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SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Wednesday, March 12 2008 @ 09:14 PM EDT

Oh, yummy. Here is SCO's redaction of its Memorandum in Support of its Motion for Judgment on the Pleadings on Novell's Claims for Money or Claim for Declaratory Relief [PDF].

I have only had a moment to read it quickly, but I confess that I'm a little disappointed. I thought it would be better than this. I doubt any old timers will be surprised. In a sentence, SCO argues that if SCO had no right to enter into the SCOsource license agreements, and if Novell didn't approve SCOsource licensing, then Novell has no right to the money SCO got from SCOsource.

Uh huh. SCO logic, whereby all brain synapses fire in only one direction all the time -- in service of the noble goal of making sure SCO keeps Novell from getting its money, while forcing Novell to spend buckets more on lawyers. So, who gets the money in SCOland? Guess. Microsoft and Sun, you silly wabbits. Who'd ya think?

At least that's what I get from the implications of footnote 3 on page 13.

Why shouldn't those two enablers be rewarded for their lack of due diligence and for helping SCO hold up the marketplace in what Novell has called a scam? Bonus points for trying to destroy Linux. Certainly they deserve every penny back.

Oh wait. SCO already told the court, it's pretty much all gone. All the dollars they have left are different dollars. Hmm. What a dilemma. I know. How's this? The new moneybags partners offering to save SCO could pay all the perps? Why wouldn't that be a SCO dream come true?

Here's the docket:

507 - Filed & Entered: 03/12/2008
Redacted Document
Docket Text: REDACTION to [506] Sealed Document, SCO's Memorandum in Support of its Motion for Judgment on the Pleadings on Novell's Claims for Money or Claim for Declaratory Relief by Counter Defendant SCO Group. (Normand, Edward)

  


SCO's Redacted Memo in Support of Motion for Judgment on Pleadings | 383 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Off Topic
Authored by: The Mad Hatter r on Wednesday, March 12 2008 @ 09:25 PM EDT

Don't forget to use clickies.


---
Wayne

http://sourceforge.net/projects/twgs-toolkit/

[ Reply to This | # ]

News Picks
Authored by: The Mad Hatter r on Wednesday, March 12 2008 @ 09:26 PM EDT

Don't forget to use clickies.


---
Wayne

http://sourceforge.net/projects/twgs-toolkit/

[ Reply to This | # ]

Korrections
Authored by: The Mad Hatter r on Wednesday, March 12 2008 @ 09:28 PM EDT


If you think PJ made a mistake - bet you're wrong <G>.


---
Wayne

http://sourceforge.net/projects/twgs-toolkit/

[ Reply to This | # ]

but if they return the money to M$ and Sun
Authored by: Anonymous on Wednesday, March 12 2008 @ 09:30 PM EDT
how will they fulfill their moral obligation to York?

Oh, the hardships and tough decisions that moral animals like Darl must make.

[ Reply to This | # ]

Official SCO Group Thread
Authored by: The Mad Hatter r on Wednesday, March 12 2008 @ 09:30 PM EDT


It's been a long time since we've done this. We used to always invite the
management at The SCO Group to post here, and I think that it's time we extend
the invitation to them again.

So guys, please come and join us, and tell us why you are ding what you are
doing.


---
Wayne

http://sourceforge.net/projects/twgs-toolkit/

[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Steve Martin on Wednesday, March 12 2008 @ 09:43 PM EDT

From page 11 of the PDF, "Legal Standard":

In applying Federal Rule of Civil Procedure 12(c), the Court applies the standards under Rule 12(b)(6).
F.R.C.P. 12(c), "Motion for Judgment on the Pleadings"
After the pleadings are closed — but early enough not to delay trial — a party may move for judgment on the pleadings.
F.R.C.P. 12(b), "How to Present Defenses":
Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:

[ ... ]

(6) failure to state a claim upon which relief can be granted;
Color me stupid if you wish, but I can't for the life of me see how 12(c) could be applied "under Rule 12(b)(6)", nor do I see what either has to do with this Motion. (I guess my IANAL is showing...)

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

[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Stumbles on Wednesday, March 12 2008 @ 09:45 PM EDT
Lol PJ. Your ability to summarize things is some of the
best I have ever seen. Loved it.

---
You can tuna piano but you can't tune a fish.

[ Reply to This | # ]

SCOXQ.pk trades 100 shares for $15
Authored by: Anonymous on Wednesday, March 12 2008 @ 10:06 PM EDT
SCOXQ.PK had a singe trade of 100 shares at 15 cets a shre today.
Dennis H

[ Reply to This | # ]

This won't get far
Authored by: Anonymous on Wednesday, March 12 2008 @ 10:10 PM EDT
The motion puts the cart before the horse.

They ask for the monetary aspects of the case to be dismissed prior to trial due
to Novell stating that TSG had no authority to enter into the agreements. The
problem being the ruling on whether they did in fact have authority will not be
determined until the summary judgment motion is decided, the oral argument is I
understand it scheduled on the Tuesday on the week of the trial.

As such this motion cannot be decided until the trial starts and is thus moot.

[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Steve Martin on Wednesday, March 12 2008 @ 10:55 PM EDT

I wonder if there's a sneaky motive behind this. In footnote 8, TSG says that "if necessary, the Court may treat this as a request for reconsideration of any part of its Order dated August 10, 2007, which would be required to effectuate such dismissal." Now let's take a look at the chronology here:

  • August 10 -- Judge Kimball rules against TSG on some significant issues.
  • August 17 -- TSG and Novell issue a Joint Statement to the Court, outlining each party's position on where things stand after the August 10 ruling.
  • August 24 -- Novell files its Motion to Voluntarily Dismiss its Third Claim for Relief, and also its Motion to Strike SCO's Jury Demand. Novell claims that, since claims for damages were dropped, everything they were asking for was equitable in nature, and so TSG was not entitled to a jury trial.
  • Today -- TSG casually mentions to Judge Kimball that he may "consider" this Motion as a motion to reconsider the August 10 ruling, if needed.
What happens if Kimball for some reason reconsiders the August 10 ruling and perhaps (for the sake of argument) puts some stuff back into play that had previously been decided? Does this count as an "enlargement" or "relitigation" of the issues, as mentioned in Novell's statement to the Court? If so, does that mean that Novell might re-institute their damages claim, and thereby hand TSG their jury trial?

In short, could this possibly be a last-ditch, back-door attempt by TSG to get Boies back in front of a jury?

Or is that too far-fetched, even for The SCO Group?

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

[ Reply to This | # ]

But Judge Kimball Already Ruled....
Authored by: Anonymous on Wednesday, March 12 2008 @ 10:55 PM EDT
that SCO owes SOME (to-be-determined) amount of money to Novell for the SUN/M$
ScoSource contracts. It seems to me that if the Judge already ruled on that
question, then trying to re-argue it here isn't going to change the upcoming
trial.

I think this is really for the sake of a future appeal; or perhaps more
importantly, add to all the other recent fluff pronouncements to hopefully
assure whoever might have 95 million dollars to lend, that lots of that money
won't go directly and immediately to Novell.

[ Reply to This | # ]

Who really loses then?
Authored by: Anonymous on Wednesday, March 12 2008 @ 11:46 PM EDT
So in SCO's version the licences are invalid.

While Microsoft and Sun may not be liable for "being misled", Sun must
stop distribution of Open Solaris until a contract is renegotiated while
Microsoft would need to stop what?

Again this seems to target open source in any form.

On the other hand do the contracts stand and SCO owes Novell all the money,
minus five percent, plus sanctions.

[ Reply to This | # ]

For a dollar, this could have been settled
Authored by: SpaceLifeForm on Thursday, March 13 2008 @ 12:09 AM EDT
Months ago, I suggested that Novell should give up on the royalties, and now, here we have SCOX basically willing to concede the point that the SCO Source licenses were not authorized by Novell, *iff* Novell will lose on their claim to the royalties.

So, if the court buys into this argument at all, and Novell's counterclaim 4 is upheld, what is the loss? SCOX has no money to pay royalties anyway.

If Novell had made an offer to concede on the royalty front for a dollar, *without* losing on counterclaim 4, then things could have become unstuck.

But, that did not happen obviously, and now SCOX is trying to bargain at the last minute via the court.

I think SCOX is trying to angle for a way to lose on counterclaims 6,7, and 8, instead of losing on 4. They have no money anyway, and have filed for Chapter 11, so I don't believe they care if they lose on 6,7, and 8.

I really believe they are totally scared of losing on 4.

Backlink - A Chart of Novell's Counterclaims and SCO's Reply

---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

Unbelievable
Authored by: mobrien_12 on Thursday, March 13 2008 @ 12:15 AM EDT
No, BSF...It's not logic.

If SCOG sold scosource without Novells approval, it's called overstepping one's
authority, and one doesn't get to profit from it.


[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Anonymous on Thursday, March 13 2008 @ 12:21 AM EDT
As I see it, if Novell cannot get any money then they can require the return of
all of Novell's information that the deal covered, and that Sun and MS desist
from using that info. This could include recalling any software that utilises
this info. (Withdrawal of vista anyone). If there was no information transferred
the corporate veil is well and truely pierced as it would at least suggest that
MS and Sun provided money only to keep the litigation going. This could be the
smoking gun that not only turns Caldera into a very smoky hole, but puts MS and
Sun well and truely in the firing line.

[ Reply to This | # ]

SCO will have to give the money back to Microsoft/Sun not Novell
Authored by: Anonymous on Thursday, March 13 2008 @ 01:51 AM EDT
In the case of an invalid contract, a counterparty who made payments under the purported agreement is entitled to the restitution of those payments. In the context of a principal-agent relationship, if the principal "decides not to ratify he must return the fruits of the unauthorized act." (p.8)

Methinks this legal quibble may trouble Novell. Surely, if SCO were without authority to enter into the Sun and Microsoft agreements, SCO has to give them the money back, not hand any part of it over to Novell. Or has not this already been decided by Kimball?

[ Reply to This | # ]

Carlyle Capital collapse - SNCP affected?
Authored by: Anonymous on Thursday, March 13 2008 @ 03:15 AM EDT

Carlyle Capital just went bust, due to some really bad leveraged investments in subprime mortgage-based securities. They've defaulted on $16 billion in debt so far, with more to come.

Carlyle Capital is part of the Carlyle Group, founded by Steven Norris. Yes, the Steven Norris of SNCP, which proposes to back SCO financially.

SNCP's web site says that they "take advantage of the business experience and relationships of its Investment Committee, including Steve Norris' long-standing relationships and substantial private equity experience as co-founder of The Carlyle Group".

This raises questions about SNCP's financial strength. They're normally a "co-investor", alongside other investors like the Carlyle Group. The Carlyle Group has other problems to deal with right now. They just put $150 million into Carlyle Capital, and they're probably not going to get it back. Novell, IBM, and other creditors can reasonably ask whether the $95 million needed to cover SCO's potential judgments is actually available.

So how does that work? Discovery against SNCP, or what? Or will SNCP back out of the deal?

[ Reply to This | # ]

NOVEL keeps the monnies
Authored by: Anonymous on Thursday, March 13 2008 @ 04:21 AM EDT
Relax, this is not going to fly. The fact that SCO had no authority to enter
into these licenses, doesn't mean that the license is no good. If Novel choses
to honor the licenses, these are going to transfer to Novel and Novel gets all
the money. Novel just wants a declaration that SCO cant do this again.

[ Reply to This | # ]

So let MS and Sun have the cash back
Authored by: Anonymous on Thursday, March 13 2008 @ 04:59 AM EDT
And then Novell will sue them for copyright infringement for the cash they
want.

A figure is already on the table as to the valid worth of this intellectual
property: the value SCO got from them.

Boned!

[ Reply to This | # ]

Who has most rights to the money?
Authored by: Anonymous on Thursday, March 13 2008 @ 05:20 AM EDT
There seem to be two logical positions that could be taken here:

1) The licences are valid because SCO was acting as an agent for Novell when it
sold them. Not obtaining specific authorization from Novell first was a minor
procedural breach of contract.

2) The licences are not valid because SCO didn't have authorization to act as an
agent.

Now follow the money.

In the first case, the money is owned by Novell. Not owed to Novell such that
they just get a potion along with the other debtors, but already owned by
Novell, at the trough before enyone else.

In the second case, SCO owes MS and SUN a refund. Which means no money goes to
Novell, whch I imagne SCO would prefer. Here, the debt to Sun and MS is probably
just another business debt in the pot with the rest, with much more chance of
skimming it in SCOs preferred directions and to those friends that SCO decides
to pay quickly, before the axe falls. MS and Sun might not even knock on the
door to collect their slices.

Another thought that runs through my mind: If the money belongs to Novell, then
Novell probably owns - not is owed, but owns - all the contents of SCOs bank
account. If the loan that they are being offered gets poured into that bank
account, could that loan money end up going in Novells direction too, with the
debt on the loan just joining the rest of SCOs debt?

[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Ian Al on Thursday, March 13 2008 @ 06:00 AM EDT
I think this is a wizard wheeze. However, I am not sure that Judge Kimball will
not just cuff them behind the ear and sanction them for being frivolous in his
court.

SCOG refused Novell the opportunity to audit the SCOSource contracts saying to
Novell and Judge Kimball that they were nothing to do with SVRX. On August 10
the Judge said that SCOG were wrong. The contracts did include SVRX. The judge
was surprised that Novell did not ask him to find that SCOG lacked sufficient
authority under the APA to let the contracts.

So SCOG are maintaining that, because of their secrecy and deception and because
of the actions of the judge, Novell are not permitted to ask for the proceeds of
the contract. However, the lack of authority was no doing of Novell and the
court. It was because of SCOG's activities. They can be found to have acted
without authority and the judge can then say to Novell 'do you want to do the
audit of the contracts now and decide whether you agree to them being valid?'
without the question of SCOG not having authority being changed in any way.

The judge fixed his gaze on SCOG during the later court proceedings and warned
them, explicitly, that they must allow the financial and contract audits going
forward. He had assumed that the financial data obtained by Novell during
discovery was sufficient to make a financial audit moot for the MS and Sun
contracts, but Novell told him that this was not true.

What the judge did not comment on was SCOG freezing the court case by going
bankrupt when they had told him they had no intention of so doing. I'm sure the
judge will ask them if, as they promised to Judge Gross, they had continued to
allow the audits and pay Novell the royalties as required by the APA. He will
ask them whether they had raised the issue of the Sun and MS contracts as a
result of his findings of 10th August. If they had not gone out of their way to
allow a belated validation of the two contracts I am sure that he will hang the
pdf in the smallest room in his court and find in Novell's favour.

As Judge Judy would say, that's all!

---
Regards
Ian Al

When nothing else makes sense, use Linux.

[ Reply to This | # ]

Getting Murky
Authored by: kh on Thursday, March 13 2008 @ 06:19 AM EDT
Either the licenses were invalid because SCO never got permission nor paid
royalties or they are valid and SCO converted the money illegally or they were
valid and not UNIX licenses.

I think MS can't really afford to admit that it was funding SCO with anti-trust
cases breathing down its neck.

So if the licenses were invalid:
1) will MS and Sun want their money back? I think they would have to at least
pretend they want it back.

2) Do they really need the licenses. I think they would have to pretend to have
really needed the licenses. Will MS and Sun be forced to rebuy those licenses
from Novell direct and essentially repay all that money?

3) Was SCO acting in a criminal way? It's a lot of money it seems to me.

If the licenses are valid and not UNIX licenses, what were MS and Sun actually
paying for? Can they afford to be seen to be funding SCO?

What a mess. Looks like there's going to be some major butt covering in the
near future.

[ Reply to This | # ]

Novell didn't steal it, so it's not theirs!
Authored by: DaveJakeman on Thursday, March 13 2008 @ 07:12 AM EDT
This isn't the usual overlength SCO guff, so SCO think they're onto something.
But does what is written in the APA concerning the Novell/SCO principal/agent
relationship trump SCO's "matter of law" argument? Novell's reply
should be interesting.

---
Monopolistic Ignominious Corporation Requiring Office $tandard Only For
Themselves

[ Reply to This | # ]

How dumb are Novell's lawyers?
Authored by: Anonymous on Thursday, March 13 2008 @ 07:36 AM EDT
I see many comments here which all seem to view this development as though it
were a huge surprise, yet it has been mentioned on Groklaw many times before.
And, with all repect, if it's been so obvious to so many here I cannot believe
that it has completely escaped the attention of Novell's lawyers (but IANAL).

So, if we operate on the assumption that Novell's lawyers are not dumb enough to
work for SCO, what might be their way out of the apparent box created for them ?


I suspect the answer lies in the tense of Novell's requested declaration, that
Novell "had" no authority to enter into those agreements. This is
simply asking for a recognition by the court that Novell did not approve the
agreements prior to their establishment.

If Novell had approved the agreements, Novell would then be faced with having to
explain why they waited so long to ask for their cut. They would also be facing
issues of precedent for any subsequent agreements SCO may have signed, such as
the EV1 license. With the declaration they have requested, Novell forecloses any
such argument and has precedent on their side if SCO (or its mutant offspring)
tries something similar.

If Novell obtains the declaration, they can focus argument over what should
happen to the money : the motion mentions that this is intended to narrow issues
in court. Novell can choose (I suppose) to approve the agreements post facto or
to withhold their approval possibly resulting in further activity regarding
misrepresentation and unjust enrichment. In the latter case it would be
particularly interesting to see whether Microsoft or Sun choose to enter into
similar agreements with Novell's approval and to ask for their money back from
the earlier agreements.

The court has already decided that Novell is entitled to a portion of the money
received by SCO on the basis that these are SVRX licenses. The court may pick
through SCO's arguments and decide that, far from Novell not being entitled to
the money, SCO is not entitled to keep the money either way - it must return it
to Microsoft and Sun or, if not, remit it to Novell. In that case SCO becomes
bankrupt pending appeal. I also suspect EV1 might be very interested if there
was a finding by the court that their license was invalid and SCO should not
have demanded money for it.

Finally, we need to bear in mind that Novell was the defendant in this case and
the first goal is to end the litigation without being crippled. Novell's lawyers
have targeted the money which funded the litigation, because without it the
litigation dies. In that respect, it doesn't matter where the money goes so long
as SCO don't have it anymore (in fact they'll be deep in the red, or deep in
something anyway).

To summarize, despite SCO's caterwauling, Novell's requested declaration doesn't
decide what happens to the money - it merely makes a statement that Novell had
no authority to enter into the agreements which brought the money. And I don't
think Novell's lawyers are dumb at all.

-------------------
Nigel Whitley

[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Anonymous on Thursday, March 13 2008 @ 08:41 AM EDT
I don't agree with the SCO law suit, but I have always wondered if this argument
was valid. My thoughts were....

If the SCOsource was not approved by NOVELL, would it be NULL and VOID?

If it was NULL and VOID, who is obligated to tell MICROSOFT and SUN etc? Do
they get their money back?

I'm no lawer, but this seems like an ok argument. What am I missing?

[ Reply to This | # ]

I think SCOG are in trouble
Authored by: Anonymous on Thursday, March 13 2008 @ 09:00 AM EDT
If I remember correctly, money from sales of SVRX licenses should be paid 100%
to Novell and then Novell gives SCOG a 5% fee.

If SCOG enter into a license without authorisation, the money isn't their's it
is Novell's and I'm not sure that Novell has to give them the 5%.

IANAL

[ Reply to This | # ]

the old "wrong crime" defence
Authored by: Anonymous on Thursday, March 13 2008 @ 09:56 AM EDT
Sorry your honor, we are not guilty of stealing any money from Novell, we
couldn't have since as they claim we were not authorized to sell a license and
do not own the copyrights.
It was a fraud, and since we have not been charged with fraud this case must be
dismissed.

[ Reply to This | # ]

SCO's SCOSource was a compete fraud and sham
Authored by: tz on Thursday, March 13 2008 @ 10:01 AM EDT
Which Novell had no part in, so Sun and Microsoft gave gobs of cash for the
title to nothing?

Possible - I've read classic con games where the customer is left with a bag of
cut-up newspaper instead of bills, or a mutt instead of a pedigreed dog.

Hey, Microsoft!, Sun!, FBI/DOJ/Spitz.. well the first few, charge SCO with
running a pigeon drop.

SCO = Scammy Congame Operator

[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Anonymous on Thursday, March 13 2008 @ 11:04 AM EDT
I would love to see Microsoft or Sun now put in a claim against SCO for
falsifying the agreements and demanding their money back.

[ Reply to This | # ]

If SCOG wins, they loose
Authored by: Anonymous on Thursday, March 13 2008 @ 12:35 PM EDT

Did Novell just succeed at forcing SCOG into a position where: if SCOG wins, they loose.

Let's see...

    If Novell wins, SCOG looses.
    If SCOG wins, but the court finds SCOG entered agreements they were not entitiled to, SCOG looses.
    I'm not sure how SCOG's alternative argument would work as I can't see the court agreeing with SCOG that Novell authorized the licenses. This one is an unknown.
So the only way SCOG can win is if the Judge finds a fact in dispute and declines to rule as a PSJ.

RAS

[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Anonymous on Thursday, March 13 2008 @ 01:46 PM EDT
Criminal charges should be filed!<br>
If we substitute a real asset such as water or electricity for 'svrx licenses',
the absurdity of their claims show criminality.<br>

Lets assume the agreement was for SCO to collect payments for water or
electricity, and to not sell to any new accounts without Novell's
approval.<br>

What SCO did then was to sell Novell's assets and keep the cash. However, SCO is
now claiming that if they aren't allowed to keep the money, it should be
returned to the buyer? Then where's Novell's compensation for these third
parties using it's assets?<br>
Granted, the assets in question are 'infinite' IP assets, as opposed to
something finite, like water or electricity, but that makes no
difference.<br>
How ironic is that? That SCO would accuse IBM, 'Linux', and others of stealing
UNIX assets, when this is exactly what they have done?<br> IMHO, SCO's
chief cook and bottle washer, Mr. McBride should leave the courtroom in
handcuffs .<br>

Of course, this post is my opinion and may or may not reflect the views of
Groklaw, it's owners, assignees, employees, lackeys or other posters to this
site. My opinion is what it is, and this post reflects that and nothing more -
my opinion.


[ Reply to This | # ]

SCO's Redacted Memo in Support of Motion for Judgment on Pleadings
Authored by: Anonymous on Thursday, March 13 2008 @ 10:30 PM EDT
According to the SCO interpretation, either SCO had the authority to enter into
the license agreements in which case monies are due Novell or SCO did not have
the authority and the monies are due the licensees. In other words either the
4th claim is valid or the 6, 7, and 8th claims are.

The reasoning goes that since Novell has not assented to the licenses then they
are invalid if SCO did not have the authority. In which case all the money
should go back to the licensees.

What we seem to be overlooking is the fact that until a court judgment regarding
SCO's authority is made, Novell has no standing to accept or decline the
licenses. Until that happens, we must operate under the assumption that SCO had
that authority. When the matter of authority is cleared up, Novell is then free
to make whatever decision suits them.

SCOs entire argument is based on Novell's repudiation of the licenses but no
such action has occurred since Novell does not yet have standing to do so.

[ Reply to This | # ]
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