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SCO Slammed in Slander of Title Suit
SillySlashdotName writes "Judge Kimball has stated that The SCO Group has failed to meet the requirements of the law in its complaint against Novell and has dismissed the case but gives TSG 30 days to try to meet the legal requirements. More info on groklaw." EWeek also has a story.
Well, technically it IS dismissed, but on the basis of 'failure to plead special damages' and not on the basis of 'falsity'.
However, Novell's motion to dismiss as grated WITHOUT PREJUDICE, meaning that SCO can amend the complaint later, and the judge has explicitly given them 30 days to do so.
So... RTFA right back atcha!
Judge Kimball:
"Accordingly, Novell's motion to dismiss SCO's slander of title claim for failure to specifically plead special damages is granted without prejudice."
And the Conclusion:
For the reasons stated above, Plaintiff's Motion to Remand is DENIED, and Defendant's Motion to Dismiss is DENIED as to Plaintiff's pleading of falsity and GRANTED as to Plaintiff's pleading of special damages. Plaintiff is granted 30 days from the date of this Order to amend its Complaint to more specifically plead special damages.
Damn, this was some heavy reading! Here's my armchair legal analysis.
First, Novell sold a lot of Unix(tm) intellectual property rights to TSG. Novell and TSG signed a contract for this, the Asset Purchase Agreement (APA). Later on, Novell and TSG signed an amedement, APA Amendment 2 (APA-2). Dunno whatever happened to APA Amendment 1.
The original APA says that no copyrights are transferred as part of the sale. APA-2 says that the sale does include some copyrights -- whatever copyrights that TSG needs to enforce its other rights for the property that they paid good money for.
Fast-forward to 2003. TSG starts its campaign: "we own the Unix copyrights. Pay us $$$$$$$$$." Novell puts out its own press releases: "actually, we (Novell) still own the actual copyrights. You don't have to listen to TSG".
TSG gets pissed off about this, says that Novell is lying about TSG's Unix copyrights and that Novell is fucking with TSG's business of selling licenses to those copyrights. TSG sues Novell about this.
TSG: "We paid for those copyrights, see APA-2"
Novell: "No, actually, APA-2 says that we promise to give you whatever copyrights you need later, APA-2 doesn't actually transfer specific copyrights."
The case ends up in Federal court, Judge Kimball. TSG wants the case to be in State court. Novell wants the case to stay in Federal court.
Kimball says: "this case is about whether APA-2 actually transferred the copyrights or not. That's a federal issue. So it stays here in federal court."
Next, Novell says: "it's so CLEARLY OBVIOUS that APA-2 does not transfer copyrights that it's okay for us to state publicly that TSG doesn't own the copyrights. Please tell TSG to stuff their lawsuit and go screw."
Kimball says: "not so fast, Novell. It's not OBVIOUS at all. Maybe APA-2 actually transferred the copyrights but MAYBE NOT. We're going to need a trial to figure that out. Since we're going to need a trial, I'm not going to dismiss the lawsuit on those grounds at this stage."
Next, Novell says: "and oh yeah, TSG's lawsuit is deficient because they weren't specific about how they were damaged -- just because they are trying to license this Unix(tm) property, and we issue press releases pissing all over the idea that Unix(tm) is THEIR property after they paid $100 million for it, that's not enough. See FRCP mumble."
Judge Kimball says: "Novell's got a point. SCO, your legalese has syntax errors and fails to validate. I'm not saying your content is bogus, I'm saying your syntax is wrong. You have 30 days to re-format your lawsuit so that it's valid FRCP".
So, the deal is:
TSG can continue to sue Novell for dumping on TSG's claims that TSG owns the Unix copyrights. TSG must pursue this lawsuit in federal court, because it's a federal issue whether those copyrights actually transferred or not.
Novell's claim that "Novell still owns the copyrights" might be legally potent or it might not. It will take a trial to determine this. But Novell can't make TSG's lawsuit go away at this stage just by claiming this. It might be true, but it's not OBVIOUS that it's true.
TSG has the right to sue Novell for slandering TSG's title to Unix(tm). But their current complaint is defective. They have 30 days for their lawyers to submit a new, more specific complaint. Then the case will proceed, in federal court, and the court can actually do some more work on the question of whether APA-2 transferred the copyrights or not.
All the dismissal says is that SCO didn't provide an indication of 'special' damages incurred as a result of Novell's actions. They provided only an indication of 'general' damages. They have 30 days to remedy this omission. If SCO lawyers are worth their salt they'll be able to produce some evidence of special damages, and even if those don't hold up during a trial, the evidence will allow them to win this preliminary battle and move on. Note that Judge Kimball spent a lot of time, though, talking about whether Novell did in fact transfer copyright. The language used in the original SCO/Novell contract is uncomfortably vague, and it's not clear exactly what was transferred and what wasn't (SCO was apparently supposed to specify by a certain date what copyrights it was assuming ownership of). Although SCO entered press releases into evidence that are supposed to tell us what everyone was thinking at the time, it's not clear from the language of the contract really what was transferred and what was intended to be transferred. I'd hate to bet the farm on this if I were SCO. It seems pretty tenuous.
---- Richard L. Goerwitz III