SCO Grp v. Novell Inc

Filing 865

NOTICE OF FILING OF OFFICIAL TRANSCRIPT for dates of March 22, 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. 865

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

THE SCO GROUP, INC., a Delaware corporation, Plaintiff,

) ) ) ) ) ) ) Case No. 2:04-CV-139TS

NOVELL, INC., a Delaware corporation, Defendant.

_________________________________) AND RELATED COUNTERCLAIMS. )

_________________________________)

BEFORE THE HONORABLE TED STEWART --------------------------------March 22, 2010 Jury Trial

REPORTED BY: Patti Walker, CSR, RPR, CP 350 South Main Street, #146, Salt Lake City, Utah 84101

Dockets.Justia.com

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

APPEARANCES

Brent Hatch HATCH JAMES & DODGE 10 West Broadway, #400 Salt Lake City, Utah 84010 Stuart Singer BOIES SCHILLER & FLEXNER 401 East Las Olas Blvd., #1200 Fort Lauderdale, Florida 33301 Edward Normand BOIES SCHILLER & FLEXNER 33 Main Street Armonk, New York 10504

Sterling Brennan WORKMAN NYDEGGER 60 East South Temple, #1000 Salt Lake City, Utah 84111 Eric Acker Michael Jacobs MORRISON & FOERSTER 425 Market Street San Francisco, California

94105

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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 Joseph A. LaSala Witness Ryan Tibbitts

INDEX Examination By Mr. Normand Mr. Brennan Mr. Normand Mr. Brennan Mr. Acker Mr. Singer Mr. Acker Mr. Singer (Direct) (Cross) (Redirect) (Recross) (Direct) (Cross) (Redirect) (Recross) PAGE 1806 1846 1860 1873 1875 1936 1980 1985

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EXHIBITS RECEIVED INTO EVIDENCE: Plaintiff's: 109 110 691 108 500 575, #200 165 165, last page 530

PAGE

1810 1818 1819 1820 1823 1841 1953 1956 1988

Defendant's: R-23 J-15 and K-15 Z-15 S-16 G-21 X-23 L-19 1836 1895 1900 1913 1930 1934 1985

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SALT LAKE CITY, UTAH; MONDAY, MARCH 22, 2010; 8:30 A.M. PROCEEDINGS THE COURT: Good morning. I'm going to give you

some rulings on some of the motions that were filed over the weekend. First, as to the SCO motion to preclude the

testimony of DeFazio regarding the intention of the APA, the Court will deny the motion. In reviewing the deposition

testimony, the Court believes that this is more like that testimony that was permitted to be elicited from Mr. Frankenberg and other witnesses who were asked questions about the intent of the APA, and the Court permitted them. Mr. DeFazio was clearly involved in the negotiations, he had personal knowledge, and the questions that were posed to him had to do with whether or not there was a specific discussion about copyrights. As with the

other witnesses presented by the plaintiffs, apparently there were no such discussions, and that was the type of testimony the Court believes ought to be elicited, again, primarily because of his personal involvement in the negotiations of the APA. Second, Novell's motion for leave to examine other witnesses about prior court rulings, the Court will deny it. The Court will find, first of all, that the relevance of the testimony, its probative value is very slight, if there is any, for the time frame in question. It's apparent that the

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time frame that matters is the year 2003 and early 2004 prior to the first ruling by Judge Kimball in June 2004. Further, the prejudicial value is still extremely high. The Court would note, however, that the question of these Court rulings might be relevant to the issue of punitive damages, specifically there ought to be a means whereby the defendants can respond to the assertions that were made in the opening statement that the so-called -well, the claim to title to the copyrights exists on the Novell Web sites to this day. Therefore, the Court will

allow a witness to be asked the question why do they remain on the Web site. And if that witness can truthfully testify

that they are there because of the prior court rulings, the Court will allow general reference to the court rulings, but the Court will not allow any reading of the rulings or anything more specific than that. Regarding Troy Keller, there is no response from SCO. Do you wish to say something here this morning? MR. SINGER: Yes. This was filed late last night.

Your Honor, Mr. Keller is to be called as a witness on the points in his declaration which reflect communications with Wilson Sonsini when Wilson Sonsini was representing Santa Cruz in the 2001 sale of these assets to Caldera and to why the language, which is questioned by Novell, states what it does and not something else.

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This was presented originally in May of 2007 in opposition to a motion for summary judgment. While this is

a number of years ago, it's our best recollection this is the first time the issues surfaced, but in that motion for summary judgment and before that time there was no reason to believe Mr. Keller's testimony on that point relating to a 2001 transaction would be probative. disclosures were subsequently amended. The various There was no effort

by Novell from the May 18, 2007 filing through the summary judgment in August of 2007 to raise this issue. Novell notes that we did not list Mr. Keller in an August 22, 2007 pretrial disclosure. We, in fact, dropped

him off the list, and that is quite correct, because by that time Judge Kimball had ruled on summary judgment against us on ownership issues, which this testimony related to, and the trial we were looking at in September would not have involved these issues. removed. The case goes on appeal. Honor in 2009. It comes back to Your That's why he was, at that time,

And in the first disclosures here we've There has

included him as someone who we intended to call.

been no effort from that point, which I think was in early February, until now to suggest that they needed the deposition of Mr. Keller. Notwithstanding that, when this issue came up a

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week or so ago, we indicated that -THE COURT: The one point they make is that you

did not disclose him as a witness in this trial until subsequent to the commencement of trial, correct? MR. SINGER: That's not quite correct, Your Honor. It is in the

We listed him in the pretrial disclosure. order signed of witnesses. THE COURT:

But then the witness list that you

submitted to the Court did not contain -MR. SINGER: not contain it. The witness list, inadvertently, did

That's why we said when we were going to

call him in our case back over a week ago, that we wouldn't call him then. We would even agree to provide a deposition

of him, which we're prepared to provide for a couple of hours this afternoon. We thought we were going to be able The stumbling block has been,

to work out these issues.

they said, well, we don't have all these Brobeck Phleger documents regarding due diligence, which of course they could have sought years ago if they wanted to pursue that. Brobeck isn't around. This is important testimony regarding things that are not privileged with respect to his conversations with Wilson Sonsini in 2001 and why he drafted this document. We're prepared for him to be fully deposed on that even though they didn't take advantage of opportunities to ask

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for such a deposition in an earlier point in time.

But he

was disclosed prior to this trial in the joint pretrial order and in the supplemental disclosures preceding that pretrial order. THE COURT: Remind me again, at what point did you

disclose that you did intend to call him as a witness in this trial? MR. SINGER: order that was -THE COURT: MR. SINGER: No, during the trial. During the trial, we disclosed on I know he was in a joint pretrial

Thursday, I believe, that he was going to be called the following day as a witness. THE COURT: prior? MR. SINGER: THE COURT: The week prior. So they have known for ten days in Thursday of last week or the week

this trial that he was going to be called? MR. SINGER: THE COURT: Yes. All right. The Court is going to If the deposition is

permit the testimony of Mr. Keller.

necessary, the Court will order that he be admitted -access be made available for him this afternoon so that that deposition may be taken. MR. SINGER: Thank you.

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THE COURT:

There is another motion filed by the

plaintiff in this case limiting Novell's trial testimony based on privilege objections. Counsel, do you want to

respond to that in writing or do you want to deal with it here orally this morning? Mr. Jacobs. MR. JACOBS: Your Honor, in discussing how to

handle this witness with Mr. Singer before court began, Mr. Singer made it a little clearer that this was kind of a heads-up, here are the issues that might arise during testimony with which we understand. I would like to make a

couple of global comments about privilege and about the material that they have submitted so that when a particular question is asked at least you have this background. Number one, I believe the record is clear from the beginning that on the questions of copyright ownership and the negotiations of the asset purchase agreement, Novell did not assert or you could say waive subject matter privilege. So in that -- so when you are looking at a record where someone is saying we're asserting privilege over the APA, that may be true as a general matter -- or as they related to negotiations, that may be true as a general matter, but the specific subjects at issue in this lawsuit, the documents were produced, the witnesses testified, there were declarations that were submitted. And so on those subjects,

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there should not be any disagreement.

You may have to

penetrate a little bit the materials that have been provided to understand that. plan. THE COURT: So let me make sure I understand. You From the beginning, that has been our

are asserting that even though during the course of the depositions there were some general privilege objections made, when it came to specific questions regarding the issues in this case, the privilege was waived and the witnesses were allowed to answer those questions in the deposition? MR. JACOBS: That's correct, Your Honor, as to the

asset purchase agreement negotiations, the focus of my comments. THE COURT: MR. JACOBS: Okay. Now one of the places where there is

some conflicting evidence submitted by SCO is in the deposition of Wilson Sonsini. deposition. entity. This was a somewhat peculiar

It was a deposition of Wilson Sonsini as an

I think at the time SCO was trying to pursue this

idea that because there is Wilson Sonsini as a firm during the '95 negotiations and then Wilson Sonsini as a firm in the 2001 transaction with Caldera, there is some kind of an institutional position on the question of whether copyrights transferred.

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Mr. Parnes is Wilson Sonsini's lawyer representing Wilson Sonsini in that deposition. And the transcript --

frankly, Your Honor, because of the way that theory was being pursued, the transcript is a bit of a mess. As we

discussed before, the team that represented Santa Cruz in 2001, 2002 was subject to an ethical wall from the team that represented Novell in 1995. So part of what Mr. Parnes as

Wilson Sonsini's lawyer is trying to fend off in that deposition is this very idea that the firm as an institution has a position on the question of copyright ownership. When he was making assertions, he was not doing so on behalf of Novell. That was a third-party deposition of So that's one additional

Wilson Sonsini, the institution.

piece of background because some of the materials they have submitted relate to that topic. The third general point relates to the 2002, 2003 This is relevant to an upcoming -- to our first The Court has

witness, Mr. LaSala, the general counsel.

seen e-mails -- internal e-mails at Novell recounting the contents of communications with, for example, Mr. McBride when Mr. McBride was telephoning the Novell personnel and raising the topic of copyright ownership. Those are

redacted because the contents of the communications we did not assert a point of privilege over, but the advice or what should we do in light of this call we regarded as internal

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legal advice.

So that's what the redactions are.

We've

cued to that faithfully, we believe, and it's a little late now to be arguing over whether the redactions were appropriate or not. Mr. LaSala will likely testify to what he understood the contents of the communications with Mr. McBride were. But, again, we did not assert a claim of

privilege over those facts while we did assert a claim of privilege over internal legal advice. Last point, because I think that the real danger here is not in the questions we're going to ask the witnesses that we're going to be presenting in our case in chief because we've had this plan in mind, if you will, for how we were going to deal with privilege issues, I think the bigger question comes up on cross-examination because it could be quite easier for the witness to hear a question on cross and think, oh, SCO is now opening the door, and to answer this question truthfully I have to discuss what happened internally at Novell. So it's really up to SCO, I

believe, to frame its questions carefully so that the witness is not put in the awkward spot of understanding from the plan how we were going to deal with privilege issues but being asked a question that to answer truthfully requires inquiry into privilege matters. With that, I don't need to say anything more

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because, again, we think we know where we assert the privilege and we've planned our direct examination accordingly. THE COURT: Thank you, Mr. Jacobs.

Let me state that the Court has now been informed and SCO has been warned, and I will again restate generally what the Court ruled last week in regards to the requests made by Novell, that the Court is not going to permit testimony to be presented to the jury that was not explored in the deposition because of the claim of the privilege, across the board, both sides. do. I don't know enough about the specifics to go beyond that in regards to the motion by SCO at this point, but I hope we all have a little bit of a framework that we can operate on without too much trouble during the course of the next four days. Mr. Brennan, do you have something? MR. BRENNAN: Your Honor. I just wanted to follow up with respect to the Court's ruling regarding prior rulings by Judge Kimball. don't intend to reargue it, I just wanted to raise a point of a practicality, as I understand it. Mr. Tibbitts, I believe, is the last witness that I Yes. Thank you. I appreciate that, That's what we're going to

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will be proffered today by the plaintiff before SCO begins its case, and one of the issues, at least as we understand it that has given rise to the request we made to the Court, is that Mr. Tibbitts had communications with potential licensees after the commencement of this case against Novell, after Novell had filed its motion to dismiss which led to the June 2004 ruling. And in those communications

the issue of the Novell litigation and the status of the ruling on the motion to dismiss was a subject matter of discussion between Mr. Tibbitts and these potential licensees. So my request, Your Honor, is in light of the Court's ruling, in particular the framing of the operative time period being, as I understood it, essentially prior to the commencement of the Novell case -THE COURT: No, it was prior to the ruling by

Judge Kimball in June of 2004. MR. BRENNAN: Thank you, Your Honor.

With that in mind, it would seem unfair and inappropriate to allow Mr. Tibbitts to testify to the contact that he had with potential licensees after that ruling. THE COURT: MR. BRENNAN: THE COURT: After June 2004? Yes. The only one I'm aware of is the

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Department of Defense, and SCO said that they were not going to explore that with Mr. Tibbitts. MR. BRENNAN: with that guideline -THE COURT: June 2004 -MR. NORMAND: There are no others. There are none I would agree, that anything after I think there may be others. So

that fall into that category. MR. BRENNAN: That makes it easier.

Thank you, Your Honor. THE COURT: MR. SINGER: Anything else? Your Honor, before we turn over to

Novell after Mr. Tibbitts, we would like to read in certain paragraphs of the answer that we believe constitute admissions. The objection that Novell raised last week was May we be permitted to do that after

rejected by the Court. Mr. Tibbitts' testimony? THE COURT: MR. JACOBS:

Mr. Jacobs, you wanted to reply? Two things, Your Honor. I believe

what the Court said was we would see how things unfolded this week to see if anything needed to be revisited in that connection. THE COURT: That is what the Court said.

Mr. Singer, the point the Court was trying to make is that though apparently in defendant's mind there is now

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some way to distinguish between UNIX and UnixWare, I don't believe that is yet before the jury. What I was

anticipating is that during the course of their case, that they may try to make that distinction. If they do, then I'm But you have your

going to allow you to read what you want.

case, two more witnesses, so you will have an opportunity to do it. I would rather we do it only if it's justified. I

don't want to confuse the jury any more than is necessary by having you out of the blue stand up and read that because I don't think they would understand the significance of that. MR. SINGER: MR. JACOBS: We understand, Your Honor. The only second point is that, as Mr.

Singer acknowledged the other day, one important point of clarification would be, as Mr. Singer proposed, to say UNIX and UnixWare copyrights existing up to the date of the asset purchase agreement. There has never been a claim by Novell

that we own copyrights to material created after the asset purchase agreement by Santa Cruz or SCO. MR. SINGER: THE COURT: That's not a point of dispute. All right. Ms. Malley, will you

please bring the jury in. (Jury present) THE COURT: Good morning, ladies and gentlemen. We have another week ahead

We hope you had a nice weekend. of us.

As I said to you last week, we do appreciate the

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fact that you have paid attention as you have, that you have remained alert during the course of the trial. We hope that

you will make an effort to do so during this next very important week. I believe, Mr. Singer, I need to ask you, or is it Mr. Normand? Mr. Normand. MR. NORMAND: It's me, your Honor.

We call Ryan Tibbitts. THE COURT: All right, Mr. Tibbitts. RYAN TIBBITTS, Having been duly sworn, was examined and testified as follows: THE CLERK: If you would please state and spell

your name for the Court. THE WITNESS: T-i-b-b-i-t-t-s. DIRECT EXAMINATION BY MR. NORMAND: Q A Q A Q A Good morning, Mr. Tibbitts. Good morning. Are you currently employed? I am. Where? At The SCO Group, Inc. Ryan Tibbitts. R-y-a-n,

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Q A Q A

When did you start at SCO? The last week of May 2003. Could you briefly describe your educational background? After I graduated from high school, over the course of

the few years I attended a junior college in Idaho, Ricks College. Graduated from there. Then I attended Brigham

Young University in Provo, received a business degree from there, and then also a law degree from BYU. Q A What did you do after law school? The first year out of law school I clerked for a

judge -- that's just working for a state judge on various matters before that court -- for a year. large Salt Lake City law firm. Q A Q firm? A I did. I think the last eight or nine years I was And then the last How long were you at the law firm? Just short of 16 years. Did you serve in any management positions at the law Then I joined a

there, I was on the board of directors.

six years I was there, I was the president of the firm. Q A What did you do after you left the firm? I left the firm to join a technology company called Was there for about a year.

Lineo, as general counsel.

Then I joined a second technology company named Center 7, as general counsel. And then I joined The SCO Group. So I'm

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on to my third technology company. Q Were you with SCO when Novell asserted in May 2003 that

SCO does not own the copyrights at issue here? A Yes. I had been there just a few days when that

happened. Q Do you generally recall the reaction from the

community? A Yeah. I think I was so new to the game at that point

in the company, the significance was maybe lost on me a little bit. But I can say within the company, you know, a

cross between absolute astonishment and total crisis mode for what it was doing to the company. Q A Now on the issue of copyrights, what happened next? Well, the next thing I recall was a few days later a

secretary there at the company found the file with what we've referred to as Amendment No. 2 in the file. Our CEO,

Darl McBride, faxed that off to Novell's CEO, Jack Messman. There were some phone conversations and letters that went back and forth. And then on June 6th, Novell issued a press

release retracting what they had previously said about copyright ownership. MR. NORMAND: Exhibit 97. BY MR. NORMAND: Q Mr. Tibbitts, is this the press release you were Mr. Calvin, would you pull up

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referring to? A Q Yes, it is. Was there particular language you were referring to in

the answer you just gave? A Yes. I think it's the last sentence of the first

paragraph where it says, the amendment appears to support SCO's claim that ownership of certain copyrights for UNIX did transfer to SCO in 1996. Q Did you rely on this press release in deciding that SCO

owns the copyrights at issue here? A Yes. I think we clearly looked at the press release,

that Novell is a public company that's issued worldwide, and then the events that led up to that, including the conversations that Mr. McBride had with Mr. Messman and the letters that had gone back and forth up to that point. Q Did SCO and Novell exchange correspondence about

copyrights over the next many months? A Q Yes, we did. Did that correspondence change your mind about whether

SCO had acquired the copyrights at issue in this case? A No, it did not. MR. NORMAND: Exhibit 109. BY MR. NORMAND: Q Do you recognize this document, Mr. Tibbitts? Mr. Calvin, would you pull up

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A

Yes.

This is a letter from September of '03 that I

sent on behalf of SCO to Joseph LaSala, who was Novell's general counsel at the time. MR. NORMAND: document into evidence. MR. BRENNAN: THE COURT: No objection, Your Honor. It will be admitted. Your Honor, I would move the

(Plaintiff's Exhibit 109 was received into evidence.) THE COURT: MR. NORMAND: BY MR. NORMAND: Q So now that the jury can see the document, Mr. This is 109, correct? That's right, Your Honor.

Tibbitts, what is the date again? A Q A Pardon me? What is the date of the document? September 10th, 2003. MR. NORMAND: Mr. Calvin, would you pull up the

middle paragraph beginning we have reviewed. BY MR. NORMAND: Q A Q A Can you see that language, Mr. Tibbitts? I do. Did this language reflect your views at the time? Yes. We were responding to a couple of letters as

referenced in the first paragraph that they had sent us, so

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this was in response to several letters.

We just conclude,

we respectfully suggest that you carefully review all of the agreements in their entirety, and particularly Amendment No. 2. Q A Why did you call out Amendment No. 2? Well, because we believed, just as Novell had stated in

their press release, that Amendment 2 cleared up the issue and confirmed that the copyrights had transferred many years before. Q We thought that was the end of the issue.

When you refer in the sentence to all the agreements,

were there other documents that SCO relied on in forming the view reflected in this letter? A Q Yes. Do you recall reviewing the technology license

agreement in 2003? A Q A Q We did. Did you rely on that agreement? Yes, we did. Do you recall relying on any other documents for the

views reflected in this letter? A Yes. All during this period of time, we were gathering

the documents on this issue because Novell had sent a couple of additional letters. So, of course, we looked at the

asset purchase agreement itself, both of the amendments, including Amendment No. 2. We looked at the technology

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license agreement.

And then in various time frames other

documents came to light, including the joint press release that Novell and SCO had issued at the time alerting the world that the intellectual property had transferred to Santa Cruz as part of this transaction. There were letters that came to light somewhere in this time frame that Novell had sent to their customers around the world. Q A When did Novell send those letters? Within a couple months after the closing date. All

went out at different times. There was an SEC filing by Santa Cruz from -- I believe late '95, shortly after the deal closed, where they indicated that they had acquired the core intellectual property to the UNIX operating system, which anyone who understands source code and software, the core intellectual property would be the copyrights. Then there was, you know,

other types of evidence that was coming in or statements about SCO being the copyright owner, including statements relating to SuSE, the company Novell announced it was going to acquire, and those sorts of documents. MR. NORMAND: Mr. Calvin, could you pull up C-14.

If you could pull up that paragraph beginning so far. BY MR. NORMAND: Q Is this the SuSE document that you were just referring

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to, Mr. Tibbitts? A Q Yes. Was there particular language in this paragraph that

you had in mind? A Yes. Third line up it says, SCO, which owns the This was part of a story on InfoWorld

copyright to UNIX.

that had come out relating to SuSE Linux, which was one of the largest Linux companies in the world. believe IBM was a majority owner of SuSE. executives were involved with SuSE. At this time I Many IBM

And SuSE, during this

time frame when they were talking about this UnitedLinux organization, had requested that SCO donate the UNIX technology and copyrights to SuSE and to the UnitedLinux organization. And, you know, that was further evidence on

what the world understood and what people that were very heavily involved in this space understood about who owned the copyrights in the business. Q Now you mentioned IBM. When you joined SCO, was SCO in

litigation against IBM? A Q Yes, we were. What were the principal claims SCO had brought against

IBM, if you recall? A Well, the principal claim was essentially a breach of SCO was

contract claim that related to SCO's allegations.

the owner of all of those UNIX licenses under which other

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companies had developed their own flavor of UNIX, IBM being one of those. Their UNIX derived flavor was known as AIX.

IBM had announced publicly to the world that they were going to donate all of AIX, if the Linux community wanted it, to Linux. We believed that was a very clear breach of their

license agreement and would be devastating to our UNIX business, which is in the same market space as Linux. so we sued them for breach of that license agreement. Q Did Novell direct SCO to waive its contract claims And

against IBM? A Q A Yes. Were you involved in the correspondence on that issue? Some of it. There were some letters earlier on, I And then, And so when

believe, between Novell and our CEO, Mr. McBride. as I say, I kind of moved into SCO in mid 2003.

they made some demands later on about asking us to waive certain claims against IBM, then I got involved at that juncture. MR. NORMAND: 243. BY MR. NORMAND: Q A Q A Do you recognize this document, Mr. Tibbitts? Yes, I do. What is the document? This is a letter to me from Mr. LaSala of Novell. Mr. Calvin, could you pull up SCO

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There is not a date on the front page, but I believe if we look at the headers on the second pages, it's October of 2003. MR. NORMAND: evidence. THE COURT: MR. NORMAND: It's already been admitted. Can we go to the last page, Mr. Your Honor, I move SCO 243 into

Calvin, and bring out those two paragraphs, if you would. BY MR. NORMAND: Q Mr. Tibbitts, what did you understand Mr. LaSala to be

saying in this portion of the letter in particular? MR. BRENNAN: Objection, Your Honor. In that

regard it speaks for itself. THE COURT: BY MR. NORMAND: Q Mr. Tibbitts, let me direct you to the last paragraph. MR. NORMAND: Calvin. BY MR. NORMAND: Q Mr. Tibbitts, would you mind reading that into the If we could highlight that, Mr. I'll sustain the objection.

record. A Accordingly, pursuant to section 1.16(b) of the asset

purchase agreement, Novell hereby -THE COURT: that again? You said 1.16. Do you want to look at

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THE WITNESS:

That's what it looks like on my

MR. BRENNAN: THE WITNESS:

It appears to be 4.16. Excuse me. Sorry about that.

4.16(b) of the asset purchase agreement, Novell hereby directs SCO to waive any purported rights SCO may claim to require IBM to treat IBM code itself as subject to the confidentiality obligations or use restrictions of the agreements. Novell directs SCO to take this action by noon,

MST, on October the 10th, 2003, and to notify Novell that it has done so by that time. BY MR. NORMAND: Q A Q Do you recall whether SCO complied with this directive? No, we did not. Do you see at the bottom the cc? MR. NORMAND: If you could bring that out, Mr.

BY MR. NORMAND: Q A Do you know who Mr. Ron Lauderdale was at that time? Yeah, by this time I knew who he was. He was an

assistant general counsel in IBM's legal department. Q Did it concern you that IBM was copied on this letter

to you from Novell? A Yes. They had copied them on some prior correspondence You

as well, and obviously that caused us some concern.

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know, if companies like IBM and Novell are lined up against you, that's a serious matter. And, you know, our choice was

do we -- do we stand up for our rights and fight for our customers and our shareholders or do we just, you know, let them run over us. Q We decided we had to stand up to them. Do you

Mr. Tibbitts, let me show you SCO Exhibit 110.

recognize this document? A Yes. This is a letter that I sent to Mr. LaSala on So I think this is responding to the

October the 9th, 2003.

letter that we just looked at. MR. NORMAND: is in evidence. Your Honor, I don't believe SCO 110

I would move it in. Your Honor, this letter was the

MR. BRENNAN:

subject of discussion in court on Friday regarding certain redactions. I don't see those redactions appearing in the

letter, contrary to your agreement. MR. NORMAND: redactions. This is the redacted version now on the screen, so the jury hasn't seen it. THE COURT: Let Mr. Brennan see the redacted I have a hard copy of the

version and make certain he's comfortable with what has been redacted. MR. BRENNAN: May I just inquire of counsel to see

the unredacted version so I can make the comparison?

1818

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THE COURT: MR. BRENNAN:

Yes, certainly. Thank you, Your Honor. I appreciate

THE COURT: MR. BRENNAN: THE COURT:

So as redacted -No objection, Your Honor. Thank you.

(Plaintiff's Exhibit 110 was received into

BY MR. NORMAND: Q So, Mr. Tibbitts, I believe you were saying this was

your letter in response to Mr. LaSala, the letter from Mr. LaSala that we've just reviewed; is that right? A Q Yes. Now let's pull out the second paragraph. Could you

read the second to last and the last sentences of this paragraph? A Q A Starting with you claim? Yes. You claim that any result other than your selective We

interpretation of the agreements would defy logic.

submit that your position that SCO received basically nothing for the many millions it paid Novell or that Novell has the unfettered right to simply declare that all SCO license rights have been waived defies logic. Q And why did you use the phrase defies logic?

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A

Well, that was their term.

They said our position

defied logic.

And just by looking at the evidence that we

had and our understanding, we thought, you know, their claim that they had literally the right to destroy our business and waive all our license protections against everybody defied logic. Q Mr. Tibbitts, let's show you SCO Exhibit 691. Do you

recognize this document? A Yes. This is a letter from October 10th, 2003

addressed to me and Ron Lauderdale from Mr. LaSala at Novell. MR. NORMAND: evidence. MR. BRENNAN: THE COURT: No objection. It will be admitted. Your Honor, I move SCO 691 into

(Plaintiff's Exhibit 691 was received into evidence.) BY MR. NORMAND: Q Now again, Mr. Tibbitts, IBM is copied on this letter.

So you recall reacting to that issue? A Well, they weren't just copied on it. It was sent to

them as well.

And along the lines that I've said before, it

was of great concern to us that two companies like IBM and Novell locking arms to try and waive all your rights of your business, and, you know, we viewed it as essentially an

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effort to shut us down.

So this was their follow-up letter.

Because we didn't comply with their order to waive our claims against IBM, they were purporting to waive those rights on our behalf. MR. NORMAND: Mr. Calvin, let's go to the second

page of this document and bring out those two paragraphs. BY MR. NORMAND: Q Is this the language you were referring to, Mr.

Tibbitts? A Q Yes. So by this point you had not complied with their

directive from a few days earlier? A Q A No, we had not. Have you ever complied with that directive? No. MR. NORMAND: BY MR. NORMAND: Q A Do you recognize this document, Mr. Tibbitts? Yes. This is another letter from a few months later to Let's look at SCO 108, Mr. Calvin.

me from Mr. LaSala at Novell. MR. NORMAND: evidence. MR. BRENNAN: THE COURT: No objection, Your Honor. It will be admitted. Your Honor, I move SCO 108 into

(Plaintiff's Exhibit 108 was received into

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evidence.) MR. NORMAND: of the document. BY MR. NORMAND: Q The subject line says, Sequent Computer Systems. Could The jury can now see the front page

you briefly describe what that refers to? A Yes. This is a little tricky, so I hope I can explain Sequent Computer Systems was another one of these

it well.

UNIX licensees that had taken a license to make their own flavor or version of UNIX. version. Sequent was purchased by IBM in the late '90s. So at So they had a UNIX derived

this time Sequent was actually part of IBM, but it was a different license agreement than the IBM license agreement. And IBM had started donating technology from Sequent's version of UNIX, their UNIX flavor, and they were donating portions of that operating system into Linux which would allow Linux to run enterprise servers. competing with us at that point. So it was directly

So we had also terminated

Sequent's license and said that they were in breach and no longer authorized to use that code, even though it was at that point owned by IBM. So it was a little complicated, but we felt the need that we had to terminate that license too because IBM was doing the same thing with Sequent Computer System as they

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were doing with their own UNIX flavor. MR. NORMAND: Mr. Calvin, let's go to the second

page of the document and bring out the last two paragraphs. BY MR. NORMAND: Q Mr. Tibbitts, could you just read that first paragraph

into the record. A Accordingly, pursuant to section 4.16(b) of the asset

purchase agreement, Novell hereby directs SCO to waive any purported right SCO may claim to require Sequent, or IBM as its successor, to treat Sequent code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license. Novell directs SCO to take these actions by

noon, MDT, February 11th, 2004, and to notify Novell that it has done so by that time. Q A Did SCO comply with this directive? No, we did not. It was another three days that they

had given us to comply with this directive, and we did not. Q Let's look at the last document in this series, Mr. Do you recognize this document,

Tibbitts, SCO Exhibit 500. Mr. Tibbitts? A Yes.

This is another letter to me from Mr. LaSala --

actually the letter is to me and to Mr. Lauderdale of IBM. This is following up their other letter where they said because we didn't comply with their order, that they were going to just do it on their own.

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MR. BRENNAN: strike that.

Objection, Your Honor, I move to The witness is

The letter speaks for itself.

characterizing it. THE COURT:

The document itself is in evidence. I will sustain the objection and

strike the answer that Mr. Tibbitts just gave. If you want to show the document, you may do so. MR. NORMAND: I'm moving the document into I move SCO 500 into evidence.

evidence now, Your Honor. MR. BRENNAN: THE COURT:

No objection, Your Honor. It will be admitted.

(Plaintiff's Exhibit 500 was received into

BY MR. NORMAND: Q Mr. Tibbitts, how does this letter relate to the letter

we just looked at? A As I said, this is a follow-up letter regarding Sequent Because we did not comply with their

Computer Systems.

previous order, they were taking that action on their own. Q Let's look at the second page of the document. MR. NORMAND: the last two paragraphs. BY MR. NORMAND: Q Could you read that language into the record, Mr. Mr. Calvin, if you would bring out

Tibbitts? A SCO has failed to take the actions directed by Novell.

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Accordingly, pursuant to section 4.16(b) of the asset purchase agreement, Novell, on behalf of The SCO Group, hereby waives any purported right SCO may claim to require Sequent, or IBM as its successor, to treat Sequent code as subject to the confidentiality obligations or use restrictions of Sequent's SVRX license. Q So in this letter Novell was actually claiming to be

acting on behalf of The SCO Group; is that right? MR. BRENNAN: witness. THE COURT: MR. NORMAND: MR. BRENNAN: his own testimony. BY MR. NORMAND: Q When you received this letter, Mr. Tibbitts, what did Sustained. Summarizing his testimony. I object to that. He ought to offer Objection, Your Honor, leading the

you understand this language on behalf of The SCO Group to signify? A That Novell was purporting to waive our rights under

the license agreements that we owned relative to Sequent slash IBM. Q Let's move to a different topic, Mr. Tibbitts, the Did you have any involvement with the

SCOsource program. SCOsource program? A Yes.

When I joined the company, the IBM litigation was

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under the broad umbrella of the SCOsource division of SCO, so I got involved over time with that lawsuit. And then I

also got involved in a few efforts to meet with customers and sell the SCOsource licenses it had developed. Q What was your first direct involvement in the SCOsource

program? A My first involvement was the first part of August 2003

where we had -- where we obtained a license from one of the largest computer technology companies in the world, Computer Associates. Q A Could you explain how that works. I hope so. It's another bit of a story. But my prior

employer, before I joined SCO, had been involved in a dispute with Computer Associates over an unrelated contract. There came a time when those parties decided they wanted to resolve that dispute. that. At the last minute, after we thought we had everything put to bed, the person who was mediating that dispute for us came in and said, Computer Associates wants one other thing. We said, what's that. They said, well, they understand, So we negotiated a settlement of

Ryan, that you are now working for The SCO Group and they want some kind of a license from SCO to make sure they are okay with SCO's IP as it relates to Linux. This obviously

surprised all of us because we were dealing with totally

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different issues.

I said, well, I just started to work for

SCO, that's true, but I don't have a position to grant you some kind of a license. I will certainly get you in touch And so

with people at SCO who can talk to you about that. we proceeded in that fashion.

A few days later Computer Associates gave us a list of the things they wanted. We negotiated back and forth. And

ultimately, in early August, Computer Associates signed what I think was our first license that became -- I don't know if it was known at that point as the RTU, or right to use license that we've talked about, but that was the first license that went into that category, I believe. Q you? A Well, because I knew CA was one of the -- I think it And, in summary, why was that discussion significant to

was a Fortune 500 company, one of the largest technology companies in the world, and they came to us and demanded that SCO provide some kind of a license to them. And they

were willing to hang up this other deal they had been working on for years to get resolve over this point. So it

told me it was a serious matter and that big companies out there were interested in this. Q What did you say happened with respect to Computer

Associates on this issue of a potential license? A They signed a license agreement.

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Q

Now with respect to the SCOsource program, what did you

understand SCO's target market to be? A Corporate users. They wanted businesses that were

using Linux in their enterprise server environment as opposed to individuals or people that were using Linux as a hobby tool on their personal computers. target at all. Q In connection with this SCOsource program, was the That was not the

company collecting evidence that Linux was infringing on SCO's rights? A Q Yes. If you can recall it this way, what materials do you

recall having organized by mid 2003 say? A Well, there were several different categories I This all started with a person within our company

believe.

who was basically in charge of our Linux marketing, when he informed management that he understood that people in the marketplace were using our SCO UNIX libraries to migrate their systems to Linux. MR. BRENNAN: communicating hearsay. He viewed that as -Your Honor, I think we're We're now hearing reports of some It's hearsay.

individual at SCO, unidentified. MR. NORMAND:

We were speaking to the issue of Mr.

Tibbitts' understanding of what materials had been collected by SCO.

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MR. BRENNAN:

But that's not what the answer had

We haven't heard what materials have been collected.

We've been hearing what someone else at SCO identified. THE COURT: Mr. Tibbitts, you know what hearsay

Would you please try to testify avoiding hearsay. Let's start over. THE WITNESS: We gathered information about SCO's

UNIX libraries that people were using to migrate their systems over to Linux away from UNIX. thing that we came up with. There were -- I think the next thing was an e-mail from a gentleman who had a Linux company. I'm afraid I'll That was the first

probably butcher his name, but it's Miguel de Icaza I believe. He had a company called Ximian that was working in Sometime in early 2003, he had sent an

the Linux space.

e-mail to the company asking SCO if it would consider donating technology that is called ELF -- or some components of ELF into the Linux open source community. ELF is a very critical technology, which I'm not qualified to explain, about the reasons that Linux moved from being an operating system that individuals could mess around with to an enterprise grade server operating system that people like IBM would use. who was -MR. BRENNAN: Your Honor, I'm sorry. The question So here's this gentleman

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that was asked is what materials were gathered. strayed beyond that. MR. NORMAND:

We've

This is exposition as to how these We can

materials were gathered and the basis for gathering.

ask a series of six questions rather than one to get there. MR. BRENNAN: gathered. THE COURT: Because this is direct, I want you to The question was what materials were

be more specific in your questions, Mr. Normand. THE WITNESS: On that point, the information we

gathered was an e-mail from this gentleman, who was well aware of Linux and the open source movement, asking us to donate portions of ELF technology into that movement. BY MR. NORMAND: Q A Q A Have you heard the phrase code room? I have. Does SCO have a code room? Yes. By late summer of 2003, SCO set up a room there

at our headquarters that had agreements and some television screens where people could come in and view some code comparisons that showed, you know, various files of UNIX code that had been copied almost verbatim into Linux. Q Can you provide any examples of code, as you recall,

that were copied verbatim? A I think the first example that someone found in

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April or May of 2003 was some code called the Malloc code. And, again, I don't understand the technology enough to explain it, but it was UNIX code that was donated by a company called Silicon Graphics into a version of Linux. And I'm not sure who discovered it or how, but you could put those two different code comparisons up on the screen and highlight in red many, many lines of that code was directly copied into Linux. So that was one example that people

could see when they visited our code room. Q Now were SCO's salespeople allowed to show potential

customers this kind of proof that you've been describing when you met with them? A Q A Not down to that level, no. Why not? We didn't want salespeople out there running around

disclosing code to people that we have no control over them or who they were. The salespeople did have bullet points

that they would show identifying the categories, but we did not give them all of the specifics of the various claims that were in the IBM case or were involved with Linux in general. Q Did people from outside the company come to visit the

code room? A Yes. There were a number of people that came in and

viewed that code, and I attended some of those meetings.

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Q A

Did you have occasion to see how people reacted? Yeah, they were impressed with it. It's pretty glaring

when you take a look at that. Q 2003? A Q I did not attend SCO Forum. During this time, 2003, 2004, did SCO have other Do you recall attending SCO Forum in the summer of

support for its claim that Linux was infringing SCO's copyrights? materials? A Yes, we did. I do know at SCO Forum in 2003, some Did they present this support in presentation

people in our company did show those examples to the people attending the forum. evidence. And we continued to gather more

There were people saying, you know, show us how

we're in violation. MR. BRENNAN: hearsay again. Objection, Your Honor. We're at

The witness said he wasn't at the show, and

he told hearsay answers. THE COURT: BY MR. NORMAND: Q Let me show you, Mr. Tibbitts, a slide from what's been I'll sustain the objection.

marked as SCO Exhibit 748. MR. NORMAND: Mr. Calvin, I'm looking at the slide

that ends in the Bates number 69. //

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BY MR. NORMAND: Q A Do you recognize this slide, Mr. Tibbitts? Yes. This was one of the slides that was in various

presentations that we showed to people who were interested in finding out what we were talking about. MR. NORMAND: Your Honor, I move to admit this I don't move to admit the

slide within SCO Exhibit 748. whole exhibit. THE COURT: MR. NORMAND:

SCO 748 has already been admitted. Thank you, Your Honor. I thought

there was only one slide from 748. MR. BRENNAN: I think that's right, Your Honor,

there is only a portion, and we do object to this as hearsay. THE COURT: at. Let me see what page you are looking

What page was it again? MR. BRENNAN: What page number is this?

Your Honor, we believe, if I can read the fine print, what was permitted was Bates number 72. entitled comments from the industry analyst. It's As I recall,

the reason this was permitted was these were comments from outsiders, not SCO, and that's different than what is before the Court that's been proffered. MR. NORMAND: Page 69 is pure hearsay.

It's not being submitted for the It's being submitted to

truth of the matter, Your Honor.

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show what materials Mr. Tibbitts would show to potential customers and others in the marketplace at the time. MR. BRENNAN: hearsay. MR. NORMAND: It's an issue that Novell has raised Object to relevance. It's still

throughout the trial, Your Honor. THE COURT: Counsel, the Court is going to sustain

the objection for the same reason I believe that this was denied when it was offered previously, except for that one page. It is hearsay. MR. NORMAND: Okay. I thought it was because

there was a foundation problem with Mr. McBride because he had not -- he acknowledged that he hadn't presented this material to anybody. MR. BRENNAN: Your Honor, it was hearsay. That

was the reason, quite clearly. MR. NORMAND: If we could have a stipulation that

Novell was not raising in the trial the question what materials were presented to potential customers, then I would be happy with that. MR. BRENNAN: Well, Your Honor, I think the issue

remains to be seen what we might use for impeachment purposes, but we're not there yet. We're on this document

given the proffered reason at this juncture. MR. NORMAND: There is a Novell claim in this case

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raising the issue of state of mind. But I will move on, Your Honor. THE COURT: There is no reason why you cannot ask

questions about the information without the document being admitted. MR. NORMAND: THE COURT: laid. MR. NORMAND: BY MR. NORMAND: Q Mr. Tibbitts, do you recall addressing the issue of SMP Thank you, Your Honor. Agreed. Assuming that a proper foundation is

in the marketplace? A Q Yes. Could you briefly describe what you understand SMP to

be and what its significance is? A Well, I don't have a very deep understanding, but SMP

is symmetrical multiprocessing, which is one of the technologies that was donated into Linux from people who had license restrictions on that, and that was one of the technologies we discussed with people who wanted to hear more about what we were claiming. Q R-23. A Let me show you, Mr. Tibbitts, what has been marked as Do you recognize this document? I do. MR. NORMAND: If you would go to the last page,

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Mr. Calvin. BY MR. NORMAND: Q A Q A Is that your signature line, Mr. Tibbitts? Yes. Do you recall sending this letter out to Linux users? Well, it wasn't just Linux users, I don't think. I

mean, as a group it was sent out to corporate -- potential corporate users, many of them -- I think maybe as many as a thousand companies, again, just showing some of the things that we were finding along the way that we alleged was a problem for Linux. And so this is a letter outlining ABI

code, which is application binary interface, that links the operating system with applications, critical technologies that we believed prove that Linux was using our stuff without our permission. MR. NORMAND: R-23 into evidence. MR. BRENNAN: reasons. Your Honor, we do object for several Second of all, There is no evidence Your Honor, we move Novell Exhibit

First of all, this is hearsay.

it's not an executed copy of a letter.

on the face of it that it was sent to any particular person or company, and there has not been a demonstration that that particular communication was sent to any particular company. Given all those reasons, it should not be admitted.

1836

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THE COURT:

The Court will admit the document.

(Defendant's Exhibit R-23 was received into

BY MR. NORMAND: Q Mr. Tibbitts, the jury, I think, can now see this

document. MR. NORMAND: Mr. Calvin, if you highlight the

bottom part of this letter. BY MR. NORMAND: Q Again, Mr. Tibbitts, to your understanding, what is it

that is being addressed in this part of the letter and the remainder of the letter regarding what I will refer to here as Linux files? A says. Well, I think the best I can do is just read what it It says, any part of any Linux file that includes the Files in

copyrighted binary interface code must be removed.

Linux version 2.4.21 and other versions that incorporate the copyrighted binary interfaces include, and the list goes on for a couple of pages, if I recall. And, again, this is

just code that our consultants looked at and reviewed and determined this was a problem. People were asking for

information, so we shared this with many companies. Q Mr. Tibbitts, let me show you a slide from what has

been marked as SCO Exhibit 575. MR. NORMAND: Mr. Calvin, I'm thinking of a slide

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that says what makes Linux different. BY MR. NORMAND: Q A Q A Do you recognize this slide, Mr. Tibbitts? I do. On what basis do you recognize it? Well, this was a slide presentation that came in

several forms, one of which we just simply pulled off the Internet somewhere in the 2003, 2004 time frame. It's a

slide presentation by Dan Frye, who is an IBM executive that runs their whole Linux technology center. piece -Q Let me stop you there because we may run into this same It's a marketing

issue from a few minutes ago. What was the relevance of the slide to you? A Well, this is one thing that we also showed people when

they wanted to know what kind of things we were talking about, and this is a document that I personally showed to many people over the course of time. MR. NORMAND: Your Honor, at least as a proffer, I

would move this slide into evidence. MR. BRENNAN: Objection, Your Honor, it suffers First of all, there's not

from the same problem before.

been a proper foundation laid as to its source of origin. This witness has not indicated that he himself did the pull off the Internet. He hasn't laid the foundation for that.

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It is hearsay on two levels. MR. NORMAND: Your Honor, again, it falls into

this category of materials that Mr. Tibbitts was showing in the marketplace, and for the reasons that I have stated before, I think it's relevant. THE COURT: There is no proper foundation for it,

but I think it could be -- it could avoid hearsay because I don't believe you're offering it for the truth, but I don't believe there's been a proper foundation. BY MR. NORMAND: Q Mr. Tibbitts, do you recall how it was that you came to

have possession of this document -- this slide? A Yes. A person who worked for SCO one day told me, look

what I found on the Internet. MR. BRENNAN: hearsay. MR. NORMAND: the matter, Your Honor. THE COURT: THE WITNESS: Overruled. So he went to a link on the Web site I It's not going in for the truth of Objection, Your Honor, that's

where this IBM document was, and we flipped through it.

said, yes, this is very interesting, I would like a copy of that. And it remained on the Internet. You could get it

until not long ago.

We put some of these slides up on our

Web site, and shortly thereafter it disappeared.

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BY MR. NORMAND: Q Did you have occasion to see the color version of this

slide on the Internet within the last several days? A Yes. MR. NORMAND: foundation. MR. BRENNAN: That is not an adequate foundation, Your Honor, I submit that's proper

Your Honor, for a document pulled off the Internet. THE COURT: BY MR. NORMAND: Q So the jury can now see this document, Mr. Tibbitts. I'll overrule the objection.

What is the particular language of the document that you regard as significant in the course of your presenting it to the marketplace? A Several things. I would start with the logo down in

the bottom right that says IBM, for International Business Machines, with a penguin next to it, which is the Linux logo, or mascot, if you will. is what makes Linux different. identified there. Then at the top the heading There are several things

In the center it says Linux attributes.

And then immediately to the left there it says derived from UNIX. Q A Why did you think that phrasing was relevant? Well, that's significant because it's an admission that It started with UNIX

that is exactly where Linux came from.

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and was derived from UNIX.

And, you know, I'm not saying

this is the beginning -- or the end of the issue, but it's a good starting place when IBM admits that Linux is derived from UNIX. Q Let me show you the next slide, Mr. Tibbitts. THE COURT: admitted. The whole document has not been

Only one slide at a time. MR. NORMAND: That's right, Your Honor. I don't

think the jury can see the next slide. BY MR. NORMAND: Q A Q Do you recognize this slide, Mr. Tibbitts? I do. Does this fall into the same category as the slide we

just looked at in terms of the use you made of it and the significance you attributed to it? A Yes, it's part of these presentations that we pulled

off the Internet from IBM. Q Is this a slide that you've seen the color version in

the last few days on the Internet? A It's also a slide that we've shown to potential

customers and others who were interested in the issue. MR. NORMAND: evidence. MR. BRENNAN: Your Honor, the same objection. In Your Honor, I move this slide into

fact, what we saw was a suggestion in connection with the

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previous one that it wasn't being offered for the truth of the matter asserted. admission. May I suggest it was somehow an

Your Honor, so the first one was misused and now We still

I suggest the same may be tried with this one.

haven't met the evidentiary requirements for its admission. THE COURT: I will overrule the objection. Let's

make certain the Bates numbers of these are made available so Ms. Malley and I will know exactly which portion of 575 has been admitted. MR. NORMAND: ending 200. (Plaintiff's Exhibit 575, slide 200, was received into evidence.) BY MR. NORMAND: Q Was there any particular language in this slide, Mr. Yes, Your Honor. It's Bates number

Tibbitts, that you found significant at the time you were making use of it? A Yes. Again, it's an IBM presentation, IBM's logo and And then the

penguin, the question why does Linux work.

first bullet I guess is somebody's attempt to be humorous, maybe, I don't know, it says, UNIX was a pre-write of Linux. MR. BRENNAN: speculation. Objection, Your Honor, calls for

Move to strike.

BY MR. NORMAND: Q How was this language significant to you at the time,

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Mr. Tibbitts? A Again, I think this is a different way of saying that

Linux is derived from UNIX, but they say UNIX was a pre-write, like UNIX was written just so Linux could be derived from it or something. making the same point. MR. BRENNAN: THE COURT: Objection, move to strike. I'm going to grant the motion to But, anyway, it's clearly

strike because I think he's speculating about as to what it says and what it means. So the Court will instruct the jury

to disregard the answers given by Mr. Tibbitts. BY MR. NORMAND: Q Do you recall having any discussions with anyone who

was reviewing the slide with you about what that language meant? A Q Sure. Could you summarize what the discussions were? MR. BRENNAN: Objection, Your Honor, lacks

foundation and it's hearsay. MR. NORMAND: foundation. MR. BRENNAN: speaking with. Because we don't know who he's I have no idea how that could lack

That's the problem. I would agree.

THE COURT: //

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BY MR. NORMAND: Q A Q Who did you discuss -Well, it says what it says. Do you recall discussing this language with anyone in

particular apart from your attorneys? A Yes. I think I discussed this with a gentleman who His name is Dean

pointed it out to me on the Internet. Zimmerman. Q

What do you recall discussing with Mr. Zimmerman about

the language? MR. BRENNAN: Honor. MR. NORMAND: It's going to Mr. Tibbitts' state of Objection, that's hearsay, Your

mind not to the truth of what Mr. Zimmerman stated. MR. BRENNAN: I'm not sure what relevance that

has, but it's still hearsay. THE COURT: THE WITNESS: I will overrule the objection. Well, the discussion was that this

was, in our view, another way of saying that Linux is derived from UNIX. But it was, again, a different way of

saying that by indicating that UNIX was written for Linux. MR. BRENNAN: Your Honor, I move to strike. Now we have Mr. Tibbitts

Again, that's speculation.

engaging in speculation with somebody else. MR. NORMAND: Your Honor, it was a description of

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his discussion with Mr. Zimmerman. MR. BRENNAN: But the description is what they

were speculating over, Your Honor. THE COURT: I will strike the answer and ask the If you will simply, without

question be asked again.

speculating as to what the individual thought, just tell us what he said. Go ahead, Mr. Tibbitts. THE WITNESS: Okay. Well, what he said is it

looked like it was another way of saying the same thing that was on the other slide, that Linux was derived from UNIX. BY MR. NORMAND: Q Now, Mr. Tibbitts, in connection with the SCOsource

program, did you meet with a company called Questar? A Q A Q A Q I did. Do you recall when you met with them? Late 2003. What was the tone of the meeting? It was a cordial business meeting. Do you recall whether Questar entered into a license

with SCO? A Yes, they did. A few weeks after our meeting -- within

a few weeks after our meeting, they entered into a SCOsource license. Q Mr. Tibbitts, do you have a view as to whether

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ownership of the UNIX and UnixWare copyrights is required for SCO to run its UNIX related business? A Q A I do. What is your view? The copyrights are critical for us to run the business

that was purchased from Novell in '95, both the SCOsource business and the right to protect that core UNIX intellectual property, and then the products businesses that emanate off of that, to continue to develop and maximize that business opportunity. Q Couldn't SCO run its UNIX business by just owning the

UnixWare copyrights? A Q A Not our current business, no. Why not? Because we own the core UNIX intellectual property and

a very critical component of that at this point in time is to protect that IP, and we have got to have that IP to keep other people from encroaching into our marketplace. Q Mr. Tibbit