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 Att. 2

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THE COURT:

Counsel, let me explain, on the

2 jury instructions and verdict form that you were just 3 given, I would like any response to it by 8:00 o'clock 4 Wednesday morning. And I will decide, thereafter,

5 whether or not we actually have to have a jury 6 instruction conference or whether or not -- whether, if 7 you disagree with some, we'll determine whether or not we 8 have a jury instruction conference or whether or not I 9 will rely upon your written objections as you create in 10 the record for the instructions, okay? 11 12 13 If we're ready, Ms. Malley. MR. ACKER: THE COURT: We're set. How long do you think it will be Thank you.

14 reasonable for the findings of fact and conclusions of 15 law? 16 MR. JACOBS: Two weeks, Your Honor, after the

17 jury verdict is entered. 18 THE COURT: Well, there's a thought here.

19 Number 1, I would like it as soon as possible, just 20 because I want my memory to be refreshed, but, on the 21 other hand, the more time you take, probably the 22 greater -- the better your product will be. So, give me

23 what you think would be reasonable to meet both of those. 24 25 MR. SINGER: MR. JACOBS: We were thinking 20 days. That's fine. 1928

Dockets.Justia.com

1 2 counsel. 3

THE COURT: Thank you. MR. JACOBS:

Okay.

Plan on 20 days, then,

Just to be clear on the form of

4 this, then, the findings of fact and conclusions of law 5 will, in a sense, be a self-contained argument with 6 reference to supporting evidence, including, as we 7 discussed, the bench trial record? 8 9 10 11 THE COURT: MR. JACOBS: MR. SINGER: THE COURT: Yes. Great. To be exchanged simultaneously? Exactly. And in not just written

12 form but also submitted electronically so that we can 13 manipulate it, please. 14 15 16 17 18 Q. MS. MALLEY: All rise.

(Jury btought into the courtroom.) THE COURT: MR. ACKER: Go ahead, Mr. Acker. Thank you, Your Honor. Mr. LaSala, let me show you what

BY MR. ACKER:

19 we have marked as G-21 and ask if you recognize that 20 letter? 21 22 A. Q. Yes, I do. And is that a letter that you wrote to

23 Mr. Tibbitts on October 7, 2003? 24 25 A. Yes, it is. MR. ACKER: I move for admission of G-21, Your

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1 Honor. 2 3 4 5 Q. MR. SINGER: THE COURT: No objection. It will be admitted.

(Novell Exhibit G-21 received in evidence.) BY MR. ACKER: Can you -- before we take a look

6 at the specific provisions of the letter, could you tell 7 the ladies and gentlemen of the jury, in sum, what you 8 were doing in this letter to Mr. Tibbitts? 9 A. This letter to Mr. Tibbitts is very much in the

10 vein of a letter we spoke about just before the break 11 concerning IBM code that had been developed by IBM, and 12 this letter concerns SCO's threat to terminate the 13 license that a company called SGI has with respect to 14 SVRX by October 14, if SGI did not correct alleged 15 breaches of the license agreement that SCO claimed it 16 made. 17 Q. And, to your knowledge, is there any

18 relationship between SGI and IBM? 19 A. To my knowledge, there is no relationship.

20 They are two totally different companies. 21 Q. And how did you; that is, Novell, become aware

22 of SCO's actions toward SGI that caused this letter to be 23 drafted and sent to Mr. Tibbitts? 24 A. My recollection is I got a call from the

25 general counsel at Silicon Graphics, at SGI, advising me

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1 that they had received this letter from Mr. McBride, that 2 we are talking about, and asking if we would take a look 3 at a claim that was being made and act appropriately. 4 5 Q. A. And what action did you ask SCO to take? Well, in this letter, we, again, reminded SCO

6 of Novell's rights under Section 4.16(b), and we asked 7 SCO -- or we directed SCO to waive any claim that it 8 might have to terminate SGI's SVRX license. 9 Q. Did you believe it was in Novell's business

10 interest to do so? 11 12 13 A. Q. A. Yes, I did. Why is that? For the same reason that we took the action

14 with respect to IBM, because we believed that SCO was 15 making these claims, and, in this case, with respect to 16 SGI, in a way or under circumstances in which it did not 17 have the rights to do so. And, if it were allowed to do

18 this, were allowed to terminate this license, it could 19 have harmed Novell's business interest, again, by 20 disturbing, disrupting the Linux market, which is a 21 market we were -- we had, by this time, gotten very much 22 into. 23 Q. And when you say "by this time," by October of

24 2003, what steps had Novell made to enter into the Linux 25 market?

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1

A.

We had taken numerous actions, going back to

2 2002, to transition our company to take -- to participate 3 in the Linux business. Perhaps the two most significant

4 things that we did were, in August of 2003, we acquired a 5 Linux company called Zimion. That was in August, 2003.

6 And, by this time, October 7, 2003, we were in 7 negotiations to acquire the second leading distributor of 8 Linux code in the world, a company called SUSE Linux, 9 which was a German -- a German company. 10 Q. And did IBM subsequently make an investment in

11 Novell with respect to Novell's acquisition of SUSE 12 Linux? 13 14 A. Q. It did, yes. And can you explain that for the jury,

15 please? 16 A. Sure. When Novell acquired this company called

17 SUSE Linux in Germany, we completed the acquisition in 18 November, and our CEO, Mr. Messman, was really looking 19 for a marketplace affirmation of the significance of that 20 transaction. And it's important to appreciate that our

21 acquisition of this company was quite a significant deal 22 in the industry and for Novell because it really put 23 our -- you know, our commitment to Linux on the table. 24 think the acquisition was about $210 million. 25 So, what we were looking for was an affirmation I

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1 by a leading market player.

In this case, it was IBM.

2 And what our CEO requested that IBM do was to make an 3 investment in Novell and then to publicly announce that 4 they had made that investment. And we viewed that as

5 a -- if you will, a stamp of approval or an endorsement 6 by a leading technology company with respect to the 7 significance of Novell buying this Linux distribution 8 company. 9 Q. Was there any relationship between the actions

10 that Novell took with respect to SCO and IBM's decision 11 to purchase Novell stock? 12 13 14 15 16 17 18 A. Q. A. Q. A. Q. A. No. Let me show you one final exhibit, X-22. Twenty-three? I'm sorry. Yes, I do. And what is it? This is a press release that Novell issued on X-23. Do you recognize that?

19 December 22, 2003, wherein we assert publicly our belief 20 that we own the copyrights to UNIX, and we include 21 correspondence between Novell and SCO in a link so that 22 the reader can access that correspondence on -- between 23 SCO and Novell as it relates to the question of ownership 24 of copyrights. 25 MR. ACKER: All right. I'd move for admission

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1 of X-23, Your Honor. 2 MR. SINGER: This is already in evidence as a

3 SCO exhibit. 4 5 6 7 8 9 10 UNIX." 11 12 13 14 15 16 17 A. Q. A. Q. A. Q. Do you see that? I do. And was that true as of December 22, 2003? Yes. And you still have that belief today? Yes. "And has applied for and received copyright Q. A. Q. THE COURT: It will be admitted.

(Novell Exhibit X-23 received in evidence.) BY MR. ACKER: Okay. On December 22, the press release reads: "Novell believes it owns the copyrights in Let's take a look at that.

18 registrations pertaining to UNIX consistent with that 19 position." 20 21 22 A. Q. Is that also true as of the December 22, 2002? Yes. "Novell detailed the basis for its ownership

23 position in correspondence with SCO." 24 25 A. Do you see that? I do.

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1

Q.

And is that a reference to your June 26 and

2 August 4 letters to Mr. McBride? 3 4 A. Q. Yes. And were those letters attached to this link so

5 that readers could view it? 6 7 8 A. Q. Yes. And then you wrote: "Copies of our correspondence and SCO's reply

9 are available here." 10 11 12 A. Q. Do you see that? I do. Also, in addition to your letters to

13 Mr. McBride on August 4 and June 26, did you also attach 14 Mr. Tibbitts' reply to those letters? 15 16 17 A. Q. A. We did. Why? Well, we thought it was important to really

18 allow the public to see the communication on the 19 substance of a very important issue, the ownership of the 20 UNIX copyrights. And, for the first time, as I alluded

21 to prior to our break, we had Mr. McBride out there, over 22 the course of, you know, almost an entire year, making 23 public statements as to SCO's ownership of UNIX. And, as

24 we have gone through here, we were making -- we were 25 sending private letters back to Mr. McBride and other

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1 representatives at SCO correcting them at every turn, 2 where we had the opportunity. 3 And we finally got to the point where we,

4 again, felt it was important to allow the public to see 5 both sides of the argument so that they could make some 6 judgments, themselves, about this very important question 7 because all they were seeing, as a matter of publicity, 8 were the statements and comments that Mr. McBride and his 9 colleagues were making about ownership. 10 And, all along, we were taking -- as we

11 recounted, we were taking every reasonable opportunity we 12 could to let them know that we thought that those were 13 wrong. So we finally got to a point where we said to

14 ourselves, "Hey, look, we've got to get our position out 15 there, let the public see it, let the public see the 16 retort from Mr. McBride or from SCO." 17 did this. 18 19 Honor. 20 21 22 BY MR. SINGER 23 Q. Mr. LaSala, you testified earlier that Novell THE COURT: Thank you. CROSS EXAMINATION MR. ACKER: I don't have anything else, Your And that's why we

24 made decisions to waive SCO's rights for Novell's 25 interests, not those of IBM; is that correct?

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1 2

A. Q.

Yes. You testified, however, that Mr. Marriott, who

3 is a lawyer for IBM, asked you to take that action to 4 waive those rights, correct? 5 A. Yes. He asked us to take -- to assert our

6 rights to waive all claims, yes, he did. 7 Q. Now, you were asked that question at your

8 deposition in February, 2007, whether IBM had asked 9 Novell to waive those rights. 10 11 A. Q. Not specifically. Let's look at your February, 2007, deposition. Do you recall that?

12 And this is going to be page 158, line 1, to 158, line 7. 13 14 line 1? 15 16 17 18 19 20 Q. MR. SINGER: MR. ACKER: MR. SINGER: Yes. All right. Mr. Calvin, will you play clip 10. MR. ACKER: Just a second. I'm sorry. 158,

This will be on your screen. (Video clip played as follows:) Did IBM ever ask you to direct SCO to take the

21 steps that Novell directed SCO to take? 22 23 A. Q. No. Do you know if IBM asked anyone at Novell to

24 take the steps that Novell directed SCO to take? 25 A. No. I'm not aware that such a thing ever

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1 occurred. 2 3 Q. (End of video clip.) BY MR. SINGER: So, Mr. LaSala, under oath, in

4 February, 2007, you denied what you've testified here to 5 today, that IBM asked Novell to take these steps, right? 6 A. Well, the request that was made, at that time, It was a request to waive all

7 was a broader request.

8 claims, is my recollection, by Mr. Marriott, and we, as I 9 testified earlier, responded in such a way as to say that 10 we would take a look at that, and we took subsequent 11 actions related to a more narrowed set of issues than 12 what was being asked. 13 Q. Sir, wasn't the very question you were asked in

14 deposition about the action that Mr. Marriott asked you 15 to take in not allowing SCO to terminate a license with 16 respect to UNIX code? 17 MR. ACKER: Your Honor, that misstates the

18 video clip, and also there is -- well, I'll do it on 19 redirect. 20 THE COURT: Well, I think, in fairness, it was

21 not clear, from the video clip, what the question was. 22 MR. SINGER: I would ask clip 9 to be played,

23 which plays the prior question and answer. 24 25 THE COURT: All right.

(Video clip played as follows:)

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1

Q.

In what way did you think that the actions

2 Novell was taking in directing SCO to take certain steps 3 could be beneficial to IBM? 4 A. Well, one example is SCO's attempt to terminate

5 the IBM/AT&T license could benefit IBM, Novell's actions 6 in relation to that could benefit IBM by preventing that 7 termination from occurring, and, thereby, had it 8 occurred, IBM would have been prevented from continuing 9 to distribute certain code. 10 Q. So, that's one example.

Did IBM ever ask you to direct SCO to take the

11 steps that Novell directed SCO to take? 12 13 A. Q. No. Do you know if IBM asked anyone at Novell to

14 take the steps that Novell directed SCO to take? 15 A. No. I'm not aware that such a thing ever

16 occurred. 17 18 Q. (End of video clip.) BY MR. SINGER: Mr. LaSala, you see that you

19 were asked in February, 2007, specifically whether IBM 20 had asked Novell to take the steps regarding SCO's 21 efforts to terminate the license that IBM had, right? 22 MR. ACKER: It misstates the prior testimony,

23 Your Honor. 24 25

It wasn't a question. The question has been read. The jury has read the question.

MR. SINGER: THE COURT:

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1 The jury can decide what was asked. 2 3 Q. A. BY MR. SINGER: Mr. LaSala?

My understanding of the question that was asked

4 in February and the question that you asked me just now 5 are different. What was -- what was asked of me by you

6 is whether or not IBM had asked us to take the actions 7 that we directed SCO to take. And what we were asked by

8 IBM was whether or not we would waive the claims that SCO 9 could possibly make against IBM. And what we responded,

10 at that time, was that we would review the matter and 11 take actions as we deemed to be appropriate. 12 So, the subsequent action that we took was

13 narrower than SCO -- than what was asked -- what you've 14 asked me about, I believe. 15 Q. So, are you saying that it is -- that your

16 testimony in February was correct, that IBM did not ask 17 you to direct SCO to take the steps that Novell directed 18 SCO to take with respect to terminating -- to preventing 19 the termination of the license? 20 A. I think that's -- what you said I think is And the reason I say that, again, is because my

21 right.

22 recollection of the conversation that we had with IBM was 23 that they asked us to waive all of the potential claims 24 that SCO might assert against IBM, and we told IBM that 25 we would look at them on a claim-by-claim basis.

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1

Mr. Jacobs spoke on our behalf at that meeting,

2 is my recollection. 3 Q. Well, in fact, Mr. LaSala, in June, 2003,

4 wasn't there an express request made to you by 5 Mr. Marriott and Mr. Rosenberg, lawyers at IBM, that you 6 stop SCO from terminating this license? 7 8 A. No. MR. SINGER: Would you play clip 15, which is

9 page 115 to -- line 11, to 115, line 22 of the May, 2007, 10 deposition. 11 MR. ACKER: Before it's played, Your Honor, may I'm sorry. What was the page

12 I look at the clip? 13 numbers? 14 MR. SINGER:

This is page 115, line 11, to page

15 115, line 22. 16 17 this? 18 19 record? 20 21 22 23 MR. ACKER: Yes, please. THE COURT: Yes. Do you want this on the MR. ACKER: Your Honor, may we approach on

(Discussion between the Court and counsel out of the hearing of the jury.) MR. ACKER: This is the point. Mr. LaSala

24 testified in his individual capacity as a 30(b)(6) 25 witness, and this is why I stood up before. I objected

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1 that this is unfair because the exact testimony he gave 2 today, he testified about in his deposition. 3 copy of a -- the statement itself, about this 4 conversation, and Mr. LaSala testified during his 5 deposition as a 30(b)(6) witness. 6 So now they are trying to leave the impression They have a

7 that that testimony was never given during the course of 8 the deposition. It's totally unfair, and that's exactly

9 what he's saying in this clip. 10 MR. SINGER: Well, but what happened first of

11 all, in February of '07, he denied, as the testimony we 12 just played, that IBM had a role in what Novell did. 13 May, 2007, he admitted that. In

And now, in his testimony

14 on the stand, he's saying that, well, they didn't tell me 15 to waive the rights with code. The clip I'm about to

16 play specifically says they were to waive the rights with 17 code. The explanation doesn't make any sense. I'm

18 entitled to do that. 19 MR. ACKER: That's the exact point. When he

20 stood up there and accused Mr. LaSala -- and I disagree 21 about your characterization about any inconsistencies so 22 far -- but when he accused Mr. LaSala of not providing 23 that testimony during the deposition, this testimony, it 24 is exactly the conversation. 25 THE COURT: Well, I believe he's entitled to

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1 use the depositions to impeach the witness.

If you want

2 to draw the jury's attention to the inconsistencies, you 3 will be able to do that. If you want to rely on

4 additional parts of the deposition, you certainly may do 5 that. But I believe that, again, Mr. Singer is entitled

6 to use the depositions in this way. 7 MR. ACKER: As long as he's accurate about He stands up and says, "you never

8 characterizing them. 9 made --" 10 11 MR. SINGER. MR. ACKER:

I can -Let me just finish. "You never

12 made these. 13 about this." 14

You never testified during your deposition

When you know he did.

You know he did.

It's

15 an improper question. 16 THE COURT: Mr. Acker, I believe he has the I don't

17 right to use the depositions as I have said.

18 believe it's correct to characterize the nature of the 19 testimony and draw -- and, in effect, be testifying as to 20 his inconsistencies. You may point them out, but I don't

21 think you should, in your questions, be testifying, 22 trying to draw undue attention to it. 23 24 25 MR. SINGER: THE COURT: Fair enough. Okay. Fair enough?

(Proceedings continued in open court.)

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MR. SINGER:

Mr. Calvin, would you play clip

2 15, which is testimony from the May, 2007, deposition, 3 page 115, line 11 to line 22. 4 5 6 Q. (Video clip played as follows:) You say in the second paragraph: "Mr. Marriott explained that IBM had paid

7 Novell for a paid-up, irrevocable license through 8 Amendment X and that SCO was threatening to terminate 9 IBM's UNIX/AIX license. Mr. Marriott requested that

10 Novell exercise its rights under Section 4.16(b) of the 11 APA and waive SCO's claims against IBM. He noted that

12 the matter was urgent in view of of SCO's threatened 13 termination date." 14 15 16 17 18 19 20 21 Q. Q. A. Q. A. End quote.

Do you see that language? I do. (End of video clip.) Did you give that testimony? Yes. Would you take a look at SCO Exhibit 530. MR. ACKER: Could we get a copy? Mr. LaSala, is Exhibit 530 a

BY MR. SINGER:

22 document which you created in connection with your 23 deposition in a corporate capacity in May, 2007? 24 25 A. Q. Yes, it is. And does this document summarize testimony --

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1 summarize conversations that you had with Mr. Marriott, 2 of IBM, and Mr. Rosenberg, of IBM, in June of 2003? 3 4 A. Q. Yes, it does. And, am I correct that, in June, 2003, you had

5 a phone conversation where you participated on behalf of 6 Novell, together with Mr. Jacobs, correct? 7 8 A. Q. Yes. Mr. Marriott, who is an outside lawyer for IBM,

9 participated, correct? 10 11 A. Q. Yes. And, at the same time, a Mr. Rosenberg, who is

12 an in-house lawyer for IBM, participated, correct? 13 14 A. Q. Yes. And, in that conversation, am I correct that

15 the IBM lawyers specifically requested that Novell take 16 action, under its agreement, to waive SCO's claims 17 against IBM? 18 19 A. Q. Yes. SCO's claims against IBM.

And, at that time, the particular -- and,

20 at that time, Mr. Marriott noted that the matter was 21 urgent in view of SCO's threatened termination date; is 22 that correct? 23 24 A. Q. Yes, it is. The threatened termination date was the date

25 that SCO had given IBM that, if this issue wasn't

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1 resolved, they were going to pull the UNIX license and 2 say that it had been terminated, correct? 3 4 A. Q. That's my understanding. And you wrote a letter, then, on June 9, 2003,

5 specifically telling SCO not to do that, right? 6 7 A. Q. Not to do what? Not to terminate IBM's AIX -- IBM's UNIX

8 license? 9 A. Yes. I wrote that letter, and not to put too

10 fine a point on it, that letter related to termination. 11 The request that we're talking about relates to a waiver 12 of SCO's claims. So, that was one of the claims. But

13 this letter is -- this note suggests there was a broader 14 request than the one that was ultimately granted. 15 Q. Well, in fact, what was requested by IBM was

16 that you waive SCO's ability to terminate that license, 17 which IBM, in SCO's view, had breached, correct? 18 A. I'm not trying to be difficult, but I really

19 understood the request to be broader than that, and I 20 think, if you read the notes regarding Mr. Jacob's 21 response, it -22 Q. I'm not asking you about Mr. Jacob's responses,

23 Mr. LaSala. 24 25 A. Okay. MR. ACKER: Your Honor, Mr. LaSala should be

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1 allowed to answer Mr. Singer's question. 2 MR. SINGER: He will have redirect. He can

3 elicit other things he wants in response. 4 THE COURT: That's correct, Mr. LaSala. In

5 effect, what I'm saying is, please answer the questions 6 as directly as possible that Mr. Singer may ask you. 7 there is additional information that you think is 8 relevant, Mr. Acker will be able to ask you questions on 9 redirect to bring those out. 10 11 Q. THE WITNESS: BY MR. SINGER: Understood. Mr. LaSala, in fact, IBM asked If

12 you both to waive all of SCO's claims, right? 13 A. I understood them to be asking us to waive all

14 of SCO's claims. 15 Q. And you did that, correct? You tried to waive

16 every claim that you had a right to waive or you thought 17 you had a right to waive? 18 19 A. Q. I'm not sure that's the case. Well, you waived -- you wrote a letter

20 purporting to waive the claims under the contract 21 agreement between SCO -- between IBM and AT&T, which SCO 22 was seeking to exercise rights to, correct? 23 A. We did write a letter directing SCO to waive

24 the breach of contract claims in connection with SCO's 25 allegation that IBM breached the confidentiality

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1 provision. 2 Q. And Mr. Marriott was also asking you to take

3 urgent action with respect to the termination that SCO 4 was seeking to take, the termination action with respect 5 to their license, correct? 6 A. He said the matter was urgent. He said the

7 matter was urgent. 8 Q. And the matter we're talking about is the

9 termination of the UNIX license that IBM had, right? 10 11 A. Q. Yes. And, after Mr. Marriott made that request, You then directed SCO to

12 that's exactly what you did.

13 waive those rights to terminate that license, correct? 14 A. We directed SCO to waive the termination of the We did.

15 IBM license. 16 Q.

Now let's talk about the issue of Novell's

17 interest that you talked about with respect to having a 18 $10 million royalty interest. There was a buyout of all

19 the royalties that IBM had to pay Novell that was done in 20 1996, correct? 21 22 A. Q. That's my understanding, yes. So there weren't any current royalties between

23 1996 and 2003 that were being paid by IBM on that 24 license? 25 A. They weren't being paid currently. All of

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1 those royalty obligations were paid up in full. 2 making reference to the earlier statement. 3 Q.

We were

Now, you understood that SCO was pursuing a

4 court suit to determine that IBM had breached its rights 5 under its contract by disclosing code that shouldn't have 6 been disclosed, correct? 7 8 A. Q. Yes. And you sought to shortcut that process so,

9 instead of the Court deciding who was right, IBM or SCO, 10 Novell was going to just move in and waive those rights 11 so there wouldn't need to be a court dispute on that, 12 right? 13 14 A. Q. No. Well, what is the purpose of the waiver, other

15 than to stop SCO from asserting those rights in court? 16 A. I think you said we were seeking to shortcut I

17 the court process, and that was not our intention. 18 wasn't -- we weren't seeking to shortcut the court 19 process. 20 Q. Well, what term would you put on waiving a

21 party's rights to bring a legal claim in court, other 22 than shortcutting that process? 23 A. We were looking out for our interests. As I

24 said, we had $10 million at stake, and we wanted to make 25 sure our interests in those were protected.

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1

Q.

Let's talk about the $10 million.

That's money

2 that was paid in 1996, correct? 3 4 A. Q. I believe that's right, yes. Let's assume, if the SCO lawsuit had proceeded

5 on without any waiver and SCO was right, that IBM 6 breached the agreement, IBM wouldn't be able to demand 7 back its $10 million from you, would they? 8 A. Well, I don't know whether they would have

9 succeeded in doing so, but we had a concern that they 10 might try to do so. 11 Q. Well, if they breached the agreement, they

12 wouldn't be able to successfully get that $10 million 13 back because they would have been in the wrong. 14 would have breached. 15 16 17 18 A. Q. A. Q. Correct? They

I don't know. You don't know that? Not for certain, no. And, if it turns out in court that IBM was

19 right, and SCO was wrong, well then IBM wouldn't have any 20 right then, either, to ask for the $10 million back from 21 Novell because they wouldn't have had any right under any 22 agreement to do so, correct? 23 A. Well, if IBM had prevailed in that litigation

24 that you're talking about, I imagine they would not have 25 come and asked us for the $10 million. That's correct.

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1

Q.

And, in fact, at no point did IBM actually ask

2 you for $10 million back, correct? 3 4 A. Q. Not that I'm aware of. In fact, what happened in November of 2003 is

5 IBM paid Novell $50 million to facilitate the purchase of 6 a Linux company, right? 7 8 A. Q. No. No? The $50 million wasn't invested in Novell

9 for the purchase of SUSE Linux? 10 A. I'm sorry. You said IBM paid Novell $50 And my answer to that

11 million I think is what you said.

12 was, no, Novell did not pay $50 million. 13 Q. They transferred the money to Novell, $50

14 million, as an investment in Novell for the purpose of 15 purchasing SUSE Linux, correct? 16 A. I'm trying to be precise here. It was not

17 for the purpose. 18 SUSE Linux.

It was not so Novell could purchase

And Novell -- excuse me -- IBM did make an That is true.

19 investment of $50 million in Novell. 20 Q.

With respect to the other waivers that Novell

21 directed SCO to make, you testified earlier about one 22 regarding SGI, Silicon Graphics. 23 24 A. Q. Yes. Are you aware, Mr. LaSala, that Silicon Do you recall that?

25 Graphics issued a public statement that they made a

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1 mistake and put UNIX code in Linux, and then they removed 2 that code. 3 4 A. Q. Are you aware of that? Yes. Now, with respect to the IBM code, you agree You caused Novell to waive SCO's

5 that you waived rights.

6 rights with respect both to IBM and a company called 7 Sequent that IBM then owned, correct? 8 9 A. Q. Yes. That second letter came a bit later.

And you talked about this being irrevocable Are you familiar with an agreement called

10 rights.

11 Amendment X that was entered into between the Santa Cruz 12 Operation and IBM? 13 14 A. Q. Yes. I'd like to show you Exhibit 165, which is in

15 evidence, I believe, already, as Novell Exhibit 08. 16 17 MR. ACKER: MR. SINGER: Do you have a copy? I'm sure this was premarked. It's

18 your Exhibit 08, and it's SCO Exhibit 165. 19 Q. BY MR. SINGER: Do you see this in front of

20 you, Mr. LaSala? 21 22 A. Q. Yes, I do. And I would move the admission of SCO Exhibit

23 165 so this copy is before the Court. 24 25 MR. ACKER: THE COURT: No objection, Your Honor. It will be admitted.

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1 2 Q.

(SCO Exhibit 165 received in evidence.) BY MR. SINGER: Do you recognize this to be

3 what we were referring as Amendment X, an amendment 4 entered into between IBM and Santa Cruz Operation; is 5 that correct? 6 7 A. Q. Yes. And Novell was a party to that agreement,

8 correct? 9 10 A. Q. Yes. This was part of resolving a dispute that came

11 up in 1996, right? 12 13 14 A. Q. That's my understanding. And, if you turn to page 2 of the agreement,

-- in fact, why don't we start on page 1, with the "No

15 additional royalties." 16 Mr. Calvin, if you can blowup the Amendment

17 Number X, paragraph 1. 18 And here you see the reference that upon

19 payment to SCO of the consideration in the section 20 entitled Consideration, IBM will have the irrevocable, 21 fully paid-up, perpetual right to exercise all of its 22 rights under the related agreements, beginning January 1, 23 1996, with no additional royalty payment. 24 25 And it says: "However, if IBM requests delivery of

1953

1 additional copies of source code of the --" let's turn 2 now to the next page -- "of the software product, IBM 3 will pay certain fees listed on this schedule." 4 And I'd like to direct your attention to the

5 next statement: 6 "Notwithstanding the above, the irrevocable

7 nature of the above rights will in no way be construed to 8 limit Novell's or SCO's rights to enjoin or otherwise 9 prohibit IBM from violating any and all of Novell's or 10 SCO's rights under this Amendment X to related agreements 11 or under general patent, copyright or trademark law." 12 13 14 A. Q. Do you see that? I do. Were you aware of this when you sought to waive

15 SCO's rights to proceed against IBM under contract 16 claims? 17 18 A. Q. Yes. I'd like to go back now to something you

19 testified to near the start of your direct examination, 20 your discussions with Mr. McBride regarding copyright 21 ownership. 22 Now, is it your testimony that Mr. McBride

23 specifically said, in your presence, that he wanted 24 Novell to transfer copyrights to SCO? 25 A. I don't recall that he used the word

1954

1 "transfer." 2 Q. He was seeking a clarification, was he not,

3 that those rights already existed with SCO, correct? 4 A. That was not my understanding of what he was

5 asking. 6 Q. Well, in fact, it's true you don't recall the

7 phrasing that Mr. McBride used? 8 9 A. Q. Not the precise phrasing. And you are -- you're not aware of Mr. McBride

10 having had a copy of Amendment Number 2 at the time of 11 those conversations, are you? 12 13 A. Q. I don't know whether he did or he did not. But you are aware that there was a document

14 that was forwarded by SCO to Novell which sought to 15 clarify these issues. 16 17 to. 18 Q. I'd like to show you the last page of SCO Do you recognize this to be a draft A. I'm sorry. Were you aware of that? I'm not sure what you are referring

19 Exhibit 615.

20 document provided by SCO to Novell? 21 22 23 A. Q. A. I've not seen this document until now. You have never seen this document before? I don't recall ever having seen this

24 document. 25 MR. SINGER: We would move the admission of the

1955

1 last page of Exhibit 615. 2 MR. ACKER: I have no objection, Your Honor, as

3 long as it's just the last page. 4 5 6 7 8 MR. SINGER: MR. ACKER: THE COURT: MR. SINGER: THE COURT: The last page. Not the declaration in front. All right. Yes. Of exhibit 615 will be admitted. The last page only?

9 (The last page of SCO Exhibit 615 received in evidence.) 10 Q. BY MR. SINGER: This was a document sent

11 for the purpose of clarifying -- well, you have never 12 seen this; is that right? 13 14 this. 15 Q. Now, there were discussions in late 2002 A. That's my recollection is that I've not seen

16 between SCO and Novell, where SCO indicated its interest 17 in licensing UNIX technology for use in Linux; is that 18 correct? 19 20 A. Q. That's my understanding. At any time between those conversations in late

21 2002 and June, 2003, did you, as general counsel, ever 22 directly tell SCO that it could not engage in SCOsource 23 licensing? 24 25 A. Q. No. I don't believe I did.

Did you ever direct others to tell SCO that it

1956

1 couldn't engage in SCOsource licensing? 2 3 A. Q. No. And, in fact, there were public announcements

4 in the early part of 2003 which announced that SCO 5 planned to do that, to engage in that licensing, correct? 6 7 A. Q. Yes. But, instead of telling SCO that, in your view,

8 they didn't have the rights to do that, you went public 9 on May 28, 2003, with a press release, right? 10 A. I'm not sure it was instead of, but we did go

11 public with the press release on May 28. 12 Q. Now let's talk about that press release and the Now, you joined Novell in 2002

13 events surrounding that.

14 as general counsel, correct? 15 16 A. Q. 2001. 2001. You weren't involved in the negotiation

17 of the transaction by which the UNIX business was sold to 18 Santa Cruz, correct? 19 20 A. Q. That's correct. And you had no involvement in the Asset

21 Purchase Agreement and its negotiation, correct? 22 23 A. Q. Correct. And you never spoke with any of the negotiators

24 of the deal about these issues, right? 25 A. Me, personally?

1957

1 2 3

Q. A. Q.

Yes. I did not. So, you were, however, an individual who

4 approved the May 28 press release before it was issued, 5 right? 6 7 A. Q. Yes. You issued a press release which stated that

8 Novell, not SCO, owned the UNIX copyrights, correct? 9 10 A. Q. Yes. And you testified that you were aware of

11 Amendment Number 2 in an unsigned fashion before you sent 12 that press release out, correct? 13 14 A. Q. Yes. And, in fact, I think what you testified to --

15 and you tell me if I'm wrong -- is that you turned the 16 company upside down trying to find whether there was a 17 signed version of Amendment Number 2. 18 that? 19 20 testimony. 21 Q. BY MR. SINGER: Isn't that what you said, sir, MR. ACKER: Objection. That misstates his Do you recall

22 you turned the company upside down trying to find it? 23 24 A. Q. I asked Mr. Lundberg to do that. And the reason you asked Mr. Lundberg, who is

25 counsel for -- another lawyer for Novell to do that is

1958

1 that you understood that Amendment Number 2 was very 2 important because it would clarify the issue as to who 3 owned the UNIX copyrights, right? 4 5 A. Q. If amendment -- no. That's not correct.

So you just asked Mr. Lundberg to turn the

6 company upside down for a document that didn't matter. 7 Is that your testimony? 8 9 A. Q. No. That's not my testimony.

Now, you had outside counsel involved in the

10 Asset Purchase Agreement, correct, the Wilson, Sonsini 11 firm? 12 13 A. Are you familiar with -I'm not familiar -MR. ACKER: Your Honor, objection. There is no He

14 foundation.

It's going to call for speculation.

15 wasn't around at the time of the Asset Purchase 16 Agreement. 17 18 Q. MR. SINGER: I'll reframe the question. Were you aware, Mr. LaSala,

BY MR. SINGER:

19 that there was outside counsel representing Novell at the 20 time of the Asset Purchase Agreement? 21 22 A. Q. Yes. Did you ask that outside counsel whether they

23 had a copy of the signed version of Amendment 2 before 24 you went public with your May 28 press release? 25 A. Did I personally do that?

1959

1 2 that? 3 4 5

Q.

Did either you or did you ask anyone else to do

A. Q. A.

I did not do that. Did you ask -And I really don't recall whether I asked

6 anyone who worked for me to reach out to Wilson, Sonsini 7 or anyone who worked on that agreement to see if a 8 copy of -- an executed copy of Amendment Number 2 was 9 available. 10 Q. Wouldn't that have been a very logical thing to

11 do if you were trying to find out whether or not 12 Amendment Number 2 had been signed before going public 13 with the press release? 14 15 A. Q. Not illogical. Now, it turned out Amendment Number 2 was

16 present in Novell's files, correct? 17 18 A. Q. That's what I was told, yes. And it wasn't off-site in some storage, was it?

19 It was in one of the executive's files, correct? 20 A. I didn't understand it to be in an executive's

21 files. 22 Q. Well, where do you understand the document was

23 found? 24 A. My recollection is that it was found in the tax

25 department.

1960

1

Q.

Now, the tax department is a department of It's not like in some warehouse somewhere,

2 Novell. 3 correct? 4 5 this. A.

Yes.

But -- and I don't know the answer to

It could have been in off-site, but it could have I just don't know.

6 been in the building. 7 Q.

Now, you, never the less, went ahead with the

8 May 28 press release before having determined whether or 9 not Amendment Number 2 had been signed, correct? 10 11 A. Q. Yes. And there wasn't any urgency that you had to You could have kept looking for that

12 come out on May 28.

13 signed version of Amendment Number 2, right? 14 15 A. Q. Yes. We could have. Yes.

But it's your view that it's just a coincidence

16 that May 28 was also the day that SCO announced its 17 earnings? 18 A. There was no connection between the release of

19 the letter on May 28 and SCO's earnings release date. 20 Q. Now let's look at the June 6 press release, And you recognize that, in this

21 which is SCO Exhibit 97.

22 press release, there is the statement that, to Novell's 23 knowledge, this amendment is not present in Novell's 24 files. 25 A. It turned out it was, correct? Yes.

1961

1

Q.

And you understand that an amendment to

2 language is very important, that it replaces language 3 that exists in the agreement before it, correct? 4 A. It has the potential to replace it, or it could

5 be additive to it. 6 Q. Well, in this case, you had seen an unsigned

7 copy of Amendment Number 2, correct? 8 9 2. 10 Q. And did you understand that, if this had been A. I had seen an unsigned copy of Amendment Number

11 signed, then the language replaced the exclusion of 12 copyrights that you had been looking at in the Asset 13 Purchase Agreement? 14 A. I probably didn't give it that much attention,

15 to be honest were you, the unsigned copy. 16 Q. On June 6, the press release states that the

17 amendment appears to support SCO's claim that ownership 18 of certain copyrights for UNIX did transfer to SCO in 19 1996, right? 20 21 A. Q. Yes. And your approval indicated that you believed

22 that this was a true and correct statement? 23 24 A. Q. Yes. And, in fact, even now you recognize that SCO

25 can get certain copyrights under Amendment 2, that it

1962

1 doesn't vest ownership of copyrights with Novell; is that 2 correct? 3 A. I would agree with -- I think I would agree

4 with the first part of your statement but not the second 5 part. 6 Q. And, is it also true that you have no view,

7 yourself, as to whether the UNIX copyrights are in fact 8 required for SCO to conduct its business with respect to 9 the UNIX and UnixWare technologies it purchased? 10 A. I am not aware that SCO has a need for the

11 copyrights to conduct the business that it purchased. 12 Q. Well, when you were asked that question at your

13 deposition -- and this is page 45 -14 15 2000 -16 MR. SINGER: February 8, 2007, page 45, line 13 MR. ACKER: Which deposition? February 8,

17 to line 17. 18 19 sorry. 20 Q. MR. ACKER: Okay. BY MR. SINGER: Do you recall giving the Let me have a sec, please. I'm

21 following testimony? 22 23 24 Q. Which is clip 3, Mr. Calvin. (Video clip played as follows:) Do you have a view, as you sit here today, as

25 to whether SCO needed any copyrights to exercise its

1963

1 rights with respect to the acquisition of UNIX and 2 UnixWare technologies? 3 4 5 Q. A. I don't have a view. (End of video clip.) BY MR. SINGER: That was your testimony in

6 February, 2007, correct? 7 8 A. Q. Yes. Now, you were also familiar with the license

9 back provisions of the Asset Purchase Agreement, even 10 before you saw Amendment Number 2, right? 11 12 A. Q. Yes. And, in fact, Novell wouldn't need a license

13 back of existing technology if it had kept the 14 copyrights, correct? 15 16 A. Q. I don't believe that's correct. Do you believe that Novell would need a license

17 back to technology that it wasn't giving anyone? 18 A. Well, I didn't say that, but there were other

19 rights conveyed to SCO in the Asset Purchase Agreement, 20 and there were -- there was additional code to be 21 developed by SCO as a result of the Asset Purchase 22 Agreement, to which Novell was going to have a license. 23 Q. But, in addition to that future code, the

24 technology licensing agreement also provided a license 25 back to the existing technology and code that was being

1964

1 sold at the time of the APA, right? 2 A. To the existing technology? Everything that

3 was being transferred to SCO, this is my understanding, 4 was the subject of a license back from SCO to Novell. 5 Q. And you agree that this technology licensing

6 agreement can be read as inconsistent with Novell 7 retaining the copyrights? 8 9 A. Well, that's a possible reading of it. MR. SINGER: I'd like to play clip 8 at page 95

10 of his February 8, 2007 deposition, line 10 to 16 11 12 13 14 15 16. 16 17 object. MR. ACKER: Your Honor, I'm just going to They can keep playing MR. ACKER: MR. SINGER: MR. ACKER: MR. SINGER: Wait, if I could just -Certainly. February? Yes. This is page 95, line 10 to

It's not inconsistent.

18 clips, but they are not inconsistent. 19 20 MR. SINGER: THE COURT: That's for the jury -That's for the jury to determine.

21 I will let the jury decide that, Mr. Acker. 22 23 24 Q. MR. SINGER: Mr. Calvin, will you play clip 8.

(Video clip played as follows:) Do you think it would be reasonable for

25 somebody to read the technology licensing agreement as

1965

1 inconsistent with the reading of the APA, that the UNIX 2 copyrights were retained by Novell? 3 4 5 Q. A. Yes. (End of video clip.) Now let's talk about your June 24 letter, which I'm sorry. It's your June 26

6 is SCO Exhibit 103. 7 letter. 8 9 paragraph. 10 Q.

Mr. Calvin, could you expand the second

BY MR. SINGER:

This is part of your letter to

11 Mr. McBride on June 26, 2003, correct? 12 13 14 A. Q. Yes, it is. And what you stated in this paragraph was: "We acknowledge, as noted in our June 6 public

15 statement, that Amendment Number 2 to the Asset Purchase 16 Agreement appears to support a claim that Santa Cruz 17 Operation had the right to acquire some copyrights from 18 Novell." 19 20 correct? 21 22 A. Q. Yes. Now, in fact, that's not what the June 6 public That's what you said in your June 26 letter,

23 statement says, is it? 24 25 A. Q. I think it is. Well, let's take a look at it.

1966

1 2

A. Q.

Okay. If we can go back to the June 6 press release, In the public statement, isn't it

3 which is Exhibit 97.

4 true you didn't say that Amendment Number 2 supports a 5 claim that Santa Cruz had the right to acquire some 6 copyrights from Novell, you stated that the amendment 7 appears to support SCO's claim that ownership of certain 8 copyrights for UNIX did transfer to SCO in 1996. 9 10 11 A. Q. Correct? That's correct. The June 6 statement talks about what had You characterized that, in June 26,

12 transferred in 1996.

13 2003, as being a statement about a claim to acquire some 14 copyrights from Novell, right? 15 16 A. Q. To your point, the statements are different. Now, you also stated, in your June 26 letter,

17 that upon closer scrutiny, however, Amendment Number 2 18 raises as many questions about copyright transfers as it 19 answers. 20 21 22 A. Q. You put that into the letter, correct? Yes. And am I correct that, in writing that, you

23 didn't have anything specific in mind with respect to 24 what questions were raised; is that right? 25 A. No. I probably did have things specific in

1967

1 mind when that was written. 2 MR. SINGER: Okay. Let's take a look at your

3 deposition on February 8, 2007, at page 53, line 24, to 4 54, 09; 55, 04 -5 6 7 55, 05. 8 9 10 11 12 13 14 4. 15 16 Q. (Video clip played as follows:) What did you mean by saying that Amendment MR. ACKER: MR. SINGER: MR. ACKER: MR. SINGER: MR. ACKER: MR. SINGER: 53, line 24? Yes, to 54, 09. Yes. Then 55, 04, to 55, 05. Okay. Mr. Calvin, would you play clip MR. ACKER: MR. SINGER: I'm sorry. Yes. Page 53? 55, 04 to

53, 24 to 54, 09.

17 Number 2 raises as many questions about copyright 18 transfers as it answers? 19 A. Well, it was made in the context of comments

20 that Mr. McBride made about the effect of Amendment 21 Number 2 on the question of copyright ownership. And it

22 was intended to point out to the reader that it wasn't as 23 clear as he was suggesting -- to the addressee, that it 24 wasn't as clear as he's suggesting. 25 Q. And do you have anything specific in mind?

1968

1 2

A.

No, I don't. MR. ACKER: Whoa. Whoa. Your Honor, we need

3 to approach. 4 5 6 (Discussion among the Court and counsel out of the hearing of the jury.) MR. ACKER: He's cut out a whole clip. The

7 next section was. 8 9 10 11 12 13 14 15 16 "And were there questions that you had in mind as of the time of this letter that Amendment Number 2 raised but did not answer." "Yes. I'm sure -- at the time, I'm sure I

had in mind questions that had been raised that the amendment didn't answer." He's cut that out. MR. SINGER: MR. ACKER: I don't believe it requires -It would have required, for

17 purposes of completeness, that it be included. 18 19 MR. SINGER: MR. ACKER: I raised this with you before -You made it as one single clip. And the next question and

20 That's a misrepresentation.

21 answer made clear that, at the time of his deposition, he 22 had questions in mind. 23 24 mind? 25 " "No, I didn't." MR. SINGER: And you just left that out. "Did you have anything specific in

1969

1 2

"Were there questions you had in mind?" "Yes. I'm sure -- at the time, I'm sure I had

3 in mind questions that had been raised but weren't 4 answered." 5 "As you sit here, do you know what those

6 questions are?" 7 "Yes. I'm having a difficult time doing that,

8 but it, I believe --" 9 10 11 12 13 14 15 16 MR. ACKER: MR. SINGER: But you -Let me finish.

"I'm having a difficult time doing that." I asked him: "Do you have anything specific in mind?" "No, I don't." I think that's fair use of the examination. MR. ACKER: But you cut out the middle where he You can't do

17 said he had questions in mind at the time. 18 that 19 20 21 MR. JACOBS: THE COURT: MR. ACKER: Your Honor -Mr. Jacobs?

But you played it as a clip as You

22 though it was one continuous question and answer.

23 left out the middle where he was asked and said he had 24 questions in mind at the time. 25 You can't do that. That's clearly improper.

1970

1

MR. SINGER:

I don't think there is anything I identified the specific

2 improper in the use of this. 3 lines I was reading.

He says that, about this press

4 release, my question to him before I used this 5 impeachment. 6 "Can you identify specifically what those

7 questions are?" 8 9 He said: "I'm sure I could." "Do you have anything

And then I asked him:

10 specific in mind?"

And he wasn't identify anything

11 specifically at the time of his deposition. 12 13 14 THE COURT: MR. ACKER: THE COURT: All right. It's not -Be quiet. If you want to right now All right.

15 stand up and point out that you think there was something 16 that was left out of the clip, you may read it to the 17 witness, all right? 18 19 20 MR. ACKER: Yes.

(Proceedings continued in open court.) MR. ACKER: Your Honor, if I might, I want to

21 read -- to have Mr. LaSala confirm that there were 22 portions of his testimony that was left out from the 23 clips that SKO's counsel played for him. 24 to give him a copy of his deposition. 25 MR. SINGER: Your Honor, I think what you had And I'm going

1971

1 asked is that the section be read. 2 THE COURT: Well, I think we need to confirm And

3 whether or not it did, in fact, happen, Mr. Singer. 4 I'll let Mr. LaSala look at his own testimony. 5 MR. ACKER:

Mr. LaSala, will you look at page

6 54, please. 7 8 THE WITNESS: MR. ACKER: Okay. And starting at the bottom of page

9 53, do you have that, line 24? 10 11 THE WITNESS: MR. ACKER: Yes. So you were asked the following

12 questions and gave the following answers in the 13 deposition: 14 15 16 17 18 19 20 21 22 23 24 "What did you mean in your statement that SCO's press release raised as many questions as it answered?" "Well, it was made in the context of comments that Mr. McBride made about the effect of Amendment Number 2 and the question of copyright ownership. And it was intended to

point out to the reader that it wasn't as clear as he was suggesting -- to the addressee, that it wasn't as clear as he was suggesting." And then you were asked the following question

25 and gave the following answer that we haven't heard:

1972

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

"And were there questions that you had in mind at the time of this letter that Amendment Number 2 raised but did not answer?" "Yes. I'm sure -- at the time, I'm sure I

had in mind questions that had been raised that weren't answered." MR. ACKER: Did you give that testimony under

THE WITNESS: MR. ACKER:

Yes. That's all I have, Your Honor. And were you then asked:

BY MR. SINGER:

"And, as you sit here, can you recall what those questions might have been?" That's what the transcript says. Yes. And you said:

"I'm having a difficult time doing that, but I believe it relates to our interpretation of Amendment Number 2, and the fact that there had been previous statements made by us about Amendment Number 2 and that there would be subsequent statements made by us with respect to its meaning, and, you know, things that hadn't yet been articulated were being articulated or were going to be articulated at some point in the future."

1973

1 2 3 4 5 6 7 A. Q.

And then you were asked: "And do you have anything specific in mind?" And your answer was: "No, I don't." That's your testimony. That's correct. Now, turning back to the June 26 release, after Correct?

8 that you proceeded, on August 4, to write another letter 9 to SCO, this one the letter that's identified as SCO 10 Exhibit 105, correct? 11 12 A. Q. Yes, sir. And, if we go down to the bottom of that

13 letter, it says: 14 "Unless and until SCO is able to establish that

15 some particular copyright right is required for SCO to 16 exercise its rights under the APA, SCO's claim to 17 ownership of any rights in UNIX technologies must be 18 rejected and ownership of such rights, instead, remains 19 with Novell." 20 21 22 A. Q. You wrote that, correct? Yes. So, did you contemplate some process where SCO "Novell, we actually

23 would have to go to Novell and say: 24 need this copyright." 25

And then Novell would decide whether or not SCO

1974

1 could have it? 2 3 A. Q. Essentially, yes. Now, if SCO doesn't own the copyrights, they'd

4 have to have a license in order to distribute UnixWare, 5 correct? 6 7 A. Q. Yes. And they would have to have a license in order

8 to develop new code, correct? 9 10 A. Q. Yes. And you agree, there is no explicit license in

11 the Asset Purchase Agreement to Santa Cruz to make use of 12 the UNIX copyrights, right? 13 14 A. Q. I think that's correct. So, what you're talking about is an unwritten, That's what, in your view, Santa Cruz

15 implied license.

16 has and what SCO today has, an unwritten, implied 17 license, right? 18 19 A. Q. Yes. So, the entire basis for SCO to run this

20 business would be an unwritten, implied license to use 21 UNIX and UnixWare copyrights, correct? 22 23 A. Q. Yes. An implied license.

Now, do you also know that, to bring lawsuits

24 to defend your intellectual property, to defend your 25 copyrights, you must either be a copyright owner or an

1975

1 exclusive licensee, correct? 2 3 A. Q. I wouldn't care to comment on that. Well, you're an attorney who worked for

4 technology companies, works for a technology -- well, a 5 communications company right now, so you're familiar with 6 copyright law, are you not? 7 A. Somewhat. Not well enough to speak with

8 authority on it. 9 Q. So, are you saying, in August of 2003, when you

10 wrote this letter, you didn't know whether or not, in 11 order to be able to protect your copyrights, in order to 12 bring a copyright suit against someone you thought was 13 infringing your copyrights, you had to either own the 14 copyrights or be an exclusive licensee? 15 that? 16 A. You know, I'm not saying I didn't know it. But those were not I You didn't know

17 suspect the position is correct.

18 thoughts that were going through my mind at the time. 19 Q. Because you weren't thinking about what rights

20 SCO might need to protect as part of rights, of why it 21 would need the copyrights? 22 A. That wasn't a concern to you?

I wasn't really thinking about or contemplating I was contemplating what

23 the rights that SCO might need. 24 the agreement said. 25 Q.

But don't the agreements speak to what

1976

1 copyrights SCO requires in order to exercise its rights 2 under the agreement? 3 4 A. Q. They do. And is one of the rights SCO has, the rights to

5 bring claims to protect its business? 6 A. SCO has the rights to bring claims to protect

7 its business, yes. 8 Q. And if it doesn't own the copyrights or have an

9 exclusive license, it can't bring a copyright 10 infringement claim, correct? 11 12 A. Q. I don't know. You didn't know -- when you wrote this letter,

13 you didn't know, in August of 2003? 14 15 A. Q. Right. Do you understand the difference between an

16 exclusive license, in that an exclusive license can't be 17 an implied license, it has to be something in writing? 18 Do you know that? 19 A. Yes. I know that. An exclusive license or an

20 express license? 21 Q. Well, you have to have -- in order for an

22 exclusive license, it has to be in writing, correct? 23 24 A. Q. Yes. And we've already covered the fact that what

25 you thought Santa Cruz, SCO, has is not something in

1977

1 writing, some implied license, right? 2 3 A. Q. Yes. And so, you have no basis to say, then, if you

4 didn't know that you needed to either be a copyright 5 owner or an exclusive licensee, with a written exclusive 6 license, that SCO didn't need the copyrights to enforce 7 its rights back in August of 2003, when you wrote this 8 letter, did you? 9 10 A. Q. Could you say that again. I apologize.

You didn't have a basis to say that the

11 copyrights weren't required for SCO to exercise its 12 rights if you didn't know, back in August of 2003, that 13 SCO couldn't bring copyright infringement suits to 14 protect its rights without either being an owner or an 15 exclusive licensee, right? 16 A. What I knew in 2003 was that we -- at this

17 point in 2003, that we had an Amendment Number 2 that 18 arguably granted to SCO certain copyrights, those that it 19 would need to exercise the rights that it had acquired 20 under the Asset Purchase Agreement. 21 of my thought at the time. That was the focus

And I also knew that SCO had

22 never demonstrated to us that they had that -- that -23 the need for a copyright to exercise their rights under 24 the APA. 25 time. That's what was going through my mind at the

1978

1

Q.

Now, following this, in September and October,

2 you had Novell apply for copyrights; is that correct? 3 4 A. Q. Yes. And, in fact, those were copyrights to the same

5 UNIX technology that AT&T had copyrighted and which Santa 6 Cruz had the copyright registrations for, correct? 7 8 A. Q. I believe so, yes. And you told the copyright office that those

9 copyrights were owned by Novell, correct? 10 11 A. Q. Yes. And, in October and September, you didn't go

12 public with the fact that you had acquired those 13 copyright registrations? 14 public with that, correct? 15 A. Well, it's a public registration, so it's At that time, you didn't go

16 public. 17 Q. But you didn't put out a press release to that

18 effect? 19 20 A. Q. I don't believe we did. And you didn't put out your August 4 letter

21 in a press release at the time either, did you? 22 23 A. Q. No. But, in December of 2003, December 22, 2003,

24 you did put out a press release that we've seen, correct? 25 A. Yes.

1979

1

Q.

And that press release was one in which you

2 revealed that you did have -- you had applied for 3 copyrights and registered the copyrights earlier that 4 year, correct? 5 A. That's my recollection of what it said. I

6 don't have it in front of me. 7 front of me. 8 Q. I apologize.

Actually, I do have it in That's what it says.

Yes.

And you didn't go public with those copyright

9 registrations in August, September, October or November. 10 You went public with them on December 22, correct? 11 12 A. Q. Yes. Were you aware that December 22, 2003, was the

13 date that SCO was announcing its earnings? 14 15 A. Q. No, I was not. Just as you weren't aware that May 28, 2003,

16 was also a date that SCO was announcing its earnings? 17 18 A. Q. That's correct. So, both of those were coincidences. The date

19 you went public in May, May 28, was a coincidence to be 20 SCO earnings release, and the date you went public in 21 December, that date was also a coincidence? 22 23 A. Yes. MR. SINGER: Would you give me one moment. I

24 have nothing further. 25 REDIRECT EXAMINATION

1980

1 BY MR. ACKER: 2 Q. Mr. LaSala, let me back up to the part where When did you

3 Mr. Singer finished off on December 22.

4 first learn that SCO had a press release on December 22, 5 2003? 6 7 A. Q. An earnings release or a press release? When did you learn that SCO had an earnings

8 release on the 22nd of December, 2003? 9 10 A. Q. Yesterday. Now, leading up to that December 22 release by

11 Novell, you testified on direct that part of the 12 motivation is that because Mr. McBride was in the 13 marketplace saying that SCO still owned the copyrights. 14 In addition to speaking on behalf of SCO, did you also 15 become aware of statements Mr. McBride made where he 16 seemed to be speaking on behalf of Novell? 17 A. Yes. It was one of the things that concerned

18 us was, in my recollection, in particular, is a comment 19 he made in an interview that had been published on the 20 web somewhere. I think it was in the July, mid-July time

21 frame, where he was not only asserting that SCO owned the 22 copyrights, but he was asserting that he was sure that, 23 if you asked Novell, they would say that they didn't. 24 And that caused us a great deal of concern, as

25 you might imagine.

1981

1

Q.

And is that part of the reason that the press

2 release was issued in December of 2003? 3 A. Yes, it was. It had gotten to the point where,

4 again, Mr. McBride was making public statements about 5 SCO's ownership claims, and he had made at least one, and 6 I think others who worked for SCO had made similar 7 claims, that Novell would say that we didn't own them. 8 And so we felt the need to put before the

9 public the arguments that we were making with respect to 10 ownership and the rebuttal that we received from SCO. 11 And that's why we did this on December 22. 12 Q. Is it fair to say that Novell didn't have in

13 your corporate offices a calendar with a big red circle 14 around when SCO's earnings announcements were? 15 A. Not that I'm aware of. No. We certainly would

16 not have had that. 17 Q. Let me show you what Mr. Singer showed you, a

18 SCO exhibit that lists a number of communications that 19 you had or others had at Novell with IBM during the 20 2002/2003, time frame. 21 22 A. Q. Yes. And Mr. Singer seemed to imply in his Do you see that?

23 questioning of you that somehow you had, during the 24 discovery process in this case, kept from SCO these 25 conversations. Do you recall that series of questions

1982

1 and playing clips from your deposition? 2 3 A. Q. Yes. That document that actually lists the

4 conversations between folks at Novell and folks at IBM. 5 Was that provided to Mr. Singer during the course of 6 discovery? 7 8 A. Q. Yes, it was. And was provided to Mr. Normand during the

9 course of discovery? 10 11 A. Q. It was. So, those statements between IBM and Novell,

12 that was something that these guys have had for years. 13 Would that be fair? 14 15 A. Q. Yes. Let me show you what we've marked as L-19.

16 And, on that last point, did you ever try and keep secret 17 from the lawyers for SCO, during the course of discovery, 18 these conversations that you have testified about between 19 yourself and representatives of IBM? 20 21 22 A. Q. A. No. Of course not.

And what is L-19, sir? L-19 is an August 20, 2003, letter to

23 Mr. McBride from me. 24 Q. And, in the letter, are you requesting

25 something of SCO?

1983

1

A.

Yes.

We're requesting that SCO provide us with

2 the source in binary code due to Novell under the asset 3 purchase agreement pursuant to the technology license 4 agreement that we -- that the parties had executed back 5 in 1995. 6 Q. Okay. And then, so the jury understands, can

7 you explain in simple terms what you understand the 8 technology licensing agreement to be? 9 A. The technology licensing agreement was an

10 agreement between Novell and SCO, at the time the Asset 11 Purchase Agreement was entered into, whereby Novell would 12 get a license to all of the assets that had been 13 transferred to SCO. 14 those. We would have a license back to

And Novell would get a license to newly developed

15 code by SCO after it acquired this business. 16 Q. And were the assets to which Novell was

17 obtaining a license, were they limited to assets that 18 were actually transferred during -- in the Asset Purchase 19 Agreement? 20 A. No. They were -- they were -- they were to

21 code that SCO developed subsequent to the Asset Purchase 22 Agreement. 23 Q. But, in your letter, what is it you're

24 requesting? 25 A. We are requesting source and binary code under

1984

1 the Asset -- due to Novell under the Asset Purchase 2 Agreement. And we're -- we make reference to the assets,

3 the definition of assets in the APA, and we make 4 reference to the excluded assets. And we say that the

5 included assets includes all versions of UNIX and 6 UnixWare, including UNIX source code products in UNIX 7 binary product releases. 8 MR. ACKER: Your Honor, I move for the

9 admission of L-19. 10 11 12 13 Q. MR. SINGER: THE COURT: No objection. It will be admitted.

(Novell Exhibit L-19 received in evidence.) BY MR. ACKER: And when you were asking for SCO

14 to get back to you the source code, were you asking 15 for the copyrights or simply the source code? 16 17 A. Q. The source code. So, was it your understanding, in August of

18 2003, that the technology license agreement provided for 19 the license back of assets that had been transferred that 20 did not include the copyrights? 21 22 23 Honor. 24 MR. SINGER: Your Honor, I have a couple A. That is correct. MR. ACKER: I don't have anything else, Your

25 questions on recross.

1985

1 2

THE COURT:

Go ahead.

RECROSS EXAMINATION

3 BY MR. SINGER: 4 5 6 7 says: 8 "It follows from the foregoing that Novell is Q. A. Q. If you look at L-19, Mr. LaSala? Yes, sir. It's on the screen. The second paragraph. It

9 entitled to copies of the source and binary code for the 10 versions of UNIX and UnixWare under SCO's control." 11 That was under SCO's control because SCO had

12 ownership of it, correct? 13 14 A. Q. No. Would you turn to Exhibit 162, the actual

15 technology licensing agreement that this letter refers 16 to. 17 18 19 20 A. Q. A. Q. I don't have it. I'm sorry.

It's on the screen. I beg your pardon. And if we turn to, I think it's the third page Have you ever seen this

21 that talks about ownership.

22 provision which says that, as between Novell and SCO, the 23 ownership of the licensed technology shall reside in SCO? 24 25 A. Q. I see that. Have you ever seen that before?

1986

1

A.

I'm sure I have.

I don't recall it at this

2 moment, but I'm sure I have, since I've read this 3 document. 4 Q. And if I recall correctly, your testimony was

5 that you could see how a reasonable person would look at 6 the technology licensing agreement and conclude that 7 Novell did not have ownership of the copyrights, correct? 8 A. I don't think that quite accurately

9 characterizes the testimony. 10 Q. Well, the jury heard your earlier testimony, so

11 we'll go with what they recall. 12 13 A. Q. Okay. One further area of questioning. You were

14 asked about the consistency of your testimony in your 15 deposition about the contacts with IBM, asking Novell to 16 waive rights. 17 18 A. Q. Yes. Now, the document which set forth the Do you recall that?

19 conversations you had with Mr. Marriott and Mr. Jacobs 20 and Mr. Rosenberg from IBM, you have that before you? 21 22 A. I do MR. SINGER: In fact, I'd like to move into

23 evidence that exhibit. 24 25 MR. ACKER: MR. SINGER: You already did. Okay. If it's in evidence.

1987

1 2 3 Q.

THE COURT: MR. SINGER:

Which number is it? It's 530.

Remind me.

BY MR. SINGER:

This was presented in a

4 deposition where you were a corporate representative in 5 May, 2007, correct? 6 7 A.