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SCO's Memo in Opposition to Novell's Motion to Stay Claims - Updated
Monday, May 29 2006 @ 11:58 PM EDT

As I promised, here is SCO's Memorandum in Opposition to Novell's Motion to Stay Claims Raising Issues Subject to Arbitration [PDF]. There is also an Ex Parte Motion for Leave to File Overlength Memorandum [PDF] and there are quite a few exhibits, and here they are, except for the ones that are printed-out cases:
  • Exhibit 1 - Scheduling Order and Order Vacating Hearing
  • Exhibit 2 - Novell's First Set of Requests for Production to The SCO Group, Inc.
  • Exhibit 3 - Plaintiff's First Request for Documents and First Set of Interogatories
  • Exhibit 4 - Cover letters as SCO delivers CDs of discovery materials
  • Exhibit 5 - Attorney Correspondence - Emails regarding protective order language
  • Exhibit 6 - Letter from Morrison & Foerster's David E. Melaugh to Boies Schiller's Edward Normand, dated May 27, 2006 regarding discovery
  • Exhibit 7 - SCO's CEO Darl McBride's May 12, 2003 letter to Novell CEO Jack Messman
  • Exhibit 8- Stipulated Protective Order


Exhibit 9 is the decision in United International Holdings, Inc. v. Wharf Holdings, Limited.
Exhibit 10 is Kafka v. Bellevue Corporation.
Exhibit 11 is Altresco Philippines, Inc. v. CMS Generation Company.
Exhibit 12 is Meyer v. Doerge.
Exhibit 13 is Turner v. Bain & Company, Inc.

The discussion is all about arbitration. SCO's position has three prongs:

1. Novell waited too long to bring up the arbitration issue. By participating in two years of litigation, including discovery, Novell has waived its rights to a stay for arbitration. Novell claims SCO's Second Amended Complaint creates a new situation, but they didn't oppose SCO filing it, and if they thought it raised arbitrable issues, Novell could have opposed it being filed.

2. None of SCO's claims is arbitrable. SCO's claims don't "arise from" the UL contracts. They have to do with earlier contracts long before the UL agreements. They also arise from federal copyright law and state law. SCO's claims don't become arbitrable just because Novell has a defense to a claim based on a contract with an arbitration clause. (But then SCO finishes up the section like this: "Under the well-established precedent, the arbitration and federal litigation should proceed concurrently." In other words, SCO argues against arbitration, but here it reveals that it knows it won't prevail on that, so it asks that at least the rest go forward at the same time.)

3. Where SCO's claims are not arbitrable, there is no basis to stay them.

The problem SCO has with this otherwise very reasonable argument is, if SCO has no copyrights or if it has no legal right under the UL contracts to sue Novell for copyright infringement, well, I am sure you can see the futility of going forward. Worse, you could end up with two decisions that are not harmonious. I am trying to think of what claims SCO has raised that do *not* depend upon them having the copyrights. Cyberterrorism under Utah's unfair competition act? Joke. Joke. They haven't said they intend to use that. Of course, they haven't exactly said what unfair competition law they have in mind. It's all a big threshold-question mystery.

I'll write more about all this after I have time to read it all carefully and research, but I didn't want you to have to wait to read it. If anyone has time to do a plain text or HTML of any of this, it would be gratefully accepted. Don't forget to leave a comment letting everyone know which one you can do, so we don't duplicate. Thank you.

Meanwhile, you can find Novell's filings that this memorandum opposes either on our Novell Timeline page or here's Novell, Inc.'s Motion to Stay Claims Raising Issues Subject to Arbitration and the Memorandum in Support, which we posted earlier (also here), and here's the Declaration of Michael A. Jacobs in Support of Novell's Motion to Stay . They are all PDFs, and the Jacobs one is very, very long. And we need to get those done as text too.

Update: An eagle-eyed reader notices that Exhibit 7 appears to be messed up. Page one of the exhibit is the McBride letter to Novell CEO Jack Messman, but page two is page one of SCO's letter to the Fortune 1000, which was mailed the same day, and then page 3 of the exhibit is page two of the Fortune 1000 letter, which is identical to the ending of the letter to Messman, except for one paragraph, which now is missing from the exhibit since page two of the Messman letter is missing. No doubt that is how SCO got confused, and when you have so many exhibits to pull together, things like this happen. It's not a significant error, and I doubt it's deliberate, but I don't want you to end up confused. You can put the puzzle pieces together by comparing Exhibit 7 with the letter to Messman and the McBride letter to the Fortune 1000. As you can see if you do that, the paragraph that is missing from the Messman letter is this:

As a consequence of Linux's unrestricted authoring process, it is not surprising that Linux distributors do not warrant the legal integrity of the Linux code provided to customers. Therefore legal liability that may arise from the Linux development process may also rest with the end user.

My, that brings back memories of SCO's salad days, when it was the bully on the block. The way SCO uses Exhibit 7 in its memorandum is by means of this sentence on page 13: "In the first part of 2003, moreover, SCO put Novell and others on notice that it believed Linux violated SCO's copyrights and that SCO intended to enforce those copyrights. (Exhibit 7)" The likely intent was to put both pages of both letters sent that day, the one to Messman and the one to the Fortune 1000, in that exhibit, as proof of that assertion.


  


SCO's Memo in Opposition to Novell's Motion to Stay Claims - Updated | 237 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections thread
Authored by: penfold on Tuesday, May 30 2006 @ 12:12 AM EDT
Place any corrections here please.

---
The worth of man is determined by the battle between good and evil in the mans
subconcious.The Evil within is so strong that the way to win is to deny it
battle

[ Reply to This | # ]

  • Corrections thread - Authored by: Anonymous on Tuesday, May 30 2006 @ 04:05 AM EDT
  • PDF 404s - Authored by: Anonymous on Tuesday, May 30 2006 @ 05:22 AM EDT
    • PDF 404s - Authored by: PJ on Tuesday, May 30 2006 @ 10:47 AM EDT
Off Topic
Authored by: penfold on Tuesday, May 30 2006 @ 12:14 AM EDT
Off Topic here, and please make links clickable.

---
The worth of man is determined by the battle between good and evil in the mans
subconcious.The Evil within is so strong that the way to win is to deny it
battle

[ Reply to This | # ]

So what is "cyberterrorism"?
Authored by: xtifr on Tuesday, May 30 2006 @ 12:48 AM EDT
I know that it's unlikely to be that actual basis for any of SCO's claims, but
just out of curiousity, what the heck is "cyberterrorism"? It sounds
like a made-up word. Does it have an actual legal definition, or is just
something the legislators threw in to give prosecutors and/or plaintiffs some
leeway in pressing their claims? Is there any way to know if someone's actions
qualify as "cyberterrorism", or can I just go to Utah and start
randomly accusing people in the street of this activity (whatever it might be)?

If Yarro actually managed to get a law passed where you can be sued for
undefined behavior, I can see how SCO might find that handy! :)

---
Do not meddle in the affairs of Wizards, for it makes them soggy and hard to
light.

[ Reply to This | # ]

Novell opposition to the Second Amended Complaint
Authored by: AllParadox on Tuesday, May 30 2006 @ 01:08 AM EDT
"Novell claims SCO's Second Amended Complaint creates a new situation, but
[Novell] didn't oppose SCO filing it, and if [Novell] thought it raised
arbitrable issues, [Novell] could have opposed the Second Amended Complaint
being filed."

You learn something new on Groklaw, almost every time you come here.

For example, this suggestion is news to me.

I understand the Fed.R.Civ.Proc. to require liberal joinder. It is no sin, nor
is it a Rule violation, to add an arbitrable claim to a lawsuit. This is
particularly true if the claim fall in the class of Compulsory Counterclaims.
Our legal system does not work that way.

Arbitrable claims are just too easy to handle. Do as Novell did, file a memo
with the Court asking that the arbitrable claims be stayed in the Court until
the arbitration is completed.

I will not say that no Federal Appellate Court has ever opined differently: I
have not researched it. The suggestion does not comport with the spirit of the
rules, though.

---
PJ deletes insult posts, not differences of opinion.

AllParadox; retired lawyer and chief Groklaw iconoclast. No legal opinions,
just my opinion.

[ Reply to This | # ]

Novell waited too long?
Authored by: jmc on Tuesday, May 30 2006 @ 02:41 AM EDT
How can SCO argue that when their 2AC claiming copyright infringement was only
filed this year?

Is Novell supposed to be psychic and predict this 2 years ago or something?

[ Reply to This | # ]

2.4 Kernel OK not 2.6?
Authored by: jmc on Tuesday, May 30 2006 @ 04:18 AM EDT
It seems (PDF page 25) that SCO have now retreated on the previoius claim that
2.2 kernels were OK but 2.4 was contaminated to saying 2.4 is OK but 2.6 is
contaminated.

But out of:

1. SuSE's implementation of the "Read/Copy/Update" algorithm
2. SuSE's implementation of NUMA Aware Locks
3. SuSE's implementation of the distributed lock manager
4. SuSE's implementation of reference counters
5. SuSE's implementation of asynchronous I/O
6. SuSE's implementation of the kmalloc data structure
7. SuSE's implementation of the console subsystem
8. SuSE's implementation of IRQs
9. SuSE's implementation of shared memory locking
10. SuSE's implementation of semaphores
11. SuSE's implementation of virtual memory
12. SuSE's implementation of IPC's
13. SuSE's implementation of load balancing
14. SuSE's implementation of PIDs
15. SuSE's implementation of numerous kernel internals and APIs
16. SuSE's implementation of ELF
17. SuSE's implementation of STREAMS
18. SuSE's implementation of dynamic linking
19. SuSE's implementation of kernel pre-emption
20. SuSE's implementation of memory mapping
21. SuSE's implementation of ESR
22. SuSE's implementation of buffer structures
23. SuSE's implementation of process blocking
24. SuSE's implementation of numerous header files

Only 2, 3, 13, 19, 21 could arguably be said to be new in 2.6 - the remainder
have been virtually unchanged since 2.2 and before. And that's being generous to
SCO.

[ Reply to This | # ]

Impression
Authored by: argee on Tuesday, May 30 2006 @ 05:50 AM EDT
For some reason, I get the impression that SCOx does
not want this to go to arbitration.....

---
--
argee

[ Reply to This | # ]

Kafka vs. Bellevue Corporation
Authored by: Anonymous on Tuesday, May 30 2006 @ 06:36 AM EDT
I googled the previous story and the word Kafka didn't appear. Yet gbl started
a kafka thread. gbl's crystal ball is better than mine. :-) This case really
is kafkaesque.

[ Reply to This | # ]

SCO's Memo in Opposition to Novell's Motion to Stay Claims
Authored by: Steve Martin on Tuesday, May 30 2006 @ 06:59 AM EDT

There is also an Ex Parte Motion for Leave to File Overlength Memorandum

Okay, my faith in the Universe is restored. It had been so long since we'd seen one of these, I was starting to worry.

---
"When I say something, I put my name next to it." -- Isaac Jaffee, "Sports Night"

[ Reply to This | # ]

is there any doubt ..
Authored by: Anonymous on Tuesday, May 30 2006 @ 07:03 AM EDT
Is there any doubt that all SCO are about is creating as much confusion and dragging this thing out as far as possible obviously realizing they have no real case to go to trial with. The only question remaining is who from or how Darl and all the boys are going to receive remuneration for all their trojan efforts to derail the Open Source sector.

I just wonder is there a law against telling willfull distortions in submissions to a legally conviened Court of Law?

"SCO owns the rights to the UNIX operating system software originally licensed by AT&T"

"We believe that Linux is, in material part, an unauthorized derivative of UNIX."

Is Darl not aware of this historically documented fact ..

"In 1994 Novell .. transferred the rights to the UNIX trademark and the specification .. to The Open Group"

Lets see some more from Novell-122Ex7.pdf:
"Commercial software is built by carefully selected and screened teams of programmers working to build proprietary, secure software"

'Commercial software` is rushed out the door as soon as it compiles without errors. Then the unpaid feedback from the unfortunate end users is used in a bug hunt for version 3. There being no version 1 as we generally rename version 1 to version 2 so as people think they are getting an improved version. V 4 released with all brand new feetures that were left out of V2 .. er V3 and introducing a whole new set of bugs.

When he refers to 'secure software` does he mean secure from viruses and spam or secure from getting sued by Darl & Co.? And what imdemnification do 'commercial software` companies provide for when your entire customer credit card database walks out the door. - zilch.

"We have evidence that portions of UNIX System V .. have been copied into Linux"

All right Darl - prove it !

[ Reply to This | # ]

Lay claim to your PDF here
Authored by: kozmcrae on Tuesday, May 30 2006 @ 08:52 AM EDT
I'll go toward the roar and take Novell-122Ex8.pdf. I'm only good at raw text
though.

Richard


---
Darl, have you been lying to us? I'm a frayed knot.

[ Reply to This | # ]

Brooke Well's is the Novell Magistrate Judge?
Authored by: Anonymous on Tuesday, May 30 2006 @ 10:04 AM EDT
They identify Brooke Wells as the Magistrate Judge in the opposition brief
header. Is that correct?

[ Reply to This | # ]

SCO's Memo in Opposition to Novell's Motion to Stay Claims
Authored by: Anonymous on Tuesday, May 30 2006 @ 10:18 AM EDT
The lawyers can hide behind their protections- but if it turns out that this is
part of a bigger scheme(multi task) then guess what ?- move over Ken Lay. The
Governments real big on going after liars,corporate criminals too. Hope everyone
has their house in order cause the truths gonna come a knockin.

[ Reply to This | # ]

Exhibit 2 is a real treat
Authored by: DaveJakeman on Tuesday, May 30 2006 @ 10:57 AM EDT
It gives a measure of the thorough nature and quality of Brakebill's work. I
like document request number 32 the best: "Please produce all your public
statements, written or oral, concerning the ownership rights or intellectual
property rights in UNIX or UnixWare."

Oo-er, SCO, isn't that the light of an oncoming train? Or is it the Light of
Truth searching you out?

---
Champagne for my real friends, real pain for my sham friends - Francis Bacon
---
Should one hear an accusation, try it out on the accuser.

[ Reply to This | # ]

request for production #28
Authored by: Anonymous on Tuesday, May 30 2006 @ 01:10 PM EDT
IANAL- but exibit 2 has this wonderful line-
---

Request for production No.28
Please produce all documents concerning any communication between you and Novell
concerning UNIX or UnixWare copyrights.

---
Now as I understand it, if SCO does not provide a document stating the explicit
transfer of copyright title under request No. 28 they CANNOT produce it later in
a 'Perry Mason' moment, either to persue their claim or to refute a Novell
Counterclaim.
In this situation, they had a chance to produce the document, said it didn't
exist ('all documents' not 'all relevant documents' - no wiggle room at all), so
now it doesn't exist as far as this particular court is concerned.

Anyone have better insight into this? I know SCO has tried to pull fast ones
before, but I should think that judges take a very dim view of surprises like
that after discovery is closed - especially extended discoveries like this is
likely to be.

[ Reply to This | # ]

On Warranties (or lack thereof)
Authored by: Anonymous on Tuesday, May 30 2006 @ 01:43 PM EDT
According to Darl:
As a consequence of Linux's unrestricted authoring process, it is not surprising that Linux distributors do not warrant the legal integrity of the Linux code provided to customers. Therefore legal liability that may arise from the Linux development process may also rest with the end user.
Before knocking Linux regarding its legal integrity, perhaps Darl should look at AT&T's own language in its Software Agreement:
7.03 ... AT&T ... make[s] no representations or warranties ... that the use of any SOFTWARE PRODUCT will not infringe any patent, copyright or trademark. AT&T ... shall not be held to any liability with respect to any claim by LICENSEE, or a third party on account of, or arising from, the use of any SOFTWARE PRODUCT.
Thus, all liability for using UNIX rests with the user.

[ Reply to This | # ]

Exhibit 7
Authored by: overshoot on Tuesday, May 30 2006 @ 06:11 PM EDT
In the "Fortune 1000" letter, paragraph 5:
Many Linux contributors were originally Unix developers who had access to Unix source code distributed by AT&T and were subject to confidentiality agreements, including confidentiality of the methods and concepts involved in software design."
(Emphasis added)

No wonder SCOX can't point to version, file, and line -- it isn't about the code, it's about SCOX owning the whole subject of programming. Also no wonder that SCOX doesn't want IBM to know that's all there is before it gets in front of a jury.

[ Reply to This | # ]

Time can waive something ?
Authored by: Anonymous on Tuesday, May 30 2006 @ 10:45 PM EDT
"By participating in two years of litigation, including discovery, Novell
has waived its rights to a stay for arbitration"

SCO has been participating in linux development for years before sueing IBM. So,
using the same logic : SCO has waived it's rights to linux.

[ Reply to This | # ]

SCO's legal fantasy and mine
Authored by: dcf on Wednesday, May 31 2006 @ 04:10 PM EDT

SCO's legal fantasy:

SCO: "Plaintiff, The SCO Group, Inc. ("SCO"), sues Defendant, Novell, Inc. ("Novell"), and alleges as follows:..."

defense: "Objection. Plaintiff is sticking its head in a noose"

judge: "sustained. Plaintiff will refrain from self-destructive actions"

Just think how many missteps SCO could have avoided in SCO v. IBM...

My fantasy: a short and sweet reply to SCO's point I (Novell should have objected to the second amended complaint):

Novell: "Plaintiff is solely responsible for its own legal strategy and the consequences thereof. Defendent is under no obligation to protect the plaintiff from failure to anticipate said consequences"

[ Reply to This | # ]
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