Dale A. Kimball, United States District Judge

“ In its attempt to argue that extrinsic evidence is necessary, SCO repeatedly overstates its case. SCO contends that the exclusion of the UNIX and UnixWare copyrights would render the APA meaningless because it would prevent Santa Cruz from pursuing its UNIX business. Braham testified that Novell's sale of UNIX and UnixWare products to Santa Cruz under the APA necessarily conferred a license on Santa Cruz to use the copyrights as needed to implement the APA. Contrary to SCO's assertions, there is evidence that SCO did not need to own the UNIX and UnixWare copyrights to pursue its UNIX business. ”

“ The court concludes that Novell's reading of Section 4.16 (b) is the only reading that is consistent with all of the APA's provisions, its Schedules, and its Amendments. SCO's attempt to narrowly interpret SVRX License to include only product supplements is not tenable under the language of the APA. A comparison of the SVRX License language in the APA with the IBM and Sequent Licenses leaves no doubt that the IBM and Sequent Licenses are SVRX Licenses as a matter of law. ”

“ Because SCO alleges in its Complaint that it owns the copyrights to UNIX and UnixWare, it claims "Novell's wrongful claims of copyrights and ownership in UNIX and UnixWare have caused, and continue to cause, irreparable harm to SCO." In response to discovery, SCO maintained that Novell's statements impeded its ability to make sales in its SCOsource business. Christopher Sontag Dep. at 117. SCO identifies approximately a dozen prospective customers who mentioned the cloud over SCO's title to UNIX copyrights as one of its reasons not to purchase a SCOsource license. ”

“ Under Section 1.6 of the APA, Novell has a license to "use the Licensed Technology without restriction for internal purposes and for resale in bundled or integrated products sold by [Novell] which are not directly competitive with the core products of [Santa Cruz] and in which the Licensed Technology does not constitute a primary portion of the value of the total bundled or integrated product." ”

“ X defined the "Related Agreements" as certain software and sublicensing agreements. Thus, Santa Cruz agreed in Amendment No. X that Novell's APA-retained rights extended to all those agreements. Even when SCO purported to terminate IBM's System V license agreements and SCO's CEO wrote to Novell refusing to waive its purported claims against IBM, he specifically called IBM's System V license agreements "IBM's SVRX License." This evidence regarding the parties' conduct is close in time to the execution of the APA and, therefore, more persuasive as to the meaning of the agreement. ”

“ Although Novell wanted to sell the entire UNIX and UnixWare business to focus on its Netware product, it became clear during negotiations with Santa Cruz that Santa Cruz could not afford to purchase the entirety of Novell's UNIX and UnixWare assets and rights. ”

“ Unfair competition is defined as "an intentional business act or practice " that falls within the categories of " (A) cyber-terrorism; (B) infringement of a patent, trademark, or trade name; (C) a software license violation; or (D) predatory hiring practices." Utah Code Ann. § 13-5a-102 (4) (ii) (2006) . Novell's alleged statements claiming ownership of copyrights based on its interpretation of the parties' contracts do not fall within any of these categories. Novell's statements are not a breach of Section 3 of the TLA, which states that SCO owns the Licensed Technology. ”

“ SCO's contention that SVRX Licenses are limited to only agreements that collect royalties instead of SVRX software agreements, which specify the restrictions on a licensee's source code rights, appears to conflict with the language of the APA and the integrated nature of the licensing agreements entered into by AT&T and Novell. Given that AT&T, and then Novell, would typically enter into a set of agreements in connection with each license of SVRX technology?a software agreement, a sublicensing agreement, and product supplements? ”

“ It is unlikely that any of the cases SCO relies upon would have agreed that a transfer of other intellectual property rights, such as copyrights and patents, occurred when only trademarks are identified under the heading of "Intellectual Property." In interpreting the plain language of the APA in this case, Schedule 1.1 (a) , itself, represents a limitation of the intellectual property the parties intended to transfer. ”

“ The use of the defined term SVRX License in this section demonstrates that even incidental licenses of SVRX are considered an SVRX License.
The APA only permits SCO to keep SVRX Royalties in the narrow circumstances outlined in Section 1.2 (e) . Although SCO references Section 1.2 (e) (ii) 's exception as applicable to the Sun and Microsoft Agreements, Novell disputes that it applies. But, even if this exception applies, it does not relieve SCO of its obligation to account for those fees. SCO agreed to administer the collection of all amounts due under all SVRX Licenses. ”

“ Novell's assertions that SCO does not own the UNIX and UnixWare copyrights do not state a claim for unfair competition under Utah common law or statutory law, and do not state a claim for breach of the implied covenant of good faith under California law.
Utah common law does not recognize an unfair competition claim based on allegedly defamatory statements. ”

“ Extrinsic evidence of business negotiators prior to the finalization of the agreement is not probative of the issue regarding copyrights because it is obvious that the deal changed over time. The extrinsic evidence demonstrates that Santa Cruz did not have the cash necessary to complete the deal. Therefore, the parties constructed a fairly complex mechanism to ensure Novell a future revenue stream. ”

“ Novell's Sixth and Ninth Claims for Relief for constructive trust and accounting seek remedies available at the court's discretion. Callery v. United States Life Ins. Co., 392 F.3d 401, 408 (10th Cir. 2004) . Under California law, the constructive trust cause of action arises from California Civil Code §§ 2223 and 2224. Section 2223 provides that " [o] ne who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner." ”

“ Robert Frankenberg, then-President and CEO of Novell, testified in a deposition that his initial intent in entering into negotiations, intent at the time the APA was signed, and intent when the transaction closed was that Novell would transfer copyrights to UNIX and UnixWare technology to Santa Cruz. ”

“ On January 4, 2003, McBride received an email from Michael Anderer, a consultant for SCO retained to examine its intellectual property. Supp. Brakebill Decl. Ex. 12. Anderer stated that the APA "transferred substantially less" of Novell's intellectual property than Novell owned. Anderer noted that Santa Cruz's "asset purchase" from Novell "excludes all patents, copyrights, and just about everything else." Id. Anderer cautioned that " [w] e really need to be clear on what we can license. It may be a lot less than we think." ”

“ The next day, Novell again wrote to SCO stating that because SCO had failed to take the action directed by Novell, Novell was waiving any claim SCO was making to require IBM to treat IBM code as subject to the confidentiality obligations or use restrictions of the IBM agreements. Id. Ex. 35. SCO responded that Novell was without authority to make such a waiver and thus it had no force and effect. ”

“ Novell and Santa Cruz hoped that the merged product would provide a commercially successful alternative to Microsoft's Windows system. Decl. Tor Braham at ¶ 8. Novell's Netware product needed an alternative operating system if it was to compete with Microsoft. Id. Novell also had a strong interest in the development of a commercially successful UNIX operating system that would run on Intel's 64-bit processors because it would expand the market for Netware. ”

“ The conversion of an SVRx customer to UnixWare will validly occur and result in the UnixWare based revenue flowing to SCO, without giving rise to a continued obligation to make payment to Seller of royalties due under the SVRx licenses, only if the following are true (note: if the customer continues to sell their SVRx based product separately, then these SVRx revenues continue to flow to Novell) : .... ”