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The Buildup to the Next SCO-IBM Motion Battle - The 10th Counterclaim
Friday, June 18 2004 @ 09:07 AM EDT

There is a new Order from Judge Kimball, setting due dates for SCO and IBM in connection with the next big motion battle, the one over IBM's Tenth Counterclaim. Darl mentioned at the June 10th 2nd quarter financials teleconference that he anticipated that the oral arguments on these motions will be on August 4, which indicates that IBM's request that both motions be heard on the same day, both SCO's motion to dismiss or stay count 10 and IBM's motion for partial summary judgment on their tenth counterclaim, was granted. Here's the schedule:

  • June 21 - IBM has been given permission to file a Supplementary Memorandum in Opposition to SCO's Motion to Dismiss
  • July 26 - SCO must file their Reply Memorandum
  • July 8 - SCO's Memorandum in Opposition to IBM's Motion for Partial Summary Judgment
  • July 26 - IBM must file their Reply Memorandum
  • June 21 - IBM's Response to SCO's Memorandum Regarding Discovery

This is the fight over IBM's Tenth Counterclaim, added to COUNTERCLAIM-PLAINTIFF IBM'S SECOND AMENDED COUNTERCLAIMS AGAINST SCO.

You may not remember what this is all about, so if you wish to review, here are the documents that all of the new motions will be about, plus a snippet from each to remind you of the issues:

  • SCO's Corrected Motion to Dismiss or to Stay Count Ten of Counterclaim-Plaintiff IBM's Second Amended Counterclaims Against SCO. "Plaintiff/Counterclaim-Defendant The SCO Group ('SCO'), by and through undersigned counsel, hereby moves the Court pursuant to Federal Rule of Civil Procedure 12(b) for dismissal, or, in the alternative, to stay Count Ten of Counterclaim-Plaintiff International Business Machines Corporation's ('IBM') Second Amended Counterclaims against SCO.

    "SCO bases its Motion on the following grounds:

    "On March 29, 2004, Defendant/Counter-Plaintiff International Business Machines Corp., ('IBM') filed its 'Second Amended Counterclaims Against SCO.' In Count Ten of that pleading, IBM added an entirely new claim seeking a declaratory judgment 'that IBM does not infringe, induce infringement of, or contribute to the infringement of any SCO copyright through its Linux activities, including its use, reproduction and improvement of Linux, and that some or all of SCO's purported copyrights in UNIX are invalid and unenforceable.' Paragraph 173. In other words, IBM is seeking to declare that a person or entity using Linux does not infringe upon SCO's copyrights and that some or all of SCO's copyrights are invalid or unenforceable.

    "These issues are being litigated in a case filed by SCO against AutoZone in federal district court in Nevada; a case that was filed prior to IBM's filing its Tenth Counterclaim. See The SCO Group Inc. v. AutoZone, Inc., Case No. CV-S-04-0237-DWH-LRL (D. Nev. 2004). This newly added counterclaim raises issues separate and apart from the primary breach of contract and other direct claims and counterclaims in this case. Given this fact, and to avoid multiple suits determining substantially similar issues, this Court should decline to exercise jurisdiction over and dismiss Counterclaim Ten. In the alternative, Counterclaim Ten should be stayed pending the outcome in the prior filed AutoZone case."

  • SCO's MEMORANDUM IN SUPPORT OF MOTION TO DISMISS OR TO STAY COUNT TEN OF PLAINTIFF IBM'S SECOND AMENDED COUNTERCLAIMS AGAINST SCO "The only copyright claim SCO has asserted against IBM is primarily for IBM's continuing use of AIX and Dynix after SCO terminated IBM's UNIX licenses. See Second Amended Complaint, Count V. The Second Amended Complaint, however, does not contain a claim against IBM for copyright infringement arising out of its use, reproduction or improvement of Linux. With SCO's Second Amended Complaint being the final amendment and not containing a claim for infringement arising out of IBM's Linux Activities, the need for IBM's Tenth Counterclaim seeking such a declaratory judgment is nil."

  • IBM's Cross-Motion for Partial Summary Judgment on its Claim for Declaratory Judgment of Non-Infringement. "1. SCO refuses . . . to disclose its purported evidence that IBM's Linux activities infringe SCO's alleged copyrights, despite two court orders requiring it to do so.

    "2. IBM asked SCO (more than seven months ago) to identify the precise lines of Linux code in which it claims rights, and the precise lines of code in the UNIX software from which SCO alleges such Linux code is copied or derives. Unless SCO can match up the lines of code in Linux to which it claims rights to the precise lines of code in the UNIX software over which SCO claims copyright protection, SCO cannot show copyright infringement.

    "3. Based upon SCO's failure to come forth with evidence to demonstrate infringement, summary judgment should be entered in favor of IBM on its claim that IBM's Linux activities do not infringe SCO's alleged copyrights relating to UNIX. . . .

    "In fact, SCO seeks to dismiss or stay IBM's claim for a declaration of non-infringement on the theory that, while the future of the global economy may hang in the balance, the issue of IBM's copyright infringement should be decided not in this case involving IBM, but in the case SCO just filed against AutoZone, Inc., an auto parts company that has had little, if anything, to do with the development of Linux."

  • IBM'S MEMORANDUM IN OPPOSITION TO SCO'S MOTION TO DISMISS OR STAY COUNT TEN OF IBM'S SECOND AMENDED COUNTERCLAIMS. "Although SCO's initial complaint against IBM did not include a claim for copyright infringement, SCO publicly accused IBM and others of infringing SCO's copyrights through their use of and contributions to Linux. As is explained in IBM's Counterclaims, SCO's claims in this case and its public accusations are part and parcel of SCO's campaign to foster and maintain fear, uncertainty and doubt in the marketplace about Linux in general and IBM's products and services in particular.

    "IBM has therefore been seeking, since the very beginning of the case, a full recitation from SCO of exactly what rights (including, of course, copyrights) it claims to have to code in Linux, and how IBM's activities infringe those rights. SCO has resisted discovery at every turn, requiring IBM to file two motions to compel and leading to the entry of two court orders directing SCO to provide the discovery IBM seeks. In fact, despite the court orders, SCO still has not adequately identified the code in Linux to which it claims rights or explained how that code relates to code in the UNIX software allegedly covered by SCO's copyrights, and IBM has therefore cross-moved for summary judgment on its Tenth Counterclaim.

    "Rather than disclose the evidence necessary to support its allegations, SCO seeks to dismiss or stay IBM's counterclaim on the grounds that doing so would conserve judicial resources. In contrast to this case, however, in which both parties have essentially completed their document productions, depositions have commenced, and IBM has moved for summary judgment on the instant claim, discovery in AutoZone has not yet begun. Indeed, in lieu of answering SCO's complaint in that case, AutoZone recently moved to stay the case until the conclusion of SCO's suit against IBM and SCO's suit against Novell, Inc., The SCO Group, Inc. v. Novell, Inc., 2:04-CV-139 (D. Utah), both of which are pending before this Court. It makes no sense to dismiss or stay IBM's Tenth Counterclaim pending the outcome of a case that is far less advanced, especially where IBM has spent many months pursuing discovery relevant to its counterclaim, Magistrate Judge Wells has entered two orders compelling SCO to provide that discovery and IBM's claim is susceptible of immediate resolution under Rule 56. Dismissing or staying the counterclaim pending resolution of AutoZone would waste judicial resources and visit injustice upon IBM and all others who seek a prompt end to SCO's campaign to create fear, uncertainty and doubt about Linux. . . .

    "Moreover, IBM's Tenth Counterclaim is ripe for summary adjudication under Rule 56, given SCO's record of failure to adduce evidence supporting its assertions of copyright infringement. It would therefore be an incredible waste of judicial resources (as well as the parties' resources) to dismiss or stay IBM's Tenth Counterclaim, which can be summarily resolved (for the reasons set forth in IBM's cross-motion for summary judgment), in deference to the AutoZone case, in which discovery has not even started. Accordingly, the Court should deny SCO's motion and retain jurisdiction over IBM's Tenth Counterclaim."

Here is how the Tenth Counterclaim they are fighting about reads:

"TENTH COUNTERCLAIM

"Declaratory Judgment of Noninfringement of Copyrights

"168. IBM repeats and realleges the averments in paragraphs 1 through 167 with the same force and effect as though they were set forth fully herein.

"169. As discussed above, SCO purports to hold copyrights relating to UNIX software.

"170. SCO has sued IBM claiming that IBM has infringed, induced the infringement of, and contributed to the infringement of, SCO's purported UNIX copyrights by, among other things, continuing to 'reproduce, prepare derivative works of, and distribute copyrighted UNIX materials through its activities relating to Linux'.

"171. IBM does not believe that its activities relating to Linux, including any use, reproduction and improvement of Linux, infringe, induce the infringement of, or contribute to the infringement of valid, enforceable copyrights owned by SCO.

"172. An actual controversy exists between SCO and IBM as to the noninfringement ofSCO' s copyrights and the validity of any purported SCO copyrights concerning UNIX.

"173. IBM is entitled to a declaratory judgment pursuant to 28 U. C. 9 2201 that IBM does not infringe, induce the infringement of, or contribute to the infringement of any SCO copyright through its Linux activities, including its use, reproduction and improvement of Linux, and that some or all of SCO' s purported copyrights in UNIX are invalid and unenforceable."

There is a lot at stake here for SCO, but not much for IBM. IBM would seem to have very little to lose, no matter how this hearing plays out, whereas SCO's head is squarely on the chopping block. No wonder they want AutoZone to go first. Here is the Order.

***********************************

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

______________________________

THE SCO GROUP, INC.,

Plaintiff/Counterclaim-Defendant,

vs.

INTERNATIONAL BUSINESS MACHINES CORPORATION, INC.,

Defendant/Counterclaim-Plaintiff.

_____________________________

ORDER RE BRIEFING FOR PENDING MOTIONS

Case No. 2:03CV294DAK

Honorable Dale A. Kimball

Magistrate Judge Brooke Wells

__________________________

Based upon the stipulation of the parties, and good cause appearing,

IT IS HEREBY ORDERED as follows:

IBM may file a supplemental Memorandum in opposition to SCO's Motion to Dismiss which shall be due on June 21, 2004.

IBM's Response to SCO's Memorandum Regarding Discovery shall be due on June 21, 2004.

SCO's Opposition Memorandum to IBM's Motion for Partial Summary Judgment shall be due on July 8, 2004.

IBM's Reply Memorandum in Support of its Motion for Summary Judgment shall be due on July 26, 2004.

SCO's Reply Memorandum in Support of its Motion to Dismiss shall be due on July 26, 2004.

DATED this 14th day of June, 2004.

BY THE COURT:

_____[signature]______
Honorable Dale A. Kimball
United States District Court Judge

BY: _____[signature]_______
SNELL & WILMER L.L.P.
Alan L. Sullivan
Todd M. Shaughnessy
Amy F. Sorenson

CRAVATH, SWAINE & MOORE
Evan R. Chesler
David R. Marriott

Counsel for Defendant International Business Machines Corporation

BY: _____[signature]_______
HATCH, JAMES & DODGE, P.C.
Brent O. Hatch

BOIES, SCHILLER & FLEXNER LLP
Robert Silver
Mark J. Heise

Counsel for Plaintiff The SCO Group, Inc.


United States District Court
for the
District of Utah
June 15, 2004

CERTIFICATE OF SERVICE OF CLERK

Re: 2:03-cv-00294

True and correct copies of the attached werre either mailed, faxed or e-mailed by the clerk to the following:

Brent O. Hatch, Esq.
HATCH JAMES & DODGE
[address]

Scott E. Gant, Esq.
BOIES SCHILLER & FLEXNER
[address]

Frederick S. Frei, Esq.
ANDREWS KURTH
[address]

Evan R. Chesler, Esq.
CRAVATH, SWAINE & MOORE
[address]

Alan L. Sullivan, Esq.
Snell & Wilmer LLP
[address]

Mark J. Heise, Esq.
BOIES SCHILLER & FLEXNER
[address]

Mr. Kevin P McBride, Esq.
[address]

Robert Silver, Esq.

BOIES SCHILLER & FLEXNER
[address]

Mr. David W Scofield, Esq.
PETERS SCOFIELD PRICE
[address]


  


The Buildup to the Next SCO-IBM Motion Battle - The 10th Counterclaim | 171 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here Please
Authored by: PJ on Friday, June 18 2004 @ 09:14 AM EDT
Please put any errors in this thread, so I can find them easily. Thank you.

[ Reply to This | # ]

The Buildup to the Next SCO-IBM Motion Battle - The 10th Counterclaim
Authored by: Anonymous on Friday, June 18 2004 @ 09:24 AM EDT
Despite any new lawyers they have it seems SCO is still double talking
everything they do, Perhaps Kimball will see this and teach them a lesson?

let's all hope so.

[ Reply to This | # ]

Predictions?
Authored by: rsteinmetz70112 on Friday, June 18 2004 @ 09:33 AM EDT
SCO's motion will be denied.

IBM's motion will be denied or deferred and SCO will be directed to connect the
dots and/or more fully explain their theory.

The judge will provide guidance on derivative works, damaging SCO alternate
reality theory of derivation.

[ Reply to This | # ]

The Buildup to the Next SCO-IBM Motion Battle - The 10th Counterclaim
Authored by: MplsBrian on Friday, June 18 2004 @ 09:45 AM EDT
In light of Dr. Stupid's article yesterday, could the SCO plan be to somehow
implicate IBM in defining the overall structure of Linux? i.e. GNU/Linux, not
the Linux kernel? If, as was speculated yesterday, the SCO copyright is the
combination of all the pieces that make up Unix Sys V and/or UnixWare, could
they be trying to use that as their claim that 'millions of lines' of Linux
infringe?

Doesn't make sense to me, but I thought I'd ask...

[ Reply to This | # ]

Confused
Authored by: Anonymous on Friday, June 18 2004 @ 09:48 AM EDT
SCO says it doesn't claim IBM violated copyrights by putting code into Linux.

IBM also says that SCO's complaint does not contain that accusation.

But IBM says in their tenth counter claim that SCO did accuse it of copyright
infringement by putting code into Linux.

Which is it? Did IBM goof in the counter claim?

[ Reply to This | # ]

What Discovery Memorandum is refered to here?
Authored by: sander123 on Friday, June 18 2004 @ 09:49 AM EDT
One of the items is regarding Discovery:

June 21 - IBM's Response to SCO's Memorandum Regarding Discovery

Does anybody know to what memorandum this refers?

Sander

[ Reply to This | # ]

The Buildup to the Next SCO-IBM Motion Battle - The 10th Counterclaim
Authored by: Anonymous on Friday, June 18 2004 @ 09:54 AM EDT
Correct me if I am wrong, but I believe that this is an intelligent lynch-pin,
here. IBM is asking the judge to certify that _IBM's_ actions do not infringe,
whereas SCO misreads it to request that _Linux_ does not infringe. If the judge
agrees with IBM, that merely means that if linux infringes (big if), then IBM is
not the causitive factor. Therefore SCO pulled IBM's Unix license wrongly, and
therefore still has it. The case is over.

[ Reply to This | # ]

Basic issues in play for the hearing
Authored by: AllParadox on Friday, June 18 2004 @ 09:56 AM EDT
There are probably going to be three issues in play for this hearing, and facts
will weigh more heavily than fancy words or "compelling" arguments.

1. "Separate issues" -- the Linux related copyright issues are only
distantly related to the other IBM claims, so they should be handled first in
the AZ case to promote judicial economy. Quick list of contradictory facts:
various statements by president McBride and Mr. Stowall (alone, not compelling,
but spell out TSG intent), indirect reference to copyrights in initial TSG
pleadings (in my opinion, probably enough to get a court to allow presentation
of evidence on copyright infringement and get to a jury, contrary to IBM's
statement), finally, this whole suit is about misuse of copyrighted material
delivered to IBM under contract; the character of the misuse is exactly the same
under the Linux distributions as under the AIX distributions and probably
involves exactly the same code and exactly the same witnesses. The only
difference is that there may be _zero_ damages in the AIX/Dynix situations,
unless IBM has sold a significant number of AIX/Dynix licenses since TSG
attempted to revoke the irrevocable license.

2. There is no actual controversy over Linux copyright use or ownership at this
time, though it may arise in the future. Contradictory facts: Again, press
statements by TSG exectives will spell out the intent, and quite a bit of
substance. The SCO v. Autozone, and SCO v. Daimler-Chrysler initial pleadings
alone demonstrate that there is, in fact, an existing controversy. One key
element that must be resolved in the AZ case is whether or not IBM improperly
contributed copyrighted material to the Linux distro used by AZ. In other
words, this counterclaim 10. Nearly all the same witnesses and evidence must be
used to resolve this issue in the AZ case.

3. AZ should go first because the Linux copyright issues were raised there
first. Again, TSG executive statements in press releases will be persuasive.
The timing of the press releases and what was said will be important (i.e.
president McBride's public claims about "stealing" and "copyright
infringement" even before the IBM case was filed. All the same issues will
be revisited in resolving this issue, with this major difference: this relates
to IBM's conduct. Very disingenuous to ask for the AZ case to decide the issue
where IBM is not allowed to participate. Also, TSG made the decision to amend
pleadings and when and where to file against AutoZone. This is forum shopping,
after discovering that they do not like the Utah forum, and should be disallowed
for this reason alone.

---
All is paradox: I no longer practice law, so this is just another layman's
opinion. For a Real Legal Opinion, buy one from a licensed Attorney

[ Reply to This | # ]

Do these "schedules" mean anything?
Authored by: Anonymous on Friday, June 18 2004 @ 10:03 AM EDT
Scox always finds some excuse for a delay, and the courts always let scox get
away with it.

[ Reply to This | # ]

Courtroom Scenario?
Authored by: moogy on Friday, June 18 2004 @ 10:03 AM EDT
Court: Why are you suing AutoZone?

SCOG: Because they are using Linux and that infringes upon
our UNIX copyrights.

Court: So anyone who's using these particular versions of
Linux is infringing upon your copyrights?

SCOG: Yes, certainly.

Court: Why did you fail, after the court ordered twice,
to identify the code in Linux that you claim infringes
your copyrights?

SCOG: Your honor, that has nothing to do with this case,
We did not file copyright claims aginst IBM.

Court: IBM uses Linux don't they? You claim anyone who
uses Linux infringes your copyrights. The court ordered
you to identify the code in Linux that you claim has
infringed your copyrights. You failed to do that. Why
should this court issue a stay in belief that you will
identify your copyright infringement claims in the
AutoZone case if you failed to do so in this court?

SCOG: Because that's NOT what THIS case is about!

Court: So you defied two court orders but you say you
can produce that evidence in another court if this
court will just wait for that. You have demonstrated
contempt of court and will just have to live with your
failures to obey court orders to provide your evidence
that Linux infringes your UNIX copyrights.

---
Mike Tuxford - irc.fdfnet.net #Groklaw
First they ignore you, then they laugh at you,
then they fight you, then you win -Gandhi

[ Reply to This | # ]

Translation?
Authored by: Garp on Friday, June 18 2004 @ 10:05 AM EDT
http://www.heise.de/newsticker/meldung/48381

Gergory Blepp shows some code at University.


[ Reply to This | # ]

The Buildup to the Battle - The Hype and the Fizzle
Authored by: webster on Friday, June 18 2004 @ 02:58 PM EDT
The SCO claim is a cancer patient and we are watching it die. Now there is a
motions hearing in the works, which is like a visit to the doctor. It is just
going to confirm what we see before our eyes day by day.

The claim is terminally ill. It needs to show which lines in SCO Unix are
related to specific lines in Linux. Despite repeated "Compel"
therapy, this essential evidence is not forthcoming. It does not exist.

IBM has asked the Court to declare the patient dead. The patient opposes, but
can show no signs of life. Indeed the Court is aware of another feeble claim by
the same patient which also suffers from a tortured APA. The Doctor may
pronounce something soon since the smell is starting to overcome him.

---
webster

[ Reply to This | # ]

Who is first?
Authored by: Anonymous on Friday, June 18 2004 @ 06:04 PM EDT
If they wanted AutoZone to be first, they should have sued AutoZone first. It is
quite amazing how long could they prolong this case. If they had a valid case,
they would want to resolve it fast (since they desperately need money).

[ Reply to This | # ]

Lamlaw says it succinctly...
Authored by: Anonymous on Friday, June 18 2004 @ 07:22 PM EDT

Begin Quote
1) SCO wants to collect royalties on all of Linux without proving they own
anything
2) IBM wants to continue to contribute to Linux and support Linux using the GPL
as the license of choice
3) Red Hat just wants to continue without interference from SCO or anyone else
and not be obligated to pay royalties to anyone including SCO
4) Novell wants to develop Linux and distribute SuSE (free of royalties of
course)
5) AutoZone just wants to sell auto parts

Given that short list it is understandable that SCO only wants to sue AutoZone
for copyright violations and avoid that legal issue with all of the other
players.
End Quote

[ Reply to This | # ]

Why are they so desperate?
Authored by: mobrien_12 on Friday, June 18 2004 @ 10:08 PM EDT
SCOG seems extremely desperate to avoid this point. I wonder why?

Darl was bragging about showing his evidence in court for a long time. Why are
they getting cold feet?

Do they fear the IBM legal team? Do they fear that Kimball and Wells will not
put up with their antics and delusions?

The only thing that I can see: the AZ complaint is already so vague that (as
some have speculated here) SGOG might spin the case into use of UnixWare
ilbraries. If so, then SCOG again manages to completely avoid showing proof
that Linux infringes on their copyrights and can go on spreading FUD.

[ Reply to This | # ]

The Buildup to the Next SCO-IBM Motion Battle - The 10th Counterclaim
Authored by: DeepBlue on Saturday, June 19 2004 @ 02:52 PM EDT
I hadn't clicked just how silly SCO are going to appear beacuase IBM won their
application to have both motions held on the same day.

It is really going to higlight their twisted logic and attempt to put the legal
process in a deadlock.

---
30 days SCOX tick, tock
........

[ Reply to This | # ]

Off Topic: Whither from here?
Authored by: Superbiskit on Saturday, June 19 2004 @ 04:05 PM EDT
  • I believe we have identified several instances here, in which SCOX's legal team have said to Court#1 "We swear that A is true and we have no interest in B!" while Court#2 hears "We swear that B is true and we are not litigating A."

    It doesn't take a jury to determine that, by saying mutually incompatible things in different court filings, the lawyers lied to one judge or the other.

    When the smoke clears, have not Bois & company let themselves in for some serious sanctions?

  • It is entirely possible that SCO v.Novell can be dismissed without litigating the substansive issue of who owns the copyrights. The existance of an arguable difference of opinion about the transfer, by itself, voids the slander-of-title issue.

    However, what about the other way around? It would seem Novell has ample cause to bring a Lanham Act complaint against SCO for the same issue.

  • Rather in the same vein, would Novell not be in a good position to enter these other cases as amicus; placing before each court the assertion that SCO does not, in fact, own the rights on which all the complaints are based?

[ Reply to This | # ]

  • Lanham Act - Authored by: Anonymous on Saturday, June 19 2004 @ 09:11 PM EDT
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