SCO, Novell suit goes to jury

At stake is ownership of Unix operating system.

By Tom Harvey
The Salt Lake Tribune

March 25, 2010

Both sides rested Thursday in the federal court trial pitting The SCO Group against Novell Inc. over which one owns the copyrights to the Unix computer operating system.

After nearly three weeks of testimony, the case is scheduled to go to the jury today. If the 12-member panel says The SCO Group owns the copyrights, then it also is being asked to determine how much money, if any, Novell owes SCO for interfering with its ownership rights. SCO has claimed it lost sales of up to $215 million as a result of Novell's actions.

Ultimately, the outcome may determine whether SCO continues to pursue another lawsuit, this one claiming that IBM used the copyrighted Unix code as a basis for changes to the Linux operating system that made Linux a successful competitor in the world of business computer systems.

Novell ended its case Thursday with three witnesses, two of them lawyers who testified they intended for Novell to retain the copyrights to the Unix system in a 1995 agreement that transferred Unix to the Santa Cruz Operations. Santa Cruz later sold the system to a Utah company, Caldera International, that changed its name to The SCO Group.

The contract between Novell and Santa Cruz contained ambiguous language about the sale of copyrights that is at the center of the dispute being aired before the jury.

David Bradford, former general counsel for Novell, and Tor Braham, an outside attorney who worked for Novell, testified the sales agreement was intended to exclude the Unix copyrights because Novell wanted to retain them in order to protect a stream of revenue from older Unix licenses.

Braham said he drafted the agreement based on orders from Bradford, who was secretary of Novell's board of directors. He did not take orders from other Novell officers who testified earlier in the trial that the intent all along was to sell the copyrights, along with Unix. Without the copyrights, the Unix deal made no sense, those officers said.

"At the end of the day, I had to listen to David Bradford and he was speaking with the board," said Braham.

Bradford said "it was very clear" that Novell had retained the copyrights to Unix and said the minutes he prepared of the board meeting where the deal was approved -- a document Novell's attorneys have pointed to time and again -- accurately reflected the sale terms.

However, SCO attorney Stuart Singer countered with a document attached to a memo that Bradford had sent to the board, informing it about the deal. The "term sheet" that described major parts of the sales agreement did not say that copyrights were being retained.

Bradford replied he wasn't sure the document Stuart presented was the exact term sheet attached to his memo.

To counter the testimony of Bradford and Braham, SCO recalled witness Robert Frankenberg, the former Novell CEO and board chairman who was in charge of the company when the deal was made. Frankenberg reiterated that former Novell officer Duff Thompson -- and not the two attorneys -- conducted the negotiations and that it was his intention to sell the entire Unix business, including the copyrights.

The two sides also had dueling expert witnesses.

One, Terry Musika, said his study showed SCO had suffered no monetary damages as a result of Novell claiming ownership of the copyrights.

But Christine Botosan, a University of Utah associate professor of accounting, defended her study that found SCO lost up to $215 million as a result of Novell's actions.