Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA405893
`ESTTA Tracking number:
`04/27/2011
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91122524
`Plaintiff
`X/OPEN Company Limited
`EVAN A. RAYNES
`FINNEGAN HENDERSON FARABOW
`901 NEW YORK AVENUE
`WASHINGTON, DC 20001-4413
`UNITED STATES
`docketing@finnegan.com, nichelle.randolph@finnegan.com
`Opposition/Response to Motion
`Mark Sommers
`mark.sommers@finnegan.com, docketing@finnegan.com,
`larry.white@finnegan.com
`/Mark Sommers/
`04/27/2011
`Opposition to Gray's Motion to Resume Proceedings.pdf ( 81 pages )(1060211
`bytes )
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`Proceeding
`Party
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`Correspondence
`Address
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`Submission
`Filer's Name
`Filer's e-mail
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`Signature
`Date
`Attachments
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`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`07737.8056
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`
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`X/Open Company Limited,
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`Opposer,
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`v.
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`Wayne R. Gray,
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`Applicant.
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`Opposition No.: 91122524
`Application No.: 75/680,034
`Mark: INUX
`
`
`X/OPEN’S OPPOSITION TO APPLICANT’S MOTION
`TO RESUME PROCEEDINGS AND RESET THE SCHEDULE
`
`For the reasons set forth below, Opposer X/Open Company Limited opposes Applicant
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`Wayne Gray’s “Combined Motion and Brief to Resume the Opposition Proceeding and Reset the
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`Schedule” filed with the Board on April 8, 2011.
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`Applicant’s motion should be denied because the civil action that occasioned the
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`suspension of the Board proceedings has not been fully terminated pursuant to Trademark Rule
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`2.117(a). X/Open’s motions for attorneys’ fees are still pending before the United States District
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`Court for the Middle District of Florida and the Eleventh Circuit Court of Appeals, and the
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`disposition of these motions may have a bearing on the Board action.
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`If the Board determines that the opposition proceedings should resume, it should deny
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`Gray’s motion to reopen discovery since the only “new” evidence that Gray seeks to introduce
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`concerns ownership of the UNIX mark and that issue was conclusively disposed in X/Open’s favor
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`in the civil action. Gray is therefore barred from relitigating it under res judicata. Should
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`proceedings resume, X/Open requests that the testimony periods be reset so the Board action move
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`

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`Opposition No.: 91122524
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`
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`forward on the only remaining issue to be litigated—the likelihood of confusion between the
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`UNIX and INUX marks for the same goods.
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`DISCUSSION
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`I.
`
`Background
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`This proceeding began more than a decade ago in April 2001 when X/Open filed an
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`opposition against Gray’s INUX mark for computer operating system software on the ground it is
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`confusingly similar to X/Open’s UNIX mark for the identical goods. As his primary defense, Gray
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`asserted that X/Open did not own the UNIX mark. Gray made this allegation despite his counsel’s
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`access to a 1996 “Confirmation Agreement” between Novell, SCO, and X/Open that conclusively
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`established X/Open’s rights to that mark. This document notwithstanding, Gray refused to
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`withdraw his counterclaim and instead multiplied the size, issues, and costs of the opposition
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`proceedings by serving over 140 pages of discovery requests, 125 pages of exhibits, 167 requests
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`for admissions, 49 document requests, and 26 interrogatories (over 75 with subparts) in his quest
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`to establish that X/Open did not the UNIX mark.1
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`Not satisfied with his efforts before the Board, Gray then proceeded to concoct a host of
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`fraud and conspiracy claims and, in 2006, filed an 83-page complaint in federal court alleging two
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`federal RICO claims, two Florida state RICO claims, two Florida Telecommunications Fraud Act
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`1 After taking over fifteen months to answer X/Open’s notice of opposition, Gray filed a string of
`motions, including: (1) a motion to reopen discovery after Gray missed the deadline to serve
`discovery requests, which the TTAB denied, (2) two motions to amend Gray’s answer and
`counterclaim alleging that SCO owned the UNIX mark, which Gray maintained despite X/Open
`directing Gray to SCO’s public acknowledgements of X/Open’s ownership; and (3) a motion to
`compel answers to Gray’s voluminous discovery requests and two briefs in support of the motion,
`which were filed after the motion in violation of the TTAB’s rules and also exceeded the page
`limit. All told, Gray filed approximately 1,400 pages of motions, declarations, and exhibits on
`these and other issues.
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`- 2 -
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`Opposition No.: 91122524
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`claims, three Lanham Act claims (two fraud-on-the-PTO counts and one “false designation of
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`origin” count), and two common-law fraud claims—all centered around the same allegation that
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`X/Open did not own the UNIX mark. All of these fraud/conspiracy ownership theories were
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`alleged on “information and belief” without any concrete supporting fact or evidence. Hoping to
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`extort a windfall monetary settlement, Gray’s complaint further alleged millions of dollars in
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`damages.2 On July 17, 2007, the Board suspended proceedings pending final disposition of the
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`civil action.
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`As in the TTAB opposition, Gray doggedly pursued his ownership fraud “theory” in the
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`civil suit, despite all the prior discovery and evidence that clearly and unambiguously pointed to
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`X/Open’s ownership of the UNIX mark. Ultimately, the district court found that Gray had offered
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`absolutely no evidence to support his various allegations and dismissed all of Gray’s claims on
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`summary judgment:
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`The Court finds that the documentary evidence in this case supports
`Novell and X/Open’s contentions that Novell granted X/Open an
`exclusive license for the UNIX mark in 1994, that it intended to
`transfer ownership of the marks to X/Open at some time thereafter,
`that SCO documented its agreement to that transfer in the 1996
`Confirmation Agreement, and that the marks were lawfully
`transferred to X/Open by operation of the 1998 Deed of
`Assignment. …Consequently, based on the clear and unambiguous
`language of the 1996 Confirmation Agreement, the Court concludes
`that the subsequent 1998 Deed of Assignment validly passed
`ownership of the UNIX trademark to X/Open as of November 13,
`1998.
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`(Feb. 20, 2009 Order at 23-27, emphasis added) (copy at Exhibit 1).
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`Because the assignment of the UNIX mark to X/Open and the recordation of that
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`assignment in the PTO was “lawful and valid,” the district court dismissed Gray’s fraud on the
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`2 Gray’s complaint alleged approximately $4.5 million in damages, and during discovery, bumped
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`- 3 -
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`Opposition No.: 91122524
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`PTO claims under the Lanham Act and found that X/Open was well within its rights to oppose
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`Gray’s INUX mark in the TTAB. (Id. at 31-32.) The district court also granted X/Open’s motion
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`for attorneys’ fees after finding that Gray’s allegations of fraudulent conspiracy under Florida
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`RICO law were “baseless” and “lacked substantial factual support.”3
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`On appeal, the Eleventh Circuit affirmed in all respects. Finding that Gray was simply
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`“mistaken” about the effect of the agreements at issue, the appeals court held that Gray’s claims
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`of fraudulent trademark registration and fraud on the PTO must fail “in light of the fact that
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`X/Open was the true owner of the UNIX mark when it registered with the PTO its receipt of that
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`mark from Novell.” (Exhibit 2 at 16.) (emphasis added).
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`Accordingly, the civil action has fully and completely disposed of the ownership issue.
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`II.
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`The “New” Evidence Gray Seeks to Introduce in the Board Proceedings
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`The “new” evidence that Gray seeks to introduce by reopening discovery essentially
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`consists of various out-of-context quotes from the March 2010 trial in SCO Group v. Novell, 721
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`F. Supp. 2d 1050 (D. Utah 2010) and various other documents, which Gray contends support his
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`position that X/Open does not own the UNIX mark. However, Gray attempted to introduce this
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`very same evidence in the appeals court in September 2010 through a motion to supplement the
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`record (see Exhibit 3), and evidence identical in substance (in declaration form as opposed to trial
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`testimony) was already before the district court on summary judgment.4 Although Gray’s motion
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`that figure to $100+ million—again, all without any real supporting fact or evidence.
`3 Gray v. Novell, Inc., 2010 U.S. Dist. LEXIS 63968, *33 (M.D. Fla. Feb. 22, 2010).
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` 4
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` For instance, Gray pointed to declarations filed in the SCO v. Novell case allegedly showing that
`Novell and SCO executives and counsel admitted that the Novell transferred the UNIX mark to
`SCO in a 1995 agreement. The Florida district court considered and weighed this evidence on
`summary judgment and found it unpersuasive, concluding that regardless of the parties’ intent or
`any ambiguity in the 1995 agreement as to the extent of rights in the UNIX trademark that was
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`Opposition No.: 91122524
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`to supplement the record was never ruled on by the court of appeals,5 the appeals court appears to
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`have weighed this evidence in its decision and determined it to be irrelevant:
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`Gray repeatedly insists that this Court must consider the Utah
`District Court’s decision in SCO Group v. Novell, Inc….in
`which—he claims—Novell admitted (and the Utah District Court
`accepted) that Novell had transferred the UNIX trademark to
`SCO… But as the District Court in this case recognized, the issue
`before the Utah court was the ownership of the UNIX and
`UNIXWARE copyrights—not the trademarks with which we are
`concerned. We are not bound by a decision involving an issue
`wholly distinct from the issue before this Court.
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`(Ex. 2 at 13-14, fn. 5.) (emphasis in original).
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`As to Gray’s attempt to introduce unredacted copies of the 1994 license agreement and
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`other documents into the Board proceedings, many of these documents were either in Gray’s
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`possession during the pendency of the civil action or were a part of the district court record.6
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`ARGUMENT
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`The Opposition Proceedings Should Remain Suspended Until X/Open’s Motions for
`Attorneys’ Fees in the Civil Action Have Been Decided
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`In a September 8, 2009 Order, the Board suspended proceedings pending “final
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`I.
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`
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`determination” of the civil action pursuant to Trademark Rule 2.117(a). That rule provides as
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`follows:
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`Whenever it shall come to the attention of the Trademark Trial and
`Appeal Board that a party or parties to a pending case are engaged in
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`transferred to SCO, the parties unequivocally clarified their intent in the 1996 Confirmation
`Agreement, which expressly provided that it superseded all previous agreements.
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` 5
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` On September 15, 2010, the appeals court entered a docket order carrying Gray’s motion with the
`case.
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` 6
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` As to Gray’s continued assertions regarding the existence of a second May 14, 1994 agreement,
`the appeals court conclusively determined that Gray’s contentions in this regard are nothing more
`than “speculative assertion.” (Ex. 2 at 14, fn. 6.)
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`Opposition No.: 91122524
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`a civil action or another Board proceeding which may have a
`bearing on the case, proceedings before the Board may be
`suspended until termination of the civil action or the other Board
`proceeding.
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`The language of Trademark Rule 2.117(a) is permissive and allows the Board to suspend
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`
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`proceedings whenever the outcome of a civil action may have “a bearing” on the Board
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`proceeding. Softbelly’s, Inc. v. Ty, Inc., 2002 TTAB LEXIS 529 (TTAB 2002) (continuing
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`suspension of proceedings where post-trial motions in the civil action were awaiting final
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`determination). Here, although the district court has granted summary judgment in favor of
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`X/Open and that judgment has been affirmed on appeal, X/Open is still awaiting final
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`determination of its motions for attorneys’ fees. Because the determination of X/Open’s motions
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`for attorneys’ fees may have an impact on how X/Open litigates the remainder of the Board
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`proceeding, including but not limited to potentially filing a motion for sanctions against Gray
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`under TBMP §527.02 for litigation misconduct, X/Open respectfully requests that the Board
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`proceedings remain suspended until final determination of its motions for attorneys’ fees.
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`II.
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`In the Alternative, If Proceedings Resume, Gray’s Motion to Reopen Discovery
`Should Be Denied and the Testimony Periods Should Be Reset
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`
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`Discovery closed in these proceedings in 2005. Under Trademark Rule 2.116(a) and
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`Federal Rule of Civil Procedure 6(b), Gray must establish that his failure to timely complete
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`discovery was the result of “excusable neglect.” The Board generally considers four factors in
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`determining whether a party’s neglect is excusable: (1) the danger of prejudice to the non-moving
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`party; (2) the length of delay and its potential impact on judicial proceedings; (3) the reason for the
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`delay, including whether it was within the reasonable control of the moving party; and (4) whether
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`the moving party has acted in good faith. Pumpkin Ltd. v. Seed Corps, 43 USPQ.2d 1582, 1586 fn.
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`Opposition No.: 91122524
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`7 (TTAB 1997) (citing Pioneer Investment Services Co. v. Brunswick Associates Ltd., 507 U.S.
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`380, 395 (1993)).
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`Here, although the evidence Gray seeks to introduce was not available in 2005, that very
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`same evidence has already been considered by the district court and the Eleventh Circuit and was
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`determined to be irrelevant. Moreover, the issue of UNIX mark ownership was conclusively
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`determined in the civil action and Gray is foreclosed from relitigating it before the Board.
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`Mother’s Rest. Inc. v. Mama’s Pizza, Inc., 723 F.2d 1566 (Fed. Cir. 1993) (issue preclusion applies
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`where identical issue was actually litigated in the prior action, the issue was necessary to the
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`resulting judgment, and the party precluded was fully represented in the prior action). It would be
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`extremely prejudicial for X/Open to have to relitigate this issue before the Board, based on
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`essentially the same evidence that was found to be unpersuasive in the civil action. Finally, Gray’s
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`good faith in these proceedings is questionable at best as he appears to be continuing his vexatious
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`litigation strategy even in the face of an appellate court decision finding him to be clearly
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`“mistaken” on the very issue of trademark ownership he now seeks to relitigate.
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`CONCLUSION
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`For the foregoing reasons, X/Open respectfully requests that the Board proceedings remain
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`suspended until such time as the Florida district court and Eleventh Circuit proceedings are
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`disposed of in their entireties, including X/Open’s pending motions for attorneys’ fees. In the
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`alternative, should the Board decide to resume the proceedings, X/Open requests that Gray’s
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`motion to reopen discovery be denied and that the testimony periods be reset so the proceedings
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`can move forward on the only remaining issue to be litigated—the likelihood of confusion
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`between the UNIX and INUX marks.
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`Opposition No.: 91122524
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`Respectfully submitted,
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`Dated: April 27, 2011
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`
`/Mark Sommers/
`Mark Sommers
`FINNEGAN, HENDERSON, FARABOW,
` GARRETT & DUNNER, L.L.P.
`901 New York Avenue, N.W.
`Washington, D.C. 20001-4413
`Telephone: 202-408-4000
`Facsimile: 202-408-4400
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`Attorneys for X/Open Company Limited
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`Opposition No.: 91122524
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true and correct copy of the attached document,
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`X/OPEN’S OPPOSITION TO APPLICANT’S MOTION TO RESUME PROCEEDINGS AND
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`RESET THE SCHEDULE, was served by email and U.S. Mail, First Class, postage prepaid, on
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`April 27, 2011 on the following:
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`David L. Partlow, Esq.
`David L. Partlow, P.A.
`P.O. Box 82963
`Tampa, Florida 33682-2963
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`/ Larry L. White/
`Larry L. White
`Legal Assistant
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`X/Open Company, Limited
`v.
`
`Wayne R. Gray
`
`Opposition No. 91122524
`
`XIOpen’s Opposition to Applicant’s Motion to
`Resume Proceedings and Reset the Schedule
`
`Exhibit 1
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`

`
`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
`TAMPA DIVISION
`
`WAYNE R. GRAY,
`
`Plaintiff,
`
`v.
`
`Case No.
`
`8:O6—cv—l950—T—33TGW
`
`SCO
`THE
`INC.;
`NOVELL,
`and X/OPEN
`INC.;
`GROUP,
`COMPANY LIMITED,
`
`Defendants.
`
`J
`
`This matter comes before the Court upon consideration of
`
`Defendant X/Open’s Motion for Summary Judgment on Liability
`
`and Damages
`
`(Doc.
`
`# 85),
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`filed on June 26, 2008; Defendant
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`Novell’s Motion for Summary Judgment on Counts Three, Four,
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`Five, Six,
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`and Seven of Plaintiff's Complaint
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`(Doc.
`
`# 90),
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`filed on June 27, 2008;
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`and Plaintiff's Motion for Partial
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`Summary Judgment as to Liability against Defendants Novell and
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`X/Open
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`(Doc.
`
`# 146),
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`filed. on January 12,
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`2009;
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`and.
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`the
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`responses thereto.
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`I.
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`Background
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`A.
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`Novell, X/Open, SCO, and the UNIX Trademark
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`Novell, Inc.,
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`is a global software company incorporated
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`in Delaware.
`
`(Doc.
`
`#
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`l at I 12.)
`
`The SCO Group is also a
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`leading marketer of
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`software
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`technology and
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`a Delaware
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`

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`corporation.
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`(Id; at I 13.)
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`X/Open Company Limited, also
`
`known as The Open Group,
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`is a United Kingdom corporation.
`
`(Id; at
`
`T 14.)
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`X/Open
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`is
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`an
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`international
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`technology
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`consortium that owns trademarks for various computer systems
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`and licenses those marks to companies whose products conform
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`to its quality control standards.
`
`(Doc.
`
`# 85 at 8.)
`
`The original owner of the UNIX trademarks was American
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`Telephone and Telegraph Company (“AT&T”), which registered the
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`marks with the United States Patent
`
`and Trademark Office
`
`(“PTO”)
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`in 1986 under Registration Numbers 1,392,203 and
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`1,390,593.
`
`(Id; at 11.)
`
`AT&T later assigned the UNIX marks
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`and registrations to Unix Systems Laboratories,
`
`Inc.
`
`(“USL”)
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`and the transfer was registered with the PTO in May 1990.
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`(;g;)
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`USL was purchased by Novell
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`in April
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`1994,
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`the
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`trademarks were transferred to Novell, and the transfer was
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`recorded with the PTO on July 27, 1994.
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`(Doc. ## 1 at I 24;
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`85 at 11.)
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`In October 1993, Novell, X/Open, and non—parties Digital,
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`HP,
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`IBM,
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`and Sun,
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`signed a non—binding term sheet setting
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`forth a framework for a future definitive agreement among the
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`named entities.1 (Doc. # 86-5.) Pursuant to this term sheet,
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`1 X/Open has submitted a redacted version of this term
`(continued...)
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`

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`the entities agreed that,
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`in furtherance of their joint vision
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`of “the UNIX software business being characterized by a single
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`specification," Novell would “license the ‘UNIX’ brand through
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`X/Open"
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`to companies whose products
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`conforn1 to specified
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`quality-control standards.
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`(Id; at 3-4.)
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`The term sheet
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`further provided that at
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`the end of
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`three years or
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`less,
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`Novell would transfer ownership of the UNIX brand to X/Open,
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`barring certain adverse financial consequences.
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`(Id; at 3.)
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`On May 10, 1994, Novell and X/Open executed an agreement
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`that, according to X/Open, embodied the terms of the 1993 term
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`sheet.2
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`(Doc. ## 85 at 11; 86-6.)
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`In the agreement, Novell
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`(1) granted X/Open
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`“an exclusive, perpetual,
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`irrevocable
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`license to use, and sub—license to third parties the use of,"
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`the UNIX trademark;
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`(2)
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`gave X/Open
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`responsibility for
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`licensing the mark to companies whose products conform to
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`certain quality criteria;
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`(3) authorized X/Open to use the
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`trademark attribution statement
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`“UNIX is a registered trade
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`mark licensed exclusively by X/Open;” and (4) agreed to assign
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`1(...continued)
`sheet as Exhibit 4 to its Motion for Summary Judgment.
`# 86-5.)
`
`(Doc.
`
`submitted a
`2 X/Open has
`licensing agreement as Exhibit
`Judgment.
`(Doc.
`# 86-6.)
`
`this
`redacted version of
`5 to its Motion for Summary
`
`_3_
`
`

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`the UNIX trademark to X/Open at the end of three years “or at
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`any time either earlier or later if Novell and X/Open agree.”
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`(Doc.
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`# 86-6 at 1-14, 21.)
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`This licensing agreement also
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`obligated. X/Open to “protect
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`the integrity” of
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`the UNIX
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`trademark.
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`(Id; at 10.)
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`Pursuant to this May 10, 1994 licensing agreement, on May
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`3, 1995, X—Open issued a license to SCO to use the UNIX mark.3
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`(Doc.
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`# 86-18.) X/Open asserts that, since that date, SCO’s
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`press releases, websites, and printed materials have reflected
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`that X/Open is either the exclusive licensor or the owner of
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`the UNIX trademark.
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`(Doc.
`
`# 85 at 12.)
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`Central
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`to this dispute is a subsequent Asset Purchase
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`Agreement
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`(“APA")
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`executed by Novell
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`and predecessor-in-
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`interest to SCO, The Santa Cruz Operation.4 The APA, executed
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`in September 1995,
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`transferred certain of Novell’s assets, as
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`listed in Schedule 1.1(a) of
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`that agreement,
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`to SCO.
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`(fige
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`Doc.
`
`# 86-7, 86-8.)
`
`In Paragraph V of Schedule l.1(a),
`
`it
`
`3 This Trademark License Agreement certified that SCO was
`registered under the “X/Open Brand Program" and that certain
`of
`their
`software products were
`in conformance with the
`required standards for use of the UNIX trademark.
`(Doc. # 86-
`18.)
`
`4 Defendant SCO Group and its predecessor-in-interest The
`Santa Cruz Operation,
`Inc. will both be referred to as “SCO”
`in this Order.
`
`

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`lists as a transferred asset, “Trademarks UNIX and Unixware as
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`and to the extent held by [Novell]
`
`(excluding any compensation
`
`[Novell]
`
`receives with respect of
`
`the license granted to
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`X/Open regarding the UNIX trademark).”
`
`(Doc.
`
`# 86-8 at 30.)
`
`In addition, Schedule 1.1(b), Paragraph V to the APA lists as
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`an Excluded Asset, “all copyrights and trademarks, except for
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`the trademarks UNIX and UnixWare.”
`
`(Id; at 33.) Minutes of
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`a September 18, 1995 meeting of Novell’s Board of Directors
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`references the 1995 APA and documents the Board's resolution
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`to transfer to SCO its UNIX and UnixWare technology assets,
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`excluding trademarks and copyrights “except for the trademarks
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`UNIX and UnixWare.”
`
`(Doc.
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`# 121, Exh. 38.)
`
`An
`
`amendment
`
`to the APA was drafted and executed on
`
`December 6, 1995
`
`(“Amendment 1").
`
`(Id; at Exh. 41.)
`
`The
`
`Amendment did not alter any provisions of the APA relating to
`
`trademarks or
`
`intellectual property.
`
`Also on December 6,
`
`1995, a Bill of Sale was executed documenting the sale of the
`
`UNIX business
`
`to SCO as
`
`set
`
`forth in the 1995 APA and
`
`Amendment
`
`1 thereto.
`
`(Id; at Exh. 42.)
`
`Gray asserts that the language of the 1995 APA clearly
`
`establishes that the UNIX and UnixWare marks were transferred
`
`to SCO pursuant to the APA and Bill of Sale and that Novell
`
`was no longer the lawful owner of those marks after December
`
`_5_
`
`

`
`1995.
`
`(Doc.
`
`# 1 at II 48-56.) X/Open disagrees, contending
`
`that the limiting language in Section 1.1(a)
`
`served to make
`
`the 1995 APA subject
`
`to the terms of the 1994 Novell—X/Open
`
`re—1icensing agreement, which in turn required Novell
`
`to
`
`assign the UNIX marks to X/Open.
`
`(Doc.
`
`# 85 at 19.)
`
`As
`
`further proof of
`
`their purported intent, Defendants’ have
`
`submitted a September 1996 “Confirmation Agreement” in which
`
`Novell, X/Open,
`
`and SCO all acknowledge that
`
`the 1995 APA
`
`conveyed the UNIX trademarks to SCO “subject to the rights and
`
`obligations established in a May
`
`14,
`
`1994 NOVELL—X/OPEN
`
`Trademark Relicensing Agreement
`
`.
`
`.
`
`.
`
`.”5
`
`(Doc. # 86-9 at 1.)
`
`The 1996 Confirmation Agreement further provides that
`
`“SCO and X/Open desire to provide for the acceleration of the
`
`vesting of title in X/OPEN to the UNIX trademark,
`
`and the
`
`assignment
`
`to SCO of NOVELL’s
`
`rights under
`
`the 1994
`
`[re-
`
`licensing] Agreement.”
`
`(Ig;)
`
`To
`
`that end,
`
`the parties
`
`thereby agreed to X/Open’s drafting and Nove11’s execution of
`
`appropriate assignment documents transferring legal title to
`
`the UNIX trademarks to X/Open “as soon as possible."
`
`(Id;)
`
`The Confirmation Agreement also stipulated that Novell would
`
`5 Although the Confirmation Agreement references a “May
`14, 1994,” Nove11—X/Open re—1icensing agreement,
`the document
`submitted by Defendants and represented to be this licensing
`agreement is dated May 10, 1994.
`(§§§ Doc.
`# 86-18.)
`
`_6_
`
`

`
`be considered the legal owner of the UNIX marks for purposes
`
`of
`
`the assignment
`
`and that
`
`such assignment would not be
`
`considered a breach of the 1995 APA between Novell and SCO.
`
`(L1-)
`
`A second amendment
`
`to the APA
`
`(“Amendment
`
`2") was
`
`executed on October
`
`16,
`
`1996.
`
`(Doc.
`
`#
`
`121, Exh.
`
`55.)
`
`Amendment
`
`2 provides
`
`that,
`
`as of October
`
`16,
`
`1996,
`
`the
`
`Excluded Assets section of Schedule 1.1(b) of the 1995 APA is
`
`revised to exclude, “All copyrights and trademarks, except for
`
`the copyrights and trademarks owned by Novell as of the date
`
`of
`
`the [1995] Agreement
`
`required for
`
`SCO to exercise its
`
`rights with respect
`
`to the acquisition of UNIX and UnixWare
`
`technologies.”
`
`(Ig;)
`
`Amendment
`
`2 did not specify which
`
`trademarks were “required for SCO to exercise its rights” and
`
`were therefore excepted from the excluded assets, but it made
`
`no revisions to the Included Assets listed in Schedule 1.1(a).
`
`(;g;) Although Amendment 2 was executed one month after the
`
`Confirmation Agreement,
`
`the Amendment did not reference the
`
`Confirmation Agreement or the parties alleged intent to allow
`
`Novell to remain the owner of the trademarks for purposes of
`
`assigning those marks to X/Open.
`
`Over
`
`two years
`
`later,
`
`in a Deed of Assignment dated
`
`November 13, 1998, Novell purportedly assigned “all property,
`
`_7__.
`
`

`
`right,
`
`title and interest
`
`in the
`
`[UNIX] marks with the
`
`business and goodwill attached to the said trade marks" to
`
`X/Open.
`
`(Doc.
`
`##
`
`1 at
`
`II 72-74;
`
`121 at Exh. 68.)
`
`The
`
`assignment was recorded with the PTO in June 1999.
`
`(;g;)
`
`Gray alleges that Novell no longer owned the UNIX marks
`
`at
`
`the time of this 1998 assignment and that both the 1996
`
`Confirmation Agreement and the 1998 Novell—X/Open Deed of
`
`Assignment were fraudulently created and executed after the
`
`fact
`
`as part of
`
`an
`
`illegal
`
`scheme
`
`to conceal
`
`the true
`
`ownership of the marks from Gray,
`
`the PTO,
`
`and the public.
`
`(Doc. # 1 at II 72-73, 113.) This alleged scheme is set forth
`
`in more detail in Part I(C) below.
`
`B.
`
`Wayne Gray and the iNUX Trademark
`
`Plaintiff Wayne R. Gray is an individual
`
`residing in
`
`Hillsborough. County, Florida.
`
`(Doc.
`
`#
`
`1 at
`
`HI 11.)
`
`He
`
`represents that he has an engineering degree from University
`
`of Florida and
`
`twenty years of
`
`experience
`
`in computer
`
`software,
`
`hardware
`
`and
`
`real—time
`
`embedded
`
`systems
`
`applications, development and marketing.
`
`(ggé)
`
`Gray began a computer software business in early 1998,
`
`which was
`
`incorporated on October 6, 1998, under
`
`the name
`
`MegaChoice,
`
`Inc.
`
`(Doc.
`
`# 121 at 21.) Gray thereafter began
`
`using the product name and trademark “iNUX"
`
`to “test
`
`its
`
`_8_
`
`

`
`acceptance with the relevant purchasing public.”
`
`(IQL)
`
`In
`
`January 1999, Gray registered the domain names “iNUX.com” and
`
`“iNUX.net" and began doing business as “iNUX.”
`
`(Id; at 22.)
`
`On April 29, 1999, Gray applied to register the iNUX trademark
`
`with the PTO.
`
`(Id; at 23.)
`
`The company name was
`
`legally
`
`changed to iNUX,
`
`Inc.,
`
`in August 1999.
`
`(;g;) Gray asserts
`
`that he introduced his first iNUX—brand product in late 1999,
`
`began limited sales in December 1999,
`
`and began shipping
`
`product
`
`in early 2000.
`
`(Id; at 24-25.)
`
`Approximately one year later, Gray received a letter from
`
`counsel for X/Open dated February 27, 2001, identifying X/Open
`
`as the legal owner of the UNIX trademark and insisting that
`
`Gray provide written assurances that he would cease using the
`
`“virtually identical” iNUX mark.
`
`(;£L_ at 25, Exh. 76.)
`
`X/Open stated that Gray's use of the mark, name, and domain
`
`name iNUX is “likely to cause confusion with and dilute the
`
`distinctiveness of
`
`the UNIX mark,
`
`and constitutes federal
`
`trademark infringement, unfair competition,
`
`and.
`
`trademark
`
`dilution under federal law .
`
`.
`
`.
`
`.”
`
`(Id; at Exh. 76.) X/Open
`
`further demanded that Gray voluntarily abandon his pending PTO
`
`application for the iNUX mark.
`
`(Ig;)
`
`On April
`
`11,
`
`2001, X/Open
`
`filed an administrative
`
`opposition to Gray's trademark application with the Trademark
`
`_9_
`
`

`
`Trial and Appeal Board (“TTAB") of the PTO, entitled Xgopen
`
`Company Ltd. v. Gray, Opposition No. 91122524, alleging that
`
`Gray's mark was confusingly similar to the valuable and famous
`
`UNIX trademark.
`
`(Doc.
`
`## 85 at 9;
`
`121 at 26.)
`
`Ensuing
`
`settlement discussions between Gray and X/Open regarding a
`
`negotiated phase—out of Gray's use of the iNUX mark and domain
`
`names
`
`in exchange for Gray's withdrawal of his trademark
`
`application were unsuccessful.6
`
`Following these
`
`failed
`
`settlement
`
`negotiations,
`
`Gray
`
`began
`
`an
`
`independent
`
`investigation into X/Open and the UNIX trademark,
`
`in which he
`
`allegedly discovered that X/Open was not
`
`the legal owner of
`
`the UNIX trademarks and that X/Open, Novell,
`
`and SCO were
`
`engaged in a fraudulent scheme to unlawfully conceal the true
`
`owner of the mark.
`
`(Doc. ## 121 at 27; 126 at 17.)
`
`Gray asserts that he first obtained access to an online
`
`copy of the 1995 APA and Schedule 1.1 thereto on November 1,
`
`6 Written correspondence between counsel for X/Open and
`Gray reveals that Gray offered to withdraw his trademark
`application if X/Open agreed to allow phase—out periods of one
`year for Gray's use of the iNUX mark and two years for his use
`of the related domain names.
`(gee Doc. # 121 at Exhs. 78-81.)
`X/Open counter—offered with one year phase—outs for use of
`both the mark and domain names and that Gray turn over the
`iNUX domain names to X/Open at the end of that period.
`(ldé)
`Gray then countered with one year
`and eighteen months,
`respectively, but refused to turn over the domain names
`to
`X/Open.
`(;g;)
`X/Open refused that settlement offer and
`negotiations ceased.
`(;g;)
`
`_l0_
`
`

`
`2003.
`
`(Doc.
`
`#
`
`1 at
`
`fl 106.)
`
`Once he realized that the UNIX
`
`marks had transferred to SCO in 1995 and possibly remained
`
`with SCO at
`
`the time of
`
`the purported 1998 Novell—X/Open
`
`assignment, Gray moved
`
`to file an
`
`amended
`
`answer
`
`and
`
`counterclaim in Xgopen v. Gray that
`
`included assertions
`
`related to fraud.
`
`(;g; at 1 108.)
`
`As more information was
`
`discovered by Gray,
`
`he
`
`again
`
`amended his
`
`answer
`
`and
`
`counterclaims on January 22, 2004.
`
`(;d;)
`
`After protracted. discovery disputes
`
`involving,
`
`among
`
`other things,
`
`the confidential nature of certain documents and
`
`the propriety of entering a protective order in the case,
`
`the
`
`TTAB opposition proceedings were
`
`formally suspended
`
`on
`
`February 24, 2005, pending resolution of several discovery
`
`motions.
`
`(Lg; at
`
`flfl 110-136.)
`
`Gray continued.
`
`to gain
`
`information through independent investigation into the chain
`
`of title of the UNIX marks and the inter—relationships between
`
`Novell, X/Open,
`
`SCO,
`
`and the UNIX marks and, based on this
`
`information,
`
`he
`
`initiated.
`
`this suit
`
`in federal court
`
`on
`
`October 23,
`
`2006.
`
`Upon application of X/Open,
`
`the TTAB
`
`opposition proceedings were thereafter suspended on or about
`
`July 17, 2007, pending resolution of this case.
`
`(Doc. ## 90
`
`at 6; 90-8.)
`
`C.
`
`The Alleged Scheme
`
`_]_l_
`
`

`
`According to Gray, Novell and X/Open have engaged in an
`
`ongoing scheme since approximately October 1993 “to conceal
`
`Novell’s
`
`true intentions of
`
`retaining ownership of
`
`the
`
`valuable UNIX marks and developing a proprietary and closed
`
`version of UNIX that would integrate its proprietary NetWare
`
`networking technologies,” for
`
`the purpose of controlling
`
`certain UNIX and UNIX—like software markets
`
`and competing
`
`against Microsoft's software business.7
`
`(Doc.
`
`# 1 at 11 2,
`
`29, 164.)
`
`In furtherance of this alleged scheme, Gray asserts
`
`that Novell and X/Open agreed that Novell would initiate a re-
`
`licensing enterprise through X/Open, whereby X/Open would be
`
`the exclusive licensor of the UNIX mark, and that they would
`
`“falsely imply and/or state publicly that X/Open owned the
`
`UNIX marks in and after 1993” to conceal Novell’s continuing
`
`7 A software is said to be “open” when its source code is
`open and available to the public. Stefano Comino and Fabio M.
`Manenti, Open Source vs Closed Source Software: Public
`Policies in the Software Market 2, http://opensource.mit.edu/
`papers/cominomannti.pdf (June 2003