Forget the Novell/SCO contract for a second. Assume Novell hold the copyrights on SysV.

Now if SCO go and sell a license to Sun/MSFT for SysV, Novell haven't been damaged by that. If SUN/MSFT use the IP invovled Novell would have a claim against them for breach of copyright. SUN/MSFT would likely have a claim against SCO as SCO have defrauded them.

This would be akin to me selling person X's car to person Y (without person X's permission). Person X doesn't have a claim against me, they have lost nothing they are still the rightful owner of the car. Person Y would have a claim against me since I conned them.

The type of claim Novell (or person X) might have would be slander of title (or some such), but that wouldn't necessarily entitle them to 95% of whatever the license sale to SUN/MSFT was.

Bring the license back into this. I haven't reread the APA so just from memory SCO do not have the right to make substantial changes to the license or add new licenses without Novells consent, no provision which makes any such breach grant any rights to a third party and give Novell the money.

In the UK (and I'll guess it's pretty similar in the US) the normal remedy for Breach of contract is to attempt to restore the parties to the position they would have been should the breach not have occurred. Should this breach not have occurred, SUN/MSFT would not have had extended license, and any negotiations for them would have to involve Novell.

In this case between Novell and SCO to repair the breach this could be done by declaring the SUN/MSFT contracts invalid as SCO wasn't allowed to enter into the agreements. I can't see what else the judge could do. (Consider for a minute if after considering the rights granted novell say, we wouldn't have issued those rights for any cost, or only for $50 million...) This would have the effect of putting the parties (Novell and SCO) back in the position they were in before the breach, i.e. SUN/MSFT don't have extended IP license, if they want them, then negotiations involving Novell would have to take place.

If the Judge does do that, Novell may still have some claims against SCO but not necessarily for the full amount. SUN/MSFT would have claims against SCO for the full amounts.