Gray v. Novell, Inc. et al

Filing 1

COMPLAINT against Novell, Inc., The SCO Group, Inc., X/Open Company Limited ; Jury Demand (Filing fee $ 350 receipt number T039141) filed by Wayne R. Gray.(cda)

Gray v. Novell, Inc. et al

Doc. 1

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 1 of 83

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION WAYNE R. GRAY, Plaintiff, vs. NOVELL, INC., and THE SCO GROUP, INC., and X/OPEN COMPANY LIMITED, Defendants. ________________________________ CASE NO.: _______________________

Jury Trial Demanded

COMPLAINT I. NATURE OF CASE. 1. Plaintiff, Wayne R. Gray ("Gray") brings this action against Novell, Inc. ("Novell") The SCO Group, Inc. ("SCO"), and X/Open Company, Ltd., ("X/Open"), seeking cancellation of two UNIX trademark federal registrations and appropriate compensation for damages under the laws of the United States and laws of the State of Florida relating to violations of the federal Racketeer Influenced and Corruption Organizations Act (Civil RICO), fraud, conspiracy to commit fraud, Lanham Act trademark violations, the Florida RICO Act and the Florida Communications Fraud Act, and demands trial by jury. 2. The present claims are based upon Defendants' long-running scheme involving willful false and fraudulent acts that evidently began in or about October 1993 associated with, inter alia, their agreements to conceal the identity of the lawful owner of the UNIX trademarks, their false claims relating to the UNIX marks and fraudulent federal filings, and false UNIX

Dockets.Justia.com

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 2 of 83

mark acknowledgements implying and/or stating publicly that X/Open owns the UNIX marks. 3. As part of their scheme, Defendants Novell and X/Open, unrelated legal entities joining together as members of a corrupt enterprise, agreed in or about 1994 to initiate a UNIX trademark re-licensing business unlawfully using the two previous UNIX mark registrations for computers and software, and agreed to use and to force their customers, competitors, and other third parties to use deceptive and false UNIX mark acknowledgements, and these actions reasonably contemplated regular use of U.S. mail and/or wire communications. 4. Novell transferred its UNIX operating system software business assets, the two UNIX and two UNIXWARE marks and other UNIX assets to Santa Cruz Operation, Inc. ("Santa Cruz", as SCO's predecessor in interest) in a September 19, 1995 Asset Purchase Agreement (the "APA"), having a closing date on about December 6, 1995. 5. Santa Cruz joined the corrupt enterprise and scheme about September 1996 and agreed, inter alia, to conceal the 1995 transfer of the UNIX marks and certain associated assets and contracts to Santa Cruz, to conceal the enterprise's prior false and fraudulent acts, and to continue to publish false implications or statements that X/Open owned the UNIX marks, and these actions reasonably contemplated regular use of U.S. mail and/or wire communications. 6. As part of their scheme, Novell (as purported assignor) and X/Open, with Santa Cruz's participation, willfully executed a false UNIX marks assignment agreement purportedly on November 13, 1998, each knowing Novell was not the UNIX marks lawful owner after 1995. 7. X/Open furthered their scheme and fraud, recording the false assignment documents, filing them before the United States Patent and Trademark Office ("PTO") in June 1999. 8. Novell, X/Open and Santa Cruz agreed in or about 1999 that X/Open would send by mail and/or wire fraudulent trademark enforcement letters (one dated February 27, 2001was sent

2

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 3 of 83

by U.S. mail to Gray) and initiate objectively baseless sham UNIX mark enforcement lawsuits to advance and conceal their scheme, to promote and profit from a new and different relicensing business, to conceal their fraudulent acts and to specifically conceal their scheme to appropriate Gray's iNUX trademark and domain name property for their use, and these actions reasonably contemplated regular use of U.S. mail and/or wire communications. 9. Gray registered "inux" domain names in January 1999 and filed a federal application in April 1999 to register his iNUX mark for software. X/Open filed an opposition action against said application before the Trademark Trial and Appeal Board ("TTAB") of the PTO alleging iNUX infringed upon the UNIX marks in order to further Defendants' scheme, to conceal the prior fraudulent acts and unlawfully appropriate Gray's iNUX property. 10. X/Open's malicious PTO opposition against Gray has continued for over five years with the specific intent to appropriate Gray's iNUX mark and domain names for its own use, to injure his good name and to destroy his iNUX business and property by depletion of his limited financial resources through objectively baseless sham litigation, thus ensuring future association of the iNUX mark and domain names with products and/or services originating only from one or more of the Defendants.

II. THE PARTIES. 11. Plaintiff Gray is an individual and U.S. citizen residing in Hillsborough County, Florida, who registered the "inux.com" and "inux.net" domain names respectively on January 17th and 20th, 1999 and is Defendant/counterclaimant in TTAB trademark opposition No. 91122524 filed by X/Open on April 11, 2001 based upon the UNIX marks and Gray's iNUX application, Serial No. 75680034, filed April 29, 1999. Gray received his engineering degree

3

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 4 of 83

from the University of Florida and has over 20 years experience in computer software, hardware and real-time embedded systems applications, development and/or marketing. 12. Defendant Novell is a Delaware corporation with its executive offices and headquarters in Waltham, Massachusetts that does business in Florida. Novell is a software company and maintains a significant presence on the World Wide Web by which it markets its products and/or services to potential customers. Novell is the purported 1998 assignor to X/Open of UNIX trademark Registration No. 1392203 issued May 6, 1986, for "computer programs" in Class 9, and UNIX trademark Registration No. 1390593 issued April 22, 1986, for "computers" in Class 9, (herein as the "UNIX marks"). 13. Defendant SCO is a Delaware corporation with its executive offices and headquarters in Lindon, Utah that does business in Florida. Defendant is a software company and maintains a significant presence on the World Wide Web by which it markets its products to potential customers. SCO is Santa Cruz's successor in interest, having acquired the assets and assumed the liabilities of Santa Cruz as to UNIX matters. 14. Defendant X/Open, also known as The Open Group, is a United Kingdom corporation with its headquarters in Reading, Berkshire, England that does business in the U.S. X/Open is a technology consortium that maintains a significant presence on the World Wide Web by which it markets its products and/or services to potential customers. X/Open is the purported 1998 assignee of the UNIX marks, and filed TTAB Opposition No. 91122524 on April 11, 2001 opposing Gray's iNUX trademark registration application.

III. JURISDICTION AND VENUE. 15. This Court has subject matter jurisdiction over Gray's trademark claims under 15

4

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 5 of 83

U.S.C. § 1121, and has jurisdiction over Gray's claims for federal civil RICO violations under 18 U.S.C. §§ 1964(a) and 1964(c), in addition to jurisdiction under 28 U.S.C. §§ 1331, 1332, 1337 and 1338. 16. Based on its subject matter jurisdiction set forth above, the Court also has supplemental jurisdiction over Gray's Florida common law and statutory claims pursuant to 28 U.S.C. § 1367. 17. This Court has personal jurisdiction over Novell because Novell has agent(s) in

and transacts substantial business in the State of Florida. 18. This Court has personal jurisdiction over SCO because SCO has agent(s) in and

transacts substantial business in the State of Florida. 19. This Court has personal jurisdiction over X/Open because X/Open is an alien

corporation that transacts substantial business in the U.S., including the Middle District of Florida. 20. Venue is proper in this Court pursuant to 18 U.S.C. § 1965(a) and 28 U.S.C. § 1391(b), (c) and (d) because of the residences and business dealings of the domestic corporate defendants and the fact that X/Open is an alien corporation, and a substantial part of the property that is the subject of this action is situated in the Middle District of Florida. 21. The amount in controversy between the parties exceeds Seventy-Five Thousand Dollars ($75,000.00) exclusive of interest, attorneys' fees, and costs.

IV. HISTORICAL BACKGROUND 22. The original owner of the registered UNIX marks was American Telephone and Telegraph Company, and the business of a related company, AT&T Technologies, Inc. (herein

5

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 6 of 83

collectively "AT&T"), included licensing software source code products to unrelated companies at least as early as 1985. 23. AT&T's UNIX licensing businesses and business assets were subsequently transferred to Unix System Laboratories, Inc. ("USL"), and that transfer of the registered UNIX marks was recorded in the PTO on about May 18, 1990. 24. USL was purchased by and merged into Novell on about June 14, 1993, and the corresponding transfer of the registered UNIX marks was executed on April 29, 1994 and recorded in the PTO on July 27, 1994. 25. UNIX trademark licensing prior to June 1993 required the licensed UNIX software to have been derived from AT&T/USL UNIX software source code. Licensing was based in significant part on versions and/or editions of UNIX definition specifications developed and owned by AT&T/USL, including, among others, those specifications known as UNIX System V Interface Definition ("SVID") and the corresponding testing software known as System V Verification Suite ("SVVS"). 26. Following a significant feud between Novell and Microsoft, Inc. ("Microsoft") over a failed merger or buy-out, Novell purchased in about 1993 and 1994 (reportedly for over $1.7 billion) the UNIX operating system as well as office programs known as WordPerfect and Quatro Pro, on information and belief apparently believing that integrating those with its leading NetWare networking software would give it a competitive edge over Microsoft and its products, and additionally Novell began cooperating with the Federal Trade Commission in an investigation of Microsoft. 27. Novell's UNIX purchase was met with suspicion by certain members of its thirdparty marketing channel, UNIX code licensees, customers, competitors, and/or the relevant

6

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 7 of 83

public, as some believed Novell's intent was to take UNIX proprietary and dominate the UNIX software market, whereas UNIX had always been "open" software. 28. On information and belief, Novell did not want to anger its marketing channel, licensees, customers and others and jeopardize its UNIX business revenue stream of about $100 million annually, or damage its NetWare products revenue of well over $1 billion annually (damage which could result in a loss of networking products market share to Microsoft), and therefore agreed about September 1993 to appear to relinquish to the X/Open consortium ownership and competitive advantage control of the valuable UNIX marks and certain UNIX assets at a meeting of about 75 computer systems industry vendors that included certain UNIX software source code licensees, but Novell actually retained effective control. The Scheme to Conceal Novell's Continuing UNIX Trademarks Ownership 29. On information and belief, Novell and X/Open schemed in and after October 1993 to conceal Novell's true intentions of retaining ownership of the valuable UNIX marks and developing a proprietary and closed version of UNIX that would integrate its proprietary NetWare networking technologies with the intent of securing for themselves certain UNIX software competitive advantages and UNIX market domination, while slowing or even reversing Microsoft's increasing computer operating system and office productivity software market share growth, thereby furthering Novell's goal of increasing its dominate networking products market share position over Microsoft. 30. To advance their scheme, Novell and X/Open agreed that Novell would initiate a new and different UNIX mark re-licensing business to be operated by X/Open as one of its technology certification businesses, and they agreed to falsely imply and/or state publicly that X/Open owned the UNIX marks in and after 1993 and conceal Novell's continuing ownership of

7

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 8 of 83

the UNIX marks and certain UNIX assets. 31. In an article entitled "X/Open Receives UNIX Trademark From Novell" dated October 11, 1993, embedded in the public Internet newsgroup posting dated October 13, 1993 entitled "The Name `UNIX' is now the property of X/Open", Ray Noorda, then president and CEO of Novell, Inc. is quoted as stating: "We are transferring the UNIX trademark to X/Open .... We are confident in the stewardship of X/Open as the new home for the UNIX trademark." 32. X/Open falsely implies and/or states in the same article that Novell transferred the UNIX marks to X/Open in a "Q&A" section in the answer to "Q4", in part stating: Novell will continue to own one product (a single implementation of UNIX) which currently conforms to the specification. Novell is clearly free to evolve that product in any way that it chooses, but may only continue to call it UNIX if it maintains conformance to the X/Open specifications. 33. Martin Kirk, then X/Open Development Manager, announced that Novell transferred the UNIX mark to X/Open in a public Internet newsgroup posting dated October 14, 1993 entitled "The Name `UNIX' is now the property of X/Open", stating "At 4:30 BST October 11, X/Open and Novell formally announced the transfer of the UNIX trademark to X/Open," and he also signaled the abandonment of the marks as registered, stating "Currently UNIX as a trademark is a TECHNOLOGY trademark. As soon as Spec1170...is finalised, UNIX will become a CONFORMANCE trademark, applicable to any system which conforms to this approved X/Open spec." 34. X/Open employee Graham Bird falsely stated that Novell transferred the UNIX marks ownership to X/Open in a public Internet newsgroup posting dated December 22, 1993 entitled "BBS recommendations UNIX Trademark", stating therein "The UNIX trademark has been transferred to X/Open Company Ltd."

8

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 9 of 83

35. On information and belief, X/Open and Novell in furtherance of their scheme, in or about May 1994 entered into one or more agreements relating and/or referring to the UNIX marks, some being known or referred to as UNIX trademark re-licensing agreements, wherein they conspired to: a. continue concealment of Novell's ownership of the UNIX marks and certain UNIX assets; b. abandon the UNIX marks as registered and use the marks exclusively as unregistered certification marks; c. initiate, promote and profit from a new and different UNIX mark re-licensing and certification business unlawfully using the two previous UNIX mark registrations for computers and software, to be operated by X/Open and significantly based upon their false representations that X/Open was the UNIX marks' lawful owner and/or registrant; and d. use the new UNIX mark re-licensing and certification business and its fraudulent UNIX marks ownership representations to conceal and advance their scheme and fraudulent acts that included, inter alia, influence and/or control of interstate and international commerce in certain government and commercial computer software markets; which actions reasonably contemplated regular use of U.S. mail and/or wire communications. 36. Novell and X/Open, in furtherance of their scheme, agreed to use deceptive and materially false UNIX mark acknowledgements in and after 1994 that deliberately omitted and fraudulently concealed Novell as the lawful owner of the UNIX marks and falsely implied and represented that X/Open was the UNIX marks owner in written agreements, contracts, press releases, letters and other communications and things, such acknowledgements being substantially similar to the following (herein the "first acknowledgement"):

9

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 10 of 83

UNIX is a registered trade mark in the United States and other countries, licensed exclusively through X/Open Company Ltd. 37. Novell and X/Open, in furtherance of their scheme and false representations that X/Open was the UNIX marks lawful owner in and after 1994, agreed to instruct Novell's UNIX software source code licensees, X/Open's consortium members and/or licensees, licensees' customers, U.S. government departments or agencies, the relevant public and other third parties in letters, press releases and documents and other means, to use deceptive UNIX mark acknowledgements substantially similar to the first acknowledgement set forth above, and these actions reasonably contemplated regular use of U.S. mail and/or wire communications. 38. X/Open's willful use of deceptive UNIX mark acknowledgements substantially similar to said first acknowledgement set forth above in press releases in and after 1994 implying it was the UNIX marks lawful owner includes, among others, an October 4, 1994 press release entitled "Single Unix Specification Now Available", publicly Internet posted on October 15, 1994 by X/Open Director of Branding Graham Bird. 39. X/Open willfully sent press releases, documents and letters by mail and/or wire requiring use of deceptive UNIX mark acknowledgements substantially similar to said first acknowledgement set forth above in and after 1994, including, among others, the following: a. X/Open legal counsel Steve Nunn email entitled "UNIX Trademark Acknowledgement" dated June 6, 1994; a copy received by AT&T is embedded in employee Richard Dimock's November 1, 1995 public internet posting entitled "UNIX-the OWNER's LAWYER sez", wherein Mr. Dimock, reasonably relying upon X/Open's misrepresentations, stated "...perhaps you would like to talk to the trademarks owner's lawyer about your observance of their trademark. ... Here is the word from Steve Nunn, legal counsel for X/Open Company Limited.", and Mr. Nunn in his email stated the following:

10

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 11 of 83

....with immediate effect, the correct trademark acknowledgement for UNIX should be: "UNIX is a registered trademark in the United States and other countries, licensed exclusively through X/Open Company Limited". b. X/Open press release entitled "Companies Warned: UNIX Belongs to X/Open" published in "UniNews" and elsewhere on or about August 31, 1994, and believed sent to UniNews members and/or subscribers and others on about August 1994 by U.S. mail and/or wire communications. It is believed that a copy of said document was received by Karen McBride of "CAUSE" by mail and/or wire on about September 1994 and, reasonably relying upon X/Open's false statements, she embedded said document into a September 8, 1994 public Internet posting entitled "The spelling of UNIX", and therein X/Open stated: All official references to UNIX in company literature, advertisements and public announcements should include the line: "UNIX is a registered trademark in the United States and other countries, licensed exclusively through X/Open Company Ltd." All references to AT&T, USL and Novell should be deleted. (emphasis added) X/Open falsely stated therein that Novell transferred the UNIX marks to it in 1994: X/Open officially took possession of the UNIX trademark earlier this year after Novell's announcement in October 1993 that it would transfer the UNIX brand to X/Open's control. 40. Apparently certain Novell employees were directly and/or indirectly aware of the Novell-X/Open scheme and publicly suggested that X/Open was not the UNIX marks lawful owner or registrant, including, among others, Novell employee Martin Sohnius in the following public newsgroup postings: a. "UNIX vs. NT" dated September 23, 1994, responding to the posted comment "Novell doesn't own the trademark any more," Mr. Sohnius states: "I believe the legal situation is a bit subtler than that (read those trademark acknowledgments carefully!)..."

11

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 12 of 83

b. "Re: Unix tm" dated October 18, 1994, Mr. Sohnius states: "I believe the current wording is: UNIX is a Registered Trademark, licensed exclusively by X/Open Ltd. (note that is does *not* state who owns the trademark :-)." 41. Novell's willful use of deceptive UNIX mark acknowledgements substantially similar to said first acknowledgement set forth above in press releases excluding and concealing Novell as the UNIX marks lawful owner includes, among others, a January 10, 1995 press release entitled "Novell Introduces UnixWare(R) 2" archived at www.archive.org by "Internet Archive Wayback Machine" (hereinafter "Wayback") on June 6, 1997. 42. Novell willfully implied publicly that X/Open was the UNIX marks lawful owner at its website trademark legal pages entitled "Copyright © 1996 Novell, Inc.," Wayback archived on October 22, 1996 and on December 20, 1996, therein using a deceptive UNIX mark acknowledgement substantially similar to said first acknowledgement set forth above. 43. Novell sent letters to persons by U.S. mail instructing use of deceptive UNIX mark attributions substantially similar to said first acknowledgement set forth above include, among others, Novell Director of Software Licensing Stephen Baker's letters sent to Novell's primary UNIX software licensees in or about 1994, discussed in a September 29, 1994 public Internet newsgroup posting entitled "UNIX or Unix?", wherein Unisys Corp. employee Gary Greene states therein "This letter details the transfer of control of the UNIX trademark to X/Open Company Ltd.", reasonably relying upon said letter he states "I cannot think of a more authoritative source..." and quotes Mr. Baker as stating in his July 29, 1994 letter to Unisys Corp. (a Novell UNIX software licensee) that the attribution for the UNIX trademark has changed to the following: "UNIX is a registered trademark in the United States and other countries,

12

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 13 of 83

licensed exclusively through the X/Open Company Limited." 44. X/Open willfully issued deceptive and/or false original issue and renewal copy (of original issue and believed annual) technology certification Certificates in and after 1995 (herein as the "Certificates") to UNIX source code software licensees, X/Open's technology licensees, licensees' customers and other third parties, and many, but not all, relate to compliance with versions of X/Open's "Single UNIX Specification" that is associated with the Novell-X/Open UNIX trademark re-licensing business and its unlawful use of the two previous UNIX mark registrations. The Certificates include deceptive UNIX mark acknowledgements similar to said first acknowledgement set forth above, and are associated with, among others: "Base", "UNIX 93 Profile", "UNIX 93", "Base 95" and "UNIX 95" certification, and these actions reasonably contemplated regular use of U.S. mail and/or wire communications. 45. X/Open's false Certificates include, among others: a. "UNIX 93 Profile" Certificate No. P1050 originally signed by X/Open President and CEO Geoffrey E. Morris and issued to Novell, first issue date of March 9, 1995 and believed to have been mailed and/or wired by X/Open to Novell on about March 1995, and b. "UNIX 93" Certificate No. P1086 (renewal copy) believed originally signed by X/Open President and CEO Geoffrey E. Morris and issued to Unisys Corporation ("Unisys"), December 22, 1995 first issue date and believed to have been mailed and/or wired by X/Open to Unisys on about December 1995. 46. X/Open willfully used deceptive UNIX mark acknowledgements in documents relating to its Certificates substantially similar to said first acknowledgement set forth above and these documents include, among others, its trademark licensing agreement entitled "Trade Mark License Agreement (January 1995)" in "Part 7 of How to Brand-What to Buy" at "Schedule 5:

13

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 14 of 83

Trade Mark Usage Guide", and these actions reasonably contemplated regular use of U.S. mail and/or wire communications. 47. Despite Novell's and X/Open's representations that X/Open owned the UNIX marks, Novell confirmed its continuing UNIX marks ownership in 1994 and 1995 in UNIX trademark enforcement actions that included, among others, the following: a. Novell executed and filed before the TTAB trademark Opposition No. 91095813, Novell, Inc. v System Six, Inc., it was acknowledged and accepted by the TTAB on about August 29, 1994, and it is believed Novell stated in the complaint it was the UNIX marks owner. In said action Novell executed and filed a motion by mail on about September 1, 1995, just prior to the UNIX marks 1995 APA transfer from Novell to Santa Cruz, and said motion was approved by the TTAB on about September 20, 1995; b. Andrew P. Bridges of "Wilson, Sonsini, Goodrich & Rosati", as attorneys for the opposer Novell, executed and filed before the TTAB trademark Opposition No. 91095421, Andrew P. Bridges v Sabrina C. Stavish Sheridan, Ross & McIntosh, it was acknowledged and accepted by the TTAB on about September 19, 1994, and it is believed the complaint included a statement that Novell owned the UNIX marks; and c. Novell executed on about October 19, 1994 and filed before the TTAB on about October 24, 1994 trademark Opposition No. 91096202, Novell Inc. v The City of Glendale, and Novell stated therein in ¶ 3 "In the United States, Novell owns the following federal registrations and applications for UNIX and UNIX-related marks" and lists ownership of UNIX mark Registration No. 1392203 and No. 1390593. Novell's 1995 Sale of the UNIX and UNIXWARE Trademarks to Santa Cruz 48. Novell was the owner and registrant of the UNIX and UNIXWARE trademarks and

14

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 15 of 83

owner of all versions and/or editions of the UNIX definition specifications and software test suites of AT&T and/or USL in September 1995, including, among others, the SVID specifications and the SVVS software test suites. 49. Novell declared that it was transferring the UNIX and UNIXWARE marks to Santa Cruz in its September 18, 1995 Board Meeting minutes stating "Novell will retain all of its patents, copyrights and trademarks (except for the trademarks UNIX and UnixWare),...". Novell entered this document as evidence on about November 8, 2004 in the civil suit styled SCO Group v Novell, Case No. 2:04cv00139, U.S. District of Utah filed January 20, 2004. 50. Novell and Santa Cruz entered into a UNIX Business Asset Purchase Agreement dated September 19, 1995 ("APA"), wherein they agreed in § I of Schedule 1.1(a) thereto entitled "Assets" that Santa Cruz would purchase all of the original registrant's ongoing and existing business to which the UNIX marks pertain. The transferring assets included, among others: UNIX software products, product documentation, definition specifications and software verification test suites; UNIX software source code and trademark licensing and/or re-licensing businesses; UNIX licensee contracts and agreements; and certain intellectual property that included the two UNIX and two UNIXWARE trademarks. They agreed that Novell would receive a significant percentage of future licensing fees paid to Santa Cruz by certain UNIX licensees in consideration for the agreed upon purchase price. 51. The APA Schedule 1.1(a) in § V entitled "Intellectual Property" specifically identifies UNIX and UNIXWARE as trademarks transferring from Novell to Santa Cruz, listing them in APA Attachment C, Seller Disclosure Schedule entitled "Trademark Status Report" as marks owned by Novell in September 1995. 52. UNIX businesses transferring from Novell to Santa Cruz pursuant to the APA

15

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 16 of 83

included, among others, one referred to and/or described as a UNIX Trademark Re-Licensing business, and Attachments "B" and "G" to the APA "Seller Disclosure Schedule" identify a related agreement transferring to Santa Cruz as follows: "May 10, 1994 Trademark ReLicensing Agreement Between Seller and X/Open Company, Ltd." 53. Novell and Santa Cruz are the only parties to the 1995 APA and its amendments. 54. Amendment No. 1 executed on about December 6, 1995 and Amendment No. 2 dated about October 16, 1996 are the only two amendments to the 1995 APA, and they do not modify § V in Schedule 1.1(a). 55. Pursuant to the APA as modified by Amendments No. 1 and No. 2, Santa Cruz was the lawful owner of the UNIX marks in and after December 1995. 56. Novell was not the UNIX marks lawful owner after 1995, and in association with the APA it entered into an agreement to license back the UNIX technology transferring to Santa Cruz in a Technology Licensee Agreement dated about December 6, 1995, therein agreeing, inter alia, Novell would not compete with certain core Santa Cruz software products that apparently included UNIX. 57. On information and belief, Novell re-confirmed to Santa Cruz that as the UNIX marks owner it lawfully transferred the UNIX marks to Santa Cruz pursuant to the APA, and Santa Cruz informed certain of its employees in and/or after September 1995 and prior to about September 1996 that the APA transferred the UNIX marks to it, including, among others, former Santa Cruz employee John R MacMillan, who, in an Internet newsgroup posting entitled "Re: Linux != UNIX " dated June 24, 1997, stated the following: ... I was at SCO when they acquired the UNIX property from Novell, and the understanding we were given at that time was that what Novell had really given X/Open was the exclusive right to license the trademark, not the trademark itself, and that's why at the time the attribution was:

16

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 17 of 83

"UNIX is a registered trademark in the United States and other countries, licensed exclusively though X/Open Company Ltd." Santa Cruz Joins the Corrupt Enterprise 58. Santa Cruz evidently joined the Novell-X/Open corrupt enterprise and scheme about September 1996, and signed one or more agreements and letters relating to their scheme and the UNIX marks, with one such agreement in September of 1996 referred to as a Confirmation Agreement, a document that Gray reasonably believes is backdated and was created and/or executed after 1996 for the purpose of concealing Novell's fraud upon the software industry, namely its continuing UNIX marks ownership after 1993 and its 1995 APA UNIX marks transfer to Santa Cruz, and criminally influencing anticipated future official proceedings, because once credibility in the software industry is lost it is difficult, if not impossible to regain, and may result in severe damage to a company's business. 59. On information and belief, Novell, Santa Cruz and X/Open confirmed their scheme in documents and communications agreeing, inter alia, to: a. conceal the 1995 APA transfer of the UNIX and UNIXWARE marks and associated UNIX mark (re)licensing business, contracts and agreements from Novell to Santa Cruz; b. conceal Santa Cruz's UNIX marks lawful ownership in and after December 1995; c. continue concealment of their scheme and prior and continuing fraudulent acts relating to the UNIX marks; d. continue falsely implying or stating publicly that X/Open owns the UNIX marks at their websites, in letters, press releases and other documents and communications; and e. use the UNIX mark re-licensing and certification business and its fraudulent UNIX marks ownership representations to influence and/or control interstate and international

17

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 18 of 83

commerce in certain government and commercial computer software markets; which actions reasonably contemplated regular use of U.S. mail and/or wire communications. 60. To advance their scheme, Novell, X/Open (also known as "The Open Group" in and after 1996) and Santa Cruz agreed to use false UNIX mark acknowledgements in and/or after 1996 that omit and fraudulently conceal Santa Cruz as the UNIX marks lawful owner and falsely state X/Open is the UNIX marks lawful owner and/or registrant, and said statements (hereinafter the "second acknowledgements") were substantially similar to one of the following: Motif, OSF/1 and UNIX are registered trademarks and the 'X' Device and The Open Group are trademarks of the Open Group; Motif, OSF/1, UNIX, and the "X" Device are registered trademarks, and IT DialTone and The Open Group are trademarks of The Open Group in the U.S. and other countries; and UNIX is the registered trademark of The Open Group. 61. Novell willfully used false UNIX mark acknowledgements prior to and after November 1998 substantially similar to said second acknowledgements in, among others, its: a. legal notice website pages entitled "Copyright © 1997 Novell, Inc.," Wayback archived on January 16, 1997, on April 18, 1997 and on June 5, 1997; b. 1996 Annual Report to shareholders published in or about February 1997 at "Other Information" on its web site, and Wayback archived on April 20, 1997 and accessible from its website pages entitled "Novell 1996 Annual Report" Wayback archived on April 19, 1997; and c. hardcopy 1997 Annual Report at "Other Information", believed published and sent to its shareholders and others on or about February 1998 using U.S. mail and/or wire communications. 62. X/Open willfully used UNIX mark acknowledgements substantially similar to said second acknowledgements falsely stating prior to and after November 1998 that it was the

18

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 19 of 83

UNIX marks owner and/or registrant in original issue and renewal copy (of original issue and believed annual) Certificates associated with its UNIX re-licensing and its technology certification business, unlawfully using the two previous UNIX mark registrations in Certificates for certifications that include, among others, "UNIX 93", "UNIX 95", "UNIX 98" and UNIX 03", and these actions reasonably contemplated regular use of U.S. mail and/or wire communications with its licensees, licensees' customers and others. Said licensees include Digital Equipment Corp/Hewlett-Packard Corp., Fujitsu Ltd, Hitachi Ltd, International Business Machines Corporation ("IBM"), NRC Corp., NEC Corp., Santa Cruz/SCO, Silicon Graphics, Inc., Sequent Computer Systems, Inc., Sun Microsystems, Inc. ("SUN"), Unisys and others. 63. X/Open's false Certificates include, among others: a. Certificate No. P1131 issued to SUN for "UNIX 98", first issue date of May 20, 1998 and believed sent by X/Open using U.S. mail and/or wire to SUN on or about May 1998 (original signed by then X/Open President and CEO Joseph De Feo prior to the October 1998 announcement of his departure, and in which the mark acknowledgement falsely states, "Motif, OSF/1, UNIX and the "X" device are registered trademarks and IT DialTone and The Open Group are trademarks of The Open Group in the US and other countries"). It is believed SUN relied upon this and other false X/Open Certificates dated in and after 1995, in turn sending them to others by mail and/or wire; b. Certificate No. P1129 issued to IBM for "UNIX 98", first issue date of May 20, 1998 and believed sent by X/Open using U.S. mail and/or wire to IBM on or about May 1998 (original signed by then X/Open President and CEO Joseph De Feo and includes the same false UNIX mark acknowledgement as Certificate No. P1131 above). It is believed IBM relied upon this and other false X/Open Certificates that were dated in and after 1995, in turn sending them

19

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 20 of 83

to others by mail and/or wire. 64. X/Open willfully used UNIX mark acknowledgements substantially similar to said second acknowledgements falsely stating X/Open was the owner and/or registrant of the UNIX marks prior to and after November 1998 in its books that include, among others, the following: a. "Go Solo 2", ISBN 0-13-575689-8, published May 1997 by The Open Group, a copy sent by Amazon.com marketplace Bookmonk bookstore using U.S. mail to Gray on about March 9, 2004; and b. "CAE Specification Systems Management: Common Management Facilities", ISBN 1-85912-174-8, published October 1997 by The Open Group, a copy sent by Amazon.com marketplace Alibris bookstore using U.S. mail to Gray on about April 20, 2004; and these actions reasonably contemplated regular use of the U.S. mail. 65. X/Open employee Andrew Josey falsely published in 1997 that X/Open owned the UNIX marks in a public Internet newsgroup posting entitled "Is Unixware exactly SVR4 ????" dated April 17, 1997, stating: "Yes, but legally this [UNIX trademark] was deeded to The Open Group from Novell not from SCO" in response to the comment therein: "The UNIX trademark is *now* owned by The Open Group. I believe you will see the trademark changed to reflect that." 66. X/Open willfully used false UNIX mark acknowledgements substantially similar to said second acknowledgements at "Schedule 5: Trademark Usage Guide" to its trademark licensing agreement entitled "The Open Brand Trade Mark License Agreement January 1998" copyright January 1998, and these actions reasonably contemplated regular use of U.S. mail and/or wire communications with its licensees, licensees' customers and other third parties.

20

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 21 of 83

67. X/Open falsely stated at its website in June 1997 that it was the registrant of the UNIX marks, willfully used and instructed use of false UNIX mark acknowledgements similar said second acknowledgements, and confirmed that Novell continued its instruction of thirdparties use of said acknowledgements, as revealed in public Internet newsgroup postings that include, among others, one entitled "Re:Linux!=UNIX" by Mr. Joel Gallun dated June 18, 1997, wherein he quotes from The Open Group's website ("From http://www.rdg.opengroup.org/ unix/../unix/trademark.html ...."): Some trade mark attributions still say Novell (or even AT&T or Bell Labs), which is correct? UNIX® is a registered trademark of The Open Group. The correct attributions are either: "UNIX is a registered trademark of The Open Group" or before X/Open Company became part of The Open Group "UNIX is a registered trademark in the United States and other countries, licensed exclusively though X/Open Company Ltd." All existing Licensees have been instructed by Novell that they should now use the correct attribution. Any other attribution is incorrect. * * * Motif®, OSF/1®, X/Open® and UNIX® are registered trademarks and the X deviceTM and The Open GroupTM are trademarks of The Open Group. 68. X/Open willfully used false UNIX mark acknowledgements similar to said second acknowledgements prior to and after November 1998 at its website pages, among others, entitled: a. "The Open Group Trademarks" Wayback archived on February 12, 1998 and on June 24, 1998; b. "UNIX System" Wayback archived on May 26, 1998; c. "Who Owns What?" Wayback archived May 26, 1998.

21

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 22 of 83

69. Santa Cruz willfully used false UNIX mark acknowledgements prior to and after November 1998 substantially similar to said second acknowledgements in press releases that include, among others, the following: a. "Computer Telephony Industry Embraces SCO's High-Volume Unix Market" dated and publicly Internet posted March 4, 1997; b. "SCO Announces Support for Network Computing Standards" dated and publicly Internet posted November 14, 1997; c. "SCO's UnixWare System Fuels Award-Winning Servers" dated and publicly Internet posted April 1, 1998; and d. "SCO Ranks #1 In What Matters Most To VARs" dated and publicly Internet posted October 19, 1998; actions which reasonably contemplated regular use of U.S. mail and/or wire communications. 70. On information and belief, X/Open and/or its UNIX mark certification business licensees (under instruction from X/Open), persuaded the U.S. Air Force ("USAF"), U.S. Navy ("USN"), the U.S. Internal Revenue Service ("IRS"), the National Aeronautics and Space Administration ("NASA"), U.S. Department of Defense ("DoD") and other U.S. federal government departments and/or agencies to require compliance with X/Open's "Single UNIX Specification" ("SUS") associated with X/Open's UNIX trademark re-licensing business unlawfully using the two previous UNIX mark registrations, as a vendor qualification requirement in certain procurement in and after 1995. The bidders' compliance requirements in certain government procurements are confirmed by X/Open in its document "Value of Procurements: By Year, Governments and Commercial" dated February 17, 2002. 71. On information and belief, many of X/Open's UNIX mark certification licensees

22

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 23 of 83

were direct and/or indirect vendors to the USAF, USN, IRS, NASA and DoD in and/or after 1995, and certain of its licensees submitted Certificates and/or associated documents to the USAF, USN, IRS, NASA and DoD falsely representing X/Open was the UNIX marks lawful owner and relating to compliance with X/Open's SUS as vendor qualification and/or bidders compliance requirements in certain government procurements in and after 1995. These actions reasonably contemplated regular use of U.S. mail and/or wire communications with its licensees, licensees' customers, government departments and/or agencies and other third parties. The False 1998 UNIX Marks Assignment & Its Fraudulent 1999 PTO Recordation 72. Novell and X/Open, with Santa Cruz's knowledge and co-operation, willfully entered into a purported UNIX mark "Deed of Assignment" dated November 13, 1998 that includes a trademark "Schedule" (herein collectively the "Assignment"), with the intent to record said Assignment at the PTO. Gray reasonably believes this is a backdated document created and/or executed after 1998 for the purpose of criminally influencing the outcome of anticipated future official proceedings. 73. In the 1998 Assignment Novell and X/Open falsely represent that Novell is the "Assignor" and X/Open is the "Assignee," falsely stating, "The Assignor is the Proprietor of the trade marks referred to in the schedule attached hereto...," and falsely stating that Novell as "the Assignor hereby assigns unto the Assignee all property, right, title and interest in said trade marks with the business and goodwill attached to the said trade marks." The Assignment "Schedule" falsely includes and represents that UNIX mark Registration No. 1392203 and No. 1390593 are owned by Novell in November 1998, as Novell, X/Open and Santa Cruz knew or should have known that Novell did not assign any UNIX business assets associated with the UNIX marks to X/Open in or prior to 1998, that Novell was not the lawful owner of the UNIX

23

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 24 of 83

marks after 1995 and that the Assignment was a willfully misleading and false document. 74. On June 22, 1999 X/Open executed a PTO Trademark Conveyance Form ("PTO Form"), PTO Trademark Library Reel 001920 at frames 0794 and 0795, and filed the PTO Form (herein the "Recordation") before the PTO on about June 22, 1999, knowingly and willfully attaching thereto the false Assignment, a mere two months after Gray's April 1999 iNUX mark PTO trademark application, and Novell, X/Open and Santa Cruz knew or should have known that Recordation of the Assignment before the PTO was a fraudulent act upon the PTO. 75. On information and belief, as a part of the continuing scheme Novell conspired in or about 1999 with X/Open's cooperation that it would develop and market a version of the Linux operation system to include proprietary technology components of Novell's network software products and the UNIX operating system in an effort to, among other things, regain its Netware networking software market domination over Microsoft, and "INUX" was a preferred product name. 76. Novell, X/Open and Santa Cruz agreed in or about 1999 that X/Open would falsely state it owned the UNIX marks in trademark actions before the PTO, in trademark usage and/or enforcement letters and initiate objectively baseless sham UNIX trademark enforcement suits to, inter alia, advance their scheme, continue fraudulent concealment of their prior and continuing fraudulent acts, promote and profit from their UNIX licensing businesses unlawfully using the two previous UNIX mark registrations and increase their influence and/or control of interstate and international commerce in certain computer software markets, and these actions reasonably contemplated regular use of U.S. mail and/or wire communications. 77. On information and belief, X/Open sent and continues to send fraudulent trademark enforcement letters by U.S. mail and/or wire to companies, among others, that it eventually

24

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 25 of 83

opposed in PTO actions in 1999 and through 2001, falsely representing therein that X/Open owned the UNIX marks, warning said companies that their respective mark and/or mark use infringed upon the UNIX marks, demanding they abandon their respective mark applications and/or registrations in the PTO, and said actions include the following: a. fraudulent letter sent by U.S. mail and/or wire to Syntunix, LLC and/or its counsel on or about 1999 warning the SYNTUNIX mark infringed upon the UNIX marks; b. fraudulent letter sent by U.S. mail and/or wire to Financial Data Corp. and/or its counsel on or about 1999 warning the CUNIX mark infringed upon the UNIX marks; c. fraudulent letter sent by U.S. mail and/or wire to UBIX Corporation and/or its counsel on or about 1999 warning the UBIX mark infringed upon the UNIX marks; d. fraudulent letter sent by U.S. mail and/or wire to IPC Unipost and/or its counsel on or about 1999, warning the UNEX mark infringed upon the UNIX marks; e. fraudulent letter sent by U.S. mail and/or wire to Unex Technology, Inc. and/or its counsel on or about 2000 warning the UNEX mark infringed upon the UNIX marks; and f. fraudulent letter sent by U.S. mail and/or wire to R. Wayne Bost Trucking, Inc. and/or its counsel on or about 2000 warning the registered UNIXTRACS trademark infringed upon the UNIX marks. 78. X/Open, through counsel, knowingly made materially false UNIX trademark ownership representations to the TTAB and defendants in TTAB actions in 1999 and through 2001 in objectively baseless sham complaints. X/Open's standing in its sham TTAB actions was and is based upon the false 1998 UNIX marks Assignment and its fraudulent 1999 Recordation as it knew or should have known that a detailed and truthful UNIX marks chain of title would reveal that Novell transferred the UNIX marks to Santa Cruz pursuant to the 1995 APA, that

25

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 26 of 83

Santa Cruz was the lawful owner of the UNIX marks in and after December 1995, and that Novell did not lawfully assign the UNIX marks to X/Open in the purported 1998 Assignment; it knew or should have known that probable cause cannot exist where lawful standing does not exist, knowingly having no standing it expected to prevail only using the petitioning process itself as opposed to a merit-based outcome; and but for the false 1998Assignment and its fraudulent 1999 Recordation, the PTO would not have permitted X/Open's UNIX mark opposition, cancellation and other actions related to the UNIX marks. 79. Through counsel, X/Open filed an objectively baseless sham trademark Notice of Opposition before the TTAB using the U.S. mail on about June 16, 1999 as Opposition No. 91114431, X/Open Company Limited v. Syntunix, LLC., and sent it using U.S. mail and/or wire to Syntunix, LLC. and/or its counsel on or about June 1999. X/Open therein falsely states "Opposer is the owner of, and successor in interest to, the following United States trademark registrations for the mark UNIX" and lists ownership of UNIX mark Registration No. 1392203 and No. 1390593. 80. Through counsel, X/Open filed an objectively baseless sham trademark Notice of Opposition before the TTAB using the U.S. mail on about July 27, 1999 as Opposition No. 91114893, X/Open Company Limited v. Financial Data Corp., and sent it using U.S. mail and/or wire to Financial Data Corp. and/or its counsel on or about July 1999. X/Open therein falsely states "Opposer is the owner of, and successor in interest to, the following United States trademark registrations for the mark UNIX" and lists ownership of UNIX mark Registration No. 1392203 and No. 1390593. 81. Through counsel, X/Open filed an objectively baseless sham trademark Notice of Opposition before the TTAB using the U.S. mail on about August 11, 1999 as Opposition No.

26

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 27 of 83

91114954, X/Open Company Limited v. UBIX Corporation, and sent it using U.S. mail and/or wire to UBIX Corporation and/or its counsel on or about August 1999. X/Open therein falsely states "X/Open is the owner of, and successor in interest to, the following United States trademark registrations for the mark UNIX" and lists ownership of UNIX mark Registration No. 1392203 and No. 1390593. 82. Through counsel, X/Open filed an objectively baseless sham trademark Notice of Opposition before the TTAB using the U.S. mail on about November 3, 1999 as Opposition No. 91115922, X/Open Company Limited v. IPC Unipost, and sent it using U.S. mail and/or wire to IPC Unipost and/or its counsel on or about November 1999. X/Open therein falsely states "X/Open is the owner of the following United States trademark registrations for the mark UNIX" and lists ownership of UNIX mark Registration No. 1392203 and No. 1390593. 83. Through counsel, X/Open filed an objectively baseless sham trademark Notice of Opposition before the TTAB using the U.S. mail on about April 26, 2000 as Opposition No. 91118446, X/Open Company Limited v. Unex Technology, Inc., and sent it using U.S. mail and/or wire to Unex Technology, Inc. and/or its counsel on or about April 2000. X/Open therein falsely states "X/Open is the owner of the following United States trademark registrations for the mark UNIX" and lists ownership of UNIX mark Registration No. 1392203 and No. 1390593. 84. Through counsel, X/Open filed an objectively baseless sham trademark Cancellation Petition before the TTAB using the U.S. mail on about August 17, 2000 as Cancellation No. 92030937, X/Open Company Ltd. v. R. Wayne Bost Trucking, Inc., and sent it using U.S. mail and/or wire to R. Wayne Bost Trucking, Inc. and/or its counsel on or about August 2000. X/Open therein falsely states "X/Open is the owner of the following United States trademark

27

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 28 of 83

registrations for the mark UNIX" and lists ownership of UNIX mark Registration No. 1392203 and No. 1390593. Defendants' Targeted Acts At Gray and Continuing Fraud Upon the PTO 85. X/Open, through counsel, executed and sent a fraudulent letter dated February 27, 2001 by U.S. mail to Gray entitled "Infringement of UNIX Trademark by iNUX, Inc.". Therein X/Open stated "UNIX has become a famous trademark..." and made false accusations relating to Gray and his "iNUX" mark, included, among others, the false statement "... X/Open Company Limited, owner of the UNIX trademark," and X/Open demanded Gray cease use of iNUX as a mark, business name, domain name or other identifier and abandon his iNUX trademark application. 86. Through counsel, X/Open filed an objectively baseless sham trademark Notice of Opposition before the TTAB using the U.S. mail on April 11, 2001 as trademark Opposition No. 91122524, X/Open Company Limited v. Wayne R. Gray, and sent it by U.S. mail and/or wire to Gray and/or his counsel on or about April 2001. X/Open therein falsely states "X/Open is the owner of the following United States trademark registrations for the mark UNIX", lists ownership of UNIX mark Registration No. 1392203 and No. 1390593 and states the UNIX mark is famous. 87. Gray, relying upon X/Open's knowing and willful materially false representations and statements in said February 27, 2001 infringement letter to Gray and in said X/Open v. Gray Opposition complaint, suspended iNUX business activities after receipt of X/Open's opposition complaint pending what he believed would be a quick resolution. 88. Negotiations ensued, but ultimately X/Open delayed the matter for eight months without reasonable explanation, finally forcing Gray, a person of limited means, to continue

28

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 29 of 83

business suspension and proceed with the opposition suit, and injury to Gray's good name and iNUX business and property was a foreseeable and intended consequence of X/Open's actions. Yet X/Open, as the purported owner of the "famous" UNIX marks, at that time was not even the owner of any existing "unix" Internet domain names. 89. X/Open's malicious targeting of Gray's iNUX property is confirmed in that in spite of its claims that the UNIX mark is "famous" it filed no PTO action against the trademark "UNIX" (Registration No. 2534586) published for opposition seven months prior to Gray's iNUX mark and registered on January 29, 2002 by a company unrelated to it. X/Open has filed no PTO actions against any mark relating to and in defense of their purported UNIX mark ownership, including many that include the word "unix," after filing its opposition to Gray's iNUX trademark application, including no PTO opposition to, and no petition to cancel, among others, the trademarks "UNIX-100" (Registration No. 2668450) or "UNIXIN" (Registration No. 2885179), registered respectively in 2002 and 2004, and no PTO opposition to the trademark applications "UNIX USA" (Serial No. 76492488) or "UNIXPRESS" (Serial No. 78513403), both opposition periods completed and notice of allowance mailed for each. 90. SCO purchased Santa Cruz's entire UNIX business, related assets and operations in a May 2001 UNIX business asset purchase, assumed its liabilities and became Santa Cruz's successor in interest in the corrupt enterprise and scheme. SCO was known as Caldera Systems or Caldera International in 2001, and formally changed its name to The SCO Group, Inc. in or about May 2003. SCO owns "OpenLinux" as its distribution version of Linux operating system software. In the industry, Santa Cruz is referred to as "SCO" prior to 2002 and The SCO Group, Inc. is referred to as "SCO" in and/or after 2002. 91. On June 12, 2003 X/Open executed a "Request That Database Be Updated To

29

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 30 of 83

Reflect Current Owner of Registration" relating to its claim of ownership of UNIX mark Registration No. 1392203 and/or No. 1390593, and filed it before the PTO on or about June 13, 2003, attaching the false 1998 Assignment and fraudulent 1999 Recordation. X/Open therein falsely states "...this registration was transferred from Unix System Laboratories, Inc. to Novell, Inc... Thereafter, the [UNIX mark] registration was assigned from Novell, Inc. to Registrant [X/Open]," willfully and deceptively omitting and concealing material facts of the UNIX marks' 1995 APA transfer from Novell to Santa Cruz, and falsely representing its ownership of UNIX mark Registration No. 1392203. 92. On information and belief, Novell, X/Open and SCO conspired in or about 2003 to allow the UNIX and UNIXWARE marks to expire and the consequential PTO cancellation in order to advance the concealment of Defendants' continuing scheme and associated fraudulent acts, realizing: a. they knew that the APA had been or would be entered into evidence in the civil suit SCO Group v IBM, Case No. 2:03cv0294, U.S. District of Utah, filed on about March 6, 2003, and its revelation that the UNIX marks lawful transfer from Novell to Santa Cruz in 1995 may result in discovery that the 1998 Assignment is a false document and its 1999 Recordation was a fraudulent act upon the PTO, and thus reveal their scheme; b. the PTO may require X/Open and/or SCO, as an alleged assignee(s), to submit a sworn chain of title affidavit with detailed documentary evidence to renew mark registrations; c. pursuant to Gray's continuing request in X/Open v Gray the TTAB may require X/Open to submit a sworn chain of title affidavit with detailed documentary evidence; and d. cancellations and new registrations might avoid such scrutiny. 93. Since at least 2002 SCO has made false public representations in press releases, at

30

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 31 of 83

its web site and elsewhere that the UNIXWARE marks transferred from it to X/Open. SCO documents falsely representing that X/Open is the registrant of the UNIX and UNIXWARE marks in acknowledgements substantially similar to "UNIX and UnixWare, used under an exclusive license, are registered trademarks of the Open Group in the United States and other countries" include, among others, the following: a. SCO web site pages entitled "Legal Notice", Wayback archived on October 11, 2002 and on December 2, 2003; b. SCO press release "Caldera to Change Name to The SCO Group" dated August 26, 2002, Wayback archived on September 2, 2002; c. SCO press release "SCO Manager v1.5 Wins Best Systems Administration Tool Award at LinuxWorld 2003" dated January 30, 2003, Wayback archived on February 1, 2003; and d. SCO press release "SCO Announces Intellectual Property License for Linux" dated August 5, 2003, Wayback archived on October 8, 2003; actions which reasonably contemplated regular use of U.S. mail and/or wire communications. 94. Since at least 2003 X/Open has made false public representations that SCO transferred the UNIXWARE marks to it in or prior to 2003 in press releases and at its website and elsewhere, and such documents include, among others, its press release entitled "Backgrounder on the UNIX® System and SCO/IBM legal action" updated May 22, 2003, Wayback archived on June 3, 2003. 95. SCO and IBM are parties to the civil suit SCO Group v IBM, and are therein apparently contesting SCO's ownership enforcement rights in certain UNIX intellectual property, as SCO is alleging that IBM's misuse of SCO's valuable UNIX software source code

31

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 32 of 83

copyrights and/or trade secrets has resulted in several billion dollars in damages to SCO. 96. In the SCO Group v IBM lawsuit, Steven Sabbath, Santa Cruz Vice President of Law and Corporate Affairs throughout 1995 and 1996, and Jim Wilt, a Santa Cruz former employee negotiating for Santa Cruz with respect to the 1995 APA, state the 1995 APA transferred Novell's entire UNIX business assets to Santa Cruz in their declarations respectively dated November 19, 2004 and November 23, 2004; such assets by necessity would include the UNIX trademarks. SCO entered both documents as evidence on about December 1, 2004. 97. Novell purchased SuSE GmbH, Nürnberg, Germany and its SUSE Linux operating system distribution version software products and business on or about January 12, 2004. 98. SCO and Novell are the parties to the civil suit styled SCO Group v Novell, Case No. 2:04cv00139, U.S. District of Utah filed on about January 20, 2004, wherein they are contesting, inter alia, SCO's ownership of valuable software copyrights only identified as UNIX copyrights. 99. On information and belief, the prevailing party in SCO Group v Novell will introduce a version of Linux operating system software that will include proprietary UNIX operation system technology components and/or will license the UNIX technology to certain Linux software vendors and their customers with the intent of influencing and/or controlling the multi-billion dollar interstate and international UNIX and Linux software markets. 100. In the SCO Group v Novell suit, counsel for Novell (referring to the 1995 APA

Schedule 1.1(A) as discussed at ¶ 51 herein), confirmed the 1995 APA transferred the UNIX marks from Novell to Santa Cruz in a Motion Hearing on May 11, 2004 (hearing transcript dated June 24, 2004 and first viewed by Gray on June 25, 2004): We're still in Schedule 1.1(A). And if you go down to Roman V, there's a heading there for intellectual properties. So we're still in the included assets.

32

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 33 of 83

What intellectual property is being conveyed to SCO in this agreement? And the answer is a couple trademarks. No copyrights are shown. No patents are shown. Just a couple trademarks. In spite of Gray's specific May 2004 subpoena document request in X/Open v Gray, Novell never provided Gray with a copy of or even informed him of this document and its position therein that the 1995 APA transferred the UNIX marks from it to Santa Cruz. 101. Novell first confirmed that the UNIX and UNIXWARE marks 1995 APA transfer from Novell to Santa Cruz was never modified in its "Answer and Counterclaims" dated July 29, 2005, in the SCO Group v Novell suit, substantially stating: a. UNIX and UNIXWARE were trademarks owned by Novell in September 1995; b. the 1995 APA includes the UNIX and UNIXWARE trademarks as assets transferring from Novell to Santa Cruz; c. Amendment No. 1 and Amendment No. 2 are the only amendments to the APA; d. Novell and Santa Cruz are the only parties to the APA and its amendments; thus § V of Schedule 1.1(a) listing the UNIX and UNIXWARE marks as assets transferring from Novell to Santa Cruz was never modified by the APA as amended, and Novell has not denied and does not now deny that said transfer was never modified. 102. SCO, in its September 12, 2005 Reply to Novell's Counterclaim in the SCO Group v Novell suit, does not deny Novell's implications or statements above relating to the UNIX and UNIXWARE trademarks and the APA, and SCO does not now deny said transfer. 103. SCO also confirmed the UNIX and UNIXWARE marks transferred from Novell to Santa Cruz pursuant to the 1995 APA in its "Response to Office Action" correspondence to the PTO dated about August 3, 2005, filed in its "Unix System Laboratories" trademark application Serial No. 78438912 dated about June 21, 2004, stating:

33

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 34 of 83

In 1995, The Santa Cruz Operation, Inc. purchased all of the UNIX assets from Novell. As part of the transaction, Novell assigned the UNIX and UNIXWARE trademarks to The Santa Cruz Operation. In spite of Gray's specific May 2004 subpoena request in X/Open v Gray, SCO never provided Gray with a copy of or even informed him of this document and its position therein that the 1995 APA transferred the UNIX marks from Novell to Santa Cruz. 104. The continuing scheme appears to be becoming more difficult to maintain, because now X/Open contradicts Novell and SCO, falsely stating under oath in its November 1, 2004 response to Gray's Second Set of Interrogatories No. 7 in X/Open v. Gray that SCO (and thus Santa Cruz as SCO's predecessor) never owned the UNIX marks. 105. After allowing the original UNIXWARE registrations to expire without renewal, X/Open executed and filed before the PTO a new trademark application for the same "UNIXWARE" mark on March 9, 2006 as application serial No. 78833448; this was less than 40 days after the PTO canceled UNIXWARE mark registration No. 2241666, in order to further Defendants' scheme, conceal fraud and obstruct justice. As the purported owner of said first registration, X/Open, as a reasonable option, could have filed before the PTO a "Request for Reinstatement of Registration" for the canceled UNIXWARE mark, however, it did not. In its trademark application for the mark "UNIXWARE" at "Prior registration(s)" X/Open states "Applicant claims ownership of [UNIX] U.S. Registration Number(s) 1390593 and 1392203," and willfully and deceptively omitted and concealed the material facts of its purported prior UNIXWARE marks ownership. Defendants' Fraudulent Concealment and Obstruction of Justice 106. Although Gray diligently and continuously investigated the facts relating to X/Open's claims in its February 2001 letter to him and in its sham April 2001 complaint in the

34

Case 8:06-cv-01950-JSM-TGW

Document 1

Filed 10/23/2006

Page 35 of 83

TTAB proceeding styled X/Open v. Gray, he did not and could not have suspected fraud relating to the UNIX marks 1998 Assignment, its 1999 Recordation, and X/Open's purporte