Novell Wins Remand Contest- Case Stays in Federal Court - It's Copyright Proof Time

Thursday, June 10 2004 @ 06:39 PM EDT

Contributed by: PJ

Judge Kimball, as he promised, has issued his order* on the Novell case. The big news is that SCO lost its fight to get the case sent back to state court. SCO's entire theory of the case as a contract issue only went out the window, and they are now squarely in a pure copyright fight, which is the last thing they wanted. They will now have to prove that they own the copyright they are using to threaten end users like AutoZone. Kimball agrees with Novell that there are serious questions about whether the agreement even as amended by Amendment 2 is sufficient to be a copyright conveyance, and that means it stays in federal court. He retains jurisdiction. Remember all the experts who told us SCO might win this? They were mistaken.

Judge Kimball says he can't grant Novell's motion to dismiss at this stage, but he clearly has a leaning, and it isn't in SCO's direction. It's just that on a motion to dismiss, the judge is required to construe all facts in the light most favorable to the party whose case might be dismissed, the non-moving party, and on the Motion to Dismiss, that would be SCO, and as a matter of law, he can't grant the motion to dismiss in totality, because while "Novell has raised persuasive arguments as to whether a sufficient writing exists" without more evidence, he can't rule on the sufficiency of the agreement yet.

As we expected, he says SCO didn't plead the damages part adequately and he gives them 30 days to try, try again. I doubt they will be able to do it.

The conclusion is this:

"For the reasons stated above, Plaintiff's Motion to Remand is DENIED, and Defendant's Motion to Dismiss is DENIED as to Plaintiff's pleading of falsity and GRANTED as to Plaintiff's pleading of special damages. Plaintiff is granted 30 days from the date of this Order to amend its Complaint to more specifically plead special damages."

This is a huge loss for SCO. It's the kind of ruling that normally gets the plaintiff settling, out of fear of what the judge might do next, like in the BSDi case, when Debevoise's ruling on a motion got the parties working things out fast. I love this judge.

This just isn't SCO's day.

*Note it may take a few minutes for the PDF to make it to ibiblio's servers. I didn't want you to have to wait to hear the news.