Sources report the distinct smell of gold American Express cards in the SCO v Novell courtroom in Salt Lake City this week suggesting that some of the spectators are money people like, oh, say, Charles River assessing whether there’s an opportunity to clean up if SCO wins.
Darl McBride may not be the only person willing to press SCO’s Linux claims.
They could also be there protecting their assets.
The spectators have probably observed that Novell appears to be down to catching out either the judge or SCO’s lawyers in a mistake so it can appeal. It’s already asked the judge to declare a mistrial because SCO told the jury that Novell continues to publicly cling to the idea it owns Unix despite the 10th Circuit overturning that decision and saying a jury should decide (speaks to damages).
McBride testified this week that Novell’s claims to own Unix led to a drop in SCO’s stock price as well as a loss of revenues and Linux licensing deals such as a $30 million arrangement that was in the works with HP and a $50 million one with Google. It’s unclear what the one that was being negotiated with Dell would have been worth.
McBride said that when he confronted Novell CEO Jack Messman, Messman ducked the issue of whether IBM was behind Novell’s ownership claims – to protect IBM against SCO’s charges of pilfering Unix code for the sake of Linux – and refused to discuss the subject without his lawyer being present. IBM did after all give Novell $50 million to buy SUSE after SCO sued IBM.
Novell claims SCO’s losses were its own fault since it alienated the Linux community, which, however, one would be hard pressed to see as being decisive Wall Street punters or controlling the legal opinion of Fortune-something companies.
Novell’s position so far depends on a Novell lawyer saying he and a couple of other Novell attorneys exceeded their instructions and excluded the Unix copyrights from the Santa Cruz purchase agreement without telling anybody. SCO maintains that deficit was later corrected by an amendment, a point Novell initially conceded in a press release then retracted.
An observer in the courtroom with a SCO bias said Novell’s case consists of the amendment not existing and the 10th Circuit Court of Appeals not overturning the summary judgment saying Novell owns the copyright.
SCO experts testified that SCO was damaged to the tune of $130 million-$215 million plus punitive damages. SCO has conceded what is called a “higher standard” or constitutional proof, meaning the jury has to decide that Novell exhibited “reckless disregard” in claiming ownership.
Novell hammered at one of the witnesses, a lady accounting professor, part of Wednesday and all day Thursday and insisted on bringing up the summary judgment – even reading parts of it into the record – despite the judge’s previous warnings that he would instruct the jury to disregard what Novell said and tell them that decision was overturned because it was wrong and that it was their job to make a decision, which is exactly what he did – three times. It is unclear what Novell gained in courting his ire.
In the interests of full disclosure, we should say that this paper is being called to testify that then Novell vice-chairman Chris Stone said in an interview on May 27, 2003 that Novell would assert its ownership claims the following day and pointed out that that was the same day that SCO was due to report its earnings, a point that would have escaped us if he hadn’t mentioned it and laughed. We put out a story, Novell made the claims and SCO’s stock took a dive. The point is malice. And it was not the only time Novell timed an ownership claim to a SCO earnings call. Chris Stone was also supposed to appear last we heard.
So far it’s been SCO’s show; Novell’s case is expected to kick off next week then go to the jury. If left to its own devices there could be a verdict this time next week. Usually in such cases the defense starts off trying to prove it has no liability. Novell’s first witness, however, is supposed to speak to damages.
By the way, the bankruptcy court in Delaware has cleared it for SCO to get maybe up to $2 million from its former chairman and friends as a “super-priority credit facility” in case it needs it to survive and press its litigation claims, support the remains of its Unix business and sell off other assets. The hearing on McBride’s bid to buy SCO’s mobility business was moved from March 15 to April 7.
Meanwhile, Novell has asked the Supreme Court to hear its claim that copyrights need an itemized bill of sale signed by the owner – or at least something in writing – to transfer. As with most appeals to the Supremes, it’s a long shot.