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Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Thursday, June 10 2010 @ 04:14 PM EDT

Here you go, munchkins. Judge Ted Stewart has ruled for Novell and against SCO. Novell's claim for declaratory judgment is granted; SCO's claims for specific performance and breach of the implied covenant of good fair and fair dealings are denied. Also SCO's motion for judgment as a matter of law or for a new trial: denied. Novell is entitled to waive, at its sole discretion, claims against IBM, Sequent and other SVRX licensees.

CASE CLOSED!

Maybe I should say cases closed. The door has slammed shut on the SCO litigation machine. The judge writes in the Memorandum Decision and Order about SCOsource, "Finally, while SCO's witnesses testified that the copyrights were 'required' for SCO to run its SCOsource licensing program, this was not something that SCO ever acquired from Novell." He totally got it. He noticed Darl McBride admitted that SCO didn't need the copyrights. It couldn't be any better if I'd written it myself.

Was the jury misled or confused? Not at all, the judge writes: "The jury could have rejected the testimony of SCO's witnesses for a number of reasons, including their lack of involvement in drafting the APA, the fact that there was little testimony on any actual discussions concerning the transfer of copyrights, or that many of the witnesses had a financial interest in the litigation."

"The Clerk of the Court is directed to close this case forthwith," Stewart writes in the final judgment. I believe that means SCO v. IBM is essentially over now, unless IBM wishes to pursue its counterclaims.

And now it is -- finally -- time, once again, for my red dress! And a huge thank you to Michael Jacobs and the team at Morrison & Foerster, who never gave up but, more importantly, showed that you can fight hard and win with ethics and dignity, and to Sterling Brennan of Workman|Nydegger, who was frankly absolutely wonderful at trial. And thank you to you, Groklaw volunteers, because we made a difference in this world.

SCO's stock I see is today worth a nickel. I consider that overpriced, personally. It's not worth a plugged nickel. Well, I know nothing about stocks, so don't go by me. Here's what I can't wait to read: SCO's press release. Remember when they put them out after all major court events? And Rob Enderle, Dan Lyons, and Maureen O'Gara. Can't wait. Say, didn't Paul Murphy say he'd stop blogging if SCO lost? Promises, promises.

And may I be forgiven for simply stating the obvious? Groklaw was never biased. We merely had sufficient expertise to call it right. And we did. SCO really did fall downstairs, hitting its head on every step. Here's the real question, though. How come Boies Schiller couldn't call it right, when a mere paralegal could, and so protect its client from going forward with a case that to me was obviously a loser from day one? Maybe they tried. But review this 2003 teleconference transcript from our Transcripts page with Mr. Boies in attendance and decide for yourself if they were dragged in or willingly jumped. It's so puzzling to me.

There may be an appeal, you say? Yes, true. I hope there is one, because Boies Schiller has to do it for free, under its contract with SCO, and they claim they are already in the red on this case. I'd call that a healthy learning experience.

You know what else I can't wait to hear? What SCO's trustee Edward Cahn tells the bankruptcy court now. First he told it that SCO had worthy claims, then he said they had a 50-50 chance, all to justify going forward with this turkey of a case, at huge expense to SCO.

And to all the folks who said viciously untrue things about Groklaw, apologies would be most welcome.

Here it all is:

06/10/2010 - 876 - FINDINGS OF FACT AND CONCLUSIONS OF LAW that Novells claim for declaratory judgment is GRANTED ; that SCOs claims for specific performance and breach of the implied covenant of good faith and fair dealing are DENIED. Signed by Judge Ted Stewart on 06/10/2010. (asp) (Entered: 06/10/2010)

06/10/2010 - 877 - MEMORANDUM DECISION denying 871 Motion for Judgment as a Matter of Law ; denying 874 Motion for New Trial. Signed by Judge Ted Stewart on 06/10/2010. (asp) (Entered: 06/10/2010)

06/10/2010 - 878 - JUDGMENT in favor of Novell, Inc. against SCO Group. Case Closed. Signed by Judge Ted Stewart on 06/10/2010. (asp) (Entered: 06/10/2010)

Update: Novell has now issued a statement:
United States District Court Judge Issues Final Judgment Confirming Novell Ownership of UNIX Copyrights and Denying Other SCO Claims

June 11th, 2010 by Ian Bruce

Yesterday, United States District Court Judge Ted Stewart issued a Final Judgment regarding the long standing dispute between SCO Group and Novell. As part of the decision, the Court reaffirmed the earlier jury verdict that Novell maintained ownership of important UNIX copyrights, which SCO had asserted to own in its attack on the Linux computer operating system. The Court also issued a lengthy Findings of Fact and Conclusions of Law wherein it determined that SCO was not entitled to an order requiring Novell to transfer the UNIX copyrights because “Novell had purposely retained those copyrights.” In addition, the Court concluded that SCO was obligated to recognize Novell’s waiver of SCO’s claims against IBM and other companies, many of whom utilize Linux.

Commenting on the Judgment, Novell President and CEO Ron Hovsepian stated “After almost a decade of litigation, we are very pleased to see this final judgment uphold all of Novell’s claims. I am very proud of this achievement and the work Novell has done to ensure Linux remains free and open.”

Update 2: O'Gara has indeed written her article, titled "Novell Wipes the Floor with SCO." You'd never guess she was a participant in the litigation. One snip:
Unless it decides to appeal, it's all over for SCO and it's not clear SCO has the financial staying power to last through an appeal. The legal bill for another appeal is already paid; it's SCO basic viability that's in question.

A call to SCO's general counsel went unanswered.

She says "unless there's a miracle" the case against IBM won't go forward now. I'm no theologian, but I'm pretty sure that if SCO is praying to God for a miracle, it's not the type of prayer that gets answered. Even Santa Claus asks if you've been naughty or nice.

She also spins some more, "It also lost its right to sue IBM for copying Unix code into Linux." That was a fantasy. It was IBM's own code SCO sued over, on a claim of control of derivative works under a license. And someone who did visit her site tells me her actual wording was "...unless there is a miracle IBM will never stand trial." Spun as IBM getting away with something. Some things never change, I see. [http://linux.sys-con.com/node/1428534 if you must.] Now I hope IBM does pursue its counterclaims, like its Lanham Act claims for all the trash talk it endured at the hands of SCO and its supporters.

Remember Groklaw's Alanyst's poem about IBM's lawyers, The Nazgul, A Derivative Work of the Intellectual Property of Edgar Allan Poe?

And the Nazgul, never flitting, still is sitting, still is sitting
On the pallid pasty bust of Bill above my office door;
And in gloom I sit defeated, crushed by lies that I repeated,
And the innocence I pleaded has been laughed down to the floor;
And the bankruptcy attorney lurking round my cellblock door
Shall release me — nevermore!
Oh my, but it's been so much fun doing Groklaw with you guys. Fun, yes, but serious work with a purpose. Imagine a world where SCO's version of copyright and contract law won.

Here's the Final Judgment wording:

This matter came before the Court for trial on March 8, 2010, through March 26, 2010. Based on the Jury Verdict and the Court’s Findings of Fact and Conclusions of Law, Final Judgment is entered as follows:

1. Judgment is entered in favor of Novell and against SCO on SCO’s claim for slander of title pursuant to the Jury Verdict.

2. Judgment is entered in favor of Novell and against SCO on SCO’s claim for specific performance pursuant to the Court’s Findings of Fact and Conclusions of Law.

3. Judgment is entered in favor of Novell and against SCO on Novell’s claim for declaratory relief pursuant to the Court’s Findings of Fact and Conclusions of Law. Specifically, the Court declares:

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.

4. Judgment is entered in favor of Novell and against SCO on SCO’s claim for breach of the implied covenant of good faith and fair dealing pursuant to the Court’s Findings of Fact and Conclusions of Law. The Clerk of the Court is directed to close this case forthwith.

SO ORDERED.

DATED June 10, 2010.

BY THE COURT:

______[signature]__________________
TED STEWART
United States District Judge

And here's the Memorandum Decision and Order, followed by the Findings of Fact:

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

IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

THE SCO GROUP, INC., a Delaware
corporation,

Plaintiff/Counterclaim Defendant,

vs.

NOVELL, INC., a Delaware corporation,

Defendant/Counterclaim Plaintiff.

___________________

Case No. 2:04-CV-139 TS

MEMORANDUM DECISION AND
ORDER DENYING SCO'S
RENEWED MOTION FOR
JUDGMENT AS A MATTER OF
LAW OR, IN THE ALTERNATIVE,
FOR A NEW TRIAL

___________________

This matter comes before the Court on SCO's Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial. For the reasons discussed below, the Court will deny the Motion.

1

I. BACKGROUND

This matter came before the Court for trial from March 8, 2010, through March 26, 2010.

The sole issue before the jury was SCO's claim for slander of title.*1. After its deliberations, the jury found that the amended Asset Purchase Agreement ('APA') did not transfer the UNIX and UnixWare copyrights from Novell to SCO.*2 Because it found that SCO was not the owner of the UNIX and UnixWare copyrights, there was no need for the jury to reach SCO's slander of title claim.

In the instant Motion, SCO argues that the 'jury simply got it wrong.'*3 As a result, SCO argues that it is entitled to judgment as a matter of law or, in the alternative, a new trial. Novell opposes the Motion.

II. DISCUSSION

A. JUDGMENT AS A MATTER OF LAW

Under Fed.R.Civ.P. 50, a court should render judgment as a matter of law when 'a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue.'*4 A party which has made a motion for

2

judgment as a matter of law under Rule 50(a) prior to a jury verdict may renew that motion under Rule 50(b) after judgment is rendered.

"In [entertaining a motion for judgment as a matter of law], the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence."*5 "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge."*6

The Tenth Circuit has made it clear that judgment as a matter of law is to be "cautiously and sparingly granted,"*7 and is only appropriate when there is no way to legally justify a jury verdict. Judgment as a matter of law is appropriate only "[i]f there is no legally sufficient evidentiary basis . . . with respect to a claim or defense . . . under the controlling law,"*8 or if "the evidence points but one way and is susceptible to no reasonable inferences which may support the opposing party's position."*9 "Judgment as a matter of law is improper unless the evidence so overwhelmingly favors the moving party as to permit no other rational conclusion."*10

3

SCO argues that it is entitled to judgment as a matter of law "because the verdict cannot be squared with the overwhelming evidence and the law."*11 The Court respectfully disagrees.

The jury was presented with two versions of the deal between Novell and Santa Cruz, SCO's predecessor in interest. On the one hand, SCO argued that the deal was essentially an acquisition of the UNIX and UnixWare business, wherein Santa Cruz acquired all of the business, including the copyrights. Novell, on the other hand, argued that the deal was more complex and that Santa Cruz only acquired the UnixWare business and that Novell retained significant rights in the UNIX business, such as the copyrights and the right to receive SVRX royalties. Evidently, the jury found Novell's version of facts to be more persuasive. This conclusion is well supported by the evidence.

There was substantial evidence that Novell made an intentional decision to retain ownership of the copyrights. For instance, Tor Braham, outside counsel for Novell and lead drafter of the APA, testified that Novell was selling to Santa Cruz the UnixWare business and retaining the UNIX business.*12 Mr. Braham testified that the exclusion of the copyrights was agreed upon by the parties.*13 Mr. Braham stated that the purpose for excluding the copyrights was to protect Novell's interest in the UNIX business that it had retained.*14

4

Mr. Braham's testimony is supported by James Tolonen, Novell's Chief Financial Officer at the time of the APA and Amendment No. 2, who testified that the copyrights were purposefully excluded from the assets to be transferred to Santa Cruz.*15 Mr. Tolonen explained that retaining the copyrights was: (1) "part of [Novell's] strategy and really necessary under the nature of the transaction"; (2) necessary because Santa Cruz was relatively small and could not afford the entire value; (3) necessary to avoid ownership issues with other products; and (4) necessary because of concerns with the long-term viability of Santa Cruz.*16

That testimony is further supported by Michael Defazio, an executive vice president at Novell at the time of the APA, who testified that the intent of the APA was not to transfer the copyrights and that the copyrights were retained as a way to "bulletproof" Novell's financial asset stream.*17

All such testimony is further supported by the minutes of Novell's Board of Directors, which resolved that "Novell will retain all of its patents, copyrights and trademarks (except for the trademarks UNIX and UnixWare)."*18

It is true that SCO presented more witnesses who testified that it was the intent of the parties to transfer the copyrights as part of the deal but, as the jury was instructed, the number of

5

witnesses is not determinative.*19 Thus, there was more than sufficient evidence on which the jury could determine that it was not the parties intent to transfer the copyrights.

SCO nonetheless argues that the copyrights were required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies under Amendment No. 2. Again, there was testimony presented that it was not the intent of Novell, in executing Amendment No. 2, to transfer ownership of the copyrights. Allison Amadia, who worked as in-house counsel for Novell at the time of Amendment No. 2 and was the lead negotiator and drafter of that document, testified that after reviewing the APA and consulting with Tor Braham and James Tolonen, the decision was made not to alter the APA with regard to copyright ownership.*20 In fact, Novell rejected a draft amendment from SCO which would have transferred ownership of the copyrights "which pertain to the UNIX and UnixWare technologies and which SCO has acquired hereunder. . . ."*21 Ms. Amadia further testified that Amendment No. 2 was meant to affirm that SCO had the right to use, manufacture, and make modifications to the UNIX technology. James Tolonen similarly testified that Amendment No. 2 was meant to address use rights, not ownership.*22

Further, SCO witnesses acknowledged that SCO could operate its UnixWare business without the copyrights. Mr. McBride, SCO's former CEO, admitted that SCO could run its

6

UnixWare business without the copyrights.*23 Mr. Tibbitts, SCO's general counsel, similarly stated that SCO could run its UNIX product business without the UNIX and UnixWare copyrights.*24 Indeed, SCO had offered to sell its business without the copyrights.*25 Moreover, it was undisputed that SCO would own any newly developed code and could obtain copyrights to protect that code.*26 Finally, while SCO's witnesses testified that the copyrights were "required" for SCO to run its SCOsource licensing program, this was not something that SCO ever acquired from Novell.

SCO relies on Recital A in arguing that SCO acquired the "Business," which is defined as "the business of developing a line of software products currently known as Unix and UnixWare, the sale of binary and source code licenses to various versions of Unix and UnixWare, the support of such products and the sale of other products which are directly related to Unix and UnixWare."*27 SCO, however, ignores Recital B which states that Santa Cruz would only acquire "certain assets."*28 Those "certain assets" are set forth in more detail in Schedule 1.1(a) and do

7

not include the excluded assets set out in Schedule 1.1(b).*29 Under the plain language of the original APA, the copyrights were excluded from the transaction.*30

SCO also points to Section II of Schedule 1.1(a), which transferred "[a]ll of [Novell's] claim arising after the Closing Date against any parties relating to any right, property or asset included in the Business."*31 However, SCO provided no evidence of any such claims that it was entitled to pursue.

Based on the above, the Court finds that SCO is not entitled to judgment as a matter of law on its claim for copyright ownership.

B. NEW TRIAL

SCO moves, in the alternative, for a new trial under Fed.R.Civ.P. 59. Rule 59(a) provides that a new trial may be granted "after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court."*32 The Tenth Circuit has stated that "[a] motion for new trial on the grounds that the jury verdict is against the weight of the evidence . . . involve[s] the discretion of the trial court . . . . The inquiry focuses on whether the verdict is clearly, decidedly or overwhelmingly against the weight of the evidence."*33

8

SCO argues that the "overwhelming weight of the evidence . . . [shows] that a transfer of copyrights was intended."*34 It is certainly true that SCO presented more witnesses than Novell concerning the intent of the parties, however, the mere fact that SCO presented more witnesses does not show that the verdict is clearly, decidedly, or overwhelmingly against the weight of the evidence. The jury could have rejected the testimony of SCO's witnesses for a number of reasons, including their lack of involvement in drafting the APA, the fact that there was little testimony on any actual discussions concerning the transfer of copyrights, or that many of the witnesses had a financial interest in the litigation.

SCO also relies on the "Forthright Negotiator Rule." Under that rule,

Where the parties assign different meanings to a term,
it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made
(a) that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party; or
(b) that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the first party.*35
Here, there is no evidence to support the argument that Ms. Amadia had reason to know that SCO attached a different meaning to Amendment No. 2. Indeed, Ms. Amadia specifically testified that she informed Mr. Sabbath that Novell would not transfer the copyrights.*36

SCO also cites to the TLA as providing support for the transfer of copyrights. The testimony concerning the TLA, however, affirmed that one of the purposes of that agreement was

9

to allow Novell the right to use post-APA SCO-developed code.*37 Further, the TLA licensed assets that were transferred under the APA, which did not include the copyrights.

SCO also points to various course of performance evidence in support of its argument. However, this evidence, either individually or in combination, does not support the notion that it was the intent of the parties to transfer copyright ownership.

Finally, SCO argues that the copyrights were required for it to exercise its rights with respect to the acquisition of the UNIX and UnixWare technologies. However, as set forth above, there was evidence that SCO did not need the copyrights to operate the UnixWare business, that it could obtain copyrights to protect any newly developed code, and that the SCOsource licensing program was not something that SCO acquired from Novell. Thus, this argument fails.

For each of these reasons, the Court finds that the verdict is not clearly, decidedly, or overwhelmingly against the weight of the evidence. Therefore, SCO is not entitled to a new trial.

III. CONCLUSION

It is therefore

ORDERED that SCO's Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial (Docket No. 871) is DENIED.

DATED June 10, 2010.

BY THE COURT:

_______[signature]_________________
TED STEWART
United States District Judge

10

*1 Novell's counterclaim for slander of title was disposed of on a Rule 50 Motion and the parties remaining claims were tried to the Court and are addressed in the Court's Findings of Fact and Conclusions of law issued contemporaneously herewith.

*2 Docket No. 846.

*3 Docket No. 872 at 1.

*4 Fed. R. Civ. P. 50(a)(1).

*5 Lytle v. Household Mfg., Inc., 494 U.S. 545, 554-555 (1990).

*6 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

*7 Weese v. Schukman, 98 F.3d 542, 547 (10th Cir. 1996).

*8 Baty v. Willamette Indus., Inc., 172 F.3d 1232, 1241 (10th Cir. 1999) (quoting Fed. R. Civ. P. 50).

*9 Finley v. United States, 82 F.3d 966, 968 (10th Cir.1996).

*10 Shaw v. AAA Eng'g & Drafting, 213 F.3d 519, 529 (10th Cir. 2000).

*11 Docket No. 872 at 4.

*12 Trial Tr. at 2347:2-5.

*13 Id. at 2363:19-23.

*14 Id. at 2364:3-11.

*15 Id. at 2021:24-2022:3.

*16 Id. at 2022:7-2023:18.

*17 Id. at 2311:7-17.

*18 Trial Ex. Z3.

*19 Jury Instruction No. 12.

*20 Trial Tr. at 2119:25-2120:6.

*21 Trial Ex. T34.

*22 Id. at 2036:5-22.

*23 Id. at 1225:18-1226:10.

*24 Id. at 1850:11-1851:18.

*25 Id.

*26 Id. at 933:2-7; id. at 939:3-18; id. at 816:19-817:14.

*27 Trial Ex. 1, Recital A.

*28 Id., Recital B.

*29 Id., § 1.1(a); id., Schedule 1.1(a); id., Schedule 1.1(b).

*30 Id., Schedule 1.1(b), § V.

*31 Trial. Ex. 1, Schedule 1.1(a), § II.

*32 Fed. R. Civ. P. 59(a).

*33 Black v. Heib's Enterprises, Inc., 805 F.2d 360, 363 (10th Cir. 1986).

*34 Docket No. 872 at 15.

*35 Flying J Inc. v. Comdata Network, Inc., 405 F.3d 821, 837 (10th Cir. 2005) (citing Restatement (Second) of Contracts § 201(2)).

*36 Trial Tr. at 2120:15-2121:2.

*37 Id. at 1964:8-22; id. at 1984:6-1985:21.

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

IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

THE SCO GROUP, INC., a Delaware
corporation,

Plaintiff/Counterclaim Defendant,

vs.

NOVELL, INC., a Delaware corporation,

Defendant/Counterclaim Plaintiff.

__________________________

FINDINGS OF FACT AND
CONCLUSIONS OF LAW

Case No. 2:04-CV-139 TS

_________________________

This matter came before the Court for trial from March 8, 2010, through March 26, 2010. Having heard the evidence presented at trial, reviewed the materials submitted by the parties, and being otherwise fully informed, the Court makes the following findings of fact and conclusions of law.

I. INTRODUCTION

"This case primarily involves a dispute between SCO and Novell regarding the scope of intellectual property in certain UNIX and UnixWare technology and other rights retained by Novell following the sale of part of its UNIX business to Santa Cruz, a predecessor corporate

1

entity to SCO, in the mid-1990s."1 Following competing motions for summary judgment, this Court issued an opinion granting summary judgment to Novell on many of the key issues.2 SCO appealed the Court's decision to the Tenth Circuit Court of Appeals which affirmed in part, reversed in part, and remanded for trial on the remaining issues. Specifically, the Tenth Circuit reversed the Court's "entry of summary judgment on (1) the ownership of the UNIX and UnixWare copyrights; (2) SCO's claim seeking specific performance; (3) the scope of Novell's rights under Section 4.16 of the APA; [and] (4) the application of the covenant of good faith and fair dealing to Novell's rights under Section 4.16 of the APA."3 The Tenth Circuit remanded these issues for trial.4

Pursuant to the Tenth Circuit's remand, a trial was held in this matter beginning March 8, 2010, through March 26, 2010. Prior to trial, the parties agreed that certain issues were to be decided by the jury and certain issues were to be decided by the Court.5 Specifically, SCO's claim for slander of title and Novell's counterclaim for slander of title were to be decided by the jury.6 At the close of Novell's evidence, the Court granted SCO's Motion for Judgment as a

2

Matter of Law Pursuant to Fed.R.Civ.P. 50 on Novell's counterclaim for slander of title.7 After its deliberations, the jury found that the amended Asset Purchase Agreement ("APA") did not transfer the UNIX and UnixWare copyrights from Novell to SCO.8 Because it found that SCO was not the owner of the UNIX and UnixWare copyrights, there was no need for the jury to reach SCO's slander of title claim.

The issues the Court must now decide include: (1) SCO's claim for specific performance, seeking an order directing Novell to transfer the UNIX and UnixWare copyrights; (2) Novell's counterclaim for declaratory judgment of its rights under Section 4.16 of the APA; and (3) SCO's claim that Novell breached the implied covenant of good faith and fair dealing in exercising its rights under Section 4.16 of the APA.9 Additionally, the parties agreed that Novell's affirmative defense of unclean hands, if any, should be tried to the Court.10 Novell did not include any discussion of its affirmative defense of unclean hands in its Proposed Findings of Fact and Conclusions of Law.11 The Court finds that this constitutes a waiver of that defense and

3

it will not be addressed by the Court.12 Therefore, only those three issues set forth above remain for the Court's determination.

II. FINDINGS OF FACT

A. THE PARTIES

1. Plaintiff, The SCO Group, Inc. ("SCO"), is a Delaware corporation with its principal place of business in Lindon, Utah.13 SCO is in the business of developing and selling software products.14

2. Defendant, Novell, Inc. ("Novell"), is a Delaware corporation with its executive offices in Waltham, Massachusetts, and its principal product development facility in Provo, Utah.15 Novell is also involved in the development and sale of software products.16

B. UNIX AND UNIXWARE

3. UNIX is the name of a computer operating system originally developed in the late 1960s by engineers at AT&T's Bell Laboratories.17

4

4. "By the 1980s, AT&T had developed UNIX System V ("SVRX"); it built a substantial business by licensing UNIX source code to a number of major computer manufacturers, including IBM, Sun, and Hewlett-Packard. These manufacturers, in turn, would use the SVRX source code to develop their own individualized UNIX-derived" flavors" for use on their computer systems. Licensees could modify the source code and create derivative products mostly for internal use, but agreed to keep the UNIX source code confidential."18

5. "In 1993, Novell paid over $300 million to purchase UNIX System Laboratories, the AT&T spin-off that owned the UNIX copyrights and licenses."19

6. "UnixWare is the brand name for the more recent releases of the UNIX System V, Release 4 operating system developed and licensed in the early 1990s by Novell and its predecessors to the technology. The product was called UnixWare because it was to be a combination of the latest release of System V source code and some components of Novell's NetWare source code. The first releases of UnixWare contain all or virtually all of the technology included in the immediately prior System V releases, SVR4.2 and SVR4.2MP."20

5

7. As will be discussed in more detail below, Novell sold the UnixWare business to Santa Cruz in 1995 under the APA.21 "The core members of Novell's UNIX licensing group became employees of Santa Cruz. After the APA, Santa Cruz and then SCO developed and licensed SCO UnixWare."22

8. "SCO released several subsequent releases of UnixWare, including multiple versions of each UnixWare 2 and UnixWare 7, which are the latest implementation of System V and the latest generation of UNIX SVR 4.2 with SVR 4.2 MP. All of the releases of UnixWare subsequent to Novell's transfer of the business are releases of System V.

Witnesses testified that the commercially valuable technology from the prior versions is included in UnixWare, and UnixWare would not operate without its System V components. The current version of UnixWare supports the newest industry-standard hardware."23

9. "Novell acknowledges that it is not entitled to royalties from any UnixWare licenses."24

C. THE SALE TO SANTA CRUZ

10. In 1995, Robert Frankenberg, then-CEO of Novell, made the determination that it would be in the best interest of Novell to sell the UNIX business.25 Mr. Frankenberg appointed

6

Novell Senior Vice President Duff Thompson as the individual responsible for accomplishing the sale of the UNIX business.26 Mr. Thompson and others from Novell had discussions with various individuals from Santa Cruz, which was ultimately chosen as the buyer.27

11. It was the initial intent of Novell to sell the entire UNIX business.28 However, during the negotiations, the parties realized that Santa Cruz could not afford to pay cash or stock for the entire purchase price sought by Novell.29 Therefore, the deal was structured so that Novell only sold certain of the assets that it had acquired when it purchased the UNIX business from AT&T.30 In particular, Novell sold Santa Crux the UnixWare business, that is the right to exploit and develop UnixWare.31 As will be discussed below, Novell retained substantial rights in the UNIX business,32 that is the UNIX System V source licensing business where source code was provided to customers to create a binary product.33 Specifically, Novell retained the UNIX and UnixWare copyrights and the right

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to receive SVRX royalties. For its part, SCO was to act as Novell's agent in the collection of those royalties and SCO acquired certain UNIX-related assets, such as contracts and employees, to aid in this role.34

12. In exchange for selling these assets, Novell received the following: approximately 16% to 19% of Santa Cruz Stock; a royalty arrangement if Santa Cruz hit certain benchmarks on certain products; and the royalties from SVRX licenses.35

D. THE ASSET PURCHASE AGREEMENT

13. In September 1995, Novell and Santa Cruz entered into the APA memorializing the terms of the sale.36 The APA was signed on September 19, 1995, and was amended in December 1995 and again in October 1996.37 SCO is a successor-in-interest to all of the assets that Santa Cruz acquired under the amended APA with Novell.38

14. Recitals A and B of the APA state:

A. Seller is engaged in the business of developing a line of software products currently known as Unix and UnixWare, the sale of binary and source code licenses to various versions of Unix and UnixWare, the support of such products and the sale of other products which are directly related to Unix and UnixWare (collectively, the"Business").

B. The Board of Directors of each of Seller and Buyer believe it is in the best interests of each company and their respective stockholders that Buyer

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acquire certain assets of, and assume certain liabilities of Seller compromising the Business (the"Acquisition").39
15. The"Acquisition" and those"certain assets" which Santa Cruz acquired are set forth in more detail in Section 1.1(a) of the APA. That section provides:
On the terms and subject to the conditions set forth in this Agreement, Seller will sell, convey, transfer, assign and deliver to Buyer and Buyer will purchase and acquire from Seller on the Closing Date . . . all of Seller's right, title and interest in and to the assets and properties of Seller relating to the Business (collectively the"Assets") identified on Schedule 1.1(a) hereto. Notwithstanding the foregoing, the Assets to be so purchased shall not include those assets (the "Excluded Assets") set forth on Schedule 1.1(b).40
16. Schedule 1.1(a) identifies those assets that were transferred under the APA. Section I of Schedule 1.1(a) states:
All rights and ownership of UNIX and UnixWare, including but not limited to all versions of UNIX and UnixWare and all copies of UNIX and UnixWare (including revisions and updates in process), and all technical, design, development, installation, operation and maintenance information concerning UNIX and UnixWare, including source code, source documentation, source listings and annotations, appropriate engineering notebooks, test data and test results, as well as all reference manuals and support materials normally distributed by Seller to end-users and potential end-users in connection with the distribution of UNIX and UnixWare . . . .41

That provision goes on to list a number of UNIX source code products, binary product releases, products under development, and other technology.42

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17. Section II of Schedule 1.1(a) transferred"[a]ll of Seller's claims arising after the Closing Date against any parties relating to any right, property or asset included in the Business."43

18. Section III.L of Schedule 1.1(a) transferred to Santa Cruz"[a]ll of Seller's rights pertaining to UNIX and UnixWare under any software development contracts [or] licenses . . . and which pertain to the Business, . . . including without limitation: Software and Sublicensing Agreements . . . ."44

19. Section IV of Schedule 1.1(a) transfers"[a]ll copies of UNIX and UnixWare, wherever located, owned by Seller."45

20. Section V of Schedule 1.1(a), the"Intellectual Property" portion of the included asset schedule, transfers: "Trademarks UNIX and UnixWare as and to the extent held by the seller . . . ."46

21. Section V of Schedule 1.1(b), the "Intellectual Property" portion of the excluded asset schedule, states:

"A. All copyrights and trademarks, except for the trademarks UNIX and UnixWare.

B. All Patents"47

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22. Section VIII of Schedule 1.1(b) excludes"[a]ll right, title and interest to the SVRx Royalties, less the 5% fee for administering the collection thereof pursuant to Section 4.16 hereof."48

23. Under the plain language of the original APA, all copyrights, including the UNIX and UnixWare copyrights, were clearly excluded from the transaction between Novell and Santa Cruz.49

24. Another significant aspect of the APA is the treatment of SVRX royalties. Under the payment provisions of the APA, Novell retained "all rights to the SVRX Royalties notwithstanding the transfer of the SVRX Licenses to [Santa Cruz]."50 Santa Cruz agreed to collect and pass through 100% of the SVRX royalties, as defined in Section 4.16, and Novell agreed to pay Santa Cruz a 5% administrative fee.51 Santa Cruz obtained only "legal title and not an equitable interest in such royalties within the meaning of Section 541(d) of the Bankruptcy Code."52

25. Section 4.16(a) of the APA, as amended by Amendment No. 1, provides:

Following the Closing, Buyer shall administer the collection of all royalties, fees and other amounts due under all SVRX Licenses (as listed in detail under item VI

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of Schedule 1.1(a) hereof and referred to herein as"SVRX Royalties"). Within one (1) calendar month following each calendar month in which SVRX royalties (and royalties from Royalty-Bearing Products) are received by Buyer [except for those SVRX Royalties to be retained in their entirety by Buyer pursuant to paragraph (e) of Section 1.2 hereof] Buyer shall remit 100% of all such royalties to Seller or Seller's assignee. Buyer shall also provide to Seller, within six (6) days following the calendar month in which such royalties are received, and estimate the total amount of such royalties. . . . In consideration of such activities described in the preceding sentence, Seller shall pay to Buyer within 5 days of receipt of SVRX Royalties from Buyer as set forth in the preceding sentence, an administrative fee equal to 5% of such SVRX Royalties . . . .53

26. Item VI of Schedule 1.1(a) states that among the assets to be transferred to SCO are "[a]ll contracts relating to the SVRX Licenses listed below."54 Item VI of Schedule 1.1(a) goes on to provide a list of SVRX software releases, up to and including UNIX System V 4.2 MP.55 UNIX System V 4.2 MP was the last version of UNIX before UnixWare.56

27. Under Section 1.2(e), which was added by Amendment No. 1, Santa Cruz had the right to retain 100% of the following categories of SVRX Royalties: (1) fees attributable to stand-alone contracts for maintenance and support of SVRX products listed under Item VI of Schedule 1.1(a); (2) source code right to use fees under existing SVRX Licenses from the licensing of additional CPU's and from the distribution by Santa Cruz of additional source code copies; (3) source code right to use fees attributable to new SVRX licenses approved by Novell pursuant to Section 4.16(b); and (4) royalties attributable to the

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distribution by Santa Cruz and its distributors of binary copies of SVRX products, to the extent such copies are made by or for Santa Cruz pursuant to Santa Cruz's own licenses

from Novell acquired before the Closing Date.57

28. Section 4.16(b), as amended by Amendment No. 1, states:

Buyer shall not, and shall not have the authority to, amend, modify or waive any right under any SVRX License without the prior written consent of Seller. In addition, at Seller's sole discretion and direction, Buyer 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 Seller. In the event that Buyer shall fail to take any such action concerning the SVRX Licenses as required herein, Seller shall be authorized, and hereby is granted, the rights to take any action on Buyer's own behalf. Notwithstanding the foregoing, Buyer 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 Buyer, of such source code. In addition, Buyer shall not, and shall have no right to, enter into new SVRX Licenses except in the situation specified in (i) of the preceding sentence or as otherwise approved in writing in advance by Seller on a case by case basis.58
29. Another aspect of the APA is the License Back of Assets found in Section 1.6. That section states that Santa Cruz must execute a license agreement giving Novell"a royalty-free, perpetual, worldwide license to (i) all of the technology included in the Assets and (ii) all derivatives of the technology included in the Assets."59

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30. The parties did enter into a Technology Licensing Agreement ("TLA") in connection with the APA's closing.60 The TLA states that Novell retains a"non-exclusive, non-terminable, worldwide, fee-free licence to" use "Licensed Technology" under certain conditions.61 The TLA provides that the term "Licensed Technology" has the same meaning attributed to it in the APA. The APA, in turn, defines "Licensed Technology" as "all of the technology included in the Assets and . . . all derivatives of the technology included in the Assets."62

31. Novell's Board of Directors approved the APA on September 18, 1995.63 As part of that approval, the Board of Directors resolved that "Novell will retain all of its patents, copyrights and trademarks (except for the trademarks UNIX and UnixWare) . . . ."64

E. THE CLOSING AND AMENDMENT NO. 1

32. The transaction between Novell and Santa Cruz closed on December 6, 1995. At the same time, the parties entered into a Bill of Sale65 and Amendment No. 1.66

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33. As set forth above, Amendment No. 1 made various changes to the APA, including changes to Section 4.16. Amendment No. 1, however, did not amend the intellectual property portion of either the included or excluded asset schedules found in Schedule 1.1(a) and Schedule 1.1(b).67

F. AMENDMENT NO. 2

34. The parties entered into Amendment No. 2 on October 16, 1996.68 Amendment No. 2 amended the intellectual property provision of the excluded asset schedule, Schedule 1.1(b), as follows:

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. However, in no event shall Novell be liable to SCO for any claim brought by any third party pertaining to said copyrights and trademarks.69
35. Amendment No. 2 also set out provisions for how the parties were to approach future buy-outs of SVRX licenses.70 Section B.5 of Amendment No. 2 states:
This Amendment does not give Novell the right to increase any SVRX licensee's rights to SVRX source code, nor does it give Novell the right to grant new SVRX source code licenses. In addition, Novell may not prevent SCO from exercising its rights with respect to SVRX source code in accordance with the Agreement.71

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G. TESTIMONY ON SCO'S CLAIM FOR SPECIFIC PERFORMANCE

36. The bulk of the evidence presented during the March 2010 trial focused on the intent of the parties concerning the APA and what copyrights were "required" for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. The Court will discuss that evidence below.

1. The Intent of the Parties

a. SCO's Witnesses

37. SCO presented a number of witnesses who testified that it was the intent of the parties to transfer ownership of the copyrights.

38. Robert Frankenberg, the CEO of Novell at the time of the APA, testified that it was his intent to sell the UNIX business in its entirety, including the UNIX copyrights.72 However, Mr. Frankenberg's testimony revealed that he was only involved in the high-level negotiations, that he did not read the entire APA before he signed it, and that he relied on the advice of the attorneys and others in accepting the APA.73

39. Duff Thompson, the Senior Vice President of Corporate Development for Novell at the time of the APA, testified that he was instructed to sell the UNIX business in its entirety.74 As part of that sale, Mr. Thompson testified that he "assumed" that the

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copyrights were being sold as well.75 Despite this assumption, Mr. Thompson offered no testimony on any actual discussions concerning the copyrights. Mr. Thompson also testified that around the time of the APA he had already decided to leave Novell.76 Mr. Thompson subsequently became a board member of Santa Cruz and ultimately of SCO.77 Mr. Thompson was part of the SCO board when SCO made the decision to sue Novell and voted in favor of that decision.78 Mr. Thompson also has a financial interest in SCO and stands to gain financially if SCO is successful in this lawsuit.79

40. Edward Chatlos, the Senior Director of Strategic Relationships at Novell at the time of the APA, was a primary negotiator of the deal between Novell and Santa Cruz.80 Mr. Chatlos testified that the general nature of the transaction was to sell"the entire business," including the copyrights.81 Mr. Chatlos admitted that his wife works for SCO and that she had stock options that could become more valuable if SCO succeeded in this lawsuit.82

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41. Jim Wilt, Santa Cruz's Vice President of Development at the time of the APA, testified that the intent of SCO was to acquire the entire UNIX and UnixWare business, including the copyrights.83 However, Mr. Wilt also testified that he became less active toward the end of the negotiations and that he could not recall any specific conversations concerning the transfer of copyrights.84

42. Alok Mohan, the CEO of Santa Cruz at the time of the APA, testified that Santa Cruz bought the business from Novell.85 However, Mr. Mohan acknowledged that he was only involved in the negotiations at a high level.86 He also testified that he was not involved in writing the APA, which was drafted by others.87

43. Doug Michels, the Executive Vice President of Santa Cruz at the time of the APA, testified that the intent of Santa Cruz was to buy the UNIX business from Novell.88 Mr. Michels testified that Santa Cruz bought the business "[a]nd as a result of buying the business, we owned all the intellectual property."89 Mr. Michels stated that there was"no

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way that [the] deal could have happened without getting the copyrights."90 However, Mr. Michels could not recall specific conversations concerning the copyrights.91 Mr. Michels further stated that he did not draft or review the APA,92 did not have specific recollections of being involved in Amendment No. 1,93 and did not know what Amendment No. 2 was.94

44. Burt Levine, an attorney working with Novell at the time of the APA who later transferred to Santa Cruz, testified that the intent was to transfer ownership rights, including the copyrights.95 Mr. Levine testified that he disagreed with the language concerning intellectual property in the excluded asset schedule of the APA and would have stricken this language or reformed it in some way.96 However, Mr. Levine did review this portion of the APA when it was being drafted and did not alter the copyright exclusion.97

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45. Ty Mattingly, Novell's Vice President of Corporate Development Strategic Relationships at the time of the APA, was also involved in the sale of the UNIX business to Santa Cruz.98 Mr. Mattingly testified that Novell "sold the business" to Santa Cruz and that Novell only retained 95% of the SVRX royalties.99 Mr. Mattingly, however, stated that he was not focused on the details of the transaction and was more of a "high level strategy guy."100 While he was involved in the memorandum of understanding phase, he was not involved in the actual drafting of the APA.101 Further, Mr. Mattingly testified that he owns over 9,000 shares of SCO stock.102

46. Kimberlee Madsen worked as the Manager of Law and Corporate Affairs for Santa Cruz at the time of the APA.103 Ms. Madsen was involved in the transaction between Novell and Santa Cruz as support for Santa Cruz's general counsel Steve Sabbath and was involved in the negotiations as well.104 Ms. Madsen testified that the intent was for Santa Cruz to purchase all of the UNIX and UnixWare assets, including the copyrights.105

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However, Ms. Madsen conceded that the transaction was more complicated than simply buying the whole business.106

47. Steve Sabbath, Santa Cruz's general counsel at the time of the APA, testified that Santa Cruz was buying the entire business, including the intellectual property.107 However, Mr. Sabbath previously executed a declaration where he made a number of contradictory statements, including that, under the APA, Novell would retain significant UNIX-related assets including much of the UNIX System V intellectual property.108

b. Novell's Witnesses

48. Tor Braham, outside counsel for Novell and lead drafter of the APA, testified that Novell was selling to Santa Cruz the UnixWare business while Novell "retained all of the economics and relationships arising out of the UNIX business."109 Mr. Braham testified that the exclusion of the copyrights was agreed upon by the parties.110 He also stated that the purpose for excluding the copyrights was to protect Novell's interest in the UNIX business that it had retained.111 Mr. Braham further testified that Santa Cruz could use the assets that it received "to then build a new version of UnixWare, and it would own the

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copyrights in what it built on top of the base UNIX and UnixWare software that it had a copy of."112 Santa Cruz could then license that product to third parties.113

49. David Bradford worked as Novell's general counsel from 1985 to 2000. Mr. Bradford testified that it was "very clear" that Novell retained the copyrights.114 Mr. Bradford further testified that the Novell board of directors agreed that under the APA Novell would retain all of its copyrights.115

50. James Tolonen, Novell's Chief Financial Officer at the time of the APA, testified that the copyrights were purposefully excluded from the assets to be transferred to Santa Cruz.116

Mr. Tolonen explained that retaining the copyrights was done: (1) as "part of [Novell's] strategy and [was] really necessary under the nature of the transaction"; (2) because Santa Cruz was relatively small and could not afford the entire value; (3) to avoid ownership issues with other products; and (4) because of concerns with the long-term viability of Santa Cruz.117 As will be discussed in more detail below, Mr. Tolonen also testified that Amendment No. 2 was meant to address use rights, not ownership of the copyrights.118

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51. Michael Defazio, an Executive Vice President at Novell at the time of the APA, testified that the intent of the APA was not to transfer the copyrights and that the copyrights were retained as a way to"bulletproof" Novell's financial asset stream.119

52. Jack Messman was a member of Novell's Board of Directors at the time of the APA120 and would later become CEO. Mr. Messman was present for a telephonic meeting where the APA was discussed.121 Mr. Messman testified that, based upon that meeting, he understood that the copyrights were not sold as part of the transaction between Novell and Santa Cruz and that there was a specific discussion on that issue.122 Mr. Messman stated Novell retained the copyrights because SCO was a "fledgling company" and because Novell was worried about the SVRX revenue stream.123 Mr. Messman tesfied that retention of the copyrights "was the key part of the deal that convinced the board to do that deal."124 Mr. Messman further testified that the copyrights were not required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies as the plan was for SCO to develop new code.125

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c. Conclusions from the Testimony

53. The Court finds the witnesses presented by SCO on the parties' intent to be less credible than Novell's witnesses for a number of reasons. First, many of SCO's witnesses were involved only in the "high level" negotiations and did not participate in the actual drafting of the APA where the details of the deal were agreed to. Thus, while these individuals may have provided relevant testimony as to what the parties were intending or hoping to do at the outset, their testimony has less relevance as to what actually happened as the negotiations unfolded and the APA was actually drafted. This fact is critical here because the transaction could not be completed as it had been initially envisioned, specifically it had to be structured to account for the fact that Santa Cruz did not have the financial resources necessary to purchase the entire business and there was uncertainty about its long-term viability. Second, many of these witnesses seemed to take for granted that the copyrights would transfer, but there was surprisingly little evidence of any actual discussions concerning the copyrights. Finally, a number of SCO's witnesses, though not all, have a direct financial interest in this litigation.126

d. Course of Performance

54. SCO also points to the parties' course of performance to support its argument that it was the intent of the parties to transfer ownership of the copyrights.

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55. SCO points to a "joint" press release issued after the transaction. That press release announced an "agreement for SCO to purchase the UNIX business from Novell."127 The press release goes on to state that "SCO will acquire Novell's UnixWare business and UNIX intellectual property."128 While SCO described this as a "joint" press release, there is no indication that it was joined in by Novell and appears to be issued solely by SCO.

Further, the press release supports Novell's argument that SCO only acquired the UnixWare business, as opposed to the UNIX business. Finally, though the press release mentions "UNIX intellectual property," it does not specifically mention copyrights and could just as logically refer to other UNIX-related assets which did transfer under the APA.

56. SCO also points to its 1996 Form 10-K in which it stated that it "acquired certain assets related to the UNIX business including the core intellectual property from Novell."129 Again, there is no mention of copyrights and no description of what "core intellectual property" was acquired.

57. SCO also relies on the fact that SCO copyright notices were placed on existing versions of UnixWare, but as SCO's own witness admitted, this does not answer the question of ownership.130 SCO also points to the physical possession of copyright registration

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certificates. However, SCO's witnesses testified that, when the APA was finalized, SCO staff and property simply remained in the same physical location as before.131

58. SCO also argues that letters sent from Novell to its customers support the conclusion that the copyrights were transferred. These letters state that Novell transferred to SCO Novell's "existing ownership interest in UNIX System-based offerings and related products."132 However, SCO's witnesses acknowledged that the letters were not meant to give the customers all of the details of the transaction, but merely to inform the customers that they were going to deal with SCO in the future.133

59. SCO also points to the TLA as further evidence of the parties intent to transfer copyright ownership. However, testimony concerning the TLA affirmed that one of the purposes of that agreement was to allow Novell the right to use post-APA SCO-developed code.134

60. The Court finds that SCO's course of performance evidence, either separately or in combination, does not support its position that it was the intent of the parties to transfer copyright ownership.

e. Conclusion on the Intent of the Parties

61. Based on the evidence presented at trial, the Court finds that it was not the intent of the parties to transfer ownership of the UNIX and UnixWare copyrights. Rather, the Court

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finds that Novell intentionally retained the UNIX and UnixWare copyrights. The Court finds that the copyrights were retained by Novell for the following reasons: (1) to protect the SVRX royalty stream; (2) because Santa Cruz could not afford to purchase the entire UNIX business; and (3) because of concerns with Santa Cruz's future financial viability.

2. Whether the Copyrights are "Required"

62. SCO argues that the copyrights are, nonetheless, "required" under Amendment No. 2.

63. As set forth above, Amendment No. 2 amended the excluded asset schedule (Schedule 1.1(b)) of the APA to state: "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."135 The parties presented differing evidence on the intent and purpose of Amendment No. 2, as well as which copyrights were "required."

a. SCO's Witnesses

64. SCO presented little evidence as to the intent of Amendment No. 2. Steve Sabbath, general counsel for Santa Cruz at the time of the APA, testified that Amendment No. 2 was meant to confirm that Santa Cruz acquired all copyrights pertaining to the UNIX business.136 Mr. Sabbath stated that the copyrights were needed to protect the technology.137 As discussed above, however, Mr. Sabbath executed a contradictory

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declaration and, as will be discussed below, Mr. Sabbath's testimony is refuted by Novell witnesses.

65. Kimberlee Madsen testified that the copyrights were essential for SCO to protect its intellectual property rights.138 However, when asked what copyrights were required for Santa Cruz to operate its UNIX and UnixWare business, she responded that Santa Cruz "would have acquired all the copyrights."139 Ms. Madsen also testified that she did not draft the language of Amendment No. 2 and had no specific recollection of any discussions with Mr. Sabbath about that Amendment.140

66. A number of SCO witnesses testified that the UNIX and UnixWare copyrights were "required" for SCO to operate its business. For instance, William Broderick, a former Novell and current SCO UNIX Contract manager, testified that the way "you show your ownership and protect your software is by copyright."141 But Mr. Broderick was not involved in the negotiation of the APA and had no involvement in either Amendment.142

67. Darl McBride, the former CEO of SCO, testified that ownership of the copyrights was required for SCO's business.143 Mr. McBride testified that there were a number of

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reasons for this, stating that copyrights were required in order to make copies, do deals, and enforce your rights against others.144 Mr. McBride was also not involved with negotiation or drafting of either the APA or Amendment No. 2.145

68. John Maciaszek, a former Novell and current SCO UNIX Product Manager, testified that copyrights are required for SCO to operate its business.146 There is no evidence that Mr. Maciaszek was involved in negotiating or drafting the APA or its Amendments.

69. Ryan Tibbitts, general counsel for SCO, testified that the copyrights were "critical" for SCO to run the business purchased from Novell.147 Mr. Tibbitts stated: "Because we own the core UNIX intellectual property and a very critical component of that at this point in time is to protect that IP, and we have got to have that IP to keep other people from encroaching into our marketplace."148 Mr. Tibbitts was similarly not involved with the APA or its Amendments.149

70. Most of these witnesses testified that the copyrights were "required" for SCO to run its SCOsource licensing program.150 However, as will be discussed below, this program was

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not something that SCO acquired from Novell. SCO only acquired the UnixWare business from Novell, while Novell retained significant rights in the UNIX business. Amendment No. 2 applies only to those copyrights "required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies."

71. SCO witnesses acknowledged that SCO could operate its UnixWare business without the copyrights. Mr. McBride admitted that SCO could run its UnixWare business without the copyrights.151 Mr. Tibbitts similarly stated that SCO could run its UNIX product business without the UNIX and UnixWare copyrights.152 Indeed, SCO had offered to sell its business without the copyrights.153

72. Moreover, it was undisputed that SCO would own any newly developed code and could obtain copyrights to protect that code.154

b. Novell's Witnesses

73. Novell presented a different view of the intent and meaning of Amendment No. 2.

74. Allison Amadia worked as in-house counsel for Novell at the time of Amendment No. 2 and was the lead negotiator and drafter of that document for Novell.155 Ms. Amadia was contacted by Steve Sabbath, general counsel for SCO, who requested an amendment to

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the APA.156 Mr. Sabbath stated that because of a "clerical error" the APA did not transfer copyright ownership.157

75. Mr. Sabbath sent Ms. Amadia a proposed amendment which would have amended Section V of Schedule 1.1(b) of the APA (the intellectual property portion of the excluded assets schedule) to state: "All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of this Amendment No. 2, which pertain to the UNIX and UnixWare technologies and which SCO has acquired hereunder. . . ."158

76. After review of the APA and discussions with Tor Braham and James Tolonen, Novell, through Ms. Amadia, made the decision not to alter the APA with regard to copyright ownership as requested by Mr. Sabbath.159 Rather than alter the APA to transfer copyrights, Ms. Amadia modified the amendment proposed by Mr. Sabbath to affirm that SCO had the rights to use the technology.160 Ms. Amadia testified that Amendment No. 2 was meant to affirm that SCO had the right to use, manufacture, and make modifications to the UNIX technology.161

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77. James Tolonen, Novell's Chief Financial Officer at the time of the APA and Amendment No. 2, similarly testified that Amendment No. 2 was meant to address use rights, not ownership.162 Mr. Tolonen stated that the easiest way to show a transfer of the copyrights would be to include them on the schedule of included assets, which did not happen.163

78. Mr. Sabbath signed Amendment No. 2, as modified by Ms. Amadia, on behalf of Santa Cruz with no apparent further protest.164

c. Conclusions from the Testimony

79. The Court finds that Amendment No. 2 was not intended to confirm that the UNIX and UnixWare copyrights were transferred to SCO under the APA, as argued by SCO. Rather, the Court finds that Novell made a conscious decision to retain the copyrights in the APA and that intent was reflected throughout the negotiating and drafting of Amendment No. 2. The Court finds that Amendment No. 2 was only meant to confirm that SCO had the right to use the UNIX technology. The Court finds the testimony of Novell's witnesses, especially Ms. Amadia and Mr. Tolonen, to be credible. The Court finds SCO's witnesses to be less credible for a number of reasons, including the fact that many were not directly involved in the negotiation and drafting of Amendment No. 2. Additionally, as previously stated, many have a financial interest in this litigation.

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80. Based on all of the above, the Court finds that it was not the parties intent to transfer ownership of the UNIX and UnixWare copyrights to SCO. Rather, Novell purposefully retained those copyrights. The purpose for doing so was to protect its significant interest in the SVRX royalty stream, to alleviate concerns of SCO's future financial viability, and because of the fact that SCO could not afford to purchase the entire UNIX business. The Court further finds that the copyrights are not required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. SCO did not acquire the entire UNIX business from Novell, but only acquired the UnixWare business while Novell retained substantial rights in the UNIX business. The undisputed evidence is that SCO did not need the UNIX and UnixWare copyrights in order to operate its UnixWare product business. Further, ownership of the copyrights is not required for SCO to protect its own code. SCO did present evidence that the copyrights were required for SCO to operate its SCOsource licensing program. However, this was a business strategy designed by SCO after the APA and its Amendments, not something that it acquired from Novell.

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H. NOVELL'S WAIVER RIGHTS UNDER SECTION 4.16

81. As stated above, Novell retained significant assets under the APA. One of those assets were royalties from SVRX licenses.165 Novell recognized that this future royalty stream would be very significant.166 Under the APA, SCO was to act as Novell's agent in the collection of these royalties.167

82. In connection with that role, SCO acquired certain assets, including certain agreements and certain employees of Novell.168

83. Section 4.16 of the APA was "the key provision that embodied the deal that the UNIX business, as compared to the UnixWare business, . . . would remain with Novell, but be administered by SCO."169 The intent of Section 4.16 was to "bulletproof" Novell's ongoing financial interest.170 A number of SCO witnesses similarly recognized the purpose of Section 4.16 as a way of protecting and managing Novell's ongoing financial

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interests, though those witnesses disagreed on the scope of Novell's rights under that section.171

84. Tor Braham testified that Section 4.16 was added to make very clear that SCO did not have the right to modify, change, or waive SVRX licenses without Novell's written consent and that if SCO did not act properly Novell "could step in and do it ourselves."172 Mr. Braham testified that Section 4.16 was drafted to avoid any doubt that Novell had complete rights to control what happened with the UNIX business.173 Mr. Braham further stated that, under Section 4.16, "[i]f SCO didn't do what it was supposed to do as [Novell's] agent, we could step in . . . and do it ourselves."174

85. Section 4.16(a) states: "Following the Closing, Buyer shall administer the collection of all royalties, fees and other amounts due under all SVRX Licenses (as listed in detail under item VI of Schedule 1.1(a) hereof and referred to herein as ‘SVRX Royalties'). . . ." Item VI of Schedule 1.1(a) states that among the assets to be transferred to SCO are "[a]ll contracts relating to the SVRX Licenses listed below." However, the list provided in Item VI of Schedule 1.1(a) provides a list of SVRX software releases, not a list of license agreements.

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86. Section 4.16(b) preserved to Novell certain waiver rights with regard to SVRX licenses. It states, in pertinent part:

Buyer shall not, and shall not have the authority to, amend, modify or waive any right under any SVRX License without the prior written consent of Seller. In addition, at Seller's sole discretion and direction, Buyer 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 Seller. In the event that Buyer shall fail to take any such action concerning the SVRX Licenses as required herein, Seller shall be authorized, and hereby is granted, the rights to take any action on Buyer's own behalf.175
87. The question here is what constitutes an "SVRX License." SCO contends that the term SVRX License applies only to product supplement agreements, while Novell contends that the term is not so limited and applies to software agreements and sublicensing agreements as well.

88. William Broderick, the Director of Software Licensing for SCO, described the various types of agreements. The first type of agreement is called the software agreement or umbrella agreement.176 The software agreement provided the general terms and conditions that a company would agree to when licensing source code.177 The second type of agreement is a product supplement agreement or product schedule license. This type of license actually licenses a software product.178 The third type of agreement is a sublicensing agreement. The sublicensing agreement grants the rights to distribute a

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binary product.179 These agreements work together. The software and product license allow companies to create a UNIX flavor and the sublicensing agreement allows that company to distribute its UNIX flavor. A company could not take a product license if it did not have an umbrella software agreement.180

89. SCO's witnesses asserted that Novell's waiver rights extend only to product schedule licenses. For instance, Mr. Broderick testified that Novell used the term SVRX Licenses to refer to product schedule licenses that licensed SVRX products.181 However, Mr. Broderick had no involvement in the drafting, negotiation, or approval of the APA or its amendments.182 Mr. Broderick also conceded that there was nothing in the APA so limiting Section 4.16.183 Other SCO witnesses testified that this provision was only meant to give Novell control over binary royalties,184 but this testimony suffers from the same flaws set forth above in relation to the intent of the parties. Further, many of these witnesses acknowledged that the language of Section 4.16 of the APA was not limited to product supplement agreements.185

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90. SCO also points to the parties' course of performance in arguing that Novell's waiver rights extend only to product schedule licenses. Specifically, SCO points to a dispute between Novell, Santa Cruz, and IBM in 1996 where Novell attempted to grant IBM a buyout of its contractual royalty obligations.186 SCO objected and began to initiate a lawsuit against Novell.187 The dispute was ultimately settled by: (1) cancelling the buyout that Novell had executed with IBM and replacing it with Amendment No. X, a three-party agreement between IBM, Novell, and SCO; (2) a payment to SCO; and (3) clarifying how to approach future buyouts through Amendment No. 2.188 During that dispute, Novell did not invoke Section 4.16(b) to the extent it now has.189 However, the fact that Novell decided to settle this dispute in this way provides little support for SCO's ultimate argument. As recognized by the Tenth Circuit, "[p]arties may choose to settle claims for a variety of reasons unrelated to their merits, not the least to avoid expensive litigation or to maintain civility in an important commercial relationship."190

91. The Court finds that Novell's waiver rights extend to all three types of agreements and are not limited to product supplement agreements. The Court bases this finding on a number of things. First, a number of witnesses, including SCO witnesses, recognized the

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importance of the royalty stream that Novell was retaining and viewed Section 4.16 as the mechanism that Novell put in place to protect that royalty stream. While Novell did transfer certain assets to SCO, it did not transfer the SVRX royalty stream. In order to protect and maintain control over that royalty stream, Novell retained significant rights, as set out in Section 4.16. It only makes sense for Novell to retain control over all components of the SVRX licensing agreements in order to protect this significant asset. The reasoning behind this is the somewhat hierarchical nature of the agreements. Each company was required to sign a software agreement and termination of the software agreement would terminate the other agreements. If Novell did not retain control over the software agreement, SCO could terminate that agreement, thereby terminating the other agreements, and deprive Novell of revenue to which Novell would be entitled. Thus, in order for Novell to protect its SVRX revenue stream, it needed to retain rights with respect to all components of the SVRX licensing agreements.

92. Second, the plain language of the APA states that Novell's waiver rights apply to "any SVRX License." The language of the APA is not limited to product supplement agreements. Several SCO witnesses conceded that the language of the APA was not limited to product supplement agreements.

93. Third, Section 1.2(e) provides support for this finding. By identifying "source code right to use fees under existing SVRX Licenses" as a type of SVRX Royalty, this provision supports the conclusion that "SVRX License" includes software agreements covering source code rights.

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94. Fourth, 4.16(a) refers to Item VI of Schedule 1.1(a). That provision states that "[a]ll contracts relating to the SVRX Licenses listed below" will be transferred to SCO. While Item VI does not go on to list licenses, it does go on to list releases of UNIX. Thus, under this provision, SVRX licenses include all contracts relating to UNIX System V releases, up to and including UNIX System V 4.2 MP, the latest version of UNIX prior to UnixWare.

95. Finally, the Court finds SCO's evidence on this to be less credible for many of the same reasons stated above in relation to SCO's claim for specific performance. Further, many witnesses acknowledged that the language of Section 4.16 of the APA was not limited to product supplement agreements.

96. Based on the above, the Court finds that Novell's waiver rights apply to all three types of agreements and are not limited to product supplement agreements. With this in mind, the Court turns to the actions taken by Novell under Section 4.16.

I. LINUX, SCOSOURCE, AND NOVELL'S ACTIONS UNDER SECTION 4.16

97. "In 2002 and 2003, tensions increased between Novell and SCO. SCO asserted that users

of Linux, an alternative to UNIX might be infringing on SCO's UNIX-related intellectual

property rights."191 98. "In late 2002, SCO formally created a new division known as SCOsource. In approximately January 2003, SCO launched its SCOsource program. . . . As a general matter, the SCOsource program was an effort to obtain license fees from Linux users

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based on SCO's claims to UNIX intellectual property allegedly contained in Linux."192 Under its SCOsource program, SCO "purported to offer Linux users the opportunity to purchase an intellectual property license in order to continue using Linux without infringing any of SCO's copyrights."193

99. In January 2003, Joseph LaSala, Novell's then-General Counsel, learned of SCO's SCOsource program.194 Mr. LaSala viewed this as a "campaign against Linux end users" and became concerned about SCO's program because of Novell's own involvement in the Linux business.195 By that point, Novell had "announced its intention to get involved in the Linux business."196 In connection with Novell's Linux business, IBM purchased $50 million worth of Novell stock.197

100. SCO filed a lawsuit against IBM in 2003 alleging that IBM had distributed UNIX source code and other confidential information to Linux.198 As part of that litigation, SCO threatened to terminate IBM's SVRX license.

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101. After the initiation of that lawsuit, Mr. LaSala received a call from IBM's outside counsel.199 IBM's outside counsel informed Mr. LaSala that Novell had certain rights under the APA.200

102. At some later point, Mr. LaSala participated in a call between himself, the general counsel of IBM, IBM's outside counsel, and Novell's outside counsel.201 During that call, IBM's outside counsel requested that Novell waive all claims that SCO had made or might make against IBM with respect to IBM's SVRX license.202 Novell, through its outside counsel, responded that they were looking at the issue, that they would evaluate each on a case by case basis, and that Novell would take action accordingly.203 Novell undertook that analysis, which resulted in letter written on June 9, 2003.204

103. On June 9, 2003, then-CEO of Novell Jack Messman wrote a letter to SCO CEO Darl McBride.205 In that letter, Novell stated that SCO was advancing unsubstantiated charges and threatening action that could potentially injure Novell, Novell's customers, and the

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industry in general.206 Mr. Messman explained that Novell and SCO had granted IBM an irrevocable, fully paid-up, perpetual right to exercise all of the rights under the IBM SVRX Licenses that IBM then held and that IBM had paid over $10 million for this right.207 Novell then quoted directly from Section 4.16(b) of the APA, stating that Novell had the sole discretion to waive any rights under any SVRX License.208 Novell concluded, acting pursuant to Section 4.16(b), by directing "SCO to waive any purported right SCO may claim to terminate IBM's SVRX Licenses enumerated in Amendment X or to revoke any rights thereunder."209 When SCO failed to take the action directed by Novell, Novell wrote a second letter on June 12, 2003.210 In that letter, Novell, acting pursuant to Section 4.16(b) and on behalf of SCO, waived "any purported right SCO may claim to terminate IBM's SVRX Licenses enumerated in Amendment X or to revoke any rights thereunder."211

104. Novell wrote another letter to SCO on October 7, 2003, responding to SCO's "position that code developed by IBM, or licensed by IBM from a third party, which IBM incorporated in AIX but which itself does not contain proprietary UNIX code supplied by

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AT&T under the license agreements between AT&T and IBM ('IBM Code'), must nevertheless be maintained as confidential and may not be contributed to Linux."212 In that letter, Novell disputed SCO's position, citing to various agreements.213 Novell again cited to Section 4.16(b) of the APA and directed "SCO to waive any purported right SCO may claim to require IBM to treat IBM Code itself as subject to the confidentiality obligations or use restrictions of the Agreements."214 When SCO failed to take the action directed by Novell, Novell, acting pursuant to Section 4.16(b), waived "any purported right SCO may claim to require IBM to treat IBM Code . . . which IBM incorporated in AIX but which itself does not contain proprietary UNIX code supplied by AT&T under the license agreements between AT&T and IBM, itself as subject to the confidentiality obligations or use restrictions of the Agreements."215

105. A similar interaction took place in relation to another company, Silicon Graphics, Inc. ("SGI"). On October 7, 2003, Novell wrote a letter to SCO disputing SCO's "position that code developed by SGI, or licensed by SGI from a third party, which SGI incorporated in its UNIX variant but which itself does not contain proprietary UNIX code supplied by AT&T under the license agreement between AT&T and SGI ("SGI Code"),

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must nevertheless be maintained as confidential and may not be contributed to Linux."216 Novell stated that SCO's position was "not supportable" and detailed the reasons why.217 Citing to Section 4.16(b) of the APA, Novell directed SCO"to waive any purported right SCO may claim to terminate SGI's SVRX license or to revoke any rights thereunder."218 Novell further directed SCO"to waive any purported right SCO may claim to require SGI to treat SGI code itself as subject to the confidentiality obligations or use restrictions of SGI's SVRX license."219 Novell made clear that it was not "directing SCO to take any action (other than to waive termination) with respect to claims that SGI incorporated in Linux certain proprietary UNIX code supplied by AT&T under the SGI license agreement."220

106. SCO also took this position with a third company, Sequent Computer Systems. Novell responded in similar fashion. On February 6, 2004, Novell wrote a letter to SCO directing SCO, under Section 4.16(b) of the APA, "to waive any purported right SCO may claim to require Sequent (or IBM as its successor) to treat Sequent Code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license."221 When

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SCO failed to take the action directed by Novell, Novell, acting pursuant to Section 4.16(b), waived "any purported right SCO may claim to require Sequent (or IBM as its successor) to treat Sequent Code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license."222

107. Chris Stone, Senior Vice President of Novell from 1997 to 1999 and Vice Chairman of Novell from 2002 to 2004, testified that when Novell took these actions with respect to IBM, it was concerned about Novell, Linux, and the open source movement, and that SCO's actions were damaging to that process.223 Mr. Stone further testified that Novell's actions were not motivated by something said or done by IBM and were not motivated by IBM's purchase of $50 million of Novell stock.224 Jack Messman, Novell's former CEO, similarly testified that Novell's action to waive SCO's claims against IBM was unrelated to IBM's investment in Novell.225

108. As will be discussed below, the Court finds that Novell had the right, under Section 4.16 of the APA, to take these actions.

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III. CONCLUSIONS OF LAW

A. SPECIFIC PERFORMANCE

109. SCO requests, as an alternative to its other claims for relief, an order directing Novell to transfer the UNIX and UnixWare copyrights. SCO's request for specific performance must be rejected for three reasons. First, the jury verdict has determined that the amended APA did not transfer the copyrights from Novell to SCO. Second, it was not the intent of the parties to transfer ownership of the copyrights. Finally, the copyrights are not required for SCO to exercise its right with respect to the acquisition of UNIX and UnixWare technologies. Each of these conclusions will be discussed in detail below.

1. The Jury Verdict

110. As set forth above, this matter came before the jury on the parties' competing claims for slander of title. While Novell's slander of title claim was dismissed on a Rule 50 motion, SCO's claim proceeded to the jury. The jury determined that the amended APA did not transfer the UNIX and UnixWare copyrights from Novell to SCO. Because the jury determined that SCO was not the owner of the copyrights, there was no need for the jury to determine SCO's claim for slander of title.

111. "[T]he Seventh Amendment prevents district courts from applying equitable doctrines on the basis of factual predicates rejected, explicitly or implicitly, by a jury verdict."226 If

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"the jury verdict by necessary implication reflects the resolution of a common factual issue . . . the district court may not ignore that determination."227

112. SCO argues that the jury verdict does not resolve its claim for specific performance. SCO argues that its claim rests on findings not precluded by the jury verdict. In support of this argument, SCO posits a number of rather tenuous grounds on which the jury could have determined the question presented to it. The Court must respectfully disagree with SCO's assessment.

113. As stated previously, the bulk of the evidence at trial concerned two issues: (1) whether the parties intended to transfer ownership of the copyrights; and (2) whether the copyrights were "required" for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. Both parties presented substantial evidence and argument on these two issues.

114. The jury verdict in this case shows that the jury considered SCO's evidence on these points and rejected that evidence in favor of the evidence presented by Novell. The jury verdict necessarily means that the jury found that it was not the intent of the parties to transfer ownership of the copyrights from Novell to SCO and that the copyrights were not required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. As discussed in the Court's Memorandum Decision and Order Denying SCO's Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial, the jury's verdict is well supported by the evidence.

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115. SCO's claim for specific performance rests upon factual predicates rejected by the jury verdict. SCO's request for specific performance essentially asks the Court to ignore or overrule the jury verdict. Such relief is prohibited under the Seventh Amendment. For this reason, SCO's claim for specific performance must fail. Even if the jury verdict did not preclude SCO's claim for specific performance, it would be rejected for the reasons discussed below.

2. The Intent of the Parties

116. Much of the evidence at trial focused on the intent of the parties in drafting the APA. While Plaintiff presented a number of witnesses from both Novell and Santa Cruz who testified that it was the intent of the parties to transfer the copyrights, the Court, as evidently did the jury, finds the evidence presented by Novell on this issue to be more persuasive. The Court finds particularly persuasive the testimony of Novell's outside counsel Tor Braham, who was the lead drafter of the APA.

117. As set forth above, Mr. Braham's testimony showed that Novell purposefully retained ownership of the copyrights. Novell did so in order to protect its substantial retained interest in the UNIX business. Mr. Braham's testimony is supported by the testimony of James Tolonen who explained that retaining the copyrights was necessary: (1) because of the nature of the transaction; (2) because Santa Cruz could not afford the entire value; (3) to avoid ownership issues with other products; and (4) because of concerns with the long-term viability of Santa Cruz. Mr. Braham's testimony is further supported by Michael Defazio, an Executive Vice President at Novell, who testified that the copyrights were

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retained as a way to "bulletproof" Novell's financial asset stream. SCO's witnesses on this issue are less credible for the reasons set forth above.

118. The parties' dealings concerning Amendment No. 2 further support the conclusion that it was not the intent of the parties to transfer copyright ownership. As set forth above, Steve Sabbath, Santa Cruz general counsel, contacted Allison Amadia, in-house counsel for Novell, to discuss a "clerical error" resulting in the copyrights not being transferred. Santa Cruz sought an amendment which would have amended Schedule 1.1(b) to exclude all copyrights and trademarks, except for the copyrights and trademarks owned by Novell which pertain to the UNIX and UnixWare technologies. Upon further research, Ms. Amadia concluded that no clerical error had occurred and Novell specifically rejected the proposed amendment. Thus, Amendment No. 2 was written to state that all copyrights and trademarks were excluded, except for the copyrights and trademarks required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. As testified to by both Ms. Amadia and Mr. Tolonen, this amendment addressed use, not ownership. This interaction shows Novell's continued intent to retain the copyrights.

119. SCO argues that the forthright negotiator rule is applicable to Amendment No. 2. The Tenth Circuit has stated:

Where the parties assign different meanings to a term, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made (a) that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party; or

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(b) that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the first party.228
Here, there is no evidence to support the argument that Ms. Amadia had reason to know that SCO attached a different meaning to Amendment No. 2. Indeed, Ms. Amadia specifically testified that she informed Mr. Sabbath that Novell would not transfer the copyrights.229

120. SCO also argues that other provisions of the APA are consistent with it acquiring ownership of the copyrights. Specifically, SCO cites to the license back provision of the APA, Section 1.6. However, that provision only applies to the assets listed in the included asset schedule, which does not include the UNIX copyrights. Further, testimony concerning the TLA affirmed that one of the purposes of that agreement was to allow Novell the right to use post-APA SCO-developed code.230 SCO also points to Section II of Schedule 1.1(a), which transferred "[a]ll of [Novell's] claims arising after the Closing Date against any parties relating to any right, property or asset included in the Business."231 However, SCO provided no evidence of any such claims that it was entitled to pursue.

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121. While it may have initially been the wish of individuals in both entities for Novell to sell and Santa Cruz to buy the entire UNIX business, that is not what happened. Rather, because Santa Cruz could not purchase the entire business, the deal had to be structured in a way different than had been originally envisioned. As all witnesses seemed to recognize, a primary component of the transaction was Novell's retention of a significant royalty stream. One of the ways that Novell chose to protect that royalty stream was to retain ownership of the copyrights. Based on all of the above, the Court finds that the intent of the parties did not entail transfer of ownership of the copyrights.

3. Copyrights are not "Required"

122. SCO further argues that transfer of ownership is appropriate because the copyrights are "required" under Amendment No. 2. SCO makes two arguments as to why ownership of the copyrights is required. First, it argues that ownership of the copyrights are required in order for it to protect its intellectual property. Second, SCO argues that ownership of the copyrights are necessary for its SCOsource licensing program. The Court rejects both arguments.

123. In order to fully understand both of these issues, the exact nature of the transaction between the parties must be understood. As set forth above, Novell initially envisioned selling the entire UNIX business that it had purchased from AT&T to Santa Cruz. However, because Santa Cruz could not afford the entire business, the transaction had to be restructured. The business was essentially divided into two components: the UNIX business and the UnixWare business. The UNIX business was the UNIX System V

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source licensing business. Novell retained the royalties from the licenses and SCO acted as Novell's agent in their collection. Novell retained significant rights in order to protect its royalty stream. Additionally, Novell retained the copyrights as a way to "bulletproof" those royalties. The UnixWare business, on the other hand, was the business whereby SCO had the ability to go forward and create a new product. SCO would, of course, own the copyrights for whatever new code it created. With this understanding, the Court turns to SCO's arguments.

124. SCO argues that the copyrights are required to protect its intellectual property. The Court agrees with this general proposition. However, SCO was not the owner of the copyrights and, thus, had no right to enforce them. Further, the parties agree that SCO would own the copyrights to any newly developed code and could use those copyrights to protect against infringement. Thus, SCO has not shown that ownership of the UNIX copyrights is required to protect its own intellectual property.

125. SCO also argues that ownership of the copyrights is necessary to run its SCOsource licensing program. However, the language of Amendment No. 2 applies to copyrights required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. The SCOsource program is not something SCO ever acquired from Novell. It appears that SCOsource was not something that was envisioned by either party at the time of the APA and its amendments. Further, both Mr. Tibbitts and Mr. McBride acknowledged that SCO could run its UnixWare business, which is something SCO did acquire from Novell, without the copyrights. Therefore, the Court finds that the

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copyrights are not required for SCO to operate the business that it had acquired from Novell.

126. Based on the above, the Court finds that it was not the intent of the parties to transfer the copyrights and that the copyrights are not required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. Further, the jury verdict precludes the Court from entering judgment in favor of SCO on its claim for specific performance. For all of the reasons stated, SCO's claim for specific performance must fail.

B. DECLARATORY JUDGMENT

127. Novell seeks declaratory relief that: (a) under Section 4.16(b) of the APA, Novell is entitled to direct SCO to waive claims against IBM, Sequent and other SVRX licensees; (b) Novell is entitled to waive such claims on SCO's behalf; and (c) SCO is obligated to recognize such a waiver.232

128. Section 4.16(b) of the APA states, in pertinent part:

Buyer shall not, and shall not have the authority to, amend, modify or waive any right under any SVRX License without the prior written consent of Seller. In addition, at Seller's sole discretion and direction, Buyer 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 Seller. In the event that Buyer shall fail to take any such action concerning the SVRX Licenses as required herein, Seller shall be authorized, and hereby is granted, the rights to take any action on Buyer's own behalf.233

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129. "The scope of Novell's waiver rights turns on the meaning of the term 'SVRX License.'"234 In order to understand the meaning of Section 4.16(b) and the term SVRX License, it is again necessary to understand the nature of the transaction between the parties.

130. As stated previously, Novell sold Santa Cruz the UnixWare business, while retaining substantial rights in the UNIX business. While Novell retained the financial portion of the UNIX business (the royalties from SVRX licenses), SCO acted as Novell's agent in the collection of those royalties.235

131. Witnesses from both SCO and Novell recognized Novell's ongoing financial interests and the importance of that interest. Section 4.16(b) was the key provision of the APA designed to protect Novell's financial interest. As Mr. Braham testified, Section 4.16 was drafted to avoid any doubt that Novell had the right to control what happened with the UNIX business and that if SCO did not do what it was supposed to as Novell's agent, Novell could step in and take what action it deemed necessary.236

132. The Court concludes that Novell's waiver rights are not limited to product supplement agreements, as argued by SCO. The Court reaches this conclusion based on a number of things. First, the financial interest Novell had in the SVRX royalty stream necessitates such a finding. As stated above, Novell retained a significant financial interest and Mr.

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Braham, as well as others, testified that Section 4.16 of the APA was designed to protect that interest. The somewhat hierarchical structure of the three types of agreements leads to the conclusion that Novell must retain rights over the software and sublicensing agreements as well. As was explained by Mr. Broderick, each company was required to obtain a software agreement. If Novell did not have the authority over the software agreements, SCO could easily cancel that agreement, necessarily cancelling both the sublicensing and product supplement agreements, and thereby deprive Novell of revenue.

133. Another consideration in support of the Court's conclusion is the contract language itself. The contract is not limited to product supplement agreements. The contract language refers to "SVRX Licenses" and does not differentiate between the three types of agreements. Further, other language in the APA, specifically Section 1.2(e) and Item VI of Schedule 1.1(a), support a broad reading of the language.

134. Finally, the Court considers SCO's evidence on this point to be less credible than that of Novell. For all of these reasons, the Court finds that Novell's waiver rights extend to software agreements, sublicensing agreements, and product supplement agreements.

135. With this conclusion in mind, the Court turns to Novell's actions with regard to its waiver rights. On June 9, 2003, Novell directed SCO to waive any right SCO may claim to terminate IBM's SVRX Licenses or to revoke any rights thereunder. When SCO failed to act, Novell waived those rights on SCO's behalf. On October 7, 2003, Novell directed SCO to waive any right SCO may claim to require IBM to treat IBM code as subject to the confidentiality obligations or use restrictions of IBM's SVRX Licenses. When SCO

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failed to act, Novell waived that right on SCO's behalf. Novell took similar actions in relation to SGI and Sequent.

136. The Court finds that Novell had the authority under Section 4.16(b) of the APA to direct SCO to waive its claims against these SVRX licensees, that Novell had the authority to waive such claims on SCO's behalf, and that SCO was obligated to recognize such waivers.

C. IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING

137. SCO argues that Novell's actions in directing SCO to waive certain claims against IBM, SGI, and Sequent breached the implied covenant of good faith and fair dealing. 138. The APA is governed by California law.237 Under California law, "[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement."238 "The covenant of good faith finds particular application in situations where one party is invested with a discretionary power affecting the rights of another. Such power must be exercised in good faith."239 That said,"[i]t is universally recognized the scope of conduct prohibited by the covenant of good faith is circumscribed by the purposes and express terms of the contract."240 The Court is "aware of no reported case in which a court has held the covenant of good faith may be read to prohibit a party from

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doing that which is expressly permitted by an agreement. On the contrary, as a general matter, implied terms should never be read to vary express terms."241

139. In this matter, the Tenth Circuit has cautioned "that it is not always the case that an express grant of contractual authority is not constrained by the operation of the covenant of good faith."242 "California recognizes at least two exceptional situations where the covenant of good faith may inform the interpretation of even an express grant of contractual authority. First, where the express discretion makes the contract, viewed as a whole, 'contradictory and ambiguous,' the implied covenant may be applied to aid in construction."243 "Second, the covenant may aid in the interpretation of a contract seemingly expressly granting unbridled discretion 'in those relatively rare instances when reading the provision literally would, contrary to the parties' clear intention, result in an unenforceable, illusory agreement.'"244

140. Considering Novell's actions, the implied covenant of good faith and fair dealing, and the exceptional situations discussed by the Tenth Circuit, the Court finds that SCO's breach of the implied covenant of good faith and fair dealing claim must fail.

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141. The Court finds, as an initial matter, that the actions Novell took with respect to IBM, = SGI, and Sequent were pursuant to an express contractual provision granting it the authority to do so for the reasons discussed above. Thus, generally speaking, Novell's conduct would not be a breach of the implied covenant.

142. Considering the exceptional circumstances discussed by the Tenth Circuit on appeal, the Court finds that neither are present here.

143. The first exceptional circumstance applies where the express discretion makes the contract, viewed as a whole, "contradictory and ambiguous," the implied covenant may be applied to aid in construction.245 Under the contract at issue in April Enterprises, one party had the right to syndicate episodes of a television show, while the other had the right to erase episodes of the show. Both parties shared revenues from compensation. Although the contract expressly granted one party the right to erase episodes, the court applied the covenant of good faith, holding that the contract was contradictory and ambiguous as to whether tapes could be erased while the other party was negotiating for syndication.

144. SCO argues that Novell's interpretation of Section 4.16(b) creates the same contradiction and ambiguity because, if Novell could change any part of the contracts that embody the UNIX-based business that Novell transferred, it could destroy that business. This argument, however, hinges on a faulty premise: that Novell transferred the UNIX business to SCO. As set forth above, Novell transferred the UnixWare business to SCO,

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while retaining substantial rights in the UNIX business. SCO's involvement with the UNIX business was as Novell's agent and those portions of the UNIX business that did transfer to SCO were transferred to aid SCO in this role. Because Novell did not transfer the entire UNIX business, it could take the above actions in relation to that business and the contractual provision allowing for such action cannot be viewed as contradictory or ambiguous. 145. The second exceptional circumstance, as stated in Third Story Music, Inc. v. Waits, provides that "courts are not at liberty to imply a covenant directly at odds with a contract's express grant of discretionary power except in those relatively rare instances when reading the provision literally would, contrary to the parties' clear intention, result in an unenforceable, illusory agreement."246 As set forth throughout this Order, this is not such a "rare instance."

146. Further, the Court finds that SCO's claim for breach of the implied covenant of good faith and fair dealing fails because Novell acted in good faith according to a reasonable interpretation of the contract language. A breach of the implied covenant requires "objectively unreasonable conduct, regardless of the actor's motive."247 Here, the Court finds that Novell's conduct was objectively reasonable, considering its actions and the language of the APA. The Court finds that Novell's actions were motivated to protect its

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own interests and those of the open source community and were not taken because of influence by IBM or any ill-will toward SCO.

IV. CONCLUSION

Based on the foregoing, it is hereby

ORDERED that Novell's claim for declaratory judgment is GRANTED. It is further

ORDERED that SCO's claims for specific performance and breach of the implied covenant of good faith and fair dealing are DENIED.

DATED June 10, 2010.

BY THE COURT:

________[signature]_______________
TED STEWART
United States District Judge

61

1 The SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1204 (10th Cir. 2009).

2 See Docket No. 377.

3 The SCO Group, Inc., 578 F.3d at 1227.

4 Id.

5 Docket No. 750.

6 Id. at 1.

7 Docket No. 839.

8 Docket No. 846.

9 Docket No. 750, at 1.

10 Id.

11 Docket No. 852.

12 Because of the Court's determination of the issues, discussion of Novell's defense of unclean hands is unnecessary in any event. In addition, the Court need not rule on Novell's defense of substantial performance.

13 Docket No. 731, at 3.

14 Id.

15 Id.

16 Id.

17 Id.

18 The SCO Group, Inc., 578 F.3d at 1204-05.

19 Id. at 1205.

20 Docket No. 542 at 7. Both parties agree that the Court's prior factual findings, to the extent not reversed, are applicable here. See Docket No. 852, at 21 & n.7; Docket No. 853, at 8 n.3; Trial Tr. 1917:8-1918:3.

21 Docket No. 542, at 7.

22 Id.

23 Id. at 7-8.

24 Id. at 9.

25 Trial Tr. at 88:9-89:13.

26 Id. at 90:13-25; id. at 223:4-11.

27 Id. at 223:12-228:6; id. at 92:14-93:19.

28 Id. at 90:2-12; id. at 221:24-222:2.

29 Id. at 234:19-25; id. at 353:3-10; id. at 459:14-22; id. at 2344:1-19.

30 Id. at 2346:23-2347:1.

31 Id. at 2305:5-2308:10; id. at 2347:2-5.

32 Id. at 2346:17-2348:3.

33 Id. at 2305:11-16.

34 Id. at 2347:6-2348:3.

35 Id. at 235:4-236:15; id. at 353:3-10; id. at 2344:20-2347:5; see also Trial Ex. 1, § 1.2(a)-(b).

36 Docket No. 731 at 3; see also Trial Ex. 1.

37 Docket No. 731 at 3; see also Trial Ex. 1.

38 Docket No. 731 at 3.

39 Trial Ex. 1, Recitals A-B.

40 Id. § 1.1(a).

41 Id. Schedule 1.1(a), § I.

42 Id.

43 Id. Schedule 1.1(a), § II.

44 Id. Schedule 1.1(a), § III.L.

45 Id. Schedule 1.1(a), § IV.

46 Id. Schedule 1.1(a), § V.

47 Id. Schedule 1.1(b), § V.

48 Id. Schedule 1.1(b), § VIII.

49 See The SCO Group, Inc., 578 F.3d at 1210 ("If we were to interpret the contract based initially only on the APA itself -- ”without regard to Amendment No. 2 -- we agree that its language unambiguously excludes the transfer of copyrights.")

50 Trial Ex. 1, § 1.2(b).

51 Id.

52 Id.

53 Trial Ex. 1, § 4.16(a) and Amendment No. 1.

54 Id., Schedule 1.1(a), § VI.

55 Id.

56 Trial Tr. 1731:24-1732:5.

57 Trial Ex. 1, § 1.2(e) and Amendment No. 1.

58 Id. § 4.16(b) and Amendment No. 1.

59 Id. § 1.6.

60 Trial Ex. 162.

61 Id.

62 Trial Ex. 1, § 1.6.

63 Trial Ex. Z3.

64 Id. at 2.

65 Trial Ex. 90.

66 Trial Ex. 1, Amendment No. 1; Trial Ex. T5.

67 Trial Ex. 1, Amendment No. 1; Trial Ex. T5.

68 Trial Ex. 1, Amendment No. 2; Trial Ex. N8.

69 Trial Ex. 1, Amendment No. 2; Trial Ex. N8.

70 Trial Ex. 1, Amendment No. 2; Trial Ex. N8.

71 Trial Ex. 1, Amendment No. 2; Trial Ex. N8.

72 Trial Tr. 90:2-9.

73 Id. at 148:13-24.

74 Id. at 221:24-222:2.

75 Id. at 230:24-231:4; id. at 304:2-10.

76 Id. at 278:1-279:11.

77 Id. at 279:12-280:8.

78 Id. at 280:9-24.

79 Id. at 281:13-282:13.

80 Id. at 349:13-16.

81 Id. at 351:8-11; id. at 351:20-22; id. at 352:5-8.

82 Id. at 374:8-375:11.

83 Id. at 445:12-446:5.

84 Id. at 442:11-444:8.

85 Id. at 458:14-19.

86 Id. at 455:20-456:9.

87 Id. at 456:10-457:6.

88 Id. at 491:15-21.

89 Id. at 501:3-4.

90 Id. at 504:7-8.

91 Id. at 504:9-505:7.

92 Id. at 510:11-24; id. 512:13-15.

93 Id. at 511:5-11.

94 Id. at 511:11-15.

95 Id. at 518:5-14.

96 Id. at 530:13-531:17.

97 Id. at 531:18-537:23; see also Trial Ex. X3.

98 Trial Tr. at 674:23-675:6.

99 Id. at 676:12-677:4.

100 Id. at 711:2-4.

101 Id. at 711:5-715:10.

102 Id. at 701:12-23.

103 Id. at 780:22-24.

104 Id. at 781:9-17.

105 Id. at 783:2-9.

106 Id. at 820:1-3.

107 Id. at 899:12-16.

108 Id. at 926:9-927:10.

109 Id. at 2346:17-2347:5.

110 Id. at 2363:19-23.

111 Id. at 2364:3-11.

112 Id. at 2365:2-9.

113 Id. at 2365:10-13.

114 Id. at 2438:14-16.

115 Id. at 2442:13-19.

116 Id. at 2021:24-2022:3.

117 Id. at 2022:7-2023:18.

118 Id. at 2036:5-22.

119 Id. at 2311:7-17.

120 Id. at 2284:2-3

121 Id. at 2284:9-10.

122 Id. at 426:9-13-428:5.

123 Id. at 2284:17-2285:1.

124 Id. at 2285:5-6.

125 Id. at 429:2-10; id. at 437:5-439:24.

126 Id. at 281:13:282:13; id. at 445:12-446:5; id. at 701:12-23.

127 Trial Ex. 526.

128 Id.

129 Trial Ex. 521.

130 Trial Tr. at 1779:2-20.

131 Id. at 641:19-642:3.

132 Trial Ex. 580.

133 Trial Tr. at 1705:22-1707:25.

134 Id. at 1964:8-22; id. at 1984:6-1985:21.

135 Trial Ex. 1, Amendment No. 2.

136 Trial Tr. at 911:8-10.

137 Id. at 913:12-15.

138 Id. at 875:7-14.

139 Id. at 802:23-803:1.

140 Id. at 802:17-22.

141 Id. at 667:20-21.

142 Id. at 621:16-25.

143 Id. at 997:3-14.

144 Id. at 997:14-23.

145 Id. at 1054:5-12.

146 Id. at 1687:22-24.

147 Id. at 1844:25-1846:1.

148 Id. at 1845:15-18.

149 Id. at 1847:16-24.

150 Id. at 1225:18-1226:10.

151 Id.

152 Id. at 1850:11-1851:18.

153 Id.

154 Id. at 933:2-7; id. at 939:3-18; id. at 816:19-817:14; id. at 2365:2-9.

155 Id. at 2105:18-25.

156 Id. at 2107:2-12.

157 Id.

158 Trial Ex. T34.

159 Trial Tr. at 2119:25-2120:6.

160 Id. at 2120:17-25.

161 Id. at 2128:1-19.

162 Id. at 2036:5-22.

163 Id. at 2037:18-25.

164 Trial Ex. 1, Amendment No. 2; see also Trial Tr. 2124:21-2127:18.

165 See Trial Ex. 1, § 1.2(b); see also Trial Tr. at 236:6-15; id. at 353:3-10; id. at 2344:20-2347:5.

166 Id. at 2310:14-15.

167 Id. at 2347:6-2348:3; see Trial Ex. 1, § 4.16(a); see also Trial Ex. 163 (stating that SCO "will manage the licensing business for UNIX prior to UnixWare 1.0 (SVRx)").

168 Trial Tr. at 2347:6-2348:3.

169 Id. at 2350:2-9.

170 Id. at 2310:15-2311:6.

171 Id. at 247:23-248:19; id. at 447:3-19; id. at 829:12-16.

172 Id. at 2350:10-19.

173 Id. at 2354:6-8.

174 Id. at 2355:6-13.

175 Trial Ex. 1, § 4.16(b).

176 Trial Tr. at 555:15-20.

177 Id. at 555:21-556:9.

178 Id. at 578:13-18.

179 Id. at 581:1-12.

180 Id. at 627:9-19.

181 Id. at 658:23-659:16.

182 Id. at 621:16-25.

183 Id. at 654:24-655:7

184 Id. at 110:2-21; id. at 247:23-248:19; id. at 367:22-369:10;id. at 447:3-19; id. at 494:23-494:18; id. at 852:1-10; id. at 906:7-23.

185 Id. at 379:12-381:5; id. at 519:17-520:14; id. at 654:24-655:7.

186 Id. at 1689:5-21.

187 Id. at 1689:22-1695:20.

188 Id. at 1696:16-1697:24.

189 Id. at 1695:21-1696:9.

190 The SCO Group, Inc., 578 F.3d at 1223.

191 Id. at 1206.

192 Docket No. 542, at 13.

193 The SCO Group, Inc., 578 F.3d at 1206-07.

194 Trial Tr. at 1882:7-15.

195 Id. at 1882:16-1883:19.

196 Id. at 1883:3-10.

197 Id. at 2289:6-2290:13.

198 The SCO Group, Inc. v. Int'l Bus. Machs. Corp., 2:03-CV-294 TC (D. Utah).

199 Trial Tr. at 1886:19:1887:1.

200 Id. at 1887:2-12.

201 Id. 1908:18-1909:12.

202 Id. at 1909:13-18.

203 Id. at 1909:19-1910:4.

204 Id. at 1910:5-8.

205 Trial Ex. F16.

206 Id.

207 Id.

208 Id.

209 Id.

210 Trial Ex. 675.

211 Id.

212 Trial Ex. F21.

213 Id.

214 Id.

215 Trial Ex. 691.

216 Trial Ex. G21.

217 Id.

218 Id.

219 Id.

220 Id.

221 Trial Ex. 108.

222 Trial Ex. 500.

223 Trial Tr. at 1613:22-1614:3.

224 Id. at 1638:3-11.

225 Id. at 2298:24-2299:23.

226 Haynes Trane Serv. Agency, Inc. v. Am. Standard, Inc., 573 F.3d 947, 959 (10th Cir. 2009).

227 Ag Servs. of Am., Inc. v. Nielsen, 231 F.3d 726, 732 (10th Cir. 2000).

228 Flying J Inc. v. Comdata Network, Inc., 405 F.3d 821, 837 (10th Cir. 2005) (citing Restatement (Second) of Contracts § 201(2)).

229 Trial Tr. at 2120:15-2121:2.

230 Id. at 1964:8-22; id. at 1984:6-1985:21.

231 Trial. Ex. 1, Schedule 1.1(a), § II.

232 Docket No. 142, at 26.

233 Trial Ex. 1, § 4.16(b).

234 The SCO Group, Inc., 578 F.3d at 1219.

235 Trial Ex. 1, § 4.16(a).

236 Trial Tr. at 2354:6-2355:13.

237 Trial Ex. 1, § 9.8.

238 Carma Developers (Cal.), Inc. v. Marathon Dev. Cal., Inc., 826 P.2d 710, 726 (Cal. 1992) (quotation marks and citation omitted).

239 Id.

240 Id. at 727.

241 Id. at 728.

242 The SCO Group, Inc., 578 F.3d at 1225.

243 Id. (citing April Enters., Inc. v. KTTV, 147 Cal. App. 3d 805, 816 (Cal. Ct. App. 1983)).

244 Id. (quoting Third Story Music, Inc. v. Waits, 41 Cal. App. 4th 798, 808 (Cal. Ct. App. 1995)).

245 April Enters., Inc., 147 Cal. App. 3d at 816.

246 Third Story Music, Inc., 41 Cal. App. 4th at 808.

247 Carma Developers, 826 P.2d at 727.


  


Stewart Rules: Novell Wins! CASE CLOSED! - Updated | 1284 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
SCOX(Q) DELENDA EST!!!
Authored by: rkhalloran on Thursday, June 10 2010 @ 04:20 PM EDT
Finally.

And at this point, all they have to look forward to are the IBM countercharges,
with their hands empty.

Awww.



---
SCOX(Q) DELENDA EST!!!

------
"They who can give up essential liberty to obtain a little temporary safety
deserve neither." - Benjamin Franklin

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Thursday, June 10 2010 @ 04:20 PM EDT
Whoops of joy around the globe :O)
Andrew Ed

[ Reply to This | # ]

Munchkins are very happy
Authored by: Anonymous on Thursday, June 10 2010 @ 04:21 PM EDT
Thanks Dorothy

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Thursday, June 10 2010 @ 04:21 PM EDT
Time for the red dress? (Sorry for anon posting, don't have access to my
password mgr at the moment...)

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Thursday, June 10 2010 @ 04:21 PM EDT
Excellent news at long last !

Does that mean we get a red dress day and some pics of it being worn ?

[ Reply to This | # ]

Novell 876
Authored by: DannyB on Thursday, June 10 2010 @ 04:22 PM EDT
95. Finally, the Court finds SCO’s evidence on this to be less credible for many
of the same reasons stated above . . .


---
The price of freedom is eternal litigation.

[ Reply to This | # ]

Chapter 7 fight?
Authored by: DannyB on Thursday, June 10 2010 @ 04:23 PM EDT
Ralph pushing for chapter 7 asap.

Cahn pulling against chapter 7 until the vultures have drained the rotting
corpse.

---
The price of freedom is eternal litigation.

[ Reply to This | # ]

Novell's waiver of IBM granted
Authored by: DannyB on Thursday, June 10 2010 @ 04:25 PM EDT
This kills IBM case except for counterclaims.

---
The price of freedom is eternal litigation.

[ Reply to This | # ]

woot!
Authored by: Anonymous on Thursday, June 10 2010 @ 04:25 PM EDT
Woot: red dress time!
http://www.youtube.com/watch?v=hjEyvivWb4U

[ Reply to This | # ]

  • woot! - Authored by: Anonymous on Thursday, June 10 2010 @ 04:52 PM EDT
    • woot! - Authored by: Anonymous on Thursday, June 10 2010 @ 07:06 PM EDT
    • woot! - Authored by: wvhillbilly on Friday, June 11 2010 @ 10:38 PM EDT
  • woot! - Authored by: Anonymous on Thursday, June 10 2010 @ 04:56 PM EDT
  • woot! - Authored by: Anonymous on Thursday, June 10 2010 @ 05:00 PM EDT
  • woot! - Authored by: mzaugg on Friday, June 11 2010 @ 11:33 AM EDT
Is it time for the Red Dress?
Authored by: Anonymous on Thursday, June 10 2010 @ 04:31 PM EDT

After all... until the final Appeal's Court available to SCOG says no... they always have their insatiable desire to proceed against all odds.

RAS

[ Reply to This | # ]

Congratulations thread
Authored by: Anonymous on Thursday, June 10 2010 @ 04:31 PM EDT
Congratulations to Novell, IBM and, of course, PJ !!!

Loïc

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: KayZee on Thursday, June 10 2010 @ 04:32 PM EDT
Bankruptcy court are you paying attention to this now please?

Can SCO Group appeal?

[ Reply to This | # ]

You might want to wait on the red dress.
Authored by: Anonymous on Thursday, June 10 2010 @ 04:33 PM EDT
If I were a betting man, I would be eyeing the odds on Yarrow
swooping in to take the UNIX business in hand before the
bankrupcy court can start doing anything.

---
Clocks
"Ita erat quando hic adveni."

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: jvillain on Thursday, June 10 2010 @ 04:33 PM EDT
I can't believe how shell shocked I was when I read that. At first all I could
think is that I read it wrong. Then I thought it must be April 1. Then I thought
PJ must have typed it wrong. It's just sinking in now.

Wow. How much time money and other intangibles have been waisted by this
endeavour? Cue the SEC, the bar association and the Dept of Justice.

[ Reply to This | # ]

To all who unjustly accused the judge of bias....
Authored by: tiger99 on Thursday, June 10 2010 @ 04:33 PM EDT
Perhaps you would care to post a brief apology here?

Even the other day, someone was trotting out the usual accusations, yet the impression I was having was that he had merely bent over backwards to be fair to SCO, to avoid the risk of further appeals. There was no proof that he was in any way helping them to win.

I have no such feeling that Judge Gross is doing a good job, but that is another court, in another state....

[ Reply to This | # ]

Corrections Thread
Authored by: bugstomper on Thursday, June 10 2010 @ 04:33 PM EDT
I sure hope there's nothing to correct in this announcement! Well, maybe there
will be a typo or two. Remember to summarize error->correction or
s/error/correction in the Title box

[ Reply to This | # ]

Finally!!!
Authored by: om1er on Thursday, June 10 2010 @ 04:34 PM EDT
Hopefully with finality.

I just don't see how they can even hope to recover anything from this beating.
It's time for them to fold up the tent and go to a new state.

---
March 23, 2010 - Judgement day.

[ Reply to This | # ]

  • Finally!!! - Authored by: Anonymous on Thursday, June 10 2010 @ 04:48 PM EDT
SCO's tinfoil hat on
Authored by: Anonymous on Thursday, June 10 2010 @ 04:34 PM EDT
According to you, does it mean that Judge Stewart had understood from day 1 that
SCOX's case was empty and moot and ruled (most of the time) against Novell just
not to give SCOX any reason to appeal ?

Loïc, full of double negatives

[ Reply to This | # ]

Off Topic threads
Authored by: bugstomper on Thursday, June 10 2010 @ 04:35 PM EDT
If your topic is off, place it here. Use HTML clickies for everyone's
convenience.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Thursday, June 10 2010 @ 04:35 PM EDT
Fantastic news, i can hardly believe it. Huge thanks to
those that made till happen. I will be able att get more
work done now that i wont spend hours everyday reading
and learning from you guys. 7 years have passed....thanks
from Sweden

[ Reply to This | # ]

News Picks Thread
Authored by: bugstomper on Thursday, June 10 2010 @ 04:37 PM EDT
Pick your News here. Please include a clickable link to the News Picks article
in case your comment is being read after the article has scrolled off the News
Picks column.

[ Reply to This | # ]

A silly question
Authored by: Anonymous on Thursday, June 10 2010 @ 04:38 PM EDT
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

Does Novell need to send another request for SCO to waive, or does the old one still apply?

[ Reply to This | # ]

COMES goes here
Authored by: bugstomper on Thursday, June 10 2010 @ 04:39 PM EDT
There's still more COMES to go. If you have any to submit, remember to use HTML
markup posted as Plain Old Text to make it easy for PJ to copy and paste.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: joef on Thursday, June 10 2010 @ 04:39 PM EDT
And the market price collapsed: $0.045. The slide stated at noon (probably with
those who got early word), and reached a low of $0.03 before bouncing a bit.
Market cap is now under $1million. Over a million shares traded

What will I do for entertainment now?

[ Reply to This | # ]

"SCO is entitled to waive" ...
Authored by: Anonymous on Thursday, June 10 2010 @ 04:41 PM EDT
"SCO is entitled to waive, at its sole discretion, claims against IBM,
Sequent and other SVRX licensees."

Wouldn't that be Novell is entitled to waive?

[ Reply to This | # ]

Just a little bit of Nazgul ...
Authored by: Anonymous on Thursday, June 10 2010 @ 04:43 PM EDT
"unless IBM wishes to pursue its counterclaims"

Come on IBM, fire up the Nazgul, just one or two filings to
get the other case moving - now's the time to give SCO that
extra little push into chapter7

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Jeff on Thursday, June 10 2010 @ 04:43 PM EDT
I get this news and my wife finally gets a job (after months of unemployment) on
the same day. I don't know how today could get better.

[ Reply to This | # ]

Well Done Judge Stewart!
Authored by: Anonymous on Thursday, June 10 2010 @ 04:47 PM EDT

While we saw certain "facts" as presented by the Appeal's Court, it appears Judge Stewart got a very clear picture indeed. Here's but one example:

11. It was the initial intent of Novell to sell the entire UNIX business. However, during the negotiations, the parties realized that Santa Cruz could not afford to pay cash or stock for the entire purchase price sought by Novell.
My hat is off to Judge Stewart for not being pulled in to the ambiguity and confusion SCOG wanted to paint as a picture and recognize what the actual facts are.

RAS

[ Reply to This | # ]

SCOXQ.PK
Authored by: tiger99 on Thursday, June 10 2010 @ 04:48 PM EDT
Link

Last trade 0.045
Change -0.065 (-59.09%)

But was as low as $0.032. Is this the final dead cat bounce?

Amazingly 1,101,982 shares changed hands. Someone must have a lot of wallpapering to do, or bonfires to light, or bottoms to wipe, or whatever SCOX are still useful for.

[ Reply to This | # ]

Do celebrate, but ...
Authored by: Silurian on Thursday, June 10 2010 @ 04:50 PM EDT
We celebrate this victory, this battle, tonight we feast, we drink, and we
dance. Do not think for a moment that the war is over. The warrior is wounded,
severely wounded, but is not yet dead. His commanders are unharmed, and there
are other warriors.

[ Reply to This | # ]

what happens to arbitration?
Authored by: nola on Thursday, June 10 2010 @ 04:53 PM EDT
What happens to the arbitration?

Is it resolved in favor of SUSE/Novell if SCO fails to appear?

[ Reply to This | # ]

Where, oh where...
Authored by: Anonymous on Thursday, June 10 2010 @ 04:56 PM EDT
... have all the mouthy trolls gone?

MSS2

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: nola on Thursday, June 10 2010 @ 04:58 PM EDT
Can SCO appeal Judge Stewart's ruling automatically or must it request leave?

I can't believe that it really REALLY is over unless/until the appeal has been
made all the way to the Supreme Court.

[ Reply to This | # ]

Maureen O'Gara...
Authored by: Anonymous on Thursday, June 10 2010 @ 05:11 PM EDT
...anyone know how she's spinning this into a win for SCO?

;)

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Thursday, June 10 2010 @ 05:23 PM EDT
PJ, you look great in the red dress. I'm really excited to learn about the
results and looking forward to the future when SCO goes chapter 7 (hopefully).

On the down side I always looked forward to the antics during the IBM and
subsequent Novel trials, and will miss them.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: webster on Thursday, June 10 2010 @ 05:34 PM EDT
.

Stewart's comments on the knowledge and relevance of SCO's witnesses appear to
support Kimball's conclusions.

.

[ Reply to This | # ]

Well done comrades.....
Authored by: Anonymous on Thursday, June 10 2010 @ 05:38 PM EDT
....it has been good to know you.

[ Reply to This | # ]

Specific Performance
Authored by: darrellb on Thursday, June 10 2010 @ 05:42 PM EDT
Many of us were wondering how the Court would rule on the question of specific performance. This sums it up quite nicely:
SCO’s request for specific performance must be rejected for three reasons. First, the jury verdict has determined that the amended APA did not transfer the copyrights from Novell to SCO. Second, it was not the intent of the parties to transfer ownership of the copyrights. Finally, the copyrights are not required for SCO to exercise its right with respect to the acquisition of UNIX and UnixWare technologies.

---
darrellB

[ Reply to This | # ]

What about the supreme court case ?
Authored by: bilateralrope on Thursday, June 10 2010 @ 05:46 PM EDT
Will it still go forwards ?

[ Reply to This | # ]

WHOOT!
Authored by: SilverWave on Thursday, June 10 2010 @ 05:47 PM EDT
:-)

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

I don't really believe it
Authored by: Alan(UK) on Thursday, June 10 2010 @ 05:54 PM EDT
Obvious grounds for appeal, 'Judge Stewart blatantly gave us every advantage,
thus convincing the jury that he was in collusion with us'.

---
Microsoft is nailing up its own coffin from the inside.

[ Reply to This | # ]

Reading complete, final SCORE is?
Authored by: Anonymous on Thursday, June 10 2010 @ 06:00 PM EDT

In favor of even a single SCOG claim:

    *crickets chirpping*
    Kimball ruling the amount SCOG owes Novell is far smaller then a lot of people figure.
Against every SCOG claim:
    Judge Kimball - almost... he did give them a much smaller debt load then he could have.
    Jury - just not enough from SCOG to convince the Jury the copyrights transferred.
    Judge Stewart - seems to this layman, Judge Stewart found SCOGs witnesses as credible as Judge Kimball did.
I wonder if SCOG is finally, with a score of 3:0 in favor of Novell, going to realize no one wants to buy what SCOG is trying to sell.

If you count the Appeal's Court giving SCOG a second chance to argue their perspective a point for SCOG, then I guess the score is 4:1 in favor of Novell... after all... the Appeal's Court did confirm the money owed by SCOG to Novell but never confirmed anything for SCOG... just a second chance to argue.

RAS

[ Reply to This | # ]

Boies Schiller
Authored by: arthurpaliden on Thursday, June 10 2010 @ 06:05 PM EDT
The next question is; "When will if anything be done about sanctions?"

---
Audio Books On Demand, No CDs, No File Managment, Just Drag Drop Play,
www.audiopod.ca

[ Reply to This | # ]

Heh my purchase of a HTC Desire is particularly apt then :-) Linux here Linux there, Linux Every
Authored by: SilverWave on Thursday, June 10 2010 @ 06:12 PM EDT
I was celebrating a different event with this purchase but...

I can now have it marking my RL celebration and...

It will now always mark the death of SCO!

Yeah! Two birds... one stone :-D

Note:

Being very, very, sad I signed up for the phone yesterday and did all my running
around today so that I can stay in, to ensure I don't miss the delivery :-)

I know, I know, sad, sad, sad. ;-) LOL

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

MIlestones
Authored by: Anonymous on Thursday, June 10 2010 @ 06:19 PM EDT
What happens to Groklaw now? 'Cept for the cleanup, what does the future for
Groklaw look like?

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Thursday, June 10 2010 @ 06:19 PM EDT
I think we've all misunderstood Ted Stewart

He has been simply covering all the angles and making sure SCO's grounds for
appeal were groundless - probably the best way to handle a vindictive,
manipulative plaintiff who has no real reason for justifiably suing anybody.

This is Ted's Coup de Grace.

We're well past the "its just a flesh wound" stage now.

[ Reply to This | # ]

CASE CLOSED?!? We HOPE!!!
Authored by: Anonymous on Thursday, June 10 2010 @ 06:22 PM EDT
Hey we are are talking about the SCO Zombie that never dies. How many times have
we thought that we had seen the last of the SCO Zombie only to see it rise once
more? Sort of reminds me of that scene from Monty Python. But now that the SCO
Zombie has no head, no arms, and no legs we would hope it is now forever DEAD...
Unfortunately the SCO Zombie still has heart.....

[ Reply to This | # ]

the last air goes out of the balloon...
Authored by: karl on Thursday, June 10 2010 @ 06:26 PM EDT
The stock lost 59% of its value in the afternoon trading session, tho' why anyone was buying stock in a company in chapter 11 is a mystery that gives me a headache if I think about it for too long. I had considered trying to short it again but the volatility of a stock trading at 11 cents was too much.

Microsoft funded this circus with $50M, or, better for them, apparently tricking some fund into giving new SCO $50M of their own money on some vague promise that Microsoft was going to cover it. Ha ha, sucker. Sun contributed to the melee by "buying" a "license" to SCO's (nonexistent) intellectual property, another attempt IMO to fund an attack on Linux, I think in the vicinity of $16M. You can see what a great job Sun did in the marketplace over those years, did so well that they recently bought database powerhouse Oracle (joke!).

Even though ultimately SCO got their butts kicked, getting $50M to them to pursue their quixotic battle probably did slow adoption of Linux. It's easy to guess that Microsoft salespeople privately made all sorts of over-the- top/unfounded statements and insinuations about the risk to a customer of using Linux... for many years.

I spent way too much time reading articles on groklaw about it... another benefit for the opposition... get all the open source coders frothing at the mouth rather than writing code.

Farewell, SCO... you were sorta OK once in an earlier incarnation, but now you're just a desiccated, diseased, discarded old husk that'll be rolled over by semis on I-80, over and over until it flakes apart and blows to dust in the desert wind. And hey, Darl McBride? Can't want to read about your next venture, because you've brought so much mirth to so many peoples' lives.

When all this was breaking back in '03, I predicted that eventually someone at SCO would go to jail over all the lying... but I'm pretty sure I was wrong about that.

[ Reply to This | # ]

Justice delayed is...
Authored by: Gringo on Thursday, June 10 2010 @ 06:30 PM EDT

...justice denied! How many millions did Novell have to pay to defend itself from these scrum bags? How many millions did SCO cost IBM? How many hours of productivity were lost by Groklaw fans reading about this over the years, and how did this impact the economy?

[ Reply to This | # ]

Hooray!!!!
Authored by: Anonymous on Thursday, June 10 2010 @ 06:34 PM EDT
I am ____SOOOOOOO_____ looking forward to reading how the SCO PR paint this as a
win.

Rofl.

[ Reply to This | # ]

Coincidences
Authored by: Anonymous on Thursday, June 10 2010 @ 06:36 PM EDT
Is the timing of the payment of the constructive trust funds
from tSCOg to Novell coincidence, or was this foreseen?

[ Reply to This | # ]

Wow...
Authored by: Bas Burger on Thursday, June 10 2010 @ 06:38 PM EDT
After 7 years I can finally congratulate you with victory, I signed on 6 or 7
years ago to support you and all others for the fight with SCO over their
ridiculous claims that we Linux users owe them a substantial amount of money
while none of the code came from any Unix, only the ideas came from Unix.
You proved not only that this website was opened right on time but also that it
was important to look at the judicial points of the software world, you were
right all the time.
I am glad that we are at this point of time and I hope you make use of this
vehicle (Groklaw) for many more years and inform us over many issues.
We have seen last 7 years that more and more litigation in our world of software
is happening and that there are still many more parties that try to heckle us
and twist our legs.

Thanks and wish you more successes in the future PJ.

Greetings,
Bas Burger.


---
No comments...

[ Reply to This | # ]

Now, now--it's not nice to gloat...
Authored by: Balance on Thursday, June 10 2010 @ 06:44 PM EDT
...but it sure is fun! :D

---
"That which can be destroyed by the truth, should be."
--Kirien, Seeker's Mask

[ Reply to This | # ]

What about criminal charges?
Authored by: Anonymous on Thursday, June 10 2010 @ 06:51 PM EDT
Now that the civil cases are nearly completely resolved, what is the likelyhood
that criminal charges will be brought against the SCO gang for securities fraud?
It seems pretty obvious to even a casual observer that they knowingly made
false statements in order to drive up their stock price.

[ Reply to This | # ]

APPEAL THAT!
Authored by: Anonymous on Thursday, June 10 2010 @ 06:58 PM EDT
I think Stewart set a high appeal bar for SCO to clear. I'll bet it was
deliberate, knowing SCO's chances were not good and that they would try to
appeal a ham sandwich.

PJ is rooting for an appeal in this tragedy. I don't see enough life left in the
SCO carcass to get up off the floor. I don't think there will be enough
invisible props to raise SCO from the floor. It will take a very clumsy puppet
show where the control lines and visible hands steal the show, to grant her
wish, with the way that chapter 7 is looming. I've got popcorn in the cupboard
just in case.

PJ, you look stunning in your red dress.

[ Reply to This | # ]

The good will out
Authored by: Griffin3 on Thursday, June 10 2010 @ 07:02 PM EDT
I am glad, my "cynicism" didn't turn out to be correct. It's
still a heck of a way to run a universe, though. At seven
years per case, seems like it wouldn't take too many running
in parallel to just saturate the bulk of the linux capital
out there. {sigh}

Jolly good work on your (Groklaw's) part of it, though.

Glenn

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: mashmorgan on Thursday, June 10 2010 @ 07:08 PM EDT
For you redditors
its no#2 on Linux

http://www.reddit.com/r/linux/comments/cdpdm/bye_bye_sco/

[ Reply to This | # ]

Novell Wins! CASE CLOSED!
Authored by: GriffMG on Thursday, June 10 2010 @ 07:09 PM EDT
Fantastic

Thank you to all at Groklaw for providing this invaluable service!

xxx
xx
x

(and I don't just kiss anyone!)

---
Keep B-) ing

[ Reply to This | # ]

I may be here alone tonight, but...
Authored by: eggplant37 on Thursday, June 10 2010 @ 07:12 PM EDT
...I'm raising a glass anyway to toast the end of this fiasco.
Seven years and a month it took to kill it, but I hope it's dead
for good.

[ Reply to This | # ]

Yay!!!!
Authored by: mossc on Thursday, June 10 2010 @ 07:15 PM EDT
I will probably comment more later but I feel compelled to go out for a
celebratory beer now.

It has been a long time coming.

Thank you PJ and all the other contributors, trial attendees etc.

Chuck
p.s. a good time to paypal a champagne/red dress/chocolate contribution

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Thursday, June 10 2010 @ 07:18 PM EDT
Can we take 'em out and string 'em up now? Can we, Sheriff?

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Thursday, June 10 2010 @ 07:26 PM EDT
As I remember, it was Bois Schiller who conducted an intellectual property
review and recomended the litigation strategy to monetize SCO's intellectual
property.

[ Reply to This | # ]

WOOOOOT !!!
Authored by: Tufty on Thursday, June 10 2010 @ 07:28 PM EDT
I wonder if something was in the wind when Novell got paid?

Tufty


---
Linux powered squirrel.

[ Reply to This | # ]

  • WOOOOOT !!! - Authored by: Tyro on Friday, June 11 2010 @ 05:37 PM EDT
    • WOOOOOT !!! - Authored by: Tufty on Friday, June 11 2010 @ 06:43 PM EDT
    • WOOOOOT !!! - Authored by: Anonymous on Saturday, June 12 2010 @ 12:54 PM EDT
Red Hat suit?
Authored by: Anonymous on Thursday, June 10 2010 @ 07:30 PM EDT
This is the only one where SCO isn't the plaintiff. If Chapter 7 is carried out,
and the Bankruptcy Court relinquishes jurisdiction, is there anyone left for Red
Hat to sue?

I do wish we would get to the merits of IBM and Red Hat.

Maybe we'll get lucky and Gross will unstay, say, IBM. Cahn said SCO still has
claims against IBM independent of Novell.

You know me. Let's them and them fight.

[ Reply to This | # ]

Outstanding News!
Authored by: SK8TRBOI on Thursday, June 10 2010 @ 07:31 PM EDT
For PJ:
"When you are inspired by some great purpose, some
extraordinary project, all your thoughts break their bonds;
your mind transcends limitations, your consciousness expands
in every direction, and you find yourself in a new, great
and wonderful world. Dormant forces, faculties and talents
become alive, and you discover yourself to be a greater
person by far than you ever dreamed yourself to be."
Patanjali, 3rd Century BC

Thanks PJ, for inspiring this 'extraordinary project'.

---
SK8TRBOI

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: ilde on Thursday, June 10 2010 @ 07:35 PM EDT
Bravooooo!!!!

Thanks PJ.
Thanks everybody.

"Thanks" to SCO for all the "fun", and a joyous R.I.P.

Amen.

[ Reply to This | # ]

How come Boies Schiller couldn't call it right
Authored by: Anonymous on Thursday, June 10 2010 @ 07:37 PM EDT
The expectation for money made many intelligent people dump as a stone and lose
everything, including their dignity.

And SCO and their lawyers saw plenty of money, billions over billions. Wouldn't
it have not been stupid to not go after it? And there was little to lose for
them, little money in relation to these vast sums, nothing more.


cb

[ Reply to This | # ]

Time for the Black Knight reference
Authored by: Anonymous on Thursday, June 10 2010 @ 07:44 PM EDT
Surprised it's not mentioned yet. Sco is now the squirming Black Knight missing
all 4 limbs. It will still claim a draw, and that (in lieu of Arthur being
yellow for riding on) with more money and time it could still win. It's
invincible after all...

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: Anonymous on Thursday, June 10 2010 @ 07:50 PM EDT
Finally, hooray!

and to think I got an email from sco just the other day announcing new
certifications for their product (not kidding)

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: Steve Martin on Thursday, June 10 2010 @ 07:53 PM EDT

Thus spake PJ:

I'm pretty sure that if SCO is praying to God for a miracle, it's not the type of prayer that gets answered.
I'd have to respectfully disagree with you there, PJ. I was taught (and firmly believe) that God answers all prayers.

But sometimes the answer is "no".

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

[ Reply to This | # ]

My, how things have changed.
Authored by: Steve Martin on Thursday, June 10 2010 @ 07:57 PM EDT

A call to SCO's general counsel went unanswered.
Hm. I guess Ms. O'Gara is no longer on the "A" List. Pity.

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

[ Reply to This | # ]

Who says SCO failed?
Authored by: Anonymous on Thursday, June 10 2010 @ 08:14 PM EDT
While I am quite pleased by the outcome, the damage done is quite considerable.
SCO was merely a chess piece. An expendable chess piece at that. Is there
*anyone* involved in this fiasco financially worse off today than they were
before they began? I don't see any of these clowns moving to the projects and
driving a 10 year old hyundai any time soon.

They did their job. They muddied the waters and created years of FUD. Just the
fact that SCO lasted as long as it did and inflicted the damage it has slowed
down Linux quite a bit and hurt a lot of people. They get to walk away, a little
older, but well paid, and you can bet they will be rewarded for their service.

It is hard to really consider this winning.

[ Reply to This | # ]

"IBM will never stand trial"? That's not IBM's fault
Authored by: Anonymous on Thursday, June 10 2010 @ 08:15 PM EDT
Dear, dear Mo. IBM was ready go at it. It's SCO that chickened out. And you
better hope IBM doesn't come after you for trade libel, or whatever else they
can think of. What you're saying about IBM isn't free speech.

[ Reply to This | # ]

Now that's a "Bing!"
Authored by: Anonymous on Thursday, June 10 2010 @ 08:16 PM EDT
In the immortal words of Ned... Ned Ryerson?

Bing!

Am I right? Or am I right, or am I right?"

Well, there's the old oak stake, right through the heart. Unfortunately, these blood-sucking scoundrels have a nasty habit of rising from the grave in the sequel(s). Oh dear lord, I never want to sit though one like this again.

I just wish there was an actual grave we could dance on.

Massive props for staying the course, PJ (and supporting cast).

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: josmith42 on Thursday, June 10 2010 @ 08:16 PM EDT
Woot!

Now if only we could get a decision on Bilski...

:-)

---
This comment was typed using the QWERTY keyboard layout. I used to use Dvorak,
but no longer :-(

[ Reply to This | # ]

So what's next?
Authored by: Anonymous on Thursday, June 10 2010 @ 08:24 PM EDT
As I recall, having waiting years and years, SCO has attempted to sue not only
IBM but Chrysler/Diamler and Autozone. I know all those cases are now closed but
what of the expenses Autozone had re: the "Limited Discovery" order
that judge granted SCO? Do those attorneys simply become another creditor?

And what of the counterclaims filed by IBM? Do they go away? Will IBM pursue
them until SCO really is a grease spot on the super-tech highway? The reason I
ask those questions is I seem to recall others here always claiming,
"remember, IBM has counterclaims if SCO loses and is still on the face of
the planet."

Does SCO now have to convert to Chapter 7 or can they continue under Chapter 11
prolonging the pain in the hopes that their phone offerings will survive?

Lastly, congratulations PJ and Groklaw. You did make a difference in what I have
always seen as Darl's pump and dump scheme. Because of you, I doubt their
pumping got as high as they hoped it would get (although it did get higher than
it deserved). This case has gone on since March 2003. It took the courts that
long to come to the same conclusion Groklaw reached even back then. I still
consider that an inefficiency in our court system. The constant foot dragging
and continuous delays, often with the court's blessing, has made this a far
longer road than it needs to be.

[ Reply to This | # ]

"Amazing Case, how weak the grounds" - worth another retelling
Authored by: SirHumphrey on Thursday, June 10 2010 @ 08:30 PM EDT
Authored by: SirHumphrey on Friday, December 15 2006 @ 04:05 AM EST
Amazing Case, how weak the grounds
brought by a wretch like me....
This case is lost and so unsound,
So blind, that, I can't see.

This case has taught me how to spread
fe-ar, uncertainty, doubt
How precious did that FUD appear...
the hour we started out.

De Novo reviews don't bother me...
I think the case Judge has erred.
I need this expedited delay
to be urgently deferred.

Through many frivolous appeals...
we have already come.
This case which brought us nought thus far...
goes on and on and on.

The PIPE fairy has funded me...
Its cash my hope secures.
It will my shield and portion be...
as long as TIME endures.

When we've delayed ten thousand times...
Just like we have from day one.
We've no less days to bring delays...
than when we've first begun.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: Anonymous on Thursday, June 10 2010 @ 08:50 PM EDT
You know what else I can't wait to hear? What SCO's trustee Edward Cahn tells the bankruptcy court now. First he told it that SCO had worthy claims, then he said they had a 50-50 chance, all to justify going forward with this turkey of a case, at huge expense to SCO instead of paying SCO's creditors.
I think PJ may be a little disappointed here. At least, I'm not so interested.

I think that stuff is old news for him. I agree that he didn't actually say in the bankruptcy court that SCO had a 50-50 chance as the same time he said that their claims had merit, but his actions show that he was thinking it already. Of course, that was about the jury verdict and the some other stuff that required SCO to own the copyrights. He already talked to the court about loosing that.

I think he considered everything else to be low probability, but still worth it because it was low cost compared to the potential gain. I expect him to say something like, "Well, that didn't work either, but I thought it was worth a shot" and just move on to the next topic, again.

I have some sympathy for Novell's representatives, who will have to be biting their tongues to avoid screaming "How many times did we tell you so!!!!" but I suppose they get paid well for that.

[ Reply to This | # ]

I hope someone props up the SCO legal team a bit longer
Authored by: NibbleAbit on Thursday, June 10 2010 @ 08:52 PM EDT
This is truly great news, but I hope it is not over. Not
just because I have had such great fun reading this (and I
have since the beginning).

There are still some unanswered questions to need to go
through the legal system (more quickly I hope). SCO made
some allegations about copyright infringement. We all know
them to be bogus, but the claims were never tested in court.
Novelle clearly now is the owner, but how many times has
this code changed hands in the past? Businesses do sell
assets. The next owner of the code may turn out to be Son-
Of-SCO, and try this all over again. I would feel much more
comfortable if there was a total annihilation of any doubts
forever.

All this does is state that the good guys currently own the
code. I would like it proven once and forever that Linux
does not have any code from any variant of Unix that it is
not entitled to use. I don't want another decade like the
past one (Or the one in the early 90's) to surface again.

[ Reply to This | # ]

Please learn to fight fair. No. Really.
Authored by: Anonymous on Thursday, June 10 2010 @ 08:54 PM EDT
Sorry, PJ. If you build a large, profitable company (illegally), you are ill
prepared to fight fair; You just don't know how! and others can easily take
advantage of you - something a bill gates could not possibly allow to happen.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: Totosplatz on Thursday, June 10 2010 @ 08:55 PM EDT
Thank goodness. I was begining to think I would never see thisday! (I am
recovering in Zhuhai from removal of a brain tumor) This is a great day indeed.
I wonder what the world will say now?

---
Greetings from Zhuhai, Guangdong, China; or Portland, Oregon, USA (location
varies).

All the best to one and all.

[ Reply to This | # ]

SCOX's legal files: can we buy them?
Authored by: Larry West on Thursday, June 10 2010 @ 09:00 PM EDT
Assuming Chapter 7 is in the offing and eventually even the corporate shell will
be sold off or shut down...

I'd gladly pay some money to purchase enough of an interest in SCOX's corporate
corpse to gain access to the legal files. Or just buy the rights to them.

And publish them.

So: is this legally possible (I can't see why not, it's the corporation itself
that is protected by confidentiality)?

And does anyone have a clue as to how much this might cost?

[ Reply to This | # ]

Stewart Rules: Judge Stewart ROCKS !!!
Authored by: dmarker on Thursday, June 10 2010 @ 09:01 PM EDT

If I at any time questioned Judge Stewart's motives I humbly apologize (I don't
think I did but what a great time for an apology anyway :) :) :) )


Am now wondering how tSCOg and BSF will keep their litigation ball bouncing as
self remains convinced they will try.

DSM

[ Reply to This | # ]

History
Authored by: nattt on Thursday, June 10 2010 @ 09:11 PM EDT
PJ has put herself in the internet history books. Thanks PJ.

[ Reply to This | # ]

Pray that IBM and Red Hat go forward
Authored by: Anonymous on Thursday, June 10 2010 @ 09:25 PM EDT
PLEASE let us wipe the face of the earth with to continuing lawsuits. IBM's
counterclaims and Red Hat's suit.
One must cut the head off the snake and then burn the remains.
Die, die die SCOG.

[ Reply to This | # ]

Thank you PJ
Authored by: froggie on Thursday, June 10 2010 @ 09:29 PM EDT
It seems like I have been following this mess (and Groklaw) forever.

PJ, thank you so much for all of the time and effort that you have invested in
informing and educating us about all of the issues involved.

A further thanks to all who have contributed to this massive project - even the
naysayers.

All of you have made a huge difference, and I believe that this site has had a
definite effect on the outcome of these cases.

[ Reply to This | # ]

  • Thank you PJ - Authored by: psgj on Thursday, June 10 2010 @ 10:04 PM EDT
  • Thank you PJ - Authored by: Anonymous on Friday, June 11 2010 @ 10:50 AM EDT
  • Thank you PJ - Authored by: Anonymous on Friday, June 11 2010 @ 12:10 PM EDT
  • Thank you PJ - Authored by: laitcg on Friday, June 11 2010 @ 04:44 PM EDT
What? No "Novell" on BSF site?
Authored by: Anonymous on Thursday, June 10 2010 @ 09:45 PM EDT
You'd think they'd have heard of "Novell" by now. http://www.bsfllp.com /news/search_out? query=novell

[ Reply to This | # ]

"Groklaw was never biased"... a quibble
Authored by: Anonymous on Thursday, June 10 2010 @ 10:10 PM EDT

Firstly, I've never thought SCO has had a leg to stand on. This is not about that. Gosh darn it (because PJ doesn't allow more appropriate epithets), I frequently complained about the length of time it has taken for SCO to wind it's way through the system (and the associated costs). I personally think that this case proves the justice system is only equitable if you have two sides of equal financial & legal resources. If you don't have the money to pay for seven years of litigation, and your opponent does, you're #$%& out of luck.

That said, just because one turns out right does not make one non-biased. A black guy convicted by a jury of robbing someone doesn't make a racist guy non-biased, just right in that particular case. Given that Groklaw has branched out into other issues where info-tech meets judicial law (such as the TurboHercules case), one cannot take a win that you desired to be indicative of objectivity. It simply means that, in this case, you were right. An important distinction to make.


--EK

[ Reply to This | # ]

"SCO's stock I see is today worth a nickel"
Authored by: Yossarian on Thursday, June 10 2010 @ 10:50 PM EDT
I shorted SCO when it was $1.50, and I've never covered my
short. It caused some headache to my accountant, she had never
seen before somebody who has kept an open short position for a
couple of years. So she asked me "well, you bought it for
$1.5, if you cover at $0.10 you still have a nice profit and
no risk, why don't you just cover your short? My answer was
"ten cents is way over-price for SCO stock."

The accountant just gave me a strange look and shrugged it.

[ Reply to This | # ]

Please take this down. NOW.
Authored by: cpeterson on Thursday, June 10 2010 @ 10:52 PM EDT
For shame - have you learned nothing on Groklaw?

That's the entire text of MOG's article, and, though we thoroughly disagree with
her, there is no cause to go lifting it in full - unattributed, no less - and
pasting it on PJ's site.

Forgetful, or are you attempting to create one last piece of trouble?

[ Reply to This | # ]

So what dose Judge Gross, do next?
Authored by: Anonymous on Thursday, June 10 2010 @ 10:54 PM EDT
So what dose Judge Gross, do next? With any real hope that
SCO can prevail now being dashed, what will happen with the
bankruptcy?

[ Reply to This | # ]

redhat?
Authored by: Anonymous on Thursday, June 10 2010 @ 11:01 PM EDT
Isn't the redhat case still pending? This should put the final nail in that
case, too.

Interestingly enough, David Bois is currently personally arguing the case
against the same sex marriage prohibition in california.

[ Reply to This | # ]

7-8 years to expose this SCO Scam
Authored by: Anonymous on Thursday, June 10 2010 @ 11:10 PM EDT
not good sign considering what it cost to do so should some
one attack a little guy.

[ Reply to This | # ]

Holy Rusted Metal Batman!
Authored by: MDT on Thursday, June 10 2010 @ 11:28 PM EDT
Woohoo! This has been a super good week. Got a new Motorola Droid phone (which
I *love* by the way), and now this. I honestly can't post the first three
sentences out of my mouth when I read this (it would violate PJs posting
policy), but I will say they started with HOLY <blank>, and ended in a
plea for hot condemnation. :)

Now, if we could just get a nice slapdown on method and concept patents by the
Supremes in re. Bilski, it would be the trifecta of the summer.

---
MDT

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: jturner on Thursday, June 10 2010 @ 11:37 PM EDT
Well done everyone. I haven't visited Groklaw a lot lately, so it's fortuitous
that I stopped by on this day of reckoning. Pamela and the regulars deserve a
medal for persistence.

James.

[ Reply to This | # ]

Stewart not only "gets it", he gets it perfectly
Authored by: Anonymous on Friday, June 11 2010 @ 12:02 AM EDT
From document 876 - read this and get a warm feeling inside:

123. [...] the exact nature of the transaction between the parties must be understood. As set forth above, Novell initially envisioned selling the entire UNIX business that it had purchased from AT&T to Santa Cruz. However, because Santa Cruz could not afford the entire business, the transaction had to be restructured. The business was essentially divided into two components: the UNIX business and the UnixWare business. The UNIX business was the UNIX System V source licensing business. Novell retained the royalties from the licenses and SCO acted as Novell’s agent in their collection. Novell retained significant rights in order to protect its royalty stream. Additionally, Novell retained the copyrights as a way to “bulletproof” those royalties. The UnixWare business, on the other hand, was the business whereby SCO had the ability to go forward and create a new product. SCO would, of course, own the copyrights for whatever new code it created."


I want to point out that not only is this correct, it's one of the most remarkably concise, eloquent, and technically accurate descriptions of the entire SCO-Novell agreement I've ever read. I'd have been glad to have seen it expressed so well by a participant here on Groklaw - but for the presiding Judge to have written it...wow. This is absolutely priceless.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: Anonymous on Friday, June 11 2010 @ 12:23 AM EDT
Stomp. Stomp, stomp, stomp. The big foot has come down, and ground them into the
dirt...

[ Reply to This | # ]

Plagiarism
Authored by: Cypher3c on Friday, June 11 2010 @ 12:56 AM EDT
Plagiarism. Plain and simple.

---
Ubersoft Lawyer: "Not only do I rule the world, but I get paid $300/hour to do
so" (Ubersoft.net)

[ Reply to This | # ]

All I can say is
Authored by: AH1 on Friday, June 11 2010 @ 01:00 AM EDT
That's it man........ GAME OVER......GAME OVER......

[ Reply to This | # ]

Parlov
Authored by: maroberts on Friday, June 11 2010 @ 01:03 AM EDT
Whilst I'm hugely relieved by the result, I read Parlovs article, and the gist of it appeared to be that he felt that SCO should get a jury trial, on the basis that there were matters of fact to be decided by a jury. The Court of Appeal agreed with him, so in retrospect it is surely hard to fault Parlov as he gave an opinion which turned out to be correct.

Anyway, congratulations, and I hope there are many more "Red Dress Days"

[ Reply to This | # ]

Other reports?
Authored by: Anonymous on Friday, June 11 2010 @ 01:37 AM EDT
Is this case old news now or are any other sites reporting this story?
Not yet on CNET, the register, or ZDnet
Salt Lake City Tribune reports
The decisions add more uncertainty about SCO's future. It filed for bankruptcy protection in 2007, and has yet to have a reorganization plan approved.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: insensitive clod on Friday, June 11 2010 @ 02:09 AM EDT
Dear Mr or Mrs God,

We are humble lawyers in seek of help.
We pray for your relieve, for us to say an Overlength Prayer in support of our
motion as not to sent to Hell,
according to your rules Nr 2, 8 and 10.



---
Lemmings vs Penguins

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: Anonymous on Friday, June 11 2010 @ 02:29 AM EDT
Sco still has not sent out a press release since 15 March
2010. (surprise.)

They currently have no job openings, and soon more SCO
employees who played no part in this suit will end up
unemployed unfortunately.

From SCO Employment Opportunities:

SCO Employment - An Equal Opportunity Employer
Current Open Positions

"There are no current employment openings at this time.
Please check back later."

http://sco.com/company/jobs/

[ Reply to This | # ]

So ummm.....book now?
Authored by: Anonymous on Friday, June 11 2010 @ 02:52 AM EDT
So PJ, are you going to start writing the book now. Please?

Books about business failures seem to be quite popular nowadays, and I'm sure
we'd all love to see you on The Daily Show promoting it.

bkd

ps: if you do write a book, any and all comments I've signed with my initials,
as above, can be freely used, though I can't imagine there'd be much to offer,
especially when compared with the insight and expertise of other commenters on
the site.

[ Reply to This | # ]

A few quick notes from a keen observer
Authored by: calris74 on Friday, June 11 2010 @ 02:55 AM EDT
I'll preface this post with a) I'm Australian, not American and b) IANAL...

1) This case has really shown that a robust legal system does work.

I know many would opine bitterly at the length of time it has taken, and the
costs etc but I think this case has really shown us that the legal system does
work provided you have the patience to see it through. Reading the pre-trial
transcript I think Judge Stewart got it right. He was not looking at this case
through our eyes, nor the eyes of SCO or Novell - He was looking through the
eyes of a Judge. I think it would do well for his detractors (unless they are
themselves are also a Judge) to remember that.

Well done to all the lawyers (both SCO and Novell) for putting up such an
impressive display of legal jousting. It may have been frustrating and
agonising, but gee it was fun :)

I am willing to bet that an appeal will be filed but I see it being along the
lines of SCO Appeal -> Novell Respond -> Court Deny! This case is now iron
clad. First Judge Kimball finds (almost entirely) for Novell, Appeals court
sends a little bit to Jury, Jury find unanimously, Judge Stewart provides a
superb summary of all the relevant points in denying SCO's request to overturn
or retrial. I don't see anything for an appeals court to work with (but then
again, IANAL)

p.s. Have a look at how very little of what Novell wanted omitted from the trial
is actually used in the judgement. This is why I think he got it right in
letting it all through to the jury. In the end, the balance of EVIDENCE not
ARGUMENT proved this material was, well, immaterial. How can one know this until
all the evidence is presented? A judge cannot afford to be so presumptuous.

2) Congratulations PJ. Not because 'we won' but because YOU stuck through this
thick and thin. Against all the detractors, naysayers, personal attacks, trolls,
lies, innuendo (the list goes on) you stuck to your mission. You are not a
government agency, nor a corporate entity which makes what you have done even
more remarkable. You (with the help of the passionate Groklaw community) have
created the single most comprehensive archive of the SCO v Novell saga. I doubt
that even the law firms dealing with each of the various parts of this saga
would come close to having what Groklaw has put together is such a refined and
organised manner, and they are being paid millions. SCO v Novell is impressive
in itself, but already it is starting to become just a small fraction of all
that Groklaw has covered.

2) Thank You PJ - You have opened many eyes to the wonderful world of the US
legal system, given us a forum to express our dismay at the actions of SCO, vent
our frustrations at a seemingly biased legal system, praise our champions at
every win against unfair corporate activity and disdainful software patents as
well as just giving us a place to 'be'

Well, that about sums it all up for me apart from one last word

WOW!

[ Reply to This | # ]

Yup, "not worth a plugged nickel" is about right
Authored by: Anonymous on Friday, June 11 2010 @ 03:33 AM EDT

SCO's stock I see is today worth a nickel. I consider that overpriced, personally. It's not worth a plugged nickel. Well, I know nothing about stocks, so don't go by me.

I get a significant part of my income from investments, and I'd say you are about right. There is still a tiny probability that BS&F will appeal and win, so the stock isn't quite worthless, it still has a little bit of lottery-ticket value. But a plugged nickel isn't worthless either, it has some scrap-metal value. Within the uncertainties inherent in the financial markets, I consider that the plugged nickel is probably worth slightly more.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: IMANAL_TOO on Friday, June 11 2010 @ 04:01 AM EDT
"It is therefore ORDERED that SCO's Renewed Motion for
Judgment as a Matter of Law or, in the Alternative, for a New
Trial (Docket No. 871) is DENIED."

It even sounds poetic.


!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

---
______
IMANAL


.

[ Reply to This | # ]

You look good in that red dress, PJ
Authored by: DaveJakeman on Friday, June 11 2010 @ 04:45 AM EDT
Oh, the beauty of those two sweet little words: "case closed".

With finality.

:)

There. That's one wooden stake driven home. How many more do we need? Is this
thing dead yet?

At least some of my darkest thoughts have melted away. This is a good day.
Some form of celebration is required.

[ Reply to This | # ]

Consequences
Authored by: Ian Al on Friday, June 11 2010 @ 06:40 AM EDT
Before I cover consequences, I would like to provide 2746 links to old articles and comments, in a further comment appended to this, where we covered each and every one of the points made by the judge with full explanation of the related facts...

Kidding!

OK, consequences.
As a general matter, the SCOsource program was an effort to obtain license fees from Linux users based on SCO's claims to UNIX intellectual property allegedly contained in Linux."192 Under its SCOsource program, SCO "purported to offer Linux users the opportunity to purchase an intellectual property license in order to continue using Linux without infringing any of SCO's copyrights."193
There are two ways of considering this finding. The first is that Judge Kimball was correct in finding that, for those issued licences that returned cash, it was a case of buyer beware in that the purchaser should have checked the terms of the licence text which made no reference to UNIX copyrights. The second is that the 1500 letters, pronouncements to the press, explanatory notes on the SCO website and the presentations at various meetings, including shareholders meetings, made it clear that the demands for licence payments were because SCO held copyrights to UNIX code that was in Linux. Judge Stewart's opinion leads me to think that he has the last say and that he has effectively reversed that part of Judge Kimball's SJ and bench judgements that covered this issue. Although Judge Stewart denied Novell's request to revisit this issue, does his new opinion reopen the doors? Also, now that it is known from the jury trial that Unixware contains significant portions of SVrX which is found not to be owned by SCOG and this is a new finding, can Novell go after the largest part of the Microsoft money, the remainder of the Sun money and the other claimed SCOSource revenue including the Computer Associates settlement?

From the Declaration of Steve Sabbath
From in or about January 1991 until in or about November 2003, I was employed by The Santa Cruz Operation, Inc. ("Santa Cruz"), which was subsequently renamed Tarantella, Inc. In 1995 and 1996, my position at Santa Cruz was Vice President of Law and Corporate Affairs.
Judge Stewart finds that Steve Sabbath knew that Santa Cruz did not own the SVrX copyrights and that he did nothing to object to the final revision of Amendment 2 which did not change the APA and did not transfer the copyrights to Santa Cruz. He was VP of Law and Corporate Affairs when Santa Cruz sold the UNIX business to Caldera. At that time, Santa Cruz said that they could not confirm that they were able to convey the SVrX copyrights to Caldera. Caldera (later, SCOG) knew, or should have known, that they did not own the copyrights according to Judge Stewart's findings. They sent letters to 1500 top companies claiming that they did own the SVrX copyrights and that the companies should work with them to resolve the arising issues. SCOG's general counsel told a shareholders meeting that they owned the copyrights and that companies would have to pay for licences. Now that these facts are confirmed by the district court, should not the SEC and/or the other law enforcement agencies begin criminal investigations?

At some later point, Mr. LaSala participated in a call between himself, the general counsel of IBM, IBM's outside counsel, and Novell's outside counsel.201 During that call, IBM's outside counsel requested that Novell waive all claims that SCO had made or might make against IBM with respect to IBM's SVRX license.202 Novell, through its outside counsel, responded that they were looking at the issue, that they would evaluate each on a case by case basis, and that Novell would take action accordingly.203 Novell undertook that analysis, which resulted in letter written on June 9, 2003.204
Novell wrote another letter to SCO on October 7, 2003, responding to SCO's "position that code developed by IBM, or licensed by IBM from a third party, which IBM incorporated in AIX but which itself does not contain proprietary UNIX code supplied byAT&T under the license agreements between AT&T and IBM ('IBM Code'), must nevertheless be maintained as confidential and may not be contributed to Linux."212 In that letter, Novell disputed SCO's position, citing to various agreements.213 Novell again cited to Section 4.16(b) of the APA and directed "SCO to waive any purported right SCO may claim to require IBM to treat IBM Code itself as subject to the confidentiality obligations or use restrictions of the Agreements."214
As will be discussed below, the Court finds that Novell had the right, under Section 4.16 of the APA, to take these actions.
11 USC § 362. Automatic stay

...the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title
Since the IBM case is SCO against IBM, the SCO claims are not stayed. The bench trial specifically finds that SCO must relinquish their claims against IBM, Silicon Graphics, Inc. and Sequent Computer Systems and, especially, as the IBM case is assigned to Judge Stewart, surely he is not stayed from removing the claims made by SCO from the case. He is only stayed from progressing the claims made by IBM against SCO. As further support, I would point out that the waiver is not a legal action against the debtor and, anyway, it could not have been taken against the debtor until this trial was complete (i.e., after the commencement of the bankruptcy case).

Finally, if there are any Amigans reading who are up-to-date with things Amiga, I think you will find this is a 'dancing banana' day. I knew there was something important missing from Geeklog!

---
Regards
Ian Al
SCOG, what ever happened to them? Whatever, it was less than they deserve.

[ Reply to This | # ]

It's time to track the assets sold for emergency funding and start the counterclaims.
Authored by: entre on Friday, June 11 2010 @ 07:28 AM EDT
IBM, it is your turn now.

[ Reply to This | # ]

Arbitration
Authored by: Anonymous on Friday, June 11 2010 @ 07:54 AM EDT
So the SUSE arbitration which started as part of this case is now considered a
separate issue. Ok.
Still SCO would have copyright on code it wrote itself, (although by SCO
copyright theory based on derivation it would be Novells code) and that code
would be subject to the SUSE arbitration.

[ Reply to This | # ]

Outstanding News! I have waited so long for this!
Authored by: TiddlyPom on Friday, June 11 2010 @ 08:25 AM EDT
This is just fantastic news for all Linux and Open Source users everywhere. It
does not mean that all threats are passed as Microsoft will presumably redouble
their efforts not that their sock-puppet (my opinion) has been defeated and
Apple are turning increasing open source hostile as well but such is the nature
of proprietary software :(

THANK YOU PJ for keeping Groklaw going through good and bad times all the way
through this difficult period - you have helped more than you can imagine. And
thank you MathFox and many other helpers who keep the site going.

The first major battle has been won and more and more people are now turning
towards open source software. We now have a tiger by the tail (Microsoft and
Apple) and a dangerous tiger it is indeed. Groklaw is needed more than ever to
squash FUD, help overturn obvious-but-deadly patents and help us to keep the
dream alive.

Wear that Red Dress with pride PJ and a hope you allow your a glass of two of
champagne - you deserve it - but steel yourself everyone for more battles.

This isn't over completely by a long way.

---
Microsoft Software is expensive, bloated, bug-ridden and unnecessary.
Use Open Source Software instead.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Friday, June 11 2010 @ 08:38 AM EDT
Thank you, PJ. I've been following this fiaSCO for seven years now on your
wonderful site. You and your team deserve a big round of applause. Thanks for
everything!

[ Reply to This | # ]

It brought tears to my eyes...
Authored by: turambar386 on Friday, June 11 2010 @ 09:13 AM EDT
..literally.

Thanks Judge Stewart for getting it, and getting it right.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: belzecue on Friday, June 11 2010 @ 09:29 AM EDT
That's the heavy artillery destroyed.

Now for Novell/IBM to mop up and go after the retreating foot soldiers. Hi,
Darl! Hide, Darl!

Thank you to Pamela for staying the course through a nasty, nasty, seven-year
wild ride. You've earned your place in history, PJ, same way the SCO boys
earned their place in infamy. Thank you for all these years of unflinching,
tireless reporting.

[ Reply to This | # ]

Open source is communism
Authored by: Anonymous on Friday, June 11 2010 @ 09:54 AM EDT
RMS: The 4 Freedoms
1 run the program in al quaeda training camps
2 study the source code and modify it into malware/trojan
3 make copies and distribute them to unsuspecting victims
4 publish modified versions on hacker websites

[ Reply to This | # ]

The Lyer
Authored by: DaveJakeman on Friday, June 11 2010 @ 10:03 AM EDT
Lyer! Lyer! Pants on fire,
At the focus of our ire,
What immortal hand or eye
Dare frame thy immorality?

In what distant deeps or skies
Burnt the dollars in thine eyes?
On what wings did they transpire?
Those sacred symbols of desire?

And what shoulder, and what art?
Could bear thy vicious twisted heart?
And when thy heart began to beat,
What the soul could bear the heat?

What the hammer? What the chain?
In what furnace was thy brain?
What the anvil? What dread grasp
Dare its deadly terrors clasp?

When the stars threw down their spears,
And watered heaven with their tears,
Did he smile his work to see?
Did he who made the Lamb, make thee?

Lyer! Lyer! Pants on fire,
At the focus of our ire,
What immortal hand or eye
Dare frame thy immorality?

[ Reply to This | # ]

The focus now shifts to Cahn
Authored by: Anonymous on Friday, June 11 2010 @ 10:03 AM EDT

Now the question is, what will Cahn do next?

So far, he has not impressed anyone with either his insight or his concern for the creditors.

[ Reply to This | # ]

Darl Footgun?
Authored by: Anonymous on Friday, June 11 2010 @ 10:13 AM EDT
Now to what extent will - at least in SCO's perception -
this verdict hinge upon Darl's testimony that "copyrights
were not required to run our business"?

I'd think it ironic if SCO were to sue Darl now because he
"cost them their victory" or something.

Wouldn't be surprised if MOG et. al would spin it like this,
to the effect of "we lost because our fired CEO testified
falsely at trial" or sumpin...

__
magicmulder

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: markonhawthorne on Friday, June 11 2010 @ 11:18 AM EDT

Pamela deserves a mountain of credit for getting us this far.
Bravo!!! Well done Lass.

But also, here is a toast to Richard Stallman and his group
for is foresight and laying the legal foundation upon which
all of this pivots. Cheers Man!!! Good show.

Mark Mason
Engineering Design Team

[ Reply to This | # ]

RedHat, et al
Authored by: Anonymous on Friday, June 11 2010 @ 12:02 PM EDT
I've been out for a while. Where are these cases now?

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Friday, June 11 2010 @ 12:18 PM EDT
They never cared about winning, it was all about spreading FUD on behalf of
Microsoft to scare people away from Linux. Don't think it worked, but it might
have helped them a bit. MS is the one who should be paying here.

[ Reply to This | # ]

Let the Stoning Begin!
Authored by: Cherkoman on Friday, June 11 2010 @ 01:10 PM EDT
Great article summarizing the verdict.;

<a
href="http://digitaldaily.allthingsd.com/20100611/sco-biggest-loser/"
/a>

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Friday, June 11 2010 @ 01:16 PM EDT
Gosh PJ, whatever will you do with your time now? blink blink

[ Reply to This | # ]

Stewart Rules!
Authored by: MikeA on Friday, June 11 2010 @ 01:32 PM EDT
Amen.

---
“'Unifying UNIX with Linux for Business' are trademarks or registered trademarks
of Caldera International, Inc."

[ Reply to This | # ]

Two Questions Remain
Authored by: Anonymous on Friday, June 11 2010 @ 02:23 PM EDT
Two Questions Remain:

1. What will you do next?
2. Do we finally get to find out who you are?

[ Reply to This | # ]

To quote Sam Cooke:
Authored by: ewe2 on Friday, June 11 2010 @ 02:49 PM EDT
Oh there been times that I thought I couldn't last for long
But now I think I'm able to carry on
It's been a long, a long time coming
But I know a change gonna come, oh yes it will

Yes it will indeed. What a result and what a precedent.

[ Reply to This | # ]

SCO is *still* threatening Linux users
Authored by: ak on Friday, June 11 2010 @ 03:12 PM EDT

All those false accusations and threats are still online, and they still want money from Linux users: http://sco.com/scosource/ip protectionfaq.html

[ Reply to This | # ]

Let's buy SCO and give it to PJ
Authored by: davecb on Friday, June 11 2010 @ 03:50 PM EDT
The price should be fairly low in a few days, making it possible for us to buy
it from the bankruptcy court.
I'll bid 37 cents (;-))

--dave

---
davecb@spamcop.net

[ Reply to This | # ]

Unanswered question: what's next for Groklaw
Authored by: Anonymous on Friday, June 11 2010 @ 04:00 PM EDT
ok we've spent 7 painful years covering SCO.

it's technically over.

so, now what?

Bilksi? whats the next big fish to fry?

or is PJ retiring?

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: Anonymous on Friday, June 11 2010 @ 04:28 PM EDT
If you slap me ten times and I become "biased" by not wanting to show favor to you, is that somehow unreasonable?

No, its perfectly reasonable, but you still shouldn't be on a jury in a case involving the guy who hit you. You are conflating "bias" with "unreasonable". Every lawyer presents the evidence in the way most beneficial to their client: that is bias, and that is how the game is played. It is not dishonesty or unreasonablenes.

Anyway, this is turning in to a pedantic argument about the meaning of "bias" - lets be clear that I have no complaints about PJs coverage of SCO. On other subjects, I am not so sure - but that isnt an argument for today.

[ Reply to This | # ]

Next - maybe Novell executes it's right to waiver
Authored by: zdvflyer on Friday, June 11 2010 @ 04:53 PM EDT
And puts an end to the IBM case.

[ Reply to This | # ]

Since nobody has started a haiku thread...
Authored by: Steve Martin on Friday, June 11 2010 @ 05:34 PM EDT

... I'll start one.

Now has Stewart ruled.
Winter now has come for SCO.
Novell feels the warmth.

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

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED!
Authored by: charlie Turner on Friday, June 11 2010 @ 05:52 PM EDT
It is very comforting to see that truth really can prevail in the end. Well done
to all at Novell and on their team, and to PJ and all who have helped along the
way here! :)

[ Reply to This | # ]

What a cynical statement Novel made
Authored by: Anonymous on Friday, June 11 2010 @ 06:12 PM EDT
"and the work Novell has done to ensure Linux remains free and open."

Excuse me, Novell, but what you've done is the complete opposite: you did the
best you could to *defeat* the free and open in GNU/Linux. Remember this
"not all Linux distros are born equal" on their website?

I'm not one bit sure who did more damage long term, SCO or Novell. What makes
Novel worse is that, unlike SCO, it CONTINUES to put Linux on harm's way on
every occasion it can without ever feeling sorry about it.

[ Reply to This | # ]

Andy Updegrove:Looking Back at SCO (What did it all mean?)
Authored by: jimbudler on Friday, June 11 2010 @ 06:25 PM EDT

Looking Back at SCO (What did it all mean?)

---
Jim Budler

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: rps on Friday, June 11 2010 @ 06:26 PM EDT
Well, what could I add that hasn't been said already? Definitely a day that will always live in our memories. Oh, by the way, the last time I checked, SCO stock is selling for 2 cents. on Yahoo (about 2 cents more than I'd be willing to pay for it)

[ Reply to This | # ]

SCOG, The Holy Grail, Scene 4: The Black Knight
Authored by: zman58 on Friday, June 11 2010 @ 06:57 PM EDT
This has been a long drawn out battle. It reminds me of Monty Python's infamous
battle between the White Knight (Novell) and the Black Knight (SCOG)...
After being totally thrashed with pools of his blood, his limbs, and his hacked
up torso around him... the Black Knight's head remains alive. The head continues
to taunt and challenge the White Knight as he rides off unscathed into the
sunset. So absurd that it is funny.

In the scene, the Black Knight initially does some serious damage to the Green
Knight which could represent the many businesses they were able to fleece for
cash with their absurd SCOSource license.

From Wikipedia,
"Although supremely skilled in swordplay, he suffers from unchecked
overconfidence and a staunch refusal ever to give up." ...Does this sound
familiar?

http://en.wikipedia.org/wiki/Black_Knight_%28Monty_Python%29

Here is a URL to the video on YouTube.com. Enjoy!
http://www.youtube.com/watch?v=2eMkth8FWno

[ Reply to This | # ]

CASE CLOSED! (we should be so lucky)
Authored by: Nice Kitty on Friday, June 11 2010 @ 08:29 PM EDT
Not that I would be, in any way/shape/form, eager for SCO to have yet one more
"out", but couldn't SCO possibly appeal to yet a higher court (again,
and again, and so on & so forth)?

State Supreme, National (SCOTUS), etc.?

A revolting thought, but Darl and his un-merry hordes have been pulling this
schtick since.... 2003?

[ Reply to This | # ]

Piercing the corporate veil
Authored by: Anonymous on Friday, June 11 2010 @ 09:01 PM EDT

Given that senior SCO management and BS&F lawfolk knew all along that their case was weak, and given that they uttered numerous misrepresentations during the last seven years, and most importantly given that the management converted funds rightfully owned by Novell, is there enough reason to pierce the corporate veil? SCO lacks the money to pay Novell the 2 million or so they still owe. Could Novell now go after McBride and the other perpetrators of this farce to recover the converted funds from them as individuals?

It would serve them right. Conversion of funds is a form of theft. If anybody normal person stole 2M$, they'd probably do time in the pen for that. The least we should expect of the SCO lads is that they give it back.

[ Reply to This | # ]

Personal linux instances since 2003: 13, bottled water taxes on those instances: 0
Authored by: Anonymous on Friday, June 11 2010 @ 09:24 PM EDT
This is perhaps a little vindictive but what the hell.

Since 2003, I've installed 13 instances of linux (probably
more, actually, but 13 is a good faith number).

It tickles me pink that I've paid <b>NOTHING</b> in
licensing fees for those instances, SCOSource or otherwise.

I'm just hoping Darl sees this post and says "Coulda,
shoulda, woulda". I'm ecstatic that your greedy, bottled
water tax plan for something that means so much to me has
met it's well deserved and overdue end. With the stroke of
a judges pen the pain, drama and morbid amusement you've put
us all through is at an end. While it's been... interesting
and educational, I'm glad I'll have this time back now.

I just wonder when the exact moment was that those inside
SCO thought, "Y'know... we could extract a fee from ~every~
linux install if we did this...". As we now know, that was
the moment the company started it's death spiral. How many
good folks lost their jobs, how much money was lost on point
less litigation for that one disastrous decision. Talk
about things that make you go, "huh..."

[ Reply to This | # ]

The same guy who made...
Authored by: skuggi on Friday, June 11 2010 @ 10:38 PM EDT
a Linux patent pledge with Microsoft say's that a lawsuit covering ancient Unix
copyrights and which has nothing todo with Linux somehow ensures that Linux
remains free and open??
I understand that SCO wanted everyone to believe that there was code in Linux
but long time ago Linux was out of the picture and only ancient Unix system 5
was at stake. We must understand that Linux is by no way under any control of
Novell or any other company. It is still free as it was before the lawsuit. So
if Novell will be bought up by let's say Microsoft it will not affect Linux.
They might try hard to make it look like that but Linux is out of the picture
many years ago and this ruling has nothing to do with that the Linux operating
system.


Novell President and CEO Ron Hovsepian stated “After almost a decade of
litigation, we are very pleased to see this final judgment uphold all of
Novell’s claims. I am very proud of this achievement and the work Novell has
done to ensure Linux remains free and open.”

---
-Skuggi.

[ Reply to This | # ]

At what point do the files get unsealed?
Authored by: Anonymous on Friday, June 11 2010 @ 11:22 PM EDT
Given that SCO has now been thoroughly trounced and their business is a whisker
a way from bankruptcy, is it possible that the those submissions to the court
that were sealed could soon be unsealed so that we all have the benefit of
knowing exactly what it was that the SCOundrels were telling the court behind
our backs?

[ Reply to This | # ]

As they say on NPR, "Let's do the numbers."
Authored by: eschasi on Saturday, June 12 2010 @ 12:12 AM EDT
SCO filed suits starting in Sept 03. During that month, shares went up to nearly
$19 per share. Today, those same shares are now worth $0.022. Clearly the suit
was an attempt to destroy stockholder value, and has been a raging success: that
value is now reduced by 99.88%. HH,OK.

Yahoo reports market capitalization (total cost to buy all the stock) of the
company is now $496,000. That compares to about $400,000,000 when the suit was
filed, and about $2,000,000,000 when SCO sprung into existence in March of 2000.
Even Bernie Madoff can respect those numbers.

I sure hope Darl et. al. put that data on their resumes. You just don't find
talent like that falling out of trees. I predict they'll soon be running BP.

[ Reply to This | # ]

An added bonus for Linux
Authored by: Anonymous on Saturday, June 12 2010 @ 02:49 AM EDT
This can never happen again simply because SCO's argument that they didn't know
that there was Unix code in the Linux they were distributing at the time (of
course we know there isn't. but for the sake of example....)... Novel are now
officially the owners of Unix copyrights.... And they know exactly what is in
the Linux they are distributing.. so they can't ever claim they are not in
volition of the GPL because they were not aware. Not that I think they would,
but if they sold the rights to Unix now, no other purchaser could make the claim
either.

good stuff.. and a bad day for Microsoft and SCO.

Google must not have been that worried though.. they went ahead with Android and
Chrome and if SCO had one they would have been dragged into court quick smart
I'll bet.

Cheers to Novel and thanks to IBM for never settling.

huge cheers to Judge Kimball for getting it completely right the first time as
proven by judge and jury.


yay!

rgds

Franki

[ Reply to This | # ]

Selected readings from the Chapter 11 Trustee Handbook
Authored by: Anonymous on Saturday, June 12 2010 @ 07:20 AM EDT
Here are some selected readings from CHAPTER 11 TRUSTEE HANDBOOK.

CHAPTER 1. INTRODUCTION
A. PURPOSE
... It is the goal of the United States Trustee to appoint trustees who will capably and expeditiously administer the estate for the benefit of creditors, ...

CHAPTER 6. DUTIES OF A TRUSTEE
A. STATUTORY AND GENERAL DUTIES
The applicable duties prescribed by $ 704 include the obligations to:

(5) as soon as practicable, file plan under section 1121 of [title 11], file a report of why the trustee will not file a plan, or recommend conversion of the to a case under chapter 7, 12 or 13 of this title or dismissal of the case;

... In short, a chapter 11 trustee is a fiduciary charged with protecting the interests of the bankruptcy estate of all parties, including all classes of creditors and the debtor. The trustee must protect and preserve estate assets.

D. OTHER REPORTS
1. Report in Lieu of Plan
In a case where a plan is not going to be filed, $ 1106(a)(5) requires a trustee as soon as practicable to either (1) file a report explaining why the trustee cannot file a plan; or (2) recommend the dismissal of the proceedings or the conversion to a case under chapter 7. 11 U.S.C $ 1106(a(5). Ordinarily, a chapter 11 trustee should not administer a case if no intention to file a plan exists. Rather, the trustee should take the appropriate action to move the court to dismiss or convert the proceedings to chapter 7. Allowing a case to remain in chapter 11 when no likelihood of reorganization exists may be detrimental to creditors because valuable assets may be lost in the process. The trustee should not unnecessarily delay closing a business when no chance for reorganization exists.

Shame on you Judge Cahn.
Shame on you Judge Gross.

[ Reply to This | # ]

And now... The search for the Puppet Master!
Authored by: DaveRexel on Saturday, June 12 2010 @ 09:30 AM EDT
If this means that IBM will not have a chance to pierce the veil I will sadly be

disappointed. The Puppet Master should be exposed and prosecuted.

Just my opinion :-)

[ Reply to This | # ]

I'm very glad to see Groklaw getting credited
Authored by: T.H. on Saturday, June 12 2010 @ 01:00 PM EDT
All the news reports I have seen about the verdict have
references to Groklaw, including links to this story. It's
nice to see that PJ and Groklaw is finally being recognized
by the "mainstream" media covering this case.

[ Reply to This | # ]

Finally.
Authored by: Tim Ransom on Saturday, June 12 2010 @ 02:40 PM EDT
I wonder if this is enough "utter destruction" to satiate the
Bowlegged IP Posse?

---
Thanks again,

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: Anonymous on Saturday, June 12 2010 @ 05:50 PM EDT

That Salt Lake City Tribune is certainly biased. Read their review of Judge Stewart's ruling.

    » Presents a serious question about the future of an SCO lawsuit against IBM ...
Obviously the reporter can't read. There is certainly no 'serious question'. There's no question. That was covered in the ruling.
    At issue was a poorly worded portion of the contract that could be read to say that Novell retained the Unix copyrights in the sale. SCO presented top-level negotiators and executives from Santa Cruz and Novell -- including former Novell CEO and Chairman Robert Frankenberg -- who all said the deal's intent was to transfer every bit of the Unix system, including the copyrights.
But the jury and the Judge found the 'top level' negotiators, were not the negotiators at all. They found the actual negotiators, the outside lawyers were credible.The poor wording here was about the 'all copyright to acquire Unixware. SCO wanted the jury to extend the 'all' so they could get the copyrights for SCOsource. But they didn't buy that business. The jury saw through that misrepresentation.
    Former U.S. District Judge Edward Cahn, the trustee who is running SCO ..., said he thought SCO had a strong case, adding its team was "deeply disappointed" by the outcome. "Juries are unpredictable and that's why cases get settled,
Judge Cahn, I remind you of the old sayings
    "Be careful what you wish for; you might get it."
and
    "God answers all prayers. Sometimes the answers 'No'"

    [ Reply to This | # ]

  • old article - Authored by: bastiaan on Saturday, June 12 2010 @ 08:24 PM EDT
    • irony - Authored by: Anonymous on Sunday, June 13 2010 @ 08:20 PM EDT
Delaware bankrupcty court ...
Authored by: Anonymous on Saturday, June 12 2010 @ 07:12 PM EDT
... the place non bankrupt companies can go to become bankrupt companies.


[ Reply to This | # ]

The SCO Group, Inc. Wins Strategic Position and Extends Opportunity in Campaign against Linux
Authored by: fudnutz on Saturday, June 12 2010 @ 09:16 PM EDT
LINDON, Utah, Jun 11, 2010 /PRNewswire-FirstCall via COMTEX/ -- The SCO Group,
Inc. (Nasdaq: SCOXE), announced today that on June 10, 2010, the Company won a
crucial delay in its long struggle to rescue its hijacked UNIX IP from Novell
and other Linux distributors when Judge Ted Stewart announced verdicts on the
remaining issues from the three week trial in March. Former U.S. District Judge
Edward Cahn, the trustee for SCO’s bankruptcy, told the Salt Lake Tribune that
the jury decision and now Judge Stewart's decision will not dissuade it from
pursuing its claims against Linux. "We can now return to the Tenth Circuit
where we again expect a correct hearing of our appeal." Having lost both a
Summary Judgment by District Judge Kimball, and now judge and jury verdicts in a
retrial before Stewart, Trustee Cahn warns his foes, "We have won more time
and a procedural advantage. The Circuit will grant our Summary Motions or send
it back for a fair trial, not a truncated, rush to judgment like we just
had."

About SCO

The SCO Group (Nasdaq: SCOXE) helps dozens of customers in more than 2 countries
to grow their businesses everyday. Headquartered in Lindon, Utah, SCO has a
worldwide network of more than 11 resellers and 4 developers. SCO Global
Services provides reliable localized support and services to partners and
customers. For more information on SCO products and services, visit
http://www.sco.com. SCO, and the associated SCO logo are trademarks or
registered trademarks of The SCO Group, Inc. in the U.S. and other countries.
UNIX is a registered trademark of The Open Group.

[ Reply to This | # ]

Lets honor the analysts
Authored by: emk on Saturday, June 12 2010 @ 09:39 PM EDT
Can we now get an Analyst's Hall of Shame, er make that 'Fame'
here on Groklaw? There are a number of long overdue inductees
waiting.

emk

[ Reply to This | # ]

Okay PJ, but only because you asked
Authored by: Anonymous on Sunday, June 13 2010 @ 12:04 AM EDT
PJ: If anyone can find any news coverage saying "boo hoo SCO lost", I'd appreciate you sending it to me.
Here is Maureen O'Gara's spin: http://linux.sys-con.com/node/1428534/print

[ Reply to This | # ]

Where are the MPAA and RIAA?
Authored by: Anonymous on Sunday, June 13 2010 @ 04:36 AM EDT
This seems like a serious attempt at infringing copyrights. Why don't we here a
little outrage against SCO by our friends at XXAA?

[ Reply to This | # ]

So what next in BK court?
Authored by: tiger99 on Sunday, June 13 2010 @ 02:20 PM EDT
According to Groklaw's timeline the next scheduled hearing is 21-Jun-2010 at 03:00 PM. Should we be expecting Chapter 7 at that time? Or, any informed guesses as to how Cahn, the Boies boyz and their hierlings will continue to manipulate Gross?

I am thinking that maybe Novell, IBM and the UST, plus whoever else is represented (Red Hat?) ought to be pushing for Chapter 7, but as IANAL I don't have much idea about how such things work. Anyway, this case has not followed any normal pattern.

[ Reply to This | # ]

Just for fun Is this The Final Countdown???
Authored by: LaurenceTux on Sunday, June 13 2010 @ 04:44 PM EDT
http://beemp3.com/download.php?file=4066360&song=The+Final+Countdown

[ Reply to This | # ]

The 12 Yr. Old Single Malt stays sealed...
Authored by: Jamis on Sunday, June 13 2010 @ 06:09 PM EDT
Just a couple of observations:

PJ: Thank you ever so much for these years of education. I have learned so much
about the U.S. legal system from your writings, and the others that have posted
here.

SCO's demise: I am certain there will be some additional "Opps",
"Gotcha's", and unforeseen happenings yet to come in this SCO debacle
that the bottle of 12 year old single malt will stay in the box until SCO truly
disappears from the business world. Maybe when the stock is no longer traded
will the seal be broken and night of celebration begun. Until then, I rejoice
in Thursday's decision.

Take Care, All

[ Reply to This | # ]

Stewart's ruling to me, leaves tSCOg's exec open to ...
Authored by: dmarker on Sunday, June 13 2010 @ 07:07 PM EDT

litigation.

I know this has been discussed often, but I believe the repeated rulings are so
clear that the whole case could be readily used to convict the executive team of
tSCOg of fraud and other crimes.

I am thinking that to let these people off would be too a serious mistake. I
guess the real question might be who would be willing to chase them further just
to jail or seriously fine them.

I don't think the Justice Dept would do it. They might
consider Boies to to expert to go up against as BS & F would have to be part
of the case. I am wondering to what extent BS & F can be held culpable if
tSCOg execs got convicted of attempted fraud.

IBM are best placed but am not sure they would want to be seen in such a role
even if chances of conviction were good.

I guess it is als worth listing what crimes these people could be chased for.
The ones that come to my mind are

- Stock manipulation

- Malicious prosecution of customers

- False representation of their rights in regard to licensing of ScoSource

Any other serious thoughts on what crimes might stick ?

DSM



[ Reply to This | # ]

Thank you
Authored by: Anonymous on Sunday, June 13 2010 @ 11:05 PM EDT
PJ,
It seems so long ago that I first ran across your site and had to look up the
term "grok". While some of the smartest folks on Wall Street bought
into these claims you had it right all along. I appreciate your insight and
commentary over the years and trust that you will remain a beacon of truth for
open source.

Best regards,
Dion

[ Reply to This | # ]

  • Thank you - Authored by: PJ on Monday, June 14 2010 @ 12:28 AM EDT
Audit anyone ??
Authored by: hairbear on Monday, June 14 2010 @ 03:10 AM EDT
Now that all the contractual issues have been ruled in Novells' favour, aren't
SCO due an audit ??

That would annoy them.




A squid eating dough in a polyethylene bag is fast ‘n’ bulbous, got me?

[ Reply to This | # ]

  • Audit anyone ?? - Authored by: Anonymous on Tuesday, June 15 2010 @ 01:32 AM EDT
Groklaw impact assessment
Authored by: IMANAL_TOO on Monday, June 14 2010 @ 04:52 AM EDT
It would be very interesting to see an impartial Groklaw impact assessment on
the path leading to the current verdict.

However, I have no idea how it would be performed or if any of the involved law
firms would admit to relying on the information provided by PJ and the readers.
Of course I know about some few cases, but I cannot judge the the seven years in
toto. After all, these law firms had done their own homework and did include
many instances of case law which had not come up here at Groklaw.

Has anyone heard any rumours or direct quotes such as "Oh yeah, we hadn't
thought about that point until we read about it at Groklaw". I recall the
SCO camps early nervousness about it. It would have been such a nice
confirmation of PJ's superbly brilliant efforts spelled out from one of the
parties.


Whatever. PJ, you are my paladin par excellence.

.

---
______
IMANAL


.

[ Reply to This | # ]

Echoes of the Past Found in the Facts
Authored by: DaveJakeman on Monday, June 14 2010 @ 10:35 AM EDT
53. The Court finds the witnesses presented by SCO on the parties' intent to be less credible than Novell's witnesses for a number of reasons. First, many of SCO's witnesses were involved only in the "high level" negotiations and did not participate in the actual drafting of the APA where the details of the deal were agreed to. Thus, while these individuals may have provided relevant testimony as to what the parties were intending or hoping to do at the outset, their testimony has less relevance as to what actually happened as the negotiations unfolded and the APA was actually drafted. This fact is critical here because the transaction could not be completed as it had been initially envisioned, specifically it had to be structured to account for the fact that Santa Cruz did not have the financial resources necessary to purchase the entire business and there was uncertainty about its long-term viability. Second, many of these witnesses seemed to take for granted that the copyrights would transfer, but there was surprisingly little evidence of any actual discussions concerning the copyrights. Finally, a number of SCO's witnesses, though not all, have a direct financial interest in this litigation.
Beautiful. SCO's "surprisingly little evidence" sounds "astonishingly" familiar, does it not?

As for "requiring" the copyrights:

70. Most of these witnesses testified that the copyrights were "required" for SCO to run its SCOsource licensing program. However, as will be discussed below, this program was not something that SCO acquired from Novell. SCO only acquired the UnixWare business from Novell, while Novell retained significant rights in the UNIX business. Amendment No. 2 applies only to those copyrights "required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies."

71. SCO witnesses acknowledged that SCO could operate its UnixWare business without the copyrights. Mr. McBride admitted that SCO could run its UnixWare business without the copyrights. Mr. Tibbitts similarly stated that SCO could run its UNIX product business without the UNIX and UnixWare copyrights. Indeed, SCO had offered to sell its business without the copyrights.

Great footshot!

And about APA Amendment 2:

76. After review of the APA and discussions with Tor Braham and James Tolonen, Novell, through Ms. Amadia, made the decision not to alter the APA with regard to copyright ownership as requested by Mr. Sabbath. Rather than alter the APA to transfer copyrights, Ms. Amadia modified the amendment proposed by Mr. Sabbath to affirm that SCO had the rights to use the technology. Ms. Amadia testified that Amendment No. 2 was meant to affirm that SCO had the right to use, manufacture, and make modifications to the UNIX technology.
Those few paragraphs put in a nutshell many lengthy discussions we've had here at Groklaw. Short and sweet.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: Anonymous on Monday, June 14 2010 @ 10:59 PM EDT
The "Copyright War" is over and Linux won - Any last reminents of
resistance will be easily mopped up

However, the "Patent War" has only just begun. Re: In Bilski will set
the scene for how this will be fought.

[ Reply to This | # ]

Stewart Rules: Novell Wins! CASE CLOSED! - Updated
Authored by: tuqui on Tuesday, June 15 2010 @ 02:09 AM EDT
And Rob Enderle, Dan Lyons, and Maureen O'Gara. Can't wait. Say, didn't Paul Murphy say he'd stop blogging if SCO lost?
Don't forget the DIDIOT, she was one of the most biased and still now.

[ Reply to This | # ]

No Wool Pulled Over Judge Stewart's Eyes
Authored by: DaveJakeman on Tuesday, June 15 2010 @ 08:37 AM EDT
121. While it may have initially been the wish of individuals in both entities for Novell to sell and Santa Cruz to buy the entire UNIX business, that is not what happened. Rather, because Santa Cruz could not purchase the entire business, the deal had to be structured in a way different than had been originally envisioned. As all witnesses seemed to recognize, a primary component of the transaction was Novell's retention of a significant royalty stream. One of the ways that Novell chose to protect that royalty stream was to retain ownership of the copyrights. Based on all of the above, the Court finds that the intent of the parties did not entail transfer of ownership of the copyrights.
And SCO's slippery wordplay bites them in the bum:
144. SCO argues that Novell's interpretation of Section 4.16(b) creates the same contradiction and ambiguity because, if Novell could change any part of the contracts that embody the UNIX-based business that Novell transferred, it could destroy that business. This argument, however, hinges on a faulty premise: that Novell transferred the UNIX business to SCO. As set forth above, Novell transferred the UnixWare business to SCO, while retaining substantial rights in the UNIX business.

[ Reply to This | # ]

A Fresh View?
Authored by: DaveJakeman on Tuesday, June 15 2010 @ 08:40 AM EDT
125. SCO also argues that ownership of the copyrights is necessary to run its SCOsource licensing program. However, the language of Amendment No. 2 applies to copyrights required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. The SCOsource program is not something SCO ever acquired from Novell...
Among the many reasons put forward in discussions at Groklaw why SCO should not receive the copyrights, I don't recall Judge Stewart's reasoning previously mentioned here, precisely. This is good to see.

[ Reply to This | # ]

Minor Future Project
Authored by: Anonymous on Tuesday, June 15 2010 @ 11:47 AM EDT
Perhaps someone with time on their hands could analyse SCO's reaction times.
After the slightest event capable of favourable interpretation -instant press
release!
After all decisive defeats -either silence or a statement saying it was all a
step on the way to eventual world domination.

Just one more person waiting for them to admit defeat!

[ Reply to This | # ]

Further Litigation?
Authored by: Anonymous on Tuesday, June 15 2010 @ 02:12 PM EDT

The statement on the SCO website says:-

What's more, the court did not dismiss our claims against Novell regarding the non compete provisions of the 1995 Technology License Agreement relating to Novell's distribution of Linux to the extent implicated by the technology developed by SCO after 1995. Those issues remain to be litigated.

Is this a separate case, or is it some sort of SCO FUD?

[ Reply to This | # ]

No press release from SCO?
Authored by: comms-warrior on Wednesday, June 16 2010 @ 04:10 AM EDT
It's been days now - and nothing. Not a peep..

What is going on in Salt Lake City right now? Is Cahn getting ready to shut the
business down? Is he talking to the BSF dolts and various other Lawyers about
the case?

No rebuttal from the devistating loss last week - nothing substantial from them
to indicate anything has changed.


Typical really - when something doesn't go their way, they hide.

[ Reply to This | # ]

And in the end ...
Authored by: cricketjeff on Wednesday, June 16 2010 @ 11:22 AM EDT
It seems that, in the end, if you are lying
The courts will say it's time for you to pay
Then crooks and scoundrels have to give up trying
We've reached the day when they must go away

They tried to tell the world that they were clever
They held to rights to everybody's code
We warned them that such porky pies would never
Be taken as a proof they owned the road

A second judge has ruled that on the merits
They never had a case worth half a bean
Their friends were proved a wagon load of ferrets
I'm pretty sure by now they can't be seen

But rampant fools will still maintain their sport
"The GPL was never proved in court"



---
There is nothing in life that doesn't look better after a good cup of tea.

[ Reply to This | # ]

Monday's (June 21) Bankruptcy Hearing Canceled
Authored by: benw on Thursday, June 17 2010 @ 09:00 PM EDT
Does that mean anything? Next one is scheduled for July 12. I guess Trustees,
Creditors, etc. don't need to wait for a hearing to file motions ... anyone have
any clue as to when we'll see conversion motions or other activity in the BK
case?

[ Reply to This | # ]

How long is SCO allowed to appeal?
Authored by: Anonymous on Friday, June 18 2010 @ 10:03 AM EDT
Does anybody know of any deadline SCO has to adhere to? When will we definitely
know that SCO will not fight further?

cb

[ Reply to This | # ]

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