Novell Files for Rehearing En Banc!(Groklaw)

Well done, Novell!

I almost have to apologize for not seeing this on its way.

Novell is absolutely correct in their arguments that the trial court (Judge Kimball) was correct and the appellate panel missed the boat.

Why?

For the simple reason that the law should never encourage the litigation of all issues. In fact, this brief mentions the intent of Congress to make copyright transfers clear and certain (or disqualify them). And that is a very worthwhile objective.

Simply put, if the copyrights to be transferred are unclear and certain then you will have many assets terminally tied up in litigation. And that can seriously affect commerce. It has done so here.

You may recall the statement coming from Santa Cruz (oldSCO) lawyers and addressed to Caldera (newSCO) lawyers that the chain of title for the copyrights has a problem. No documents. The chain is broken or missing. Or, as would best be put, not there at all. In other words, the title did not change.

And it is very important that the law secure that position.

Again, you have to ask why.

The reason is so that lawyers for all parties in a transaction has some certainty as to what property has been or what property has not been transferred. (That is the objective of Congress in drafting the copyright act.)

It is almost an aside that the kind of evidence offered by SCO does not even shed any light on a list of copyrights that supposedly transferred. Rather almost all of the evidence related to what parties (not involved in the negotiations) might think could have been transferred. Well, anything could have been transferred. But, nothing was listed as actually having been transferred. And that is the point of the Novell appeal here.

And, no, it is not a good idea to require extensive and expensive litigation to determine years later what might or might not have transferred.

To be honest, SCO lawyers made a mistake by not presenting any evidence regarding which copyrights were needed to conduct the business of selling UNIX licenses. They just ignored that issue. Assuming I suppose that if they do not point any copyrights out to the court, they could get them all?

SCO should be shut out here by the full panel.

It is important that copyright transfers not only be in writing but clearly define just which copyrights are involved. Many lawyers practice what is called transactional work. These are the lawyers that negotiate the agreements. And it is just as important that they know what is being transferred and that they know what is not being transferred. And clearly a well drafted writing is the best way to achieve that understanding by all parties to a transaction.

So it is not just avoiding expensive litigation (or the remand of issues in the SCO v Novell case). It is also avoiding such litigation from being filed in the first instance.

SCO lawyers knew for a fact that they did not possess a document listing the copyrights they hoped SCO held. They knew that. The agreements did not identify the copyrights they wish SCO held. And unfortunately because of that and perhaps because of some uncertainly in the law, SCO sued. Not for contract violations mind you. Not for specific performance of the transfer. But, as we all know now, only for “slander of title”. We, that is a little bit like suing Novell for having a sloppy APA agreement. And, it is true, that the APA was a bit sloppy in that regard. It should have been much more clear about stating the intent of the parties. So clear that even SCO lawyers would know that SCO did not have the UNIX copyrights transferred to SCO.

Of course it is easy to say now that the APA should have been more clearly drafted. But, the attorneys at the time did not have any misunderstanding at all. Note as did the trial judge that the attorneys for Santa Cruz (oldSCO) did not offer to testify at all that they thought the agreement meant the copyrights transferred. Remember? They were missing in action. So it is fair to suggest that neither Santa Cruz nor Novell attorneys at the time thought that the agreement included the transfer of any copyrights. Indeed, you have the testimony regarding some rejected terms which may have resulted in transfers.

In all contracts you have an obligation to determine what is termed the “meeting of the minds”. What did they agree on? And it is critical for SCO that they have not even presented any evidence at all that the attorneys for Santa Cruz (oldSCO) thought the copyrights transferred. So I am not exactly sure what evidence would be relevant during remand. And, remember the discussion regarding the parole evidence rule. Some jurisdictions have it. Others do not but just do not value extrinsic evidence very heavily. In SCO's case, they have not presented any evidence at all that the agreement was actually intended to transfer copyrights. Rather only that a bunch of people today think that could have happened. Or, should have happened. But, none have proffered evidence suggesting that it did happen. And in fact, the comments from oldSCO lawyers to Caldera related to the absence of a chain of title. So the closer you get to the lawyers representing Santa Cruz (oldSCO) the weaker the evidence becomes. Even to the point of the oldSCO lawyers being a “no-show” on the witness list.

But, put aside all of the issues that might be important on remand. Novell's brief here is right on point. The APA does not identify with specificity which copyrights were transferred (if any) and the copyright law requires it.

The copyright law requires it for very sound and important reasons. Certainty in business transactions regarding copyrights and the avoidance of unnecessary litigation.

The rehearing en banc is highly likely to result in a confirmation of the decisions of the trial court.

Interestingly enough is the fact that the new trustee in bankruptcy is going to decide how to respond to this motion to hear the case en banc (hearing of the case by the full appellate court). It is easy to understand why the trustee is not looking forward to this case being remanded anyway. Actually trying the case on remand is going to cost money. Money that the bankrupt estate does not have. And if SCO were successful in getting a different result in the Novell case, SCO would have to look forward to possibly trying the IBM and Red Hat cases as well. Again, no money available for that either. (Need I mention AutoZone?)

Of course, the old corrupt SCO management and their nuisance law firm would oppose the hearing en banc and look forward to these great trials of the century. But, the truth is that even the old guard was running out of money to pursue their litigation dreams.

Hears hoping the en banc hearing will put SCO out of its misery and establish good law for the benefit of all in the future.

But, for the immediate future I do expect the old SCO nuisance lawyers to submit a brief arguing against the petition for an en banc hearing. After all, they have been prepaid for their legal services, right? And even though their hopes of ever getting to the actual trial have all but vanished as the new trustee was appointed by the court, they have been paid and they have been working a losing case all along. And they knew that from day one.

Either you have a transfer agreement that spells out which copyrights you have or you do not have any copyrights. Certainly the SCO lawyers knew that getting into the courtroom (trial court, appellate court or supreme court) would not be enough if Novell, IBM, Red Hat or even AutoZone? insist upon litigating their rights. Even nuisance lawyers are not ignorant of the law. They just think they can cause enough of a stink to get paid off.