SCO Grp v. Novell Inc

Filing 866

NOTICE OF FILING OF OFFICIAL TRANSCRIPT for dates of March 23, 2010-Jury Trial before Judge Ted Stewart, re 567 Notice of Appeal,. Court Reporter/Transcriber Patti Walker, CSR, RPR, CP, Telephone number (801)364-5440. 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 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).

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SCO Grp v. Novell Inc Doc. 866 Att. 1 2060 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 A. Q. (Recess) THE COURT: MR. HATCH: MR. BRENNAN: THE COURT: Are we ready, counsel? As ready as we can be. Yes, Your Honor. All right. (WHEREUPON, the jury enters the proceedings.) THE COURT: MR. HATCH: BY MR. HATCH Q. Mr. Tolonen, during the break did you have a long Go ahead, Mr. Hatch. Thank you. discussion about your testimony with your counsel? A. No, a short conversation. He gave me the pep talk and said you're doing fine. Q. Keep up the good work. When we left off we were talking about the preparation Let me give for the board meeting on September the 18th. you what has been marked as Exhibit 754. Do you see that document, sir? Yes, I can see that. This is, again, from Mr. Bradford. You worked with him to preparing the board, correct? A. I worked with David Bradford, and he is obviously sending something to me directly from himself and to the board on this transaction. Q. A. Have you seen this document before? I don't know if I did or not. I don't recall. I 2061 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 probably helped prepare it. I probably printed out some of the attachments and prepared some of the -- someone in my group, in the finance group might have done some work for him, for David. Q. A. We talked about the attachments -There is a stock trading chart, and that would have been something that probably came out of one of my groups. There is historical financial performance and analysis, which is something I did or someone from my group did. Q. Then on page 5, if you turn the sheet, there appears to be some financial dealings as well in paragraph three. Do you see that? A. I'm sorry. Yes. Q. A. Okay. That would have come from your shop as well? Paragraph three? It was a mathematical computation and we would have been involved in looking at that to make sure that the numbers were correct and accurate, and that the percentages were under 20 and those things that were important to finance. Q. You were part of the team that tried to help portray accurately things to the board so that they could make decisions accurately and appropriately, correct? A. Yes. MR. HATCH: Your Honor, I would move the admission 2062 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 of Exhibit 754. MR. BRENNAN: Your Honor, no objection. Maybe I am mistaken. I thought this was already in evidence. MR. HATCH: THE COURT: number, but -MR. BRENNAN: THE COURT: Not in this form. 754 is not. It may be a different No objection. It will be admitted. (Plaintiff's Exhibit 754 was received into evidence.) BY MR. HATCH Q. So that the jury can see it, let's go back to the first page, Mr. Tolonen. As we indicated, this is a memorandum from Mr. Bradford to the Novell board of directors? A. Q. A. Q. Yes. September 15th, correct? That is what it says, yes. To your understanding that is just a couple of days before the board of directors meeting, correct? A. Q. Yes. Just so we're clear, the board of directors meeting wherein the A.P.A. was approved? A. Q. Correct. Then page 3, this is the market trading performance 2063 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 chart that you indicated someone on your staff likely made, correct? A. Yes. MR. HATCH: BY MR. HATCH Q. This is the historical performance analysis that you The next page, Mr. Calvin. were talking about as well? A. This could have been my group or it could have been the business development group. Q. Let's go to the next page. In paragraph three, and we will highlight that, it talks about what Novell was receiving from SCO, correct? A. In board of directors terms, correct. It is a summary, not -Q. I understand. It is interesting that you put it that Is it fair to say that way, in board of directors terms. that is not legalese, it is more English? A. Q. It is a letter, it is not the contract, yes, English. You do that for the board because no one expects the board to be able to read and parse a lengthy agreement, so you're trying to give them an executive summary, correct? A. It is an executive summary. Or maybe as an analogy, and when I was talking to the jury I used the pizza analogy, and that was maybe an extreme case, and you wouldn't do that with the board, but maybe looser language than a contract, 2064 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 and it is English not as legal. Q. That's all. But you're trying to put in the important points and not leave anything out? A. Q. A. Q. Absolutely. You wouldn't want to mislead the board? We certainly didn't want to do that. Here you are actually setting forth, at least financially, what Novell is going to get from SCO from entering into the A.P.A., correct? MR. BRENNAN: Objection, Your Honor. That mischaracterizes the witness's testimony. that he prepared this or that he -MR. HATCH: He did not say I think he indicated that he or someone in his group -THE WITNESS: May have contributed to it or the I was not a board member. I business development group. wasn't a director. BY MR. HATCH Q. A. I was a recipient of this. You're familiar with this language, right? I have not seen this document. I don't recall it specifically. Q. I wasn't at that board meeting. Let's do it the way Mr. Brennan wants us to do it and let's walk through it. MR. BRENNAN: Objection, Your Honor. I move to strike. That is just argument and not necessary. 2065 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 A. MR. HATCH: BY MR. HATCH Q. I'll rephrase, Your Honor. Paragraph 3-A says that Novell is going to get 16 percent, stock equal to 16.6 percent of SCO after the transaction. It says 19.9 percent of shares outstanding before the transaction. Do you see that? That is correct. I think I mentioned under 20 percent was important. Q. A. That was important why? For accounting reasons, technical accounting reasons and how the transaction is recorded as an asset purchase not as a company -- SCO was not becoming a consolidated entity with Novell. Q. If I understand your prior testimony, and let me make sure, this is how you understood the deal, right? A. Q. A. I'm sorry? This is how -- This part of it -That we were receiving this compensation as the payment from SCO of approximately seven and a half percent, 6 million shares of their stock, yes. Q. I think you had told the jury when Mr. Brennan was questioning you that that was somewhere between 50 and $60 million of value in your mind? A. Correct. 2066 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 Q. B says 95 percent of all royalties. We are under the heading Novell receives from SCO. The company was putting a value of close to $50 million on that, correct? A. But it technically wasn't consideration because we owned it 100 percent and they were administering those under the contract. Q. Sir, I think my question was what is the value of that that was put on it by the company? A. The royalties would be retained from the other SVRX royalties, so $47 million. Q. Just so we are clear it is under the section called Novell receives from SCO, correct? A. That they would collect it and then remit it back to us as the administrator, correct. Q. Then in C it says, a third item says if SCO hits our business forecasts, which admittedly is aggressive, royalties on future UnixWare shipments by SCO through the year 2002, which royalties have a net present value of 50 to $60 million. Do you see that? A. Q. A. Uh-huh. Explain to the jury what net present value is. It is a calculation to try and bring forward the value A simple case of something to be received in the future. would be would you rather have $100 today or $100 three 2067 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 years from now? I will take the $100 today. What is the That is $100 three years from now worth? the present value. Q. Something less. So the board is being told here that the value to us today, we're saying it is probably 50 to $60 million, although the total amount will be greater over the course of the year or in the forecast, correct? A. I believe in my earlier testimony I said one of the elements of the A.P.A. was a royalty transaction that had a minimum floor below which SCO would pay nothing, and a range where if they were able to penetrate the market we would share in that royalty, and then a cap. There were three It elements to the royalties, the potential royalties. could be zero. in between. Q. It could be a lot or it could be something If my math is right and I add those up, this appears to Does that square with come between 150 and $170 million. your recollection? A. If you mathematically add them up and you get that, and it is sort of a funny characterization because some of them were already ours. owned that. The middle one was already ours and we We retained that. Mr. Calvin, go up and highlight for me MR. HATCH: paragraphs one and two on that same page. BY MR. HATCH 2068 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 Q. Now, again, this is the high level summary for the board, correct? A. Q. Yes. It says under one that Novell is giving SCO -- A says the UNIX technology assets, right? A. Q. A. Q. Yes. And B is the UnixWare technology assets? Correct. Paragraph two says Novell retains, I think, all patents, right? A. Q. Yes. It says a license back, and we have heard reference in this case to a T.L.A. or a transfer of license agreement, and you have heard of that, correct? A. Q. A. Yes. What did you understand the T.L.A. to be? That we kept the rights to internal use of UNIX and UnixWare, even though the products were part of the assets sold. Q. A. The NetWare? NetWare? A license back to UNIX and UnixWare for internal use and -Q. So SCO was licensing it back to Novell was your understanding, right? A. Okay. 2069 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 Q. And C is Tuxedo and other miscellaneous and unrelated technology? A. Assets that were part of the UNIX system that we did not sell, yes. Q. I think you mentioned Tuxedo earlier and I think NetWare as well, correct? A. Q. NetWare was a Novell product, yes. Those were things that you retained. Okay. So in this high level summary for the board it does not say that Novell is retaining the copyrights, does it? A. Q. I don't see it there. Now, let's go for a second to the A.P.A. MR. HATCH: BY MR. HATCH Q. Again, it says it is an asset purchase agreement, Exhibit 1, Mr. Calvin. correct? A. Q. A. Q. Yes, it does. It does not say it is a license agreement, right? It says asset purchase agreement. Let's go to Section 1.1-A. MR. HATCH: Let's go, if you would, Mr. Calvin -If you would, go to let me get my copy out. Section 1.3-A-1. Highlight the little i and one so that we can read that, so that I can see that. 2070 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 BY MR. HATCH Q. A. Q. Do you see it says intent? Yes. It says the intent of the parties hereto is that all of the business and all of the seller's backlog, if any, relating to the business be transferred to the buyer. Do you see that? A. Q. Okay. Do you believe that is the intent of the parties to the A.P.A.? A. Q. A. Q. A. Okay. I believe it is in the A.P.A. as terms, yes. It says the intent, right? Yes. It says all of the business, right? It is a capital B, and so it is a defined term, so the assets sold -Q. A. Q. That is a good point. I don't know -Explain to the jury what you mean when you have it capitalized. A. Oftentimes in agreements you use a definition in a contract so that it can be reused later as saying when I use this word it means that definition rather than having to repeat the whole schedule again. Q. Let's go to recital A. 2071 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 these. MR. HATCH: Blow it up. Highlight that for me. I have bad eyes. That is why I have There we go. BY MR. HATCH Q. A. Q. Can you read that? Yes, I can. Is this where you're talking about where it defines business? A. It looks like it is where it says, paren, collectively the business, quote, unquote, capitalized, and that would mean it is reusing the term and to refer back to the definition. Q. A. Q. A. Q. A. Q. That is the point of putting in the quotes under it -It is a defined term. It means what it says here, right? Right. Let's read what the business is here. Sure. It says seller is engaged in the business of developing a line of software products currently known as UNIX and UnixWare, and the sale of binary source code licenses to various versions of UNIX and UnixWare, the support of such products, and the sale of other products which are directly related to UNIX and UnixWare. Collectively, the business. 2072 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 A. A. Q. A. Right? Correct. Is that an accurate description of Novell's business? We were developing and selling binary source and supporting those products. Q. Okay. That is an accurate description of Novell's business, the UNIX and UnixWare business, correct? A. The developing and sale and support, okay, and that is what it means when we use the term business here. Q. A. That is the whole business? That is what this definition in this contract is referring to, the development and sale and support, yes. Q. Let's go down to Section 1.1-A. MR. HATCH: BY MR. HATCH Q. It says purchase of assets, and it says all of Highlight it starting with all of it. seller's -- it uses the word all, do you see that? A. It says all and all is identified on the schedule, yes. MR. HATCH: with all. BY MR. HATCH Q. All of seller's right, title and interest. What does right mean? Well, I don't know that -- there is not a capital so it Highlight that, Mr. Calvin, starting is not defined. 2073 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 Q. A. Is a copyright a right? It could be a right, but I would say that is one that was not sold because it was not on the schedule identified here in this paragraph. Q. A. Q. Well, that is why we are here, sir. Okay. All of seller's right, title and interest in and to the assets and property of the seller relating to the business. It is again capitalized, right, the business? A. Q. Right. Okay. Then it says collectively the assets and it says identified on the next page, Schedule 1.1-A? A. Q. A. Q. The list of assets sold, correct. Right? Uh-huh. Let's go to Schedule 1.1-A. Number one, again, it says all, and it uses the word all and it uses rights again, all rights and ownership of UNIX and UnixWare, including but not limited to all versions of UNIX and UnixWare and all copies of UNIX and UnixWare including revisions, updates in process and all technical design, development, installation, operation and maintenance information concerning UNIX and UnixWare, including source code, source documentation, source listings, and annotations and appropriate engineering notebooks, test data, test 2074 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 results, as well as all reference manuals and support materials normally distributed to seller and to end users, and potential end users in connection with the distribution of UNIX and UnixWare, such assets to include without limitation the following. Then it continues to go through a rather lengthy listing of all of these things, correct? A. Q. Yes, a complete list of what was and what wasn't. Now, shortly after this transaction occurred wasn't there a transition between the transfer of this business from Novell to SCO? A. You can't just flip a light switch. There were hundreds of employees and thousands of customers and, yes, there was a process of moving it across the line, if you will. Q. A. Were you involved in that process? Not very much, no. Yes on some elements, but it did not take a lot of my time. Q. A. Do you know what involvement you had? I don't recall specifically. I stayed involved in some form because of being an executive on the project and wanting to make sure that it went smoothly, and there were some facilities issues and some human resource issues. I mean, some of the contracting issues I mentioned earlier, I got later involved in an amendment on the A.P.A. a year 2075 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 later. Q. I stayed involved but not -- Were you involved in any of the announcements to customers or the press as to what had happened in the transaction? A. No. Well, to the analyst community, yes, absolutely, but not so much to the customers or the press. Q. The analyst community you indicated to them that Novell had sold the business to SCO, correct? A. We explained it similar as I did here, what was sold and what we retained and the relationship that we still had with UNIX and UnixWare and the industry. Q. Now, eventually you indicated, I believe, that you said that you signed amendment number two, correct? A. Yes. That is correct. MR. HATCH: BY MR. HATCH Q. You talked about Section A of amendment number two, and Let's put up amendment number two. if we can pull that up, it said with respect to Schedule 1.1-B of the agreement entitled excluded assets, Section 5, subsection A shall be revised to read -- do you see that? A. Q. A. Yes. When you say revised to read, what does that mean? It was an amendment to change the language of that one paragraph of the A.P.A., the asset purchase agreement. Q. And it replaces the language, correct? 2076 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 A. Q. A. Correct. So the old language is of no effect? From this day forward I would presume that this would be the correct language when the parties agreed to an amendment. MR. HATCH: Mr. Calvin, put up Schedule 1.1-B, the old language that has been revised. BY MR. HATCH Q. page. Now, you understood that Section 1.1-B was the excluded assets, correct? A. Q. Correct. I think as we can see here, and Mr. Calvin will Let's go to Section 5. Well, go back to the first highlight it, it says any asset not listed on 1.1-A including without limitation any assets which pertain to NetWare. Do you see that, NetWare? A. Q. Certainly. Section two again says NetWare. Do you see that? A. Q. Yes. And you indicated that NetWare was Novell software that you wanted to make sure SCO was not getting, correct? A. One of many things, yes. 2077 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 Q. A. Q. That was not part of the deal, NetWare? Correct. So with excluded assets we're talking about NetWare, and Tuxedo was another one that you mentioned, I believe, right? A. Q. A. Q. A. Q. A. Q. Yes. Then Section 4 again talks about NetWare, right? Okay. Yes. Section 4-B is NetWare, right? Okay. Section C is NetWare, right? Yes. So all the intellectual property we have been talking about so far has been NetWare, correct? A. Q. Yes. If we go to Section 5, which is what amendment two meant, right? A. Q. Okay. Yes. It says intellectual property and it says all copyrights and trademarks except for the trademarks UNIX and UnixWare. Do you see that? A. Q. Yes. Now, when we read the term sheet to the board, the only thing that was mentioned in that was patents, right? 2078 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 A. Q. A. Q. Not on the board's resolution, but in the letter -The term sheet? Correct. I remember that. We're talking over each other. MR. HATCH: I will try not to. BY MR. HATCH Q. Okay. So this language in A, all copyrights and trademarks excepts for the trademarks in UNIX and UnixWare, that is the part that was revised and replaced, so this language does not exist in the agreement anymore, correct? A. Q. It was revised. Let's go back to amendment two. MR. HATCH: BY MR. HATCH Q. Again, here is Section 5, where we just were, and Blow up A again, please. subsection A, that is the part that is copyrights, will be revised to read, and it is replacing it with the language below here, correct? A. Q. Okay. It says all copyrights and trademarks, and then it says except for the copyrights and trademarks owned by Novell as of the date of the agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies, right? A. Correct. 2079 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 Q. So no longer does it say you don't get any copyrights at all, right? A. I believe this was the discussion that we had earlier that says that they get -- it is a limiting -- we have taken out the language that says you get all of the copyrights, and instead it says you will get the rights you need for the acquisition of the technologies. Q. A. Q. Okay. It is a very narrow definition. It says the copyrights you are getting are the ones that require you to exercise the rights -A. Q. A. Or the use of those. Okay. My recollection, and I said this clearly, was this was not a change in the transaction to release copyrights. Q. Well, you indicated that you didn't go back to the board for approval because at the time no one felt that this changed the agreement materially, right? A. Q. It was not against the board's resolution, correct. Well, it wasn't what Mr. Frankenberg who was the head of the company -- was he chairman of the board as well? A. not. Q. I don't recall if there was an independent chairman or He may well have been chairman at the time. Mr. Frankenberg testified that this agreement transferred all of the copyrights. 2080 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 said. MR. BRENNAN: Objection, Your Honor. Two points. First of all, there has been an exclusion order and now we are introducing prior testimony. Second of all, it is improper, and Mr. Hatch did it earlier, to ask a witness to vouch for prior testimony of another witness that this witness didn't hear. I would object and move to strike the reference to the prior witness's testimony that Mr. Tolonen has not had the benefit of listening to. THE COURT: reflected -MR. HATCH: I think it is for the jury to As long as the testimony is accurately understand, but if I couch it and put myself on the line here saying that Mr. Frankenberg testified to the jury that the intent was to transfer the copyrights, all of the business -MR. BRENNAN: Your Honor, Mr. Frankenberg offered What he did no testimony regarding amendment number two. testify to was that he left the company before amendment two was negotiated and executed. That is a mischaracterization, to the extent that Mr. Hatch is suggesting that Mr. Frankenberg testified that the intent of amendment number two was to transfer copyrights. THE COURT: I don't believe that is what Mr. Hatch He said the intent of the original A.P.A. and that is all that he was representing. 2081 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 MR. HATCH: confused here. THE WITNESS: A.P.A. as well. BY MR. HATCH Q. A. he -Q. I think he is trying to get me and us Mr. Frankenberg was wrong about the That is your position? The A.P.A. thoroughly excluded it. I don't know that My question was slightly different. The jury is going One of to be asked to determine who owns the copyrights. the things is the intent of the parties. Do you believe that Mr. Frankenberg is not telling this jury the truth when he says the intent of this agreement was to transfer the copyrights? MR. BRENNAN: Your Honor, I object. It is inappropriate to ask the witness to vouch for the truthfulness of another witness's testimony. THE COURT: MR. HATCH: I will sustain that objection. I did misword that. Let's move on, because I don't think it is worth going over. BY MR. HATCH Q. At the very least we do know that the portion of the A.P.A. that said none of the copyrights were transferred has been replaced by this language and that is no longer in 2082 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 effect, right? A. Q. That is what the amendment did, yes. Just so we are clear, it says that what SCO is getting is the copyrights and trademarks owned by Novell as of the date of the agreement requiring SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare, right? A. Q. That is the reading of the agreement, yes. Now, two things here. MR. HATCH: I want to go back. Mr. Calvin, if you will, go back to Blow that up. It is the A.P.A., Exhibit 1, Section 1.1-A. on the bottom. BY MR. HATCH Q. It says everything necessary to exercise its rights. What rights did SCO get? We just What rights did it get? read it. It is the fourth line down. It says all of seller's right, title and interest, right? MR. BRENNAN: Objection, Your Honor. This is not a complete presentation, and the question of what Section 1.1-A suggests or states -THE COURT: He is asking what it says. I think it is an He is asking the witness what it says. appropriate question. THE WITNESS: in its context. I think the question is appropriate It You can't read a part of a sentence. says all of the interests as identified in the schedule and 2083 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 as excluded by the other schedule and that is the sentence. You can't just read the first five words. BY MR. HATCH Q. Let me make sure that I am clear here. Are you telling the jury that they didn't get all of the rights because the excluded assets schedule, which has now been amended away, that somehow you're going to piggyback that back in now saying that they don't get the copyrights? A. No, I am saying there is a list of purchased assets on 1.1 and the copyrights are not there. Q. Sir, let's go back to amendment two. Do you remember when Mr. Brennan was talking to you he put in front of you a prior draft of amendment two? A. Q. I do. And I think you indicated that that was not accepted and that it was changed and we then got this final amendment two. A. Right. The draft was a version that SCO had proposed and we said no, not acceptable, and took out some language. Q. Go to T-34. MR. HATCH: BY MR. HATCH Q. One of the changes here in addition to getting all of Highlight the A language. the rights required, you'll notice it says except for the 2084 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 copyrights and trademarks owned by Novell as of the date of this amendment number two. Do you see that? MR. BRENNAN: Your Honor, I object. I assume it is inadvertent, but there was a reference to all of the rights required in the question, and that language does not appear in what Mr. Hatch is showing the witness, thus it mischaracterizes matters. MR. HATCH: I think I even started my question by saying that, Your Honor. THE COURT: THE WITNESS: something new? BY MR. HATCH Q. A. ago. Q. A. Q. That Mr. Brennan showed you. Owe. It said for copyrights and trademarks owned by Novell This is on the draft, correct? This is the existing draft that I looked at a while Go ahead. Excuse me. Am I looking at as of the date of this amendment. Do you see that? A. Q. Okay. The amendment was about a year after the A.P.A., correct? 2085 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 A. Correct. MR. HATCH: Let's go back down, Mr. Calvin, to Let's blow up amendment number two signed by Mr. Tolonen. A, if you would. BY MR. HATCH Q. Now it says as of the date of the agreement. Do you see that? A. Q. Okay. Wasn't one of the issues that the parties had was they wanted to make sure that the rights, the copyrights that were being transferred were those that were in existence as of the date of the agreement not a year later? A. I'll say yes. In context it was as a cleanup point and There had been lots this was an amendment to the agreement. of code written by both parties in the mean time, so as not to bring that into question about what are we talking about here. Q. Isn't it true that the reason that change was important is because Santa Cruz and senior Novell officials believed that as of the date of the amendment that in their mind the copyrights had already transferred? A. Q. No. I do not believe that is correct. Isn't it true that like you said this didn't have to go to the board, because this was just a clarification of what had transferred at the date of the A.P.A.? 2086 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 A. No. The agreement was clear what transferred and what didn't transfer. Q. A. Q. A. Now, you gave a declaration in this case, didn't you? Yes. Several years ago I gave a declaration. At the request of Novell's lawyers? I don't know who made the request, but I did give a I believe it was Novell's attorneys. It is Exhibit 640. declaration. Q. Let me give you a copy of that. Is that a copy of your declaration? A. Q. A. Yes, it is. What is the date on that? I don't know where the date is shown. The 20th day of April of 2007. Q. Now, when you provided that declaration to Novell, you were not employed at Novell at the time? A. Q. Correct. I was not an employee. And you had not been employed there for almost nine years? A. Q. Correct. At that time you were the chief financial officer at a company called Business Objects S.A., right? A. Q. A. Q. Correct. I think you talked about -As one of the -Now, Business Objects S.A. from time to time has to 2087 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 make filings with the United States Securities and Exchange Commission, correct? A. Q. A. Q. A. Q. Correct. And you signed those on behalf of the company, correct? Correct. Back then when you -When I was the C.F.O. Let me give you a copy. Do you recall filing a form 8-K and -MR. BRENNAN: The document put before the witness There is nothing to impeach is not on any exhibit list. and -MR. HATCH: I am going to use it to refresh his recollection, Your Honor. MR. BRENNAN: There has been no demonstration that he does not remember anything. MR. HATCH: THE COURT: I will do that. It will only be used if the witness cannot remember and for refreshing purposes and not for submission to the jury. MR. BRENNAN: BY MR. HATCH Q. Do you recall making a submission to the United States Thank you. Securities and Exchange Commission form 8-K on February 6, 2007? 2088 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 A. Q. I don't recall it, but I was there and we did it, yes. If you don't recall it, when you look at this does this refresh your recollection? THE COURT: Mr. Hatch, why don't you ask him questions that may justify him referring to the document, and until it is necessary for him to refresh his memory it is not necessary for him to focus on the document. MR. HATCH: BY MR. HATCH Q. Do you recall that shortly before you signed your Okay. declaration that your business then, Business Objects S.A., entering into a large strategic alliance with I.B.M.? A. that. Q. A. Okay. This refers to that. I mean, this talks about I am just scanning it quickly. Without -It is a press release and it talks about other business highlights and -THE COURT: ask him questions. MR. HATCH: I am trying to. Let's not focus on the document, just It is my fault. BY MR. HATCH Q. Without looking at the document, do you recall that shortly before you entered into your declaration that your company, Business Objects S.A., entered into a strategic 2089 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 alliance with I.B.M.? A. I don't recall being associated -- almost every company They are I have worked with has done business with I.B.M. one of the largest technology companies in the industry. Q. A. Q. So you have done a lot of business with I.B.M.? Off and on, I suppose I have. Do you specifically recall in the months before your declaration your company entering into a strategic alliance with I.B.M.? A. I recall that Business Objects entered into a strategic alliance with I.B.M., yes. Q. A. Do you recall when? It has to be around this date because the 8-K was filed I don't recall the exact date, no. Did that have anything to do talking about it. Q. Is that a coincidence? with your declaration? A. Q. Nothing whatsoever. Let's move forward to this year. You're involved, I think you said, on the board of several companies still, correct? A. Q. A. Q. A. I am on one public company board, yes. I think you mentioned Blue Coat? Yes. You're on the board of Blue Coat? Yes, I am. 2090 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 Q. Didn't Blue Coat just announce in the last month that Blue Coat signed a global deal with I.B.M.? A. I am not sure that I recall exactly the specifics of that, but they may well have. Q. You're on the board, and how many meetings in the year did you meet in 2009 with Blue Coat? A. Probably eight or ten meetings. I had committee I'm a member of the meetings as well as board meetings. audit committee and on a special committee as well. Q. A. Q. A. Was the deal with I.B.M. a big deal with your company? No bigger than other large transactions. That just happened, right? If you say there was a release about it I will say that I don't recall the specifics of that agreement. it did. Q. Would you deny that the company announced just on February the 23rd, exactly a month ago today, that they signed a global agreement under which I.B.M. will provide new -- serve security web gateway offerings to new and existing clients? A. That is true. MR. HATCH: THE COURT: MR. BRENNAN: That's all that I have, Your Honor. Mr. Brennan. I have a few questions, Your Honor. REDIRECT EXAMINATION BY MR. BRENNAN 2091 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 Q. I would like to show you what has been marked and admitted as Exhibit C-3. Excuse me, wrong document. confused my C and Z. Before you, Mr. Tolonen, is a document in evidence. is the minutes of a meeting of the board of directors of Novell, Inc. on Monday, September 18th, 1995. I believe you It I apologize. Z-3. I told us that you were not physically present at that meeting, correct? A. Q. Correct. I would like to direct your attention down to the You'll see that there are a second page of Exhibit Z-3. series of resolutions, and I would like to in particular highlight the first set of resolutions where it says resolved. MR. HATCH: Your Honor, I object. He has indicated that he was not there and involved. MR. BRENNAN: The witness was asked several times by Mr. Hatch about his understanding of the board of director meeting minutes, and with respect to the resolution approved by the board. questions. MR. HATCH: I believe it was the term sheet and I am following up on Mr. Hatch's the things that he signed, Your Honor. THE COURT: I'm going to sustain the objection. 2092 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 BY MR. BRENNAN Q. Are you aware that the Novell board of directors approved a resolution stating that Novell would retain all patents, copyrights and trademarks except for the trademarks UNIX and UnixWare? MR. HATCH: MR. BRENNAN: Same thing, Your Honor. Objection. I am entitled to ask the witness whether he is aware of a resolution. THE COURT: question. He is indeed entitled to ask that The document itself -MR. HATCH: If he could re-word it. I may have misheard it. I thought he talked about in terms of what the board did and -BY MR. BRENNAN Q. The question was are you aware that the board of directors of Novell approved a resolution to the effect that Novell under the asset purchase agreement would retain all of its patents, copyrights and trademarks except for the trademarks UNIX and UnixWare? A. Q. Yes. Now, in connection both with my earlier questions of you and Mr. Hatch's questions, there were suggestions made apparently by Mr. Hatch that you may not have had involvement in the transaction. You did attend, in fact, board meetings between September of 1995 and December 6th of 2093 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 1995 where the asset purchase agreement was discussed; is that correct? A. Q. Yes. That is correct. If I could direct your attention now to what has been X-4 are marked, but not yet in evidence, to Exhibit X-4. minutes of a meeting of the Novell board of directors held on October 20th, 1995. Do you recall being present at that meeting? A. Q. Yes. Do you recall making a presentation or having discussions with the board at that meeting regarding the asset purchase agreement? A. Yes, it was discussed. MR. BRENNAN: Your Honor, I would like to move into evidence Exhibit X-4. MR. HATCH: MR. BRENNAN: I am not sure what is redacted. There are redactions of privileged attorney-client matters that were discussed at the meeting. Exhibit X-4 are the meeting minutes redacted to remove the privileged communications. This was produced during the course of discovery and is on Novell's list. MR. HATCH: THE COURT: Your Honor, I have no objection. It will be admitted. (Defendant's Exhibit X-4 was received into evidence.) 2094 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 BY MR. BRENNAN Q. If we could look at the second paragraph of Exhibit X-4, it says six of the eight directors were in attendance for the meeting. It names Bob Frankenberg, Alan Ashton, Ian Wilson, Elaine Bond, Larry Sonsini and John Young. Do you see that? A. Q. Yes, I do. It says also present by invitation are David R. Bradford, Mary Burnside, Jeff Turner and Jim Tolonen. Do you see that? A. Q. A. Q. Yes, I do. That reference to Jim Tolonen is to you, correct? Yes, it is. Then if we could go down to the lower half of the first page, there is a section entitled status of the SCO transaction. Do you see that? A. Q. Yes, I do. It reads, quote, Mr. Frankenberg then asked Mr. Bradford to review the current status of the company's efforts to close the transaction with Santa Cruz Operation. Mr. Bradford and Mr. Tolonen then outlined the status of the following action items. One, H.S.R. filings. Do you know what H.S.R. fillings are? A. Sure. That is a Hart-Scott-Rodino filing and it has to 2095 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 do with employment law. Q. Then it references, two, operating agreements; three, disclosure schedules; four, benefits agreement, and; five, source code licensing arrangements. It continues, it was pointed out that while excellent progress had been made on each of the foregoing, the company had decided to move its target close date to the end of November. Do you see that language? A. Q. Yes, I do. Do you recall being present at the board meeting and discussing the items that are referenced in the board meeting minutes? A. Yes, I do. MR. BRENNAN: I would like to have shown to the witness Novell Exhibit B-6. This is not yet in evidence, Your Honor. BY MR. BRENNAN Q. Exhibit B-6 is the minutes of the meeting of the board of directors of Novell, Inc. held on Monday, December 11th, 1995. Did you attend that meeting as well? A. Yes, I did. MR. BRENNAN: Your Honor, I would like to move into evidence Exhibit B-6. MR. HATCH: I don't have any objection, Your 2096 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor. THE COURT: B-6 will be admitted. (Defendant's Exhibit B-6 was received into evidence.) BY MR. BRENNAN Q. If we look at the minutes of the board of directors meeting that Novell held on Monday December 11, 1995, and let's focus on the second paragraph, and it says six of the eight directors were in attendance for the meeting. It lists Mr. Frankenberg, Mr. Ashton, Mr. Wilson, Ms. Bond, Mr. Sonsini and Mr. Young. Do you see that? A. Q. Yes, I do. It says also present by invitation were David R. Bradford, Mary Burnside, Jeff Turner and Jim Tolonen. Do you see that? A. Q. Yes, I do. Scroll down a little lower. There is a reference at the bottom of page 1 to the UnixWare sale to SCO. Do you see that? A. Q. Yes. It states that management announced that the sale of the UnixWare product line to SCO was closed on December 6, 1995. Mary Burnside and Jim Tolonen outlined the efforts undertaken to transition employees from Novell to SCO and 2097 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 Hewlett-Packard. Do you see that? A. Q. Yes, I do. Did you in fact discuss with the members of the Novell board of directors at the December 11, 1995 board meeting the transition of employees from Novell to S-C-O and Hewlett-Packard? A. Q. Yes, we did. If you would, turn to what has been admitted into This is a document that Mr. Hatch evidence as Exhibit G-4. showed you. So that we can have a clear look at it, let's turn to page 2 of Exhibit G-4. MR. BRENNAN: Highlight the first and second full paragraphs of that document. BY MR. BRENNAN Q. Mr. Hatch discussed this with you, but so that we are all literally on the same page, the memorandum from Mr. Bradford says I am now in receipt of a final asset purchase agreement between Novell and SCO. Simultaneous to my receipt of this contract you have been faxed an identical copy. Do you recall receiving on or before the date of this memorandum a copy of the asset purchase agreement? A. Yes. 2098 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 Q. Then it reads the purpose of this memorandum is to let you know that I have reviewed -- just so we are clear, you understand the I to be David Bradford? A. Q. Absolutely. You understood that Mr. Bradford's role at that juncture as general counsel to be what relative to this transaction? A. To pull all the pieces together and to agree that the intent as negotiated had been met by the legal contract, the terms of the legal contract, and give his agreement so that Mr. Frankenberg would be comfortable signing it. Q. In fact, as you have indicated, the language of Mr. Bradford's memo continues, I have reviewed the final document and find the same to be an accurate reflection of the business and legal terms and conditions negotiated between the parties. I, therefore, approve this asset purchase agreement for final signature by Bob Frankenberg. Do you see that? A. Q. Yes, I do. Did you understand that the form of the asset purchase agreement that Mr. Bradford had approved as being an accurate reflection of the business and legal terms and conditions negotiated between the parties, that is Novell and Santa Cruz Operation, was the form of the asset purchase agreement that Mr. Frankenberg signed on September 19th, 2099 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 1995? A. Q. Yes, that is my understanding. Just a question or two about what transpired after the initial asset purchase agreement was entered into. What to your observation occurred with respect to the UnixWare business after it was transferred to Santa Cruz Operation? A. Well, there was a period of time, and I think we referred to that as the overlap period, the actual transfer of people and assets and technology was moving. Novell stayed involved and also was a party to the contract in a number of ways, so we continued to be friends of Santa Cruz, not an investor but owner of 17 percent owner of the company and supporter of the business, as well as to continue with our other UNIX related business partnerships with the other companies that we had relationships with. Over a longer term our expectations for the success of that were not met, frankly. One of the things we looked at earlier was a proposed business plan where royalties would be calculated. The parties had agreed how big the market was and what kind of penetration over time would be achieved, and at which point no royalties would be paid and at which point royalties would be paid and a cap. I don't believe any royalties were ever paid under that, so there were really never -- it was not as successful as we had 2100 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 hoped. MR. BRENNAN: THE COURT: MR. HATCH: No further questions, Your Honor. Mr. Hatch. A short inquiry. RECROSS-EXAMINATION BY MR. HATCH Q. To follow up on Mr. Brennan's discussion of the board minutes and the sale, let me give you what has been marked as Exhibit 503. Do you recognize Exhibit 503 as being the 10-Q of Novell dated March 12, 1996? A. Q. Okay. Yes. Is that your signature? Look on pages 16 of 17. MR. BRENNAN: I assume the question is whether this is an electronic signature? THE WITNESS: mine. BY MR. HATCH Q. A. That is how you file them with the S.E.C.? Yes. The electronic filings have a slash S to reflect It is an electronic signature of the signature. Q. There is no doubt that you signed this on behalf of the company? A. Q. That is my signature. What does your signature represent? 2101 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 A. Q. A. Q. The chief financial officer and executive vice -No, by signing this what are you telling the S.E.C.? That this is true and correct to my belief. Right. MR. HATCH: MR. BRENNAN: THE COURT: Your Honor, I move Exhibit 503. No objection, Your Honor. It will be admitted. (Plaintiff's Exhibit 503 was received into evidence.) BY MR. HATCH Q. A. Q. This is shortly after the sale of the business to SCO? Two quarters. It would have been the second quarter. Your have to talk about the transaction and give a representation to the S.E.C. of what happened, correct? A. Q. Correct. I have a couple of quick questions. Turn to page 9. MR. HATCH: If you would put that on the screen. Highlight the first line. BY MR. HATCH Q. A. Q. It says in December? Yes. In December, 1995, Novell sold its UNIX and UnixWare product line to the Santa Cruz Operation. Correct? 2102 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 A. Q. A. Q. Correct. You understood both UNIX and UnixWare? Yes. Turn to page 10. MR. HATCH: Highlight the paragraph, Mr. Calvin, that starts with UNIX Systems Group. BY MR. HATCH Q. What are you talking about here? You're talking about $19 million in royalties as a result of the sale to SCO? A. That is the accounting calculation of how the royalty present value shows up in our financial statements because of the purchase. Q. Again, you recognize the sale of the UNIX and the UnixWare product line to SCO in December of 1995, correct? A. Yes. MR. HATCH: THE COURT: MR. BRENNAN: THE COURT: MR. HATCH: THE COURT: That's all that I have, Your Honor. May this witness be excused, counsel? On Novell's behalf, yes. Mr. Hatch? Yes. Mr. Tolonen, that means that you do You can go back to Please do not not need to worry about being re-called. your business. I do need to caution you. discuss your testimony with any other witnesses in this case or potential witnesses or in the presence of any other 2103 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 witness, and please do not communicate the content of your testimony to any other witness in the case. Thank you very much. THE WITNESS: THE COURT: MR. BRENNAN: Allison Amadia. ALLISON AMADIA Having been duly sworn, was examined and testified as follows: THE WITNESS: A-m-a-d-i-a. DIRECT EXAMINATION BY MR. BRENNAN Q. A. Q. Good morning, Ms. Amadia. Good morning. So we're clear, have you previously been known by your Allison Amadia, A-l-l-i-s-o-n, Thank you. Mr. Brennan. Yes. Novell wishes to call Ms. maiden name? A. Q. A. Q. A. I have. What is that? It is Lisben. Would you please tell us your occupation. I am an independent legal consultant and my speciality is technology licensing. Q. In addition to your consulting work that you do, you 2104 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 are involved in other activities such as teaching and other professional pursuits? A. Yes. I am a part-time lecturer at Santa Clara Law School and I teach a technology licensing class there. Q. A. Please summarize for us your educational background. Yes. I received a bachelor of arts from the University of California at Davis in political science, and a juris doctorate degree from the University of Pennsylvania. Q. After you completed your law degree, did you then go to work for a federal district judge? A. I did. I worked for Judge William B. Shubb in the Eastern District of California. Q. That would be a District Court judge such as the judge that we have here, Judge Stewart? A. Q. A. Q. Yes. Have you ever worked for Novell? I did work for Novell from 1995 to 1997. During that span that you were employed by Novell, what was your position or capacity at Novell? A. Q. I was in-house counsel. What were your job duties or responsibilities while you worked for Novell as in-house counsel? A. Basically supporting the business division and in licensing contracts and other contracts that were assigned to me through the legal department. 2105 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 Q. A. Q. Where was your place of business or physical location? San Jose. Did Novell have an office in San Jose when you worked there? A. Q. Yes. Are you familiar with the asset purchase agreement between Novell and the Santa Cruz Operation which was entered into in 1995? A. Q. I am familiar with it. How is it that you have become familiar with the asset purchase agreement? A. I became familiar with it when I was an employee at I was working on a contract, a licensing agreement Novell. involving I.B.M. and Novell and Santa Cruz, and reviewed the asset purchase agreement back at that time when we were working on that transaction and also making amendments to the asset purchase agreement. Q. Are you familiar as well with what is known as amendment number two to the asset purchase agreement? A. Yes. I was the lead negotiator and drafts person on behalf of Novell with respect to amendment number two. Q. So is it fair to say that you were essentially one who wrote it? A. Yes. Well, wrote it and also responded to drafts of it from my counterpart at Santa Cruz. 2106 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 Q. Can you tell the jury how amendment number two came about? A. Yes. I was working on a royalty buy-out license between Novell and I.B.M. when I was employed by Novell, and at the time that that royalty buy-out license was executed, and Santa Cruz became aware of it, they objected to it. So we began to negotiate a three party settlement, so to speak, between Santa Cruz, I.B.M. and Novell with respect to I.B.M.'s rights as a buy-out to the SVRX license. At the time that we were negotiating that agreement, which was finally executed and is referred to as amendment number X, we also discussed and eventually agreed to future buy-out rules. Novell and Santa Cruz were trying to identify in the future if there were opportunities for buy-outs how that would be conducted so that there wouldn't be any future litigation on that matter. started with amendment number two. Q. Did you have any communications or discussions with any That is how we legal representatives of the Santa Cruz Operation with respect to either amendment X that you have identified or with what became amendment number two to the asset purchase agreement? A. Yes. I had many face-to-face and phone conversations with Steve Sabbath, who was the general counsel of Santa Cruz at the time, and with respect to both the amendments 2107 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 number X and two. Q. This Mr. Sabbath, who you said was the general counsel of Santa Cruz Operation, did he ever make any suggestion or statement to you regarding the ownership of copyrights under the asset purchase agreement? A. Yes, he did. In the context of trying to negotiate the terms for the future buy-outs, he contacted me by phone and said, more or less, oh, by the way, we need to also amend the asset purchase agreement because there has been a clerical error in the original agreement and it did not include the transfer of copyright ownership, so this is another thing that we need to fix was what he said. Q. So when Mr. Sabbath made reference to some clerical error, did you have any understanding as to what he was referencing? A. Yes. I mean, I had some understanding, but I basically told him at the time to let me go and review the documents and do some research and I will get back to you. Q. You were not involved in the actual draftsmanship of the initial asset purchase agreement? A. Q. No, I was not. So your involvement with amendment number two began after the initial asset purchase agreement was entered into. Is that fair? A. Correct. 2108 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 Q. So when Mr. Sabbath indicated to you that he believed there had been some sort of clerical error, what did you do next in response to Mr. Sabbath's suggestion or request? MR. NORMAND: Your Honor, this raises a privilege issue that might be more appropriate to speak about at sidebar. MR. BRENNAN: If we can, Your Honor, just so the record is clear, this witness has never been deposed and there has never been a privilege asserted with respect to her testimony. MR. NORMAND: THE COURT: MR. NORMAND: THE COURT: That is correct, Your Honor. Do you still want the sidebar? Yes, I do. All right. (WHEREUPON, a sidebar was begun.) MR. NORMAND: The issue is as follows, Your Honor. From what I understand from the declaration, the witness is about to testify that she called Tor Braham, an outside attorney for Wilson Sonsini. We took a Rule 30(b) deposition of Wilson Sonsini and Novell attended, and at that deposition when I asked about any discussions that Mr. Braham had with anyone at Novell other than David Bradford, there was an cross the board privilege objection. Therefore, I was not permitted to cross-examine the Wilson Sonsini 30(b)(6) representative about the extent of the 2109 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 discussions with Novell. Therefore, I was not given full discovery on the issue of what the intent was under the A.P.A. So for this witness to now link back and say that she spoke to Mr. Braham and found out the, quote, intent of the A.P.A. with respect to Novell would be unfair. MR. JACOBS: I will handle this, Your Honor. Neither Ms. Amadia nor Mr. Braham were deposed by SCO. Mr. Braham had long departed Wilson Sonsini by the I alluded to this yesterday in our time of this deposition. conversation, and SCO took a deposition of Wilson Sonsini as an entity and the Wilson Sonsini lawyer was trying to deal with this very odd circumstance and he is the one that asserted the privilege. Novell has not asserted the privilege with respect to communications between Ms. Amadia and Mr. Braham and Mr. Braham and Ms. Amadia, and there is no such assertion of privilege. Now, because of the confusion around this deposition and the nature of the deposition they were taking, and the fact that Mr. Braham was gone by then, and the fact that they never took Mr. Braham's deposition, and the fact that they never took Ms. Amadia's deposition, they may be able to point to snippets, but they have not made a record asserting privilege as to communications between Mr. Braham and Ms. Amadia. 2110 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 MR. NORMAND: I would like to read a portion of the transcript of this Rule 30(b)(6) because Novell's counsel is there, and Mr. Jacobs is correct that in many instances the Wilson Sonsini attorney would first make a privilege objection, and then the pattern of the deposition was Mr. Brakebill would -- Novell would decide whether they wanted to waive some portion of the objection. Here Mr. Brakebill says there may be some discussions between Mr. Bradford and Ms. -- or Mr. Braham or Wilson Sonsini that may not be privileged. The premise of the whole discussion is that almost all of them are privileged, and now I will decide when they are or are not. Then later in the transcript there is a flat out objection from the Wilson Sonsini attorney that you cannot answer on grounds of privilege whether Wilson Sonsini spoke with anyone other than Mr. Bradford at Novell. And Mr. Brakebill did not consider it then the way he had done several other times in the deposition. I don't think it is accurate to say that Novell was not acting in cooperation or at least in discussions with Wilson Sonsini as to the extent of the privilege that was being invoked. MR. JACOBS: I think it is quite clear that they did not clearly make the record that Novell was asserting a privilege vis-a-vis the conversation between Ms. Amadia and Mr. Braham. In fact, in both the declaration -- I'm sorry, 2111 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 in Ms. Amadia's declaration, which has been out there now for three years, there has never been any argument or litigation around this scope of privilege assertion or around the failure to waive or anything like that. now spring that -MR. NORMAND: THE COURT: One last thought. The question is whether or not a So to privilege was exercised in regard to questions about communications between anyone at the law firm and anyone at Novell other than Bradford. If the privilege was then invoked, then I cannot allow this witness to discuss those questions or those conversations between herself and anyone at the law firm. MR. JACOBS: Novell. The privilege was not invoked by This was a That is the problem, Your Honor. 30(b)(6) deposition of Wilson Sonsini as an entity. Mr. Parnes representing SCO as an entity -THE COURT: If in fact Mr. Normand was clearly disadvantage by the exercise of the privilege, and whether it be by Novell or whether it be by the law firm, then -MR. JACOBS: No, Your Honor. He chose for some strategic reason, unbeknownst to us, Mr. Normand and SCO chose to handle the inquiry into Wilson Sonsini's communications, that is the specific lawyers at Wilson Sonsini, by not deposing those attorneys and -- 2112 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 THE COURT: MR. JACOBS: Tor Braham? Or Ms. Amadia. They specifically chose to depose the entity and to try to position the entity, as to whether the law firm as an institution had a position on whether the copyrights transferred. It was a very peculiar deposition and a very peculiar approach to deciding the question of what the testimony would determine. Again, Ms. Amadia's declaration was out there and this issue could have been ventilated and raised before we got to this trial, and so the complexity of this I think is unfair to us now that she can't testify to what she did. MR. NORMAND: the same page. I want to make sure we are all on No one has taken issue with this in the last several days when this issue came up with whether the privilege was invoked properly. He presupposes that I should have filed a motion to compel that the privilege was invoked. More properly, I am arguing that it is incongruous now for Ms. Amadia to tell the jury that I spoke with Tor Braham and he is the end all as to the intent of Novell under the A.P.A., when I was not permitted by Novell's attorney, that was present and free to waive the privilege on behalf of Novell, as he did many other times, and where he chose not to waive the privilege, and it is not fair for her to suggest to the jury now that Mr. Braham spoke to Novell and the intent under the A.P.A. is -- 2113 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 THE COURT: Is it true that during the course of the deposition that Novell on occasion waived the privilege? MR. JACOBS: Your Honor, in candor I have not reviewed that deposition with this specific testimony in mind. So I cannot speak to the representations Mr. Brakebill is making, but what I can speak to is the fact that Wilson Sonsini was stuck in the situation where Mr. Braham is no longer at the firm, and so the Wilson Sonsini lawyer cannot go back and investigate what questions were being asked and he is stuck here in this situation -THE COURT: I think this turns on the question of whether or not Novell had opportunities to waive the privilege and refused to do so or failed to do so, and now because the deposition did not get into this area I cannot, therefore, allow it at trial to now proceed with questions about her communication with Tor Braham. MR. JACOBS: Then you would have to find, Your Honor, that SCO's counsel asked the 30(b)(6) representative of Wilson Sonsini whether she could testify as to the communications that Mr. Braham had with Ms. Amadia, and whether they have any institutional recollection of those, and whether had the privilege not been asserted there would have been such testimony, and whether the witness was following his counsel's and Novell's attorney's direction. If there is no instruction and an actual following 2114 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 of the instruction, then the record is incomplete. What I will represent to Your Honor is that Mr. Braham himself actually does not have a recollection of the conversation Ms. Amadia is going to report. So had they asked the question there would be testimony as to Mr. Braham's communications with Ms. Amadia, but absent the assertion of the privilege the answer would have been no. However, she was never deposed. She has a very clear recollection of it being brought up, about the asset purchase agreement by Mr. Braham. MR. BRENNAN: Just one other thing. In the declaration which Ms. Amadia did submit, and which SCO's attorneys had for some time and was never objected to, and it was relied upon by Judge Kimball in prior rulings, and this was never raised as grounds for not allowing the testimony on this point. Mr. Normand is very intelligent and he has had the declaration all this time, for several years, and what has apparently occurred here -THE COURT: law firm was deposed? MR. BRENNAN: MR. JACOBS: MR. BRENNAN: I didn't know the answer to that. He did not. Just one other comment, Your Honor. Did he have the declaration before the As far as the process, you will remember that when we have had privilege issues that have come up before, I on 2115 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 behalf of Novell raise them in advance with the Court so that there would be a ruling made before the witness was called. Apparently this is premised on this declaration and Mr. Normand did not give us or Your Honor the advance benefit that I gave before. MR. NORMAND: We gave points and authorities on the issue of privilege and this issue was flagged and Mr. Jacobs -- it was going to create an issue from witness to witness, and I thought that is where we were, and it was not a blanket ruling that -THE COURT: representation. I believe that is the proper We are I don't think it was improper. going to have a lot of sidebars during the course of the trial on the same basis, the issue of privilege. Again, my dilemma is whether or not at the deposition the attorney for SCO apparently -- the fact is is that the testimony was not permitted because privilege was invoked, and there was no waiver by Novell and the questions were not asked, and I think it would be unfair to allow the questions now to be asked of the witness about her conversation with Mr. Braham since they were not permitted in the deposition. MR. JACOBS: If that is your ruling, I have to at the break closely look at the transcript and -- I will do that now. 2116 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 THE COURT: MR. JACOBS: Yes. Could the question be asked did you Because, again, there have a conversation with Mr. Braham? is no record that that was foreclosed, and then the witness can answer yes and then we can move on. MR. BRENNAN: And the third point is that we need to have a brief break to inform the witness that she is not permitted to testify as to her discussion with Mr. Braham, if it turns out -THE COURT: That is the Court's ruling. You may revisit it, if and when you have had a chance to look at the deposition. I think you ought to go right now while the noise is still on and tell her that, if you would, please. MR. BRENNAN: THE COURT: Okay. You will be permitted to ask the question did you or did you not have a conversation with -MR. BRENNAN: MR. NORMAND: Thank you, Your Honor. Thank you, Your Honor. (WHEREUPON, the bench conference was concluded.) MR. BRENNAN: THE COURT: BY MR. BRENNAN Q. Before our sidebar, Ms. Amadia, we were talking about Thank you, Your Honor. Go ahead, Mr. Brennan. communications that you had had with Mr. Sabbath, the 2117 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 general counsel at Santa Cruz Operation and his request that this clerical error be fixed. Did you do anything to look into that or to follow up on Mr. Sabbath's request? A. Yes. The first thing that I did was review the actual

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