

Novell Wins Again - Jury Rules Copyrights Didn't Go to SCO - pbewig
http://www.groklaw.net/article.php?story=20100330152829622

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grellas
How is it even remotely possible that sophisticated parties selling something
so major as the UNIX-related rights can't agree whether the copyrights were
transferred in the deal?

Here is how the mess began:

1\. In 1993, Novell buys UNIX System Laboratories and thereby acquires the
UNIX copyrights and licenses.

2\. In 1995, Novell initially intends to sell the complete UNIX business to
Santa Cruz Operation but Santa Cruz is unwilling or unable to commit
sufficient financial resources to buy the entire UNIX business outright.

3\. Novell sells its UNIX-related rights to Santa Cruz Operation in an asset
sale while retaining a 95% interest in SVRX license royalties.

4\. The asset purchase agreement provides that Novell will sell all its right,
title, and interest in all the assets identified in an appended Schedule
1.1(a).

5\. The asset purchase agreement provides that, "[n]otwithstanding the
foregoing, the Assets to be so purchased shall not include those assets . . .
set forth on Schedule 1.1(b)."

6\. Schedule 1.1(a) included within the list of "Assets" transferred "[a]ll
rights and ownership of UNIX and UnixWare." Separately in the asset schedule,
under the heading of "Intellectual property," it was provided that Santa Cruz
Operation would obtain rights to the "[t]rademarks UNIX and UnixWare." No
mention was made of copyrights.

7\. Schedule 1.1(b) ("excluded assets") expressly spoke to copyrights as
follows: "All copyrights and trademarks, except for the trademarks UNIX and
UnixWare" and "[a]ll patents" were excluded from the deal.

8\. In 1996, less than a year later, the parties agreed to an amendment to
Schedule 1.1(b) ("excluded assets") that designated the following as among the
excluded assets (i.e., assets _not_ being transferred to Santa Cruz): "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."

9\. This 1996 amendment was the source of years of convoluted litigation. What
did it mean that Novel was excluding all copyrights from the sale "except for
the copyrights . . . required for SCO to exercise its rights with respect to
the acquisition of UNIX and UnixWare technologies"?

10\. This wildly unclear language is what resulted in this vampire litigation
that simply would not die. Why? Well, in 2000, SCO was acquired by Caldera, a
group whose primary shareholder was a VC fund. Within a very short time,
Caldera goes fishing to find out whether there is any UNIX code in Windows,
Mac OS X, Linux, and versions of BSD. They hire high-powered lawyer David
Boies to frame their legal strategy. By January, 2003, SCO is saying they plan
to sue Linux vendors over this issue, claiming that UNIX code found its way
into the Linux distributions via IBM and otherwise. Now add Microsoft to the
mix, which pays a multi-million dollar sum to settle up with SCO and which
incidentally helps via that settlement payment to fund the all-out attack on
Linux that SCO launches. When Novell steps up to announce publicly that the
UNIX-related copyrights did not belong to Caldera because they had been
excluded from the asset sale, Caldera/SCO sues Novell for slander of title and
other claims, pulling out of its back pocket the 1996 amendment that Novell
claimed it did not even have in its files.

11\. From all this came all manner of lawsuits and countersuits involving
multiple parties and countless issues, but the Novell/SCO case was and is the
really key case because that is where the fundamental issue would be decided:
did Novell in fact transfer UNIX copyrights to SCO back in 1995/1996 or did it
not? If it did, the many cases would proceed and would involve multi-billion
dollar claims against the major players in the Linux world. If not, all cases
would effectively die.

12\. In August, 2007, the U.S. district court granted summary judgment to
Novell on the key issue, finding as a matter of law (meaning, without the
necessity of even holding a trial) that Novell had _not_ transferred the UNIX-
related copyrights. In August, 2009, however, the Tenth Circuit Court of
Appeals reversed the district court, concluding that the issue had to be
decided at a trial and could not be disposed of summarily. Well, this jury
verdict is the result and it is momentous. While one never knows in legal
proceedings, it may indeed be that the stake has finally been driven through
the vampire's heart.

~~~
bediger
There's some speculation that the vague wording (your item 9) comes from AT&T
knowing that some of the code in System V wasn't the cleanest with respect to
copyright. AT&T did essentially lose its own lawsuit against Univ of
California over BSD Unix. Some SysV code might actually be BSD code with UC
copyright notice removed. Also, some SysV code might be 32V unix code, which
was distributed _without_ the copyright notice that was required of
copyrighted material back in the day. So 32V code was in the public domain.

In any case, copyrights aren't all that clear with SysV, so Novell selling
them outright might have caused even more litigation, with System V maybe
ending up public domain.

But it is an unholy mess.

------
dfranke
The fat lady is getting hoarse.

------
jacquesm
Garlic, wooden stakes and silver bullets. There has to be at least one more
appeal left they can try.

That hat never seems to be devoid of more rabbits. Most people would have had
the class to fold by now, they're just wasting the courts and other peoples'
time.

