So with that disclaimer, here is the annotated version, my thoughts on what it all means. The Memorandum text is black, my notes are blue, indented, and quotations from other sources, such as laws, cases, or earlier pleadings, are in purple, double indented. I hope you enjoy it.

The other documents you will need to follow along, although I've quoted from them and provided links in the notes, are SCO's Complaint, Novell's original Memorandum in Support of Motion to Dismiss (as distinguished from this current Reply Memorandum in Support of Motion to Dismiss), and SCO's Memorandum in Opposition to Motion to Dismiss.

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

MORRISON & FOERSTER L.L.P.
Michael A. Jacobs (pro hac vice pending)
Matthew I. Kreeger (pro hac vice pending)
[address, phone, fax]

Paul Goldstein (pro hac vice pending)
[address, telephone]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
[address, phone, fax]

Attorneys for Defendant Novell, Inc.

_____________________________

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION

____________________________

THE SCO GROUP, INC., a Delaware
corporation,

Plaintiff,

vs.

NOVELL, INC., a Delaware corporation,

Defendant.

__________________________

REPLY MEMORANDUM IN
SUPPORT OF MOTION TO DISMISS

Case No. 2:04CV00139

Judge Dale A. Kimball

_________________________

INTRODUCTION

SCO's opposition to Novell's motion to dismiss concedes that its slander of title claim turns on whether the Asset Purchase Agreement (the "APA") assigned the copyrights from Novell. SCO also concedes that section 204(a) of the Copyright Act sets the applicable legal standard. The principal issue in this motion to dismiss, therefore, is whether the APA constitutes a written instrument of conveyance of the copyrights, as the statute requires.

Here Novell is drawing a line in the sand. This is what we agree on, they are saying, because SCO has conceded the following:

• that SCO's entire case depends on whether or not the APA assigned them copyrights
• that the legal standard is Section 204(a) of the Copyright Act

So the only question before you, your Honor, Novell is saying, is whether or not the APA is a sufficient written instrument of conveyance of the copyrights. If it isn't, SCO's whole slander of title case fails. Novell then proceeds to argue that it isn't sufficient.

Here is Section 204(a) of the Copyright Law:

"(a) A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent."

Case law over the years has refined that definition, as you will see in the cases Novell uses. SCO probably didn't intend to concede all of the above. It was actually Novell that brought Section 204(a) into the argument, in their Memorandum in Support of Motion to Dismiss. But in saying SCO has conceded these things, Novell is pointing out that SCO failed to argue against them when they responded to Novell's Motion to Dismiss. Instead of arguing that this isn't a copyright case (which later SCO did argue in its separate Motion to Remand) or that this isn't the pertinent legal standard, SCO in the Memorandum in Opposition argued that the APA plus Amendment 2 was enough to meet the Section 204(a) standard, without including that they didn't think it applied because this was a mere contractual claim or on some other grounds. Woops. Now, Novell is trying to hold them to it.

Here is what SCO wrote about Section 204(a) in their Memorandum in Opposition to Motion to Dismiss instead of arguing that it didn't apply:

"As support for its position, Novell claims that Section 204(a) imposes 'very strict requirements on purported transfers of copyright ownership' and that SCO has not alleged a writing sufficient to meet those strict requirements. [Novell's Mem. at 5.] Novell grossly overstates the law and mischaracterizes both the terms of the Asset Purchase Agreement, as amended, and the allegations in SCO's Complaint. As the Ninth Circuit has held in a leading case on the subject, '[t]he [§204(a)] rule is really quite simple: If the copyright holder agrees to transfer ownership to another party, that party must get the copyright holder to sign a piece of paper saying so. It doesn't have to be the Magna Charta; a one-line pro forma statement will do.' Effects Associates, Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990). The Asset Purchase Agreement as amended and as alleged in SCO's Complaint clearly meets the requirements of a Section 204(a) writing.

"SCO's allegations, together with the plain language of the Asset Purchase Agreement, as amended, are sufficient to establish SCO's ownership of the UNIX and UnixWare copyrights and the falsity of Novell's public representations to the contrary. Novell asks this Court to ignore the allegations in SCO's Complaint and declare that Novell owns the UNIX and UnixWare copyrights because Novell claims the Asset Purchase Agreement as amended is not a sufficient writing to transfer the UNIX and UnixWare copyrights to SCO under Section 204(a) of the Copyright Act. Novell is wrong and has misstated the law regarding Section 204(a)."

Now Novell is asking the judge to hold them to this legal standard. If you look at SCO's Motion to Remand, filed later, their argument about 204(a) has morphed into a denial that it applies at all:

"In its removal papers, Novell claims that for the Court to determine the falsity of Novell's claims of purported ownership of the UNIX and Unixware copyrights, the Court must consider the parties' 1995 Asset Purchase Agreement. Novell claims that because Section 204(a) of the Copyright Act provides that copyrights may only be transferred by a written instrument, note or memorandum, SCO's claim arises under the Copyright Act because the Court must determine whether the 1995 Asset Purchase Agreement is a written instrument, note, or memorandum. Numerous courts have considered and rejected the precise argument Novell makes in this case. . . .

"While SCO believes this Court can fully and properly address the issues raised in SCO's Complaint, this Court lacks subject matter jurisdiction to do so. This is a Utah common law tort action for slander of title and involves the interpretation of a contract. Novell has failed to meet its burden of establishing jurisdiction on federal question grounds under 28 U.S.C. 1331, and this case should be remanded to the Third Judicial District Court for the State of Utah where it may proceed forward on the merits."

I have a theory as to why SCO so much desires this case to be defined as a contract case, not a copyright case. Here's my theory. Remember in the SCO-Novell correspondence there was a July 8, 2003 letter from Novell to SCO telling them to stop interviewing prior Novell employees?

"Novell hereby demands that SCO cease all communications with former Novell executives on matters arising out of or relating to their employment with Novell."

I'm guessing that SCO may have found one or two willing to testify that the APA and Amendment 2 intended to transfer the copyrights. That doesn't necessarily mean it is true. It means they may have found somebody willing to say so, for whatever motivation. It would be up to the jury to decide who to believe. Obviously though, if SCO had such potential witnesses, it would be a plus for them.

If that guess is correct, then framing this matter as a contract case has an advantage to SCO, because it can then use those witnesses. In a contract dispute, if the document itself is unclear, then the way you decide what it meant is by asking the parties to it or witnesses to it or somebody who might know what the parties intended, as well as looking at the conduct of the parties after the contract was executed. SCO raised the issue of there being new executives at Novell, and they raised the issue of intent, in their Memorandum in Opposition. That is what gave me the clue that they may have witnesses and may be hoping to send the case back to the local Utah court defined as a contract case, hoping the judge there says the APA and Amendment 2 are not clear on their face, so it will be necessary to determine the parties' intent. Then SCO can trot out whoever they may have lined up to testify on their side. Novell probably discerns the strategy, and therefore it is in their best interest to define the case as a copyright case, in federal court, where if there is a document purporting to be a conveyance of copyrights that is unclear, it is decided in favor of the original copyright holder, meaning Novell. This is just my theory, mind you, but it is perfectly normal for lawyers to try to figure where and how they have their best shot and then try to have the case heard there.

Novell knows that both of SCO's documents are being read by the same judge, the Memorandum in Opposition to the Motion to Dismiss and SCO's Motion to Remand, and that they are contradictory, so here they say, Your Honor, SCO has already conceded that 204(a) applies, so don't forget that when you are thinking about how to rule on the Motion to Remand, and don't miss that their two arguments don't match. And as far as this Motion to Dismiss goes, please decide it based on their concessions. Now you may have some insight into why SCO asked the judge to rule on the Motion to Remand first, and why Novell leads with what they call concessions on SCO's part.

Here is footnote 1 from SCO's Motion in Opposition:

"[1] SCO has filed a Motion to Remand this case to state court on the basis that this Court lacks subject matter jurisdiction. This Court should not address Novell's Motion to Dismiss until it has addressed and ruled on SCO's Motion to Remand. See In re Bear River Drainage District, 267 F.2d 849 (10th Cir. 1959) (when a district court is faced with a motion to remand and a motion to dismiss, the court should 'rule first on the motion to remand' and if granted send 'the motion to dismiss back to state court'). While SCO may in fact prefer having its claim heard in federal court, it is obligated to raise the issues that SCO believes preclude this Court from exercising jurisdiction over this case."

Novell had until yesterday, the 26th, to answer SCO's Motion to Remand, so we don't yet know what they will say in answer. We should find out Monday or Tuesday, at the latest Wednesday.

SCO's opposition brief largely ignores the text of the APA. SCO does not rebut Novell's textual analysis that the APA, even as amended by Amendment No. 2, constitutes, at most, a contractual promise to assign, under certain conditions, certain rights falling under the rubric of "copyright". Notwithstanding its appeal to some divined "intent of the parties" based on facts outside the complaint, SCO is unable to show that the APA as amended actually conveyed copyright ownership to SCO's alleged predecessor, and hence its complaint must fail. [1]

I'm sure you noticed that they say "alleged predecessor", not "predecessor". No doubt they expect this issue to come up, one way or another in the future, so they make clear they intend to argue this point eventually, should it prove necessary.

If you go back and reread Novell's Motion to Dismiss and then SCO's response, I think you'll have to agree that SCO didn't rebut all of Novell's arguments point by point. Novell argued in detail that at most this was a conditional promise of a possible future transfer that never occurred. SCO talks about the intent of the parties and that the leadership at Novell changed, as if to say, Your Honor, don't go by the intent of the current crop of executives. But such arguments don't seem to belong in a motion to dismiss.

Here's SCO's footnote 2 from their Memorandum in Opposition:

"[2] Novell's management at the time of the Asset Purchase Agreement that transferred the copyrights to SCO is largely no longer at Novell."

Go by what they intended back then, Your Honor, SCO is implying. Novell responds to that implication by saying that you can't prove intent by facts outside of the complaint in a motion to dismiss, and the complaint didn't say a word about a changing of the guard, so it's really not relevant, as you can see in their footnote 1 below, which says:

"[1] SCO's reference to 'facts' outside of the complaint is not limited to the intent of the parties as to the APA, but also includes that Novell's management has changed and that 'Novell's slander campaign was directly timed to its change of senior executive management and its decision to embrace Linux-related business activities in partnership with IBM.' (Opp'n at 3). The latter statement is simply untrue. More to the point, statements outside of the complaint are not to be considered in deciding a motion to dismiss. MacArthur v. San Juan County, 309 F.3d 1216, 1221 (10th Cir. 2002), cert. denied, 123 S. Ct. 226 (2003)."

I am stumped as to why SCO made these arguments. Maybe a reader can explain. The only possibility that comes to me is that it hopes to raise "facts" in dispute, in a hope that it will cause the motion to dismiss to fail.

SCO's reliance on its claim for attorneys' fees in this action for its required pleading of special damages is also unavailing, as Utah courts have rejected this very theory. SCO's complaint should be dismissed for this reason as well.

Here Novell summarizes what it is about to argue in detail, that Utah courts have already rejected the very argument SCO makes. When you tell a judge who is obligated to follow Utah law, whenever state law is relevant to a case, that Utah cases have already decided something, you get his or her attention. That's because they are supposed to follow prior cases in that state, unless they have a mighty good reason. So this is letting the judge know that some good Utah cases are going to be presented that Novell feels should be controlling.

I. SCO'S COMPLAINT SHOULD BE DISMISSED BECAUSE NOVELL'S
STATEMENTS REGARDING COPYRIGHT OWNERSHIP ARE TRUE.

This is a direct response to SCO's subhead in their Motion in Opposition:

"I. SCO IS THE OWNER OF THE UNIX AND UNIXWARE COPYRIGHTS PURSUANT TO THE ASSET PURCHASE AGREEMENT AND NOVELL'S PUBLIC STATEMENTS TO THE CONTRARY ARE FALSE."

It's also a complete defense to slander of title. SCO's slander of title action depends on SCO being able to prove fraud or deceit on Novell's part. Truth is a checkmate to a slander of title action, consequently, and so Novell lays it before the judge. If he agrees with them, the case is over. I believe that is likely the decision that he will reach, which is why SCO put in the Motion to Remand and demanded that it be decided first.

As we've pointed out before, in a slander of title action, there are necessary elements you have to prove to win. It's like when you hit the ball in baseball, you don't get a home run unless you actually run around and touch all the bases. You can't just stand there and say, It's out of the ballpark, so I don't need to bother running around. In slander of title, here are the elements you must "touch" to get your "home run" in Utah:

". . .[t]o prove slander of title, a claimant must prove that (1) there was a publication of a slanderous statement disparaging claimant's title, (2) the statement was false, (3) the statement was made with malice, and (4) the statement caused actual or special damages." (First Sec. Bank of Utah, N.A. v. Banberry Crossing, 780 P.2d 1253 (Utah 1989)).

Novell cited this case in their pleadings. So, if Novell is telling the truth that they are the owners of the copyrights, or even if they sincerely believe they are and have some rational reason for their belief, they ipso facto can't be guilty of slander of title. That's why Novell pleads truth. Also presumably because they believe it is true, based on the arguments they are about the present to Judge Kimball. Here's how they sum up in their original Memorandum in Support of Motion to Dismiss:

"The Complaint fails, however, to allege facts sufficient to support two necessary elements of slander of title: falsity and special damages. As to falsity, the documents SCO relies upon to establish ownership of the copyrights fail on their face to meet the federal copyright law requirements for such an instrument. Without conclusively establishing that it owns the UNIX and UnixWare copyrights, SCO cannot show that Novell's statements to the contrary are false, and cannot prevail. As to special damages, SCO has not set forth its alleged special damages sufficently to state a claim."

In its opposition, SCO does not dispute core propositions in Novell's opening brief:

• In order to survive a motion to dismiss, SCO must plead facts sufficient to show the falsity of Novell's statements that copyrights were not transferred. (Memorandum in Support of Motion to Dismiss ("Opening Br.") at 4.)
• Where allegations of fact are at variance with the terms of documents attached to the complaint, the documents control. (Id at 3-4.)
• Section 204(a) of the Copyright Act mandates a written instrument of conveyance in order to effect a transfer of copyright ownership and governs the determination whether a particular writing constitutes such an instrument. (Id. at 5.)

Here Novell points out three things they say SCO probably should have argued but instead conceded, by not offering a rebuttal to what Novell wrote in their Memorandum in Support of Motion to Dismiss. First, SCO had the obligation to prove Novell wasn't truthful in claiming ownership of the copyrights, but they didn't do so, Novell argues. Second, Novell asserted that if alleged facts disagree with the actual APA and amendments, then the documents trump SCO's alleged facts. And third, SCO failed to argue against Novell's Section 204(a) argument, that it requires a specific writing clearly conveying the specific copyrights and that it is the legal standard.

The middle one is the only one not yet explained, so here goes. SCO argued this way:

"In considering a motion to dismiss, a court must take the allegations of the complaint at face value and must construe them favorably to the plaintiff. The allegations in the plaintiff's complaint are presumed true. Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991). A court should not grant a motion to dismiss unless it appears beyond doubt that the plaintiff could prove no set of facts supporting the claim which would entitle plaintiff to relief. Huxall v. First State Bank, 842 F.2d 249, 250- 51 (10th Cir. 1988). The court's function on a Rule 12(b)(6) motion is merely "to assess whether the plaintiffs complaint alone is legally sufficient to state a claim for which relief may be granted." Miller, 948 F.2d at 1565."

In their Memorandum in Support, Novell reponded by carefully presenting to the judge lengthy arguments as to why SCO's allegations didn't match what the actual documents say. They presented cases showing that in such a situation the judge doesn't have to accept as true the allegations of the plaintiff. Instead, the judge must choose the documents over alleged facts. Here are the cases Novell used to present and support that conclusion:

"The trial court need not accept as true 'allegations of fact that are at variance with the express terms of an instrument attached to the complaint as an exhibit and made a part thereof.' Jackson v. Alexander, 465 F.2d 1389, 1390 (10the Cir. 1972). In such instances, the instrument controls. GFF Corp. v. Associated Wholesale Grocers, 130 F.3d 1381, 1385 (10th Cir. 1997); Jackson, 465 F.2d at 1390. Therefore the Court should ignore any allegations in the Complaint that are contradicted by the Asset Purchase Agreement and Amendment No. 2."

This is just devastating to SCO's position. Here Novell makes a list of all the other things that SCO failed to contest or rebut. It adds up to four key claims that Novell argued and they say SCO simply didn't respond to directly. This is not good for SCO. And the thing is, there shouldn't be any further opportunity to do so, not on this Motion to Dismiss. Unless there is an oral hearing scheduled, which I have seen no indication of, SCO has had its say.

The most important thing in legal documents is not to leave any strings dangling. You may have observed how when answering a complaint, the defendant will say that it admits, denies or lacks facts sufficient to admit or deny, and if the last, then it denies, just in case. Some of you thought that was a bit much, judging by some comments, but really it is essential not to leave any accusation or argument unanswered, because it can end up deemed conceded. So far in this document, Novell has presented a list of 7 items it argues should be deemed conceded. Seven is a lot. If my attorney failed to rebut seven items, I'd fire him or her. But it's not the last one.

SCO also fails to contest that Amendment No. 2, standing alone, does not constitute a written instrument of conveyance sufficient to transfer copyright ownership. (Id. at 6.)

Here is another biggie, number 8 on Novell's conceded items list. SCO failed to contest Novell's claim that Amendment 2 is insufficient to be a "written conveyance" as per the requirements of copyright law. SCO has already conceded that the APA excluded copyrights, according to this Novell list, so if the APA didn't convey copyrights, then Amendment 2 had better do so, but SCO failed to rebut Novell's assertion that it can't because it's insufficient, standing alone.

The only remaining question, therefore, is whether the APA as amended meets the requirements of section 204(a), as SCO contends. (Opp'n at 7.) Because it constitutes only a promise to assign, and not an instrument of conveyance, and because it is so vague as to be indeterminate on the issue of which copyright rights to which works were supposedly transferred, the amended APA does not meet the requirements of section 204(a) and SCO is unable to demonstrate ownership.

Here Novell says that after all SCO's concessions, there remains only one issue for the judge to decide: does the APA as amended meet the requirements to be an instrument of conveyance under the law or was it merely a promise to assign? The APA alone didn't convey the copyrights; Amendment 2 didn't either. But what if you put the two together? Then did they convey the copyrights? They answer no, that it's a conditional promise to assign, not a sufficient written conveyance. It doesn't list which copyrights were involved, Novell says, the way it should if it were an intended transfer sufficient to meet the requirements of Copyright Law. Consequently, they argue, SCO has failed to prove it is the owner of the copyrights. They now elaborate on some cases to support their conclusion.

A. The Amended APA Constitutes At Most a Promise to Transfer Copyrights.

Having conceded that the APA before Amendment No. 2 excluded all copyrights from transfer, and that Amendment No. 2 is not a stand-alone instrument of conveyance, SCO's lead argument is that lurking in the 50-page APA as amended there must be an instrument of conveyance somewhere that satisfies section 204(a)'s requirements.

Here Novell is mocking SCO, and they are referring to this paragraph from SCO's Memorandum in Opposition:

"Novell claims in its Motion to Dismiss that the nearly 50-page Asset Purchase Agreement between Novell and SCO, together with its numerous schedules and amendments, was not a sufficient 'writing', 'note', or 'memorandum' under Section 204(a) of the Copyright Act to transfer the UNIX and UnixWare copyrights from Novell to SCO. Novell then claims that because it purportedly owns the UNIX and UnixWare copyrights, Novell's public representations of ownership are not false and therefore SCO has not alleged a claim for slander of title."

Novell is making fun of SCO's apparent argument that 50 pages is a lot of pages, so it must be enough. The law says there are necessary elements to make it sufficient as a true copyright conveyance, and if they are present, one sentence is enough. If the elements are lacking, it doesn't matter how many pages you have.

SCO cannot point, however, to any language of assignment anywhere in the amended APA. Indeed, SCO ignores that in its own complaint it seeks a court order transferring the copyrights from Novell, a request that is at odds with its position that it already owns the copyrights. (See Opening Br. at 5.) [2]. Instead, it challenges Novell's reading of the case law and asserts that the issue here is the parties' intent. (Opp'n at 6-7.) SCO's argument does not withstand analysis.

Here is the section from the Complaint Novell refers to, number 3 in the Prayer for Relief section:

"WHEREFORE, Plaintiff SCO prays this Court grant relief against Defendant Novell in favor of SCO as follows: . . .3. For a preliminary and permanent injunction (a) requiring Novell to assign to SCO any and all copyrights Novell has registered in UNIX and UnixWare. . . . "

The fundamental problem with SCO's opposition is its failure to reckon with section 204(a)'s requirement of a written instrument "of conveyance." What SCO must do is show that there is some instrument, in writing, in which an actual transfer of ownership occurs. See Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1581 (Fed. Cir. 1991) (agreement containing only a promise to assign distinguished from case in which the contract read "seller 'hereby sells' the patent and buyer 'hereby purchases.'") (distinguishing Sims v. Mack Trucks, Inc., 407 F.Supp. 742 (E.D.Pa. 1976)). SCO has not identified that written instrument. Absent such a written instrument, ownership could not have transferred. Effects Assoc., Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990)("[S]ection 204 of the Copyright Act invalidates a purported transfer of ownership unless it is in writing.")

I couldn't find a free version of these cases online for you to read. However, the Arachnid case is referred to in another case that is available, and it explains it. Here is what the judge in Gaia Technologies, Inc. v. Reconversion Technologies, Inc., et al said the Arachnid case decided:

"The facts of this case are similar to Arachnid, Inc. v. Merit Industries, Inc., 939 F.2d 1574, 19 USPQ2d 1513 (Fed. Cir. 1991). In Arachnid, IDEA and Arachnid entered into a 1980 agreement whereby IDEA was to provide consulting services to Arachnid. The agreement provided that any inventions conceived by IDEA would be the property of Arachnid and that all rights would be assigned by IDEA to Arachnid. After the agreement was terminated, several IDEA employees filed a patent application and assigned the application to IDEA. The application matured into a patent that accordingly issued to IDEA. On May 6, 1985, IDEA granted a non-exclusive license to Merit to practice the invention of the patent, and Merit sold devices covered by the patent during 1985 and 1986. Arachnid then sued Merit for infringement of the patent during that time period. Id. at 1576-77, 19 USPQ2d at 1514-15.

"On appeal to this court, Merit argued that Arachnid was not the owner of the patent at issue and thus lacked standing to bring the patent infringement action. Arachnid contended that it held legal title to the patent based on the 1980 consulting agreement between IDEA and Arachnid. Id. at 1577-78, 19 USPQ2d at 1516. This court flatly rejected Arachnid's argument, stating:

the fact remains that the Arachnid/IDEA consulting agreement was an agreement to assign, not an assignment. Its provision that all rights to inventions developed during the consulting period 'will be assigned' by IDEA to Arachnid does not rise to the level of a present assignment of an existing invention, effective to transfer all legal and equitable rights therein to Arachnid and extinguish any rights of IDEA.

That case, Novell argues, is similar to this one. What the APA and Amendment 2 are is a conditional promise to convey, not an actual conveyance. They presented this case in their original Memorandum in Support of the Motion to Dismiss, so SCO had the opportunity to try to rebut.

Seeking to avoid the basic distinction between a promise to assign and an instrument of conveyance, SCO states that authority cited by Novell is not "remotely comparable to this case" and attempts to distinguish Li'l Red Barn because it concerned only "an agreement that a trademark could be reassigned upon the occurrence of a breach." (Opp'n at 9 n.4.) That case, however, like the others cited by Novell and ignored by SCO, recognizes the general proposition that an agreement of future assignment does not constitute an actual assignment. Li'l Red Barn, Inc. v. The Red Barn Sys., Inc., 322 F.Supp. 98, 107 (N.D.Ind. 1970), aff'd 174 U.S.P.Q. (BNA) 193 (7th Cir. 1972) (applying general rule in connection with assignment of trademarks); see also Arachnid, Inc., 939 F.2d at 1580-81 (same in conection with patents); Monarch Licensing, Ltd. v. Ritam Int'l, Ltd., 24 U.S.P.Q.2d (BNA) 1456, 1459 (S.D.N.Y. 1992) (same in connection with trademarks and copyrights). SCO cites no case that holds that a promise to assign constitutes an actual assignment, and thus has no support for its attempt to blur the well-recognized distinction between the two.

Novell here sums up: We have presented a number of cases, which SCO has failed to rebut adequately. SCO failed to find any case that overthrows the premise that a promise to convey is not an actual conveyance. Therefore, Arachnid and the other cases cited should be followed. Without a doubt, SCO should have offered a case to rebut Arachnid. It doesn't even mention the case in the Memorandum in Opposition. It did offer this in regard to the Li'l Red Barn case, in footnote 4:

"[4] For example, Novell cites Li'I Red Barn, Inc. v. The Red Barn System, Inc., 322 F.Supp. 98 (N.D. Ind. 1970). In that case, the parties entered into an agreement providing that a trademark would be reassigned if the purchasing party defaulted in the performance of the terms of a purchase agreement. The court merely held that an agreement that a trademark could be reassigned upon the occurrence of a breach was not an actual assignment. Id. at 107. That case does not support Novell's motion."

SCO's argument that the copyrights were transferred because the time to assign has come and gone (Opp'n at 9) is contradicted by the documents.

So you can follow, here's what SCO argued on this point:

"Novell also claims that because the Asset Purchase Agreement states that Novell 'will sell, convey, transfer, assign, and deliver' UNIX and UnixWare to SCO 'on the Closing Date,' the Asset Purchase Agreement was merely a promise to assign assets in the future (at the Closing Date) and therefore does not meet the requirements of Section 204(a). Again, Novell's argument is meritless. The Closing occurred in December 1995. Novell received 6.1 million shares of stock from SCO and SCO received all rights and ownership in UNIX and UnixWare and the copyrights related thereto from Novell and has exercised those rights unfettered for more than eight years. The allegations in the Complaint make this clear and must be accepted as true for purposes of Novell's Motion. The cases Novell cites do not involve Section 204(a) and are not remotely comparable to this case."

The APA was signed on September 19, 1995. In that document, Novell agreed that on the Closing Date (December 6, 1995) it would assign all assets on Schedule 1.1(a) but that it would transfer no assets listed on Schedule 1.1(b), the Excluded Assets schedule. (APA Section 1.1(a).) [3] There is no dispute that copyrights were expressly listed on the "Excluded Assets" schedule. Thus, even if, as SCO maintains, the assignment of something was self-executing on the Closing Date, no copyrights were transferred to SCO's alleged predecessor on that date. SCO's observation that Novell received 6.1 million shares of stock from SCO is irrelevant to the issues at hand and does nothing to alter the fact that no copyright transfer occurred. (Opp'n at 9.)

Over ten months later, the parties entered into Amendment No. 2. By its terms, the amendment was not retroactive to the date of the APA, but instead was effective only as of October 16, 1996, and thus could not have effected (or affected) a transfer that supposedly occurred on a self-executing basis ten months earlier. (Amendment No. 2 at 1 ("As of the 16th day of October 16, 1996 the [APA] is amended in the following respects.").)

SCO's argument that the assignment was self-executing is also contrary to the law. In the Monarch Licensing case, the contract stated that "upon termination [Licensee] agrees to assign all rights, title and interest in the trademarks and/or copyrights to [Licensor.]" Monarch Licensing, Ltd., 24 U.S.P.Q.2d at 1459. It was undisputed that the agreement had terminated but that the Licensee had not executed an assignment following termination. Although the time to assign had passed, the court did not convert the promise to assign into an actual assignment and instead found that "[n]othing in the Agreement suggests that the assignment of trademark and copyrights provision is self-executing." Id. As such, the "most Monarch has is a contractual right to receive assignment of those rights." Id.

Monarch Licensing is on all fours with the facts here. It confirms that transfer of copyright ownership (as in the case of any ownership transaction, such as a purchase of a home) requires an actual assignment as opposed to a promise to assign, and it undermines SCO's claim that one may stretch the proper interpretation of a contract to find a self-executing assignment where none exists.

You might like to see what an actual transfer looks like, so here's the Monarch Licensing document at the USPTO.

B. The APA as Amended Is Too Indeterminate to Meet Statutory Requirements for an Instrument of Transfer.

Having conceded by its silence the law that copyright law construes a purported assignment in favor of the copyright holder and against a transfer of any copyrights, SCO fails to explain how an instrument framed in terms of copyrights that are "required" in order to exercise other rights can satisfy section 204(a) and effect a transfer of copyright ownership to it. SCO argues that because "no magic words" are required and a transfer agreement can be a "one-line" statement, the fifty-page APA is sufficient. (Opp'n at 6.) While a simple writing of conveyance may satisfy section 204(a) in some circumstances ("I hereby transfer the copyright in the attached manuscript to Publisher" would probably be sufficient), the instrument of conveyance must be clear in defining the copyrights that are transferred.

Thus, in Radio Television Espanola S.A. v. New World Entm't, Ltd., there were numerous written documents that plaintiff argued transferred the copyrights, but the court found that none of the documents, read individually or together, had the clarity required to constitute valid instrument of conveyance under section 204(a). 183 F.3d 922, 927-28 (9th Cir. 1999). The court observed that "the writing should 'serve as a guidepost for the parties.'" Id. [4] Where the written documents fail to do so adequately, they do not satisfy section 204(a).

Again, this is a case Novell used in its Memorandum in Support of Motion to Dismiss:

"The Copyright Act, however, imposes very strict requirements on purported transfers of copyright ownership. Under section 204(a) of the Act, '[a] transfer of copyright ownership, other than by operation of the law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent.' 17 U.S.C. § 204(a); Radio Television Espanola S.A. v. New World Entm't, Ltd., 183 F.3d 922, 926 (9th Cir. 1999). 1 Here, the documents relied upon by SCO do not constitute such an instrument of conveyance."

SCO's response to Novell's use of this case and the other two previously cited on the need for specificity was this:

"The purpose of Section 204(a) is to 'protect copyright holders from persons mistakenly or fraudulently claiming oral licenses or copyright ownership.' Imperial Residential Design, Inc. v. The Palms Development Group, Inc., 70 F.3d 96, 99 (11th Cir. 1995). 'No magic words must be included in a document to satisfy § 204(a).' Radio Television Espanola S.A. v. New World Entertainment, LTD., 183 F.3d 922, 927 (9th Cir. 1999). Courts have held that the document need not even include the word 'copyright' to constitute a valid transfer. See, e.g., Schiller & Schmidt v. Nordisco Corporation, 969 F.2d 410, 413 (7th Cir. 1992). As set forth above, the rule is simple and requires as little as a 'one-line' signed note reflecting the parties' intent to transfer copyrights. Effects Assoc., 908 F.2d at 557. See also Radio Television Espanola, 183 F.3d at 927 (holding that the Section 204(a) requirement is 'simple'); Kenbrooke Fabrics, Inc.v. Soho Fashions, Inc., 690 F.Supp. 298, 300 (S.D.N.Y. 1988) (finding that a short letter transferring ownership of certain products but never mentioning copyrights and an invoice showing payment was a sufficient writing under Section 204(a) to defeat a motion for summary judgment).

"Contrary to the above law, Novell claims in its Memorandum that Section 204(a) provides draconian requirements of specificity and clarity, and that written agreements that do not meet Novell's proposed heightened standard are invalid. Novell has not, however, cited a single case where a writing even remotely as detailed as the Asset Purchase Agreement as amended has been found insufficient under Section 204(a). In fact, of the three cases Novell cites in support of its supposed heightened standard, two did not involve written agreements. See Effects Assoc., Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990) (holding that oral agreement did not meet Section 204(a) requirement of a 'writing") and Konigsberg Intl., Inc. v. Rice, 16 F.3d 355, 356 (9th Cir. 1994) (same). In the third case Novell cites, Schiller & Schmidt, Incorporated v. Nordisco Corporation, 969 F.2d 410, 412 (7th Cir. 1992), the Seventh Circuit held that a basic sales agreement that did not mention the word 'copyright' was sufficient to meet the requirements of Section 204(a). The court's opinion in Schiller & Schmidt actually supports SCO's position.

"The Asset Purchase Agreement, as amended, is clearly sufficient to meet Section 204(a)'s requirement of a 'writing,' 'note' or 'memorandum.'

"Likewise, in Playboy Enters., Inc. v. Dumas, Inc. , the plaintiff argued that the endorsement of a legend acknowledging 'payment in full for the assignment to Playboy Enterprises, Inc. of all right, title and interest in and to' the listed item was sufficient to satisfy section 204(a). 53 F.3d 549, 563-64 (2d Cir. 1995), cert. denied, 5l6 U.S. 1010. The court examined the written document and circumstances and found, contrary to plaintiff's assertions, that the written document was ambiguous as to whether copyrights were included. Hence, section 204(a) was not satisfied. Id."

It's up to the judge to read all the cases cited by both sides and decide which case or cases most resemble the facts in this case, if any, and his order will tell us exactly which case or cases he found compelling. Novell realizes this, so the lawyers take the time to argue against SCO's use of Schiller & Schmidt v. Nordisco Corp. , in harmony with the principle that you leave no argument without a rebuttal.

SCO relies heavily on Schiller & Schmidt v. Nordisco Corp., 969 F.2d 410, 413 (7th Cir. 1992). In that case, an agreement to transfer all of the assets of a business without specifically mentioning copyrights was held to comply with section 204(a). According to SCO, the APA "is significantly more detailed" than the agreement in Schiller, and therefore must satisfy section 204(a). (Opp'n at 8.) SCO's argument misses the crucial fact that in the present case, the APA as originally executed was not silent as to copyrights; it specifically excluded them. [5] SCO's repeated citation to the "all rights and ownership of UNIX and UnixWare" language from the APA is therefore beside the point. That language is found in an agreement which, when executed, expressly excluded copyrights from the assets to be transferred.

Novell says that the case SCO relies on had to do with a situation where a document was silent as to copyright. That's not the situation here, they argue. The APA specifically excluded copyrights, so there is no doubt what was intended by that document.

Nor does Amendment No. 2, signed ten months later, clearly specify the copyrights to be transferred. Rather, it contemplates a future assignment if SCO demonstrates that there are copyrights owned by Novell that are "required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies." (Amendment No. 2 (emphasis added).)

SCO maintains that all copyrights are covered by this provision, because it "could not exercise its those [sic] rights without ownership of the UNIX and UnixWare copyrights as specifically set forth in Amendment No. 2." (Opp'n at 7.) SCO thus tries to rewrite Amendment No. 2 to read "all copyrights except those copyrights in UNIX and UnixWare," but that formulation is not what the parties chose, and it is not open to SCO to elide the "required for" from Amendment No. 2.

Indeed, "required" is a strong word, and the overall structure of the APA does not support the idea that SCO needed outright ownership of all of the UNIX and UnixWare copyrights. The APA drew a sharp distinction between the existing Novell UNIX "SVRX" products and new products that SCO was expected to develop in the future. Novell was entitled to a 100% interest in on-going royalties from existing UNIX licensees (with a 5% administrative fee paid back to SCO), and had the power to prohibit SCO from entering into new licenses for SVRX products. (See e.g., APA, Sections 1.2(b), 1.6, 4.16(b).) New products that SCO developed over time, by contrast, would carry much reduced royalty obligations. (See APA at Schedule 1.2(b).)

The copyright ownership rights provided by the APA follow this same division. Schedule 1.1(b) explicitly excludes all UNIX and UnixWare copyrights from the transfer, leaving Novell as the owner. [6] To the extent that SCO authored new copyrightable software after the acquisition, SCO would own the copyrights. Amendment No. 2, far from altering this balance by transferring "all" copyrights to SCO, at most transferred rights which SCO "required" to exercise its rights in the technology. As Novell has shown, SCO required far less than total ownership of the entire bundle of rights included within all of "the copyrights." (Opening Br. at 8-9.) SCO offers no argument in response. Thus, SCO's assertion that "[a]s set forth in the Asset Purchase Agreement, SCO acquired from Novell 'all rights and ownership' in 'all versions of UNIX and UnixWare' and all copyrights related thereto" must fail. (Opp'n at 8 n.3 (emphasis added).)

Here is what Novell wrote in their Memorandum in Support of their Motion to Dismiss on this point:

"Even if the documents SCO cited facially purported to constitute an actual transfer rather than merely a promise to transfer, the agreements would still fail to satisfy the Copyright Act's conveyance requirements. In order to suffice as a written instrument of conveyance under the Copyright Act, the purported assignment must state 'precisely what rights are being transferred.' Effects Assoc., Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990); Konigsberg Int'l, Inc. v. Rice, 16 F.3d 355, 357 (9th Cir. 1994). The terms of the transfer must be clear and definite in order to fulfill the purposes of the statute, to 'enhance predictability' in copyright ownership and to make intellectual property 'readily marketable.' Effects Assoc., 908 F.2d at 557; Konigsberg, 16 F.3d at 357. See also Community for Creative Non-Violence v. Reid, 490 U.S. 730, 749-50 (1989) ('Congress' paramount goal in revising the 1976 [Copyright] Act [was that of] enhancing predictability and certainty of copyright ownership.'); Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 412 (7th Cir. 1992) (explaining that the purpose of the analogous writing requirement in § 101(2) of the act was 'to make the ownership of property rights in intellectual property clear and definite.')

"Particularly when a purported assignment seeks to transfer something less than 'all the rights,' definiteness is required. Here, there are multiple works potentially at issue, as UNIX and UnixWare had many versions and releases. Moreover, as to any particular work, copyright ownership is comprised of a bundle of rights, which can be transferred in whole or in part. Effects Assoc., 908 F.2d at 559. Without specificity as to which particular copyrighted works and which rights within each copyrighted work's bundle of rights were purportedly transferred, the purported assignment fails.

"Amendment No. 2's vagueness as to which copyrights are at issue is glaring. It merely amends the schedule of excluded assets as follows:

"All copyrights and trademarks, except for the copyrights and trademarks owned by Novell as of the date of the [Asset Purchase Agreement] required for [Santa Cruz] to exercise its rights with respect to the acquisition of UNIX and UnixWare Technologies.

"(APA Amendment No. 2, attached at Compl. Ex. A.) Amendment No. 2 does not identify which, if any particular rights associated with which, if any, copyrighted works are 'required.' It thus fails as a written instrument of conveyance due to its vagueness, and it is insufficient to satisfy section 204(a) of the Copyright Act.3

"Contrary to SCO's assertions, Amendment No. 2 does not purport to concern 'all copyrights pertaining to the UNIX and UnixWare technologies.' Instead, it concerns only the unidentified rights that make up copyrights required for Santa Cruz to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies. Not only are those rights not identified, but SCO's 'rights with respect to the acquisition of UNIX and UnixWare technologies' are identified. In the face of such vague and ambiguous language, the governing authority is clear: the purported assignment must be construed in favor of the copyright holder and against a transfer of any copyrights. Bieg v. Hovnanian Entes., Inc., 157 F. Supp. 2d 475, 480 (E.D. Pa. 2001). See Effects Assoc, 908 F.2d at 557 (stating that the writing requirement voids inadvertent transfers of copyright ownership by copyright holders)."

Long-time SCO watchers will not be amazed to see that SCO is arguing that specificity is not required.

Because the amended APA does not identify the copyrights that are "required," there is no "guidepost" for the parties or the Court meeting the requirements of section 204(a). Prevailing copyright doctrine, which SCO does not dispute, is that close calls go to the copyright owner against the purported transferee. (See Opening Br. at 10.) SCO has not demonstrated that the question is even close. Even if the APA as amended was a purported transfer of copyright ownership (as opposed to a promise of future assignment), SCO has not shown that these instruments are sufficiently clear to meet the requirements of the statute, and its claim of ownership transfer must therefore fail. Under section 204(a), SCO has failed to demonstrate that it is the owner of the copyrights in question and its slander of title complaint must therefore be dismissed.

Here, Novell sums up its argument. Being careful, they argue first that the document, the APA and the Amendment 2 together, does not identify which copyrights should go to SCO, even if it meant to convey any. This is the "even if" argument. Even if the judge were to rule against Novell and say that this was not a promise to convey but an actual conveyance, the document fails to meet the legal standard by not listing which copyrights should be transferred. Either way, Novell argues, SCO's slander of title action should be dismissed.

II. NOTWITHSTANDING ITS PRAYER FOR ATTORNEYS FEES, SCO HAS NOT ADEQUATELY PLED SPECIAL DAMAGES.

Special damages mean money you can prove you actually lost. For example, if I lose a day's pay, that exact amount lost is special damages, and if I can prove you caused the loss, I can ask the judge to make you pay me back for my loss. SCO has asked for special damages, but it offered no exact figures. Instead it argued that listing a category is enough and if not, that it should be allowed to specify them later:

"SCO has pled with sufficient particularity the damage it incurred and is continuing to incur as a result of Novell's slander of SCO's title to the UNIX and UnixWare copyrights. It has set forth the specific loss of pecuniary advantage that SCO's customers are unable to ascertain the truth of ownership in UNIX and UnixWare because of Novell's wrongful acts. SCO has also incurred legal fees protecting its valuable ownership rights in UNIX and UnixWare. SCO's allegations are sufficiently particular to "apprise" Novell of SCO's claims. Indeed, Novell knows exactly what is at issue in this case and, as alleged in SCO's Complaint, Novell has acted with the specific intent of causing SCO the precise type of damages SCO has alleged. SCO has met the pleading requirements for its claim of slander of title in this action. Novell's Motion to Dismiss should be denied. [5] . . . .

"[5] Even if the Court determined that SCO did not allege damages with sufficient particularity to apprise Novell of SCO's claim, SCO should be granted leave to amend its Complaint. This case is in its initial stage and Novell would not suffer any prejudice if SCO were granted leave to amend."

The problem with this argument is that isn't the way you normally set forth special damages. In a personal injury case, for example, your specials are your actual hospital bills, your doctor's bills, the cost for the ambulance, etc.

SCO concedes that an appropriate allegation of special damages must "apprise the defendant of such damages as must of necessity flow from that which is alleged." (Opp'n at 10, citing Cohn v. J.C. Penney Co., Inc., 537 P.2d 306, 311 (Utah 1975).) SCO also acknowledges that absent its general prayer for attorneys' fees, its damages allegations consist only of the following two items:

Customers and potential customers of SCO are unable to ascertain the truth of ownership in UNIX and UnixWare, and make decisions based thereon; and

SCO's efforts to protect its ownership of UNIX and UnixWare, and copyrights therein, are subject to a false cloud of ownership created by Novell.

(Opp'n at 10.) As these are not realized pecuniary losses, they are insufficient.

Here Novell points out that even if listing a category were sufficient, SCO has listed only future possible losses, not losses already sustained. Here is what SCO argued on this point:

"In its Memorandum, Novell has substantially overstated the Rule 9(g) pleading requirement. The Utah Supreme Court held in Cohn v. J.C. Penny Co., Inc., 537 P.2d 306 (Utah 1975) that in Utah there is no 'inflexible rule' regarding the pleading of special damages. 537 P.2d at 311. Rather, it is simply 'a question of whether or not the pleadings contain such information as will apprise the defendant of such damages as must of necessity flow from that which is alleged.' Id. see also Simmons v. Wilkin , 15 P.2d 321, 322 (Utah 1932) ('The purpose of the rule is to avoid surprise to the defendant.')- Thus, while special damages must be specifically plead, 'the law does not require that the exact dollar amount of special damages be specifically pleaded. Hodges , 811 P.2d at 162 (holding that general allegations of 'lost wages, medical expenses, and severe emotional distress' contained in a complaint are sufficient 'to satisfy the requirement of Rule 9(g)')."

Nice try, Novell answers, but allegations of "lost wages, medical expenses, and severe emotional distress" are supposed to describe losses already sustained which presumably are quantifiable at trial. But in SCO's case, it has listed no losses actually suffered to date, only vague, possible future losses. It's also probably worth pointing out that if I were sued by SCO for copyright infringement, I think I'd quote SCO's sentence that customers and potential customers are unable to determine who actually hold the UNIX copyrights, SCO or Novell. That knocks out willfulness right there, I think, not to mention that I can't infringe SCO's copyright if it doesn't have any. This isn't legal advice, of course, but I can't help noticing SCO's admission.

Valley Colour, Inc. v. Beuchert Builders, Inc. , 944 P.2d 361. 364 (Itaj 1997) ("The special damages rule requires the plaintiff to establish pecuniary loss that has been realized or liquidated."). SCO half-heartedly argues that these allegations suffice. (Opp'n at 10.) But the very cases upon which SCO relies show that SCO's allegations are insufficient. See Cohn, 537 P.2d at 310-11 (specifically pled that plaintiff could not work which resulted in loss of earnings, as well as medical expenses incurred); Hodges v. Gibson Prods. Co. , 811 P.2d 151, 162 (Utah 1991) (same). In those circumstances, defendants were apprised of the damages. Here, SCO's allegations do not identify any specific or actual loss.

SCO goes on to argue that its general prayer for attorneys' fees incurred in this action satisfies the special damages pleading requirement. (Opp'n at 10-11.)

Here is precisely what SCO said in trying to argue that attorneys' fees constitute special damages:

"SCO has also incurred legal fees protecting its valuable ownership rights in UNIX and UnixWare. SCO's allegations are sufficiently particular to 'apprise' Novell of SCO's claims."

That is insufficient. Attorneys' fees constitute special damages for purposes of a slander of title action only where they were incurred to clear plaintiff's title and undo the harm of slander of title. First Sec. Bank of Utah 780 P.2d at 1258. There, the plaintiff alleged slander of title based upon the defendant placing a notice of default on the plaintiff's property. The court found that the notice of default was false, but refused to give any weight to plaintiff's argument that the attorneys' fees it had incurred in the slander of title action constituted special damages. Id. To the contrary, it held "[plaintiff] did not incur attorney fees to clear its title or undo harm caused by the original notice of default and therefore did not establish special damages." Id.

Crediting SCO's argument would eviscerate the special damages pleading requirement. If an allegation that "uncertainty about title exists" combined with a general prayer for attorneys' fees were sufficient, plaintiffs could meet the special damages pleading requirements simply by asserting that slander of title has occurred. The law requires that plaintiffs do more in order to state a claim for relief.

Finally, SCO includes in a footnote a request for leave to amend to include additional allegations of special damages. (Opp'n at 11 n.5.) The Court should deny this request where SCO has failed to exercise its right to amend and where it has failed to indicate what facts, if any, it believes it could add to show special damages. Glenn v. First Nat'l Bank, 868 F.2d 368, 370 (10th Cir. 1989) (a request in an opposition to motion to dismiss for leave to amend "does not rise to the status of a motion" and can properly be denied).

Here Novell is saying that if SCO wanted to amend, it should have brought a motion. Just tacking on a footnote in a Memorandum in Opposition to Novell's motion is not sufficient.

CONCLUSION

No amount of hand waving can rescue SCO's complaint from its infirmities. Importantly, SCO has not proposed to amend its complaint to assert additional allegations of copyright ownership.

Once again, Novell points out something SCO failed to do. If it wanted to fix its complaint, it should have put in a motion to amend the complaint. It didn't. Therefore, at this juncture, it has to stand or fall on the documents involved in the case as they are, Novell argues.

Its slander of title claim therefore rises or falls with the contents of the APA and Amendment No. 2 attached to its complaint. These documents do not meet the copyright law's standards for an instrument of conveyance. Similarly, SCO's allegations of special damages fail when assessed against Utah's pleading requirements. For these reasons, SCO's complaint should be dismissed.

DATED: March 19, 2004

ANDERSON & KARRENBERG

_______signature___________
Thomas R. Karrenberg
John Mullen
Heather M. Sneddon
Attorneys for Defendant Novell, Inc.

[1] SCO's reference to "facts" outside of the complaint is not limited to the intent of the parties as to the APA, but also includes that Novell's management has changed and that "Novell's slander campaign was directly timed to its change of senior executive management and its decision to embrace Linux-related business activities in partnership with IBM." (Opp'n at 3). The latter statement is simply untrue. More to the point, statements outside of the complaint are not to be considered in deciding a motion to dismiss. MacArthur v. San Juan County, 309 F.3d 1216, 1221 (10th Cir. 2002), cert. denied, 123 S. Ct. 226 (2003).

This is the paragraph that started me thinking about why SCO so urgently wants to go back to state court, and resulted in my theory enunciated above.

Novell, for good measure, further distinguishes SCO's use of this case.

Judges don't like it if you give them only part of a quotation, if the full quotation would work against you, naturally. So Novell provides the entire quotation that SCO failed to provide.

This is a zinger. One of the worst things you can do in a legal document's preparation is to fail to Shephardize your cases to the end. That means to look up what happened to them as they traveled up the process through appeals or to the final order. It's part of what paralegals do. You don't want to cite a case that won in a lower court or in a summary judgment but got roundly overturned on appeal or the case turned against your position later, not if you want to show the judge a case that won. Here Novell is saying that SCO cites a case they didn't research far enough, apparently, or didn't tell what happened to the case later. They cite it as if the case proves their point, but later, it didn't, so it works against SCO to cite it. It's embarrassing when that happens. I haven't researched this particular case to see who is right, but presumably Novell did the necessary research, given the detail they offer.

That's it, then. I hope you enjoyed the journey. Was there more to it than you thought? Good. That was the purpose of this exercise: to show you the process, how many levels lawyers are working with, and that it's a profession requiring real skill and even a measure of art. Like chess, there are rules to the game, but how you put it all together is the art, and there is a difference between a schoolkid playing chess and a Grand Master.