Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 1 of 56 EXHIBIT 2 Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 2 of 56 :' I 1 rN THE UNITED STATES DISTRICT COURT 2 FOR THE DISTRICT OF UTAH/ CENTRAL DIVIS]ON 3 4 THE SCO GROUP/ INC., a Delaware tr J corporation, 6 Pl-aintif f and Counterclaim- 1 Defendant, B VS. Case No. 2:04-CY-739 dak 9 NOVELL, INC./ a Delaware 1U corporation, 11 Defendant and Counterclaim- Pl-aintif f . T2 13 EOPY 74 15 76 BEFORE THE HONORABLE DALE A. KIMBALL I1 DATE: APRIL 29, 2008 1B REPORTERIS TRANSCT]PT OF PROCEEDTNGS 19 TRIAL TRANSCRIPT 20 2L 22 23 24 Reporter: REBECCA JANKE, CSR, RMR 25 KELLY BROWN H]CKEN/ CSR/RMR 1 Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 3 of 56 1 APPEARANCES 2 3 FOR NOVELL: MORR]SON & FOERSTER LLP 4 BY: MICHAEL A. JACOBS, ESQ. q EIRC M. ACKER, ESQ. 6 DAVID E. MELAUGH, ESQ. 1 3625 I{ARKET STREET B sAN FRANCISCO, CALIFORNTA 94105 9 1_0 11 I2 FOR SCO: BOIES, SCHILLER & FLEXNER LLP 13 BY: STUART H. SINGER/ ESQ. L4 EDWARD J. NORMAND, ESQ. 15 ,JASON CYRULNIK, ESQ. T6 401 EAST LAS OLAS BLVD, SUITE 1200 L'7 FORT LAUDERDALE, FLORIDA 33301 1B I9 HATCH, JAMES & DODGE, P.C. 20 BY: BRENT O. HATCH, ESQ. 2T 10 VüEST BROADWAY, SUITE 400 22 SALT LAKE CITY, UTAH 84101 23 24 25 Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 4 of 56 1 Thesecondpointl'dl-iketoturntorwhich'if 2 we turn to sl-ide Ig in the binder of materials and 3 hopefully werII put it on the screen momentarily here. 4 And it is a follow-up of a statement Mr. Jacobs made here And 5 today, where he said. the focus of scosource is svRX. 6 that's really similar t.o a statement which was f iled in 1 Novel-l's memorandum in support of its motion for Summary B judgment on its fourth claim, which is, from start to 9 finish, Novell said, sco never claimed scosource had 10 anything to do with sco's UNIX derivative rights and any 11 attempt by SCo to recast scosource now should fail. t2 SotheyarefeelingtheCourtinitspapersand 13 now in open court, that scosource had nothing to do with I4 unixware. That is símply not so. If one turns to what 15 the documents the court will see during this week of T6 trial will- show, and the very next slide it's the I1 December 2oo2 press rel-ease. sco's shared libraries -- _LO and it talks about unixware and openserver licensing L9 agreements did not allow those UNIX libraries to be 20 separated from the operating systems. 2I The January 2003 announcement, which talks 22 about SCO's UnixWare and OpenServer l-icense aqreements, 23 the February 2OO3 sales guide, which says precisely that 24 with respect to the shared library, the document and LJ repeatedly refers to sco's concern that unixvÍare 31 Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 5 of 56 1 OpenServer technology have been improperly used in Linux. 2 In the July 2003 press release, where it says the company 3 also announced it wil-l offer UnixWare licenses to support 4 one-tíme binary use of Linux for al-l- commercial users of 5 Linux based upon certain terms. 6 So the evidence wil-I show that in fact 1 SCOsource, at its inception and throughout remained B concerned with technology that was in UnixWare and 9 OpenServer. 10 And the third point Ird l-ike to observe comes 11 off of a chart which Mr. Jacobs used which tries to draw 1,2 this distinction. It's the chart that was the timeline 13 where on the left-hand side you had SVRX and, on the I4 right-hand side, you had SCO UnixWare. And ít suqgrests l_5 that these are two different universes, that SVRX and SCO 16 UnixWare are somehow distinct and, if you're referring to 1'1 II SVRX¡ you're not incl-uding UnixWare, and vice-versa. 18 The reality is, is that there is not a 19 dichotomy in terms of the technology between UnixWare and ZU System V. UnixWare is System V technology. It is the 21 latest evol-ution of that. It is UnixVüare -- UNIX System 22 V, 4.2 MP. And this dichotomy that Novell- seeks to draw 23 between UnixWare and System V, with respect to the z4 technology, is simply not the case. And that's shown, for example, by documents such as Novel-l I s own sales JL-a Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 6 of 56 1 binders for UnixWare, which says that this is the latest 2 implementation of UNIX System V, Release 4.2 MP 3 technology and repeats that many times as being the 4 l-atest generation of that use, that this is powerful, 5 scaIable, reliable UNIX System V, Rel-ease 5. 6 Thus, when we talk about our UnixWare rights, 1 when we talk about the System V license in the context of B SCOsource, that doesnrt mean something other than 9 UnixWare, that includes UnixWare. And that will be 10 important as we look at the fact that UnixWare has within 11 it the critical- System V technology, and SCO obtained the 12 right to license that technol-ogy and do other things with 13 that technology with third parties through the Sun I4 agreement, the Microsoft agreement and the SCOsource 15 agreement. L6 The question is valuation of for the I1 purposes of the APA, what is the value on the SVRX 1B rightsr âs defined in the APA, for that portion on which 19 that has to f low through to Novel-l-. 20 Now, if f can put that and let me, before 2I leaving that issue, refer to a couple of the documents aa LL that Mr. Jacobs referred to. He refers to a letter that 23 was sent out to a lot of people with respect to SCOsource .A ¿¿) lj-censing and it talked about are UNIX System V, but that 25 does not exclude UnixWare, which is part of System V 33 Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 7 of 56 1 for those products, therefore Noveff is entitled only to a L a de minimus royalty with respect to its residual rights. 3 THE COURT: Thank you, Mr. Singer. 4 You may call- your first witness. 5 MR. JACOBS: We do, Your Honor. We call 6 Mr. Joe LaSala. 1 THE COURT: Come forward and be sworn, please B right up here in front of the cl-erk of the Court. 9 JOSEPH LA SALA, 10 the witness hereinbefore named, being first 11 duty cautioned and sworn or affirmed to teII the truth, I2 the whole truth, and nothing but the truth, was examined 13 and testified as follows: t4 THB CLERK: Please state your name and spell it 15 for the record. L6 THE WITNESS: My name is Joseph A. LaSaIa, Jr. I1 My last name is spelled L-a, capital S-a-l--a. 18 THE CLERK: Thank you. 79 THB COURT: Go ahead, Mr. Jacobs. 20 D]RECT EXAMTNATION 2L BY MR. JACOBS: 22 O. Good morning, Mr. LaSal-a. Coul-d you briefly 23 introduce yourself and your background to the Court. 24 A. Yes. Good morninq. My name is Joe LaSal-a. I 25 was the general counsel- at Novel-l- from July of 2001 45 Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 8 of 56 1 through mid-January, 2008. Today I am, and since that 2 time, I have been the qenera I counsel of Discovery 3 Communications. 4 O. Were you involved in the dispute and the 5 rel-ationship between SCO and Novell as the SCOsource 6 campaÍgn unfolded? 1 A. Yes, f was. B O. Can you characterize the level of your 9 involvement, please? 10 A. WeIl¡ âs qeneral counsel of the company, I was 11 made aware of virtually all of the important activities T2 j-n connection with the litigation and in connection with 13 SCOrs launch of the SCOsource campaiqn, our company's T4 reaction to that, the various public and private 15 communications that occurred between the companies at the 16 time and the enqagement of counsel and overall the 1,1 strategy with respect to our company's response to those 1B activities. 1_9 O. Could you look at the first exhibit in your 20 binder, please, NovelI ExhibÍt 2I5? 2t A. Yes. 22 O. What is that? 23 A. This is a June 24, 2003 Ietter from me to .A z1] Mr. McBride, and I thlnk it. constitutes one of the first 25 letters that NoveIl sent to SCO, and the principal 46 Case 2:04-cv-00139-TS Document 852-3 Filed 04/19/2010 Page 9 of 56 1 purpose of this l-etter was to request that SCO provide us 2 with copies of two SCOsource licenses that it had 3 recently announced that it had entered into; one with 4 Microsoft and one with an unnamed party. q MR.