SCO Grp v. Novell Inc
NOTICE of Corrected Filing by Novell, Inc. re 273 MOTION for Partial Summary Judgment on SCO's Non-Compete Claim in its Second Claim for Breach of Contract and Fifth Claim for Unfair Competition (Sneddon, Heather)
SCO Grp v. Novell Inc
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MORRISON & FOERSTER LLP Michael A. Jacobs (pro hac vice) Kenneth W. Brakebill (pro hac vice) Grant L. Kim (pro hac vice) 425 Market Street San Francisco, CA 94105-2482 Telephone: (415) 268-7000 Facsimile: (415) 268-7522 ANDERSON & KARRENBERG Thomas R. Karrenberg, #3726 John P. Mullen, #4097 Heather M. Sneddon, #9520 700 Chase Tower 50 West Broadway Salt Lake City, UT 84101 Telephone: (801) 534-1700 Facsimile: (801) 364-7697 Attorneys for Defendant and Counterclaimant Novell, Inc.
IN THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION
THE SCO GROUP, INC., a Delaware corporation, Plaintiff and CounterclaimDefendant, vs. NOVELL, INC., a Delaware corporation, Defendant and CounterclaimPlaintiff.
NOVELL'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON SCO'S NON-COMPETE CLAIM IN ITS SECOND CLAIM FOR BREACH OF CONTRACT AND FIFTH CLAIM FOR UNFAIR COMPETITION Case No. 2:04CV00139 Judge Dale A. Kimball
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Novell, Inc. ("Novell") moves the Court for partial summary judgment as to The SCO Group, Inc.'s ("SCO's") non-compete claim in its Second Claim for breach of contract and Fifth Claim for unfair competition. Federal Rule of Civil Procedure 56 permits the Court to grant partial summary judgment if the pleadings, discovery, and affidavits show that there is no genuine issue of material fact and that Novell is entitled to judgment as a matter of law. SCO's non-compete claim is based on the assertion that the Asset Purchase Agreement ("APA") and Technology License Agreement ("TLA") each contained a non-compete clause that prohibited Novell from using Licensed Technology to compete with SCO's core operatingsystem products. SCO has asserted essentially the same non-compete claim as part of both its Second Claim for breach of contract, and its Fifth Claim for unfair competition. Novell is entitled to summary judgment on SCO's non-compete claim for three independent reasons. First, the plain language of the TLA and the APA demonstrates that the clause cited by SCO is merely a limitation on the scope of Novell's retained license, and not an affirmative covenant not to compete. As a matter of law, SCO may not use this limitation on the scope of Novell's license as a "sword" to bring a claim for breach of an affirmative covenant that simply does not exist. Second, the contracts expressly provide that the limitation on the scope of Novell's license shall "cease to exist" upon Santa Cruz's sale of substantially all of its assets. The undisputed facts establish that Santa Cruz sold substantially all of its assets to SCO's predecessor, Caldera, in 2001. This sale terminated the contractual limitation on which SCO relies.
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Finally, under controlling California law, a covenant not to sell competing products is void except in narrow circumstances that do not apply here. Therefore, even if the TLA imposed an affirmative non-compete obligation that was not automatically terminated by the Change of Control, this obligation would be void as a matter of law. Accordingly, Novell respectfully requests that its motion for partial summary judgment be granted. DATED: April 20, 2007 ANDERSON & KARRENBERG
/s/ Heather M. Sneddon Thomas R. Karrenberg John P. Mullen Heather M. Sneddon -andMORRISON & FOERSTER LLP Michael A. Jacobs (pro hac vice) Kenneth W. Brakebill (pro hac vice) Grant L. Kim (pro hac vice) Attorneys for Defendant and Counterclaim-Plaintiff Novell, Inc.
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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 20th day of April, 2007, I caused a true and correct copy of NOVELL'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON SCO'S NON-COMPETE CLAIM IN ITS SECOND CLAIM FOR BREACH OF CONTRACT AND FIFTH CLAIM FOR UNFAIR COMPETITION to be served to the following: Via CM/ECF: Brent O. Hatch Mark F. James HATCH JAMES & DODGE, P.C. 10 West Broadway, Suite 400 Salt Lake City, Utah 84101
Stuart H. Singer William T. Dzurilla Sashi Bach Boruchow BOIES, SCHILLER & FLEXNER LLP 401 East Las Olas Blvd., Suite 1200 Fort Lauderdale, Florida 33301 David Boies Edward J. Normand BOIES, SCHILLER & FLEXNER LLP 333 Main Street Armonk, New York 10504 Devan V. Padmanabhan John J. Brogan DORSEY & WHITNEY, LLP 50 South Sixth Street, Suite 1500 Minneapolis, Minnesota 55401 Via U.S. Mail, postage prepaid: Stephen Neal Zack BOIES, SCHILLER & FLEXNER LLP 100 Southeast Second Street, Suite 2800 Miami, Florida 33131 /s/ Heather M. Sneddon
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