Court Rules: Novell owns the UNIX and UnixWare copyrights! Novell has right to waive!

by Pamela Jones
Groklaw

August 10 2007

[T]he court concludes that Novell is the owner of the UNIX and UnixWare Copyrights.

That's Aaaaall, Folks! The court also ruled that "SCO is obligated to recognize Novell's waiver of SCO's claims against IBM and Sequent". That's the ball game. There are a couple of loose ends, but the big picture is, SCO lost. Oh, and it owes Novell a lot of money from the Microsoft and Sun licenses.

If anyone can please put this into text for us, that'd be simply great. [We have it done.] There is a filing in IBM also, and here's the docket entry:

08/10/2007 1077 [ http://www.groklaw.net/pdf/IBM-1077.pdf ] - NOTICE OF DECISION AND REQUEST FOR STATUS UPDATE. Signed by Judge Dale A. Kimball on 8-10-07. (sih) (Entered: 08/10/2007)

Judge Kimball asks the parties, in view of the ruling in Novell, which "significantly impacts the claims and counterclaims asserted" in IBM, to prepare by August 31 "a statement of its view of the status of this case and, more specifically, the effect of the SCO v. Novell decision on each of the pending motions."

All right, all you Doubting Thomases. I double dog dare you to complain about the US court system now. I told you if you would just be patient, I had confidence in the system's ability to sort this out in the end.

But we must say thank you to Novell and especially to its legal team, Morrison & Foerster, for the incredible work they have done. I know it's not technically over and there will be more to slog through, but they won what matters most, and it's been a plum pleasin' pleasure watching you work. The entire FOSS community thanks you for your skill and all the hard work and thanks go to Novell for being willing to see this through.

I'm eating chocolates!

My thanks to Jill C. Carpenter for the cartoon, and to UserFriendly's JD Frazer, who inspired it.

Here's the Conclusion section, which sums up the decision:

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CONCLUSION

For the reasons stated above, the court concludes that Novell is the owner of the UNIX and UnixWare copyrights. Therefore, SCO's First Claim for Relief for slander of title and Third Claim for specific performance are dismissed, as are the copyright ownership portions of SCO's Fifth Claim for Relief for unfair competition and Second Claim for Relief for breach of implied covenant of good faith and fair dealing. The court denies SCO's cross-motion for summary judgment on its own slander of title, breach of contract, and unfair competition claims, and on Novell's slander of title claim. Accordingly, Novell's slander of title claim is still at issue.

The court also concludes that, to the extent that SCO has a copyright to enforce, SCO can simultaneously pursue both a copyright infringement claim and a breach of contract claim based on the non-compete restrictions in the license back of the Licensed Technology under APA and the TLA. The court further concludes that there has not been a change of control that released the non-compete restrictions of the license, and the non-compete restrictions of the license are not void under California law. Accordingly, Novell's motion for summary judgment on SCO's non-compete claim in its Second Claim for breach of contract and Fifth Claim for unfair competition is granted to the extent that SCO's claims require ownership of the UNIX and UnixWare copyrights, and denied in all other regards.

Furthermore, the court concludes, as a matter of law, that the only reasonable interpretation of the term "SVRX License" in the APA is all licenses related to the SVRX products listed in Item VI of Schedule 1.1(a) to the APA. Therefore, Novell is entitled to a declaration of rights under its Fourth Claim for Relief that it was and is entitled, at its sole discretion, to direct SCO to waive its claims against IBM and Sequent, and SCO is obligated to recognize Novell's waiver of SCO's claims against IBM and Sequent. Accordingly, Novell's motion for partial summary judgment on its Fourth Claim for Relief for declaratory judgment is granted, and SCO's cross-motion for summary judgment on Novell's Fourth Claim for Relief is denied.

Finally, the court concludes, as a matter of law, that the only reasonable interpretation of all SVRX Licenses includes no temporal restriction of SVRX Licenses existing at the time of the APA. The court further concludes that because a portion of SCO's 2003 Sun and Microsoft Agreements indisputably licenses SVRX products listed under Item VI of Schedule 1.1(a) to the APA, even if only incidental to a license for UnixWare, SCO is obligated under the APA to account for and pass through to Novell the appropriate portion relating to the license of SVRX products. Because SCO failed to do so, it breached its fiduciary duty to Novell under the APA and is liable for conversion.

The court, however, is precluded from granting a constructive trust with respect to the payments SCO received under the 2003 Sun and Microsoft Agreements because there is a question of fact as to the appropriate amount of SVRX Royalties SCO owes to Novell based on the portion of SVRX products contained in each agreement. Furthermore, because Novell has obtained the information that it would otherwise obtain through an accounting during the course of this litigation, the court denies Novell's Ninth Claim for Relief for an accounting. However, the court also notes that SCO has a continuing contractual obligation to comply with the accounting and reporting requirements set forth in the APA.

Accordingly, Novell's Motion for Partial Summary Judgment or Preliminary Injunction [Docket No. 147] is GRANTED IN PART AND DENIED IN PART; SCO's Cross-Motion for Summary Judgment or Partial Summary Judgment on Novell's Third, Sixth, Seventh, Eighth and Ninth Counterclaims [Docket No. 180] is GRANTED IN PART AND DENIED IN PART; Novell's Motion for Partial Summary Judgment on its Fourth Claim [Docket No. 171] is GRANTED; SCO's Cross-Motion for Partial Summary Judgment on Novell's Fourth Claim [Docket No. 224] is DENIED; SCO's Motion for Partial Summary Judgment on its First, Second, and Fifth Claims and Novell's First Claim [Docket No. 258] is DENIED; Novell's Motion for Partial Summary Judgment on Copyright Ownership of SCO's Second Claim for Breach of Contract and Fifth Claim for Unfair Competition [Docket No. 271] is GRANTED; Novell's Motion for Partial Summary Judgment on SCO's Non-Compete Claims in its Second and Fifth Claims [Docket No. 273] is GRANTED IN PART AND DENIED IN PART; Novell's Motion for Summary Judgment on SCO's First Claim for Slander of Title and Third Claim for Specific Performance [Docket No. 275] is GRANTED; and Novell's Motion for Summary Judgment on SCO's First Claim for Slander of Title for Failure to Establish Special Damages [Docket No. 277] is MOOT.

04:52 PM EDT

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