|IBM's Supplemental Memo in Opposition to Motion to Dismiss, Stay CC 10 - as text
Wednesday, June 30 2004 @ 11:32 PM EDT
Here is the IBM Supplemental Memorandum in Opposition to SCO's Motion to Dismiss or Stay Count 10 of IBM's 2nd Amended Counterclaims, as text -- thanks to Steve Martin, who is unbelievably fast.
SNELL & WILMER LLP
Alan L. Sullivan (3152)
Todd M. Shaughnessy (6651)
CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler (admitted pro hac vice)
David R. Marriott (7572)
Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
THE SCO GROUP, INC.,
IN OPPOSITION TO SCO'S
MOTION TO DISMISS OR STAY
COUNT TEN OF IBM'S SECOND
Case No. 2:03CV-0294 DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells
Defendant/Counterclaim-Plaintiff International Business Machines Corporation
("IBM") respectfully submits this supplemental memorandum in further opposition to
Plaintiff/Counterclaim-Defendant The SCO Group, Inc.'s ("SCO") motion to dismiss or stay
IBM's Tenth Counterclaim.
In its June 10, 2004 letter brief to the Court, SCO suggests for the first time that
IBM's Tenth Counterclaim should be dismissed or stayed because it is a permissive rather than a
compulsory counterclaim.(1) SCO is wrong. IBM's Tenth Counterclaim "arises out of the
transaction or occurrence that is the subject" of SCO's claims against IBM and is therefore a
compulsory counterclaim. Fed. R. Civ. P. 13(a). Thus, in addition to the reasons set forth in
IBM's initial opposition papers, IBM's Tenth Counterclaim should not be dismissed or stayed
because it is compulsory.
The crux of SCO's lawsuit is that "a significant amount of UNIX protected code
and materials are currently found in Linux ... in violation of SCO's contractual rights and
copyrights." (Second Am. Compl. ¶ 79.) SCO has asserted contract claims against IBM, and a
claim for copyright infringement alleging that IBM has infringed, and has induced the
infringement of, copyrights SCO purports to hold to certain versions of UNIX software. IBM's
Tenth Counterclaim seeks a declaration that IBM's Linux activities (including IBM's
participation in the development of Linux, IBM's internal copying and use of Linux, and IBM's
provision of Linux to customers as part of its hardware and service offerings) do not infringe or
induce others to infringe those very copyrights. Thus, IBM's Tenth Counterclaim arises out of
SCO's claim that materials in Linux infringe its alleged UNIX copyrights.
In an attempt to argue that IBM's counterclaim is permissive, SCO contends that
IBM has misrepresented the scope of SCO's claims. SCO asserts (wrongly, we believe) that its
infringement claim against IBM is based only on code found in Linux that was allegedly
contributed by IBM, not on code found in Linux that was contributed by other persons or
entities.(2) Even under SCO's view of its claim, however,(3), IBM's Tenth Counterclaim is
compulsory, and, as such, should not be dismissed or stayed.
Irrespective of the specific code that SCO presently contends to be at issue in its
claims (which SCO has yet even to identify fully for IBM, more than a year after it commenced
the case), IBM's Tenth Counterclaim is logically related to and raises the same basic issues of
fact and law as SCO's claims: (1) whether SCO owns valid copyrights to certain UNIX
software, and (2) whether code in Linux infringes (i.e., is identical or substantially similar to)
any protectable expressions in the UNIX code to which SCO claims copyright ownership. If IBM
had not asserted its Tenth Counterclaim in this case, it would have been precluded from asserting
the claim in a subsequent suit. Accordingly, there can be no doubt that IBM's Tenth
Counterclaim is compulsory.(4)
For these reasons, it addition to the reasons set forth in IBM's initial
memorandum in opposition to SCO's motion, the Court should deny SCO's motion to dismiss or
stay in all respects.
IBM'S TENTH COUNTERCLAIM IS COMPULSORY
AND THUS SHOULD NOT BE DISMISSED OR STAYED.
Under Rule 13(a), a counterclaim is compulsory "if it arises out of the transaction
or occurrence that is the subject matter of the opposing party's claim". Fed. R. Civ. P 13(a).
Courts give "the terms 'transaction' and 'occurrence' contained in Rule 13(a) ... flexible and
realistic constructions in order to effect 'judicial economy', i.e., trial in one action of all related
controversies between the parties and, of course, the avoidance of multiplicity of suits."
Pipelines Local Union No. 798, Tulsa, Okla. v. Ellerd, 503 F.2d 1193, 1198 (10th Cir. 1974); see
also 6 Charles Alan Wright, Arthur Miller & Mary Kay Kane, Federal Practice and Procedure
§ 1409 (2d ed. 1987 & Supp. 2004) (hereinafter "Wright & Miller") ("The reason for compelling
the litigant to interpose compulsory counterclaims is to enable the court to settle all related
claims in one action, thereby avoiding a wasteful multiplicity of litigation on claims arising from
a single transaction or occurrence.")
Rather than articulate precise definitions for the terms "transaction" and
"occurrence", the Tenth Circuit (like other circuits) has articulated a number of standards "by
which the compulsory or permissive nature of specific counterclaims may be determined",
including the following:
"(1) Are the issues of fact and law raised by the claim and counterclaim largely the same?
Ellerd, 503 F.2d at 1198 (quoting Wright & Miller § 1410).(5) Of these four
separate tests, "[t]he
'logical relation' test is the most controlling." Id. at 1199.
(2) Would res judicata bar a subsequent suit on defendants' claim absent the compulsory
(3) Will substantially the same evidence support or refute plaintiffs' claim as well as
defendants' counterclaims? and
(4) Is there any logical relation between the claim and the counterclaim?"
Under any of these four tests, IBM's Tenth Counterclaim is compulsory and not
permissive. Most critically, IBM's counterclaim for a declaration of non-infringement of SCO's
copyrights is logically related to SCO's claim for copyright infringement. (See Section I.A
below.) IBM's counterclaim also raises substantially similar issues of fact and law, and depends
on much the same evidence, as SCO's claim for copyright infringement, and res judicata would
bar IBM from bringing a subsequent claim for a declaration of non-infringement of copyright
related to IBM's Linux activities if not brought in this action. (See Section I.B below.) The
contrary arguments on which SCO relies are untenable. (See Section I.C below.)
A. IBM's Tenth Counterclaim Is Logically Related to SCO's Claims.
Under any reading of SCO's allegations, there is a "logical relation" between
SCO's claims against IBM and IBM's Tenth Counterclaim.
As set forth in IBM's cross-motion for summary judgment on its Tenth
Counterclaim, SCO has challenged all of IBM's Linux activities (including its internal copying
and use of Linux), not just IBM's specific contributions of source code to Linux as SCO now
contends.(6) As a result, IBM's Tenth Counterclaim is simply the mirror image of SCO's own
claims against IBM and, therefore, is plainly logically related to SCO's claims.(7) Indeed, SCO
has already conceded as much in its representations to the U.S. District Court for the District of
Delaware in a case brought in August 2003 by a commercial distributor of Linux, Red Hat, Inc.,
Red Hat, Inc. v. The SCO Group, Inc., C.A. No. 03-772 (D. Del.).
In its case against SCO, Red Hat — like IBM here — seeks a declaration of non-
infringement of SCO's purported copyrights (based, of course, on Red Hat's own Linux
activities). In arguing that the Red Hat case should be dismissed, SCO stated unequivocally in
September 2003 that "[t]he infringement ... issues Red Hat seeks to adjudicate in this case are
currently before U.S. District Judge Dale A. Kimball in the SCO v. IBM Case pending in Utah
Federal District Court". (Sorenson Decl. Ex. 1 at 2 ¶ 2.) SCO further suggested that "[t]he
previously filed SCO v. IBM Case addresses most, if not all, of the issues of copyright
infringement and appropriation" and that if "these issues are decided against SCO in that
case, then Red Hat's lawsuit becomes unnecessary." (Id. at 15.)(8) More recently, in May 2004,
SCO argued in opposition to Red Hat's attempt to lift the stay the Delaware Court had imposed
sua sponte "pending a resolution of the Utah litigation between SCO and IBM" (Sorenson Decl.
Ex. 2 ¶ 2) that "the IBM case will address a central issue in this [Red Hat] case: whether Linux
contains misappropriated UNIX code". (Sorenson Decl. Ex. 3 at 3.)(9)
Entirely apart from the parties' disagreement concerning the scope of SCO's
copyright claim, however, IBM's Tenth Counterclaim is compulsory. That is because it is
compulsory even under SCO's present articulation of its claims. SCO agrees that it alleges IBM
has infringed a number of SCO's purported UNIX copyrights based, at least in part, on IBM's
contributions of allegedly infringing code to Linux. As SCO itself describes its claim in its letter
brief, "IBM's own contributions to Linux are at the center of the lawsuit SCO brought". As
stated, IBM's Tenth Counterclaim seeks a declaration that IBM does not infringe the very same
copyrights by its Linux activities, including contributing to the development of Linux, copying
and using Linux internally and providing Linux to customers as part of hardware and service
offerings. Thus, even as SCO now views its copyright claim, IBM's Tenth Counterclaim is the
flip side of at least a portion of SCO's claim for copyright infringement. Accordingly, IBM's
Tenth Counterclaim logically relates to SCO's copyright infringement claim and is compulsory.
It is axiomatic that counterclaims relating to the same copyrights that are the
subject of a plaintiff's claims are logically related to the plaintiff's claims and are therefore
compulsory. See Relational Design & Tech., Inc. v. Data Team Corp., Civ. A. No. 91-2452,
1992 WL 97799, at *3 (D. Kan. Apr. 16, 1992) (holding that counterclaim for declaration of
non-infringement of copyright, filed in response to plaintiff's copyright infringement claim,
"constitutes a compulsory counterclaim pursuant to Federal Rule of Civil Procedure 13(a)")
(Exhibit A); Burns v. Rockwood Distrib. Co., 481 F. Supp. 841, 848 (N.D. Ill. 1979) (holding
that counterclaim for declaration of non-infringement of copyright, filed in response to plaintiff's
copyright infringement claim, was compulsory); Wright & Miller § 1410 ("Any counterclaim
involving the same patent as is involved in the original action usually is considered to arise from
the same transaction as the main claim ... Actions involving copyright infringement follow the
same basic pattern as patent infringement actions.").(10)
This is true not only when the defendant seeks a declaration of non-infringement
with respect to the copyrights at issue, as in this case, see Relational Design, 1992 WL 97799, at
*3, but even when the defendant asserts an altogether different claim that merely relates in some
way to the copyrights at issue. See, e.g., Grupke v. Linda Lori Sportswear, Inc., 174 F.R.D. 15,
17 (E.D.N.Y. 1997) (holding that common law unfair competition and tortious interference
counterclaims, filed in response to plaintiff's copyright infringement claim, were compulsory);
Grumman Sys. Support Corp. v. Data General Corp., 125 F.R.D. 160, 162 (N.D. Cal. 1988)
(holding that antitrust counterclaims, filed in response to plaintiff's copyright infringement
claims, were compulsory); Four Seasons Solar Products Corp. v. Sun Sys. Prefabricated Solar
Greenhouses, Inc., 101 F.R.D. 292, 295 (E.D.N.Y. 1983) (holding that antitrust, anti-competitive
practices and tortious interference counterclaims, filed in response to plaintiff's copyright
infringement claim, were compulsory.(11)
In this case, where IBM seeks a declaration of non-infringement with respect to
the very copyrights upon which SCO has sued IBM — and indeed, with respect to the very same
allegedly infringing product, Linux — there can be no question that IBM's counterclaim is
"logically related" to SCO's claim and is therefore compulsory. This is true even if SCO intends
now to limit its own copyright infringement claim against IBM to "IBM's own contributions to
Linux", as SCO suggests in its letter brief. As stated, the touchstone of whether a counterclaim
is compulsory is if its insertion into the case would promote judicial economy. Judicial economy
is best served here by IBM seeking a declaration of non-infringement as to all the allegedly
infringing code in Linux as part of the instant case, rather than as part of a separate, stand-alone
action against SCO where many of the same issues (such as the ownership and scope of the
copyrights at issue) would be raised.
B. IBM's Tenth Counterclaim Raises Largely the Same Issues as SCO's Claims,
Requires Substantially the Same Evidence as SCO's Claims, and Would Be
Barred by the Doctrine of Res Judicata if Brought Later.
Each of the other considerations suggested by the Tenth Circuit also supports the
conclusion that IBM's Tenth Counterclaim is compulsory. IBM's Tenth Counterclaim raises
substantially the same issues of fact and law as SCO's claims, requires the presentation of much
the same evidence as SCO's claims, and would be barred by res judicata if IBM attempted to
bring the claim later.
The issues of fact and law raised by SCO's claims and IBM's Tenth
Counterclaim, and the evidence necessary for SCO's claims and IBM's counterclaim, are largely
the same. Both SCO's claim for copyright infringement and IBM's Tenth Counterclaim raise
(and require the presentation of evidence concerning), among other things, issues relating to the
authorship, protectability, and current ownership of the UNIX code to which SCO allegedly
holds copyrights. In addition, SCO's claim for copyright infringement and IBM's Tenth
Counterclaim require analysis and comparison of the UNIX source code allegedly covered by
SCO's copyrights and Linux source code to determine whether any similarity exists between the
protectable elements of the UNIX code and the code contained in Linux.
Further, just as a subsequent claim brought by SCO against IBM for copyright
infringement concerning Linux code would be barred by res judicata, a subsequent suit by IBM
for a declaration of non-infringement concerning Linux code would be barred by res judicata.
As the Tenth Circuit articulates it, "[u]nder res judicata, or claim preclusion, a final judgment on
the merits of an action precludes the parties or their privies from relitigating issues that were or
could have been raised in the prior action." Wilkes v. Wyoming Dep't of Employment Div. of
Labor Standards, 314 F.3d 501, 503-04 (10th Cir. 2003) (emphasis in original) (quoting Satsky
v. Paramount Comm., Inc., 7 F.3d 1464, 1467-68 (10th Cir. 1993)); see also Federated Dep't
Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981) (noting that res judicata "precludes the parties or
their privies from relitigating issues that were or could have been raised in that
As SCO has sued IBM in this case for copyright infringement concerning certain
code in Linux, it is precluded by the doctrine of res judicata from bringing subsequent claims
against IBM for copyright infringement based on different code in Linux, since such claims
could (and therefore should) be raised in this case. When a plaintiff possesses evidence, or could
have discovered evidence, supporting a claim it has asserted against a defendant (e.g., for
copyright infringement), it is well-settled that the doctrine of res judicata bars that plaintiff from
instituting a subsequent action asserting the same claim based on such evidence. See, e.g., Well-Made
Toy Mfg. Corp. v. Lotus Onda Indus. Co., No. 02 Civ. 1151, 2003 WL 42001, at *10-*11
(S.D.N.Y. Jan. 6, 2003) (holding that res judicata barred plaintiff's second action for copyright
infringement because it was based on evidence that plaintiff could have discovered before if it
had exercised due diligence) (Exhibit D).(13)
Here, SCO has (and has had since well before it commenced its suit against IBM)
all the information it needs to determine whether there is any code in Linux that infringes any of
SCO's purported copyrights — the source code for Linux, which is publicly available on the
Internet and is contained in many of SCO's own software products, and the UNIX source code
that SCO claims to have been copyrighted. As a result, if SCO's current claim of copyright
infringement against IBM relating to certain code in Linux is decided on its merits, SCO is
barred from bringing a subsequent claim of copyright infringement against IBM for any other
allegedly infringing code in Linux of which it is presently aware or could be aware with the
exercise of due diligence.(14)
As any subsequent copyright infringement claim by SCO against IBM relating to
Linux code would be barred by res judicata, it necessarily follows that any subsequent claim by
IBM for a declaration of non-infringement relating to Linux code would also be barred by res
judicata. Such a claim by IBM would constitute merely the mirror image of SCO's claim. Any
claim for a declaration of non-infringement relating to Linux could be, and thus should be, raised
in the instant action, and not in subsequent litigations.
C. SCO's Argument That IBM's Tenth Counterclaim Is Permissive Is Mistaken.
SCO argues that IBM's Tenth Counterclaim is not compulsory because it involves
"wholly separate and new issues" related to "the conduct of third parties" and not to "conduct
unique to IBM". The argument has no merit. IBM's Tenth Counterclaim seeks a declaration of
non-infringement only with respect to IBM's own conduct relating to Linux. As stated in IBM's
counterclaims, IBM (like many others), has contributed to the development of Linux and
regularly (as part of its business) makes copies of Linux. IBM simply seeks a declaration that
IBM's contribution to, and copying of, Linux does not infringe the UNIX copyrights SCO claims
Either there is code in Linux that infringes SCO's purported UNIX copyrights
(because it is identical or substantially similar to protected UNIX code) as SCO contends, or, as
IBM believes, there is not. Whether any allegedly infringing code in Linux was contributed by
parties other than IBM, and whether those parties might as a result also be liable to SCO for
copyright infringement, breach of contract or some other claim, is of little moment to IBM's
Tenth Counterclaim. SCO's lamentations about the "sweeping breadth" of IBM's counterclaim
are therefore unfounded.(15)
Contrary to SCO's suggestion, IBM's Tenth Counterclaim does not require
adjudication of the conduct of countless third parties or contemplate extensive additional
litigation. Whether IBM's Linux activities infringe SCO's purported UNIX copyrights involves
an assessment of IBM's conduct and can — indeed must — be resolved in a single litigation.
Under SCO's theory, by contrast, each segment of infringing code in Linux would be addressed
in a series of "mini-litigations" against each individual contributor of code to Linux, such that no
single alleged infringer would ever be entitled to a declaration of non-infringement as to all the
code in Linux.(16) That makes no sense. As SCO would have it, IBM (and many others
throughout the world) could be subjected to a virtually endless torrent of litigation brought by
SCO, because SCO could file new claims each time SCO purports to find additional infringing
code that has been present in Linux all along. The efficiencies associated with addressing IBM's
Tenth Counterclaim in this lawsuit, and resolving once and for all whether IBM's Linux
activities infringe SCO's alleged copyrights — in contrast to the inefficiency of SCO's proposed
course of action — supports the conclusion that IBM's Tenth Counterclaim is compulsory.
IBM's Tenth Counterclaim is a compulsory counterclaim. For this reason and the
other reasons set forth in IBM's Memorandum in Opposition to SCO's Motion to Dismiss or
Stay, SCO's motion to dismiss or stay should be denied.
DATED this 28th day of June, 2004.
SNELL & WILMER L.L.P.
Alan L. Sullivan
Todd M. Shaughnessy
CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler
David R. Marriott
Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation
INTERNATIONAL BUSINESS MACHINES CORPORATION
Donald J. Rosenberg
Alec S. Berman
Attorneys for Defendant/Counterclaim-Plaintiff International
Business Machines Corporation
SCO did not raise this argument in its opening memorandum. In response to a question posed by the
Court at the June 8, 2004 hearing concerning scheduling issues, counsel for IBM mistakenly stated that its
Tenth Counterclaim was not compulsory. The following day, on June 9, 2004, IBM sent a letter to the
Court correcting its statement and stating IBM's position that its Tenth Counterclaim is compulsory.
SCO submitted its letter brief the next day.
SCO states in its letter brief that its lawsuit only asserts claims "based on IBM's own conduct" and that
IBM's counterclaim would expand the case to include the conduct of "entities other than IBM". That is
not true. IBM's Tenth Counterclaim seeks only a declaration that IBM's own conduct concerning Linux
does not infringe any of SCO's alleged UNIX copyrights.
As discussed below (at 6-7), it is SCO (not IBM) that misstates "what SCO's case is (and is not) about".
(SCO's Letter Br. at 1.) After all, SCO represented to the Court in Red Hat, Inc. v. The SCO Group, Inc.
that "[t]he previously filed SCO v. IBM Case addresses most, if not all, of the issues of copyright
infringement" raised by Red Hat's complaint seeking a declaration that its copying and commercial
distribution of Linux does not infringe SCO's copyrights. (Declaration of Amy F. Sorenson, dated May
18, 2004 ("Sorenson Decl."), Ex. 1 at 15.)
Based on its contention (which is, we believe, mistaken) that SCO is only presently charging IBM with
copyright infringement based on certain segments of code in Linux, SCO argues (again in error, we
believe) that it should be allowed to later charge IBM with infringement based on other segments of code
in Linux, after SCO has litigated against the individual contributors of such code. Thus, SCO reasons,
IBM should similarly be allowed to bring a succession of claims for declarations of non-infringement
based on different segments of Linux code and need not assert a claim relating to all of IBM's Linux
activities in this suit. Such a piecemeal approach to litigation makes no sense and is contrary to the
objectives of Rule 13(a) and the doctrine of res judicata, which are intended to promote judicial economy
and the avoidance of multiplicity of suits.
According to Wright and Miller, "[i]n the case of each of these tests, an affirmative answer to the
question posed means that the counterclaim is compulsory". Wright & Miller § 1410. "Further, over the
years it has become clear that the fourth test, logical relationship, is the preferred approach for
determining what claims arise out of the same transaction or occurrence." Id.
In its complaint, SCO alleges, among other things, that IBM's misconduct includes "incorporating (and
inducing, encouraging, and enabling others to incorporate) SCO's proprietary software into Linux open
source software offerings". (Second Am. Compl. ¶ 6 (emphasis added).) SCO also alleges that IBM
"knowingly induced, encouraged, and enabled others to distribute proprietary information [in Linux] in an
attempt to conceal its own legal liability for such distributions [of Linux]". (Id. ¶ 109 (SCO's first)
(emphasis added).) SCO's pleading, as IBM reads it, does not limit SCO's charges to only certain Linux
SCO also asserts that IBM infringed SCO's alleged UNIX copyrights by continuing to reproduce and
distribute its AIX and Dynix programs after SCO purported to terminate IBM's licenses to distribute such
programs. IBM's Ninth Counterclaim, which is also compulsory and which SCO has not moved to
dismiss or stay, seeks a declaration of non-infringement of SCO's copyrights with respect to IBM's
reproduction and distribution of AIX and Dynix.
In fact, when SCO made these representations to the Delaware Court, SCO had not even brought a
copyright infringement claim against IBM. SCO argued to the Red Hat court that its contract claims
against IBM by implication raised issues of copyright infringement that would have to be resolved in this
Apparently recognizing that its position in the Red Hat case is inconsistent with its new view of its
copyright claim, SCO recently submitted a letter to the Red Hat court attempting, it seems, to explain
away the inconsistency. There is no explanation except that SCO seeks now to redefine its claim to
support its present motion.
Cf. Commerce Bancorp, Inc. v. BankAtlantic, No. Civ. 02-4774, 2004 WL 6 612525, at *2 (D.N.J. Jan.
12, 2004) (holding that counterclaim for declaration of non-infringement of trademark, filed in response
to plaintiff's trademark infringement claim, was compulsory) (Exhibit B); J. Lyons & Co. Ltd. v.
Republic of Tea, Inc., 892 F. Supp. 486, 490 (S.D.N.Y. 1995) (holding that counterclaim for trademark
infringement, filed in response to claim for declaration of non-infringement of trademark, was
compulsory); Akzona, Inc. v. E. I. DuPont de Nemours & Co., 662 F. Supp. 603, 618 (D. Del. 1987) ("In
the instant case, both the declaratory judgment action [for non-infringement] and the counterclaim [for
patent infringement] arise out of the same patents and both seek to define the scope and determine the
validity of those patents. Such a situation is clearly within the mandate of Rule 13(a)."); Phillips
Petroleum Co. v. U.S. Steel Corp., 566 F. Supp. 1093, 1097 (D. Del. 1983) (holding that counterclaim for
declaration of non-infringement of patent, filed in response to plaintiff's patent infringement claim, was
See also Static Control Components, Inc. v. Dallas Semiconductor Corp., No. 1:02CV1057, 2003 WL
21666582, at *8 (M.D.N.C. July 16, 2003) (Report and Recommendation) ("Courts in other jurisdictions
have routinely found copyright misuse and antitrust claims to be compulsory counterclaims to previously
filed copyright infringement claims.") (Exhibit C).
As with Rule 13(a), a central principle behind the doctrine of res judicata is judicial economy. See,
e.g., Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591, 597 (1948) ("The general rule of res
judicata applies to repetitious suits involving the same cause of action. It rests upon considerations of
economy of judicial time and public policy favoring the establishment of certainty in legal relations.")
See also L-Tec Electronics Corp. v. Cougar Elec. Org., 198 F.3d 85, 88 (2d Cir. 1999) (holding that res
judicata bars second action based on additional evidence when plaintiff "could have ascertained this
information through due diligence, including pre-filing investigation or discovery upon the original
complaint"); Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 596 (7th Cir. 1986) ("When a litigant
files a lawsuit, the courts have a right to presume that he has done his legal and factual homework. It
would undermine the basic policies protected by the doctrine of res judicata to permit the [plaintiffs] to
once again avail themselves of judicial time and energy while another litigant, who has yet to be heard
even once, waits in line behind them.").
Indeed, in the letter it recently submitted to the Court in the Red Hat case, SCO claims as a result of its
on-going investigations to have "discovered significant instances of line-for-line and 'substantially
similar' copying of code from Unix System V into Linux". However, despite IBM's discovery requests
asking SCO to provide such information, and two Court orders directing SCO to provide it, SCO still has
not fully identified for IBM the "line-for-line" and "substantially similar" copying it claims to have
Moreover, the "breadth" of IBM's Tenth Counterclaim is of SCO's own making. It is SCO, not IBM,
that has stated publicly that there is a substantial amount of infringing code in Linux. IBM merely seeks a
declaration of non-infringement.
The fallacy of SCO's new argument is further demonstrated by SCO's own lawsuit against AutoZone,
Inc., which it recently filed in the United States District Court for the District of Nevada, The SCO Group,
Inc. v. AutoZone, Inc., Civil No. CVS-04-0237 (D. Nev.). In that case, SCO has sued AutoZone for
copyright infringement based on AutoZone's use of Linux in its business. SCO has not sought to join any
of the thousands of contributors to Linux or suggested that multiple "mini-litigations" will be necessary
before SCO could litigate its claims against AutoZone.
|Authored by: PJ on Thursday, July 01 2004 @ 12:00 AM EDT|
|Pls. put all my mistakes here in this thread. Thanks.|
[ Reply to This | # ]
|Authored by: Anonymous on Thursday, July 01 2004 @ 12:34 AM EDT|
|of interest to Groklaw readers. This makes
it easy to find them. Please try to
HTML Formatted mode to make it easy to click
on a link and follow it
directly to the article
This is also the place to start
unrelated to the topic(s) of the article.
Please choose new and
appropriate titles for
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|Authored by: hhind on Thursday, July 01 2004 @ 01:24 AM EDT|
|And more importantly, can we get a copy of the correspondence with the judge? |
Is it part of the court record? The more I watch, the more I notice that there
are many things going on behind the scenes. I am just thankful to PJ for
providing a forum to see all that we do.
[ Reply to This | # ]
|Authored by: Anonymous on Thursday, July 01 2004 @ 02:25 AM EDT|
|What a kick-ass reply! That should fairly box SCO in to providing the proof of|
I have a friend who can write legal briefs and he isn't a lawyer. I've hung
around an attorney and read his briefs.
Reading these documents are instructive into how briefs are structured and how
each part performs a certain function.
Fun, fun, fun!
[ Reply to This | # ]
|Authored by: Anonymous on Thursday, July 01 2004 @ 06:22 AM EDT|
|1st post - pls be gentle =;¬)
I haven't seen this mentioned anywhere
else if it has then apologies.
It seems to me that there is another
reason why SCO would definitely not want this 10th counterclaim to be
allowed. All the way through IBM are insistent that the counterclaim is only
about their behaviour w.r.t. copyright. If the judge accepts this
argument, then surely the stay on the RH case would no longer be valid. My
understanding is that the RH stay was put in place as the IBM case was supposed
to sort out the issues in the RH case; however the RH case is not specifically
about IBMs copyright behaviour but a much broader declaration of non
Therefore if the counterclaim is allowed, wouldn't it
make sense for RH to ask for their stay to be lifted as it would appear that the
IBM case would no longer settle the broader issues at stake in RH
Am I reading this correctly?
[ Reply to This | # ]
|Authored by: nola on Thursday, July 01 2004 @ 08:10 AM EDT|
|What a wonderful quote ...|
"When a litigant files a lawsuit, the courts have a right to presume that
has done his legal and factual homework."
[ Reply to This | # ]
|Authored by: Anonymous on Thursday, July 01 2004 @ 09:36 AM EDT|
|With only a modicum of speculation, I think we can make reasonable inferences|
about SCO's (or Darl's) original plan for monetizing Linux.
My opinion has always been that SCO **NEVER** wanted a legal resolution of all
their claims of infringement by Linux.
The problem for SCO with a legal resolution (apart from the fact that SCO
apparently has no evidence so it's unlikely to be in their favour), is even if
SCO were to prevail, sure they would get some damages (although rather doubtful
they would get billions), but that would be the end of it and of SCO. A legal
resolution would mean infringing code is identified, is ripped out of Linux,
nobody pays the SCOsource license, and everybody hates SCO so nobody buys
Of course it would be dangerous (suicidal?) for SCO to say to the courts that
they do not want the cases that they themselves brought to be resolved (although
SCO seems to have come at least dangerous close in their June 10th letter brief
to the IBM court).
SCO's theory has always been that the IBM case is only about IBM's contribution.
And that other cases against other parties would be brought as new infringing
code was discovered (or should I say invented?)
SCO's theory has always been that IBM (or anybody else) can never be completely
cleared. Because, according to SCO, the other contributions can only be
resolved by litigation between SCO and the particular individual contributor.
Thus SCO have put together this theory on two levels:
1. They have resisted revealing all the allegedly infringing code to IBM in the
IBM case during discovery. (IBM interrogatories 11 and 12). Kevin McBride's
comments on December 5th that this is not properly part of the case are quite
2. They still resist as evidenced by the June 10th SCO letter brief to which IBM
If you follow the line of logic here:
- SCO sues IBM for contributing item 1. SCO hopes that this won't get resolved.
However if it does get resolved they go to:
- SCO sues party X for contributing item 2. SCO hopes that this won't get
resolved. However if it does get resolved they go to:
- SCO sues party Y for contributing item 3. SCO hopes that this won't get
resolved. However if it does get resolved they go to: (etc)
Eventually SCO hopes to hit on a defendant who muffs the defense and loses, or
better yet who settles. In the example above, suppose Y settles. Item 3 is
never revealed by SCO or Y, and SCO claims IBM (or parties X and Z) can not
litigate about item 3, as the correct parties for litigating about item 3 are
only SCO and party Y.
SCO's plan has been or will be destroyed by a number of factors, including:
1. IBM and RH have brought declarative judgement actions involving *ALL* their
2. IBM's discovery requests relating to IBM's counterclaims (initially alleging
that SCO misrepresented its rights in Linux)
3. SCO's representations to the RH court that the IBM case would resolve all the
4. SCO bring a case against AZ prior to getting any settlement or whatever about
any particular contribution.
[ Reply to This | # ]
|Authored by: Observer on Thursday, July 01 2004 @ 10:02 AM EDT|
|I wonder how long it will be before IBM just decides to start sending along text
copies of their filings directly to Groklaw immediately after filing them with
the court, in order to save us the trouble of transcribing them. I don't know
if these are considered "public" documents until the court officially releases
them (I suppose they could keep some of them secret if they thought it
necessary), but I'm sure they are aware of the fact that, as soon as they come
available, we've got them on-line in a matter of hours. Unlike SCO, IBM has
every interest in keeping this matter out in the open.
Of course, if they
did that, it might come across as "sponsoring" Groklaw, or at least cooperating.
We want to avoid even the appearance that Groklaw is another "front" for
[ Reply to This | # ]
|Authored by: Anonymous on Thursday, July 01 2004 @ 10:17 AM EDT|
|Footnote 4. "... after SCO has litigated against the individual contributors of|
Can anyone think of a strategic reason why SCOG hasn't sued
individual kernel contributors already? Surely they'd be able to extort a
confession of "illegal contribution" from some hapless individual who couldn't
afford litigation against SCOG. That could be a lot better FUD tool than being
beaten to pulp by multibillion dollar companies...
[ Reply to This | # ]
|Authored by: rsteinmetz70112 on Thursday, July 01 2004 @ 11:11 AM EDT|
|IBM refers to a letter SCOG sent to the court in the RedHat case. |
Is it available somewhere? Did I miss it here?
Obviously IBM has it.
I imagine it would be pretty entertaining.
[ Reply to This | # ]
|Authored by: Anonymous on Thursday, July 01 2004 @ 11:26 AM EDT|
|IBM has given SCO plenty of rope to hang themselves with. By trying to morph the|
case into a copyright case regarding IBM distributing AIX/Dynix, SCO has been
twisting it's language with the court to implicate IBM in copyright violations
stemming from Linux contributions. They thus make the breadth of the
By screwing aroung in court with regards to complying with the court's orders to
produce code, they've give IBM a path to immediately argue for the summary
judgement on the basis that what SCO produced in discovery does not show
infringement. So rather than waiting to get to trial, IBM now gets to accelerate
this issue to the here-and-now and not wait for September of next year.
The damage to SCO's case(s) would be huge if this is granted. Although it likely
doesn't affect Autozone or DC (it is AZ that SCO claims is infringing and this
court has no subject matter jurisdiction to rule on that), RedHat would then get
a kick in the butt, because RedHat can immediately claim that the issue has been
resolved in SCO v IBM and the case should move forward, thus forcing SCO to
seperate the two issues and fight RedHat separately (no more waiting for
It also means SCO will be forced to appeal the decision while moving forward
with this case simultaneously, thus expending more money on legal resources. If
they don't, RedHat gets to whomp on them in court at the same time.
Anyway you slice it, this probably increases SCO's legal budget bny a few
million per quarter, meaning they have less life left in them to last to the end
of litigation with IBM (or hell even to trial).
[ Reply to This | # ]
|Authored by: jdg on Thursday, July 01 2004 @ 12:54 PM EDT|
|If the judge rules that the Tenth Counterclaim is Compulsory, it seems to me|
[IANAL] that the copyright issue is effectively raised at the outset in this
case. Thus, this case takes priority (over AZO) under the "First Filed
Rate Doctrine". Is this inference correct?
SCO is trying to appropriate the "commons"; don't let them [IANAL]
[ Reply to This | # ]
|Authored by: Anonymous on Thursday, July 01 2004 @ 12:54 PM EDT|
|I think, with only a degree of speculation, we know what SCO will argue on the|
dismissal/stay motion (in their answer brief), and on IBM's Partial Summary
Judgement motion (in SCO's reply brief)
To anybody who sees red with this type of post (posts attempting to see into
SCO's mind), please bite your tongue, and remember I am arguing what I think
that SCO will argue. I don't actually agree with their arguments.
Argument #6 is their new argument.
SCO predicted argument for dismissal/stay of CC10:
1. It should be dismissed/stayed in favor of AutoZone based on SCO's
interpretation of first filed rule (they already argued this in their initial
2. It should be dismissed/stayed in favor of AutoZone for judicial economy and
to avoid IBM duplicating the AZ litigation (they already argued this in their
3. It should be dismissed/stayed because IBM's seeks to inject the conduct of
other non-IBM parties into the case and/or expand the case (they already argued
this in various places, including apparently in their letter brief of June
SCO's predicted argument in response to summary judgement motion:
4. CC10 + PSJ should be denied in favor of dismissal/stay of the claim for
reasons already stated
5. If CC10+PSJ is not dismissed/stayed, then SCO needs discovery of all the
interim versions of AIX and Dynix under rule 56(f). (they already argued this
in their discovery memo, but I think they know this is a loser as far as CC10 is
concerned because of IBM's repeated citing of Gemisys)
SCO's NEW ARGUMENT ==> 6.. If CC10+PSJ is not dismissed/stayed, then SCO
needs further discovery under rule 56f and/or to join other parties. This is
because IBM seeks to adjucate claims involving non-IBM contributions to Linux,
but SCO have only been doing discovery primarily related to IBM's own
IMHO, these are what SCO will argue. 6 is a new argument. All are, of course,
easily refuted, especially #6, because of SCO's prior certifications relating to
the 2 discovery orders. Nevertheless, this appears to be all they've got - or at
least all they've shown so far.
[ Reply to This | # ]
|Authored by: Anonymous on Thursday, July 01 2004 @ 02:28 PM EDT|
|SCO says that the 10th counterclaim should be dismissed or stayed because IBM is|
broadening the scope to include the actions of other entities. Yet it is SCO
who has already claimed the IBM "knowingly induced, encouraged, and enabled
others to distribute proprietary information".
Since there is no way to resolve that claim without first proving that 1)others
distributed SCO IP, and 2) IBM somehow induced them to do so, the claim of
necessity involves the actions of third parties. So SCO's logic here falls flat
on its face. (And incidentally, IBM's reply that they only seek to address their
own actions stumbles on that a bit. While true in the context of its actual
wording, dismissing SCO's claim would also severely weaken SCO's claims against
I think that wording by SCO is there specifically so SCO can use it for further
delay, i.e. "IBM induced AZ to (insert BS here) but we need to complete
discovery in the AZ case to prove it, so please put this case on hold until
then." And then "AZ was using Redhat, who was induced by IBM, so we
need discovery in the Redhat case, but that has been stayed".
And incidentally, has anyone else noticed the number of times the term
"induced" appears in SCO's complaint and then in subsequent motions
and memorandums? Any connection to a certain piece of slimey legislation by the
father of a certain SCO attorney that also uses that term conspicuously?
[ Reply to This | # ]
|Authored by: codswallop on Thursday, July 01 2004 @ 04:53 PM EDT|
|What's the chance of Judge K. ruling that IBM's activities don't infringe,|
because SCO haven't managed to make any case for it. So IBM's donations are
clean, and IBM's use of the rest is clean (forced nonexclusive license to the
extent there may be something to license, or some such), but he's not ready to
give the whole world a pass. This kills SCO's only plausible argument, and
partly unblocks Redhat.
If IBM want the rest, they would have to find a way to argue the APA directly.
They probably can, as long as there's a dispute between SCO and Novell. SCO
would move to stay pending SCO v. Novell, but they couldn't very well move to
stay Novell pending IBM. It's the same judge!
[ Reply to This | # ]