Now it's Novell Inc.'s turn.
After listening to witness after witness for The SCO Group, a
federal court jury may begin hearing testimony as early as today from
witnesses for Novell. They will address which company owns the
copyrights to the Unix operating system.
Because the jury may side with SCO on that question, Novell's task
also is to try to limit the damages it could potentially pay for
interfering with SCO's ownership rights. Lindon-based SCO is trying to
convince the jury that interference cost it tens of millions of
dollars.
The case is being followed intensely in some financial circles
because of the recent offer by Elliott Associates to buy Novell in a $2
billion deal. But potentially a jury verdict in favor of SCO also could
restart its program to offer licenses to commercial users of the rival
Linux computer operating system that the SCO says makes use of Unix's
copyrighted code.
Novell plans to counter
SCO's claims that are at the heart of its 6-year-old lawsuit with
testimony from attorneys and others who will say that Novell retained
the copyrights to Unix when it sold some rights to the system in 1995.
Novell bought Unix two years earlier for $300 million. It was part
of its abortive effort to compete in scale with giant Microsoft. But
then it reversed course and decided to sell the system to the Santa
Cruz Operation. That firm later sold it to a Utah company, Caldera,
which changed its name to The SCO Group.
Santa Cruz could not pay cash for Unix. So part of the deal was
that Novell retained a lucrative stream of royalties from pre-1995
versions of Unix, as well as receiving stock in Santa Cruz. In order to
protect its royalties even if Santa Cruz went broke, Novell's attorney
says the company retained the copyrights as part of the deal.
To assert its claim, Novell will call to the stand several
attorneys who were involved in drafting the agreement. That testimony
could counter testimony from former Novell and Santa Cruz officials who
have testified the copyrights were included in the sale, and the deal
made no sense without them.
The ex-officials from SCO and Santa Cruz "were so high level they
did not become intertwined in the details of the deal," attorney
Sterling Brennan said in his opening argument.
Novell plans to call David Bradford, Novell's former in-house
attorney and board secretary, to the witness stand to testify about the
drafting of the sale agreement and the board's vote to approve it.
"The Asset Purchase Agreement means what it says: copyrights were
not included as an asset," Bradford said in a declaration filed earlier
in the lawsuit. "Copyrights were specifically excluded from the asset
transfer."
That statement is at odds with the testimony of Robert Frankenberg,
the Novell CEO in 1995, who said his orders to the team of negotiators
were to sell the entire business, including the copyrights.
Novell also plans to call as a witness Tor Braham, an outside attorney who helped negotiate and draft the agreement.
Part of the back-and-forth of the trial has been over who the lead
negotiators were for each side. That could show who might have the
clearest understanding of the intent of the contract language that is
fuzzy at critical parts. SCO has portrayed the former officials of
Novell and Santa Cruz as the lead negotiators who gave details of the
agreement to attorneys to draft the legal language.
Braham, however, has asserted that he was the primary negotiator
for Novell in the deal and that he was told by Bradford to withhold the
copyrights.
A part of the original sales contract is ambiguous and can be read
to say copyrights to Unix were not part of the sale. SCO has pointed to
an amendment later added to the contract that appears to clear up the
confusion and give the copyrights to SCO.
The trial is scheduled to end March 26, although it is running about a day behind schedule.
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