"1. SCO Group, Inc. v. International Business Machines Corp.

"In March 2003, SCO filed a Complaint against IBM asserting breach of contract and various state law claims arising out of IBM's alleged misappropriation of SCO's purported confidential information for use in the Linux operating system. Although SCO did not assert copyright infringement against IBM at that time, it subsequently amended its Complaint to add such a claim. On March 29, 2004, IBM amended its counterclaims against SCO seeking, inter alia, a declaratory judgment that IBM is not infringing any of SCO's copyrights through its use, reproduction and improvement of Linux and that SCO's asserted copyrights are invalid and unenforceable.

"On April 23, 2004, SCO filed a Motion to Dismiss or Stay IBM's counterclaim. In its June 17 letter to this Court, SCO claimed that it 'continues to believe that IBM's violations of its license obligations and U.S. copyright law through its improper contributions of SCO's intellectual property to Linux -- the issues that SCO's complaint in Utah presents -- are of paramount importance and will continue to dominate.' (6/17/04 Letter at 2). To the Court in Utah however, SCO asserted in its Motion that the 'primary' claims asserted against IBM are its 'breach of contract and other direct claims.' (Mem. in Support of Mot. to Dismiss at 2.) SCO further asserted that '[t]he 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 . . . . The Second Amended Complaint does not contain a claim against IBM for copyright infringement arising out of its use, reproduction or improvement of Linux.' (Id. at 3 (emphasis added).)

"IBM opposed SCO's Motion to Dismiss, and has filed a Cross-Motion for Partial Summary Judgment on Its Claim for Declaratory Judgment of Non-Infringement. The primary basis for IBM's motion is that, after more than a year of litigation, two orders to compel, and affidavits from SCO certifying its compliance with discovery, SCO has yet to identify the necessary link between the parts of Linux that SCO claims infringe its copyrights and the specific UNIX code over which it claims copyright protection. Oral argument on IBM's motion is scheduled for August 4, 2004."

SCO tells a very different story. It doesn't even mention their copyright switcheroo.

To hear them tell it, what's been happening is IBM has been "steadfastly resisting" providing the "complete production" of AIX and Dynix that SCO is seeking. This is likely so she won't decide to open up the Red Hat case because of all the delay.

What they also don't tell the judge is that getting every version of AIX and Dynix since the founding of the world was not what the judge granted SCO in her order. IBM was told to provide what they had offered at the hearing to provide. Now SCO is asking for more. SCO on May 28 filed a request for more code. IBM hasn't yet been ordered to turn over that additional code. To read SCO's letter, you'd get a very different impression, that IBM is resisting compliance with a judge's order. Here are the documents SCO's letter refers to so you can verify:

• Judge Kimball's June 10th Order -- as [PDF]
• IBM's Second Amended Counterclaims -- as [PDF]
• IBM's Cross Motion for Partial Summary Judgment -- as [PDF]
• SCO's Corrected Motion to Dismiss or Stay Count 10 of IBM's 2nd Amended Counterclaim -- as [PDF]
• SCO's Memorandum Re Discovery -- as [PDF]

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

Morris, Nichols, Arsht & Tunnell
[letterhead] July 6, 2004

Jack B. Blumenfeld
[address, phone, fax, email]

BY HAND

The Honorable Sue L. Robinson
United States District Court
[address]

Re: Red Hat, Inc. v. The SCO Group, Inc.: C.A. No. 03-772-SLR

Dear Chief Judge Robinson:

SCO, as directed by this Court's April 6, 2004 Order, provides this summary of the status of the SCO v. IBM case pending before The Honorable Dale A. Kimball in the United States District Court for the District of Utah.

On June 10, 2004, Judge Kimball entered an Order granting SCO's Motion to Amend the Scheduling Order. Under the revised Scheduling Order, discovery will continue until March 25, 2005, with the trial scheduled to start during the five-week jury trial calendar beginning November 1, 2005.

In addition, before this Court entered its April 6 Order, IBM had filed a Second Amended Counterclaim (served on March 29, 2004) in which it dismissed one of its patent counterclaims and added other claims. One of the added counterclaims was IBM's effort to seek a declaration that IBM's use and reproduction of Linux does not infringe SCO's copyrights. Specifically, IBM seeks a declaration 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 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." Counterclaim-Plaintiff IBM's Second Amended Counterclaims Against SCO at Paragraph 173 (Tenth Counterclaim). SCO answered all counts of the Second Amended Counterclaim except for Count Ten on April 23, 2004. IBM and SCO filed the following Motions directed to Count Ten since April 6, 2004:

1. Defendant/Counter-Plaintiff IBM's Cross-Motion for Partial Summary Judgment on Its Claim for Declaratory Judgment of Non-Infringement; and

2. SCO's Motion to Dismiss or to Stay Count Ten of IBM's Second Amended Counterclaim.[1]

Both of these motions are scheduled for hearing on August 4, 2004.

In addition to these substantive motions, there has been extensive motion practice regarding needed discovery. Specifically, on May 28, 2004, SCO filed a memorandum pursuant to the procedure the Magistrate Judge outlined in her order requiring IBM to produce certain versions of its AIX and Dynix code. SCO has sought complete production of this code and IBM has steadfastly resisted providing it. This matter is currently scheduled to be fully briefed on or before July 12, 2004.

Respectfully,

____[signature}____
Jack B. Blumenfeld

JBB/bls

cc: Peter T. Dalleo, Clerk (By Hand)
Josy W. Ingersoll, Esquire (By Hand)
William F. Lee, Esquire (By Fax)
Mark J. Heise, Esquire (By Fax)

[1] SCO previously described this motion to the Court in its Opposition to Red Hat's Motion for Reconsideration, dated June 4, 2004 (D.I. 39).