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SCO v. Novell Trial, Day 7, Tuesday, March 16, 2010: It's Darl, Darl, Darl - as text

By Pamela Jones et al.

Here's the transcript of Day 7 of the SCO v. Novell trial in Utah, March 16, 2010, as text, the second trial, with the Hon. Ted Stewart presiding, and it's Darl McBride, all day long on the witness stand. He was on the stand the day before, and he'll be returning for more on the next day, but this day is by far the most intriguing so far.

We find out something we never noticed, but Morrison & Foerster's Eric Acker did, and Acker uses it in his questioning of Darl. You know that SCO accused Novell of slander of title, and part of SCO's shtick was that on the day that SCO announced its fabulous financials from the Microsoft and Sun license deals, on May 28, 2003, Novell ruined everything and sent SCO's stock into the tank by choosing that same day to announce that Novell, not SCO, owned the UNIX copyrights. In opening statements, both SCO lawyers, Boies Schiller's Stuart Singer and Brent Hatch, went on and on about the damage to SCO's stock after Novell made its announcement that day.

Guess what Acker demonstrates? That actually what really happened is SCO had already announced their projected financials prior to May 28, on May 14th, in a press release, and on that day, without Novell saying a word, the SCO stock only went up by the end of the day from $3.34 at the start of the day and to a closing price at $3.55. By May 28, it was at around $10, and early in the morning of May 28, despite SCO announcing its fabulous numbers at a 9 AM conference call, the SCO stock began trending downward *before* Novell's announcement. At the time of Novell's press release, it was at around $8 and it went down by the end of the day to $6 something. Who can say that it was Novell at all, considering the pattern from the morning onward? Plus $6 is higher than it was on May 14th, when SCO had the stage to itself and told the world about its wonderful numbers.

Now *that's* good lawyering. It pretty much evicerates SCO's claim. Because SCO was depending on the concept that their stock was going to go to the moon, had it not been for Novell saying what it did, but that is not what happened at all on May 14, and then on May 28th, the stock started to trend downward after SCO announced its numbers before Novell said a word. After all that is on the table, SCO finds itself in a leaking boat, and the water up to their ankles. If SCO had prevailed on its slander of title claim, at a minimum this testimony could be used to make any damages very, very small.

I can't believe SCO wants a do over. But we find out why some might want it. Darl admits on this day that he stands to make millions if SCO were to prevail, thanks to him owning millions of options and shares. He began buying shares in Caldera in 2000, as he mentioned in a July 2002 "Dear Shareholder" letter [PDF]: "I became a shareholder of Caldera, along with many of you, at the time of their IPO in March 2000. My goal over the next few years is to make a profit on my initial investment in Caldera." Indeed.

Full post as published by Groklaw on September 29, 2010 (boomark / email).