I really like my civil procedure class. It's just so RELEVANT. I was telling my professor the other day, every time we turn another page in our casebook, there's SCO somehow involving that topic of procedure. SCO now has 5 lawsuits going (that I know about): 4 are fights they picked, against IBM, Novell, AutoZone, and Daimler Chrysler, and one is against Red Hat who sued them for a declaratory judgment regarding SCO's copyright assertions. Ultimately those copyright assertions are of critical importance to most, if not all, of the other cases.
Earlier this semester we learned about subject matter jurisdiction and whether cases could be heard in federal court. Roughly speaking if there's an issue of federal law, the case would be heard in federal court. I say roughly because the rules could never be quite that simple. Sometimes it also can be difficult to ascertain whether there is an issue of federal law at hand. It's not like these cases always sort themselves out cleanly, and the parties often disagree about the merits of having cases tried in federal court. State courts can tend to favor one party or the other, either with its common law or local juries. Litigants will therefore jostle over the question of jurisdiction in efforts to get the case heard in the court they prefer. Though ultimately it's not a question of their preference. A federal court cannot adjudicate where it does not have jurisdiction and at any time, including mid-trial, can step in on its own accord to refuse to hear the case even if both parties wanted it to.
Such maneuvering is present in the suit against Novell. SCO's plan to sue half the planet is dependent on it owning the copyrights it says it does. However, Novell has come out publicly to say that it, not SCO, actually owns the copyrights in question. Consequently SCO brought the state-created claim for slander of title against Novell in Utah state court.
Section 204(a) of the Copyright Act says that copyrights can only be transferred by a writing. You can't just tell someone that they now own your copyrights, you have to note it in writing with a certain degree of clarity. How much clarity has been for courts to decide. The question the parties are currently skirmishing over is which court is going to decide this: the Utah state court, or the Federal District Court in Utah.
Novell, in its notice to remove to federal court, said that an affirmative defense to slander of title is the truth of its assertion. There was a 1995 document, an Asset Purchase Agreement, between the two companies (actually, not the current SCO group but its corporate predecessor) that may (as SCO claims) or may not (as Novell does) have transferred the copyrights in question. Novell argues that because the issue in question is whether the document qualifies as a transfer of copyrights as required by Section 204(a) it is a matter of interpretation of federal law and belongs in federal court. SCO meanwhile argues that interpretation of the Asset Purchase Agreement is a contractual issue and in the purview of state courts. Both parties cite Jasper v. Bovina Music, Inc., 314 F.3d 42 (2d Cir.2002), which basically says that yes, if it's just a matter of interpretation of a contract it belongs in state court, but if it's a question of whether the document conforms with 204(a) it belongs in federal court. The Jasper court notes that since it's possible to construe almost anything as a 204(a) issue, as a result, the bias should be to construe these types of conflicts as contractual issues. However, exceptions exist and in certain instances a 204(a) analysis is proper. Unhelpfully, the court doesn't do much to articulate how the exceptions should be drawn.
So which is it in this case? Novell has yet to respond to SCO's motion so we'll have to see if it raises other arguments and which ones the court will accept.
The court documents can be found here:
Novell - Notice of Removal.
SCO - Plaintiff's Memorandum in Support of Motion to Remand.
Edit 3/11/04: I took a second crack at writing this entry. The title changed, as did some of the paragraphs. Just in case you blinked and couldn't figure out what was different.