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Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
Thursday, May 13 2004 @ 03:19 PM EDT

The Order in the Novell v. Canopy Group case is now here. As you will see, Novell prevailed. The Appeals Court affirmed the lower court decision.

However, the court order says it's true Novell wanted Canopy Group to sue Microsoft. Of course, at that time, Ray Noorda was the head of Novell, and it's no surprise to learn about such feelings on his part, and as SCO pointed out in one of its legal documents the executives that used to be there are no longer at Novell, but I admit I am still surprised. The order also solves one piece of the DR-DOS history puzzle:

" ¶3 Accordingly, Novell entered into negotiations with Caldera, Inc., the predecessor in interest to Canopy, to sell DR DOS to Canopy.(1) The main purposes of this sale were to obligate Canopy to bring suit against Microsoft, to allow Novell to share in the recovery, and at the same time to obfuscate Novell's role in the action against Microsoft. Novell insisted that its role be completely undetectable to avoid retaliation from Microsoft."

Here is the order.

*******************************************

IN THE UTAH COURT OF APPEALS

____________________________

Novell, Inc., a Delaware corporation,

Plaintiff and Appellee,

v.

The Canopy Group, Inc., a Utah corporation,

Defendant and Appellant.

_______________________________

OPINION

(For Official Publication)Case No. 20030211-CA

 F I L E D
(May 13, 2004)

  2004 UT App 162

____________________________

  Fourth District, Provo Department

The Honorable Anthony W. Schofield

Attorneys: Robert L. Jeffs, Provo, and Ralph H. Palumbo, Philip S. McCune, Lynn M. Engel, and Lawrence C. Locker, Seattle, Washington, for Appellant

John P. Mullen, Thomas R. Karrenberg, Scott A. Call, and Jon V. Harper, Salt Lake City, for Appellee

_____________________________

Before Judges Jackson, Orme, and Thorne.

JACKSON, Judge:

   ¶1 The Canopy Group, Inc. (Canopy), a Utah corporation, appeals the district court's grant of summary judgment to Novell, Inc. (Novell), a Delaware corporation, and the district court's denial of Canopy's motion for summary judgment. We affirm.

 BACKGROUND

   ¶2 This is a breach of contract action. Novell owned the source code for DR DOS, a computer operating system that was the target of anticompetitive practices by Microsoft in the early 1990s. Novell's board of directors worried that, if they brought suit against Microsoft in a private antitrust action, Microsoft would retaliate with further unfair practices that could neutralize the value of any antitrust recovery. At the same time, however, Novell's board of directors recognized that Novell's shareholders would not permit Novell to simply walk away from such a significant cause of action and potential recovery.

   ¶3 Accordingly, Novell entered into negotiations with Caldera, Inc., the predecessor in interest to Canopy, to sell DR DOS to Canopy.(1) The main purposes of this sale were to obligate Canopy to bring suit against Microsoft, to allow Novell to share in the recovery, and at the same time to obfuscate Novell's role in the action against Microsoft. Novell insisted that its role be completely undetectable to avoid retaliation from Microsoft.

   ¶4 To accomplish this, Novell and Canopy executed two separate documents: the first was a contract of sale, obligating Canopy to pay $400,000 for rights to the source code; the second was a temporary license obligating Canopy to pay $600,000 in license fees and "royalties." The royalties included provisions for payment to Novell of a percentage of any recoveries from lawsuits. The negotiations between the parties were very prolonged, and the parties considered a wide variety of proposed royalty bases.

   ¶5 Upon execution of the final documents, Canopy initiated suit against Microsoft. The dispute was settled by Microsoft's payment of an undisclosed sum of money to Canopy. Before Canopy paid Novell its percentage, Canopy deducted attorney fees, court costs, and other litigation expenses, applying Novell's percentage against the balance. Novell initiated suit for breach of contract, claiming the two documents that constituted the contract made no allowance for the deductions Canopy made. Canopy counterclaimed for declaratory relief, asserting the existence of an oral agreement permitting deduction of attorney fees, costs, and expenses from the settlement with Microsoft before calculating Novell's share.

   ¶6 The district court first considered a motion for partial summary judgment by Novell to dismiss Canopy's counterclaim based on a contemporaneous oral agreement regarding the calculation of Novell's royalty base. The district court determined that the written contracts together constituted an integration. It therefore granted Novell's motion. The district court then considered Novell's motion for complete summary judgment. To counter that motion, Canopy argued that the terms of the royalty base, as contained in the written agreements, were ambiguous, and that a genuine issue of material fact therefore existed. The district court determined as a matter of law, however, that the terms were not ambiguous, and that Novell was entitled to judgment. It therefore entered summary judgment against Canopy, and denied Canopy's motion for summary judgment. Canopy appeals.

 ISSUE AND STANDARD OF REVIEW

   ¶7 Canopy challenges the district court's grant of summary judgment to Novell, and the denial of Canopy's motion for summary judgment.(2)

We review the district court's summary judgment ruling for correctness, granting no deference to its legal conclusions. In reviewing a summary judgment decision pursuant to Rule 56(c) of the Utah Rules of Civil Procedure, we consider whether the trial court correctly concluded that no genuine issue of material fact exists and whether it correctly applied the law.

Woodbury Amsource, Inc. v. Salt Lake County, 2003 UT 28,¶4, 73 P.3d 362; see also Utah R. Civ. P. 56(c).

 ANALYSIS

   ¶8 Canopy made two basic arguments for the existence of a genuine issue of material fact. First, it argued that the written contracts were not intended by the parties to be an integration of all their agreements. It claims that the parties entered into an oral agreement regarding the royalty base and that the parties did not intend the final writings to supercede the oral agreement. In its first summary judgment ruling, the district court determined that the contract was in fact integrated, and that no such oral agreement existed. Second, Canopy argues that, even if the contract was integrated, the contract's term defining Novell's percentage of the Microsoft recovery is ambiguous. In its second summary judgment ruling, the district court ruled the term is not ambiguous, and therefore denied the admission of extrinsic evidence to interpret the term.

 I. Integration

   ¶9 Canopy argues the parties had entered into contemporaneous oral agreements not embodied in the final written contracts. For example, neither of the writings contained an explanation of Canopy's obligation to pursue an antitrust suit against Microsoft, but Novell does not dispute that that obligation is at the center of the parties' agreement. Likewise, Canopy asserts the parties agreed that it would deduct attorney fees, costs and expenses incurred in the Microsoft litigation before calculating Novell's percentage of the recovery. Canopy maintains that, because the parties did not intend the writings to supercede the contemporaneous oral agreements, the district court erred in ruling that the writings constituted the final and complete embodiment of the agreement between the parties. At the least, Canopy argues, a genuine issue of material fact exists regarding whether the parties in fact agreed to allow the deductions from the Microsoft recovery.

   ¶10 The parol evidence rule "operates in the absence of fraud to exclude [prior and] contemporaneous conversations, statements, or representations offered for the purpose of varying or adding to the terms of an integrated contract." Union Bank v. Swenson, 707 P.2d 663, 665 (Utah 1985) (emphasis omitted). "An agreement is integrated where the parties thereto adopt a writing or writings as the final and complete expression of the agreement." Eie v. St. Benedict's Hosp., 638 P.2d 1190, 1194 (Utah 1981) (quotations and citation omitted).

   ¶11 The parol evidence rule, as applied to integrated contracts, is a substantive rule of contract construction, rather than a rule of evidence. See 6 Arthur Linton Corbin, Corbin on Contracts § 573 at 72 (interim ed. 2002). Parol evidence is not so much inadmissible to vary the terms of an integrated writing as it is irrelevant, because "the later agreement discharges the antecedent ones in so far as it contradicts or is inconsistent with the earlier ones." Id. at 82.

"[A] court must first determine whether the writing was intended by the parties to be an integration. In resolving this preliminary question of fact, parol evidence, indeed any relevant evidence, is admissible." However, to preserve the integrity of written contracts, we apply "a rebuttable presumption that a writing which on its face appears to be an integrated agreement is what it appears to be."

Smith v. D.A. Osguthorpe, 2002 UT App 361,¶18, 58 P.3d 854 (alteration and emphasis in original) (citations omitted); see also Terry's Sales, Inc. v. Vander Veur II, 618 P.2d 29, 32 (Utah 1980) ("Where parties have various claims and obligations to each other, and have had a discussion about resolving their disputes which results in a written agreement signed by them, it is generally to be assumed that their disputes were merged into the written agreement.").

   ¶12 Canopy produced a great deal of evidence to establish that the written agreements do not contain all the terms to which the parties agreed, such as Canopy's obligation to sue Microsoft. It argues further that the agreements themselves purposely obfuscated Novell's entitlement to a recovery from Microsoft by dealing with Novell's entitlement in very broad, general terms.

   ¶13 Canopy's evidence and arguments, however, do not negate Canopy's concession that it entered into written agreements that provide for the payment of royalties by Canopy to Novell. Canopy's evidence clearly shows the parties participated in prolonged negotiations to settle their disagreements regarding the deductions and Novell's overall percentage. Canopy's evidence may or may not establish the existence of a prior agreement.

   ¶14 However, Canopy has not rebutted the presumption of integration. Absent a showing to the contrary, we "assume[] that their disputes were merged into the written agreement." Id. at 32. In other words, regardless of whether the parties may have had preliminary agreements about a given subject during the course of negotiations, we will assume that a writing dealing with the same subject was intended by the parties to supercede any prior or contemporaneous agreements. See id.; see also Smith, 2002 UT App 361 at ¶18. Canopy's arguments and evidence regarding the apparently laborious and convoluted nature of the parties' negotiations are therefore entirely irrelevant to rebut the presumption that the parties intended to replace their prior agreements with a new agreement in the form of the final writings. See id. (applying the presumption of integration); 6 Arthur Linton Corbin, Corbin on Contracts § 573 at 82 (explaining that evidence of prior agreements is irrelevant to question of integration).

   ¶15 Further, a showing that the parties did not include all the terms of their agreement in the writing does not render the writing unintegrated with respect to the terms it does include, because contracts may be partially integrated:

"[P]arol evidence not inconsistent with the writing is admissible to show what the entire contract really was, by supplementing, as distinguished from contradicting, the writing. In such a case parol evidence to prove the part not reduced to writing is admissible, although it is not admissible as to the part reduced to writing."

Webb v. R.O.A. Gen., Inc., 804 P.2d 547, 551 (Utah Ct. App. 1991) (emphasis in original) (quoting Stanger v. Sentinel Sec. Life Ins. Co., 669 P.2d 1201, 1205 (Utah 1983)). "Therefore, in most instances, where a binding agreement exists, whether completely or partially integrated, evidence of prior or contemporaneous agreements or discussions is not admissible to contradict terms of the written agreement." Id. (emphasis added); see also State Bank of Lehi v. Woolsey, 565 P.2d 413, 418 (Utah 1977)(stating "parol evidence of contemporaneous conversations, representations or statements will not be received for the purpose of varying or adding to the terms of the written agreement").

   ¶16 Here, the parties entered into a written contract presumed to be the final expression of their agreement with respect to royalties. The terms of that writing obligate Canopy to pay Novell a percentage of its recovery from Microsoft. Indeed, that percentage is the central purpose of, and impetus for creating, the contract. Canopy argues for the existence of a contemporaneous or prior verbal agreement that would reduce the amount to which Novell is entitled. These deductions are nowhere alluded to in the contract, and would result in a payment to Novell of less than the agreed-upon percentage of the overall Microsoft recovery. Thus, the purported oral agreement allowing Canopy to reduce the Microsoft recovery by the amount of its litigation expenses would contradict the terms of the written agreements. Accordingly, the district court was correct not to give force or effect to the alleged oral agreement.

   ¶17 Because Canopy has not presented any evidence that would establish the parties did not intend the writings to be integrated, the district court's first summary judgment ruling was correct. Thus, we affirm the district court's ruling regarding integration.

 II. Ambiguity

   ¶18 The license agreement provides for the payment of a royalty to Novell by Canopy. The agreement further provides that the royalty is to be paid on the "Royalty Base," defined in the agreement as "Gross Revenues less the book value of assets sold." "Gross Revenue" is defined as

[a]ll proceeds, gross receipts, and revenues of [Canopy], net of returns and allowances, relating to any sale, license, transfer, settlement, award, recovery or any other amounts accrued or earned relating to transactions occurring or causes of action arising prior to the fifth anniversary of the Effective Date, including causes of action arising prior to the Effective Date.

   ¶19 Canopy argues that the term "proceeds" is ambiguous, because it "can mean either gross proceeds (before deduction for fees and costs) or net proceeds (after deduction for attorney[] fees and costs)." Thus, it argues, there is a genuine issue of material fact that renders summary judgment inappropriate.

   ¶20 Courts determine whether a term is ambiguous as a matter of law. See Parduhn v. Bennett, 2002 UT 93,¶5, 61 P.3d 982. "The underlying purpose in construing or interpreting a contract is to ascertain the intentions of the parties to the contract. 'In interpreting a contract, the intentions of the parties are controlling.'" WebBank v. American Gen. Annuity Serv. Corp., 2002 UT 88,¶17, 54 P.3d 1139 (citations omitted).

If the language within the four corners of the contract is unambiguous, the parties' intentions are determined from the plain meaning of the contractual language, and the contract may be interpreted as a matter of law. However, if the language of the contract is ambiguous such that the intentions of the parties cannot be determined by the plain language of the agreement, extrinsic evidence must be looked to in order to determine the intentions of the parties. If a contract is ambiguous, the court may consider the parties' actions and performance as evidence of the parties' true intention.

An ambiguity exists in a contract term or provision if it is capable of more than one reasonable interpretation because of uncertain meanings of terms, missing terms, or other facial deficiencies.

Id. at ¶¶19-20 (internal quotes and citations omitted). "When ambiguity exists, the intent of the parties becomes a question of fact. [A] motion for summary judgment may not be granted if a legal conclusion is reached that an ambiguity exists in the contract and there is a factual issue as to what the parties intended." Id. at ¶22 (alteration in original) (internal quotes and citations omitted).

   ¶21 To determine whether a contract term is ambiguous, a court is not limited to the document itself; rather, the court may look to all the attendant circumstances surrounding the execution of the document:

When determining whether a contract is ambiguous, any relevant evidence must be considered. . . . Although the terms of an instrument may seem clear to a particular reader--including a judge--this does not rule out the possibility that the parties chose the language of the agreement to express a different meaning. A judge should therefore consider any credible evidence offered to show the parties' intention.

. . . [R]ational interpretation requires at least a preliminary consideration of all credible evidence offered to prove the intention of the parties . . . so that the court can place itself in the same situation in which the parties found themselves at the time of contracting. If after considering such evidence the court determines that the interpretations contended for are reasonably supported by the language of the contract, then extrinsic evidence is admissible to clarify the ambiguous terms.

Ward v. Intermountain Farmers Assoc., 907 P.2d 264, 268 (Utah 1995) (alteration and second omission in original) (internal quotes and citation omitted).(3)

   ¶22 Here, the district court considered evidence presented by both sides concerning the negotiations and drafting of the final written agreement. Specifically, it considered evidence that in earlier drafts of the agreement the parties had agreed that Canopy would deduct litigation expenses from the recovery. Further, it considered evidence of Novell's intention to obfuscate its role in the Microsoft litigation by using "unclear" and general terms in the Canopy-Novell contract. It also considered Canopy's argument that there exist mutually exclusive dictionary definitions of the word "proceeds." Ultimately, the district court determined that the term "proceeds" as contained in the agreement is not ambiguous, and thus that no parol evidence may be introduced to explain the meaning of the contract term. We agree with the district court that this term is not ambiguous.

   ¶23 Canopy has vigorously argued, below and on appeal, that Novell's attempts to disguise its role in the Microsoft litigation have resulted in the inclusion of ambiguous terms in the final written agreement. It has not, however, offered any evidence to support the claim that the parties may have ascribed a meaning to the term "proceeds" that would permit deduction of any expenses other than those already listed in the contract's definition of "Gross Revenue."

   ¶24 "[A] contract provision is not necessarily ambiguous just because one party gives that provision a different meaning than another party does. To demonstrate ambiguity, the contrary positions of the parties must each be tenable." R&R Energies v. Mother Earth Indus., Inc., 936 P.2d 1068, 1074 (Utah 1997). In this case, Canopy has not offered any evidence that would render its position tenable.

   ¶25 There is no dispute that earlier drafts of the License Agreement included a deduction for litigation expenses in the definition of the term "Royalty Base." There is also no dispute that at the six-hour "marathon" closing, after several drafts of the agreement were proposed and discarded, the litigation expense deduction was removed. Canopy argues this removal was simply part of Novell's scheme to obfuscate its role in the Microsoft litigation. We fail to see how it furthers Novell's obfuscation schemes to include a provision obligating Canopy to pay a percentage of any litigation recovery, but then to conceal the fact that Canopy may deduct litigation expenses. Thus, the obfuscation argument offers no evidentiary basis to conclude the term "proceeds" is ambiguous.(4)

   ¶26 Beyond evidence of the attendant circumstances surrounding the execution of the writings, Canopy argues the term "proceeds" is ambiguous on its face. It offers several mutually exclusive dictionary definitions that could include deductions for expenses incurred in obtaining the proceeds. The test for determining facial ambiguity in a contract, however, is not whether several definitions of a word exist, but whether the term, in context of the contract, "is capable of more than one reasonable interpretation." WebBank v. American Gen. Annuity Serv. Corp., 2002 UT 88,¶20, 54 P.3d 1139 .

   ¶27 Here, the term "proceeds" is not capable of reasonably being interpreted to include a litigation expense deduction because the term "Gross Revenue," the definition of which includes "proceeds," describes exactly what should be deducted to arrive at a net. It says "[a]ll proceeds, gross receipts, and revenues of [Canopy], net of returns and allowances."(5) (Emphasis added.) It is unreasonable to say the term "proceeds" might include a deduction when, in the same sentence, the parties expressly inserted deductions for "returns and allowances." If "proceeds" meant "net proceeds," there would be no reason to insert "net of returns and allowances." (Emphasis added.) This would run afoul of our rules of contract construction because it would render meaningless the deductions portion of the definition of "Gross Revenue." See Plateau Mining Co. v. Utah Div. of State Lands & Forestry, 802 P.2d 720, 725 (Utah 1990) ("Each contract provision is to be considered in relation to all of the others, with a view toward giving effect to all and ignoring none." (Internal quotes and citation omitted.)). Indeed, "a word is known by the company it keeps." Hansen v. Wilkinson, 658 P.2d 1216, 1217 (Utah 1983) (internal quotes and citation omitted).

   ¶28 Further, even if the term "proceeds" could be reasonably interpreted to mean "net proceeds" or "gross proceeds," as Canopy asserts, the definition of "Gross Revenue" provides for Novell's percentage to be applied against "all proceeds." (Emphasis added.) Even if the term "proceeds" is ambiguous, the term "all" is not. "[A]ll proceeds" would include both "gross proceeds" and "net proceeds," effectively precluding the deductions Canopy seeks. Thus, the district court correctly determined the term "proceeds" is not ambiguous in the context of this contract and susceptible to being interpreted to include deductions for litigation expenses. Accordingly, we affirm the district court's grant of summary judgment to Novell on its affirmative claim against Canopy.

 CONCLUSION

   ¶29 The district court correctly concluded the royalty base provisions of the written agreements were integrated, thus merging any prior oral agreements. It accordingly correctly granted partial summary judgment to Novell on Canopy's counterclaim. The district court also correctly concluded that the contract term "proceeds" contained in the definition of "Gross Revenue" is unambiguous and does not contemplate the deduction of Canopy's litigation expenses. Accordingly, it correctly granted summary judgment on Novell's substantive claim against Canopy. We affirm.

Norman H. Jackson, Judge

   ¶30 WE CONCUR:

Gregory K. Orme, Judge

William A. Thorne Jr., Judge

1. For convenience, we refer to Caldera and Canopy collectively as Canopy.

2. Because we determine the district court correctly granted summary judgment to Novell, we do not reach the challenge to the district court's denial of Canopy's summary judgment motion.

3. Thus, even if a contract is integrated such that the parol evidence rule precludes the admission of extrinsic evidence to contradict the terms of the written contract, if the integrated contract contains a term which is ambiguous, extrinsic evidence will be admitted to clarify the meaning of the contract.

4. The district court perspicuously noted that the Canopy position "requires the court to reach the anomalous conclusion that by taking the attorney[] fee provision out of the agreement it really was writing the provision into the agreement."

5. Canopy does not argue that litigation expenses are subsumed within the term "returns and allowances."


  


Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft | 286 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here, please...
Authored by: jbeadle on Thursday, May 13 2004 @ 03:45 PM EDT
... So PJ can find them quickly.

-jb

[ Reply to This | # ]

Note the Reference to the Parole Evidence Rule
Authored by: arvoh on Thursday, May 13 2004 @ 03:48 PM EDT
You can't come in later and try to say that the contract should be interpreted
in a way that wasn't written down if the contract is clear on its face.

[ Reply to This | # ]

Microsoft anticompetitive finding?
Authored by: DannyB on Thursday, May 13 2004 @ 03:50 PM EDT
From paragraph 2...

Novell owned the source code for DR DOS, a computer operating system that was
the target of anticompetitive practices by Microsoft in the early 1990s.

So does it have any significance that the court put this into their decision?

---
The price of freedom is eternal litigation.

[ Reply to This | # ]

Better have it in writing!
Authored by: ray08 on Thursday, May 13 2004 @ 03:58 PM EDT
Or you don't have it. It's kinda rare, I think, for a court to overrule a
written contract based on oral agreements, even if there are witnesses to the
oral agreements.

Hear that, Darl?

[ Reply to This | # ]

.."Novell Wins" is really newsworthy? ;-)
Authored by: Anonymous on Thursday, May 13 2004 @ 04:02 PM EDT
..come on, we all _knew_ Novell would win over the Canopy
Group. ;-)

[ Reply to This | # ]

Predecessor in interest?
Authored by: Anonymous on Thursday, May 13 2004 @ 04:06 PM EDT
>Caldera, Inc., the predecessor in interest to Canopy

How did Canopy get to be Caldera's successor instead of SCO? I realize that
Canopy owns large portions of SCO, but how did that make them a successor in
interest?

[ Reply to This | # ]

Amount of settlement $155 million!
Authored by: Anonymous on Thursday, May 13 2004 @ 04:09 PM EDT
See this link for proof:

http://www.winntmag.com/Articles/Index.cfm?ArticleID=8045

[ Reply to This | # ]

Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
Authored by: Anonymous on Thursday, May 13 2004 @ 04:23 PM EDT
While no doubt legally correct, the result seems to me unfair. The essential result is that the amount Canopy had to pay Novell was based on the gross proceeds of its action against Microsoft, not the net proceeds.
An agreement that requires one party to pay another a fraction of the gross proceeds of a lawsuit could have the result that the first party would be better off if it dropped the lawsuit. It's difficult to imagine that the parties really intended that. My conclusion is that Canopy's lawyers, at the time the agreement was signed, must have been outstandingly incompetent.

[ Reply to This | # ]

Canopy's Tries Blackmail?
Authored by: Kelledin on Thursday, May 13 2004 @ 04:32 PM EDT

I'm compelled to wonder exactly how relevant this "oral arrangement" to sue MSFT really was? It sounds to me like Canopy was actually waving Novell's semi-dirty laundry as some form of settlement leverage. Canopy figures, hey, if Novell doesn't want the anti-MSFT intent aired, maybe we can use that to our favor.

Obviously it didn't work, probably for two reasons: Novell doesn't have so much fear of MSFT retaliation anymore, as evidenced by the Novell-SuSE merger; and nobody likes a stool pigeon.

---
<Lionel Hutz> I'll be defending...The SCO Group!!!??? Even if I lose, I'll be famous!

[ Reply to This | # ]

PJ, You've really done me in...
Authored by: dirkoid on Thursday, May 13 2004 @ 04:32 PM EDT
I _never_ would have imagined I could read a legal document such as the
preceeding without falling asleep, passing out from boredom, etc... I now have
to admit I not only didn't fall asleep I actually enjoyed reading the whole
thing. What a beautifully crafted document.

Thanks for helping me (us) to see the beauty in the legal system.

Dirk

[ Reply to This | # ]

OT: SCO vs. Novell Motions - Kimball & IBM case
Authored by: kberrien on Thursday, May 13 2004 @ 04:56 PM EDT
This is off topic, but I'm really interested in this theory, and what other thing of it, so exuse me.

In SCO vs. Novell case before Kimball.

Motion 1: Return to State Court (case continues) bad for Novell.
Motion 2: Dismiss slander (case ends) could majorly effect IBM case.

Now, Kimball, sitting before both the SCO/Novell & SCO/IBM cases. Would taking the "drastic" ruling of denying the remand, and ruling for dismissal - this would have the effect of seriously harming SCO's case vs. IBM. Could it not be said in essance - the same Judge is ruling on both cases at the same time?

Will Judge Kimball, logically/judicially correct or not, but fully aware of these facts, be less likely to rule drastically against SCO, without further process or discovery to back up any rulings?

Does this kinda of "cross-case" situation have bearing on Judge's decisions? Do we know anything about Kimball in relation to this?

Is it perhaps likely, he rules half/half. No remand, no dismissal? Thus the case continues and becomes more clear?

[ Reply to This | # ]

Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
Authored by: blacklight on Thursday, May 13 2004 @ 05:00 PM EDT
"Canopy counterclaimed for declaratory relief, asserting the existence of
an oral agreement permitting deduction of attorney fees, costs, and expenses
from the settlement with Microsoft before calculating Novell's share."

What a tangled web do we weave, when we practice to deceive. Too bad these guys
ain't puppies, because sick puppies get put to sleep!

[ Reply to This | # ]

Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
Authored by: blacklight on Thursday, May 13 2004 @ 05:03 PM EDT
I have no idea of valuable Ray Norda would be as a witness for SCOG, because
this is definitely ga-ga behavior.

[ Reply to This | # ]

Cost of doing business
Authored by: Anonymous on Thursday, May 13 2004 @ 05:07 PM EDT
If your business is litigation then I would suspect that legal expenses are part
of the cost of doing business.

I also find it quite a relief that oral evindence for contracts is only heard if
the contract is ambiguous. The APA does not look ambiguous with the "none
except 1), 2)..." copyrights.

From the company that gave us "non-literal copying"...

Leonard

[ Reply to This | # ]

Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
Authored by: Anonymous on Thursday, May 13 2004 @ 05:08 PM EDT
Or perhaps it is a clarification in its own right that corrects another Noorda
obsfucatory manouvre tactic from the same management team that was at Novell and
are now shaded within other Canopy companies.

[ Reply to This | # ]

"a word is known by the company it keeps."
Authored by: jfw25 on Thursday, May 13 2004 @ 05:16 PM EDT
Evidently, more judges have a sense of humor than I would have thought.

[ Reply to This | # ]

Cambridge Technology Partners 1 : Novell Old Boys 0
Authored by: Anonymous on Thursday, May 13 2004 @ 05:18 PM EDT
This whole Canopy vs Novell thing is the last desperate parting shot of a whole
bunch of pissed off ex-Novell guys (names witheld to protect the guilty) trying
to get back at the Cambridge Technology Partner guys (Jack Messman etc.) who
kicked them all out after the "merger".

Unsuprisingly, the ex-Novell guys' strategy failed (like that's the first time
that has happened <g>), and the Cambridge guys came out on top.

It's interesting to see the difference in culture between the two groups.
Canopy/ex-Novell guys working in secret, verbal agreements, sealed court
documents, scared of fighting Microsoft etc. whereas you have CTP/new-Novell
saying "bring it on Microsoft/SCO/Sun...let's see who has the biggest balls
(P.S. Have you met our friend IBM ?)" :-)

Go Novell !

[ Reply to This | # ]

Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
Authored by: walth on Thursday, May 13 2004 @ 05:34 PM EDT
Read it again. That is a footnote clarifying one specific aspect of the
BACKGROUND, not the legal decision.

Novell was negotiating WITH CALDERA to sell DR-DOS to CANOPY and eventually
entered into a contract with CANOPY for the sale.

Yes, the decision is specific and exact. What is not exact is the
Caldera/Caldera International/Canopy/SCOGroup mishmash of companies, holding
companies, financing companies, wholely owned subsideriaries, leasing companies,
etc, etc, as nauseaum.

[ Reply to This | # ]

Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
Authored by: sphealey on Thursday, May 13 2004 @ 05:44 PM EDT
> and at the same time to obfuscate Novell's role in the
> action against Microsoft. Novell insisted that its role be
> completely undetectable to avoid retaliation from Microsoft.

Can't say I agree with Novell's obfuscation work there, since everyone I knew in
the industry at the time (which was a fair amount of people), including myself,
were under the impression that Novell WAS the one suing Microsoft! And that the
spin-off only came later.

Bizarre to learn otherwise from a judge!

sPh

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OT: 52-week low for SCO due next Wednesday
Authored by: Anonymous on Thursday, May 13 2004 @ 05:50 PM EDT

As long as SCOX stays below $6 ($6.13 is the magic number, I think), a 52-week
low will be established next Wednesday.

[ Reply to This | # ]

OT: www.sco.pl has a telling farewell
Authored by: Anonymous on Thursday, May 13 2004 @ 07:17 PM EDT
just go there:

http://www.sco.pl/


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my personal favorite
Authored by: maco on Thursday, May 13 2004 @ 07:29 PM EDT
Novell's board of directors worried that ... Microsoft would retaliate with further unfair practices....[emphasis mine]

Well, call a spade a spade.

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Footnote 4 - More Judicial (Judicious) Humour?
Authored by: ankylosaurus on Thursday, May 13 2004 @ 07:41 PM EDT
I like footnote 4:

4. The district court perspicuously noted that the Canopy position
"requires the court to reach the anomalous conclusion that by taking the
attorney[] fee provision out of the agreement it really was writing the
provision into the agreement."

---
The Dinosaur with a Club at the End of its Tail

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File under METHODS OF OPERATION
Authored by: Anonymous on Thursday, May 13 2004 @ 08:02 PM EDT
This court ruling is hard proof that Canopy/Caldera/SCOG has/will enter into secret agreements to further someone else's agenda for money.

This court ruling is hard proof that Canopy/Caldera/SCOG has/will enter into secret agreements to sue a third party for someone else's agenda.

H'm mm, This sounds like some other case.

I wonder where we should start looking for other proofs!

[ Reply to This | # ]

I think this decision gives insight...
Authored by: Jude on Thursday, May 13 2004 @ 09:10 PM EDT
...as to how the SCO v Novell court might deal with the troublesome language in
the APA amendment 2. It talks at some length about the issues of (1) whether or
not there is ambiguity, and (2) how to deal with any ambiguity that might be
found.

It's fairly complicated, and I don't think I've grasped the nicities after only
two readings. I'd appreciate if other readers would post any ideas they might
have about this.

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    Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
    Authored by: Anonymous on Thursday, May 13 2004 @ 09:37 PM EDT
    At this point, wouldn't Canopy be in breach of contract with regards to
    confidentially? It would be really funny to see Novell sue Canopy for secrets
    leaked during Canopy's *attempt* to sue Novell.

    [ Reply to This | # ]

    OT: Interesting article about the Judiciary using the internet to research
    Authored by: radix2 on Thursday, May 13 2004 @ 10:09 PM EDT
    Search engines take the stand
    Last modified: May 13, 2004, 4:00 AM PDT
    By Declan McCullagh
    Staff Writer, CNET News.com

    Fifteen years after his trial, a convicted drug dealer in New York state belatedly got a chance to clear his name--thanks in part to an Internet search.

    A federal judge last November threw out Manuel Rodriguez's conviction and granted him a new trial after discovering evidence of potential jury tampering in a review of court records and queries on Web search engine Google. U.S. Magistrate Judge Frank Maas said that his review of the 1988 court transcript, coupled with looking up jurors' names in Google, had revealed that the assistant district attorney had "improperly" removed Hispanics.

    more at http://n ews.com.com/2100-1032-5211658.html?part=dht&tag=ntop

    [ Reply to This | # ]

    Champerty and Maintenance ?
    Authored by: Kevin on Thursday, May 13 2004 @ 10:15 PM EDT
    Correct me if I'm wrong here, but aren't contracts to bring litigation of the form "let's you and him fight" generally regarded as being unenforceable because of the common-law prohibition of champerty and maintenance? Assigning IP rights to a third party with the understanding that he will sue for infringement thereof and enrich you with the proceeds certainly feels champertous.

    I realize that the common-law definition of champerty and maintenance has weakened in recent years, and three States have dropped the concept entirely (New Jersey, South Carolina and Massachusetts). Utah, however, is not one of those states.

    What gives?

    ---
    73 de ke9tv/2, Kevin (P.S. My surname is not McBride!)

    [ Reply to This | # ]

    OT: Groklaw RSS feeds + Creative commons
    Authored by: Anonymous on Thursday, May 13 2004 @ 10:16 PM EDT
    There is a lot of interest in this site...

    1. Groklaw has an RSS feed

    2. But I don't see the headlines being widely syndicated where it would really
    count (i.e. commercial news outlets)

    3. Groklaw is under creative commons license and if you click the button it
    explicitly says non-commercial use.


    It just occurred to me that (2) may be in part because of (3). For example, a
    commercial news organization might think (and I would assume correctly based on
    my understanding) that they were not allowed to syndicate the headlines and
    story summaries.


    All this is fine, and PJ's choice. I'm certainly NOT demanding any changes.

    However it did occur to me that by loosening up restrictions on RSS syndication
    and/or adding a specific exception for the use of the RSS feeds (with guidelines
    on attribution, and what may be syndicated etc.).... the Groklaw message might
    be spread wider.

    As I said, I am fine with the way things are, but I just wanted to raise this
    issue, just in case PJ thinks that it's worthy of some consideration.

    [ Reply to This | # ]

    I teach "English" (night school) ...
    Authored by: Night Flyer on Thursday, May 13 2004 @ 10:24 PM EDT
    I asked my students to paraphrase the following:

    "3. Thus, even if a contract is integrated such that the parol evidence
    rule precludes the admission of extrinsic evidence to contradict the terms of
    the written contract, if the integrated contract contains a term which is
    ambiguous, extrinsic evidence will be admitted to clarify the meaning of the
    contract."

    I was faced with 31 blank stares. (There are normally 32 students in the class,
    one was absent.)

    I explained the context, and the use of word definitions that are not the first
    ones listed in the dictionary. Two that had previously announced that they are
    going into law school are now rethinking. (We actually got one of the best
    discussions of the year started from this - I must remember to thank the judge,
    maybe I will forward several of the interpretations including the
    tongue-in-cheek one.)

    I have spent years teaching clarity of presentation and the choice of
    non-ambiguous words and phrases to present a point, the use of vocabulary and
    descriptive phrases that make a clear image in the minds of the reader...

    Ah well...

    I consider this a "real world" opportunity for my students to evaluate
    someone else's writing. I am going to keep on this one and some of the other
    choice phrases (with my class).

    ---------------------------

    My Clan Motto: Veritas Vincit: Truth Conquers


    [ Reply to This | # ]

    Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
    Authored by: PJ on Thursday, May 13 2004 @ 10:31 PM EDT
    This is standard in pretty much all legal documents. You define your terms
    and for convenience you shorten names of entities you will have to talk about
    a lot. The earlier definition retains the exactness.

    [ Reply to This | # ]

    A little parable and the lesson
    Authored by: tangomike on Thursday, May 13 2004 @ 11:27 PM EDT
    Some years ago a successful LAN services company decided to start manufacturing
    it's own network cards, rather than buying them from 3Com. They had a good
    design team and a capable maufacturing contractor. The effort took longer than
    they expected, and of course cost more. The services company ended up bankrupt
    when their loans were called in.

    The consensus around the local industry was that they should have set up a
    separate company, to protect the successful services company from the risk.

    Whether or not the Canopy fur ball is carrying it too far, there's good reason
    why separate, but related, companies get set up for various projects. And we all
    know that tech stuff moves so quickly that today's bright idea could look as
    smart as a cup of dirt tomorrow.



    ---
    To The SCO Group - please come back when you pass a Turing test.

    [ Reply to This | # ]

    Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
    Authored by: Anonymous on Friday, May 14 2004 @ 02:19 AM EDT
    Heh, so it sounds like Canopy is pro when it comes to suing secretly on behalf
    of others..

    [ Reply to This | # ]

    OT : Sun defending deal with Microsoft
    Authored by: nvanevski on Friday, May 14 2004 @ 02:54 AM EDT
    In Sun's newsletter : deepening customer support, better integration, open standards, blah, blah...
    There is also a free DVD (!!) offer on the page, for those who want to understand the deal better. Man, what do they need to say to fill the dvd? I ordered it, but the shipping to this god forgotten country takes a month and more. Anyone care to order it in USA and see what it's about?

    [ Reply to This | # ]

    Definition of "Integration"?
    Authored by: Jude on Friday, May 14 2004 @ 06:24 AM EDT
    I'm trying to understand this court decision because I think it offers insight
    about how the court might deal with the Novell-SCO APA.

    The decision makes use of the terms "Integration" and
    "Integrated", which seem to have specific legal meaning that might be
    crucial to my understanding. I can guess what they mean, but I'd appeciate a
    proper definition.

    Could someone please help me with this? I tried searching with Google, but
    searchs that include "contract" and "integration" (or
    "integrated") turn up huge numbers of non-relevant hits.

    [ Reply to This | # ]

    Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
    Authored by: odysseus on Friday, May 14 2004 @ 07:04 AM EDT

    This ruling has so many parallels to our main cases, I hope Kimball gets a read of it. Loved this little pearl in the footnote:

    4. The district court perspicuously noted that the Canopy position "requires the court to reach the anomalous conclusion that by taking the attorney fee provision out of the agreement it really was writing the provision into the agreement."

    Or in our little universe: "SCO requires the court to reach the anomalous conclusion that by putting the no-copyrights provision in the agreement it really was writing the provision out of the agreement."

    [ Reply to This | # ]

    Worth the paper......?
    Authored by: jjflash53 on Friday, May 14 2004 @ 07:42 AM EDT
    I always thought that oral agreements were only worth the paper they were
    written on.

    [ Reply to This | # ]

    Does this mean Novell taught Canopy this business model? eom
    Authored by: Anonymous on Friday, May 14 2004 @ 09:29 AM EDT
    EOM

    [ Reply to This | # ]

    Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
    Authored by: Anonymous on Friday, May 14 2004 @ 11:49 AM EDT
    What company would bet millions of dollars on a handshake? Not to mention that
    if what Canopy says is true, then they and Novell both took a huge risk of
    purjuring themselves in court over a handshake (I mean obfuscation's goal would
    be to hide Novell's involvement right? That being the case, don't you think
    Microsoft would ask this question directly in court? They're not dumb.)

    Personally, I think this is yet more proof that Canopy is really just a greedy
    company run by people with little to no ethics.

    You can look at it in one of two ways:

    1) Canopy really does do this type of behind the scenes handshaking with other
    companies with no written record or contract. If this is the case, then they
    accept the risk that comes with that practice.

    2) Canopy doesn't do "oral" agreements with people. Then the fact is
    they got greedy and tried to stick Novell for a few million and lost in the
    process, and now have spent more money paying their lawyers than they would have
    it they would have just stuck to the agreement.

    Either possibility gives you a good picture as to the intelligence level or
    ethical behavior of the principal interests at Canopy.

    [ Reply to This | # ]

    Novell Wins Over Canopy Group - Novell Did Want Canopy to Sue Microsoft
    Authored by: Anonymous on Friday, May 14 2004 @ 11:54 AM EDT
    Canopy. The king of contracts that are:

    Wait, that's not what we really agreed to, no matter what it says.

    No, the contract isn't really THE contract.

    The word "all" is ambiguous.

    Ignore them. They knew what we agreed to even if we did agree to the opposite in
    writing.

    [ Reply to This | # ]

    OT - OS business strategies (links section?)
    Authored by: Anonymous on Friday, May 14 2004 @ 12:48 PM EDT

    Did I miss the links section?

    Anyway, an interesting article today in the IT Manager's Journal, describing seven open source business strategies & citing examples of each. Interesting stuff. I post it here in hopes that Darl, et al might catch the link and figure out what they've been doing wrong.

    http://management.itmanagersjournal.com/management/04/05/10/2052216.shtm l?tid=85

    I'm really beginning to like that website.

    brian in mpls

    [ Reply to This | # ]

    UPDATE - SCO Director Bails Steve Cakebread
    Authored by: Anonymous on Friday, May 14 2004 @ 01:15 PM EDT
    SCO Director Bails Steve Cakebread has left the SCO Board. SCO says it's because
    he is under time constraints. He says nothing. Cakebread is CFO of
    Salesforce.com, which I hear is a Linux-based ASP.

    http://www.groklaw.net/article.php?story=20031223152005138&query=Salesforce.
    com

    Latest CNET story ... Salesforce.com has been hiding insider trades ->

    "But one loophole remains, and it is being used by Salesforce.com, a
    software company about to go public.

    At first glance, this offering shows no selling of shares by insiders. But an
    investor who adds and compares numbers on different pages of the prospectus
    discovers that insiders have disposed of millions of shares since they bought
    them in 1999 and 2000. Were they sold years ago, or weeks ago? At what price?
    The prospectus has no answers."

    http://news.com.com/2100-1014_3-5212829.html?tag=st.lh

    [ Reply to This | # ]

    Darl: Can somebody tell me what's going on?
    Authored by: Anonymous on Friday, May 14 2004 @ 01:23 PM EDT
    http://www.linuxworld.com/story/44809.htm

    Darl "claims he doesn't know any more than we do"

    [ Reply to This | # ]

    Judges aren't interested in the evidence
    Authored by: Anonymous on Monday, May 17 2004 @ 05:09 PM EDT
    The judges in this case have their heads on backwards.

    On the first issue, Canopy argues that
    on the issue of royalties percentage, the agreement
    was intended to NOT be integrated, and they have evidence
    to prove it. The judges ignore this and say that just
    because the agreement is not integrated in other areas
    (intentionally so), this part of the agreement must be,
    because Canopy and Novell talked about it so long on the
    final day, and finally removed the language.

    They use logic, rather than evidence, to arrive
    at this conclusion. Canopy may have bad lawyers, but
    how can you argue with judges with logic this faulty?
    If Canopy has evidence that the agreement was not
    integrated, who are these guys to suppress it from
    consideration by a jury?

    [ Reply to This | # ]

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