Novell Asks Court to Separate SCOsource Money

clusterix writes "Groklaw has posted Novell's answer to SCO's slander of title complaint. In it, Novell produces many counter claims. The most eye-catching is the claim for the revenue from the SCOsource licenses bought by Microsoft and Sun and others. Novell states that they must be SVRX licenses which entitles them to 95% of revenue in royalties. They further request a trust to be constructed to hold the revenue until the case is decided. It is hard to see how the judge could deny such a request to protect the money which will likely bankrupt SCO."

Comments

Re:"UNIX" title?

[AKAImBatman]

Only The Open Group can decide the trademark. Wikipedia has the info on this crazy, screwed up situation:

http://en.wikipedia.org/wiki/UNIX#Branding

Just in case you're wondering, The Open Group has the power to happily brand MS Windows as UNIX(TM) without it actually being UNIX.

100 percent, not 95 percent

[Hal9000_sn3]

Novell states that they must be SVRX licenses which entitles them to 95% of revenue in royalties.

Novell does not, and did not ever claim to be entitled to only 95% of revenue on royalties.

Novell is entitled to 100% of royalties and remits 5% back to SCO as an admistrative fee.

See page 13 of Novell's answer and counterclaim.

http://www.groklaw.net/pdf/Novell-78.pdf

Twenty years in jail for SCO gang

[linuxguy]

For falsely claiming SUN and MS revenus among other things Darl and gang face prison terms in addition to fines.

From Groklaw:

CEOs and CFOs of listed companies (like SCOX) face ten years in jail and $1m fines for a mistake in their reporting. Twenty years and $5m if it's a "willful" mistake.

See sections 302 and 906 of the Sarbanes-Oxley Act: here's the relevant bit of s.906:

(c) CRIMINAL PENALTIES.--Whoever--
(1) certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $1,000,000 or imprisoned not more than 10 years, or both; or
(2) willfully certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $5,000,000, or imprisoned not more than 20 years, or both.

Mod Parent Up

[MooseByte]

This is truly the meat in the Novell case. They must know that NewSCO itself is small potatoes. Novell also mentions they rejected NewSCO's invitation to join in the SCOSource initiative because it sounded like a scheme.

I think Novell is now hoping discovery will reveal evidence that NewSCO approached Sun and MS with the same scheme offer prior to launching their war against Linux.

If Novell can show Sun or MS acting with some fraudulent intent (shakedown, FUD to keep Linux down, etc.) then just imagine how big the pot of gold at the end of that litigation rainbow would be.

In the end Novell may be the one laughing all the way to the bank as a result of the NewSCO fiasco.

Current events, calendar.

[Anonymous Coward]

Quick update: Big news. Novell has answered SCO's complaint and has filed some impressive counterclaims. Read the pdf here . Among other things, Novell alleges that SCO had repeatedly asked for Novell to transfer UNIX copyrights, and at the early stages, actually asked Novell to go in with SCO on the SCOSource program. In Novell's counterclaims, they specifically allege:

In late 2002, SCO repeatedly contacted Novell in connection with SCO's soon-to-be-announced SCOSource campaign. SCO requested copies of certain documentation concerning rights to UNIX, including the agreement between Novell and Santa Cruz. SCO also expressed its interest in a campaign to assert UNIX infringement claims against users of Linux. SCO asked Novell to assist SCO in a Linux licensing program, under which SCO contemplated extracting a license fee from Linux end users to use the UNIX intellectual property purportedly contained in Linux. Novell refused to participate.

Some of what Novell is seeking seems to hit right to the heart of SCO's cash resources. The best example of such a tactic is a request by Novell to require SCO to put the money it received from Microsoft, Sun, and others (through SCO's "Intellectual Property Licenses with Linux end users and UNIX vendors") in a "constructive trust" until Novell's contract claims are decided. Unless they move to extend their time, SCO should respond to Novell's counterclaims by 22 Aug 2005.

Current events:

• SCOvIBM: In the wake of the recent opinion issued by Judge Kimball, fact discovery will continue until 27 Jan 2006, and the parties must disclose with specificity all "allegedly infringing materials" by 22 Dec 2005. Redacted and unsealed motions are being rapidly released, with SCO finally joining in. The parties seem to be still consulting with each other on the privilege log issue. Finally, a fully briefed, completely sealed discovery motion awaits a ruling, though no hearing date is yet set.

• SCOvNovell: Judge Kimball has denied Novell's motion to dismiss, and now Novell has answered SCO's complaint. On top of that, Novell has filed an impressive array of counterclaims . Alleging that SCO "asked Novell to assist SCO in a Linux licensing program, under which SCO contemplated extracting a license fee from Linux end users to use the UNIX intellectual property purportedly contained in Linux," Novell not only says that they refused, but indicate that these conversations demonstrate the SCO launched their storied lawsuits with knowledge that their ownership position in the UNIX System V copyrights was uncertain. Perhaps the most compelling request that Novell is presenting to the court is a request that income SCO received from Microsoft, Sun, and the "Intellectual Property Licenses with Linux end users and UNIX vendors" be put out of SCO's reach into a "constructive trust" until Novell's contract claims are decided. Other counterclaims call for relief relating to SCO's alleged slander of Novell's title to UNIX System V copyrights and declarative, injunctive, and monetary relief relating to SCO's alleged breaches of the contracts relating to the sale of Novell's UNIX business to Santa Cruz. Unless SCO is granted an extension of time, it should reply to these counterclaims by 22 Aug 2005.

• RedHatvSCO: This case remains stayed. However, Judge Robinson indicated that if "it woul

Good point. On the other hand...

[jd]

...a weekend in jail for the SCO board of directors could finish the company. The major shareholders are already fidgity and this could result in a major pull-out of any and all investment. Too much risk of bad publicity.

On the flip-side, SCO would make a great target for the Justice Department - too puny and insignificant to have any real impact on business, too flat-broke on their existing lawsuits to mount much of a defence, good publicity for their anti-corruption efforts (!) for every executive they convict and good for some of the big-name US companies being hastled by SCO.