under these licenses pursuant to the APA. Without an accounting, it is therefore impracticable for Novell to name a fixed sum that is owing with respect to these licenses. Denies the allegations of ¶136; and to the extent ¶136 purports to state a legal conclusion, states that no response is required.
137 Given the large number of customers currently responsible for making royalty payments to SCO under the SVRX licenses or under other agreements relating to royalty bearing products, the complexity of the formulas by which these royalty payments are calculated, and the fact that SCO receives directly all these royalty payments without immediate notice to Novell, it is impracticable for Novell to name a fixed sum that is owing with respect to these royalty payments without an accounting. Admits that the binary royalty payments due to Novell under the APA are calculated by formula and that SCO directly receives those payments; denies each and every other allegation and the characterizations in ¶137; and to the extent ¶137 purports to state a legal conclusion, states that no response is required.
138 Novell therefore seeks an accounting for monies owed to Novell under the APA. Denies the allegation that SCO owes Novell monies under the APA, and states that Novell is not entitled to an accounting.


  


Chart of SCO's Answer to Novell's Counterclaims | 319 comments | Create New Account
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Blake's story - another contradiction
Authored by: Anonymous on Thursday, September 15 2005 @ 07:55 PM EDT
From PJ:
This doesn't match Novell's story, which you can read in paragraphs 14-19.
You might also point, it doesn't match oldSCO's behavior either

Remember the 1996 agreement (Amendment X) between OldSCO/Novell/IBM???

If Blake's story were the correct view:

1. How come Novell were involved at all? oldSCO would have had the power to do this deal by themselves.

2. How come Novell got a huge chunk of the money from that deal? oldSCO would have been able to keep ALL the money

Quatermass
IANAL IMHO etc

[ Reply to This | # ]

Corrections pleas
Authored by: Tufty on Thursday, September 15 2005 @ 07:59 PM EDT
Keep it tidy


---
There has to be a rabbit down this rabbit hole somewhere!
Now I want its hide.

[ Reply to This | # ]

Off topic pleas
Authored by: Tufty on Thursday, September 15 2005 @ 08:01 PM EDT
With Lickable Clinks in HTML


---
There has to be a rabbit down this rabbit hole somewhere!
Now I want its hide.

[ Reply to This | # ]

Now the plates are spinning furiously
Authored by: dyfet on Thursday, September 15 2005 @ 08:14 PM EDT
I always imagined SCO as someone who spins plates on sticks. You have to keep running to each one to make sure one doesn't fall. And the more plates you have, the harder it is to do.

Similarly, each major claim or campaign SCO does must somehow be reconciled with what it once stated in SEC filings, what it states in other court cases, etc, and keep them all spinning somehow. Keeping the facts consistent while presenting completely inconcistent conclusions in multiple venues is not an easy thing. I think the SCO vs Novell story SCO is trying to sell is very wobbly, clearly contradicts other facts SCO itself claimed and cannot repudiate elsewhere without consequences, and so is about to fall...

[ Reply to This | # ]

On the payments
Authored by: Tufty on Thursday, September 15 2005 @ 08:14 PM EDT
From how I understood the APA the payments were to be 100% to Novell who would
then pay SCOG 5% administration fee. Is this correct?

BTW can you lighten the purple highlight on the merged APA as it is very hard to
read those bits, ta.


---
There has to be a rabbit down this rabbit hole somewhere!
Now I want its hide.

[ Reply to This | # ]

Links to the APA and Ammendments.
Authored by: Anonymous on Thursday, September 15 2005 @ 08:41 PM EDT

Asset Purchase Agreement

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT

AMENDMENT No. 2 TO THE ASSET PURCHASE AGREEMENT

Novel l Asset Purchase Agreement With Amendments 1 & 2 Merged

Brian S.

[ Reply to This | # ]

If it told the truth SCO could get off.
Authored by: Anonymous on Thursday, September 15 2005 @ 08:53 PM EDT
SCOsource revenue is in reality not SVRX revenue because there is actually no
SVRX code in linux at all. I don't expect them to make this argument though. The
frying pan may be hot, but it is still cooler than the fire.

[ Reply to This | # ]

Paragraph 86 and 91 question
Authored by: Jude on Thursday, September 15 2005 @ 09:19 PM EDT
In their response to (86), SCO claims that the IBM and Sequent license they
terminated were not SVRX licenses. In their response to (91), SCO claims that
whatever was sold to Sun and Microsoft was similarly excluded.

If the IBM and Sequent licenses were not in the scope of the APA, then by what
means did SCO become a successor in interest to these licenses, which they
needed to have standing to sue IBM? And how did SCO obtain the right to sell
whatever it was that they sold to Sun and Microsoft?

SCO seems to be claiming that that APA did include these things in the purchase
from Novell, but excluded them from being subject to some of the terms of the
APA.

I think it would require a fair amount of text in the APA and amendments to
stipulate the kind of hair-splitting destinctions that SCO seems to be relying
on here, but I sure can't find it. Can anyone else?

[ Reply to This | # ]

Why amendment #2?
Authored by: Anonymous on Thursday, September 15 2005 @ 09:24 PM EDT

SCO's response to 14

Admits that the APA transferred to Santa Cruz "all of Seller's right, title and interest in and to the assets and properties of Seller relating to the [UNIX and Unixware] Business," including (among other things) the copyrights in UNIX and Unixware, the assignment of thousands of contracts and licenses, and the other assets listed in ¶14.

So if we were to accept the scruth[1] of the matter, that Novell gave them all the Unix rights and the kitchen sink, then why was amendment 2 entered into? To give them more of the complete set of rights they had already attained?

Also why ask for confirmation from Novell in writing that you have the full rights to all assets if it is laid out already in the contracts?

And finally, although slightly conjecturish, it appears that SCO has been paying for the Unix licensees up until this point. Were they all 'existing Unix customers' at the time of the original Santa Cruz deal, or have new customers been signed up and royalties been paid? I believed his was the case, but I do not have any documentation to confirm or deny this. But if so, why pay licences on things you do not have to?

[1] scruth - n. 1. The SCO interpretation of the truth.

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its UNIX intellectual property found in Linux
Authored by: Anonymous on Thursday, September 15 2005 @ 09:36 PM EDT
47.Admits that the SCOsource licensing program allows Linux end-users to enter
into intellectual property agreements that properly compensate SCO for its UNIX
intellectual property found in Linux;...

Which SCO's UNIX intellectual property are found in Linux, please ?

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whats with the binary stream?
Authored by: ghostly on Thursday, September 15 2005 @ 09:44 PM EDT
Isnt the binary code the same as the source code, and the source code is what
the fight is about?
This has me a little confused, im not a technichal person in this area.

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Chart of SCO's Answer to Novell's Counterclaims
Authored by: Anonymous on Thursday, September 15 2005 @ 09:45 PM EDT
"When Caldera purchased the Santa Cruz Operation and renamed itself SCO,
the company acquired all right, title, and interest in the UNIX business. Among
other things that transferred were all of the UNIX licensing agreements,
including the one that IBM entered into with AT&T in 1985. In our court
filings, we've made a claim of copyright infringement because IBM has continued
shipping AIX after the company terminated its rights to continue distributing
SVRX derivative code."

How does this hold up - OSCO didn't own that, and they haven't got a copy of the
contact to show what they bought

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    #37 is particularly pathetic
    Authored by: Anonymous on Thursday, September 15 2005 @ 09:45 PM EDT
    Notice that here SCOX denies not having ever been profitable before June 2002? D'oh! (-:

    [ Reply to This | # ]

    Say that again?
    Authored by: sk43 on Thursday, September 15 2005 @ 09:57 PM EDT
    According to Blake Stowell:

    "Any licensing agreements that the Santa Cruz Operation entered into after
    the UNIX property was fully acquired would be the property of the Santa Cruz
    Operation and would not be subject to quarterly royalty fees. . . ."

    Maybe there were discussions of this sort between Novell and Santa Cruz, but
    where in the APA (with amendments) was this understanding written?
    Specifically, I don't find any concept there of "after the UNIX property
    was full acquired" - where does that come from? Furthermore, Amendment 1,
    para. 5 provides no less than four situations where Santa Cruz would retain 100%
    of royalties, two of which pertain to source code licenses. Clause 3, in
    particular, states that Santa Cruz would retain royalties from:

    "source code right to use fees attributable to new SVRX licenses approved
    by Seller pursuant to Section 4.16(b) hereof; ..."

    No need to fully acquire the UNIX property - just get Novell to sign off.

    Any corrections, thoughts, clarifications to the above welcome.

    [ Reply to This | # ]

    Can't remember if this has been asked,
    Authored by: kjb on Thursday, September 15 2005 @ 10:07 PM EDT
    Can MOG be subpoenaed and compelled to state the 'code' she saw from SCOG? I
    know she apparently signed an NDA, can the court override NDA? She made a very
    public statement, as nobody else is willing (able) to show proof . . .

    ---
    keith.burt at gmail dot com
    Copyright info in bio

    "No! Try not. Do, or do not. There is no try."
    - Yoda

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    Chart of SCO's Answer to Novell's Counterclaims
    Authored by: Bill The Cat on Thursday, September 15 2005 @ 10:11 PM EDT
    According to the linked article at the top of this story, SCO's PR Director Blake Stowell says:
    'At the time that the Santa Cruz Operation purchased the UNIX business from Novell, they weren't in a position to pay Novell multiple hundreds of millions of dollars. Novell a few years previously had paid AT&T more than a billion dollars for the UNIX business, so in order to make it possible for the Santa Cruz Operation to acquire the business, both parties (Novell and the Santa Cruz Operation) agreed that any companies that had entered into licensing agreements to that point (the end of 1995) and had agreed to pay quarterly royalty fees rather than a lump sum payment, that the Santa Cruz Operation would agree to pass those quarterly royalties on to Novell and keep a 5 per cent processing fee. Any licensing agreements that the Santa Cruz Operation entered into after the UNIX property was fully acquired would be the property of the Santa Cruz Operation and would not be subject to quarterly royalty fees.'
    Maybe I'm missing something but I don't recall a document, agreement or anything that says what I put in bold. Please correct me if I'm mistaken.

    ---
    Bill Catz

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    Para. 20: SCO isn't claiming "successor in interest"?
    Authored by: uw_dwarf on Thursday, September 15 2005 @ 10:18 PM EDT
    SCO is admitting only the first three sentences in paragraph 20, but not the
    remainder. In the fourth sentence, Novell says that SCO claims to be the
    successor in interest to Santa Cruz with respect to the purchase agreement and
    amendments. Yet in their answer, SCO seems to be denying that they're the
    successor in interest to Santa Cruz.

    If SCO is not the sucessor in interest, why are they still arguing? SCO has no
    claim under that contract if they deny this. Or am I missing something here?

    [ Reply to This | # ]

    Paragraph 8
    Authored by: SkArcher on Thursday, September 15 2005 @ 10:30 PM EDT
    Admits that Linus Torvalds purportedly developed the Linux operating system by consulting and referring to other materials; admits that numerous other parties have also contributed to Linux, including parties who wrongfully contributed SCO's UNIX intellectual property; but denies information or knowledge sufficient to form a belief as to the truth of each and every other allegation of ¶8.
    FUD ammo. Note the "by consulting and referring to other materials" - will this be the reference to Andrew Tanenbaum's Minix as the "missing link" between UNIX and Linux, which Tanenbaum already dismissed, or are they going to try a different angle on UNIX-to-Linux derivation?

    "including parties who wrongfully contributed SCO's UNIX intellectual property" - that's pretty laughable, given that they don't have any and have admitted as much by trying to get Novell to give it to them.

    [ Reply to This | # ]

    Kettle Logic
    Authored by: Anonymous on Thursday, September 15 2005 @ 10:49 PM EDT
    SCO's arguments remind me of what Freud called "kettle logic"

    A man is accused of breaking a kettle. In his defense he replies, "I wasn't
    there when it happened, I saw someone else do it, and besides, it isn't
    broken."

    [ Reply to This | # ]

    Chart of SCO's Answer to Novell's Counterclaims
    Authored by: Anonymous on Thursday, September 15 2005 @ 11:23 PM EDT
    Why keep paying Novell 95% of royalties received if you OWN everything that is
    Unix? Wouldn't 100% go to SCO instead of 5%?

    [ Reply to This | # ]

    Paralogia! Paralogia! Everybody's Coming To Get Thee!
    Authored by: Anonymous on Thursday, September 15 2005 @ 11:43 PM EDT
    Hey, everybody!

    Some thoughts:

    1) Is it too late to expand the paralogia analogy into all of SCO calling
    itself Switzerland?

    2) How in the world do they expect the judge to take this seriously? Some of
    the stuff is clearly not intended for the judge but for the press and people
    like us (Novell hadn't made money on UNIX, either). I don't see much here that
    is intended to get the judge on their side.

    3) Couldn't they have saved time and paper by simply writing, "And in
    conclusion, 'Hammina hammina hammina."?

    4) The underlying logic of Novell's counterclaims are not addressed. I have a
    feeling that Novell knows the judge is bright. Otherwise, they would have
    pointed out things like the "If SCO had the rights all along, they wouldn't
    have asked us to transfer the rest." Either SCO is missing these
    subtleties or they don't have an answer. Either way, they are slicing their own
    throats, and Novell is happily handing them the razors.

    5) Considering some of SCO's claims are refuted by filings in the IBM case in
    front of the exact same judge, this is very stupid on their part. And I can't
    wait for Novell to mention all those SEC filings should SCO last long enough to
    get to trial.

    As another poster said, not a very entertaining filing, it's too busy confusing
    itself. I think the only thing McBride can do is go to court, rip off his
    shirt, write "Soy bomb" on his chest, and plead insanity.

    The streaming video alone would be priceless.

    Dobre utka,
    The Blue Sky Ranger

    "But now, we need time, time to learn, time to understand
    "Where we went wrong, 'cause I feel so strong
    "We are cruising for bruising, my baby."
    --Basia
    "Cruising For Bruising"
    Taken out of context, but it sure fits

    [ Reply to This | # ]

    The pincer movement (maybe it was planned)
    Authored by: Anonymous on Thursday, September 15 2005 @ 11:53 PM EDT
    Lots of people have commented on how SCO's filing has many apparent
    inconsistencies with the IBM case.

    It doesn't take an MIT rocket scientist to think

    Either:

    Novell saw SCO spinning themselves out of control in the IBM case, and was just
    waiting for the moment when SCO had spun itself so far it would no longer be
    able to spin in the opposite direction to defend itself from Novell.

    or even:

    IBM knew SCO's strategy was to spin, so they let them spin, in anticipation that
    Novell would jump in at an opportune moment.


    Let's remember, this stuff about meetings in 2002 and so on, may be a recent
    surprise to us, but Novell and IBM knew about these meetings all along. Novell
    because they were there. IBM, either because Novell told them, or because they
    would have found anyway thru discovery (from both SCO and Novell), in SCO v IBM.

    [ Reply to This | # ]

      para 81
      Authored by: kh on Thursday, September 15 2005 @ 11:56 PM EDT
      81
      Among other changes to the APA, Amendment No. 1 added 9 1.2(e), which provides that SCO has a right to retain all "source code right to use fees attributable to new SVRX Licenses approved by [Novell] pursuant to Section 4.16(b)."

      I think Novell didn't get this one right. Shouldn't it read:

      "The APA etc. which provides that Santa Cruz has a right to ...."

      [ Reply to This | # ]

      • para 81 - Authored by: Anonymous on Friday, September 16 2005 @ 06:26 AM EDT
      wow, PJ!
      Authored by: Anonymous on Friday, September 16 2005 @ 12:23 AM EDT
      This is an amazing piece of work. Well done, just like all
      the other charts. And research, and analysis, and
      everything.

      Eee I'm turning into a Groklaw groupie.

      __
      Carla Schroder

      [ Reply to This | # ]

      • Wrong! - Authored by: Ian Al on Friday, September 16 2005 @ 06:33 AM EDT
      • wow, PJ! - Authored by: Anonymous on Friday, September 16 2005 @ 08:56 AM EDT
      • wow, PJ! - Authored by: Anonymous on Monday, September 19 2005 @ 10:47 AM EDT
      APA royalty questions
      Authored by: Anonymous on Friday, September 16 2005 @ 01:45 AM EDT
      132 NOVELL: "Between the time the APA was concluded and the present, there
      have been hundreds of customers responsible for making royalty payments to SCO
      under the SVRX Licenses or under other agreements relating to royalty bearing
      products. SCO was obligated under the APA to receive and administer these
      royalty payments and share them with Novell."

      SCO: "Admits the allegations of ¶132 only to the extent the phrase
      "royalty payments to SCO under the SVRX Licenses" is limited to the
      binary royalties described in ¶128, above."

      APA:
      Are SCO seriously going to try and claim that NONE of those licenses included
      source code?

      If not, did SCO just admit that they have been ripping Novell off for years?

      Are AZ & DC included in the 100s of customers?

      And regarding breaching the APA:
      Novell claims SCO not only failed to administer their obligations under the APA,
      but that they likely are not to be trusted to do so in the future. So can Novell
      have those contract and royalties assigned back to them? Cut SCO out of the
      picture altogether?

      [ Reply to This | # ]

      • Yes - Authored by: Anonymous on Friday, September 16 2005 @ 02:03 AM EDT
      • Here's how it works - Authored by: Jude on Friday, September 16 2005 @ 08:25 AM EDT
      4.16 in APA - what does Novell royalty apply to
      Authored by: Anonymous on Friday, September 16 2005 @ 02:07 AM EDT
      What does the Novell royalty apply to?

      This seems to be the core of the dispute

      Well 4.16 says the Novell royalty referss to items listed in section VI, of
      1.1(a) of the schedule of assets.

      And here is what is listed in that section:

      VI. All contracts relating to the SVRX Licenses listed below:

      - UNIX System V Release 4.2 MP Intel386 Implementation

      - #UNIX System V Release 4.2 MP International Edition, Intel386
      Implementation

      - UNIX System V Release 4.2 Intel386 Implementation

      - #UNIX System V Release 4.2 International Edition, Intel386
      Implementation

      - UNIX System V Release 4.1 ES Intel386 Implementation

      - #UNIX System V Release 4.1 ES International Edition Intel386
      Implementation


      Schedule 1.1(a) Assets (Page 4 of 4)

      - UNIX System V Release 4.0 MP Intel386 Implementation

      - #UNIX System V Release 4.0 MP International Edition Intel386
      Implementation

      - UNIX System V Release 4.0 MP Intel386 Version 4 Implementation

      - #UNIX System V Release 4.0 International Edition Intel386 Version 4
      Implementation

      - UNIX System V Release 4.0 Intel386 Version 3 Implementation

      - #UNIX System V Release 4.0 International Edition Intel386 Version 3
      Implementation

      - UNIX System V Release 4.0 Intel386 Version 2 Implementation

      - #UNIX System V Release 4.0 International Edition Intel386 Version 2
      Implementation

      - UNIX System V Release 4.0 Intel386 Version 1 Implementation

      - #UNIX System V Release 4.0 International Edition Intel386 Version 1
      Implementation

      - UNIX System V/386 Release 3.2 and #UNIX System V/386 Release 3.2
      International Edition

      - UNIX System V Release 3.2 and #UNIX System V Release 3.2 International
      Edition

      - UNIX System V Release 3.1 and #UNIX System V Release 3.1 International
      Edition

      - UNIX System V Release 3.0 and #UNIX System V Release 3.0 International
      Edition

      - All prior releases and versions of UNIX System V Release 2.1

      - #All prior releases and versions of UNIX System V Release 2.1
      International Edition

      - All prior releases and versions of UNIX System V Release 2.0

      - #All prior releases and versions of UNIX System V Release 2.0
      International Edition

      - All prior UNIX System releases and versions preceding UNIX System V
      Release 2.0

      - #All prior UNIX System releases and versions preceding UNIX System V
      Release 2.0


      Quatermass
      IANAL IMHO etc

      [ Reply to This | # ]

      Binarys
      Authored by: pfusco on Friday, September 16 2005 @ 08:52 AM EDT
      I dont seem to remember the APA specifying "Binarys" at all as what
      the licensing royalties were all about.

      ---
      only the soul matters in the end

      [ Reply to This | # ]

      was it just me or was SCO's quoting of the APA...
      Authored by: gumnos on Friday, September 16 2005 @ 09:41 AM EDT

      Was it just me, or was SCO's quoting of the APA a little peculiar? They literally quote the bits regarding transfer of various bits and bobs, but then outside the quotation, they then include the copyrights. E.g.

      entered into negotiations resulting in the transfer to Santa Cruz of "all of Seller's right, title and interest in and to the assets and properties of Seller relating to the [UNIX and Unixware] Business," including the copyrights in UNIX and Unixware;
      with the previous from paragraph 10 and the following from paragraph 14
      Admits that the APA transferred to Santa Cruz "all of Seller's right, title and interest in and to the assets and properties of Seller relating to the [UNIX and Unixware] Business," including (among other things) the copyrights in UNIX and Unixware

      You'd figure with something so greviously central to their cause, they'd at least try to quote the portions apropos to the transfer of the copyrights.

      -gumnos



      [ Reply to This | # ]

      hrmm... like a bank note...
      Authored by: Anonymous on Friday, September 16 2005 @ 09:46 AM EDT
      Actually.. what Novell seems to be saying about SCO is that... they've never
      finished *paying* for the Unix business from the initial purchase made by
      oldSCO.

      Kinda like buying a car... yes.. in theory it's your car.. but.. the bank still
      has the title until the debt is paid.

      So.. until the agreed upon price is reached.. Novell holds the copyrights (and
      rights to protect said copyrights) and would pass them on to SCO at the actual
      end of the transaction.

      Am I reading that right?

      -JH (not logged in.)

      [ Reply to This | # ]

      What keeps SCO group in business?
      Authored by: mwgrenier on Friday, September 16 2005 @ 10:14 AM EDT
      For SCO group to stay in business, they need to fend off Novell's attempt to
      hold the royalty payments for Microsoft and Sun agreements in escrow. To do
      that, SCO Group would need to show that no System V code exists in the license
      sold to Microsoft and Sun. Per the Novell/SCO agreement:
      ------
      (f) SVRx Converted Units. The parties agree that SCO will have the opportunity
      to convert existing SVRx-based customers to a UnixWare derived product, thus
      depriving Seller of the economic benefit of the SVRx licenses. The process for
      determining if a customer is validly converted is as follows:

      The conversion of an SVRx customer to UnixWare will validly occur and result in
      the UnixWare based revenue flowing to SCO, without giving rise to a continued
      obligation to make payment to Seller of royalties due under the SVRx licenses,
      only if the following are true (note: if the customer continues to sell their
      SVRx based product separately, then these SVRx revenues continue to flow to
      Novell):

      (i) The customer ships a binary copy of a Golden Master of UnixWare, Eiger, MXU
      or White Box, or

      (ii) The product is derived from a source version of UnixWare, Eiger, MXU or
      White Box and (i) none of the original SVRx code provided by Novell to the
      customer, under the SVRx license, is included in the new product or (ii) Buyer
      shall demonstrate to Seller's reasonable satisfaction that an insignificant
      amount of original SVRx code is so included and the adoption of UnixWare is so
      substantial as to constitute a valid conversion.

      [ Reply to This | # ]

      Do they admit breaking the law?
      Authored by: Anonymous on Friday, September 16 2005 @ 12:13 PM EDT
      Para 56 "Admits that SCO has publicly stated that it owns the UNIX
      copyrights and that Linux end-users may be liable for infringement of those
      copyrights"

      If it is very unlikely that the end-users are liable for copyright infringement,
      are they not admitting that they attempted to extort a fee from the end-users?

      [ Reply to This | # ]

      Wow, Novell certainly know how to make the damages look utterly devastating
      Authored by: pooky on Friday, September 16 2005 @ 12:55 PM EDT
      Lessee, Novell wants the court to:

      1)Force SCO to comply with the audit requests.
      2)Set up a trust to receive all revenues from SVRX licenses and Linux IP
      licenses so SCO doesn't mishandle them
      3)Force SCO to turn over the revenues from the MS and Sun licenses.
      4)Force SCO to return all of their 5% fee from collecting SVRX royalties (my
      guesss would be only back to the point where they breahed their duty under the
      APA)
      5)Plus asks for untold damages caused by SCO in amounts to be determined at
      trial.

      Any of 2-5 is going to instantly bankrupt SCO unless they fire all their
      developers, halt all R&D, and cut back their support staff to a minimum to
      make the licensing of their own product profitable.

      -pooky

      ---
      Many Bothans died to bring us this information.

      [ Reply to This | # ]

      Chart of SCO's Answer to Novell's Counterclaims
      Authored by: Anonymous on Friday, September 16 2005 @ 01:53 PM EDT
      "Novell counsel agreed to sign a letter stating that the APA transferred
      all right, title, and interest in and to the copyrights associated with the
      AT&T SVRX software agreements; admits that SCO sent Novell counsel a draft
      of that letter but Novell responded that it was no longer interested in UNIX and
      would not sign; admits that Novell did not sign the letter and ceased
      communications with SCO;"

      that's just got to burn Daryl that they didn't get it in black and white. you
      always get in black white no matter what. to me this kind of throws their whole
      so called businesss/sco source model out the window along with the lawsuit.

      how does anybody know Novell said they weren't interested in Unix - that is just
      b.s. - my word against your word - got to get in black and white.

      [ Reply to This | # ]

      #38: SCO can't even lie straight
      Authored by: Anonymous on Friday, September 16 2005 @ 03:07 PM EDT
      "...admits that in early 2003, Novell counsel agreed to sign a letter stating that the APA transferred all right, title, and interest in and to the copyrights associated with the AT&T SVRX software agreements; admits that SCO sent Novell counsel a draft of that letter but Novell responded that it was no longer interested in UNIX and would not sign; admits that Novell did not sign the letter and ceased communications with SCO; further admits that during the aforementioned conversations Novell never asserted its purported, or challenged SCO's, ownership of the UNIX and Unixware copyrights; but denies each and every other allegation of"

      Wow. I don't know where to start here...
      Novell agreed that the APA assigned copyrights to SCO but then refused to sign a letter saying such beause they didn't care about Unix anymore? Oh c'mon! I've heard better arguments then that on Judge Judy!

      [ Reply to This | # ]

      Another flat out lie
      Authored by: Anonymous on Friday, September 16 2005 @ 03:22 PM EDT
      Novell:"Notwithstanding Novell's rejections, SCO embarked on an aggressive
      campaign in which it falsely asserted ownership over these same copyrights via
      public statements, a series of letters to Linux end users, several lawsuits
      against Linux distributors and end users, and a licensing program purporting to
      offer SCO's Intellectual Property Licenses for Linux. " Sco:Denies the
      allegations of ¶40.

      Please how can they possibly deny this after all they did in the public, even
      went to comdex and had the NDA agreement, had journalist look at the code. There
      is no hiding this.

      [ Reply to This | # ]

      Chart of SCO's Answer to Novell's Counterclaims
      Authored by: sprag on Friday, September 16 2005 @ 04:53 PM EDT
      I think its interesting that the writer of this article doesn't make the
      distinction between old and new SCO, yet comes to the conclusion that the
      agreement seems to agree with Novell's interpretation.

      http://www.pcpro.co.uk/news/77423/sco-and-novell-dispute-takes-new-twist.html

      "SCO had not returned requests for comment at the time of writing." I
      bet.

      [ Reply to This | # ]

      Beats reading tea leaves
      Authored by: Tufty on Friday, September 16 2005 @ 05:27 PM EDT
      Any day of the week, well monday to friday at least. SCOX seems to shine a light
      on what is happening inside the SCOG camp.

      A while back I noted that it had gone very quiet and something was up. I think
      someone like Stats did as well. Fwhump, up pops Negris and trade resumes its
      usual shenanegans.

      A little later I noticed this trend again and noted that 'something dark this
      way comes'. The push for $5 happened, I think related to the invesment advisors
      coming on board.

      Monday volume plunged. Ok, I know it wasn't hig to start but a drop from around
      27k to 9k is a third. Tuesday speculation was rife that SCG had filed and the
      insiders and pumpers had a copy. Volume has been bad all week and the price
      decending despite the Paintblaster.

      Today volume up and an odd number final sale to close down.

      What does this mean (other than my tin foil hat is too tight)? I would say this
      response from SCOG went down like a home sick flounder. It was not liked and
      they are wondering what's next.

      Next week's trading will be interesting. - discuss


      ---
      There has to be a rabbit down this rabbit hole somewhere!
      Now I want its hide.

      [ Reply to This | # ]

      So what happens next?
      Authored by: Anonymous on Friday, September 16 2005 @ 07:12 PM EDT
      Will the judge just decide to FINISH THEM by effectively bankrupting them or
      does anyone think SCO really has a shot at getting more delays in with this
      reply?

      [ Reply to This | # ]

      This Case has suddenly gotten very simple
      Authored by: rsteinmetz70112 on Friday, September 16 2005 @ 08:11 PM EDT
      It seems to boil down almost entirely to what is a "SVRX License".
      This lands it squarely in the Judges lap.

      The Only hope SCOG now has is if someone from SCO later Tarantella now a part of
      SUN (where is Doug now?) says they agree with SCOG even then the judge might
      decide the language is not ambigious and simply rule.

      ---
      Rsteinmetz - IANAL therefore my opinions are illegal.

      "I could be wrong now, but I don't think so."
      Randy Newman - The Title Theme from Monk

      [ Reply to This | # ]

      Very solid article on LamLaw
      Authored by: _Arthur on Friday, September 16 2005 @ 09:04 PM EDT
      PJ, this one seems worth a guest column, IMHO

      http://www.lamlaw.com/

      "So if SCO wants the court to find that the APA transferred all of
      Novell's right, title and interest in Unix along with those copyrights, they
      will have to prove it and not simply "admit it"."
      Simply put, self serving statements are not and can not be
      "admissions".
      They can show up in pleadings such as this answer but it is only for show and
      of no legal significance."

      The Conclusion:

      " Only the party with a legitimate claim to the copyrights can litigate
      that issue. And that is Novell.

      Welcome to the courtroom.

      All rise. "


      [ Reply to This | # ]

      New track for SCO
      Authored by: Anonymous on Saturday, September 17 2005 @ 07:33 AM EDT
      Hmm.. SCO seem to be trying a new tack

      From:

      "At the time that the Santa Cruz Operation purchased the UNIX business from
      Novell, they weren't in a position to pay Novell multiple hundreds of millions
      of dollars."

      To:

      "When Caldera purchased the Santa Cruz Operation and renamed itself SCO,
      the company acquired all right, title, and interest in the UNIX business."

      Via:

      "...pay [Novell] quarterly royalty fees rather than a lump sum
      payment..."

      So now they own it, but on "Hire Purchase"? Is there a time-limit for
      these quarterly payments? I think not... So you don't really own it, you are
      leasing it.

      [ Reply to This | # ]

      Chart of SCO's Answer to Novell's Counterclaims
      Authored by: rm6990 on Saturday, September 17 2005 @ 03:47 PM EDT
      SCO trying to say Novell only got royalties for distribution of SYSV in binary
      form is complete doggy do-do.

      So let me get this straight. Let's say IBM wants to license SYSV as the core of
      AIX. Are they trying to say Novell would buy a Power machine, compile SYSV for
      IBM, and only pass on to IBM the binary and that IBM would somehow have to
      integrate that binary into the rest of AIX, which is obvious developed as source
      code?

      Or is there something I am missing here?

      [ Reply to This | # ]

      A question
      Authored by: Anonymous on Saturday, September 17 2005 @ 10:39 PM EDT
      If SCOG do not produce the contracts for Microsoft and Sun in court, who's
      version gets precidence? Will the judge side with Novell's counterclaim or
      accept SCOG's response. That could open some interesting issues?

      Tufty

      [ Reply to This | # ]

      What happens if you make a mistake in a filing?
      Authored by: l8gravely on Saturday, September 17 2005 @ 11:57 PM EDT
      I know this has come up before in some discussions, and especially in the IBM
      case where the realized they made an error and notified the judge promptly.

      But in this case, where SCOX seem to have made a couple of responses which give
      away the keys to entire kingdom, what happens if SCOX suddenly wakes up and says
      "Ooops, we made a mistake in our filing, we really meant to say this
      instead..."

      Would a judge allow it? Would Novell be able to cry foul? Or beg for
      permission to file their own response?

      For example, paragraph 20 where SCOX admits to the first three sentences, but
      denys the rest. And as others have pointed out, it kinda torpedoes their case.
      Can the come back and say they really meant to write "Admits the
      allegations of the first sentence of ¶20, but denies each and every other
      allegation of ¶20.

      Would they be allowed to do such a tweak?

      Another one I noticed (as have others) is point 74, where they admit they owe
      the money, but try to weasel in the binary only part. But since you don't need
      to define the meaning of the SVRX licenses, since each and every license which
      had been signed between ATT (and successors) and software companies spelled out
      what that license meant. So it would have been redundant to specify it in the
      APA or even the purchase agreement. It was already defined elsewhere!

      John

      [ Reply to This | # ]

      Novell's Missing Argument
      Authored by: DaveJakeman on Tuesday, September 20 2005 @ 10:20 AM EDT
      Novell argue that SCO implicitly acknowledged Novell's title to the UNIX
      copyrights by the act of SCO repeatedly asking Novell to transfer said
      copyrights from Novell to SCO.

      What Novell don't seem to argue is that by SCO paying royalties to Novell (which
      SCO admit to in 15), SCO is also implicitly acknowledging title.

      How is it one would pay royalties to someone else for something one owned
      outright? How can SCO hope to paint that picture? With outright lies? Surely
      not.

      Supposing I buy a new car. I can't quite afford the full price, but I want that
      car now, so people will know how rich I am. I take out what amounts to a hire
      purchase agreement (whatever else you might want to call it, that's what it is).
      So now it's my car. I drive it, I park it in my garage and no-one else gets to
      drive it unless I give my explicit permission. I buy a select registration
      number composed of my initials, "SCO 1", so people really know it's
      mine, with distinction. I lovingly wash and polish it on Sundays. If you're
      lucky, I might offer you a lift so I can show off how nice it is. Anyone can
      see it's mine.

      But what if I default on my repayments? What happens then? Well, what do you
      know, before I can say "I'll pay it next month", it's been
      repossessed! What? It's no longer in my garage? It's gone!

      So who really owned that car?

      The same goes with buying a house. Or a piano, or pretty well any major
      purchase.

      So what makes SCO different, that they need to pay Novell royalties on something
      that belongs, lock, stock and barrel, to SCO outright? Why would that be? Or
      does SCO really own UNIX, as they so often said in their previous SEC filings
      (but now omit).

      The APA is clearly open to wide interpretation, as it doesn't define the word
      "the". After all, "the" could mean anything.

      SCO provide very little by way of answers, but deny anything and everything they
      can do in their reply. Perhaps we should just say SCO is in denial.

      ---
      Should one hear an accusation, first look to see how it might be levelled at the
      accuser.

      [ Reply to This | # ]

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