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IP/Entertainment Case Law Updates

The SCO Group, Inc. v. Novell, Inc.

Court grants in part and denies in part defendant’s motion for summary judgment on plaintiff’s slander of title claim relating to software copyrights

Plaintiff claimed that it is the rightful owner of the UNIX and UnixWare copyrights. Defendant disputed plaintiff’s claims of ownership and publicly claimed that it, not plaintiff, is the true owner of the copyrights in question. Plaintiff filed suit for slander of title, asserting that defendant’s claims of ownership resulted in lost sales of the plaintiff’s SCOSourceInitiative product. Specifically, the plaintiff argued that it was unable to enter into licensing agreements with various companies because those companies refused to enter into licensing agreements as a result of the purported ownership dispute. Plaintiff further argued that it was forced to accept lower prices from those who did enter into agreements.

According to the court, to prove slander of title, a claimant must prove that (1) there was a publication of a slanderous statement disparaging claimant’s title, (2) the statement was false, (3) the statement was made with malice, and (4) the statement caused actual or special damages.

The defendant moved for summary judgment on plaintiff’s slander of title claim, based on plaintiff’s alleged failure to prove special damages and on the ground that the defendant was not the cause of the licensing failure. The court stated that the special damage rule requires the plaintiff to establish pecuniary loss that has been realized or liquidated, as in the case of specific lost sales. The court held that the plaintiff presented sufficient evidence of lost sales to survive summary judgment and that there are genuine issues of material fact as to whether defendant’s actions were the direct and immediate cause of the lost sales. The court denied defendant’s motion for summary judgment on these issues, but granted it on the issue of whether a diminution of stock price constitutes special damages.

Regarding attorney’s fees, the court asked the plaintiff to distinguish attorney’s fees incurred while trying to clear title to the software from those attorney’s fees incurred to litigate the slander of title claim; the former constitute proof of special damages while the latter do not.

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