SCO Wednesday filed its appeal brief asking the 10th Circuit in Denver to overturn the Utah district court’s summary judgment finding that Novell owns the Unix copyrights and that Novell had the right to tell SCO to call off the dogs and waive its claims against IBM, the claims that allege that IBM ripped off Unix code and stuck it in Linux.

SCO also wants the appeals court to reverse Utah’s decision that SCO owes Novell a piece of the royalties it got from Sun Microsystems, a judgment that would have SCO write a check to Novell for $2.55 million.

SCO’s lawyers say the Utah court was wrong on all points as a matter of law and had no business issuing a summary judgment in the first place rather than let the case go to trial.

They say the court insisted on reading the Asset Purchase Agreement (APA) that transferred Unix and its copyrights from Novell to SCO’s predecessor company, the Santa Cruz Operation, for $250 million in 1995 in isolation from the Amendment that supposedly clarified the transfer of the copyrights and construed ambiguities in Novell’s favor when – according to the California law governing the deal – they should have been drawn in favor of SCO.

The brief argues that the expression “all rights and ownership of Unix and UnixWare” that appears in the APA means copyrights too – the core IP on which the Unix licensing business depended. Anything less would have been sheer folly; buying a software business means buying the copyrights.

When Novell replies, it’s going to have to grapple with issues like why it licensed the technology back from Santa Cruz in 1995 if it still owned the copyrights; how it is that Novell sent SCO its Unix copyright registrations; why Novell changed the copyright notices on existing Unix and UnixWare source code to read Santa Cruz; why Novell sent out a press release saying the “Unix IP” had been acquired; why it notified customers that its “ownership interest in Unix” had transferred; or why when Santa Cruz caught Novell selling IBM royalty buy-out rights in 1996 Novell never mentioned it still owned the copyright but plodded through six months of negotiations and ultimately paid Santa Cruz $1.5 million for a release from its claims.

Without ever saying so outright, the 70-page brief makes a strong case for judicial bias.

The Utah court, for instance, dismissed out of hand the evidence offered by all the top-ranking folks at both Novell and the Santa Cruz Operation including their respective CEOs that – whatever the ambiguities of the APA – the intent was to sell Santa Cruz the copyrights.

SCO also points out that the district court nodded off at times like when it said the copyright exclusion made sense because “Santa Cruz indisputably did not acquire ownership of Novell’s Unix-related patent.” Honey, Novell didn’t have any Unix-related patents.

The district court, which according to the rules had no business weighing evidence, decided that the testimony of a dozen or more SCO witnesses was “less reliable given the passage of years and witnesses’ mistaken beliefs” but didn’t apply the same standard to the declarations of two Novell lawyers who claimed that they – unbeknownst to any of the parties – made changes in the deal that gave Santa Cruz only an “implied license” to the IP, an expression that appears nowhere else outside their statements.

Implied licenses, by the way, can only be non-exclusive and might fly in cases of commissioned works but the APA clearly gave Santa Cruz the right to sue and according to case law holders of a non-exclusive license lack standing to sue. But more to the point, SCO says that copyright exclusion the Novell lawyers claim to have secretly inserted was inserted into an “inoperative version of the Excluded Assets Schedule” not the revised APA.

Bottom line, SCO says that if you buy the Utah court’s interpretation of things then “Novell retained the unlimited right to destroy the economic value of the business it had sold and for which it had received more than $250 million of consideration.”

And so SCO argues that Santa Cruz didn’t pay “for rights that Novell could abrogate at its whim by, among other things, allowing licensees to violate contract and intellectual property rights. Whether Novell was motivated to exercise its purported waiver rights due to IBM’s $50 million payment [to Novell to buy SUSE] or for some other reason, it is clear that the action damaged SCO, interfered with its rights to manage the Unix business that it had purchased under the APA and thus cannot be accepted, beyond factual dispute, as a good faith exercise of discretion.”

SCO, which is currently also trying to put together a reorganization plan to get out of Chapter 11, is asking Denver to hear oral arguments during its normal course of business in May or else convene a special panel in June. It says it’s willing to file its reply brief to Novell’s retort early.