1 IN THE UNITED STATES DISTRICT COURT

2 DISTRICT OF UTAH, CENTRAL DIVISION

3

4 THE SCO GROUP, INC., a Delaware )

5 corporation, )

6 Plaintiff, )

7 vs. ) Case No. 2:04-CV-139TS

8 NOVELL, INC., a Delaware )

9 corporation, )

10 Defendant. )

11 _________________________________)

12 AND RELATED COUNTERCLAIMS. )

13 _________________________________)

14

15 BEFORE THE HONORABLE TED STEWART

16 ---------------------------------

17 March 26, 2010

18 Jury Trial

19

20

21

22

23

24 REPORTED BY: Patti Walker, CSR, RPR, CP

25 REDACTED

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1 A P P E A R A N C E S

2

3

4 For Plaintiff: Brent Hatch

HATCH JAMES & DODGE

5 REDACTED

6

7 Stuart Singer

BOIES SCHILLER & FLEXNER

8 REDACTED

9

10 Edward Normand

BOIES SCHILLER & FLEXNER

11 REDACTED

12

13

For Defendant: Sterling Brennan

14 WORKMAN NYDEGGER

15 REDACTED

16

Eric Acker

17 Michael Jacobs

MORRISON & FOERSTER

18 REDACTED

19

20

21

22

23

24

25

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1 SALT LAKE CITY, UTAH; FRIDAY, MARCH 26, 2010; 8:30 A.M.

2 PROCEEDINGS

3 THE COURT: Good morning.

4 Let me ask, first of all, whether or not you have

5 any disputes over closing argument demonstratives or slides,

6 or whatever else?

7 MR. BRENNAN: Your Honor, we had a chance to look

8 at one another's. I think with some modifications that were

9 just made, we should be in agreement, at least in terms of

10 presentation of the material.

11 THE COURT: I'm not sure that I understand what

12 you mean at least in regards to the presentation of

13 materials.

14 MR. BRENNAN: We don't have an objection to the

15 use of the demonstratives.

16 THE COURT: Do you have an objection to any of Mr.

17 Brennan's?

18 MR. SINGER: No, Your Honor.

19 THE COURT: SCO today filed a motion regarding

20 three issues about closing, and I would agree with their

21 request. I am going to assume the first one is no longer

22 relevant because the parties have agreed as to the

23 demonstratives.

24 MR. SINGER: That's correct.

25 THE COURT: The second is SCO objects to any

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1 attempt by Novell to argue to the jury that Novell's

2 assertion to ownership applied only to UNIX and not to

3 UnixWare copyrights. Do you wish to address that, Mr.

4 Jacobs?

5 MR. JACOBS: We do not quarrel with that in the

6 context of the closings, Your Honor, but we will be making

7 clear the delineation between the pre-APA UnixWare and

8 post-APA UnixWare.

9 THE COURT: I think the jury instruction now

10 reflects that better than it did before as well.

11 The third has to do with an attempt, frankly, by

12 either side to argue something contrary to law. My

13 assumption is that neither of you will have done that in any

14 event; is that correct?

15 MR. JACOBS: That is correct. Just to avoid

16 confusion during the openings themselves, SCO's motion is

17 drawn to section 204(a) of the Copyright Act, which was the

18 subject of the Tenth Circuit ruling. The Tenth Circuit

19 ruling was that there is no per say requirement under 204(a)

20 of the Copyright Act for something that represents

21 specifically or in substance a bill of sale. We're not

22 arguing that issue under the Copyright Act. We will be

23 arguing that the asset purchase agreement was a promise to a

24 assign, not an assignment, that Amendment No. 2 is dated

25 October 26th, I think, 1996, and that as a matter of

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1 contract law, just as in the purchase and sale of a house,

2 there was no subsequent evidence of an actual transfer. So

3 we'll be arguing it as a matter of contract law, which the

4 Tenth Circuit did not address.

5 MR. SINGER: Your Honor, this is exactly the type

6 of argument that we filed this motion because we were

7 concerned they might make. The Tenth Circuit specifically

8 held they didn't see anything to this date issue. I think

9 it's expressly in one of the footnotes on this section when

10 this argument was made. There is no difference between

11 making this argument in the context of the Copyright Act or

12 making it in the contract section. The Court of Appeals

13 specifically ruled that Amendment 2 would be sufficient to

14 transfer title, that that was the intent of the parties.

15 So I think, with all due respect, Mr. Jacobs is in

16 the teeth of that decision.

17 THE COURT: Mr. Jacobs.

18 MR. JACOBS: Your Honor, footnote 2 is the

19 footnote I think Mr. Singer is referring to and it's a

20 footnote in the context of the discussion of section 204(a),

21 it is not a holding that the contract could not be

22 interpreted in the way that we're proposing to interpret it.

23 There was no such briefing or argument before the Tenth

24 Circuit. The footnote itself is not definitive at all on

25 the question that we propose to argue as a matter of

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1 contract interpretation. I could hand it to Your Honor if

2 it would be convenient, you could look yourself.

3 THE COURT: I probably need to look at it.

4 MR. SINGER: We would also submit that this would

5 just be confusing to the jury because there's been no

6 evidence here that they would be drawing any conclusions

7 from that.

8 THE COURT: Mr. Singer, I think that is probably

9 your best argument, that this ought to be handled by you in

10 your reply. But I do want to look at the footnote.

11 MR. JACOBS: Sure. Just for the avoidance of

12 doubt, Ms. Amadia did say had she intended to transfer,

13 there would have been additional documents that would have

14 been required.

15 May I, Your Honor?

16 THE COURT: Yes.

17 If you are not arguing a pure legal issue about

18 the bill of sale or something akin to it but rather the

19 intent of the parties, I believe that footnote would not

20 preclude you from doing so.

21 MR. JACOBS: Thank you, Your Honor.

22 THE COURT: Counsel, let me again remind you, it

23 would be my intent to dismiss juror 13 as the alternate.

24 MR. SINGER: We understand, Your Honor.

25 THE COURT: I am going to hold you to your one

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1 hour and 15 minutes. My intent will be to instruct the jury

2 and then to have your initial presentation and closing.

3 Will that be by you, Mr. Singer, or Mr. Hatch, or

4 will you be splitting it?

5 MR. SINGER: We will be splitting it, but I plan

6 to reserve 15 minutes for rebuttal.

7 THE COURT: Who will go first.

8 MR. SINGER: I will be going first, Mr. Hatch will

9 be taking over at about the 45-minute mark.

10 THE COURT: All right.

11 Mr. Brennan, will you making the closing?

12 MR. BRENNAN: Yes, I will, Your Honor.

13 THE COURT: Again, after your initial hour, then

14 we'll take a break and come back to Mr. Brennan, and then

15 your rebuttal.

16 MR. SINGER: Would it be possible to have a few

17 minutes break after the reading of the instructions just to

18 set up?

19 THE COURT: Certainly.

20 MR. SINGER: One final question, given that the

21 Court has granted SCO's 50(a) motion and dismissed Novell's

22 counterclaim, and that's been raised in opening and

23 otherwise, will the Court make some mention of that?

24 THE COURT: There is a specific jury instruction

25 that will state, and I'll read it to you, if you've not seen

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1 it, the claim of Novell that SCO slandered Novell's title is

2 no longer before you and will not be decided by you. Do not

3 concern yourselves with this development and do not

4 speculate about it.

5 MR. SINGER: Thank you.

6 THE COURT: Counsel, let me remind you that the

7 Court will expect proposed findings of facts and conclusions

8 of law as to those issues reserved for the Court on the 16th

9 of April, which is 20 days plus. Okay.

10 All right. Is there anything else before we bring

11 the jury in?

12 MR. BRENNAN: Not from Novell, Your Honor.

13 MR. SINGER: Not from SCO.

14 THE COURT: Ms. Malley.

15 (Jury present)

16 THE COURT: Good morning, ladies and gentlemen.

17 Let me begin by reassuring you that a copy of the

18 instructions that I'm about to read to you will go with you

19 into the jury room, so I do not expect you to memorize this

20 as I go through it. All right.

21 Members of the jury, now that you have heard the

22 evidence, it becomes my duty to give you the instructions of

23 the Court as to the law applicable to this case.

24 It is your duty as jurors to follow the law as

25 stated in the instructions of the Court, and to apply the

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1 rules of law to the facts as you find them from the evidence

2 in the case.

3 You are not to single out one instruction alone as

4 stating the law, but must consider the instructions as a

5 whole.

6 Neither are you to be concerned with the wisdom of

7 any rule of law stated by the Court. Regardless of any

8 opinion you may have as to what the law ought to be, it

9 would be a violation of your sworn duty to base a verdict

10 upon any other view of the law than that given in the

11 instructions of the Court; just as it would be a violation

12 of your sworn duty, as judges of the facts, to base a

13 verdict upon anything but the evidence of the case.

14 You are to disregard any evidence offered at trial

15 and rejected by the Court. You are not to consider

16 questions of counsel as evidence. You are not to consider

17 the opening statements and the arguments of counsel as

18 evidence. Their purpose is merely to assist you in

19 analyzing and considering the evidence presented at trial.

20 The Court did not by any words uttered during the

21 trial or in these instructions give or intimate, or wish to

22 be understood by you as giving or intimating, any opinions

23 as to what has or has not been proven in the case or as to

24 what are or are not the facts of the case.

25 The claim of Novell that SCO slandered Novell's

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1 title is no longer before you and will not be decided by

2 you. Do not concern yourselves with this development and do

3 not speculate about it.

4 SCO has the burden of proving its claim by a

5 preponderance of the evidence.

6 To prove by a preponderance of the evidence means

7 to prove something is more likely so than not so. It does

8 not mean the greater number of witnesses or exhibits. It

9 means the evidence that has the more convincing force when

10 taken on a whole compared to the evidence opposed to it. It

11 means the evidence that leads you the jury to find that the

12 existence of the disputed fact is more likely true than not

13 true.

14 Any finding of fact you make must be based on

15 probabilities, not possibilities. A finding of fact must

16 not be based on speculation or conjecture.

17 When I say in these instructions that the party

18 has the burden of proof on any proposition or use the

19 expression if you find or if you determine, I mean that you

20 must be persuaded, considering all the evidence in the case,

21 that the proposition is more probably true than not true.

22 In determining whether any disputed fact has been

23 proven by a preponderance of the evidence you may, unless

24 otherwise instructed, consider the testimony of all

25 witnesses, regardless of who may have called them, and all

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1 exhibits.

2 If a party fails to meet this burden of proof, or

3 if the evidence weighs so evenly that you are unable to say

4 that there is a preponderance on either side, you must

5 resolve the question against the party who has the burden of

6 proof on that issue and in favor of the opposing party.

7 In this particular civil case, one of the elements

8 of the claim made by SCO, the showing of constitutional

9 malice, has a different burden of proof called clear and

10 convincing evidence. That means that SCO has a higher

11 burden than preponderance of the evidence, but it does not

12 require proof beyond a reasonable doubt. Clear and

13 convincing evidence is evidence that shows it is highly

14 probable that what is claimed is true. It is evidence that

15 produces in your mind a firm belief as to the fact at issue.

16 For such evidence to be clear and convincing, it must at

17 least have reached a point where there remains no

18 substantial doubt as to the truth or correctness of the

19 claim based upon the evidence.

20 You have been chosen and sworn as jurors in this

21 case to try the issues of fact presented by the allegations

22 of the complaint of SCO, and the answer thereto of Novell.

23 You are to perform this duty without bias or prejudice as to

24 any party. Our system of law does not permit jurors to be

25 governed by sympathy, prejudice, or public opinion. Both

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1 the parties and the public expect that you will carefully

2 and impartially consider all the evidence in the case,

3 follow the law stated by the Court, and reach a just

4 verdict, regardless of the consequences.

5 During the trial I have permitted you to take

6 notes. Many courts do not permit note-taking by jurors.

7 And as instructed at the beginning of trial, a word of

8 caution is in order. There is always a tendency to attach

9 undue importance to matters which one has written down.

10 Some testimony which is considered unimportant at the time

11 presented, and thus not written down, takes on greater

12 importance later in the trial in light of all the evidence

13 presented. Therefore, you are instructed that your notes

14 are only a tool to aid your own individual memory and you

15 should not compare your notes with other jurors in

16 determining the content of any testimony or in evaluating

17 the importance of any evidence. Your notes are not

18 evidence, and are by no means a complete outline of the

19 proceeding or list of the highlights of the trial. Above

20 all, your memory should be your greatest asset when it comes

21 to deliberating and rendering a decision in this case.

22 Both SCO and Novell are corporations and, as such,

23 can act only through their officers and employees, and

24 others designated by them as their agents.

25 Any act or omission of any officer, employee or

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1 agent of a corporation, in the performance of the duties or

2 within the scope of the authority of the officer, employee

3 or agent, is the act or omission of the corporation.

4 Unless you are otherwise instructed, the evidence

5 in this case consists of the sworn testimony of the

6 witnesses, regardless of who may have called them; and all

7 exhibits received in evidence, regardless of who may have

8 produced them; and all facts which may have been admitted or

9 stipulated; and all facts and events which may have been

10 judicially noticed.

11 Any evidence as to which an objection was

12 sustained by the Court, and any evidence ordered stricken by

13 the Court, must be entirely disregarded.

14 Unless you are otherwise instructed, anything you

15 may have seen or heard outside of the courtroom is not

16 evidence and must be entirely disregarded.

17 There are, generally speaking, two types of

18 evidence from which a jury may properly find the truth as to

19 the facts of a case. One is direct evidence, such as the

20 testimony of an eyewitness. The other is indirect or

21 circumstantial evidence, the proof of a chain of

22 circumstances pointing to the existence or nonexistence of

23 certain facts.

24 As a general rule, the law makes no distinction

25 between direct and circumstantial evidence, but simply

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1 requires that the jury find the facts in accordance with the

2 burden of proof in the case, both direct and circumstantial.

3 You, as jurors, are the sole judges of the

4 credibility of witnesses and the weight their testimony

5 deserves. You may be guided by the appearance and conduct

6 of the witnesses, or by the manner in which the witness

7 testifies, or by the character of the testimony given, or by

8 evidence to the contrary of the testimony given.

9 You should carefully scrutinize all the testimony

10 given, the circumstances under which each witness has

11 testified, and every matter in evidence which tends to show

12 whether a witness is worthy of belief. Consider each

13 witness's intelligence, motive and state of mind, and

14 demeanor and manner while on the stand. Consider the

15 witness's ability to observe matters as to which he or she

16 has testified, and whether he or she impresses you as having

17 an accurate recollection of these matters. Consider also

18 any relation each witness may bear to either side of the

19 case; the manner in which each witness might be affected by

20 the verdict; and the extent to which, if at all, each

21 witness is either supported or contradicted by other

22 evidence in the case.

23 Inconsistencies or discrepancies in the testimony

24 of a witness, or between the testimony of different

25 witnesses, may or may not cause you to discredit such

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1 testimony. Two or more persons witnessing an incident or a

2 transaction may simply see or hear it differently and

3 innocent misrecollection, like failure of recollection, is

4 not an uncommon experience. In weighing the effect of a

5 discrepancy, always consider whether it pertains to a matter

6 of importance or an unimportant detail, and whether the

7 discrepancy results from innocent error or intentional

8 falsehood.

9 After making your own judgment, you will give the

10 testimony of each witness such weight, if any, as you may

11 think it deserves.

12 Witnesses who, by education, study and experience,

13 have become expert in some art, science, profession or

14 calling, may state opinions as to any such matter in which

15 that witness is qualified as an expert, so long as it is

16 material and relevant to the case. You should consider such

17 expert opinion and the reasons, if any, given for it. You

18 are not bound by such an opinion. Give it the weight you

19 think it deserves. If you should decide that the opinions

20 of an expert witness are not based upon sufficient education

21 and experience, or if you should conclude that the reasons

22 given in support of the opinions are not sound, or that such

23 opinions are outweighed by other evidence, you may disregard

24 the opinion entirely.

25 In resolving any conflict that may exist in the

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1 testimony of experts, you may compare and weigh the opinion

2 of one against that of another. In doing this, you may

3 consider the qualifications and credibility of each, as well

4 as the reasons for each opinion and the facts on which the

5 opinions are based.

6 In determining the weight to be given to an

7 opinion expressed by any witness who did not testify as an

8 expert witness, you should consider his or her credibility,

9 the extent of his other her opportunity to perceive the

10 matters upon which his or her opinion is based and the

11 reasons, if any, given for it. You are not required to

12 accept such an opinion but should give it the weight to

13 which you find it entitled.

14 During the trial of this case, certain testimony

15 has been presented to you by way of a deposition, consisting

16 of sworn recorded answers to questions asked of the witness

17 in advance of the trial by one or more of the attorneys for

18 the parties to the case. The testimony of a witness who,

19 for some reason, cannot be present to testify from the

20 witness stand may be presented in writing under oath or on a

21 videotape. Such testimony is entitled the same

22 consideration, and is to be judged as to credibility, and

23 weighed, and otherwise considered by the jury, insofar as

24 possible, in the same way as if the witness had been present

25 and had testified from the witness stand.

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1 Certain charts, graphs and illustrations have been

2 shown to you. Those charts, graphs and illustrations are

3 used for convenience and to help explain the facts of the

4 case. They are not themselves evidence or proof of any

5 facts.

6 You have heard evidence that there were earlier

7 rulings by this Court concerning the ownership of the UNIX

8 and the UNIX copyrights existent as of the date of the asset

9 purchase agreement. In making these rulings, the Court did

10 not have the benefit of the evidence that you have now

11 heard. These prior rulings have been reversed in a

12 unanimous ruling by the Court of Appeals, which is why these

13 issues are being presented to you in this trial. You must

14 decide this case solely on the evidence presented to you in

15 this trial. The earlier rulings should have no bearing on

16 your determination of which party owns the copyrights at

17 issue in this case. However, the existence of these prior

18 rulings may be considered by you in your determination of

19 special damages and punitive damages, if any.

20 You heard reference to a SCO Group bankruptcy.

21 That is a reorganization proceeding which is pending in

22 another court. SCO continues to operate its business in

23 reorganization and the existence of that proceeding should

24 have no bearing on your consideration of this case.

25 You have also heard reference to a trial involving

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1 SCO and Novell in 2008. That trial concerned other issues

2 that are not before you.

3 In this case, SCO has alleged that Novell has

4 slandered its title regarding ownership of copyrights over

5 the UNIX and UnixWare computer operating systems.

6 Slander of title requires you to find that:

7 First, there was a publication of a statement disparaging

8 SCO's title; second, the statement was false; third, the

9 statement was made with constitutional malice; and, fourth,

10 the statement caused special damages. I will now explain

11 these four elements in more detail.

12 The first element requires SCO to prove that

13 Novell published a statement that disparaged SCO's title or

14 ownership of the UNIX or UnixWare copyrights existent as of

15 the date of the asset purchase agreement. SCO alleges that

16 Novell made several slanderous statements in 2003 and 2004.

17 The allegedly slanderous statements do not include

18 statements made in pleadings and filings made by Novell in

19 connection with this litigation, which began in January

20 2004. Novell may not be held liable for making such

21 statements made in pleadings and filings.

22 For the statement to have been published, it must

23 have been communicated to someone other than SCO.

24 A statement is not slanderous if the context makes

25 clear that the speaker is expressing a subjective view or an

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1 interpretation or theory, rather than an objectively

2 verifiable fact. You may determine, however, that the

3 speaker intended to convey a statement of fact even if the

4 speaker has couched its statements in the form of an opinion

5 or belief.

6 In deciding whether a publication disparaged SCO's

7 title, you should not view individual words or sentences in

8 isolation. Rather, each statement must be considered in the

9 context in which it was made, giving the words their most

10 common and accepted meaning. You should also consider the

11 surrounding circumstances of the statement and how the

12 intended audience would have understood the statement in

13 view of those circumstances.

14 The second element of a claim for slander of title

15 is falsity of the statement that disparages title. False

16 means that the statement is either directly untrue or that

17 an untrue inference can be drawn from the statement. You

18 are to determine the truth or falsity of the statement

19 according to the facts as they existed at the time the

20 statement was made.

21 The statement, to be true, need not be absolutely,

22 totally, or literally true, but must be substantially true.

23 A statement is considered to be true if it is substantially

24 true or the gist of the statement is true.

25 In order to determine whether the statements at

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1 issue were true or false, you must determine which party

2 owned the UNIX and UnixWare copyrights, existent as of the

3 date of the asset purchase agreement, at the time the

4 statements were made.

5 To determine which party owned the UNIX and

6 UnixWare copyrights, existent as of the date of the asset

7 purchase agreement, you should consider the asset purchase

8 agreement and the amendments thereto. I will now provide

9 you instructions on how you should interpret these

10 agreements.

11 Several contracts relating to the same matters,

12 between the same parties, and made as parts of substantially

13 one transaction, are to be taken together. The contracts

14 need not have been executed on the same day to be parts of

15 substantially one transaction.

16 Where contracts are made at different times, but

17 where the later contract is not intended to entirely

18 supersede the first, but only modify it in certain

19 particulars, the two are to be construed as parts of one

20 contract, the later superseding the earlier one where it is

21 inconsistent with the earlier.

22 Here, the amendments, including Amendment No. 2,

23 must be considered together with the asset purchase

24 agreement as a single document. The language of the

25 amendments, including Amendment No. 2, controls whenever its

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1 language contradicts the asset purchase agreement.

2 In deciding what the terms of a contract mean, you

3 must decide what the parties intended at the time the

4 contract was created. You may consider the usual and

5 ordinary meaning of the language used in the contract as

6 well as the circumstances surrounding the making of the

7 contract.

8 With respect to your consideration of the

9 agreements at issue here, where contract terms are clear,

10 they should be given their plain and ordinary meanings.

11 In deciding what the words of a contract meant to

12 the parties, you should consider the whole contract, not

13 just isolated parts. You should use each part to help you

14 interpret the others, so that all the parts makes sense when

15 taken together.

16 You should assume that the parties intended the

17 words in their contract to have their usual and ordinary

18 meaning unless you decide that the parties intended the

19 words to have a special meaning.

20 With respect to who owns the copyrights at issue,

21 you may consider what is called the extrinsic evidence of

22 the intent of the parties to the amended asset purchase

23 agreement. Extrinsic evidence is the evidence of what

24 parties to a contract intended apart from the language they

25 used in the contract.

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1 One type of extrinsic evidence is testimony or

2 documents showing what the people who were negotiating the

3 contract said or did or understood at the time of the

4 transaction.

5 Another type of extrinsic evidence is called the

6 parties course of performance. Course of performance is how

7 the parties interpreted and applied the terms of the

8 contract after the contract was created but before any

9 disagreement between the parties arose.

10 In determining which party owns the property at

11 issue, and your consideration of the amended asset purchase

12 agreement, you may consider the nature of a copyright.

13 Copyright is the exclusive right to copy. The

14 owner of a copyright has the exclusive right to do and to

15 authorize the following: One, to reproduce the copyrighted

16 work in copies; two, to prepare derivative works based upon

17 the copyrighted work; three, to distribute copies of the

18 copyrighted work to the public by sale or other transfer of

19 ownership, or by rental, lease or lending.

20 The term owner includes the author of the work, an

21 assignee, or an exclusive licensee. In general, copyright

22 law protects against production, adaptation, distribution,

23 performance, or display of substantially similar copies of

24 the owner's copyrighted work without the owner's permission.

25 A copyright owner may enforce these rights to

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1 exclude others in an action for copyright infringement.

2 Even though one may acquire a copy of a copyrighted work,

3 the copyright owner retains rights and control of that copy,

4 including uses that may result in additional copies or

5 alterations of the work.

6 Possession of certificates of copyright

7 registrations is immaterial to ownership of the copyrights,

8 but may be considered for other purposes, such as the intent

9 of the parties.

10 A copyright owner may transfer, sell, or convey to

11 another person all or part of the copyright owner's property

12 interest in the copyright. A property interest in a

13 copyright includes the right to exclude others from

14 reproducing, preparing a derivative work, distributing,

15 performing, displaying, or using the copyrighted work.

16 To be valid, the transfer, sell, or conveyance

17 must be in writing. The person to whom a right is

18 transferred is called the assignee. The assignee may

19 enforce this right to exclude others in an action for a

20 copyright infringement.

21 The copyright owner may also transfer, sell, or

22 convey to another person any of the exclusive rights

23 included in the copyright. To be valid, the transfer, sell,

24 or conveyance must be in writing. The person to whom this

25 right is transferred is called an exclusive licensee. An

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1 exclusive licensee has the right to exclude others from

2 copying the work to the extent of the rights granted in the

3 license and may bring an action for damages for copyright

4 infringement.

5 Nonexclusive licenses, on the other hand, do not

6 transfer copyright ownership and can be granted orally or

7 implied from conduct. An implied license can only be

8 nonexclusive. A nonexclusive licensee cannot bring suit to

9 enforce a copyright.

10 An implied nonexclusive license may arise when,

11 one, a person, the licensee, requests the creation of the

12 work, two, the creator, the licensor, makes the particular

13 work and delivers it to the licensee who requested it, and,

14 three, the licensor intends that the licensee-requestor copy

15 or distribute his work.

16 The third element of slander of title requires SCO

17 to prove by clear and convincing evidence that Novell's

18 statement disparaging the ownership of the UNIX and UnixWare

19 copyrights, existent as of the date of the asset purchase

20 agreement, was made with constitutional malice. That is,

21 SCO must prove that the statement was published with: One,

22 knowledge that it was false; or, two, reckless disregard of

23 whether it was true or false, which means that Novell made

24 the statement with a high degree of awareness of the

25 probable falsity of the statement, or that, at the time the

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2620

1 statement was transmitted Novell had serious doubts that the

2 statement was true. Clear and convincing evidence leaves no

3 substantial doubt in your mind that the constitutional

4 malice is highly probable, as previously explained in

5 Instruction No. 13.

6 In determining whether Novell published the

7 statement knowing the statement to be false or with reckless

8 disregard for the truth, you should take into account all

9 the facts and circumstances. You should consider whether

10 the statement was fabricated or the product of the party's

11 imagination. You may also consider whether the party knew

12 about the source of the information and whether there were

13 reasons for the party to doubt the informant's veracity,

14 whether the information was inherently improbable, or if

15 there were other reasons for the party to doubt the accuracy

16 of the information.

17 In determining whether there was knowing falsehood

18 or reckless disregard for the truth, however, it is not

19 enough for you to find that the party acted negligently,

20 carelessly, sloppily or did not exercise good judgment in

21 researching, writing, editing, or publishing the statement.

22 An extreme departure from the standards of investigating and

23 reporting ordinarily adhered to by responsible publishers

24 does not, standing alone, constitute knowledge of falsity or

25 reckless disregard for the truth. The reliance on one

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2621

1 source standing alone does not constitute knowing falsehood

2 or reckless disregard for the truth, even if other sources

3 would be readily available, and even if, in applying

4 reasonable reporting of care, you believe those other

5 sources should have been contacted.

6 Spite, ill will, hatred, bad faith, evil purpose

7 or intent to harm does not alone support a finding of

8 constitutional malice.

9 The mere fact that a mistake may occur is not

10 evidence of knowing falsehood or reckless disregard for the

11 truth. Reckless disregard for the truth or falsity requires

12 a finding that the person making the statement had a high

13 degree of awareness that the statement was probably false,

14 but went ahead and published the statement anyway. The test

15 is not whether the person acted as a responsible publisher

16 under the circumstances. While exceptional caution and

17 skill are to be admired and encouraged, the law does not

18 demand them as a standard of conduct in this matter.

19 Unless you find by clear and convincing evidence,

20 under all the circumstances, that Novell acted knowing the

21 statement to be false or with a high degree of awareness of

22 its probable falsity, there can be no liability.

23 The final element of a claim for slander of title

24 requires a showing that the statement disparaging SCO's

25 ownership of the UNIX of UnixWare copyrights, existent as of

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2622

1 the date of the asset purchase agreement, caused special

2 damages to SCO.

3 This requires SCO to establish an economic loss

4 that has been realized or liquidated, as in the case of lost

5 sales. Special damages are ordinarily proved in a slander

6 of title action by evidence of a lost sale or the loss of

7 some other economic advantage. Absent a specific monetary

8 loss flowing from a slander affecting the salability or use

9 of the property, there is no damage. It is not sufficient

10 to show that the property's value has dropped on the market,

11 as this is not a realized or liquidated loss. The law does

12 not presume special damages.

13 Special damages in the form of lost sales may be

14 shown in two ways: A, proof of the conduct of specific

15 persons or, b, proof that the loss has resulted from the

16 conduct of a number of persons whom it is impossible to

17 identify. There is a separate test you must apply for each.

18 First, when the loss of a specific sale is relied

19 on to establish special damages, SCO must prove that the

20 publication of the disparaging statement was a substantial

21 factor influencing the specific, identified purchaser in his

22 decision not to buy.

23 In order for the disparaging statement to be a

24 substantial factor in determining the conduct of an

25 intending or potential purchaser, it is not necessary that

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2623

1 the conduct should be determined exclusively or even

2 predominantly by the publication of the statement. It is

3 enough that the disparagement is a factor in determining his

4 decision, even though he is influenced by other factors

5 without which he would not decide to act as he does. Thus

6 many considerations may combine to make an intending

7 purchaser decide to break a contract or to withdraw or

8 refrain from making an offer. If, however, the publication

9 of the disparaging matter is one of the considerations that

10 has substantial weight, the publication of the disparaging

11 matter is a substantial factor in preventing the sale and

12 thus bringing financial loss upon the owner of the thing in

13 question.

14 The extent of the loss caused by the prevention of

15 a sale is determined by the difference between the price

16 that would have been realized by it and the salable value of

17 the thing in question after there has been a sufficient time

18 following the frustration of the sale to permit its

19 marketing.

20 Second, in the case of a widely disseminated

21 disparaging statement, SCO need not identify a specific

22 purchaser and recovery is permitted for loss of the market.

23 This may be proved by circumstantial evidence showing that

24 the loss has in fact occurred and eliminating other causes.

25 A decline in stock price is not an appropriate

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2624

1 claim for special damages.

2 You are entitled to award punitive damages if you

3 deem them to be appropriate.

4 Before any award of punitive damages can be

5 considered, SCO must prove by clear and convincing evidence

6 that Novell published a false statement knowing it was false

7 or in reckless disregard whether it was true or false, and

8 that Novell acted with hatred or ill will towards SCO, or

9 with an intent to injure SCO, or acted willfully or

10 maliciously towards SCO.

11 If you find that SCO has presented such proof, you

12 may award, if you deem it proper to do so, such sum as in

13 your judgment would be reasonable and proper as a punishment

14 to Novell for such wrongs, and as a wholesome warning to

15 others not to offend in a like manner. If such punitive

16 damages are given, you should award them with caution and

17 you should keep in mind they are only for the purpose just

18 mentioned and are not the measure of actual damage.

19 The fact that I have instructed you on damages

20 does not mean that I am indicating that you should award

21 any. That is entirely for you, the jury, to decide.

22 Any damages you award must have a reasonable basis

23 in the evidence. They need not be mathematically exact, but

24 there must be enough evidence for you to make a reasonable

25 estimate of damages without speculation or guess work.

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2625

1 The burden is upon the party seeking damages to

2 prove the existence and amount of its damages and that its

3 damages were caused by the acts of the opposing party. You

4 are not permitted to award speculative damages.

5 You have heard evidence concerning specifics about

6 the parties' rights and obligations under section 4.16 of

7 the amended asset purchase agreement. You are instructed

8 that those issues of specific rights and obligations under

9 section 4.16 are for the Court to decide and you are not to

10 concern yourself with them. You may consider section 4.16,

11 as well as all other provisions, in interpreting the amended

12 asset purchase agreement.

13 It is the duty of the attorney on each side of the

14 case to object when the other side offers testimony or other

15 evidence which the attorney believes is not properly

16 admissible. You should not show prejudice against any

17 attorney or his or her client because the attorney has made

18 an objection.

19 Upon allowing testimony or other evidence to be

20 introduced over the objection of any attorney, the Court

21 does not, unless expressly stated, indicate any opinion as

22 to the weight or effect of any such evidence. As stated

23 before, the jurors are the sole judges of the credibility of

24 all witnesses and the weight and effect of all evidence.

25 When the Court has sustained an objection to a

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2626

1 question addressed to a witness, the jury must disregard the

2 question entirely, and may draw no inference from the

3 wording of it or speculate as to what the witness would have

4 said if he or she had been permitted to answer any question.

5 During the course of the trial, I may have

6 occasionally asked questions of a witness, in order to bring

7 out facts not then fully covered in the testimony. Do not

8 assume that I hold any opinion on the matters to which my

9 questions may have related.

10 A copy of these instructions will also accompany

11 you to the jury room. Do not write on the instructions.

12 You will notice during are deliberations that

13 there may be gaps in the numbering of the instructions. The

14 instruction numbers are for the convenience of the Court and

15 the parties, and you are not to be concerned by them.

16 Upon retiring to the jury room, you must select

17 one of your members to act as your foreperson. The

18 foreperson will preside over your deliberations and will be

19 your spokesperson here in court.

20 The verdict must represent the collective judgment

21 of the jury. In order to return a verdict, it is necessary

22 that each juror agree to it. Your verdict must be

23 unanimous.

24 It is your duty, as jurors, to consult with one

25 another and to deliberate with a view to reaching an

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2627

1 agreement if you can do so without violence to individual

2 judgment. Each of you must decide the case for yourself,

3 but do so only after an impartial consideration of the

4 evidence in the case with your fellow jurors. In the course

5 of your deliberations, do not hesitate to reexamine your own

6 views and change your opinion if convinced it is erroneous.

7 But do not surrender your honest conviction as to the weight

8 or effect of evidence solely because of the opinion of your

9 fellow jurors for the mere purpose of returning a unanimous

10 verdict.

11 Remember at all times, you are not partisans. You

12 are judges, judges of the facts. Your sole interest is to

13 seek the truth from the evidence in the case.

14 Your verdict must be based solely upon the

15 evidence received in the case. Nothing you have seen or

16 heard outside of court may be considered. Nothing that I

17 have said or done during the course of this trial is

18 intended in any way to somehow suggest to you what I think

19 your verdict should be. Nothing said in these instructions

20 and nothing in any form of verdict prepared for your

21 convenience is to suggest or convey to you in any way or

22 manner any intimation as to what verdict I think you should

23 return. What the verdict shall be is the exclusive duty and

24 responsibility of the jury. As I have told you many times,

25 you are the sole judges of the facts.

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2628

1 The Court has prepared a verdict form for your

2 convenience. You are instructed that your answers to the

3 interrogatories on the verdict form must be consistent with

4 the instructions I have given you and with each other.

5 When you have reached a unanimous agreement as to

6 your verdict, your foreperson will fill in, date and sign

7 the verdict form upon which you have unanimously agreed.

8 When you have reached unanimous agreement as to your

9 verdict, the foreperson shall inform the bailiff and you

10 shall return to the courtroom.

11 If it becomes necessary during your deliberations

12 to communicate with the Court, you may send a note by the

13 bailiff. But bear in mind that you are not to reveal to the

14 Court or to any person how the jury stands, numerically or

15 otherwise, on the question before you, until after you have

16 reached a unanimous verdict or agreement.

17 The attitude and conduct of jurors at the outset

18 of their deliberations are matters of considerable

19 importance. It is rarely productive or good for a juror,

20 upon entering the jury room, to make an emphatic expression

21 of his or her opinion on the case or to announce a

22 determination to stand for a certain verdict. When one does

23 that at the outset, his or her sense of pride may be

24 aroused, and he or she may hesitate to recede from an

25 announced position if shown that it is wrong.

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2629

1 During your deliberations, you are able as a group

2 to set your own schedule for deliberations. You may

3 deliberate as late as you wish or recess at an appropriate

4 time set by yourselves. You may set your own schedule for

5 lunch and dinner breaks.

6 However, I do ask that you notify the Court by a

7 note when you plan to recess for the evening.

8 You have now been instructed on the law, ladies

9 and gentlemen. Again, a copy of the instructions, what I

10 just read to you, will accompany you to the jury room.

11 It is now time for closing statements, and we'll

12 begin with SCO. And because SCO is the plaintiff in the

13 case and, as I just instructed you, has certain burdens to

14 carry by way of the weight of evidence and such, the

15 plaintiffs have the opportunity to go both first and last in

16 their closing statements, meaning that SCO will go ahead now

17 with part of its closing. We'll then hear from Novell, and

18 then SCO will be given the last word.

19 Mr. Singer, if you would like to proceed.

20 MR. SINGER: Thank you, Your Honor.

21 Ladies and gentlemen, it's been a long three weeks

22 and we appreciate your close attention to this case. I know

23 it's not been the most exciting case at times, but I assure

24 you it's a very important case. It's very important to SCO,

25 it very important to individuals like Bill Broderick, John

Case 2:04-cv-00139-TS Document 869 Filed 04/19/10 Page 34 of 76

2630

1 Maciaszek, and Andy Nagle, men who have been with the

2 company for 20 years, going all the way back to AT&T, and

3 they are still there at SCO turning out UnixWare, providing

4 products for companies all over the country and the world,

5 and trying in a difficult situation to have the company

6 proceed.

7 These individuals and the customers, and some of

8 these have been long time or current customers, McDonald's,

9 NASDAQ, BMW, that business depends on the copyrights,

10 depends on having ownership of intellectual property that is

11 at the heart of their business.

12 You are going to be asked in this case two basic

13 important questions. It will be your responsibility to

14 decide, first, to declare that the UNIX, UnixWare copyrights

15 that existed back at the time of this transaction went with

16 the rest of the business, except for this royalty stream,

17 and belonged to SCO. That is very important and critical on

18 its own. And, second, you will be asked to determine, if

19 you agree with us, that there's been a slander on SCO's

20 title, to determine that and award a reasonable amount of

21 damages to compensate SCO in connection with that slander.

22 Now as the Court has instructed you, you are the

23 judges of the facts and, in doing so, you must determine

24 credibility. And credibility is, in part, a question of the

25 consistency of witnesses with one another. And I would like

Case 2:04-cv-00139-TS Document 869 Filed 04/19/10 Page 35 of 76

2631

1 to give you an example of one of the things you can look at.

2 You'll recall Mr. Stone when he was testifying

3 here about whether or not when they waived rights of SCO

4 that benefited IMB, whether that was done unilaterally or

5 whether it was done at IBM's request. Mr. Stone answered

6 no, it wasn't at IBM's request. We acted on our own. No

7 input from IBM at all.

8 Then a few days later you heard from Mr. LaSala,

9 the former general counsel of Novell who admitted on the

10 stand that, in fact, Mr. Marriot, a lawyer for IBM,

11 specifically asked Novell to assert those rights to waive

12 SCO's claims; in fact, said it was urgent. You also learned

13 that even internally, with Mr. LaSala's testimony, there was

14 an inconsistency because when he was first asked about that

15 in February 2007, he denied it. Only later in May, when we

16 pursued the issue, he admitted it. That's credibility.

17 That's an issue you can consider in determining who to

18 believe in this case.

19 Another example, Mr. Stone again, on a basic

20 point. This is not something people can be confused about.

21 Were you asked to leave the company. Yes, I was. I asked

22 Mr. Messman the same question, was Mr. Stone asked to leave

23 Novell. Answer, no. Someone is not telling the truth.

24 Now the questions that you will need to answer in

25 this case will be set out in the verdict form that you will

Case 2:04-cv-00139-TS Document 869 Filed 04/19/10 Page 36 of 76

2632

1 receive along with a copy of the instructions and the

2 evidence, and the very first question will be did the

3 amended asset purchase agreement transfer to UNIX and

4 UnixWare copyrights from Novell to SCO. I would like to

5 address that question at the outset.

6 Amendment No. 2, we submit, is the key to

7 answering that question. Amendment No. 2 replaced the

8 language that was inconsistent with what was the intent of

9 the transaction, the intent of the parties who put this deal

10 together that those copyrights would be transferred with the

11 UNIX and the UnixWare business. Amendment 2 replaces the

12 old language, which is gone, and that is the operative

13 language.

14 Now Judge Stewart read you an important

15 instruction that makes that clear, which is the instruction

16 I have on the screen, and it makes clear that it is the

17 language of the amendments, including Amendment No. 2,

18 controls wherever its language contradicts the asset

19 purchase agreement.

20 Of course you knew that from the face of it, that

21 it says it replaces the old language. It took out this

22 copyright exclusion and put in language that, we submit to

23 you, is consistent with what the parties intended, that the

24 copyrights required for the business were now part of what

25 were the included assets.

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2633

1 Now you might remember about three weeks ago

2 Novell's counsel telling you that it was important to listen

3 for the rest of the story. I think he invoked Paul Harvey.

4 I was thinking about that statement all during the first

5 week of this trial, and I was doing that because it seemed

6 that all during that week Novell was focused on this

7 language in the schedule of excluded assets, excluding

8 copyrights, when the rest of the story was that language

9 didn't exist anymore. That language was replaced by

10 Amendment No. 2. So the language that they have spent more

11 hours in this trial on than anything else is simply not in

12 the agreement and hasn't been in there since 1996. That's

13 really the rest of the story on this because under the plain

14 language of the asset purchase agreement with Amendment 2,

15 it is very clear that the assets, the copyrights

16 transferred.

17 You have a schedule of included assets, which

18 you've seen many times and you will be able to look at when

19 you deliberate, it says, all rights and ownership of UNIX

20 and UnixWare on all these products, including the UnixWare

21 products, and you haven't heard any evidence there are any

22 products on there that -- products missing from that list.

23 This includes what we're talking about, that all rights and

24 ownership of UNIX and UnixWare are transferred.

25 And then you had the old language that excluded

Case 2:04-cv-00139-TS Document 869 Filed 04/19/10 Page 38 of 76

2634

1 copyrights and trademarks. Now you have the current

2 language replaced by Amendment 2 which says that Novell gets

3 to keep copyrights, except for the copyrights and trademarks

4 owned by Novell as of the date of the agreement required for

5 SCO to exercise its rights with respect to the acquisition

6 of UNIX and UnixWare technologies. That really is the heart

7 of this case. With Amendment No. 2, it is clear that those

8 copyrights were transferred.

9 Now I would submit to you that Novell has admitted

10 the fact that SCO, in light of Amendment No. 2, owns those

11 copyrights, and they did that on two occasions. The first

12 occasion that that was admitted goes back to June 6th of

13 2003 when Novell issued the press release, when they -- of

14 course, you've heard about Amendment No. 2 when they said

15 they didn't have it and it turns out they did have it. They

16 didn't know it was signed. They claimed they had a signed

17 copy in the files. But the important point here on

18 copyright ownership is their recognition that it appears to

19 support SCO's claim that ownership for certain copyrights of

20 UNIX did transfer to SCO in 1996. So that's the first time.

21 The second time that that was admitted was in

22 front of you a few days ago on March 23rd, and that was when

23 Allison Amadia admitted -- and certainly she started out in

24 her testimony being adverse to SCO and in favor of Novell.

25 Then under Mr. Normand's cross-examination, listen to what

Case 2:04-cv-00139-TS Document 869 Filed 04/19/10 Page 39 of 76

2635

1 she said. She was asked, now you agree that under the plain

2 language of Amendment 2 Novell has included in the transfer

3 of assets the copyrights required for SCO to exercise its

4 rights in UNIX and UnixWare. Her answer was, the way I

5 wrote and intended Amendment No. 2 to be read is that this

6 language was saying that whatever copyright rights Santa

7 Cruz needed in order to exercise the rights it was given,

8 then they would have those rights.

9 Then a little bit later near the end of her

10 cross-examination she was asked, so if there are copyrights

11 that are required for SCO to exercise its rights, like the

12 UNIX and UnixWare trademarks, they were transferred,

13 correct. Her answer was yes.

14 Now there is no real dispute, ladies and

15 gentlemen, that the copyrights are required for the UNIX and

16 UnixWare business. You have heard a lot of evidence on

17 that. It has included Bob Frankenberg, the Novell president

18 and CEO, who said it was ludicrous to think about selling

19 software without selling the copyrights.

20 Doug Michels, the SCO founder and vice president,

21 equated it to breathing oxygen, that it's so essential.

22 There is no way this deal would have happened without

23 getting the copyrights.

24 Jim Wilt, who was the lead negotiator for Santa

25 Cruz, says that, you know, when you walk out the door, I

Case 2:04-cv-00139-TS Document 869 Filed 04/19/10 Page 40 of 76

2636

1 assume your head goes with you. That's how he equated it.

2 And, of course, the copyrights have to go with the company.

3 Steve Sabbath was asked, if you didn't own the

4 copyrights, how could you go after somebody that's pirating

5 your software, how could you enforce your rights to the

6 technology.

7 Bill Broderick said, if we couldn't protect our

8 software, we'd be out of business. This is how you protect

9 your software.

10 Now with Amendment No. 2, the APA makes sense.

11 Without it, the agreement doesn't make sense. The software

12 business without the copyrights, well, I would suggest to

13 you that's like a car without an engine, or maybe a house

14 without a roof, or maybe even suggest that it's an ice cream

15 sundae where you only get the cherry and not the ice cream,

16 as Mr. Braham suggested a couple days ago. It doesn't make

17 any sense.

18 Now with Amendment No. 2 all of the things fit

19 together and makes sense, beginning with the very recital at

20 the beginning of the document that says that this is the

21 sale of a business, the UNIX and UnixWare business, the

22 support of those products, all of that is what it being

23 sold. It is the intent that all of the business relating to

24 that be transferred. So it's consistent with the overall

25 intent of the deal.

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2637

1 There's been some discussion about the

2 consideration received. I suggest to you that it makes

3 sense because of the amount of money which Novell received.

4 Back in the opening you might remember seeing this slide

5 from Novell, the first one on the left-hand side, where it

6 suggests the purchase price was just the stock. The stock

7 itself was worth a lot of money, 40, $50 million. You

8 wouldn't even receive that if you weren't transferring the

9 copyrights. But if you look at the entirety of that section

10 of the asset purchase agreement, you see that there was

11 another part to the payments which included the royalty

12 stream that would occur in the future, both from the

13 existing UNIX products and the UnixWare products.

14 If you look at Mr. Bradford's memo to the board

15 right before Novell approved this transaction, he identified

16 those four royalty streams, which turn into a lot of money.

17 The stock is worth about 40, $50 million, $50 million a year

18 in the UNIX royalties, the estimated present value of

19 $60 million or so in the UnixWare royalties. So this was a

20 sale of a business. This wasn't simply serving as an agent,

21 as Mr. Braham suggested, to collect for someone else.

22 For instance, you've got here all the title to the

23 UNIX licenses. If you have a real estate agent handle your

24 house, you don't give them title to sell it. I don't know

25 of any real estate agents who would pay me something like

Case 2:04-cv-00139-TS Document 869 Filed 04/19/10 Page 42 of 76

2638

1 $100 million to handle a transaction. This agency was very

2 limited to the collection of royalties that Novell was going

3 to keep, and the rest of this was the sale of a business.

4 Now Amendment 2 also is needed to make sense of

5 something you've heard me refer to and my colleagues refer

6 to throughout the trial, the license back provision, and

7 that's because -- and Novell has never been able to explain

8 this, it makes no sense for Novell to have kept the

9 copyrights and then the license back right to use them. If

10 they kept them, they wouldn't need the license back. That

11 is clear evidence that this was intended to be a sale of the

12 copyrights.

13 The license back of assets appears right in the

14 asset purchase agreement in section 1.6. Now Novell tries

15 to say, well, it only applied to the new products, so that's

16 why you had the license back. But the plain language of the

17 license back says, all of the technology included in the

18 assets, which means they are getting a license back to the

19 assets being sold. They wouldn't need a license to use that

20 if it wasn't for the fact they were selling the copyrights.

21 And, in fact, if you look at the technology

22 license agreement, it says specifically, as between Novell

23 and SCO, ownership of licensed technology shall reside in

24 SCO. We think that makes it very clear, and you have heard

25 a lot of witnesses say when I asked them or Mr. Normand

Case 2:04-cv-00139-TS Document 869 Filed 04/19/10 Page 43 of 76

2639

1 asked them that does it make any sense to have a license

2 back if you retained the copyrights, and everyone agreed

3 with that.

4 Now Amendment 2 -- with Amendment 2, the agreement

5 also makes sense in light of -- let's see, there we are.

6 With Amendment 2, the agreement also makes sense in light of

7 the testimony of the witnesses that you've heard. Now I

8 told you a few weeks ago in the opening, pointing to this

9 chart, that you would hear from ten witnesses drawn from

10 both the Santa Cruz and the Novell side of the transaction

11 who would agree that it was intended that the copyrights

12 were sold. All ten of those witnesses, either through video

13 deposition or through live testimony here, have so

14 testified.

15 I would like to start with the Santa Cruz side

16 because there's been a lot of attention here paid to what

17 Novell intended and what was going on at Novell's board

18 meeting. That's really not the issue before you. The issue

19 before you is what the two parties to a contract intended.

20 So you have to look at both parties' intent and how they

21 expressed that to each other. And there is no confusion at

22 all on the Santa Cruz side there. All of these executives

23 and negotiators testified consistently that this deal

24 required the transfer of the copyrights.

25 You remember Doug Michels. I think that was

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2640

1 pretty memorable videotaped testimony, wasn't it? He was

2 perplexed that anyone could even raise the issue.

3 Copyrights are like breathing oxygen. I'm going to read you

4 a little bit of his testimony. He says, I guarantee you, we

5 put copyright notices in every document we wrote. How could

6 we do that if we didn't own the copyrights? We put

7 copyright notices in every module of source code we wrote.

8 They all said we own the copyrights. We own the

9 intellectual property, and every action we took represents

10 that. I don't do a very good imitation of him.

11 THE COURT: Mr. Singer, remember, if you read too

12 fast, the court reporter will have difficulty.

13 MR. SINGER: I will try to read slower as well.

14 Michels also said, we took over the business. We

15 were in the business of selling intellectual property. We

16 were in the business of supporting the intellectual

17 property. We were in the business of providing marketing

18 materials. We couldn't do any of that without owning the

19 copyrights.

20 He was asked if any attorney from Santa Cruz ever

21 told him that Novell was asking for -- that he had to go to

22 Novell and ask them for the copyrights. He said, I think I

23 would have laughed them out my office.

24 Now you recall that you also heard testimony from

25 Steve Sabbath who said, when we bought the UNIX business

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1 from Novell, all copyrights came with the product and

2 Amendment No. 2 was meant to confirm that, and he testified

3 to that.

4 In addition, you had Kimberlee Madsen. Ms. Madsen

5 has no interest in this litigation. She works for Apple.

6 She came here and testified clearly to you that the

7 copyrights were going with the assets. She was asked, do

8 you have a view, as you sit here, as to whether the parties

9 intended that the copyrights would be retained by Novell.

10 Answer, no. The intent was clearly to be that the

11 copyrights for the UNIX and UnixWare were to be transferred

12 to The Santa Cruz Operation.

13 And you heard Mr. Mohan, Mr. Wilt also. So there

14 is no question on the Santa Cruz side of the equation that

15 everyone agrees that the copyrights were part of the deal.

16 Now in a typical case you would expect to see the

17 Santa Cruz executives and attorneys saying one thing and the

18 Novell executives and lawyers saying something completely

19 different. The incredible thing about this case is that you

20 have numerous senior executives and lawyers who were with

21 Novell at the time who agree with Santa Cruz, who agree that

22 the copyrights were intended to be sold.

23 Now you have heard from Robert Frankenberg, the

24 chief executive officer at the time, on the first day and

25 again on the last day of testimony. I think he's probably

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1 the most important witness in this trial. Ladies and

2 gentlemen, in the future, when I think of a stand-up guy,

3 I'm going to be thinking of Bob Frankenberg. He has no

4 financial or other interest in this. A lot of CEOs would

5 simply duck something like this and say they don't remember,

6 it's a long time ago. He didn't do that. He has given you

7 forthright testimony, both on the first day of trial and

8 yesterday, that this was a deal to sell the copyrights along

9 with the rest of the business.

10 He acknowledged that he missed that line item in

11 one part -- one word in a [ Reply to This | # ]

