OS and Software > All Things Unix > SCO-Novell Lawsuit Finally Going to Trial

SCO-Novell Lawsuit Finally Going to Trial

said by Tom Harvey :

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Six years later, SCO-Novell lawsuit finally going to trial

At long last, it's time for the main event in the long-running legal battle between The SCO Group and Novell over who owns the copyrights of the Unix software than runs many businesses computer systems.

Six years after SCO sued Novell, a trial is set to begin Monday in U.S. District Court for Utah. It will determine who owns the Unix copyrights. But the trial, expected to last three weeks, may be just the prelude to an even bigger legal battle.

If the jury sides with SCO, then the Lindon company can pursue its lawsuit against IBM. The computer giant is accused of using Unix as the basis to make important changes in the Linux operating system. These are actions that SCO said made Linux a viable competitor and led to a steady decline in its revenues.

And if SCO wins against IBM, it also would have won the right to assert that anyone who used that version of Linux must pay a licensing fee. These are monies that SCO said could be more than a billion dollars when it first sued IBM back in March of 2003.

Still, all of this legal intrigue is taking place in a radically altered environment than when the tiny SCO took on IBM seven years ago.

An adverse ruling in the Novell case, later overturned by an appeals court, sent SCO into bankruptcy court in 2007. It remains in court under control of a trustee, who fired CEO Darl McBride under whose leadership the company had filed the two lawsuits. SCO several times has been on the edge of dissolution as its tries to reorganize itself. The trustee now is proposing selling off its small mobile software business -- to McBride.

But three days ago, Novell's future also took a twist. A hedge fund, Elliott Associates, offered to buy the Waltham, Mass.-based company -- it had been founded in Utah -- for $2 billion in cash. Some analysts believe that the Elliott offer could spark a bidding war that could create a long period of uncertainty over who will own the company that employs about 1,000 people in Provo.

Momentum in the case has swung to SCO. The 10th Circuit Court of Appeals overturned a ruling by federal Judge Dale Kimball, who had previously presided over the lawsuit and who had ruled that Novell indeed owned much of the copyrighted computer code.

In flurry of pretrial motions, Novell had asked Stewart to limit what some witnesses could testify about. But Stewart ruled largely on SCO's side.

Now the jury will have the final say.

Novell and The SCO Group declined comment on the trial.

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I hate to say it, but money is the root of all evil and we still love it and want it.

What happened to competitive America, where Americans bonded together to win the technological race against other nations..? Dont get me wrong i am all up companies making fair money, however, this is just a waste of money...

This is all about attempting to crush Linux.

reply to SUMware
From The Salt Lake Tribune
03/08/2010 -

said by Tom Harvey :

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Jury seated in SCO lawsuit against Novell

A jury has been seated to hear the lawsuit in which The SCO Group is claiming Novell interfered with its ownership of the Unix computer operating system and cost it more than $100 million in business.

Opening arguments are set to begin today in the dispute in which The SCO Group of Lindon is asking the jury to declare it, and not Novell, owns the copyrights to the Unix, system used by many companies.

If it wins, SCO says it is owed as much as $215 million by Novell, plus punitive damages that could be several times that amount, because it lost business as a result of Novell's actions.

A win by Novell probably would mean the demise of The SCO Group, which is already struggling in bankruptcy court.

A jury was seated Monday on the first day of what is expected to a three-week trial in federal court in Salt Lake City before Judge Ted Stewart.

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reply to SUMware
Thought experiment: What if all this time and money, currently spent on lawsuits and defense, were instead spent on research and development?

reply to OutOfMem

reply to SUMware
Groklaw is providing exemplary trial coverage for those interested in following the legal arguments.

reply to OutOfMem

reply to SUMware
I won't be following this case in detail, I'm sick and tired of the whole thing.

When this first started I avidly devoured every news report I could find, I read Groklaw, I donated money to PJ (who ran an Apple back then ). But time has moved on, my Linux desktop now only exists in a VM, and I purchased a Mac Pro.

Even the mention of SCO is liable to give me a migraine, yes it's that bad.

reply to Ryan

reply to SUMware
From H-Online
13 March 2010 -

said by Detlef Borchers :

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SCO vs. Linux: From the Court of Appeals to the Supreme Court

The trial between the SCO Group and Novell over the question of whether or not the copyrights to Unix were sold together with the Unix distribution rights has taken another turn. As many SCO witnesses gave hearsay evidence during the oral hearing at the Court of Appeals, Novell filed a petition with the Tenth Circuit Supreme Court. Novell has asked the Supreme Court to clarify whether a copyright is inherently included in a transfer of software distribution rights or whether a distribution contract leaves it up to the buyer to determine which of the copyrights that aren't explicitly mentioned are transferred.

Novell filed its Petition for Writ of Certiorari (the higher court can request records of a trial which is in progress) about the copyrights question against the background that, in the oral hearing at the Court of Appeals in Salt Lake City, SCO lawyers are presenting many witnesses who give hearsay accounts of the contract arrangements between SCO and Novell. These witnesses are of the opinion that the copyright to Unix was transferred to SCO along with the contracts that allowed SCO to distribute and further develop Unix.

On the fourth day of trial, this position became particularly evident in a video testimony given by Doug Michels, who was vice president of SCO when the contracts with Novell were signed. Michels said that, in his opinion, there is no doubt that software copyrights are sold together with the software and don't have to be mentioned specifically in a contract. According to Michels, copyrights belong to software development "like breathing oxygen". "Well, I meant that the only way that I know of, and anyone on my team knew of to buy a software business is to buy the copyrights, and there's no way we would have ever done a deal to buy a software business where we didn't get the copyrights and all the other intellectual property." However, when asked about the contracts, the SCO founder had to admit that he never looked into the contract details, and that he had no knowledge of any additional contractual agreements. These additional "Asset Purchase Agreements" hold the restrictions cited by Novell.

Michels' statement may cause astonishment given that the executive and his father Larry founded the original Santa Cruz Operation to develop the Xenix derivative of Unix produced by Microsoft. While SCO sold Xenix, the copyright remained with Microsoft.

The testimonies of Michels and others were mainly opposed by the statement, also in video form, by Novell CEO Jack Messman. Messman described the transfer of the development of Unix to SCO against the background of the market situation at the time. SCO was given everything it needed to release a unified Unix which was able to compete with Microsoft Windows NT, explained Messman. The copyrights were not part of the agreement because they weren't essential to the software development, said the executive. This is the reason why Novell has filed a petition with the Supreme Court for a leading decision about the copyright question.

It is uncertain whether Novell will be successful with its motion to involve the Supreme Court in the current trial in order to clarify a question of principle about software contracts. According to US law, the Supreme Court can reject the petition without providing any reasons. In his testimony, Messman also denied having made a statement that caused damage to the SCO Group. According to the executive, the Linux Indemnification Program to protect Linux users against potential royalty claims for Linux installations by SCO was only put into place by Novell to reassure its own customers. In addition to the debated copyrights, the Court of Appeals is also investigating allegations made by the SCO Group that Novell's Linux Indemnification Program spoiled SCO's business. SCO intends to hold Novell liable for loss of revenue, claiming that many companies refused to purchase a SCO antidote licence. The vendor estimates that the damage incurred is at least $25 million.

The Salt Lake City appeal trial is heard by a jury and will go into a scheduled recess this weekend. In the past few days, the judge has repeatedly cautioned jury members not to discuss the case, be it in person or online via Twitter, Facebook or LinkedIn, in chat rooms or via BlackBerry Mail. Members of the jury are also required to ignore media reports about the trial. At the beginning of the trial, Judge Stewart only explained to the jury that the case was about an "open source program called Unix", but this statement was protested by both parties.

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reply to SUMware
... and the beat goes on!

From PRNewswire
March 15, 2010 -

quote:

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The SCO Group Announces $2 Million in Financing

Lenders to fund operating, administrative and litigation expenses

The SCO Group, Inc., today announced that it had secured Bankruptcy Court approval and funding for $2MM in postpetition financing in the form of a secured super-priority credit facility from a group of private lenders. Proceeds from the financing will be used to fund the company's operating and administrative expenses, as well as litigation-related expenses.

This financing is intended to allow for the preservation of the value of the Company's business while enabling the Company to proceed with asset sales, continue supporting SCO's loyal UNIX customer base and to pursue litigation against, among others, IBM and Novell.

"The financing is intended to enable SCO to continue to sell and support its products while servicing the needs of our customers and partners on a worldwide basis through the bankruptcy period," said Ken Nielsen, chief financial officer, The SCO Group.

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reply to SUMware
From H-Online
20 March 2010 -

said by Detlef Borchers :

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SCO vs. Linux: The jury has been informed

The second week in the Salt Lake City jury trial between the SCO Group and Novell about the copyright to Unix has uncovered further surprising details of this never-ending story. First, SCO's former CEO Darl McBride, who was called as a witness, confirmed that SCO didn't need the debated copyrights for the development of its family of operating systems, and that the copyrights were only required for the licensing business of the vendor's SCOSource division. Then the previously unaware jury members were informed that a judge had already delivered a ruling in this matter, but that his decision had been overturned. The trial will go into its third week while, at the same time, Novell's Brainshare conference will be held in Salt Lake City.

The current jury trial became necessary after, in 2009, a Court of Appeals overturned the first instance ruling passed by district judge Dale Kimball in 2007. The Court of Appeals ruled that the question whether the copyright to Unix was transferred when Novell sold the Unix distribution rights to SCO should be retried. In the court's opinion, this question was so involved that it should be tried by an unbiased jury instead of a district judge. Consequently, a jury without any prior knowledge of the long case history was sworn in to decide on the copyright question in the first week of the appeal trial.

During the testimony of a financial expert on day 9 of the trial, the presiding judge decided to inform the jury that a ruling had been passed against SCO in a previous trial but that this ruling was overturned by a Court of Appeals. Earlier, the questioning of a witness on day 8 of the trial had revealed that the copyright question is closely tied to the issuing of the antidote licences SCO intended sell to corporate Linux customers. SCO's former CEO Darl McBride had to admit to the court that the copyright ownership was regarded a prerequisite for selling antidote licences. According to McBride, this business collapsed after Novell announced that it would protect its customers against legal claims by SCO.

Another surprise during the second week of trial was the testimony given by Gary Pisano, an expert commissioned by SCO, who had to admit having based a calculation of damages on a market study by the Yankee Group without having investigated the methodology used for the study. Furthermore, the court was presented with an internal memorandum by Hewlett-Packard about the question of whether it was in customers' interest to purchase an antidote licence. The authors of the HP memorandum were of the opinion that buying such a licence is similar to providing financial support to terrorists.

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reply to SUMware
LA Times
March 26, 2010 -

quote:

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Utah jury weighing dispute between SCO Group, Novell over ownership of Unix software code

A Salt Lake City jury has started deliberations in a case pitting two software companies that each claim ownership of the Unix computer operating systems used by large corporations.

The SCO Group, of Lindon, Utah, filed a lawsuit in 2004 asserting Waltham, Mass.-based Novell Inc. sold it copyrights when it allowed SCO to take over the business of servicing Unix technology in 1995. Novell says it sold the servicing rights, not the copyrights.

SCO is seeking damages of up to $215 million in U.S. District Court.

A victory for SCO would allow it to revive another lawsuit alleging IBM Corp. dumped proprietary Unix code into the open-source Linux operating system.

IBM has denied any wrongdoing.

The jury started deliberating Friday and is expected to take several days to reach a verdict.

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reply to SUMware
Quick! Switch to the BSDs—where all this nonsense was already played out years ago…

reply to SUMware
From Ars Technica
March 28, 2010 -

said by Ryan Paul :

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Jury deliberating UNIX ownership in ongoing SCO trial

Groklaw has published a series of first-hand accounts from spectators who were present on Friday when the final arguments were heard.

Laywer Sterling Brennan, representing Novell, contends that SCO's claim of owning the SVRX copyrights is invalid because it is based on a term sheet rather than the final agreement. He also questioned the credibility of SCO's witnesses, contending that the few who seem to remember what actually transpired have a financial stake in the outcome of the trial. Further, he says that the threats of litigation that SCO sent to Linux customers were a blatant violation of the terms of the asset purchase agreement.

Stuart Singer, representing SCO, claims that the transfer of the SVRX copyrights was excluded by accident in the original transaction, but that this was rectified in an amendment that was added later. He contends that the amendment is valid and that it was authorized by Novell. This matter is disputed, but SCO's witnesses say that the original intent of the agreement was to transfer the copyrights.

The judge has instructed the jury to consider the amendment when evaluating SCO's claim of ownership. He also explained that SCO has the burden of proof, which means that they should only find in SCO's favor if they believe that SCO's evidence is clear and convincing.

The jury will not deliberate on Monday due to a scheduling conflict for one of the jurors, but may return a verdict as early as Tuesday; any decision must be unanimous. If they do not issue a verdict in SCO's favor, it's likely that this will be the end of the road for the dying UNIX vendor. SCO's bankruptcy proceedings are ongoing, and the end result could very well be liquidation if a verdict in favor of Novell pulls the rug out from under SCO's legal campaign against Linux.

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reply to SUMware
From Computerworld
March 29, 2010 -

said by Steven J. Vaughan-Nichols :

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Is this the end for SCO?

You may have thought that this was settled.

Most of us who followed SCO certainly thought that was a done deal.

After all, the matter of who owns Unix comes down to a fairly simple issue of contract law and not some esoteric IP (intellectual property) legal gymkhana.

I don't think for a minute in a rational universe that SCO can win this case.

But, it is in front of a jury and, after-all, a jury is made up of twelve-people who weren't bright enough to get out of jury duty.

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reply to SUMware
Jury Says Novell Owns Unix Copyrights!

From The Salt Lake Tribune
03/30/2010 -

said by Tom Harvey :

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A federal jury Tuesday found that Novell Inc., and not The SCO Group, owns the copyrights to the Unix computer operating systems used by many businesses.

The decision ends a long-running legal battle between the two companies and between Lindon-based SCO and IBM. It also likely means the end of SCO, which already is teetering in bankruptcy court.

Lawyers for SCO had contended Novell owed it millions of dollars for lost sales revenue and that it was due punitive damages on top of that. SCO claimed it lost as much as $215 million as a result of Novell's actions, which stretch back to 2003.

After a three-week trial and closing arguments from each side before presiding Judge Ted Stewart, the jury filed out of the courtroom to begin deliberations Friday. The jury went home 4½ hours later and reconvened this morning.

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So is this the end of this ballyhoo? Hopefully there is no legal opening for retrial etc...