SCO Grp v. Novell Inc

Filing 858

NOTICE OF FILING OF OFFICIAL TRANSCRIPT for dates of March 11, 2010-Jury Trial before Judge Ted Stewart, re 567 Notice of Appeal,. Court Reporter/Transcriber Patti Walker, CSR, RPR, CP, Telephone number [phone]. NOTICE RE REDACTION OF TRANSCRIPTS: Within 7 business days of this filing, each party shall inform the Court, by filing a Notice of Intent to Redact, of the parties intent to redact personal data identifiers from the electronic transcript of the court proceeding. The policy and forms are located on the court's website at www.utd.uscourts.gov. Please read this policy carefully. If no Notice of Intent to Redact is filed within the allotted time, this transcript will be made electronically available on the date set forth below. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 5/10/2010. Redacted Transcript Deadline set for 5/20/2010. Release of Transcript Restriction set for 7/19/2010. (Attachments: # 1 Part Two, # 2 Part Three)(jmr) Modified by removing restricted text on 7/19/2010 (rks).

SCO Grp v. Novell Inc

Doc. 858 Att. 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor. THE COURT:

(12:10 p.m.) I understand that there are some of you Ms. Malley did not

who are protesting my time keeping.

indicate to me any specific names, but I try to keep us going. jury in? MR. JACOBS: THE COURT: Not from us, Your Honor. Ms. Malley, if you would, please. I'm Do you have anything, counsel, before we bring the

curious, Mr. Normand, Mr. Singer, why you don't have the words below the deposition? MR. NORMAND: Is there some conscious effort?

There was no conscious decision, Your

It was my understanding was it was something that

was very difficult to accomplish. MR. SINGER: Part of it was we had edited out

objections that weren't being made, and that couldn't have been apparently done from running transcript. MR. JACOBS: Just on that point, Your Honor, we're

going to try to make sure that the objections are edited out going forward. but -THE COURT: It is really quite distracting. It is You have been kind not to call us on it

even more so than, well, I do -- I don't know which is better in terms of whether you should have the banner below or not, but it is kind of like going to a basketball game and spending the whole time looking at the screen, the 508

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floor, because you become distracted by those words moving below it. I will not stop either of you from doing it or

not doing it, I was just curious why the decision was made for one to do it and the other not. Mr. Singer, did you have something? MR. SINGER: There is. What we're trying to clarify

is one of the witnesses that we plan to call tomorrow there has been a concern that somehow he is not properly listed. And we are trying to get to the bottom of it. pretrial order signed by the court. He is on the

There has been a

suggestion that he was not on a more recent order and Mr. Jacobs and I have been trying to work through that issue. But right now there is nothing we need to take up

with Your Honor. THE COURT: day? MR. HATCH: I will start bringing that every day. I All right. Was his name read the first

can look again, but I am pretty sure he was. THE COURT: MR. HATCH: Is his name on my witness list? That is the problem, Your Honor, Troy

Keller is the name. MR. SINGER: the court. He was on the pretrial order signed by

We would need to check to see whether he was on

the list that was read. MR. JACOBS: He is not on the list. 509

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MR. HATCH: MR. JACOBS: He is a lawyer. up to you. THE COURT: THE CLERK:

He is not on the list, I agree with that. There may be a set of privilege issues. So we'll try and work this out and get it

All right. All rise for the jury.

(Whereupon, the jury returned to the courtroom.) THE COURT: please. (Whereupon, the deposition continued.) Q. Did you draft any of the language of the Asset Go ahead, Mr. Jacobs, if you would,

Purchase Agreement? A. Q. Agreement? A. No, not really. I think there was, you know, No. Did you review drafts of the Asset Purchase

a -- a -- prior to the Asset Purchase Agreement there was some kind of letter of intent or -- or high level deal, and I'm sure I reviewed that carefully, but once we -- the trans- -- translation from the sort of two- or three-page deal to the Asset Purchase Agreement -- you know, had a great team to do that, and they didn't -- they only came to me if there was a debate about the translation process. So -Q. Do you recall any of the debates that they came 510

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to you about on the translation process? A. Q. A. Q. Not in detail, no. Even -- even vaguely? Not really. But sitting here today, you don't have any

recollection of being involved in the negotiation of Amendment Number 1? A. I -- same answer. I was involved in the

negotiations of all of the agreements, and I don't have any recollection specific to any particular agreement. Q. Is the same true of Amendment Number 2? Were you

-- do you have any recollections of being involved -specific recollections of being involved in the negotiations of Amendment Number 2? A. Q. I don't even know what Amendment Number 2 is. Fair enough. Let's talk a bit about the I'm going to hand you

declaration you gave in this action. a copy of it.

Let's mark this as exhibit -- I think Do you recognize

we're -- the first one is Exhibit 241. this document? A.

This is a declaration I gave in regard to the

case with IBM, not the case with Novell, correct? Q. That is correct, as far as I understand. Now,

I'm -- the last page, that's your signature above the line, "Doug Michels"? 511

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A. Q. A. Q. A. Q.

I would say that looks like my signature. Did you draft the language of this declaration? Not -- I edited it, but I didn't draft it. Who drafted the language of this declaration? The -- the SCO attorneys. So let's talk again a bit more about the basis

for your conclusion that copyrights transferred as part of the Asset Purchase Agreement. I take it that's based on It's -- you don't Is it

your general understanding of the deal?

recall anything specifically told to you about this? based on -- are there provisions of the Asset Purchase

Agreement that you can recall that support this opinion? A. recently. I -- I didn't read it then, and I haven't read it I've never read it through. I'm not a lawyer,

and I have no comment about the Asset Purchase Agreement. Q. And did you read the Asset Purchase Agreement

agreement in preparation for your December, I think -November 2006 declaration? A. Q. No. When was the last time you read the Asset

Purchase Agreement? A. I have never read the Asset Purchase Agreement.

I've glanced at it, I've skimmed through little bits of it, but I have never read it. Q. Is the same true of -- of the other agreements we 512

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discussed earlier? A. Q. Agreement? A. Q. A. Q. Yes. And the two amendments? I have never read any of them cover to cover. So to begin back where we left off, to be clear, Yes. The Technology Licensing Agreement, The Operating

you did not review the Asset Purchase Agreement in preparation for the execution of your declaration? A. Q. I don't -- did not, no. And -- and you have not read the Asset Purchase

Agreement cover to cover? A. Q. No. So if I asked you, as a businessman, where would

I go to learn the answer to this question, what would your answer be? A. My answer would be I would call my counsel and

ask them, you know, what's the answer to this question? Q. What was your involvement in those agreements?

Did you, for example, draft any of the language of those agreements? A. contacts. Q. I take it the answer is no, you didn't -- you did 513 Oh, sure, of course. I love to write legal

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not write any of the language in those agreements? A. agreements. Q. No, I did not write any of the language of those I was involved -Now, is it fair to say that for all of those

topics -- term sheets, communications with Novell, communications with the Board of Directors, press releases, communications with counsel and paralegals -- you have no specific recollection, sitting here today, that's informing your testimony? A. No. I mean, I can't give you a specific -- I

mean, I know in order to -- to do a deal in this magnitude we had to do a major presentation to the Board, you know, before you can make a deal involving nearly 20 percent of the equity of the company. I mean, the Board -- the Board And we -- we

had a duty to scrutinize it in great detail.

prepared a detailed analysis of the deal, and the rights, and, you know, all that. So there was -- there was a lot of discussion internally, and -- and even formalization of that. But, you

know, from ten years ago, can I remember the exact details of that? Q. No. I take it it is your testimony then, that you

don't have any specific memory of conversations with people from Novell in which they said they're transferring the UNIX copyrights as part of the Asset Purchase Agreement? 514

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Q.

I take it it's your testimony that you haven't

had conversations, one way or the other with Novell, about UNIX copyright ownership between 1995 and 2001? A. Q. I might have. I don't know. I don't recall.

You don't recall any conversation, one way or the

A.

I certainly recall with certainty that Novell

never claimed that they had the copyright. Q. Did SCO -- did anyone from Novell ever say that

SCO owned the UNIX copyrights? A. I don't know. That concludes this witnesses testimony,

MR. JACOBS: Your Honor. THE COURT:

Thank you, Mr. Jacobs.

Mr. Normand, your next deposition? MR. NORMAND: The next deposition designation will be

of Burt Levine who was deposed on March 23rd, 2007. (Whereupon, the following is deposition excerpts of Mr. Burt Levine's deposition.) Q. Okay. You were a lawyer for AT&T back in the

1980's; is that correct? A. Q. That's correct. How many lawyers were there in the legal Roughly.

department at AT&T in the eighties? A.

I guess between 75 and a hundred. 515

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Q.

At some point in time when you were a lawyer in

AT&T's Legal Department, were you involved in working on AT&T's UNIX business? A. Q. Yes. What portion of the 75 to a hundred lawyers in

AT&T's Legal Department were involved in working on AT&T's UNIX business, to the best of your recollection? A. Q. I guess, um, 15 to 20. When AT&T spun off its UNIX business in the form

of UNIX Systems Labs in 1991, did you go to USL? A. Q. Yes. Now do you recall that I believe in 1993 USL and

its UNIX assets were purchased by Novell? A. Q. A. Q. Yes. Do you recall what the purchase price was? I don't. When Novell purchased USL and its UNIX assets in

1993, did you move to Novell? A. Q. Yes. And when I say "moved to Novell," I meant you

went to work for Novell in 1993; is that right? A. Q. That's correct. Is it fair to say that you and Mr. Weitz and

Mr. Tannenbaum in New Jersey were continuing to head up the legal efforts relating to UNIX after Novell's purchase of 516

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the USL in 1993? A. Q. That was my understanding. Do you have an understanding that on September

19th, 1995 Novell sold certain UNIX assets to a company called Santa Cruz? A. Q. Yes. Immediately after that purchase on

September 19th, 1995 did you continue to work with Novell back in New Jersey? A. Q. A. Q. As I recall, I did. Right. -- I remember I did. Were you still in Summit, New Jersey, at that In the same facility --

point in time? A. Q. I believe we were, yeah. A few months or so after the purchase by Santa

Cruz of certain UNIX assets from Novell did you then move to Santa Cruz, meaning you began to work for Santa Cruz? A. Q. A. Yes. Do you remember approximately when that happened? It was a transition time and by February 1st of

2006 I know that the three of us in the Legal Department were considered SCO employees, whether there was anything that was formalized on company records before that, I don't know. 517

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Q.

Is this document, Schedule 1.1(b), unclear to

A. Q. A.

Yes. How is it unclear to you? The asset that purports to be transferred from

Novell to SCO in the intent of the parties ex -- will include, to my reading or to my knowledge, even though I don't remember the specific terms of this agreement, the intention was to convey all of these ownership and auxiliary ownership rights to the asset including copyright. And the

fact that there is this kind of an exclusion there tells me that there is an ambiguity in this agreement or a mutual mistake which wipes out any kind of an integration clause. I don't agree that that's what the agreement means. Q. Can you tell me in your view what is ambiguous

about the exclusion on Schedule 1.1(b) of, quote, all copyrights and trademarks except for the trademarks UNIX and UnixWare? A. I don't think you can exclude a copyright in this I think you can exclude a

kind of an asset transfer.

copyright if you're transferring the physical manifestation of the asset, but when you purport to transfer the whole asset and all the business and everything else I think inherent in that is going to be the copyright and it's a contradiction in terms for the copyright to be excluded like 518

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this. Q. What language can you point me to where there is

that restriction in Section 4.16(b)? A. I think you would have to look at the intent of The intent of the parties was to give as one

the parties.

category of compensation a royalty stream. Q. Aside from the intent of the parties, can you

point me to any specific language in Section 4.1(b) that supports your limitation on Novell's dictation right? A. No, I can't point to anything specifically in

those sections but it's inconceivable to me that if you take the language of (b) literally, this derogates 100 percent from the grant that's being given from Novell to SCO. grant is illusory if Novell wanted to actually enforce something like this to the extent it says in subsection (b). There may as well not be an agreement. Q. Now you've talked about the intent of the The

parties, Mr. Levine, as being the basis for your view that the dictation right in 4.16(b) is limited to a royalty stream. What specifically can you point me to in support of You can

your view of the intent of the parties on 4.16(b). answer? A. Q.

I can't point you to anything in the agreement. What are you referring to when you talk about the What are you basing that on? 519

intent of the parties?

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A.

One of the few things that I can recollect about

these things is the discussions that I've had with the negotiating people. Q. A. Q. Which people? With Novell. Which people in the negotiating team did you

discuss concerning any limitation on Novell's dictation right under Section 4.16(b)? A. Q. Definitely Chatlos and probably Maciaszek. Do you remember any specific conversations with

Ed Chatlos concerning your view that Section 4.16(b) in Novell's dictation right thereunder is somehow limited to a royalty stream? A. Q. No. No, nothing specific.

Do you recall how long you stayed with Santa

A. Q. A. Q.

Yes. How long did you stay with Santa Cruz? Till September of 2000. Was it your understanding at the time of the

drafting or negotiations of the APA that Mr. Bradford was personally involved at all? A. Q. Yes. Did Mr. Bradford ever tell you that Novell was

retaining any UNIX or UnixWare copyrights with respect to 520

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the APA? A. Q. No. Did Mr. Bradford ever tell you that he had

informed Wilson Sonsini lawyers to draft the APA so as to have Novell retain any Unix or UnixWare copyrights? A. Q. No. Mr. Levine, from the time of the APA in 1995

until you left Santa Cruz in 2000, did you ever hear anyone whether inside or outside of Santa Cruz or inside or outside of Novell say that Novell had retained the UNIX or UnixWare copyrights? A. Q. No. If you had heard anyone make such a statement,

would that have been a surprise to you? A. Q. A. Very much so, yeah. And why do you say "very much so"? My personal experience with the couple of years

that I spent at Novell was that it was a very ethical company and I, I was very impressed with that. Q. And how has that fact bear on your answer, the

fact that you had the view that Novell was an ethical company? A. Was ethical and I believe that being an ethical

company in its dealings with its partners or transferees or whatever it is that they would not resort to withholding 521

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information or trying to withhold something that the transferee in this case would be entitled to. Q. As I ask you now, what words would you use to

describe your view that the copyrights had been transferred? A. Right. That the transfer of the business,

including both the physical assets and the intellectual property assets, would automatically convey the copyright along with the rest of the business assets. Q. Is it your view that under the Asset Purchase

Agreement between Novell and Santa Cruz that Santa Cruz merely acquired a license from Novell to use the UNIX and UnixWare source code? A. No, they obtained a full right, title and

interest in ownership of that asset. Q. If a prospective licensee had signed a software

agreement and no other documentation with AT&T, what rights with respect to source code did it have? A. It would have no rights under the agreement

because there was no product identified. Q. And how would that licensee gain rights to use

source code from AT&T? A. It would have to obtain a supplement and schedule

for that product to define what it was it was licensing and pay the fees. Q. If a licensee had entered into a software 522

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agreement and sublicensing agreement and no other agreement with AT&T, what rights would it have, if any, with respect to binary products or sublicensed products? A. If you mean a form sublicensing agreement without

any identification of the product, then they would have no rights. Q. Do you recall reviewing the language of Section

4.16(b) with Mr. Brakebill earlier? A. Q. Yes. And I believe that you testified in response to

Mr. Brakebill's questions that part of the source of your understanding of Section 4.16(b) is discussions with Mr. Chatlos and Mr. Maciaszek following the execution of the APA; is that fair to say? A. Q. Yes. And I believe you said with respect to Section

4.16(b) that to read it literally would make the transfer of the assets and the licenses under the APA illusory, do you recall using that word? A. Q. Words to that effect, yes. Could you just review for me in your words how it

is that you used that word and what you meant by using that word illusory? A. Yes. That given the scope of the grant of the

agreement, the fact that the intention of the parties, as I 523

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read the agreement, was very broad and commensurate with that, that to give this under -- to give this paragraph any interpretation other than the limitation that I testified to would render this broad grant illusory, certainly weaken it substantially if the things that Novell could do or require SCO to do were part of this agreement and in the limit it could nullify it completely. So I think reading the

agreement as a whole as to what was intended and what is here that this is the only proper interpretation of 4.16(b). Q. Was it ever your view while at Novell or Santa

Cruz to the best of your recollection that Novell under the APA retained the right to direct SCO to modify or change its source code rights under the agreements that had been transferred under the APA? A. No. Your Honor, that completes SCO's

MR. NORMAND:

designations of Mr. Levine. THE COURT: MR. JACOBS: Mr. Levine. THE COURT: Q. If you would like to go ahead. Mr. Jacobs? We have some additional testimony of

Do you have an understanding that there was an

Asset Purchase Agreement that was signed by Novell and Santa Cruz on September 19th, 1995? A. Yes. 524

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Q.

Just so you have it, I'm going to hand you what's

been marked as Exhibit 1 in this case. A. Q. A. Q. Thank you. Do you recognize this document, Mr. Levine? Yes, I've seen it. Okay. And this is a document entitled Asset

Purchase Agreement By and Between The Santa Cruz Operation, Inc. and Novell, Inc., dated as of September 19th, 1995; do you see that? A. Q. I see it. As you sit here today, do you recall what

involvement, if any, you had in drafting or contributing any portion of this particular agreement dated September 19th, 1995? A. I know that I worked on drafting some of the

provisions, I don't know which ones in particular. Q. And how is it that you recall that you were

involved in drafting some provisions? A. Novell. Q. And as you sit here today are you sure that any I was asked to do it by the negotiators for

drafting that you did relating to the Novell-Santa Cruz deal was in connection with this particular September 19th, 1995 contract as opposed to an amendment to this contract? A. No, I can't recall specifically, you know, what 525

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work I did on one versus the other. Q. Do you remember any particular provisions in this

contract as you sit here today? A. Q. A. Q. No. Memories can fade over time? Yes. You would agree with me that a contract is

written to govern the rights and obligations of the party; isn't that right? A. Q. I believe that's usually the purpose of it. Do you recall as you sit here today that there

were any provisions in this September 19, 1995 contract relating to intellectual property as assets? A. Q. No, I don't recall. Let me turn your attention to Exhibit 1 which is

the September 1995 contract between Novell and Santa Cruz? A. Q. (Complies.) And ask you to turn to the page in the lower

right-hand corner ending in 950? A. Q. A. Q. (Complies.) Are you there? Yeah. Okay. And you'll see this is a part of the

contract entitled Schedule 1.1(a) entitled Assets? A. Yes. 526

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Q.

Okay.

And if you turn to -- you see there are a

series of Roman numerals on the left-hand side, do you see that? A. Q. Yes. I'd ask you if you could turn to Roman numeral V

which is on the third page of Schedule 1.1(a)? A. Q. A. Q. (Complies.) Do you see that? I do. Okay. And do you see that Roman numeral V is

entitled Intellectual Property? A. Q. Yes. And do you see that it lists one particular type

of intellectual property as an asset? A. Q. Yes. And it's listed as "trademarks UNIX and UnixWare

as and to the extent held by Seller, parenthetical, excluding any compensation Seller receives with respect to the license granted to X/Open regarding the UNIX trademark"? A. Q. I see it, yeah. And that's the only type of intellectual property

listed as an asset; is that right? A. Q. Yes. Aside from listing trademarks UNIX and UnixWare,

it doesn't list any other type of intellectual property as 527

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an asset, does it? A. Q. No. Do you recall that there was a schedule of

excluded assets in the September 19th, 1995 contract between Novell and Santa Cruz? A. I guess to the extent I remember anything about

this document, I would have remembered this, but -- as a title of something in here, I think so, yeah. Q. And I'll ask -- well, as an experienced lawyer in

transactions what does excluded assets mean to you? A. Q. A. Just off the top of my head what you're asking. Yes. If you have a definition in the agreement of a

particular term, an asset means so and so and so and so and so and so, usually you would put the exclusion right in that same paragraph, which is my practice. I'm assuming, because

I don't know different, that this has got the same effect that whatever an asset is, it does not include this. Q. Do you see the last sentence, Mr. Levine, of this

Section 1.1(a) of the contract that says, quote, Notwithstanding the foregoing the capital assets to be so purchased shall not include those assets, parenthesis (the, quote, excluded assets, quote) parenthesis, set forth on Schedule 1.1(b)? A. I see it. 528

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Q.

Now turning back to the Excluded Asset Schedule

in Schedule 1.1(b) that we were just looking at which is on Page 954 of this document in front of you, as an experienced lawyer do you understand that what's listed in this Excluded Asset Schedule is specifically an asset or assets that are not included in the purchase? A. As a matter of form that's true, I agree with

Q.

Then referring you to Page 955 in the lower

right-hand corner which is the second page of the Excluded Asset Schedule? A. Q. (Complies.) By the way, there are eight items that are listed

on the Excluded Asset Schedule; is that right? A. Q. that right? A. Q. Intellectual property, yes, definitely. And if you look at Roman V it is entitled Eight Roman numerals, yes. Right. And those are assets of substance; isn't

Intellectual Property, correct? A. Q. Right. And it lists as two types of excluded

intellectual property, one, all copyrights and trademarks except for the trademarks UNIX and UnixWare, and two, all patents; do you see that? 529

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A. Q.

I see that. Okay. What is listed is (a) and (b) of Roman V

are specifically excluded assets under this contract, would you agree with me? A. Q. A. Q. Specifically listed assets, yes. Specifically listed as excluded -Right. -- assets, correct? In reading this, do you

understand that Novell is excluding all patents from this asset transfer? A. I understand what the agreement says, I

understand what the exclusions are in the document. Q. Okay. And based on reading this exclusion in the

contract do you understand that all copyrights and trademarks except for the trademarks UNIX and UnixWare are excluded from this asset transfer? A. Q. No, I don't. You disagree with the language in this schedule;

is that right? A. No, I don't disagree that these are listed here,

I disagree that in the context of this agreement that this is, that this is the whole story. Q. Based on what you're saying today, would you have

stricken this from the Excluded Asset Schedule? A. You're asking me to say what I would have done, 530

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certainly that would have been something that went through my mind, I don't know what I would have done. Q. Well, you seem to think there's an ambiguity as

you sit here today in this copyright -A. Q. Well, ambiguity or mistake, yeah. Okay. As you sit here today you think there's

some kind of ambiguity or mistake in this Excluded Assets Schedule excluding all copyrights and trademarks except for the trademarks UNIX and UnixWare; is that right? A. Q. Yes. So I take it today 12 years after the fact, you

would strike this reference to all copyrights and trademarks except for the trademarks UNIX and UnixWare; is that right? A. Or would have tried to have the agreement

reformed or amended, yeah. Q. A. Q. You wouldn't have left it in, correct? No, I wouldn't have left it in. In fact, Mr. Levine, you did review schedule

1.1(b) prior to the execution of this Asset Purchase Agreement on September 19th, 1995, didn't you? A. Q. I don't recall. I'm going to hand you what's been marked as

Exhibit 202? A. Q. Thank you. For the record this is a fax from you, 531

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Mr. Levine, to an attorney named Aaron Alter at the Wilson Sonsini firm that was representing Novell? A. Q. A. Q. Okay. Do you see that? I see. Okay. And this fax cover from you is dated

September 18th, 1995, do you see that? A. Q. Correct. In fact, there's a fax transmission line up at

the top, it says September 18, 5:20 a.m. USL Legal Department, do you see that? A. Q. correct? A. I'll accept that I did, I have no reason to think I see it. Okay. This is a fax that you sent, isn't that

I didn't, but I don't recall it. MR. JACOBS: Your Honor, I would like to move into

evidence Novell's Exhibit X3, the fax from Mr. Levine to Aaron Alter at Wilson Sonsini just referred to in the deposition. MR. SINGER: THE COURT: No objection. Exhibit X3 will be admitted.

(Whereupon, Defendant's Exhibit X3 was admitted into evidence.) MR. JACOBS: Your Honor, what I propose to do, the 532

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witness is going to walk through various pages.

So we'll go

through his walk through and alternate between the deposition and showing the jury the various pages that he is referring to, okay? THE COURT: Q. All right.

Turning to Page 2 you write a note to Aaron Alter Attached are copies of the following:

and it says, "Aaron:

A suggested markups of certain pages in Schedules 1.1(a) and 1.1(b)." A. Q. Do you see that? Yes. Okay. And then turning you to Page 3 of this

document there's a draft of Schedule 1.1(a), do you see that? A. Q. Yes. Okay. Do you recognize this as the schedule, a

draft of the Schedule 1.1(a) that you were just looking at? A. Q. Yes. And do you see some handwriting about halfway

down the page and then on a few of the subsequent pages of Schedule 1.1(a), that's your handwriting; isn't that right? A. Q. Yes. Okay. You reviewed Schedule 1.1(a) prior to the

execution of this September 19th, 1995 contract; isn't that right? A. It seems that way, yeah. 533

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Q.

And you provided some comments on this Schedule

1.1(a) draft? A. Q. Yes. And if you turn to Roman V of this Schedule

1.1(a), do you see that page? A. Q. Yes. And up in the left you've written in your

handwriting "from Schedule 1.1(a)"? A. Q. Yes. And then do you see you've made some comments on

Roman V relating to intellectual property? A. Q. Yes. Okay. And you made one change adding the phrase

"and to the extent" in between the phrase "trademarks UNIX and UnixWare as," and the phrase, quote, held by seller, do you see that? A. Q. I see it. You left in place "trademarks UNIX and UnixWare"

as a type of intellectual property to be an included asset; is that right? A. Q. Yes. Okay. And you did not add any other types of

intellectual property to this list of included assets, did you? A. No. 534

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Q. A. Q. A. Q. A. Q. A. Q.

You didn't add copyrights? Not as a specific item, no. Okay. No. You did not add UnixWare copyrights? No. You did not add patents? No. Now your cover memo to Mr. Alter of Wilson You did not add UNIX copyrights?

Sonsini says that you also were attaching suggested markups of certain pages in Schedule 1.1(b), correct? Page 2 of the fax. A. Q. (Reviews.) 1.1(a) and 1.1(b), yes. And this is

And turning your attention to the excluded asset

draft which is on the page ending 613 of this fax number in the lower right-hand corner, are you there? A. Q. Okay, yeah. Do you see that up in the left-hand corner you've

handwritten "from Schedule 1.1(b)"? A. Q. Yes. And do you see that this is your markup of a

portion of Schedule 1.1(b) of the excluded assets? A. Q. That's what it appears to be, yeah. And you actually reviewed the Intellectual

Property section of the Excluded Assets Provision of 535

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Schedule 1.1(b) before the Asset Purchase Agreement was executed on September 19th, 1995; isn't that correct? A. Q. Yeah. Yes.

And specifically looking at and commenting on

intellectual property you deleted a reference to patent licenses, do you see that? A. Q. Yes. Okay. And do you see that in reviewing a draft

Schedule 1.1(b) prior to the execution of the agreement you specifically looked at and commented on the exclusion of all copyrights and trademarks except for the trademarks UNIX and UnixWare? A. Q. Yes. Okay. And do you see that you made only one

comment on that line item? A. Q. Yes. Okay. And the comment that you added was at the

very end a phrase, quote, as and to the degree held by Seller, quote; is that right? A. Q. That's true. Okay. When you looked at the Excluded Asset

Provision prior to the exclusion of the Asset Purchase Agreement, you left in tact the exclusion of all copyrights and trademarks except for the trademarks UNIX and UnixWare; isn't that correct? 536

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A. Q.

Yes. And you also left in the exclusion of all patents

as being a transferred asset; isn't that right? A. Q. Yes. And again you passed your comments on to the

outside lawyers of Wilson Sonsini who were representing Novell in the negotiation and drafting of this contract between Novell and Santa Cruz, correct? A. Q. That's correct. And your inclusion of "all copyrights and

trademarks except for the trademarks UNIX and UnixWare" in the Excluded Assets provision of Schedule 1.1(b) was also transmitted to Santa Cruz during the negotiations, correct? A. Okay. My -- inclusion it wasn't modified "all of

the copyrights and trademarks," yeah. Q. You did not modify the line item "all copyrights

and trademarks except for the trademarks UNIX and UnixWare," correct? A. Q. No. And so when your comments on Schedule 1.1(b) were

transmitted to Santa Cruz the line item "all copyrights and trademarks" was included as an excluded asset, correct? A. Q. It was included. And do you recall that one of the types of

intellectual property that was excluded was all patents? 537

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A. Q.

Yes. As you sit here today, do you have any

understanding as to whether SCO as part of the Asset Purchase Agreement in 1995 got a license to practice the UNIX patents or any other IP that Novell retained? A. Q. A. Yes, I do. And what is your understanding today? My understanding is similarly to my stand on

copyrights that the grant of the whole business carries with it at least licenses under the patents needed to carry on the business to the extent that Novell had them. Q. Do you remember any specific conversations with

Ed Chatlos concerning your view that Section 4.16(b) in Novell's dictation right thereunder is somehow limited to a royalty stream? A. Q. No. No, nothing specific.

So you just recall in general having a

conversation with Ed Chatlos -A. Q. A. Q. Yes. -- at some point in time? Yes. Okay. And 12 years ago you wrote some documents

concerning 4.16(b), didn't you? A. Q. Very possibly. And we looked at -- do you have Exhibit 206 538

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before you? A. Q Yes. And if you look at Paragraph 2 at the bottom this

is an e-mail that you sent Mr. Chatlos on November 16th, 1995, do you recall that A. happened. Q. This is an e-mail that you sent to Mr. Chatlos on I don't recall that, I see that that's what

November 16, 1995? A. Okay. Your Honor, at this point we move into

MR. JACOBS:

evidence Exhibit I5 which is the memo or e-mail that is being referred to in this portion of the deposition. THE COURT: MR. SINGER: THE COURT: Any objection? No objection. I5 will be admitted.

(Whereupon, Defendant's Exhibit I5 was received into evidence.) MR. JACOBS: Your Honor, in this case I think it would

be helpful to read it out loud. THE COURT: MR. JACOBS: You may do so. My reading of the Asset Purchase

Agreement is that while we would have the right to direct SCO to offer HP licenses on any terms we choose with respect to any SVRX products that HP needs to carry on the Rhine 539

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River work, it is not clear whether we can restrict SCO in the terms they can offer HP for UnixWare licenses for this purpose. Do you think we should try to cover by amendment

that at least with regard to HP, we should have the right to specify the terms for UnixWare licenses as well? Q. And in this e-mail to Mr. Chatlos you expressed

your viewpoint concerning Novell's rights to direct SCO to offer licenses, quote, on any terms we choose with respect to any SVRX products, isn't that what you said? A. Q. Yes, it is. You did not say in this memorandum dated November

16th, 1995 that Novell would have the right to direct SCO to offer HP licenses on any terms we choose with respect to any binary SVRX agreements, did you? A. Q. No, I didn't. You don't say in April of 1996 that Novell's

dictation right under 4.16(b) only extended to binary SVRX agreements, isn't that the case? A. That's true. That ends the testimony of Mr. Levine,

MR. JACOBS: Your Honor. THE COURT: Mr. Singer? MR. SINGER: THE COURT:

Thank you, Mr. Jacobs.

Our next witness is Bill Broderick. All right. 540

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THE CLERK:

Mr. Broderick, if you would come forward.

If you would raise your right hand. WILLIAM BRODERICK, called as a witness at the request of the Plaintiff, having been first duly sworn, was examined and testified as follows: THE WITNESS: THE CLERK: Yes. Thank you. Please be seated. If you

would please state and spell your name for the court. THE WITNESS: THE CLERK: William Broderick, B-R-O-D-E-R-I-C-K. Thank you. DIRECT EXAMINATION BY MR. NORMAND: Q. A. Q. A. Q. A. Good afternoon, Mr. Broderick. Good afternoon. Are you currently employed? Yes, I am. Where? I am director of software licensing for the SCO

Q.

Could you briefly summarize your responsibilities

in that capacity? A. I am responsible for all software licensing and

contracts that go through the company. Q. And what kind of software licensing or contracts 541

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are you talking about? A. Um, it is -- we have business in certain areas.

We have source code licensing, binary licensing, we have support contracts, third-party software agreements where we license products with third parties. Q. later. Okay. I'm sure we will get into more of that

Could you briefly describe your educational

background? A. Well, I graduated high school in 1966. I went my

freshman year out to Missouri. year and I enlisted in the Army.

I have completed my freshman I spent two and a half

years in the Army, a year and a half with 101st Airborne Division in Vietnam. Came home, graduated in 1973 from And in

William Patterson College with a degree in business.

1975, I graduated from Santa Clara University of California with an MBA. Q. A. What did you do after that? I went to work for Trans World Airlines. I spent

five years with them in various accounting positions in New York, London and Paris. Q. Did there come a time when you became involved in

the UNIX business? A. Q. I did. That was in 19 -- late 1991.

And in what capacity did you become involved with

the business at that time? 542

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A.

I was working for a computer manufacturer in New

Jersey and I had an opportunity to join UNIX System Laboratories, it was AT&T's UNIX Group. And in I believe it

was December of 1991, I joined USL as manager of sales operations. Q. A. Q. A. USL is UNIX System Labs? Yes. And what did you do there? Um, I managed the sales operations. I had some

people that worked with me.

I was responsible for the sales

compensation plan, of coordinating revenue forecasts and expense forecasts with the finance people, and chasing down any problems the vice-president of sales told me to chase down. Q. A. What did the UNIX group at USL do at that time? At that time they -- they licensed source code Source code is the code

for the UNIX operating system.

where it's -- it is a code that you actually go in and manipulate and you work with. So what we had was a lot of

computer manufacturers, also government agencies, that licensed the source code because they wanted to go in and be able to work with it. And you have got a computer, you take

the source code which is a generic operating system, you know how to manipulate that source code so it would work on your computer. So what you did was you created your flavor 543

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of UNIX.

And so we licensed the source code for companies These are companies like Hewlett Packard, IBM,

to do that.

Stratus, large -- every large computer manufacturer in the world licensed to UNIX. And we licensed them the source

codes so that they could do that. Q. A. business. And how long were you at USL? I was at USL until 1993 when Novell purchased the I think it was officially called a merger with

USL but it was a purchase of the business from AT&T. Q. point? A. Q. A. Yes, I did. And in what capacity? I first went as -- I continued in sales And did you transition over to Novell at that

operations but just a short time, just a few weeks, and then I was put into doing contracts and licensing. Q. licensing"? A. I became a person at Novell who worked with the And what does that mean "doing contracts and

sales people, product management, development people and the customers. We actually licensed the source code I talked

about earlier. Q. And did there come a time when you became aware

of a sale of the UNIX business to Santa Cruz? A. Yes, there was. 544

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Q. A.

When did you become aware of that? That was the fall of 1995. We were all -- all of

the employees were called down to a cafeteria in the building where we were at. And the executives from the -Mike DeFazio was the

from Novell's UNIX group were there.

lead executive and he chaired it and he made the announcement that Novell was going to refocus their attention back to their net ware product, which was their flagship product, and as a result of that refocussing, they were going to be selling the UNIX business and the technology to a company called Santa Cruz Operation. Q. And did you have any particular reaction to that

announcement? A. Q. A. Q. Santa Cruz? A. Pretty much the same the job I had. We had three God I hope I go to Santa Cruz Operation. Did that end up happening? Yes, it did. And in what capacity did you end up going to

license -- three people that did licensing and contracts at Novell and we moved to the Santa Cruz Operation. And we

primarily handled the source code licensing, but Santa Cruz was also in the business of licensing a binary product. They weren't a computer manufacturer, but they had developed a UNIX for what they -- it is sort of an Intel platform. I 545

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don't want to get too complicated, but it was kind of like Microsoft windows, but it was a UNIX operated system. they sold binary. And

You can go into a store and you can buy a

copy of Microsoft windows and load it onto your computer. Santa Cruz had a product where you could go to a distributor, go to a store, and actually buy a UNIX product, same type, a binary, and load it onto your computer. So

Santa Cruz was in that business and now by purchasing the UNIX Technology they were in the source licensing business. So we did a combination of all of that. Q. Did you participate in any transition process

upon the announcement of the sale from Novell to Santa Cruz? A. Yes. Starting in the -- starting after the

announcement in September of '95 that they had -- Novell was selling the business, um, they put together a lot of employees in the transition teams. And these handled all of

the different areas of the company from the development, product management, IT, contracts, finance, and they had to work together to see how best to transition the business from Novell to Santa Cruz. months. Q. And in the course of those transition team And we met over the next few

meetings, do you recall any discussion about the notion that copyrights had been retained by Novell? MR. ACKER: Objection, hearsay, Your Honor. 546

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MR. NORMAND:

The question is whether he recalls any

such statement being made. THE COURT: I believe I can have this answer given but

not beyond that if it is going to be specific. MR. NORMAND: Q. question? A. Yes. So I can give a simple yes or no? You may. Give the question again. Do you recall any discussions Thank you, Your Honor.

(By Mr. Normand) Mr. Broderick, do you recall the

THE COURT: THE WITNESS: Q.

(By Mr. Normand)

in these transition meetings about whether Novell was retaining any UNIX or UnixWare copyrights as part of the transaction? A. comments. Q. Did the transition team discuss the issue of Retaining ownership, no, I did not hear any

whether copyright notices in the source code had to be changed? MR. ACKER: Same objection, he is asking for hearsay.

Objection, Your Honor. MR. NORMAND: Same response, Your Honor. It doesn't

go to the truth, it goes to what Mr. Broderick remembers and how it bears on what he did during the transition work. THE COURT: Well beyond that, isn't this a party 547

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opponent? MR. ACKER: things from. THE COURT: Well, until we get more specific, I'm Well, I don't know who he said he heard

going to have to allow the questions to be asked. MR. ACKER: Q. question? A. Q. Give it again. Do you recall during the transition work as to All right.

(By Mr. Normand) I take it you don't recall the

whether the issue of needing to change copyright notices came up? A. Q. A. Yes. And in what sense did that issue come up? The Novell software engineers announced that they

were completing the changing of the Novell copyrights in UNIX to Santa Cruz. Q. And do have any firsthand knowledge as to how

that work was undertaken? A. Q. No. In the course of explaining what copyright

notices would be changed, do you recall there being any discussion about some copyright notices not being changed? MR. ACKER: Your Honor, again I'm going to object.

That is really very vague as to who these comments were 548

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allegedly coming from.

I don't think he has clearly

established if it is going to come from a party to be qualified as a party admission. THE COURT: I would agree with Mr. Acker. You have

got to ask more specific questions before you elicit this type of testimony. MR. NORMAND: Q. Thank you, Your Honor.

(By Mr. Normand) In the course of this transition

work, did you undertake to send out any letters to UNIX customers to inform them of the transition that was happening? A. Yes. As part of the transition meetings it was

Burt Levine who was the attorney at the Novell UNIX Group who was tasked with putting together a notice letter. We

had some discussion on who the notification should go to the licensees from, Santa Cruz or Novell, and it was decided that Novell ought to send the license because, you know, if you received a letter from somebody saying make your mortgage payments to me now, you probably wouldn't comply with it and have your bank to do it. So Burt Levine drafted up a letter that would go to all of the general licensees, all of the ones that had the standard license agreements. And he drafted it up and And that letter

passed it around to some of us to look at. was sent down to all licensees.

Then what we did was we had 549

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to go through because there was some contracts, mostly third party suppliers, or we had some special agreements with some other companies that required their approval of an assignment of the contracts. So we had to go through, dig

through the files, and find those companies and they were given a slightly different letter where it was, you know, Novell is doing this, Santa Cruz is doing this, please sign below your acceptance of the assignment. Q. In your work with respect to the drafting of

these letters, did you ever speak with Mr. Levine about the issue of any retention of copyright? A. No. Your Honor, I would propose to put into

MR. NORMAND:

evidence SCO Exhibit 580. THE COURT: MR. NORMAND: THE COURT: MR. ACKER: THE COURT: MR. NORMAND: Which number again? 580, Your Honor. 580. Any objections to this?

No, Your Honor. 580 will be admitted. Thank you, Your Honor.

(Whereupon, Plaintiff's Exhibit 580 was received into evidence.) Q. screen? A. Yes. 550 (By Mr. Normand) Do you see the document on your

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Q.

I'm going to blow up the language so you and the Is this letter in the form of the

jury can see it better.

letters you just described? A. Yes, it is. This is in the form of the letter of

one of the customers who would have to approve the assignment of the agreement. Q. And, again, what was your understanding as to the

purpose of this letter and letters of this sort? A. Well, it was to advise any licensees or people we

had contracts with that Santa Cruz owned the business and the technology. Q. Would you pull up the first two paragraphs? The opening paragraph

Actually, the one above that as well.

of the letter, Mr. Broderick, as can you see, quote, "as you may know, Novell transferred to The Santa Cruz Operation, Inc., SCO, its existing ownership interest in UNIX System-based offerings and related products as listed in Attachment A of this letter "collectively Transferred Products." Could we go to Attachment A. Attachment A begins,

"Novell Software Products, all releases of UNIX System V and prior Releases of the UNIX System. All UnixWare releases up

to and including UnixWare Release 2 (encompassing updates and upgrades to these releases as well.) Do you see that language, Mr. Broderick? 551

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor.

A. Q.

Yes, I do. How does this language comport with your

understanding of what ownership interest Novell had transferred? MR. ACKER: Objection, Your Honor, based on hearsay,

based on the testimony so far of what his understanding is of what ownership rights -MR. NORMAND: It is not all based on hearsay, Your

It is his personal experience and his work and his

work drafting the letter and the transition team meetings and his employment. MR. ACKER: He has testified that he had no That anything

involvement in the APA, any of the contracts.

that he heard was heard from others and he has already established that is hearsay. hearsay. MR. NORMAND: We have established, Your Honor, that This is going to be based on

what he heard, at least some of what he has heard, he has heard from Novell employees. THE COURT: Q. I will overrule the objection. The question, Mr. Broderick,

(By Mr. Normand)

was how does this description of the ownership interest that Novell had transferred comport with your understanding of what you believe Novell had transferred during the course of your employment? 552

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A.

It is -- it is exactly consistent with what I In fact, during

know of the sale from Novell to Santa Cruz.

the transition teams, we were given portions of the Asset Purchase Agreement where Novell sold all right, title and interest in the assets. This letter seems to state that

they sold all their interests. Q. Go back to Page 1. Thank you. Mr. Broderick,

the second paragraph begins, "it makes immeasurably more business sense for SCO, as the owner of the Transferred Products, to handle directly with Prentice-Hall any matters that may become relevant under the subject agreement." you see that language? A. Q. Yes. How does that language comport with your Do

understanding of what Novell was intending to achieve by sending these letters out? A. call SCO. Q. A. Q. Why? Because SCO owned divisions from that point on. Do you recall who Prentice-Hall was, the It was telling people don't call us any more,

addressee in this letter? A. They were a publisher, book publisher, they

published some books on UNIX. Q. Do you see at the bottom of this paragraph, 553

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Mr. Broderick, it states, "accordingly, Novell would appreciate Prentice-Hall's formal concurrence under Section 28 of the subject agreement, to Novell's assignment of its rights and delegation of any remaining obligations under the subject agreement insofar as such rights and obligations relate to the Transferred Products to SCO. Novell

represents that SCO has undertaken in writing to assume such obligations." A. Q. Yes. Is it your understanding that SCO had undertaken Do you see that language?

to assume the obligations of the UNIX business? A. Q. Absolutely. Now, let me take a step back, Mr. Broderick. You

started to speak to this issue already.

You did go over to

Santa Cruz as part of the transition; is that right? A. Q. Yes, I did. And what was your job responsibilities the next

several years? A. Q. A. It was as a licensing and contracts manager. What did you do from day-to-day? I wrote contracts, issued contracts. I dealt

with sales people and customers, negotiated terms of the contracts. We answered questions from current contract, you

know, companies that had contracts as far as what their rights were under the contract. If you wanted to license 554

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software from Santa Cruz Operation, you went through the sales people to the contracts people, and I was one of the contracts people. Q. Did you approach your contracts work at Santa

Cruz in any way different from how you approached it when you were at Novell? A. With the exception that we added that extra As far as In fact,

binary business to some of our responsibilities. the source code goes, they were exactly the same.

in the transition meetings, we were directed by Novell on the source code licenses not to make any changes to the licenses except to replace the name Novell with Santa Cruz. Q. A. Q. Is that what you did? Yes. What were the agreements that Novell and Santa

Cruz actually used in licensing source code products to licensees? A. The source code products it is -- it started with And

an umbrella agreement called the software agreement. that software agreement -Q. A. What do you mean by umbrella agreement?

It is -- overall, it was the general terms and

conditions that you would agree to when you licensed the source code product. So when I talk about -- we always

refer to it as an umbrella agreement because it covered the 555

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general terms and conditions.

We will license you source

code, you can do this with the source code, you can't do this with the source code, you have to protect the source code, you can't tell anybody or show anybody the source code because the source code is the company's family jewels. If

you lose control of the source code, you're out of business. Now, what we did was with the software agreement, it was that umbrella agreement that had the general terms and conditions for being able to license a source code product. MR. NORMAND: Okay. Your Honor, I would move into

evidence SCO Exhibit 4? MR. ACKER: THE COURT: No objection, Your Honor. Exhibit 4 will be admitted.

(Whereupon, Plaintiff's Exhibit 4 was received into evidence.) Q. (By Mr. Normand) Do you see the document on the

screen, Mr. Broderick? A. Q. A. Q. A. Q. Yes. Do you recognize this document? Yes, this is a software agreement. That is the document you just described? Yes. And with whom is this software agreement or who

is it between? A. This is between AT&T and IBM. 556

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Q.

And in the course of your work at Santa Cruz, did

you have occasion to read and review and grapple with documents of this sort? A. Yes, I did. Mr. Normand, would you be looking for an

THE COURT:

appropriate time for us to recess for the afternoon? MR. NORMAND: there, Your Honor. THE COURT: Q. I think in a minute or two we'll be I apologize for the delay. All right.

(By Mr. Normand) Mr. Broderick, we're having

brought out Section 7.03 of the software agreement which states, "AT&T warrants that it is empowered to grant the rights granted hereunder." A. Q. Yes, I do. It continues a couple of lines down, "AT&T makes Do you see that paragraph?

no representations or warranties of merchantability or fitness for any particular purpose, or that the use of any Software Product will not infringe any patent, copyright or trademark." A. Q. Do you see that language? Yes, I do. In the course of your work, did you develop an

understanding or view as to what the point of this kind of language and software agreement was for? A. Q. Yes, I did. In summary, what was the view that you developed? 557

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A.

Well, what they were doing was they were You are licensing the software

licensing the software. product.

Here is our software product, um, go ahead and Don't come back to us

license it and go ahead and use it.

and tell us it won't run your Ferris Wheel. Q. Now we're going to stop in a few minutes. Did

the software agreement actually license any product as such? A. No, it didn't. It was the umbrella agreement If you look through

that had general terms and conditions.

this software agreement, you get -- you get the right at some point in time to license a software product. This does

-- this agreement does not give you a software product. There are no fees associated or royalties associated with this software agreement. MR. NORMAND: will end. THE COURT: recess. All right. Thank you. Um, we will We Your Honor, on that cliff-hanger, we

You get to come back tomorrow, Mr. Broderick.

will recess for the afternoon. Ladies and gentlemen of the jury, I do not want to, again, be too specific other than to remind you about the importance of you avoiding any exposure about this case on the television, radio, newspaper, internet. do any research on your own. Again, do not

Do not do anything that would More 558

violate those instructions you have been given.

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specifically, do not discuss the case with anyone or allow anyone to discuss it with you. If anyone attempts to, again

I will remind you to bring it to my attention. Finally, as I have told you today, you have heard a lot of evidence so far. You have yet to hear a lot more.

So it would be inappropriate for any of you to be making up your minds about this case in any respect. And we'll start

at 8:30 in the morning and we will be in recess until then. THE CLERK: All rise for the jury, please.

(Whereupon, the jury left the courtroom.) THE COURT: Mr. Broderick, we will have you back here You intend to continue

I believe at 8:30 in the morning.

with this witness, don't you, Mr. Normand? MR. NORMAND: THE COURT: Yes, Your Honor. Please do not discuss your testimony with

any other witness or in the presence of any other witness. Do not discuss this matter with anyone other than perhaps attorneys. All right. Certainly. Thank you. Counsel, the issue about the

THE WITNESS: THE COURT:

witness that suddenly appeared out of nowhere, is it a significant issue that we need to meet earlier in the morning to deal with it? MR. SINGER: I don't believe so because what I think

we may be prepared to do, I mean this witness, Mr. Keller, 559

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was listed in initial 26(a)(3) disclosures and was in the joint pretrial order as issued by the court. He was not on

the forms which were submitted to the court for witnesses. And we understand that therefore there may be some surprise to Mr. Jacobs and to Novell's team. So instead of us trying

to call him tomorrow, what we would propose to do is call him out of turn. He is going to be out of the country next

week on business, he works for Huntsman Corporation, and he would then appear out of turn during the third week with the court's permission. And hopefully during the time, between now and then, Novell's counsel and myself would be able to work out any issues regarding his privilege point which has been raised. That is how we would propose to handle the issue. THE COURT: MR. JACOBS: Mr. Jacobs? Your Honor, if we could meet and confer

this afternoon and I'll alert your office if we need to come in early tomorrow morning on this topic, all right? THE COURT: All right. And unless I hear from you, All right. I

then we will presume we'll start at 8:30 then.

But we are agreeable to start earlier, if necessary.

would rather we deal with it before 8:30 instead of keeping the jury in the jury room too long in the morning. Anything else before we recess? MR. SINGER: I was going to mention the order of 560

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witnesses or the other witnesses for tomorrow. THE COURT: MR. SINGER: If you will, please. We will finish with Mr. Broderick. Then

we are going to call Mr. Mattingly and then Mr. Maciaszek. We may -- I'm not certain of the order of those, one order or the other, it will be Maciaszek and Mattingly or Mattingly and Maciaszek. And then we will go to the We think that would be

videotape deposition of Ms. O'Gara.

the final -- that will take us through the end of the day. If not, we will play another deposition. THE COURT: MR. JACOBS: THE COURT: MR. JACOBS: All right. Two things. Yes, sir. We talked earlier about the relationship

between the evidence coming in on the breach of the covenant of good faith and fair dealing relating to Section 4.16(b) and the slander of title claim. And I think where we left

it is that you were considering -- as it is turning out, evidence is coming in on both claims during the course of the trial. I think where we left it is that you were going to consider instructing the jury that they're going to hear evidence in the interest the efficiency, something like that, but it is reserved for the court. So we would, now

that it has happened, it has crystalized in the proceeding, 561

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we thought it might be a good time to renew that request. THE COURT: Mr. Jacobs, my desire would be not to tell

the jury now because my fear is that they would begin to speculate what they have to pay attention to and what they don't. I think it would be best to just simply make a

strong -- give them strong instruction at the end that you ought not to worry yourself about the fact that there will be some issues you may have heard evidence to that you are not asked in the verdict form to decide. concern? But can you see my

If I do it now, I think it would be fairly natural

for them to begin wondering okay what is and what isn't for us to decide. MR. JACOBS: topic. I understand, Your Honor. The second

We think that there was a quite significant door And I

opening event yesterday and in opening statements. just want to pull up my notes on this.

The topic is the

admissibility or instructions to the jury of what happened during the course of this litigation over the past several years. The court's prior ruling and strong indication was that the court was reluctant to have the jury hear about that. regard. And we understand the court's reasoning in that The door opening event is that in examining

Mr. Duff Thompson yesterday, Mr. Singer asked him what we're going to colloquially refer to as the "to this day" 562

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question.

He asked Mr. Thompson, isn't it true that to this

day Novell is publishing the allegedly slanderous statements on its website? That was not inadvertent because three

times in SCO's opening statement the "to this day" comment was made as well. SCO argued to the jury "to this day Well that places

Novell is publishing these statements."

into question Novell's continuing basis for making the statements for not taking down, I suppose, the statements from the website. And, of course, Novell's continuing

intent is heavily informed by the rulings that have been received over the course of the past several years. What we propose to do is crystalize this in writing. We would -- we realize it is something that the court has given this whole question, that the court has given a lot of thought to this, so we would like to submit something tomorrow. Maybe give SCO until the first thing Monday or It is -- it is not urgent that the

something like that.

jury be informed of this, but I think both sides should know where this issue would fall out going forward. THE COURT: Okay. Your point is well taken and I

would request that you put it in the form of writing with a specific request for SCO to respond. MR. JACOBS: THE COURT: MR. SINGER: Perfect. All right. Thank you, Your Honor. Anything else?

Um, Your Honor, there are some disputes 563

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regarding Ms. O'Gara's deposition.

Would you like to

undertake those now or bring us in early in the morning or -THE COURT: I would rather you get me something in It always easier for me to

writing as I have requested.

read it in advance before I hear argument on it. MR. SINGER: THE COURT: We will submit some