From Information Week, March 16 1992

Novell Faces Legal Battle
   by Bob Violino

Novell Inc. is bracing for a battle that could be fiercer that
anything the company has faced in the network software market.  This
battle will be in the courts, where both Novell and one of its largest
customers will try to prove that a patent they are charged with
infringing is not valid.

Novell's antagonist is Roger Billings, a scientist, former computer
company executive, and founder of the non-profit, unaccredited
American Acedemy of Science in Independence, Montana.  Billings, best
known for his work developing automobiles that run on hydrogen-based
fuel cells, claims his patent covers the concept of using file servers
for distributed computing.

Billings further claims that Novell customer Bank of America Corp. is
also infringing his patent.  What set s the case apart is that the
patent is so broad that a ruling in Billings' favor could affect
numerous network users and vendors.

In a suit filed in U.S. District Court, Northern California, last
December, Billings claims Novell's NetWare network operating system
infringes his patent when used for distributed computing.  Billings
applied for the patent in February 1982, nearly a year before NetWare
hit the market; he won approval in 1987 after twice being rejected by
the U.S. Patent Office.  Billings wants Novell to fork over royalties
representing 8% of total NetWare sales through the trial date, or
about $220 million.

Novell, which subsequently filed a countersuit in Salt Lake City
calling the patent invalid, unenforceable, and not infringed, has
publicly downplayed the case.  David Bradford, Novell's senior VP and
general counsel, says the firm is confident the patent will be ruled
invalid, and a Novell spokesman says the chances of the suit having a
financial impact on the company are remote.

But patent law experts say Novell may have cause to worry.  "Billings
has an issued patent, which gives him leverage--he can force them into
a lengthy legal battle," says Tom Villeneuve, head of the technology
group at Brobeck, Thleger, & Harrison in Palo Alto, Calif.  "I don't
expect this will put Novell out of business.  But it will probably
cost them a lot of money."

Novell's attorney concedes that the case may be long and costly.
"Anytime you're defending a patent infringement claim there are huge
costs involved," says Gary Hecker of Hecker & Harriman in Los Angeles.

San Francisco-based BofA, which has 100 NetWare networks, was stunned
by the suit.  It could be "an expensive and not very pleasant
process," says Katherine Spelman, a partner with Graham & James,
BofA's San Francisco law firm.

Spelman asserts that the bank was named by Billings merely to generate
publicity.  "Bank of America is being held hostage to this lawsuit,"
she charges.  Billings says he cited the bank because "it's benefiting
from my invention in a major way."

Billings' patent is extremely broad, Villeneuve says, and this may
work in Novell's favor.  But, he adds, "You never know what the courts
will do.  A patent is presumed to be valid, and someone has to prove
it's not."


   `Prior Art'

Novell's defense will be that many similar networking schemes existed
before Billings applied for his patent, and that the patent didn't
account for this "prior art."  Says Billings: "We disclosed all prior
art we were aware of.  They don't issue a patent without doing a
vigorous survey of prior art themselves."

The case is likely to focus on the early history of Novell, when the
firm, known as Novell Data Systems, bought the rights to NetWare from
a group of four former Brigham Young University students known as the
"Superset."  Billings and the Superset separately worked on similar
networking projects in the Provo, Utah area in the early 1980s, a
coincidence Billings' supporters find amazing.  "There's a cover-up"
regarding the early development of NetWare, asserts Michael Sturgill,
a software developer and friend of Billings, who says he's spent 300
hours independently researching the case.

Three of the Superset's members still work for Novell.  The fourth,
Mark Hurst, has left the firm, but will not speak to the press.
Sturgill claims to have interviewed Hurst, who maintains, despite
Sturgill's prodding, that the Superset did not base NetWare on
Billings' work.

A tentative trial date is set for January 1993.  Novell and Billings
are scheduled to meet this week to exchange pre-trial information.
Next week, Novell will file a motion to transfer the case from
Northern California to Utah, Hecker says.

Meanwhile, Billings says he will announce a licensing program for his
"invention" within 30 days.  He says at least one network
vendor--which he declines to identify--already has contacted him.

Although Billings' hydrogen research has recieved widespread coverage
in the general press, his somewhat eccentric past has been less
publicized.  For example, he was ousted from the company he founded,
Billings Computer Corp., by dissident shareholders in 1984; and he
calls himself "Dr." even though the title is self-conferred (he was
the first graduate of the American Acedemy of Science, his own
institution).

People who know Billings express little surprise--and considerable
skepticism--at the suit.  Gordon Stokes, a professor of computer
science at BYU who taught Billings, calls him a "master showman who
can sell him a "master showman whocan sell anything.  He's the best
salesman in the world."