Court hears suit over Novell pact

0 Comments | Deseret News (Salt Lake City), Apr 3, 2004

PROVO -- A breach-of-contract dispute between Novell and The Canopy Group was heard by Utah Court of Appeals Friday.

Novell wanted to sue Microsoft for anti-competitive practices involving Novell's source code for DR DOS, but worried that Microsoft would retaliate.

Novell enlisted the help of The Canopy Group, which agreed to buy DR DOS from Novell, then sue Microsoft, and, if successful, split the recovery with Novell.

When Canopy successfully settled the suit with Microsoft, it gave Novell the required amount minus attorney's fees, courts costs and other litigation expenses.

Novell sued, saying Canopy should not have made the deductions. The 4th District Court ruled in favor of Novell, saying contracts made by the companies did not allow the deductions.

Canopy attorney Robert Jeffs argued on Friday that Novell falsely said an oral agreement to split the recovery before taking out the deductions was made the day of the signing between the two companies. "That discussion never occurred," Jeffs said.

Novell attorney John Mullen said there was no separate oral agreement, and there is no evidence to dispute that claim. He also said it was Canopy's testimony that there was no agreement until the day of the signing that convinced the district judge.

Mullen said the royalty agreement was made clear in the contracts.

The judges, which listened to arguments Friday at Brigham Young University's law school, are expected to issue an opinion within two months.