"She agrees with Red Hat that it has a 'reasonable apprehension' of eventually being sued by SCO since 'There is no question that Red Hat is a Linux software developer who is engaging in the allegedly infringing activities' that SCO is claiming and since, as Robinson reckons, SCO has basically said it would sue Red Hat.

"The line 'There will a day of reckoning for Red Hat' that fell from the lips of SCO CEO Darl McBride didn't pass her notice no matter how SCO has subsequently attempted to construe the remark.

"Because Red Hat's situation meets the two criteria - the threat of a suit and potentially unclean hands - needed for the declaratory judgment that Red Hat sued SCO to get from the court, the judge denied SCO's motion to simply throw the Red Hat suit out.

"She also said something about plaintiffs - which would be Red Hat - not getting 'advisory opinions on their potential liability for initiating some future activities.'"

That last sentence is what good reporters do when they aren't sure of what something means. They just report it. But the "potentially unclean hands" reference isn't quite accurate. Let me explain both.

If you click on the link to Law.com's dictionary on the left, you will be able to find a definition of "unclean hands", and if you do that, you will find that it's an affirmative defense, not a requirement for a declaratory judgment. Here is the definition:

"unclean hands -- n. a legal doctrine which is a defense to a complaint, which states that a party who is asking for a judgment cannot have the help of the court if he/she has done anything unethical in relation to the subject of the lawsuit. Thus, if a defendant can show the plaintiff had 'unclean hands,' the plaintiff's complaint will be dismissed or the plaintiff will be denied judgment. Unclean hands is a common 'affirmative defense' pleaded by defendants and must be proved by the defendant. Example: Hank Hardnose sues Grace Goodenough for breach of contract for failure to pay the full amount for construction of an addition to her house. Goodenough proves that Hardnose had shown her faked estimates from subcontractors to justify his original bid to Goodenough."

Instead, you can see that unclean hands is an affirmative defense, meaning something the accused can bring up in defense. Red Hat is not the one accused in the Red Hat v. SCO case. SCO is. Red Hat is the plaintiff, not the defendant. IBM has a number of Affirmative Defenses listed in its Answer to SCO's Complaint, and that is appropriate because IBM is the defendant, the one accused. Red Hat, instead of being accused of wrongdoing, is bringing to the court the fact that SCO is making accusations of copyright infringement, accusations Red Hat believes are unfounded and harmful, and so it is asking the court to declare that there is no copyright infringement going on and to award it damages for the false accusation and other matters. That is what the Declaratory Judgment Act says you can do:

"In a case of actual controversy within its jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such."

That is what Red Hat asked the court for, and the court just agreed to hear this matter. It had discretion to say yes or no to Red Hat's request, and it said yes.

So exactly what is a declaratory judgment, and what are the necessary elements in order to be granted one? First, the Declaratory Judgment Act is an enabling statute, not one that confers rights on you, the litigant. Your case has to fit into the confines of the Declaratory Judgment Act, 28 U.S.C. §§2201 -02. You can ask for a declaratory judgment, but the judge doesn't have to grant you your wish. It's a hurdle you must successfully get over, and Red Hat just did.

What confines? First, you have to have an actual "controversy" in the constitutional sense. Basically, that means it isn't a hypothetical problem and it isn't moot, meaning the court must be able to settle your problem with a declaratory judgment. And you must have a real controversy, meaning you really have a reasonable apprehension of being sued. Red Hat had to prove it fit within those confines in order to block SCO's attempt to get the court to dismiss. It did, which is why SCO's Motion to Dismiss was denied.

Second, you have to meet jurisdictional requirements, meaning the case is about something that federal courts are authorized to settle. The question is whether a particular court has the power or competence to decide the kind of controversy that is involved. Copyright fits the bill here, being a federal statute, so the Delaware court has authority to hear this case. If you recall, that is at issue in the Novell-SCO dispute, namely, should it be heard in state or federal court.

So what about the part about 'advisory opinions on their potential liability for initiating some future activities'? What was the judge saying? That is referring to there being an actual case and it's answering something that SCO argued in its Motion to Dismiss. SCO said that "Red Hat's action does nothing more than seek an advisory opinion of this Court regarding SCO's intellectual property rights, something that is clearly prohibited under the Declaratory Judgment Act." The judge is ruling against SCO's argument. If Red Hat were just asking for an advisory opinion ("If we hypothetically do X someday, might that be an infringement of SCO's copyright?" in a context where SCO hadn't indicated any concern about infringement), then the necessary prong of it being an actual controversy would not be met. The judge was saying, Red Hat isn't asking a hypothetical question. It is really likely to be sued by SCO. Here is the definition of "advisory opinion" from Steven H. Gifis' "Law Dictionary", Second Edition:

"ADVISORY OPINION - a formal opinion by a judge, court, or law officer upon a question of law submitted by a legislative body, governmental official, or other interested party, but not actuallly presented in a genuinely adversary proceeding. Such opinion therefore has no binding force as law. Compare declaratory judgment. See also case or controversy."

The judge was just saying that isn't the case here, that there is a real controversy, that SCO's words and behavior qualify as sufficiently menacing that Red Hat has a reasonable anticipation of being sued, something SCO in its attempt to have the matter dismissed fervently denied was the case. The judge found that Red Hat was right and SCO was ... well, you know.

Here is a detailed explanation from a tutorial on declaratory judgments:

"Case or Controversy

"The United States Constitution (Article III, Section 2) limits the exercise of the judicial power to 'cases' and 'controversies.' The Declaratory Judgment Act in its limitation to 'cases of actual controversy,' refers to the constitutional provision and is operative only in respect to controversies which are such in the constitutional sense. A justiciable controversy is thus distinguished from a difference or dispute of a hypothetical or abstract character; from one that is academic or moot. The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests. It must be a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937). For adjudication of constitutional issues 'concrete legal issues, presented in actual cases, not abstractions' are requisite. The power of courts to pass upon the constitutionality of acts of Congress arises only when the interests of litigants require the use of the judicial authority for their protection against actual interference. A hypothetical threat is not enough. United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L.Ed. 754 (1947).

"Jurisdiction

"The operation of the Declaratory Judgment Act is procedural only. Relief under the Act is available only if the requisites of jurisdiction, in the sense of a federal right or diversity, provide foundation for resort to the federal courts. The Declaratory Judgment Act allowed relief to be given by way of recognizing the plaintiff's right even though no immediate enforcement of it was asked. But the requirements of jurisdiction - the limited subject matters which alone Congress had authorized the District Courts to adjudicate - were not impliedly repealed or modified. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 70 S.Ct. 876, 94 L.Ed. 1194 (1950)."

So, now let's break the order down into its elements and see what the judge said. First, she writes about the law not requiring her to act on Red Hat's request for a declaratory judgment, that there has to be an actual controversy and that Red Hat had the burden of proving that there was one:

"1. The motion to dismiss filed by defendant The SCO Group, Inc. ('SCO') (D.I. 8) is denied.

"a. The Declaratory Judgement Act limits the use of declaratory judgments to cases of 'actual controversy.' 28 U.S.C. $ 2201; Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239- 40 (1937). Generally, the presence of an 'actual controversy' within the Act depends on 'whether the facts alleged, under all circumstances, show that there is a substantial controversy between the parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.' Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941). Plaintiff, as the party seeking to invoke the court's jurisdiction, bears the burden of proving by a preponderance of the evidence that an 'actual controversy' exists at the time of the complaint's filing, and continues to exist throughout the pendency of the action. See International Med. Prosthetics Research Assoc. v. Gore Entrp. Holdings, 787 F.2d 572, 575 (Fed. Cir. 1986). Even when it is determined that an actual controversy exists, federal courts may decline to exercise that discretionary jurisdiction. See Public Affair Assoc. v. Rickover, 369 U.S. 111, 112 (1962) ('The Declaratory Judgment Act was an authorization, not a command. It gave federal courts competence to make a declaration of rights; it did not impose a duty to do so.')."

Next, she writes about the facts of this case, showing the two-prong analysis that justifies calling a dispute an actual controversy:

"b. In deciding whether to allow a claim for declaratory relief to proceed in patent and copyright cases, federal courts use a two-step analysis in determining whether an 'actual controversy' exists. First, defendant's conduct must have created a reasonable apprehension on plaintiff's part that it will face a suit for infringement. This test is an objective one, focusing on whether the defendant's conduct rose to a level sufficient to indicate an intent to enforce its patent or copyright. Goodyear Tire & Rubber Co. v. Releasomers, Inc., 824 F.2d 953, 955 (Fed. Cir. 1987). Courts have not required an express infringement charge. Id. at 956. Absent an express charge, courts must consider under the totality of the circumstances whether the defendant's conduct meets the first prong. Id. at 955. Second, the plaintiff must have engaged in allegedly infringing acts, or possessed the capability and definite intention to engage immediately in such acts. Id. This second prong, in essence, prohibits declaratory judgment plaintiffs from seeking advisory opinions on their potential liability for initiating some future activites. Arrowhead Indus. Water v. Ecolochem, Inc., 846 F.2d 731, 736 (Fed. Cir. 1988) (citations omitted). Declaratory judgment plaintiffs must be engaged in an actual making, selling, or using activity subject to an infringement charge or must have made meaningful preparation for such activity. Id. (citations omitted)."

The judge starts with the overview, what the law is and how courts have interpreted what an actual case or controversy means. Red Hat had to be able to fit within this case law interpretation. First, the defendant's (that would be SCO) conduct has to have "created a reasonable apprehension" on plaintiff's (that would be Red Hat) part "that it will face a suit for infringement." That is the first prong.

The second prong you have to meet to get a judge to hear your case is that you, the plaintiff, must be in a position to be sued. In other words, if there is no way under any theory or set of facts that you could be sued for copyright infringement, you can't ask the judge to declare you aren't guilty of it. Red Hat does distribute Linux, and SCO, whether rightly or not -- the prong here doesn't judge one way or another at this point -- is claiming that Linux has allegedly infringing code in it, so Red Hat meets the second prong, that it could really be sued by SCO on their theory of the facts. Whether they could win is a separate issue, but you can bring a lawsuit even when you have no real leg to stand on, as we have observed. In other words, O'Gara's article made it sound like Red Hat was potentially the bad guy. In actuality, the issue is whether SCO has been the bad guy, saying things and making claims in public that have hurt Red Hat's business and reputation. The Declaratory Judgment Act is designed to help you in such circumstances.

Next, going from the law and its interpretation to actual facts in this case, the judge concluded that Red Hat had a reasonable apprehension of being sued, and it is distributing Linux, so it will be given its opportunity to prove that SCO is the bad guy here:

"c. Plaintiff Red Hat, Inc. ('Red Hat') has alleged that defendant SCO is engaged in a campaign to create fear, uncertainty, and doubt about the LINUX operating system, with resulting direct harm to Red Hat. Moreover, Red Hat has submitted multiple press releases which indicate that SCO, in fact, has embarked on a campaign to protect its proprietary interests in its UNIX OS, particularly as against the LINUX industry which, SCO claims, is illegally appropriating its UNIX source code. (See, e.g., D.I. 10, exs. E, F, G) Although SCO chose as its first adversary International Business Machines Corporation ('IBM') (the 'Utah litigation') (see D.I. 10, exs. A, B), nevertheless, SCO has publicly stated that it has issues with Red Hat, that it will likely file a new suit or amend its controversial lawsuit against IBM to target other companies' like Red Hat in the LINUX industry, that '[t]here will be a day of reckoning for Red Hat,' and that 'chances for negotiating with such companies [as Red Hat] appear to be slim.' (D.I. 10, exs. E - G)

"d. Under these circumstances, the court concludes that SCO's conduct has created a reasonable apprehension of suit. Moreover, there is no question that Red Hat is a LINUX software developer who is engaging in the allegedly infringing activities."

So, on that basis, SCO's Motion to Dismiss was denied. Red Hat will get its day in court. You can tell when reporters have been talking to SCO, because they get the story almost right, but not exactly. SCO has been spinning it that this was some kind of victory, because there is a temporary stay. That's just procedural. Courts don't like to decide the same thing in two different courts at the same time. It's a waste of their time and taxpayers' money. And there is a danger of getting conflicting decisions. No, this was not a SCO victory. It was a defeat.

SCO tried very hard to get Red Hat to go away. If you have any doubt about how much they wanted that, I suggest you reread their Opening Brief in Support of its Motion to Dismiss. They raised every possible excuse or reason, from alleging the judge lacked jurisdiction to saying there was no actual case or controversy to claims that the Constitution immunized SCO's speech, as to why the judge did not have authority to hear this case and that therefore the case should be dismissed. No, excuse me, they said it "must" be dismissed, and some counts "with prejudice". Here is their conclusion:

"Red Hat is not in reasonable apprehension of being sued by SCO for infringement or misappropriation. In fact. Red Hat's stated purpose for its declaratory relief claims is to seek an advisory opinion from this Court regarding SCO's intellectual property claims. This is an entirely impermissible use of the Declaratory Judgment Act. Red Hat cannot establish subject matter jurisdiction to support its claims for declaratory relief, and Counts I and II of the Complaint must be dismissed for lack of jurisdiction.

"Red Hat's claims under Counts III through VII seek to impose liability for actions and expression that do not give rise to liability under the Lanham Act or the associated state law claims. Further, any governmental interest served under the Lanham Act is heavily outweighed by fundamental governmental interests in protecting copyright interests, ensuring full and free access to courts, providing litigation immunity, promoting judicial economy and fairness in litigation, and safeguarding freedom of speech and the press. Therefore, Counts III through VII must be dismissed, with prejudice."

They strenuously argued that the judge should make this Red Hat thing go away, and she said no.