CASE IN POINT

After eight years of litigation, two trial victories, and two appellate victories, the June 2010 ruling by the federal district court in Utah in favor of our client Novell has all but slammed the door on SCO’s claims of ownership of the UNIX operating system.

The case began in 2003 when SCO filed suit against IBM, seeking billions of dollars in damages relating to alleged violations of SCO’s rights in UNIX, and then sent demand letters to the Fortune 1000 companies alleging that any company’s use of the Linux operating system infringed SCO’s alleged rights to the UNIX copyrights. SCO’s actions created an existential threat to the Linux open source operating system. At the heart of all of SCO’s claims was its alleged ownership of the core UNIX copyrights.

In August 2007, the district court granted summary judgment for Novell, finding that Novell, not SCO, owns the UNIX copyrights. The Wall Street Journal described the ruling as a “boon to the open source software movement that has become an alternative to Microsoft Corporation’s Windows operating system.” In July 2008, the court issued an order in favor of Novell ruling that SCO must pay Novell roughly $2.5 million (plus interest) in royalty revenue paid to SCO by Sun Microsystems. SCO appealed to the 10th Circuit, which affirmed the district court’s judgment with regards to royalties due Novell, but remanded for trial on the question of who owns the UNIX copyrights.

After a three week trial in federal district court in Salt Lake City, the 12-person jury returned a decisive verdict in favor of Novell. This factual determination was fatal to SCO’s claim that Novell was liable to SCO for between $115 million and $200 million for Novell’s alleged slander of SCO’s claim of ownership of the UNIX copyrights. In June 2010, Novell prevailed on all bench trial issues and post-jury trial motions before Judge Ted Stewart in federal district court in Utah. Novell’s recent victories in the federal court in Utah are a boost for Linux open source software which can now evolve unencumbered by the threat of SCO’s litigation. Additionally, the court granted Novell’s request for declaratory judgment, a decision that may impact the closely watched suit that SCO brought against IBM in 2003, with alleged damages of $1 billion, related to IBM’s involvement in Linux. SCO applealed the jury verdict and cournt ruling, but in August 2011 the 10th Circuit affirmed Novell's victory

San Francisco associates Daniel Muino, Nathan Sabri, and Patricia Svilik were members of the 2010 trial team that succeeded in convincing the jury and the court that Novell owned the copyrights and was not liable to SCO for slander of title. As the senior associate on the team, Daniel assumed the role of “Chief Operations Officer,” coordinating and supervising the team’s efforts on a myriad of trial tasks, overseeing and editing the drafting of filings, negotiating with SCO’s trial counsel, and drafting trial and post-trial motions. Daniel worked with witnesses to prepare them for testifying, wrote daily summaries of the trial highlights, and drafted a large part of Novell’s motion for judgment as a matter of law.

Daniel observes: “Success at trial often turns on effective story-telling, which in complex litigation is a collective achievement. Like a theater production, it’s not just about the actors on stage, but the directors, writers, and other supporting crew behind the scenes. Every member of the Novell trial team, partners and associates alike, had a hand in the creative work of crafting and telling our client’s story. It was a thrill and an honor to spend three high-energy weeks with such a talented group of lawyers.”

Nathan acted as architect of Novell’s opening statement and closing argument, interfacing with graphics consultants, jury consultants, and local counsel to distill testimony and evidence from a multiple-year dispute into condensed and compelling presentations. Nathan also conducted real- time background research on potential jurors during the voir dire process. After trial, he was one of the primary drafters of Novell’s post-trial briefing, including Novell’s Findings of Fact and Conclusions of Law and opposition to SCO’s motion for judgment as a matter of law or a new trial.

According to Nathan, “There’s nothing quite like the energy of a trial team in full swing. Every piece of work you do is on a short deadline and immediately becomes an integral part of the case your team is presenting to the jury. Our team would meet for a lunch debriefing with the client at the end of each day’s testimony and brainstorm, and the partners in charge made it clear from the beginning that they valued the input of each member of the team and trusted the associates to take on significant trial tasks.”

As the team’s jury instruction maven, Patricia drafted Novell’s proposed jury instructions, melding constitutional law with Utah and California state law to explain to the jury in simple, neutral terms how to interpret complicated legal issues. In a case that required various rounds of complete briefing throughout the trial, Patricia worked with local co-counsel to convince the judge to accept Novell’s formulation of the law over SCO’s competing proposals. Patricia also participated in negotiations with opposing counsel and drafted direct and cross-examination outlines as well as multiple motions in limine to exclude the testimony of witnesses who lacked personal knowledge of the events in question. One trial highlight for Patricia was spotting an adverse witness who had slyly carried papers up to the stand with him. After Patricia shared this observation with partner Michael Jacobs, those papers were exposed in a heated cross examination and became a memorable trial exhibit.

Patricia reflects that “being part of the Novell trial team was an unforgettable experience because of the excitement of trial and the good-natured spirit of the partners, associates, and staff. We would brainstorm potential challenges together as a group every afternoon and convert those ideas by morning into tangible trial motions or weave those ideas into witness examinations. Watching the partners strategize behind the scenes and then work their magic in front of the jury, as well as observing the jurors’ and witnesses’ behavior, was fascinating. Everyone’s observations were valued, everyone had a role to fulfill, and everyone was willing to help each other out. It was a lot of fun.”